A couple years ago, I came to the rather obvious realization that I didn't know jack about how to handle my money. Saddled with more than $10,000 in credit card debt and unsure of whether I'd have enough cash to pay the rent in two weeks -- despite the fact that I earned almost twice the median income for my city -- I decided it was time to get a grip on my finances. Since then, the process into which I dragged myself kicking and screaming has actually become enjoyable. Several tools helped me craft my transformation.
For many (myself formerly included), the main barrier to becoming financially wise is a dysfunctional relationship with, or understanding of money. I don't know how many times I've heard friends say: "I just HATE money." I used to say it myself -- proudly, even. But hating money is about as emotionally fruitful as falling in love with Elizabeth Taylor. Two good old fashioned books helped me learn a more balanced attitude toward money and personal finance: "Your Money or Your Life," by Joe Dominguez and Vick Robin, and former Wall Street broker Marshall Glickman's "The Mindful Money Guide." While both titles have their shortcomings -- I'd never recommend following Dominguez and Robin's investment advice, and Glickman waxes a bit holy at times -- they are both inspired starting points for building a richer understanding of the role of money in the considered life.
Somewhere in the middle of your book learnin', you'll likely want to start tracking your finances and building a budget. Think of Quicken as your personal finance operating system. A desktop application which links seamlessly to up-to-date online tools and resources, Quicken will do as much or as little as you want, scaling easily to your own evolving needs and level of financial smarts. You can start out simply by tracking your checkbook ? direct integration to your personal bank accounts via the Web makes it a no-brainer. You?ll be surprised how much you'll learn about where your money keeps disappearing to (e.g. before Quicken, I had no idea just how much I was spending in aggregate on fly fishing gear). Step up with automatic bill payment capabilities, budget projections, loan finders, and a virtually endless list of online and offline financial self-help and analysis tips and tools. Soon enough Quicken will prompt and prod you into financial maturity without you even realizing it.
For continuing education, it's hard to love Ken Kurson's Green Magazine too much. The former punk rocker-turned-Esquire columnist-turned-finance guru to the young and ambitious, Kurson infuses every issue of Green with a combination of substance, irreverence and simplicity. His basic schtick: don't be obsessive, but save a little now so that tomorrow you can party even harder. If there's a better and more engaging magazine for the beginning investor, I don?t know of one. Kurson's book, The Green Magazine Guide to Personal Finance, belongs on every beginning investor's shelf too, alongside Andrew Tobias' personal finance bible, The Only Investment Guide You'll Ever Need.
The Green Magazine Web site sports some of the most useful investment tools for time-strapped beginning investors, including a well-designed portfolio tracker and an amazingly flexible stock picking tool.
For deeper data on stocks (including news and analysis), Bloomberg can't be beat, while Morningstar is the place to learn more than you really need to know about individual mutual funds.
While taking control of your finances may seem a monumental challenge, these tools can help make it easy, and dare we say, even fun. In less than two and a half years, I've washed away my credit card debt, saved up enough to survive for three months without pay, and started a retirement account ? all without a wage increase. What's your money been up to?