Personal Finance

Managing your personal finances is the first thing you need to get a handle on so you can invest. Below are some terms and simple ways to help manage this.

Budget – tracking your expenses is absolutely necessary to succeed financially regardless of your income.  This can be done on paper, an excel spreadsheet, online sites, etc.  The goal is to make budgeting as simple as possible so it’s not a burden and is not complicated.  This is mandatory to truly understand where your money is going and maximize your options.  You might be surprised and maybe a little disappointed when you see where your money is going.  Once you start spending intentionally, you will find more value in the purchases that you do make.  Track every dollar! As you earn more it doesn’t mean you have to spend more.  Don’t let your income define your budget. The best way to get a raise is to spend less!  Taken a step further, your first expense should be to your savings account with setting up an automatic monthly transfer. Pay yourself first.

  • Net Worth Statement –add up all your accounts (assets) and then subtract your debts; this is your net worth.   If you have more debt than assets, it could be a negative number.  Your net worth is a better way to track your progress, rather than basing it solely on increasing your income.  If you spend more than you make, your income is irrelevant to your net worth.  Your goal is to grow this number annually.  It is a true measure of how you are performing financially.  Checking this annually is an excellent way to gauge your progress.
  • Debt – debt should be considered an emergency until it is paid off.  There should be no investing other than possibly an employer retirement match until debt is paid off.  A home mortgage may be the one exception.  I agree with Dave Ramsey (national expert on personal finance) that you should eliminate all non-essentials in your life until you have it cleaned up:  no bars and restaurants, travel, vacations, or shopping other than for essentials of food and basic clothing.  This may seem harsh but to succeed is necessary.  The end result is a financial life with less stress and far more opportunities available to you.  Dave Ramsey has a list of baby steps to eliminate debt that can be found at and they are an excellent and proven tool.


You can check your credit reports at  It is a free service that can be accessed once a year.  There are three reports available from Experian, Transunion and Equifax.  It is recommended to retrieve one every four months.  When you do this, you should check for accuracy and contact that credit bureau to correct mistakes.  Your credit score matters in what rate you may be able to obtain if you need a mortgage or short-term loan. Some prospective employers also use this to assess if you are a responsible person to hire.