All Articles With Category : Personal Finance

The latest and the best financial news, tips and tricks.

How to Avoid Lifestyle Inflation for Fresh Graduates

There’s something extremely satisfying about finally getting your very first paycheck from your very first job. There’s this distinct feeling of euphoria and elation that grips you and makes you want to spoil yourself. It’s easier for a fresh-out-of-the-university person to fall into the trap of lifestyle inflation. It’s also easier for the same age bracket to manage their money, especially with all of the tech and the apps to help track expenses or plan a budget according to a specific goal. Experts like Jean Folger have attributed the phenomenon of lifestyle inflation with a need to keep up with the latest trends. They also state that while it is an eventuality as your pay grade goes up, it doesn’t mean you can’t avoid the worst of it. With that in mind, here are some tips to avoid lifestyle inflation for fresh graduates. Keep your lifestyle simple That first paycheck can symbolize a lot of things for you, one of which is you are now an adult that has responsibilities and much else besides. Your first job and first paychecks won’t always be as huge as you might expect, so keep any “treat yourself” spending simple. It really IS okay to separate a portion of your paycheck specifically for spoiling yourself. What isn’t okay is going over the top. You do deserve something for putting the effort in and getting the job done as quickly and as efficiently as possible, but rewarding yourself with a super expensive item is too much. Save up for an emergency fund You’ve heard this time and time again from your parents, sometimes you’ve probably resorted…

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6 Money Lessons Parents Fail to Teach Teens

When it comes to teaching their kids about personal finance, many parents fail to make the grade. “Teaching kids about money is one of the major jobs of a parent,” said author and financial advisor Cheryl Castillo. Unfortunately, most parents don’t impart these money lessons. Whether they lack the confidence to teach it or they assume their kids learn it in school, parents tend to avoid talking to their kids about basic money management. Don’t delay educating your teens about personal finance. Here are a few tips on raising money-smart teens. Give them the money talk early A Cambridge University study says that a child’s financial habits are formed by age 7. It’s important to teach them the value of money, saving, and good financial habits while they’re young so that they make a habit of making good money choices. Why it’s important: The younger they’re aware of money, the better their grasp on their finances will be by the time they’re teens. Determine wants and needs A need is something necessary to one’s well-being or continued growth. Help your teen learn what wants and needs are. Ask them questions on what they think wants and needs are, and explain the difference. Why it’s important: A teen that knows to prioritize financially has the ability to put off impulse buys, and is less likely to rack up bad debt. Identify their money goals It doesn’t matter what that money goal is. Sit down with your kids and ask them what they’d like to do with their money. Discuss what they…

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7 Simple Tricks to Spend Less on School Supplies

With kids on their way back to school, parents are preparing their budget for the purchase of school supplies. Many parents are eying higher expenses as the K-12 program kicks in. When buying school supplies, “Remember to prioritize and buy the necessities first,” says personal finance guru and author Fitz Villafuerte. With that in mind, here are a few tips on how to save money for the school year. Make a list and stick to it Having a list of things to buy will cut down on shopping time. Get your child involved in the process of making the list as a lesson in planning, and allocating money to a certain goal. Ask them what kind of things they want, and make a list of pros and cons towards getting these particular items. Shop during a sale Most malls and outlets have end of summer or back to school sales that you can take advantage of if you time it right. Check newspapers, magazines, and websites for when these happen and plan your shopping accordingly. The odds of getting discounts and freebies are much higher on these dates. Know when to go cheap and when to buy quality Shopping for school supplies on the cheap can be harmful to your child. It’s best to consider quality over getting something cheap to ensure that they last more than a single academic year. Items that you should consider on the quality list are bags, lunchboxes, and rain gear. Buy basic supplies in bulk Brand may sometimes determine how much more or less…

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Interview: Earning a Million Before 30

