Money Basics

NovaLova

Hi all!

Where did you learn the basics of investing, financial planning, credit building, budgeting, etc? my family didn't seem To have the know how to pass it down to me (DHs family either) like many of my classmates who picked this stuff up from their parents. Are there workshops or books that are helpful for an absolute beginner? Where/how did you learn the basics?

Thanks !! Xox

noffgurl

I'm learning from here! Lol. DH and I are like you, we didn't have financial role models. Funnily, our families are very open about everything (seriously I could tell you all about pretty much all of their sex lines, finances, etc.), but, despite all this openness, there really hasn't been any education.

hoffse

In law school I read Smart Women Finish Rich by David Bach.  I thought it was a good primer on all things finance.  He also wrote Smart Couples Finish Rich, which gets a lot of love on this board.

I follow some bloggers - most of them are too extreme for me one way or another (which I guess is why they make their living blogging), but it's interesting to read different viewpoints.  I think my favorite blog is Get Rich Slowly - it's more middle-of-the-road than others I read.

I also have a subscription to Money magazine, and I read a lot of articles on Forbes and Business Insider online.  My husband reads the Economist and the BBC online.  He also reads some French news outlets.

My husband had no head start at all, and he's entirely self-taught. His parents make a ton of money, but have (we think) minimal or no savings. When we met, my H thought a credit card was only used to buy something you couldn't afford to pay for outright - he had never heard of paying off a credit card in full each month.  Needless to say, he learned that from his parents.  He has come a very long way since then!  

I did have a pretty great financial role model growing up - my parents make a small fraction of what H's parents make (their salaries averaged two public school teachers their entire career), but they were millionaires before I started college.  No family money or inheritance, they did it entirely on their own.

As a result, I tend to do the day-to-day money management in our household, but H has a strong voice.  I know that he's learned enough to have insight into it, and I definitely listen to his thoughts and suggestions.  We also like different things - I track domestic stuff, and he tracks international stuff.  He has a knack for predicting things like oil prices and currency fluctuations.  He's the one who picked out most of our best investments, based largely on these predictions of his. He's learned a ton about finance in the last 10 years.

I suggest both you and your H learn the basics: start with budgeting, then work from there - debt, emergency fund, retirement accounts, investments.  This is important for everyone to know.  As you learn you might find that you guys like different parts of it or that one of you is really good at the day-to-day, while the other takes a more big picture approach.  Just don't be afraid to learn!  I think a lot of people are intimidated by the vocabulary, but it's not that hard once you get started.  

And please stick around!  This is a great board - lots of differing viewpoints, and we learn a lot from each other.

Xstatic3333

Like @hoffse I read Smart Women Finish Rich when I was younger, and that was my first introduction to money basics.  My parents are actually very good with their money but had (and still have) the attitude that money should not be discussed, so I didn't really learn their habits.  As a result, despite being given every advantage, I messed up and got myself into a pretty big heap of consumer debt in my early 20s.  

I have also learned a lot just from googling and reading blogs since.  One blog that I like for basics is Budgets are Sexy.  I also learned a bit from Money Under 30, but I don't trust all of their advice.  An extreme but entertaining blog is Mr. Money Moustache.  This board was actually the first place I heard about Dave Ramsey, who is very popular and has some introductory books.  His approach is very distinctive and not for me, but many do find it very helpful and I'm sure someone following his plan will chime in about it on this thread.

I also agree that I have learned a ton from this board.  There are some very knowledgeable people here who are always willing to share their perspective and what they have learned, and its great to have a safe place to ask money questions and get unbiased advice.

jessica490

I learned the basics about saving, 401K's, credit cards from my parents. But I really learned a lot more in detail from this website!

Sisugal

I grew up dirt poor and worked starting at age 13 to pay for my own clothes. My parents did not believe in using credit cards and that was a great lesson for a teen-ager -- you cannot spend what you do not have!
I knew I would be responsible for my own education expenses and was encouraged to always, always save something from every check.
From there it was how to divide my small inome to cover my expenses - how to prioritize necessities first. You learn real quick what is a need and what is a want.
I did not learn about retirement,investing, buying a home etc until after college and gettiing married, merging finances.
I am still debt averse and very conservative with money and like to read all kinds of sources on finances.

als1982

My parents and grandparents were good role models in matters of finances and frugality, but it took me a few years to see that.  

