Monthly Archives: May 2010

Top Ten Financial Tips

Thinking about improving your financial situation is a good decision to make at any time of the year; many people find it easier to make it at the beginning of the year. It’s not important when you begin. The basics still remains the same. Here are the top ten strategies that will keep you stable financially.

1) Get paid what you are worth and spend less than you earn It looks very simple when you read this line, but most people struggle through this first basic rule. Know the worth of your job in the marketplace. Evaluate your skills, productivity, job tasks, contribution to the company, and the going rate, both inside and outside the company, for what you do. If you are getting less paid, it will have a downward effect in your working tenure.

Once you have determined your earning potential, don’t spend more than what you earn. You will never get ahead in life. It’s very easy to spend, but it takes a lot of time, patience and skills to earn. A little cost-cutting effort in a number of areas can result in big savings. You don’t need to make big sacrifices all the time.

2) Stick to a budget Everyone needs to do a proper budgeting of their finance to know the inflow and outflow of your money. It will be tough to set spending and saving goals if you don’t know where your money is going.

3) Pay off credit card debts credit card debt is the number one obstacle to getting ahead financially. Credit cards are so easy to use and it’s even easier to forget that it’s actually real money and needs to be paid when payments are due. If we don’t pay in time, we end up paying the principal at highest interest rates and fees that could have been saved otherwise.

4) Contribute to a retirement plan if your employer is providing you a 401(k) plan and you are not taking the benefits, you are walking away from one of the best deals. If your employer has such plans, sign up for it today. If you are already contributing, try to increase the contribution. It will help you only after retirement. If your employer doesn’t offer a retirement plan, consider an IRA.

5) Make a savings plan Pay yourself first! If you wait until you have paid all your debt obligations and then see whether there is any amount left for saving, chances are that you will never be able to make a healthy savings account or investment. Always try to set aside at least 5% to 10% of your salary before staring to pay the bills and utilities.

6) Keep investing first try to put money as much as possible towards a retirement plan and a savings account, and then see if you can stretch more towards making some investments. Your finance will get all better in your future.

7) Employment benefits Employment benefits like a 401(k) plan, flexible spending accounts, medical and dental insurance, etc., are quite expensive. Make sure you’re maximizing yours and taking advantage of the ones that can save you money by reducing taxes or out-of-pocket expenses.

8 ) Insurance cover you need to have enough insurance for yourself and your family to get protection in case of death or disability.

9) Update your Will protect your loved ones. Write a will. Most people in US don’t have a will. But if you make one, this will be for good reasons and beneficial to your family members.

10) Keep good records Always do book keeping perfectly. If you are not doing it, you are probably not claiming all your allowable income tax deductions and credits. It will be much easier instead of scrambling to find all the details during filing taxes. There will be chances to save more money if you have every income and expense documented.