- Save for emergencies : Whether you save 3, 6 months, or a month worth of living expenses, save for emergencies. Otherwise, u are living paycheck to paycheck
- Pay yourself first! If U wait until U have met all Ur other obligations before seeing what is left over for saving, U may never have healthy savings or investments
- Set aside a min of 5% to 10% of Ur salary for savings B4 u start paying your bills. Have money deducted from your paycheck & deposited into a separate account
- Employment benefits are worth big bucks. Maximize yours by taking advantage of the ones that can save U money by reducing taxes or out of pocket expenses
Insurance
- Do not forgo necessary insurance. A serious emergency could leave u penniless. Besides, knowing u r insured gives u the confidence to plan & invest boldly
- Many insurance companies offer significant discounts when you bundle your insurances with them. Go with the company that offers the best overall plan.
Investing
- Start investing today : It may not be a lot of money at first, but even a little adds up over time. Pick sound mutual funds or stock and bonds to invest in.
- Live below your means & save. Investing for the future is only possible if you have some money left over at the end of each month to sock away
- Keep enough cash available worth 6-9 months of living expenses. With extra cash available, you can avoid selling investments to pay for expenses in an emergency.
- Over the long term, stocks have historically outperformed all other investments. Do not simply pack your money in a bank savings account; invest in shares & bonds
- Inflation may be the biggest threat to your long-term investments. So its important to put your retirement investments where they earn the highest long-term returns
- Do not let the fear of losing money, fear of failure, or fear of the unknown stop u 4m investing. After all that is the only way u will multiply your money
Banking
- Always read the fine print on any loan agreement or credit/debit card information especially details about interest rates, late fees, cash advances costs
- Consider Leasing if you own a business: Y ou can write off portion of your lease payments, including fuel, but more, you get an interest payment exemption
Money management basics
- Ensure that necessities fall within after-tax income. Make sure their total cost is less than your take-home pay. If it is not, can you cut back somehow?
- If u are having trouble making ends meet & cant reduce the cost of your necessities, its time to involve a longer-term strategy like getting a 2nd degree or job
- No job is truly guaranteed, & thus neither is your next paycheck, making the goal to fit your expenses into your current income an important one.
- Get beyond the next paycheck mindset. If u always think about your next paycheck, then u r burning up your current one & spending the next one before u even get it
- Do not be in a hurry to pay your bills: Hang on to that cash for as long as possible, coz it is in your money market account earning you healthy interest
- Keep track of your net worth : Your net worth is simply the value of everything you own less the amount of all your debts.
- Prepare for periodic expenses : Car insurance, life insurance, Christmas and other gifts, car repairs and the like never come at a convenient time
- Keep all of the money in your money market account, and only transfer what is needed to pay bills, etc. do not live money lying idly in your account
- Talk to your kids about money – Its important for parents to actively engage and talk to their children about money. They wont get it at school
- Take advantage of the Internet . It provides tools to help manage your money, but u can also to access your checking account, view your investments, etc
- When you get a raise, you should consciously choose how you will spend the extra money. Keep in mind that your raise wont be nearly as much after taxes
- If you go from being a homebody to party animal, or start dating someone new, your financial situation will change too, for better or for worse. Beware of that
- Any time you change your habits, you will see a corresponding change in your finances, sometimes giving you more money, and sometimes less.
- After getting rid of a major expense like a mortgage or college fees, there is extra money left. Your budget & financial goals can guide you on how to invest it
- There are always items you are going to need every year like cards & batteries. Plan ahead and shop for these items well before the holiday shopping season
- In stores, cheaper items are usually placed in the least visible or least convenient location so you will go for the more expensive, prominently placed items
- Retailers generally put the most work behind selling items that yield higher returns. Start your shopping at the back of the store and work your way to the front
- When cutting costs, look first for small savings, not because they will end your budget problems, but simply because they r easy to find & take advantage of
- A house that is too large, a car that is too luxurious or a lifestyle that is too lavish for your income causes the most common spending problems.
- Cut your taxes. Usually this means taking advantage of itemized deductions & is a lot easier to do if you are either self-employed or have some outside income
- Reduce larger expenses. If you smoke, for instance, take steps to quit. Trade in your luxury car or SUV for something a lot cheaper to buy, fuel, and maintain
- Get paid what U r worth & spend less than U earn. Know Ur jobs worth in the marketplace; evaluate Ur skills, productivity, job tasks & contribution 2 da company
- No matter how much or how little U r paid, U will never get ahead if U spend more than U earn. Little cost cutting in a no of areas can result in big savings
- Only buy things that u need. I know this can be hard to do, but you need to cut back on buying things that u want. It takes sacrifice to save your money
- Do not use money to make yourself feel good. Instead, do things that promote self-respect & creativity so u do not have to seek those feelings thru spending money
- If you are worried about ever being able to amass enough money to retire, consider taking on a second job or small business and investing your earnings
- Evaluate the asset allocation of your portfolio. Are u being conservative by acquiring only fixed income investments OR taking more risk than u r comfortable with?
Debt management
- Do not go into debt for things that are not long-term investments like a home. Consumer debt will strike a major blow to your finances.
- Buy a home and live in it a long time : Long-term ownership of real estate can build substantial wealth; renting never will.
- Pay off high-interest debt. Any debt that costs more than you can earn from your investments after taxes should be paid off as quickly as possible.
- Some debt is good. Borrowing for a home or university usually makes good sense. Make sure you do not borrow more than you can afford to pay back.
- The best way to start reducing debt is to set up a budget. You will need to add up your income and subtract your expenses, then set up a plan
- Use your budget to help you plan your debt-reduction strategy. List all your debts, pay down the highest-rate balances while making on-time minimum payments on the others.
