Do you like working out?
A lot of people certainly do, and in this day and age in which there seems to be a greatly-heightened consciousness about health habits and overall well-being, regular exercise is something that all Americans, both young and old, seem comfortable incorporating into their lives.
Well, according to one Ph.D. economist, those same Americans could look forward to having just as rosy an outlook when it comes to their financial health if they approached their finances just as they approach exercise - ritualistically.
In an article over at CNBC.com, Annamaria Lusardi, the chair of economics and accountancy at the George Washington University School of Business, says that is precisely how everyone should handle their money.
“We don’t floss, we don’t eat well or exercise as much as we should. Personal finance is the same. We need to put time aside to do it well,” says Lusardi, who has taught at the world’s most prestigious business schools, including Columbia Business School and Harvard Business School.
“If I don't pay attention, I’m likely to spend more,” she says. “Ignorance is not bliss. Inaction is not bliss.”
As she goes on to mention, looking at elements of one’s financial profile each day is not simply about ensuring against overspending. It is also about being a good steward of long-term investment accounts, like retirement plans, including making certain that enough money is being set aside into them on a regular basis.
“I didn’t take advantage of many opportunities, like maximizing a 401(k),” Lusardi says, referencing her own early money mistakes. “We all have a great asset, which is time. Time works in our favor because of interest compounding.”
By Robert G. Yetman, Jr. Editor At Large