Managing Your Money the Smart Way
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As a member of the personal finance community, I’m amazed at how many people are a part of it.
To get the word out on other sites, I’m interviewing bloggers in the community. Jon from Money Smart Guides is joining us this week.
You've worked in and around the financial industry since you graduated from college, how does that affect how you manage Money Smart Guides?
It makes managing Money Smart Guides both easy and difficult.
On the one hand, it makes things easier because I have so much knowledge about personal finance and in particular investing, that I can pull in experiences from both personal and professional situations. This makes writing posts much easier.
In a way, I always have content to write about.
But on the other hand, it makes managing these posts difficult. For example, since I’ve worked in the investment industry for so long and went to school for it, I know much more about investing than most of my readers. There have been times when I sometimes talk over my their heads.
To me, what I am writing about is basic, but to my readers, who don’t have the same background as me, they get confused or lost more easily.
I’ve had to work on taking a step back and making sure what I am writing about can be understood by those readers without the background I have.
What seems to be the most common financial mistakes couples have made?
The biggest issue by far is lack of communication.
Whether it is one person spending and not telling the other person or one person handling the finances and keeping the other in the dark, couples need to remember that they are a team.
If they are open to discussing finances with each other, they can go a lot further, much quicker than they could alone. After all, most couples have 2 incomes compared to single people who only have one.
For example, I handle tracking our budget and net worth on a monthly basis. My wife has no interest in running the numbers, compiling the data, etc. But after I complete everything, I sit down with her for 5-10 and go over it and answer any question she has.
Doing this not only keeps her informed, it helps to keep us both on the same page of reaching our goals.
One of these goals is early retirement. She sees how saving more in certain months positively affects our net worth and how months when we spend a lot negatively affects things.
I make sure she is a part of our financial calculations because when I worked for a financial planner, I saw what happened when a spouse (typically the male) handled the money and passed away.
The widow had no clue what to do financially or what they have in terms of investments and even accounts.
In many cases, we had to basically educate her on what they had and why they were invested the way they were and how to handle money wisely.
We don’t like thinking about death or even divorce, but it’s important to be part of the financial conversation.
Even if you have no interest at all, take 5-10 minutes every few months to see where you are financially and where you have accounts. The more you know and understand, the better off you will be.
What system do you employ with your money?
When I first began budgeting, I tracked every penny because I was in debt and wanted to get out.
After I paid off the debt and became more accustomed to my spending, I cut back and only tracked my variable expenses.
I knew what my mortgage payment was every month, so for me, there was no point in tracking that.
I was more concerned with my grocery spending, dining out, entertainment, etc.
Currently, however, my wife and I are tracking every penny. This is because she is looking at a career change and we want to get a solid understanding of where our money is going and what can be cut out if we need to trim down.
For investing, we are buy and hold investors. Through all of the research I’ve read and real life examples I’ve seen, there is no point in trying to beat the market.
We just save a certain amount each month and invest it on a regular basis. Most people think investing is complicated, but to be a successful investor all you have to do is understand the basics.
With my career, I am self-employed. I make it a point to reinvest most of my income back into the business. I do take 25% out each month and put that towards a solo 401k so I have money for retirement and get the tax write-off.
Once my business has the money saved that I feel is adequate, I plan to start paying myself a salary.
Right now, we are comfortable living off of my wife’s salary.
Why did you start these All-Star lists? How do you keep tabs on so many people?
I started both the Debt All-Stars and the Investing All-Stars to help my readers get inspiration.
I was in debt after college and know it can seem overwhelming. By looking at how much others have paid off, my hope is that my readers will see that even though their debt might seem overwhelming, they can get out of debt.
The same idea holds true with the investing list. People who are just starting out don’t think investing $20 here and there will make a difference.
Over time, it does add up, thanks to compound interest. Seeing how others have grown their portfolio hopefully helps readers continue investing on a regular basis. That is how to invest for success.
You've written three books on finances, what made you choose these particular topics?
I started out with the saving money book because that is the most common issue for many – how to save more money.
I then wrote my book on investing because I wanted to show that just following 7 steps will make you wealthy.
You don’t need to monitor your investments every weekend and constantly buy and sell. Just follow my 7 steps and you will see results.
Lastly, my early retirement book is for a small, niche market. As I mentioned earlier, my wife and I are on a path of early retirement.
I wrote this book because I found things that many people overlook when thinking about retiring early.
My book shows you a quick, comprehensive plan to successfully retire early.
What are some of your goals for Money Smart Guides this year?
My main goal is simply to attract new readers. I am always looking to grow my readership base.
I love helping others and the more people I can reach, the more I can potentially help.
I am considering an investment course as well – something a little more interactive for those that would rather not just read a book. But that is in the very early stages and might not even become reality. At this point, it’s just an idea.
Thanks again to Jon for sharing his thoughts. Please check out Money Smart Guides!
Nice to meet you, Jon! As a previously hands off investors, but starting to plan to manage my investment portfolio myself I am searching to learn as much as I can about investing so I will check out your blog. I’ll also am keen to check out your Debt All Stars. I’m intrigued because I have yet to meet a PF blogger with as much debt as us. I hope to find some company!