As the global economy flounders, making ends meet is often an exhausting, never-ending task. Though there are many factors in making a decent living, some primary keys to financial success are these:
First, Deborah Fowles of About.com says “Get paid what you’re worth, and spend less than you earn.” Of course, the first tip seems obvious and simple, but it is actually one that is most struggled with. It is important to know the worth of your skill or position in the marketplace, and regularly evaluate your capabilities, efficiency, productivity and contribution to your workplace. Even small salary increases can make an impact in the long run.
Spending as much as, or more than, you earn is also a major issue when it comes to your savings and financial security. Spending less is almost always easier than earning more, so spending responsibly can lead to significant savings.
Second, is a budget. Stick to it. Budgeting will help you keep track of where your money goes, as well as manage spending and savings.
Third, get rid of credit card debt. Pay it off. Now.
Fourth, reconstruct or evaluate your retirement plan. Generally speaking, the majority of your investments should be in stocks. If you’re in your 20s or 30s, try to keep even 80% in stocks and the rest in bonds. As you age, slowly shift from stocks to bonds, since stocks yield higher returns only over longer periods of time.
Be careful not to move from retirement accounts or stocks to “safe” money market funds, even if your accounts are down. Your investments buy additional shares of your retirement funds, and the more shares you own, the more you will have when the market picks back up.
Fifth, if you don’t have a retirement plan, get one. One of the best deals available today is a 401 (k) plan, so find out if your employer has it, or something similar today.
Sixth, commit to a savings plan. In order to may it effective, be sure to ‘pay yourself first’ by setting aside 5% or 10% of your salary before you even glance at the bills. The best way to do this is to have the bank deduct the money automatically, and place it in a different account.
Seventh, don’t go overboard with your insurance coverages. Keep an eye on them, and update your plan as your life changes.
Eighth- Invest, invest, invest. If you’re already contributing to a retirement plan and a savings account and can afford to put a little more away, investment is the way to go.
And ninth, keep a detailed record of all of your finances. This will help you cut back on costs, find more effective plans or strategies, and also define goals and efforts for future savings.
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