Pimpin' My Money!

Yesterday, I had an appointment with my mom's financial advisor for Edward Jones, and I am really excited that he is now my financial advisor too.  One thing I really like about Edward Jones is that you get to meet with someone face-to-face and talk about what you want to do with your money.  After going to a seminar he gave about teaching kids about money, I decided it was time for me to learn a few more things about money for our family.

David and I don't have a problem budgeting, and we don't live beyond our means.  But we also haven't really thought much about the future and what we want our money to do for us.  We have only one credit card and the balance on it is about $5,700.  We agreed that we want to pay it down by half by the end of this year.  Our other financial goal is to begin investing.  I opened an emergency account yesterday, and will contribute to it each month.  The contribution will be automatically deducted from our checking account, which I like.  Once our emergency fund reaches a certain amount, we will begin to put money into other types of investments.

The other really awesome thing I found out was that David's retirement account that was set up when he was teaching is still viable, and the amount has doubled since he stopped teaching.  We're having the paperwork sent to us so we can roll that money into an IRA and be able to manage it a little closer to home.  Currently, the account is managed by a firm in Washington D.C.

Our last goal is to set up savings accounts for each of our children and contribute to them regularly.  Lucy's is already set up, and next week, I'm heading to our bank to set up the other girls' accounts.  They won't have $10,000 by the time they're 18, but every little bit helps when you're going to college or setting up your home.

So here's what I've learned so far:

1. Setting goals is the key to financial success.  Set a goal, put a deadline on it, and it will happen.
2. There are 2 types of goals--short term goals and long term goals.  Short term goals are for things you want to achieve in 1 year or less.  Long term goals are for things you want to achieve in 5 or more years.  Paying off a credit card?  Short term goal.  Buying a retirement/vacation home?  Long term goal.
3. SAVING is for short term goals.  INVESTING is for long term goals.
4. Donating money (through tithing or other charitable contributions) is part of a healthy budget.  Why?  Because giving money away helps others, but also it teaches a person to budget, especially when your donation comes out of your income before any of your bills are paid.
5. There is a difference between needs and wants.  This is an important lesson for children and adults to learn.  Another good lesson is to learn to put off what you want now for something better later.  How interesting that tithing and sacrifice are such important parts of personal finance.