"Managing your money does not require that you be a Wall Street wizard. In truth, it's how you manage a handful of major life choices that can make or break your financial future." written by Richard Jenkins in an article for MSN Money.
You can take an inventory of your financial decision making ability by going over these 7 qualities:
1. How do you handle risk: Would you rather work for a rock-solid company, a small start-up with loads of potential or work for yourself?
2. What's Your choice of career: Depending upon your education, some fields pay better than others. Getting the training you need for a better job could be the best investment you make.
Does your pay depend on distortions in the market?
Will your skills retain their value in the years to come?
3. What's Your Lifestyle: Americans are conditioned to overbuy. Do you shop out of necessity or for fun?
How much house do you really need? Every dollar you don't spend on a house saves roughly $2.40 mortgage payments.
4. How do you manage debt: Pay yourself instead of your creditors. Credit is the privilege of spending money you don't have. Banks make a lot of money lending to people who can't wait to buy things.
5. How do you protect your assets: Your most important asset is your ability to work. Disability insurance will pay you a percentage of your income if you're sick or injured and totally unable to work.
You also need to provide adequate protection for the rest of your assets.
If you're self-employed, insulate your assets.
6. How many children will you have: Of course you can't put a price on the love and joy that children bring into your life. However, each one will cost you $250,000 to raise to the age of 18, not counting college.
7. Marrying for better or worse: Deciding whom to marry may not seeem like a financial decision, but if you ever have to endure the pain of a divorce, none of your assets are safe from the divorce attorneys.
On the positive side, getting married can double your income. Although two cannot live as cheaply as one, it does not cost twice as much either.
Reprint from ALMC Mortgage Newsletter