Friday, May 5th, 2017
Have you heard about money clubs? They're like book clubs, but instead of getting together to talk about books, the subject is personal finance. The idea is for everyone to become financially smarter by sharing knowledge in a relaxed, social setting.
Meetings can be at someone's home, a restaurant or at a different location each time.
Unlike investment clubs, which charge a membership fee and pool members' money to invest in companies or stocks, money clubs are generally free to join, and members don't do any purchasing or investing as a group.
And unlike share clubs — where people discuss their individual stocks and shares — money clubs cover a whole slew of financial topics, for example: reducing taxes, saving on weekly groceries, retirement planning. Members also share personal stories, discuss financial books and sometimes invite guest speakers. They celebrate their successes, sympathize over their troubles and try to have some fun.
The Pros and Cons
What's nice about money clubs is you don't have to know a lot about money to join one. So if you're new to the money game, it's a great chance to learn and be inspired on a regular basis. Hearing how someone else got out of their own financial mess might show you a path out of your own, or learning some quick money saving tips can help free up cash. You may get useful information about how to reduce your income tax, or names of financial books and websites that can help you become more financially savvy. Best of all, you can find people who will hold you accountable to your financial plan, as in: "No, Joan, forget about blowing that holiday bonus on new clothes — stick it in your emergency fund!"
On the downside, be aware that money strategies you hear about at club meetings that worked for one person may not be right for you. In addition, not everyone is comfortable revealing personal financial information to a group of people, especially strangers. For this reason, some money clubs now have formal agreements to not disclose anyone's personal financial information outside the group. Money clubs also take time and commitment, and you may find over time that clubs can fizzle out.
Finding One to Join
While finding an investment or share club is pretty easy, money clubs are harder to find because of their informal nature. Most don't have a website or even a Facebook® page. In addition, many clubs like to restrict their numbers — as in 6 to 10 people — so that everyone has a fair chance to participate. You can ask people in your social and professional circles if they know of any that are accepting new members. Before committing, see if you can attend one meeting first as a guest to make sure you're comfortable with the group. Also, consider what you want to get out of it, how much commitment it'll take on your part, and whether the meeting times and location work for you.
Starting Your Own
If you can't find a money club to join, you can always start your own. The Women's Institute for Financial Education has an entire webpage dedicated to money clubs and offers step-by-step guidance on the process.
They may not be for everyone, but if you like talking and learning about money in a casual environment, it may pay for you to join or start a money club.
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