- Share This Post
- Pin It
- 2
-
Sparkle (0)
In the past few months, I've been cooking more - much more - at home and baking from scratch. Aside from the savings I've gained by making my own meals, cooking at home is better for you because you have more control over the ingredients (although when it comes to cupcakes... that conclusion might not hold. Butter is butter, right?).
The most important thing I've realized from cooking (this ties in to personal finance, I promise!), however, is that I have more of an understanding of what goes into certain types of food. Take, for example, hollandaise sauce. This creamy sauce is a popular topping for eggs benedict and steamed asparagus. It's delicious. But after making it once I know that I really shouldn't have it more than once in a blue moon. Why? Because the hollandaise sauce is basically egg yolk and butter. Lots of egg yolks and LOTS of butter. My heart clogs a little just thinking about it.
Of course, if I read recipes about the hollandaise I could see its composition without making it myself. But the act of breaking apart 8 eggs and whisking it with sticks and sticks of butter and still have to open a new pack just made me realize how much fat (delicious fat) it's made of.
The same goes for personal finances (there's the connection I promised you earlier). There are a myriad of tools such as online calculators, books, and blogs out there to help you assess the state of your finances. There is also an army of professionals (tax experts, investment advisers, estate planning lawyers, etc) who would be able to advise you. In a household there might be individuals who have more of an interest in taking charge of the investing / budgeting / bill-paying, etc. Your wife might be the investment manager for the family. Your husband might be in charge of monthly bills.
But, until you become an active participant in managing your finances - the tax-planning, estate-planning, and investment process, etc., you won't truly understand what is going on with your money - where it's going, what's your return, and how it's utilized.
This doesn't mean that you shouldn't hire the people with appropriate expertise or that you should do everything yourself. Indeed, knowing when and how to hire good people are one of the reasons how people can manage their finances successfully.
If you have a complicated estate situation (where you want to establish a trust or leave an inheritance, for example), a competent estate lawyer who can set up a favorable tax structure will be worth every penny of her $300 per hour fee. If you are running a small business, a trustworthy tax advisor can guide you through complex tax rules and help you avoid a visit from the IRS and its ensuing headaches. Hiring experts, however, doesn't mean that you shouldn't understand how your personal finances work. The Madoff scandal has taught investors everywhere that blind trust in experts is a dangerous proposition.
For 2010, make it a priority to understand your finances from the inside out. Know what important tax information you have record, make sure to carefully vet your investment professionals or investment firm, and remember that no one will keep a closer eye on your money than you will. No one will care about your money as much as you care.
http://wellheeledblog.com http://twitter.com/wellheeledblog Savvy Living Through Personal Finance
