A Journey to Financial Security
It would help if you planned for your success; failing to do it will cost you. This edition looks at how you can make true your dreams of financial independence.
It all begins with a Financial Plan. What are the things you want to save and invest in?A home, car or retirement? Make your list starting with the most important goals. Decide how many years you have to meet each specific goal because when you save or invest, you’ll need to find a savings or investment option that fits your time frame for meeting each goal. Many tools exist to help you put your financial plan together.
Know Your Current Financial Situation. Take an honest look at your entire financial situation. You can never take a journey without knowing where you’re starting from, and a journey to financial security is no different. You’ll need to figure out on paper your current situation—what you own and what you owe. You’ll be creating a “net worth statement.” On one side of the page, list what you own. These are your “assets.” And on the other side, list what you owe other people, your “liabilities” or debts.
Know Your Income And Expenses. Keep track of your income and your expenses for every month. Write down what you and others in your family earn and then your monthly expenses.
Pay Yourself or Your Family First. Many people get into the habit of saving and investing by following this advice: always pay yourself or your family first. Many people find it easier to pay themselves first if they allow their bank to automatically remove money from their paycheck and deposit it into a savings or investment account.
Finding Money to Save or Invest. If you are spending all your income and never have money to save or invest, you’ll need to look for ways to cut back on your expenses. When you watch where you spend your money, you will be surprised how small everyday expenses you can make without adding up over a year.
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