[TheCDAllenGroup]

It seems to me that the majority of people simply don't have the willpower to properly budget their finances. Call them inept or not, they simply don't do it for whatever reasons... In fact, the government figured out a long time ago that people don't budget their money, so it set up a system where the appropriation of funds would be extracted out of paychecks AUTOMATICALLY.

So, how do budget your money, without necessarily budgeting your money? Do what I do and have it done automatically.

For example:
1. Get direct deposit setup by your employer to automatically deposit your funds in your bank account.
2. Have your employer setup an IRA to be funded AUTOMATICALLY from each paycheck - 5-15%, based on your preference. And remember, this is pre-tax money. And invest your IRA funds in an investment vehicle, such as mutual funds, or other simple, basic investment strategies.
3. Have a "rainy-day-because-crap-happens" money market account funded
AUTOMATICALLY. Again, 5-5% based on your preference.

This is basically a system that sets up your finances in a fashion where you don't have the ability to foolishly spend money before you fund important accounts.

Read David Bach's The Automatic Millionaire for more information.

[The Stealthy One]

Great advice (especially for so many young people here - like me! )! Thanks for sharing!

[TheCDAllenGroup]

Would anyone like to contribute their own experience or method for managing a business' finances?

[materacruz]

This is a great post, and is important for us, as young people, especially to set our lives up for success. I have read many financial books (including Rich Dad, Poor Dad--Robert Kiyosaki, Auto. Millionaire--David Bach, Smart couples finish Rich--by same author, Total Money Makeover--by Dave Ramsey) in order to seek advice on this exact topic. The Automatic Millionaire is a very quick read and has tons of great information. The principles aren't rocket science, just common sense, but sometimes it takes reading it to believe it.

That said I am also a HUGE fan of Dave Ramsey's financial advice. Check out his site here. He is a Christian based financial planner who gives biblical advice about finances. He has gone through the ups and downs of going bankrupt, which led him to do a 360 degree turn from credit cards, and debt and devise a system that would help millions lead lives with Financial peace. He has a nationally syndicated radio show that you can stream online from 2-5 every day also. It's a really cool show where people call in and he gives them great advice on how to fix their problems. He is an interesting guy and if you like talk radio like me you'd probably love the show. He's definitely set in his ways, and he speaks his mind so if you disagree with his principles you wouldn't like the show, but he has literally single handedly changed my financial situation, and made my relationsip with my wife 200% better because of his advice. He always touts a stat that says something like 70% of divorces are over financial problems.

Read his book if this sounds interesting to you.. either Total Money Makeover( I read this and love it, it sounds kinda crazy at first but once you start on the plan for about a month you are driven and focused to succeed and you feel like you are making awesome progress), or Financial Peace.

[JAllenConsulting]

Having retirement savings and emergency funds automatically debited is the way to go. It’s amazing how you eventually adjust to apparent income change.

I was a terrible money manger until my mid twenties. When I was 24 my dad suggested I write down every expense I made for one month. I thought it was stupid and more than a little retentive, but I did it anyway. In the end I realized how much money I was hemorrhaging through stupidity and laziness and made a lot of changes.

All of the books mentioned in this post are good books, and some even qualify as great. But none of them can replace a modicum of common sense and good judgment.

[quinnie0930]

Roth IRA is even better than IRA because it completely free you from taxation on your profits. You can contribute up to 4000 for 2006 (5000 if you're over 50)
"The intelligent investor" by Benjamin Graham is a very good book.

If you have high risk tolerance, get in the stock market since the dot com is still coming back. China markets are especially good right now.

If you're working, don't miss out the company's matchings, up to 6%, so make sure you contribute to 401k enough money so you can maximize your matchings. The funds you pick are important as well. Forget the bank, mutual funds is a much better return and relatively safe (I'm up 19% last year and 18% the year before). Diversifying your portfolio is also the key to minimize the risk.

[jhhardin]

I have had a decent amount of success saving money recently, and I only made one lifestyle change - I stopped eating out. A meal for two at a restaurant costs me, on average, between 10 and 20 dollars. Multiply this by a conservative 4 days a week and you are looking at a lot of money! Eating at home I spend between 2 and 6 dollars a night, sometimes less. It really ads up.

[TheCDAllenGroup]

^^Great posts gentlemen - I personally think all this should be instrumentally emphasized to the young people as we all know that financial education is simply not being taught in most of the educational establishments in our country.

What I like about David Bach's "Automatic Millionaire" teaching is that it does not stress the importance of having a budget - the accounts you set up for retirement, savings, and investments are the budget. The fixed and percentage-based amounts that you specify to go to the various accounts are your budget!