One of the great things about personal finance is that it’s, well, personal, and with that come varying degrees of strategies employed to make sure everything is in order. After recently reading Ramit Sethi’s I Will Teach You To Be Rich, and am now in the midst of Grant Sabatier’s Financial Freedom, I’ve become intrigued to learn more about the various strategies available to obtain financial security. There are, however, some steps that remain tried and true.
From Jonathan Pond’s Ponderings:
F FORMULATING OBJECTIVES. You can’t get there from here unless you establish some important personal financial planning objectives, both for the near term and later on.
I INSURING THAT YOU HAVE ADEQUATE INSURANCE. Always maintain continuous and comprehensive insurance coverage.
N NEVER GIVING UP CONTROL OVER YOUR MONEY. Don’t let other people tell you what to do with your money before assuring that they have your best interests in mind. You are your own best financial planner.
A ALLOCATING YOUR INVESTMENTS APPROPRIATELY. Deciding how to apportion your investments among stocks, interest-earning securities, and real estate is crucial to your investment success.
N CREATING A NEST EGG. There’s nothing like money in the bank to give you financial peace of mind. Kick the spending habit and get hooked on saving regularly.
C COPING WITH MAJOR LIFE EVENTS. Life deals each of us a variety of cards – some are good and some are not. Preparing for the unexpected helps minimize financial disruptions.
I INVESTING WISELY. Learning about how to invest and putting your knowledge to work are two of the most important ingredients to your achieving financial security.
A ASSURING THAT YOU MINIMIZE INCOME TAXES. Income taxes take a large chunk out of your income, and there is no reason to pay any more than the minimum that the law obligates you to pay.
L LEARNING TO LIVE BENEATH YOUR MEANS. The only way to accumulate the investments necessary to achieve financial security is to spend less than you earn, and the only way to spend less than you earn is to live beneath your means.
S SETTING YOUR RECORDS STRAIGHT. Organize your records and prepare personal financial statements to get a better handle on your finances.
E PLANNING YOUR ESTATE. You’ll not only be doing your heirs a big favor by preparing the necessary estate-planning documents, you will also benefit during your own lifetime.
C MEETING COLLEGE EDUCATION COSTS. The best way to meet college education costs is to undertake a realistic savings plan when the kids are young, then become familiar with the financial aid process as they near college age.
U USING CREDIT WISELY. Credit can be useful to achieving financial security, or it can destroy your financial security. It all depends on how you use it.
R PARTICIPATING IN RETIREMENT PLANS. Maximize your participation in tax-advantaged retirement plans to help assure a comfortable retirement.
I INVESTING IN YOUR CAREER. Devote the time necessary to improve your skills and advance in your career. Your career is your most important income-producing investment.
T TAKING THE TIME TO ATTEND TO YOUR FINANCES. The time you spend to work on your personal finances is always time well spent.
Y YOU’RE RESPONSIBLE FOR ACHIEVING FINANCIAL SECURITY. It’s up to you to take the actions necessary to achieve financial independence.