Gen X and Gen Y have an advantage that previous generations didn’t — information is right there and easily accessible, 24 hours a day. The problem with having all of this information at your fingertips is that it makes it difficult to discern what is applicable to you and how you should use it.
There are 5 important financial skills and topics that everyone in their 20s, 30s and 40s should master. Over the next several weeks, I will be covering each one in detail so that you can feel confident that you’re on your way to developing the skills and knowledge needed to take control of your financial future.
1. Negotiating What You’re Worth
The ability to successfully negotiate your salary, benefits and promotions will have a huge impact on your finances, both in the present and in the future.
A study conducted by George Mason University and Temple University researchers found that if one negotiated his or her first salary higher by $5,000, assuming 5% raises, that person would earn $600,000 more over a career of 40 years.
In an upcoming post, you will learn why negotiation is so important, and how you can develop or improve this important skill.
2. Investing So Your Money Grows
You don’t need to be the Wolf of Wall Street or sign up for a trading course. However, you should know the basics, as well as a few of the finer points — and why your investing strategy might differ from a friend’s.
In a future post, you will learn about different types of investments, how to put together a balanced mix of those investments, and why it’s important to keep that balance in check.
3. Having a Good Relationship with the IRS
Does the word “tax” make you want to take a nap?
Yeah, me too. But taxes are an important part of your financial picture, and one that is often ignored.
After my crash course, you will be able to understand the basics of how taxes work.
I’ll cover topics ranging from how to adjust taxes on your paycheck to the difference between a deduction and a credit. We’ll discuss how tax brackets are more like steps than a ladder, and how to make the tax code work for you (or at least keep it from working against you ).
4. Budgeting Like a Pro
You don’t have to count every penny going in and out to have a good handle on your budget.
You can spend money on the things that are important to you while still working towards the goals that are important for your financial health.
If you’ve ever thought that you could be saving more, or if you just wish you had a better handle on where your hard-earned cash is going, you’ll want to read this!
5. Choosing the Best Retirement Plan for You
You may be enrolled in a retirement plan at work, but do you know how it really works? Have you heard about other plans from friends and feel unsure whether you should be doing something different? Do you work for a small company that doesn’t offer a retirement plan?
In this column, you’ll learn the lingo and how to distinguish between a Roth IRA, a traditional IRA, a 401(k), a Roth 401(k) and other retirement plans. You’ll also learn to contribute strategically if you have access to more than one retirement vehicle, and what to do if you don’t have access to retirement plans through work.
I hope you’re excited to roll up your sleeves and dive in! I’ll cut through the jargon and misinformation to give you the information you need to start living Your Richest Life.