By in Debt, Investing, Money Management

Categories: investing, life, money management, & debt

“What is important for kids to learn is that no matter how much money they have, earn, win, or inherit, they need to know how to spend it, how to save it, and how to give it to others in need. This is what handling money is about, and this is why we give kids an allowance.”
Barbara Coloroso

Investing sounds exciting and glamorous. At the start of my investing career, I thought it was so cool to research investments and invest in the stock and bond markets; UNTIL I HAD MY FIRST LOSS. When I saw my first stock pick drop 50% in price, I WAS NOT HAVING FUN!

Investing is not a game, but an important activity to facilitate the accumulation of wealth. In the short run, investing is also an activity which can facilitate losing wealth.

Barbara Coloroso’s advice to kids holds equally true for ADULTS. For that reason, this list tells you in plain English what to do before you even think about investing* and why.


1. Open a bank checking account-You need to this account for your monthly expenses. Internet or bricks-and-mortar banks are ok.

2. Open a bank savings account-This is where you keep all of your short term savings. Build your emergency fund in the savings account. Internet or bricks-and-mortar banks are ok.

3. Write down your income and expenses for a month-I know this is a pain in the —–. You MUST do this to be in control of your cash. There is no way out! Start with a small notebook or day calendar. Pledge to do it ONLY one day first. After the first day, continue; one day at a time.

4. Make a budget or spending plan-I know this one is painful too; but do it anyway. Find one that works for you. Once you find out where your money is going, you can decide if you are getting enough pleasure from your spending.

5. Follow the spending plan-Do the best you can, you don’t need to be perfect. Adjust along the way. Maybe when you go out for drinks, you’ll decide a beer is as much fun as a martini, and more than half the cost.

6. Pay off all credit card debt-You cannot move forward financially with credit card debt.

7. Transfer a specific amount regularly into the savings account-Don’t worry about the amount in the beginning. Just develop the saving HABIT.

8. Save enough in the savings account to equal 6-8 months living expenses– Allocate this savings for unexpected emergencies and replenish after using.

9. Buy inexpensive TERM life insurance if you have someone (spouse &/or kids) depending on your income-Term insurance doesn’t cost much and if you die, your family/spouse do not end up in the poor house. 

10. Enjoy LIFE and the PROCESS OF LIVING! After all, you’re not doing all this planning to have a miserable life or ONLY for some far reaching goal.

 You must live and have fun along the way.

 *Caveat: If your employer matches your contribution to a retirement plan, then contribute enough to get the employer match. If you don’t contribute, you are throwing away free money.


Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it for all of your personal finance goals, thoughts, activities, and plans.

1. Choose one step to take today.

2. Complete one step per week. Enlist a friend and complete the steps together; it will motivate you to continue.