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Basic Beginning Financial Steps:
- Spend Less Than You Earn: It may sound simplistic, but many people struggle with this first basic rule. No matter how much or how little you're paid, you'll never get ahead if you spend more than you earn.
- Stick to a Budget: How can you set spending and saving goals if you don't know where your money is going? You need a budget whether you make thousands or hundreds of thousands of dollars a year.
- Pay Off Your Credit Card Debt: Think of the things you could do with your income if you didn't have those credit card payments to make. That 10% savings the departments store gives you that day you open the account turns out to be more expensive once interest is figured in. Infact, just cut those puppies up.
- Have a Savings Plan: You have to have an emergency fund so that when life happens, you don't end up in debt. If YOU don't have a plan for emergencies, the credit card companies DO.
- Contribute to a Retirement Plan: If your employer has a 401(k) plan and you don't contribute to it, you're walking away from one of the best deals out there. Ask your employer if they have a 401(k) plan (or similar plan), and sign up today. Also look at IRAs. There are Traditional and ROTH IRAs. A qualified professional can help you decide which is best for you.
- Review Your Insurance Coverages: Lots of people are talked into paying too much for life and disability insurance, whether it's by adding these coverages to car loans, buying whole-life insurance policies when term-life makes more sense, or buying life insurance when you have no dependents. On the other hand, it's important that you have enough insurance to protect your dependents and your income in the case of death or disability.
- Keep Good Records: If you don't keep good records, you're probably not claiming all your allowable income tax deductions and credits. Set up a system now and use it all year. It's much easier than scrambling to find everything at tax time, only to miss items that might have saved you money.
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