If you could go back in time to give financial advice to your 21-year-old self, what would you say? In this series, our blogger friends share the things they wish they knew about saving money when they were 21. Mahatma Ghandi once said: “Your actions become your habits, your habits become your values, and your values become your destiny.” This quote was the first piece published on the Millionaire Acts blog. Tyrone Solee, the blog’s founder, is a mathematician-cum-personal finance advocate who made his first million by 26. You’d think that someone who accomplished this did everything right since he was 21, but Tyrone has a few financial lessons he wishes he could tell his younger self. Right from the start “At the age of 21, I was a new graduate of BS Mathematics at Ateneo de Manila University,” he says. “I was busy applying in jobs until I got in at an investment bank later that year.” Tyrone also says that he was fortunate, as his time there allowed him to grow his savings. As a college student, he ran a buy-and-sell business. This gave him a pretty good idea of how to work with money, but he credits valuing money as a lesson learned while immersed in a high-stress environment at work. “Money then was not easy to earn. It involved hard work and a strong heart against bullies,” Tyrone says. “I have to endure long hours of work and the constant temper of my bosses. I learned how to value money. As much as possible, I tried my best to…

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7 Things to Stop Wasting Your Money on Today

    There’s a fine line between a worthy purchase, and a waste of your hard earned money. There are times when you can spend and it’ll be worth it, and times when you just definitely need to think before you leap. Read More: How to Avoid Being Broke “There’s simply no rule that says an evening or afternoon on the town has to cost a ton of money,” said Chelsea Fagan, a personal finance writer and founder of The Financial Diet. It stands to reason that certain things you choose to reward yourself for a job well done are actually a waste, and here are seven of them: Impulse Shopping Retail therapy is one of the ways that a lot of people relieve stress. Shopping is fun, and you end up with that new, shiny thing that you’ve had your eye on for the longest time. But the question you’ll eventually ask yourself afterward is: did you really need it? The impulse shopper’s answer is often, “Not really, but I had to have it.” When it isn’t a waste: Buying something quality isn’t a waste, but there’s a difference between wanting something and actually needing it. It isn’t a waste when you’re buying something after weighing the pros, cons, price, and your need. Artisan Coffee You need coffee to function, or at least, that’s how you justify your daily Starbucks habit. There’s a mighty need for you to have that particular blend of coffee every morning, before you come in for work. You pay over a hundred pesos for the largest…

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How an Ex-Beauty Blogger Found Financially Freedom

If you could go back in time to give financial advice to your 21-year-old self, what would you say? In this new series, our blogger friends share the things they wish they knew about saving money when they were 21. Read More: Top 4 Products Most Yuppies Spend Money on At 21, most young people are just starting their careers or pursuing further studies. It’s a good time to start learning life’s invaluable lessons about responsibility, work, and money. We asked lawyer, mom, and blogger Jill Sabitsana what money lessons she would tell her 21-year-old self.Twenty-one and… “I was still in college at 21, a senior – I think,” she says, and on the path to becoming a lawyer. “I had a nonchalant relationship with money. I was on an allowance from my parents and was able to live within it. I didn’t have any money goals and didn’t have a savings account. I didn’t think about money at all.” She also states that her financial education was very Pinoy, with some exceptions. She and her siblings never got a formal lecture on finances, and money was mentioned in passing. Despite this, she learned a few things from her parents that was useful to paying her own mortgage – requesting a lower interest payment from the bank, and paying with a lump sum on the loan anniversary. As a hobby, Jill founded the beauty blog Kikay Exchange while finishing her law degree. The blog’s readership grew and young, internet-savvy Filipinas used it as a resource for the latest in beauty and…

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4 Everyday Items You Should Never Buy Cheap

Saving money means cutting back on purchases and getting cheaper things, right? No, not really. “Just because something is cheap, doesn’t necessarily mean that it’s frugal,” said personal finance writer Peter Anderson. The purchase of a cheaper item will mean that you’ll need to spend more to replace it in a shorter amount of time. Read More: 7 Surprising Ways to Save Money on Clothing So when should you buy quality? Here are a four instances that buying quality means saving money. When buying clothing If you want clothes that don’t give in to wear and tear easily, quality matters. Certain articles of clothing serve you best when you invest in them. Shoes wear out quickly, and buying cheap ones might cause a little bit of a problem if they fall apart in the middle of a commute. Formal attire is also something worth investing in. A guy should have a suit impeccably tailored to him, and a lady should have one or two bespoke dresses to wear to a formal occasion. Why buy quality: Clothes make the person, quality clothes only serve to enhance the look you’re going for. Sales on shoes go around often enough, allowing you to get quality clothing without burning a hole in the pocket of your very sturdy jeans. When buying luggage and carry-alls There’s a fine line between sturdy bags, and overpriced branded bags. A sturdy bag may not always be the most fashionable, but it’ll hold everything you throw in it and more. The same should be said of the wallet that holds…

