Valuable Savings Strategies and Planning Goals

1. Start Saving: Experts suggest that you start small by saving 10% to 15% of your net income each month. Establish a separate savings account, and get into the habit of putting small amounts of money away each month. It is easier to save small amounts instead of large lump sums.
2. Enroll into a 401 (k) plan at work: Try to put away a minimum of 5% percent of your gross income into a 401 (k) plan each month. In many cases your employer will match up to 50 cents on the dollar, which gives you an immediate return on your money.
3. Keep track of Your ATM Withdrawals: Entertainment can drain your account. It’s easy to access money from an ATM machine. You should set up a separate entertainment account that is only hooked up to your ATM. Over time, you will get into the habit to spend within your budget.
4. Credit Card: Interest on credit cards is not deductible. Always try to pay more than the minimum payment each month, and try not to be late with your payment. Late fees can increase your balance. In addition, stay within your credit limit. If not, you could be charged an over-limit fee.
5. Automatic Investment Plan: Speak to your local bank and see if you can arrange for your bank to draft $25 or $50 or $100 each month from your bank account and deposit it into an investment fund account. You work hard for your money. It’s time to have your money work for you.
6. Mortgage Payments: If possible, try to pay extra money each month to your principal balance or make an extra mortgage payment within the year. This will cut years off your payoff time and save you thousands in interest over time.
7. Car Loans: Interest on car loans in most cases is not deductible. You should, if possible, make larger payments each month to pay off the loan. If you have equity in your home, it may be an option to take a loan against your equity and pay off the car loan. In this case, the interest may be deductible on your home equity loan.
8. Open and IRA: Setting up a Roth IRA may be one of your best options. In a Roth Ira, you contribute after-tax dollars and when you reach retirement you can withdraw the money tax-free. You may be able to contribute to a Roth IRA even if you have a company 401 (k) plan. Many people set up a Roth IRA when they are maxed out in contributing to their 401 (k) plan.
9. Term Life Insurance: If you are paying for annual renewable life insurance, you should consider changing to a level (10, 15, or 20 years) term life insurance policy. Shop around. Call a local insurance broker, not an agent, and ask them to give you a comparison of companies and their rates.
10. Money Management: It is important to know where you spend your money each month. People who keep track of their spending keep themselves in the black and from having financial problems.

• Step 1: Use a computer to get organized. You should consider purchasing a financial software package like Quicken or QuickBooks to organize and list all of your monthly bills, home furnishings, assets, bank accounts and investments. This program also allows you to print checks from your printer. You can purchase this program at any computer or office supply store.
• Step 2: Prepare a livable household budget. Budgeting is the key to living a life free of debt. There are many budgeting programs on the market that you can use, such as Quicken to help you get your budget under control. This program allows you to track monthly expenses as well as control spending.
• Step 3: Prepare for emergencies: You need to set aside a minimum of two month’s worth of income in a savings account. Emergencies can pop up when you least expect it. If possible, you should set aside as much as four months’ worth of income in case you lose your job.
• Step 4: Review your will and keep it updated. If you do not have a will, it’s critical that you have one prepared, particularly if you have children. It’s important to review your will each year and update, especially if you have a child since you last reviewed your will. You should contact an attorney for information on wills, or you can contact a pre-paid legal companies like Pre-paid Legal.
• Step 5: Take control of your credit cards. If you are making minimum payments each month, it could take you 20 years to get out of debt. Consider speaking to a Credit Counseling Agency for consolidating credit cards into one payment as well as setting up a repayment plan with lower payments and interest with your creditors. Most consumers enrolled in a credit counseling program can be out of debt within 48 to 60 months.
• Step 6: Establish Savings: Goals help you focus on priorities and offer a vision of what you really want out of life. Whether it is your retirement, a house, a car, or that vacation, you need to start preparing today. (As an example, if you’re 35, you’ll need to start with $50,000 in savings and consistently put away $11,000 a year for 20 years to have $1 million dollars when you are 55 years old). It’s never too late to start. You may want to seek the advice of a financial advisor company such as Morgan Stanley, Merrill Lynch, etc., for information on financial planning.
• Step 7: Set up an investment account. Where to start? The place to start is with your employer. Make sure that you enroll in the company’s 401 (k) retirement plan. Second, you may want to open a managed account with a financial advisor company like Morgan Stanley, Merrill Lynch, etc., These companies will help you create an investment portfolio, stocks, bonds, mutual funds, etc., to fit your investment needs.
• Step 8: Build your net worth and track your investments. Retirement always comes sooner than you plan. Some experts believe that Social Security will be bankrupt by the year 2015. If this is true, you need to take control of building your net worth and making sure that you spend your money wisely on items that will build net worth; Real Estate, stocks, bonds, CD’s, annuities, etc. Buying cars, water sport toys, jewelry, etc., does not build net worth. These items are luxuries that usually depreciate in value.
• Step 9: Protect your family, home and assets with insurance. Life insurance is designed to protect what you have worked so hard in your life to build, which is true net worth. It’s important that your family maintains your true net worth in the event of death. Most people today don’t have enough life insurance to fully protect their true net worth. For Example, if your annual income is $60,000, you should purchase 10 times your income of insurance, which would be $600,000 of life insurance. The younger you are, the less expensive it will be.

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