I'd recommend you start out with Dave Ramsey and Suze Orman books and shows.  IMO they tend to balance each other out with their differing perspectives and together can help you find a comfort level that's best for you!

jtmh2012

I learned the basics (checking, savings, credit cards) from my parents.  At my first real post college job I was fortunately that my boss had a financial person come in one day who offered her services to anybody else that was interest, so I talked to her and started a 403(b) (it's like a 401(k) but for people in government) and a Roth IRA.  When I left that job, we added a 401k.  I've also gone out and done things on my own as I've found out about different stuff.

FirstMate06

Some banks and credit unions have great (and free!) seminars that focus on different areas of financial basics ranging from opening a checking account to applying for mortgages and investing. I would look into your local banks, a lot of times you don't even have to be a member to attend.

In college I also rented a lot of those "For Dummies" series books that covered things like basics of IRA's and investing in the stock market. I think they're a great and simplified resource to start with from ground zero.

I also second Smart Women Finish Rich!!

brij2006

We read and live by Dave Ramseys', Total Money Makeover.  He has some great insight on budgets, debt, when/how to invest, the best way to buy a home, etc. 

NovaLova

Whoaaa! Thank you all so much for the excellent resources! I'll def check out Smart Women Finish Rich! And great tip @FirstMate06 I had no idea that banks offer Educational opportunities!

MommyLiberty5013

One thing you need to learn quickly, though, when dealing with the financial world is the difference between fact and opinion.

For example:

Someone may say that" this mutual fund is a great buy and you need to buy it." Truth is, it may indeed be a good selection, but unless you know the facts about it, you have no idea why or if it is indeed a smart/good buy.

Secondly, financial institutions and banks are businesses. Therefore, they too are looking to make a profit. This isn't bad, it just means you are a buyer of their products and services and therefore have to take your own level of responsibility for whatever product or service you "buy" from them. Due to the new laws that came out of the Great Recession of 2008-2009, consumers are more protected than ever, however, you STILL need to have an understanding of what you're doing/getting.

As a former banker myself, I enjoyed teaching people. Yes, I was selling to them, but I felt that if I truly educated folks they would ultimately know more about things and feel more confident. I do recommend that if you work with a professional, find one that can "teach" to you and is open to answering lots of questions. Anyone who shuts down questions isn't worth your time or money.

hoffse

I think MommyLiberty makes a great point.  I think learning the distinction between fact and opinion is also really important when you read finance books or blogs.  Reading from multiple sources helps you drill down to what is generally accepted as good advice or facts about the finance world (ie: tax treatment of different retirement account) and what is that author's advice to be financially successful (ie: how much debt vs. savings you should have).  I'm sure you know that every author is going to have biases - their own successes, failures, and financial role models will play a big part in the advice they give.  There's nothing wrong with that, but sometimes it's a good idea to remind yourself of that when you're reading about a strategy that's unfamiliar to you.

I don't think there is a single financial planner or financial writer out there whose advice is applicable to every person who reads their stuff.  The financial plan you guys ultimately follow needs to be tailored to your incomes, goals, levels of debt aversion, and risk tolerance.  This is going to be different for every person, and they will evolve over your lifetime.  Some people do find that one financial Bible they live by (Total Money Makeover probably has this distinction more than any other book), but it's ok if you never find that one book for you.  H and I really haven't found one yet, and we've done fine by picking and choosing what we like from a bunch of different resources and ignoring the rest.  You guys are the best people suited to figuring out your financial plan, even if it takes some trial and error.  The more you read, the more tools you will have to figure it out on your own and blend ideas from different authors.

UncleL1228

@novalova  What motivated you to reach out about the basics of finance?

My lack of education about finances paired with a high stress job pushed me to self educate about finances to take care of my wife and I's future selves.  There are some great blogs out there to check out if you want something in smaller bites as compared to reading a whole book.  I would suggest mrmoneymustache and 20somethingfinance.  They offer some advice about investing and CC's) that varies from Dave Ramsey and can be very beneficial for young couples