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The Faustos on Financial Literacy in Families

If some Filipinos find the topic of personal finance intimidating and too serious of a subject, the Fausto family proved otherwise. The Family FQ Workshop by the Faustos, held on May 9, Saturday, at the SM Aura SMX Convention Center, was indeed made fun. FQ Mom and author of The Retelling of Richest Man in Babylon, Rose Fres Fausto, reiterated the importance of focused parenting in raising the kids with high financial intelligence quotient or FQ. She had to give up her career in investment banking to take care of the kids full-time. Rose Fausto in action at the Family FQ seminar She and her husband, also the founding president of the Fund Managers Association of the Philippines, Marvin Fausto, made it clear that family and parenting should come first. The upbringing with abundant knowledge in money and core values was reflective on their three sons, Martin, Enrique, and Anton. The three boys supported the idea that high FQ starts in the family with a common goal – financial freedom. Family Teamwork to Attain High FQ Rose was the first to take the stage. She recalled the family’s humble beginnings and the journey they took, and still taking, to impart their expertise in investment and financial management to families for a stronger reinforcement. More than just money matters, she shared life lessons and beliefs. “God’s will – is the intersection of our greatest passion and the world’s greatest need”, she said. Shortly after her, the talented sons owned the floor with a dance number. They called in a few kids…

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What does the S&P Rating mean for the Philippines?

A country’s credit rating is an indicator of how well it might be doing in terms of its economy; the way it manages foreign debt, and how the government is managing the nation’s budget. This also provides insight for foreign investors as a potential source of growth. Basically, the better a country’s credit rating is – the better chance it has to raise its investment grade, and attract investors. Standard & Poor’s is a bond ratings firm that releases information on a country’s credit rating and expresses how it may or may not be able to deliver on its financial obligations. There are several investment grades, but in the case of the Philippines, the current S&P Rating is ‘BBB’. This means that the country has a fairly solid growth trajectory. What does it mean, really? Given the country’s current investment grade, it marks the Philippines a potential market for foreign investors due to sound fundamentals, an improving fiscal situation and a stable financial system. An influx of foreign investors means the creation of more jobs, access to better benefits, less fluctuation in the price of goods, and possibly the most important thing for a country: being able to manage its foreign debt better. All of these mean an improvement to the standard living conditions in the country. It doesn’t stop there, though. According to reports from Fitch, another debt watching agency, the country ended 2014 with $ 79.5 Billion in gross international reserves. The amount is enough to cover nearly a year’s worth of import costs (roughly 10.2 months, actually)…

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5 Surprising Reasons 80% of Pinoys Have No Bank Account

In the first Consumer Finance Survey conducted by the Bangko Sentral ng Pilipinas, a surprising number of Filipinos said that they do not actually have a deposit account. Read More: Why Pinoys Ignore Insurance According to the survey, 8 out of 10 households (78.5% of the total respondents) do not have deposit accounts. Of those who do have bank accounts, only six out of ten have deposit accounts that allow their money to earn interest. Here are five reasons most Pinoys have no bank account. Not Enough Money Within the survey, around 92% responded that they do not have enough money to open a bank account. This may be a reason when there is shortage in income, or opting for the payroll account to be their only bank account. The Minimum Balance is Too High Some banks require anywhere between PHP 1, 500 and PHP 3,000 for general deposit accounts, although there are banks that actually offer deposit accounts – that earn interest – with no maintaining balance. Among these banks are HSBC, and Citi. Cannot Manage an Account There may be those among the people who do have bank accounts that cannot maintain it, owing to a multitude of factors. According to the survey, of those who do have deposit accounts, very few actually earn interest owing to the fact that deposits made do not meet the average daily balance. This may be a contributing factor as to why they may say that they cannot manage an account. Do Not Like to Deal with Banks or Financial Institutions This behavior comes…

