There are five principles, which we will call building blocks, you need to know to make the most of your money. The blocks represent the key principles to keep in mind as you make day-to-day decisions and plan your financial goals. In this post, I will give a brief description of each block, principle, and then cover each block in more detail in future posts. 1 2
The Five Building Blocks
EARN – Make the most of what you earn by understanding your pay and benefits. The Earn principle is about more than the amount you are paid through work. This principle is about knowing the fine print and details about your paycheck, including deductions and withholdings.
SAVE & INVEST – It’s never too early to start saving for future goals such as a house or retirement, even by saving small amounts. Saving is a key principle. People who make a habit of saving regularly, even saving small amounts, are well on their way to success.
PROTECT – Taking precautions about your financial situation, accumulate emergency savings, and have the right insurance. The Protect principle means taking precautions about your financial situation.
SPEND – Be sure you are getting a good value, especially with big purchases, by shopping around and comparing prices and products. The fundamental concept of Spend is: make a budget or a plan for using your money wisely. It’s helpful to set short and long-term financial goals and manage your money to meet them.
BORROW – Borrowing money can enable some essential purchases and builds credit, but interest costs can be expensive. And, if you borrow too much, you will have a large debt to be repaid. Sometimes it’s necessary to borrow for major purchases like an education, a car, a house, or maybe even to meet unexpected expenses.
Please go to the first principle “Earn” to begin learning these five important principles that will help you make the most of your money.
LifeCrafter – Money $ense