Personal finance is defined by the Cambridge Dictionary as “the activity of managing your own money.”

We are not born knowing how to budget or invest, but throughout life, we set financial goals for ourselves, from small goals such as saving up to buy a new laptop or big ones like buying a house or funding college.

Understanding how to manage your money is an important skill that will guide you throughout your lifetime, helping you to make financial decisions with confidence and giving you the freedom to live your life the way you want it. 

Money doesn’t grow on trees 

Income is the money from sources such as salary, disability, Social Security and bank interest. Some people have side gigs to bring in more money to supplement their main source of income. 

Make sure you are having enough withheld from your paycheck so that you don’t end up owing come tax time. You can check your withholding on the IRS’s Tax Withholding Estimator and then talk to your employer about any adjustments. Consider a side gig. 

Put your money where your mouth is  

Spending is the money you use for your needs such as housing, groceries and eating out. By looking at your spending habits, you can make sure you are living within your means and if you aren’t, you are in the driver’s seat to change your course. 

Determine cash flow. Find a budget method that works for you. Pay your bills on time. Find ways to cut back on discretionary spending. Reassess your budget regularly to make sure it fits your reality. 

A penny saved is a penny earned 

Savings is the income left over that can be used for paying down debt, emergency repairs, retirement or other financial goals. 

Pay yourself first. Automate your savings so it becomes a required move and not an optional one. Set short-term and long-term financial goals. Build an emergency fund for emergency repairs or unexpected medical/dental bills.

We recommend saving at least three months of basic living expenses to provide a financial cushion for yourself and your family because you never know what might be just around the corner. Pay down debt.  

Building a nest egg 

Investing is the purchasing of assets such as stock and bonds, mutual funds, and real estate with the goal to get back more money than you put in.

Don’t leave your money in a savings account and forget about it. Make your money work for you. Put some money into several different investments such as securities, mutual funds, stocks and bonds to mitigate the risks. 

Put up your umbrella 

Protecting your wealth with products such as life and health insurance, auto insurance and estate planning is a small price to pay for peace of mind from financial risks.. 

Make a will. Set up trusts. Shop around for lower insurance premiums. Seek professional advice to assess your needs. 

When my youngest daughter was about 8 years old, I found a note from her on which was written, “My goal is to get $0.37 before January 15!” It would be so easy for all of us with this kind of goal, but it’s a place to start.

Your financial goals do not have to be big and your journey does not have to be fraught with worry. Attitudes toward money are formed through our experiences, our family culture and our emotions when we are children and reinforced or countered as we move into adulthood. Sometimes it’s just easier to not pay attention because then you avoid the reality of perhaps not being able to save or pay your bills.

Be kind to yourself as you work on financial well-being. The good news is that you don’t have to go it alone. At The River Center, we have volunteer money coaches to assist you. They cannot tell you what to do or give investment advice, but they can define your options and suggest resources. They help pave the way so you can see the road you are on. They will cheer you on and provide encouragement so that you may gain the confidence to reach your money goals.

Money coaching at The River Center is free and confidential, and available to anyone regardless of age or income. Call us at 603-924-6800 or email us at info@rivercenternh.org for information or to make an appointment with one of our money coaches.  

NisaSimila is communications and money matters coordinator at The River Center Family and Community Resource Center, which provides community connections, parenting support, tax assistance and money coaching to strengthen individuals and families in the eastern Monadnock region.

Funding comes from Monadnock United Way, New Hampshire Charitable Foundation and contributions of individuals, businesses and private foundations. The River Center is located at 9 Vose Farm Road, Suite 115, Peterborough.

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