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The 3 Laws of Money Management

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With the barrage of financial information available, it’s hard to decipher which advice is best. Mountain America Credit Union is here to help with a sweet and simple financial strategy. Faithfully and successfully employ these three laws of money management and your financial worries will be slim to none. Yes, really!


The foundation of having virtually no money problems is really very simple. Understanding and following these laws will result in extra cash in your pocket within just a few short months.


The Law of Ten Cents
This one is simple. Take ten cents of every dollar you earn or receive and put it away. The money can go in your credit union savings, share certificate account, closet shoebox or backyard hole. It doesn’t matter. Some people call this “paying yourself first.” Whatever you call it, follow this rule and you will soon be on your way to building a very comfortable nest egg.


You might think that ten cents on the dollar doesn’t go very far. However, live on 90% of your income for ten months and you‘ll already have a full month’s salary saved. Not bad! After ten years, you could technically take a year off. Once you’ve established this practice, decide what to do with your chunk of change. That’s where investments and retirement savings provide a great opportunity to talk with your financial advisor.


The Law of Organization
How much money do you have in your checking account? How about your savings account? How much do you currently owe on your credit card? If you don’t know, and if it would take more than three minutes to find out, you’re forgetting one simple law—the Law of Organization. Developing a clear picture of what is where and updating it frequently is critical to good money management.


Set up a system for account tracking with an app, like Mint or your credit union’s money management app, or put together your own spreadsheets. It may take a few hours, but once you’ve set it up, regular maintenance shouldn’t take more than 20 minutes per week.


This also helps save on late fees, insufficient funds fees and other expenses that result when finances are not in order. The Law of Organization helps you avoid all that and more.


The Law of Enjoying the Wait
It’s widely accepted that good things come to those who wait. If you must have things before you’ve earmarked the money, you’ve fallen prey to the great American debt machine. The Law of Enjoying the Wait states that giving in to your instant gratification cravings is going to cost you. To outsmart the debt monster, save the money first for the purchases you have in mind.


Do you pay extra to get things sooner? Start by looking at your credit card interest rate. Debt isn’t cheap. Think of how many things you could have purchased with the money spent on interest. When you start following this law, you’ll actually begin to enjoy the wait. Not to mention, you’ll feel more satisfied with whatever you decide to purchase.

If you’re serious about developing financial order or would like more information on these money strategies, now’s the time to talk with a financial advisor. Mountain America is here to guide you forward!

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