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Regardless of where you are in your life, this article can teach you something about money and how to better prepare for your future. According to the national average, most people have $10,000 in credit card debt, and savings rates are dropping. This information can help put things back on track so that you have a more fulfilling financial life.
Research has consistently demonstrated that relying on conscious effort alone when it comes to investment often leads to initial good intentions but eventual failure after a few months. However, implementing automated savings methods, such as utilizing your employer’s 401k plan, a self-employment plan (SEP), or setting up direct deductions from your account, can prove advantageous. The underlying principle is that if you’re not actively seeing and realizing the deductions, you’re less likely to miss or be affected by them. Moreover, some of these deductions can decrease your taxable income, resulting in additional tax savings (consult your CPA and tax advisor for more detailed information on this matter). As a general guideline, it is advisable to set aside approximately 10% of your income for savings purposes.
If you haven’t bought a house yet, do it. Renting won’t make your landlord rich – buying will be the best long-term investment for you. Mortgage interest is tax deductible, so real estate always goes up in value, and people will need housing forever. Just watch HGTV; real estate has made many millionaires over the years and is an important part of most TV shows on wealth accumulation. Stick with a standard 30 year fixed mortgage – it’s good advice no matter what happens in the market.
If you love your family, they are a must. But don’t get stuck relying on them forever. You should also have life insurance in case something happens to them. A 20-year policy will be enough coverage, and if you follow these tips, you won’t need anything more than that. Whole life insurance can cost a lot of money, and it doesn’t offer much value for the high costs involved. Term life policies are available cheaply over the internet and often have great savings compared to other options like whole life or employer plans. In most states, Blue Cross & Blue Shield offers good health insurance plans that are far cheaper than Cobra or company-sponsored plans. If you already have an adequate job-based plan, stick with big name companies like Blue Cross since they’ll be around for years to come
Buying a car can be a costly mistake. Not only will you pay for the depreciation that occurs the moment you drive it off the lot, but also on your insurance and taxes. Another important thing to remember before buying is to Get your credit score so you know what loans are available to you. This information can easily be found online, which would save you money at your local dealer.
There are many ways to reduce or get rid of debt. If you’re overwhelmed with high interest credit card bills, there are organizations that can help negotiate lower payments and new terms for your debts. It’s important to have a plan in place so you can pay off your highest-interest loans first. Be wiser about what purchases you make – do you really need that big screen tv? a car that costs more than you can afford? Make cuts to all other cards but one (for emergencies only). The main purpose behind store cards is to tempt people into buying more, which often leads them into deeper financial trouble. My grandfather always said: “If it’s too expensive, don’t buy it.” You should only take on a loan if necessary – mortgage rates are currently low compared to the alternatives.
If you leave your current job, be sure to do it on good terms. If time permits, find a replacement. This will put you in a good light with your former management and could result in future favors. Never leave on bad terms – that would reflect poorly on you and might not even benefit you financially. It’s always polite to take an old colleague or customer out for lunch occasionally; this can help you keep up with the industry and give you new contacts that may come in handy later. – think of all the lobbyists working in Washington! Don’t be afraid to ask for a favor from someone once in a while- by helping others, you help yourself too.
Donating time and money to help others is the right thing to do. You will feel good, and karma dictates that you will receive more than you give in return. It’s easy to volunteer your time- even for just one hour a week- and it can make you a better person in the process.