Cash Management: How To Track Dollars, Cents?

By Jon L. Ten Haagen, CFP ®
asktheexpert@longislandergroup.com

Let’s talk about cash management and how you can keep track of your dollars and cents, and how to put them to work.

First, a fun side note. The word dollar comes from a silver coin called the “Joachimsthaler,” which was minted in 1518 in the St. Jauchim valley, in what was Bohemia and is today part of the Czech Republic. The coin was used throughout Europe, and its name shifted, and pronunciations changed, in the different areas. ‘Daalder’ in Holland; in Scandinavia it was ‘Daler;’ and in England, ‘dollar.’ This information is according to The Wall Street Journal’s Guide to Understanding Money & Investing.

Anyway, there are a number of ways you can get yourself on a strong track to comfortably saving and investing.

First, create short- and long-term goals. Remember to pay yourself first. When your paycheck is deposited, put 10-15 percent into a retirement investment. Yes, we have covered this before. But, how many can say they are doing this? If you feel you cannot put away 15 percent now, start with a smaller percentage, say 5 percent, and work your way up by increasing the amount by 1 percent, or more, at the beginning of each year. You should be the first bill you pay with each new paycheck. Make this automatic by starting an automatic investment into a diversified investment vehicle. Start a regimented program to pay yourself first, then your mortgage or rent, utilities and insurances. This will insure your extra dollars-after-bills do not disappear through your hands.

If you have your paycheck deposited into your savings/checking account each time, you will create a vehicle that will help you stay on track. You can direct your bank to automatically transfer funds electronically to various accounts, such as your monthly automatic bills and your investmen

By Jon L. Ten Haagen, CFP ®

asktheexpert@longislandergroup.com

Let’s talk about cash management and how you can keep track of your dollars and cents, and how to put them to work.

First, a fun side note. The word dollar comes from a silver coin called the “Joachimsthaler,” which was minted in 1518 in the St. Jauchim valley, in what was Bohemia and is today part of the Czech Republic. The coin was used throughout Europe, and its name shifted, and pronunciations changed, in the different areas. ‘Daalder’ in Holland; in Scandinavia it was ‘Daler;’ and in England, ‘dollar.’ This information is according to The Wall Street Journal’s Guide to Understanding Money & Investing.

Anyway, there are a number of ways you can get yourself on a strong track to comfortably saving and investing.

First, create short- and long-term goals. Remember to pay yourself first. When your paycheck is deposited, put 10-15 percent into a retirement investment. Yes, we have covered this before. But, how many can say they are doing this? If you feel you cannot put away 15 percent now, start with a smaller percentage, say 5 percent, and work your way up by increasing the amount by 1 percent, or more, at the beginning of each year. You should be the first bill you pay with each new paycheck. Make this automatic by starting an automatic investment into a diversified investment vehicle. Start a regimented program to pay yourself first, then your mortgage or rent, utilities and insurances. This will insure your extra dollars-after-bills do not disappear through your hands.

If you have your paycheck deposited into your savings/checking account each time, you will create a vehicle that will help you stay on track. You can direct your bank to automatically transfer funds electronically to various accounts, such as your monthly automatic bills and your investments.

Set aside certain amounts of money in an account for future needs, both short- and long-term, such as for a new car, a yearly vacation, a swimming pool or even a new yacht or boat. Also, set aside funds into what I call an ‘emergency fund.’ That fund can be converted to cash within a short period of time, such as a month, for near-term needs. It is short term in nature so it will not fluctuate in value too much. You want this money to be there if and when you need it. This will help you focus on the important things and creates a path to follow.

The best investment you can make is in yourself. If your employer offers a 401k retirement savings plan, take a serious look. Many employers offer an incentive of what is called a ‘match’ with their plan. This is basically free found money for your future. Your money is invested into a retirement plan, which is tax deferred, so your income is reduced, saving you on tax dollars and letting your monies grow without current taxation toward your future. Do take a serious look at this option.

As always seek help from a competent financial advisor – preferably one with strong credentials (i.e. a CFP), with a track record of being in the business for some time and that has your best interests first.

If you need guidance call us for a no obligation consultations. We are here to serve.

ts.

Set aside certain amounts of money in an account for future needs, both short- and long-term, such as for a new car, a yearly vacation, a swimming pool or even a new yacht or boat. Also, set aside funds into what I call an ‘emergency fund.’ That fund can be converted to cash within a short period of time, such as a month, for near-term needs. It is short term in nature so it will not fluctuate in value too much. You want this money to be there if and when you need it. This will help you focus on the important things and creates a path to follow.

The best investment you can make is in yourself. If your employer offers a 401k retirement savings plan, take a serious look. Many employers offer an incentive of what is called a ‘match’ with their plan. This is basically free found money for your future. Your money is invested into a retirement plan, which is tax deferred, so your income is reduced, saving you on tax dollars and letting your monies grow without current taxation toward your future. Do take a serious look at this option.

As always seek help from a competent financial advisor – preferably one with strong credentials (i.e. a CFP), with a track record of being in the business for some time and that has your best interests first.

If you need guidance call us for a no obligation consultations. We are here to serve.