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Why You Should Be Bookkeeping Your Personal Finances

Personal financial management may not be taught next to Math and English in schools, but that doesn’t mean it’s any less important of a subject to learn. Read More: Unaccounted Expenses That Burn Your Money On that note, bookkeeping shouldn’t be a practice reserved only for businesses—not only does bookkeeping help you keep personal finances separate from that of your business, but it also helps you manage your personal finances better, in ways we share with you below. It helps you identify your goals If you have debts you want to pay off or are trying to save up for a car, a house, or a dream vacation, it helps to identify them right away, and budget your money with a little less pain. Knowing what’s at stake will keep you focused on why you’re choosing not to spend on that cup of coffee and go for an instant instead, or why you’re not buying a new bag when your current one is just fine. It lets you solve the mystery of where your money goes Without keeping track, it’s impossible to remember what you spend on a weekly—let alone monthly, or yearly—basis. Before you can budget your money, you have to make sure you’re able to track what you’re spending on. A spreadsheet will help you track and categorize your expenses; just make it a habit to list your expenditures at the end of a day. You can collect all your receipts in a plastic envelope, or take pictures of them to take note of later. Make sure you do…

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5 Money Habits That You Got From Your Parents

Studies have shown links between genetics and money habits, but why do these matter? Understanding what drives us to spend, borrow or invest the way we do is not an excuse for poor financial planning. Rather, they provide solutions we can apply to counter these habits. Read More: 5 Habits That Will Stop You From Being Rich When it comes to financial decisions, both nurture (the way we were raised) and nature (genetics) play a big role. This is why parents are reminded to train children early to save and spend money wisely. Overspending This is a common habit shared by many people, including Filipinos. According to a study conducted by Hersh Shefrin, a Canadian economist known for his behavioral finance works, only 25 percent are born with a gene that tells us to stop buying what we should not be buying. This is why some are just better at self-control than the others are when they see something irresistible at a clearance sale. Before you have your brain tested for this, you should also know that you could trick your brain to be smarter when it comes to money matters, and science does prove this. We can actually come up with our own heuristics or rules-of-thumb based on experience, when we are facing financial decision-making. For instance, you can say that you only buy something you want as a treat for yourself because it’s your birthday, or you never shop during a sale because you have a tendency to buy what you don’t really need. Investing Behavior A study conducted by…

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The 5 Things We Love about the BIR E-filing System

Given the April 15th deadline to manually file your income tax, everyone was in a scramble to get theirs done by today. The additional fact that the electronic copy of your income tax form must be filed is enough to either confuse or downright cause rage in the average taxpayer. So let’s be real for a little while, and call a spade for a spade. Here are the five stupidest things about the new BIR E-Filing system. The fact that the extension applies to the e-filing A June 15 extension was given for filing the electronic copies of ITRs… But only if it’s of the “no payment” variety. This was done in order to allow the BIR to “concentrate on returns with payments”. But even if you don’t have to pay anything, you still have to manually file your “No Payment” ITR by today. The fact that manually filed returns need to be re-filed electronically Manually filed returns need to be re-filed electronically by June 15th, or penalties will apply, which differ from all other penalties already imposed on taxpayers should they be delayed in manually filing their ITRs. It defeats the purpose of actually going to your Registered District Office and standing in line for hours on end just to get it done. The conflict regarding its implementation It apparently takes about a month to activate a taxpayer’s e-filing account via their bank. If the point of the e-filing system is to lessen the burden of taxpayers, and prevent the “armageddon” that exists each time taxpayers have to file their ITRs,…

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Financial Tips to Follow for a Better Year

