Good vs. Bad Spending
When you start looking for financial advice (or any kind of advice, for that matter), experts will share their take on what’s “good” and what’s “bad.” In personal finance, there are some classifications that we can all agree on: Debt is bad. Emergency funds are good. Overdrawing your account is bad. Earning interest on your savings is good. Aside from the obvious examples, the guidelines are a bit murky; plus, the financial advice gurus often contradict each other. One expert will tell you that spending money is “bad” and saving money is “good.” The next will say that saving money is “bad” and investing it is “good.” Another might tell you that there are some “bad” investments and some forms of “good” debt. If you’re waging an inner battle of good vs. bad every time you whip out your credit card or peek at your monthly bank statement, it’s probably time to give your views on budgeting a shake-up. Start by losing the desire to classify everything as “good” and “bad.” There are good and bad ways to spend money, just as there are good and bad ways to save it. Following that logic, there are good and bad ways to budget. A good budget is one that, quite simply, works for you. It allows you to meet your needs and plan for your goals, and—most importantly—it motivates you to keep on budgeting. Successful budgeting systems vary wildly in their approach and in the tools you need, but they tend to have the same three actions as building blocks: • PRIORITIZE • TRACK • REWARD These building blocks not only help you organize your finances, but they also have the ability to boost your motivation (and there’s real science to back that up). Learn more at: firefightersfirstcu.org/Financial-Literacy-Good-vs-Bad-Spending