Financial education is often the first step towards financial freedom. Most people these days are taking steps to ensure that they live the latter parts of their careers in relative comfort, and are able to enjoy the perks of actually having a career. Read more: The Cost of Education in the Philippines and How to Prepare Financially Of course, not everyone manages to make it as easily as another. People move at varied paces and get work their way to financial freedom in different ways. If you’re curious how you can get started, here are a few financial tips from Coffee Bean and Tea Leaf’s Brew Your Best Year blog. Don’t apply for a credit card unless you know how to use it. They aren’t meant to be alternatives to cash. Develop plans for saving and spending. Keep it in mind that savings are put away before allocating your income to expenses. Have a budget. There are a lot of easy ways to track your budget and prevent you from living paycheck to paycheck. Organize your financial documents. Keep your bills – paid or unpaid – sorted, it’ll allow you to track your payments. Have strong goals. Keeping a goal in mind will help you track your finances as you work towards said goal. Inflation is a reality. No matter how high your salary increase is, the cost of living continues to rise. Explore investment options. There are plenty of ways to invest your money, hunting up options to do so is dependent on what you’re looking for. Once you have investments,…

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FWD Life and Security Bank tie up for insurance

Manila, Philippines – FWD Life Insurance Corporation (FWD Life), the life insurance arm of Asia-based Pacific Century Group, and Security Bank Corporation (SBC), the eighth largest private universal bank in the country, officially launched their bancassurance partnership, bringing a new experience to insurance services in the Philippines. Read More: SkyCable Forms SkyBiz for Corporate Clients The launch marks the rollout of selected FWD Life[1] products in all Security Bank[2] branches in Metro Manila. Customers will initially have access to two FWD Life insurance savings plans with attractive optional benefits. A number of additional products are also in the pipeline. Security Bank will make these insurance products easily accessible with dedicated FWD Life Financial Solutions Consultants (FSCs) present in each branch to provide professional advice on customers’ individual insurance needs. Security Bank President and Chief Executive Officer Albert Villarosa underscore how bancassurance aligns with the bank’s thrust towards BetterBanking. “We are happy that through this partnership, we are able to further strengthen our financial services portfolio. Offering insurance services to our bank’s customers is an integral and strategic aspiration for the bank. The partnership with FWD Life complements our goal to provide financial planning solutions and helps us offer attractive insurance propositions to our customers.” Villarosa adds, “Our extensive nationwide branch network makes financial services more accessible to customers. Given the dynamic economic landscape that our country has now, the insurance needs of Filipinos are also evolving and these needs are what we aim to fulfill.” FWD Group Chief Executive Officer Huynh Thanh Phong expresses his confidence in the partnership and how…

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8 Ways to Save Money for Your Dream Vacation

Wouldn’t it be nice to just hop on a plane on a Friday night, arrive in Tokyo or Sydney hours later, see the sights for the weekend, and be right back at your desk on Monday? Many of us share the urge to travel and see new places. With so many budget airlines making travel more affordable, going on a weekend trip is now more affordable than ever. Air miles you collect on your credit card are also useful for getting airfare discounts. Some destinations like Tokyo, Sydney, or New York are just more expensive than say, going on a trip to nearby countries in Southeast Asia. So how can you afford that dream vacation of yours? Ways to Save Money for Travelling 1. Keep Busy on Weekends What do you do on weekends? Go to the mall or eat out? Try keeping busy during the weekend by working on chores to keep you away from going out to the mall and spending money. The money saved could go instead to your travel funds. 2. Stop Food Waste Have you stopped to consider how much food you waste every day? In the Philippines, the amount of food wasted is roughly around 22 grams per person on a daily basis. That percentage mirrors the global stat which shows that roughly a third of the food produced for human consumption is lost. By getting sensible portions of food, you can cut down on food waste and even save money in the process. If you spend PHP 150 a day on food and…

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Senior Citizens Can Get Discounts on Utility Bills

If your parents or grandparents are already 60 years of age and above, that makes them a senior citizen. Most local governments have various benefits for senior citizens registered in the area. A notable example of this is the discounted (or free) cinema screening in Quezon City. You may have noticed too that they enjoy up to 20% discount on food and transportation. This is one of the benefits extended to them by Republic Act 9994, more commonly known as the “Expanded Senior Citizens Act of 2010,” which also exempts them from Value Added Tax (VAT) on all establishments. But did you also know that under R.A. 9994, senior citizens are also entitled to discounts on utility bills such as electricity and water? Related Articles: Senior Citizen Discount and Benefits: Important Facts You Might Not Know What Benefits Can Senior Citizens Enjoy in Your City? Your Guide to the Best Health Cards for Senior Citizens in the Philippines The Discount Provision Under this Act, a senior citizen is entitled to a minimum 5% discount relative to the monthly dues on electricity and water utility bills, providing that they reside in said household. The stipulation for the discount also states that the billing for either or both must be under the senior citizen residing at the address registered. One further stipulation is that that the monthly consumption does not exceed one hundred kilowatt hours (100 kWh) of electricity and thirty cubic meters (30 m’) of water. Note that this privilege is granted per household regardless of how many registered senior citizens are residing there. A second discount of…

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Financial Discussions with your S.O.

When your girlfriend blows her salary on another pair of shoes, or when your boyfriend maxes out his credit card to buy the latest video game console, what do you do? Keep mum about it, most probably. This isn’t surprising, though, as our society isn’t particularly open about discussing money—we’re either too embarrassed about having too little or too much of it. Here’s why you should be having financial discussions with your Significant Other. Silent Frustration That being said, you have to discuss money with your partner. After all, if you cared about someone, wouldn’t you want them to avoid financial ruin? Moreover, money problems have a way of squeezing the life out of even the best relationships. Read More: Should You Merge Your Finances After Marriage? Broaching this prickly topic is never as easy as it sounds, though. That’s why MoneyMax.ph offers a few tips to help you navigate this awkward but inevitable conversation: Is Now the Right Time? The perfect time to discuss financial matters with your sweetheart is when your relationship takes a turn for the serious. At this point, you’re far enough into your relationship to warrant having the talk, but not too far into it that you can turn a blind eye on bad money habits. Keep it Cool Avoid having this discussion when you’re miffed about your partner being too thrifty or spendthrift. Find a time when you’re calm before approaching him or her—a hot head never helped a couple communicate better. It’s All in the Approach When you’re discussing a topic as uncomfortable as…

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Subdued Inflation to Allow for Economic Growth

As the first quarter of the year enters its second month, the lowered price of fuel is likely to be cause for monetary authorities – such as the Bangko Sentral ng Pilipinas – to ease up on various policies and allow for further economic growth. What this means, according to financial giant JP Morgan & Chase, consumers will likely benefit more should the BSP ease policy settings. The bank also stated that their economics team expects the oil prices to keep inflation in check and have “penciled in” cuts to reverse repurchase (RRP) and special deposit account (SDA) rates in the second half. A note to clients over the weekend also explained that they believe that “this bodes well for the country amid diverging global monetary policies and uncertainties surrounding expectations of a US Fed rate hike.” BSP Governor Amado M. Tetangco, Jr. also said that a benign outlook on inflation for the year would also allow the central bank to keep rates steady. The BSP has also declared that January presented a decelerated inflation rate, its apparent slowest in the last half-decade. The bank is set to have its first policy stance meeting on the 12th of February and may discuss cutting down the benchmark rates for the SDA by 25 basis points, and may expect a similar cut for overnight borrowing rates – currently at 4 percent. With these benchmark rates cut, interest rates across the country may also be lowered, allowing for a greater boost in government spending. JP Morgan further stated that thanks to cheaper oil,…

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5 Best Books on Money Management

Learning to manage finances isn’t an inherent skill in everyone. Some people are more capable at it than others, but everyone can always learn more. It doesn’t matter whether you’re a college kid trying to save up for your future, or someone with a career; there’s always room for a little more knowledge. While there are plenty of books on money management and personal finance, here are five books that should be on your list. While the title may imply that the book is a how-to on getting rich, this 1937 self-help book explains a series of philosophies to help one succeed in any endeavor; be it their career or managing their finances. Originally written at the suggestion of steel magnate and millionaire Andrew Carnegie, it also interviews a series of millionaires and philanthropists, and is largely considered the pinnacle of self-help books. The best-seller from the renowned financial literacy activist discusses financial independence through making smart investments and investing in real estate. He draws parallels between the advice he gives and his formative years in Hawaii – the rich dad and poor dad of the story being two key figures in it as well. Suze Orman is no stranger to writing about managing money, and this book is tailored to helping “generation broke” with a whole plethora of topics, ranging from credit card debt to buying your first house. She also discusses the financial issues of the self-employed, and how to handle your first job. Other books in her repertoire are less youthful in comparison but offer fantastic advice as…

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