Keeping Your Personal Finances In Shape
While it’s highly recommended that you use a Certified Financial Planner (r) professional to grow your investment portfolio, there are a lot of things you can do before you ever speak to a financial advisor to grow and maintain your investment portfolio. Investing, like everything else in life, has no guarantees, and even the hottest stock or the best tip may not always perform the way we would like it to at times. Keeping that in mind, here are a few things you can do (or not do) when starting out on your investment journey.
Set Financial Goals
Where do you want to be one year from today? How about in five years or maybe even ten years from today? Time goes by so much faster than you could possibly imagine and that five years will pass before you know it. If you want your world five years from now to look significantly different than the one you currently inhabit, start making your savings and investment decisions with the end goal of making that fictional world a reality.
Start Saving Now
Don’t wait to start putting money away. Sure, your salary may be insignificant right now, but if you’re lucky enough to have the opportunity to stash money away in a 401(k) through your employer, don’t let that chance slip by you. Additionally, many employers offer a match of anything you contribute, so you certainly don't want to leave that money on the table. Even if you can only swing 2%, sign up today.
Open A Roth IRA
If you don’t have the option to contribute to a 401(k), open a Roth IRA. While the maximum contribution levels are lower with a Roth IRA, they both allow you to save. Although you’ll contribute to a Roth IRA with after-tax funds upfront, there are no taxes due on withdrawals (if certain criteria are met) and any gains to the account are tax-free.
Stop Making Emotional Financial Decisions
It’s so easy to fall in love with that palatial home in an upscale, gated community, or that hip penthouse in the middle of the city. But what does that mean for your financial health? Will you be ‘married’ to that home for the next thirty years and in essence be unable to save much financially since all of your money will be tied up in your home? Instead, buy that cute starter home that allows you to have a place of your own, yet doesn't cripple you financially.
Pay Off Credit Cards Every Month
Use your credit card the way it should be used; as a substitute for carrying cash around town. That means only using it for purchases that can be paid off at the end of the month. It’s so easy to start using a credit card for that coat we fall in love with or tickets to that big game, but when the bill arrives at the end of the month, panic can quickly set in and send you scrambling for resources . Get in the habit of only using your credit card for purchases that can be paid off at the end of the month. This will keep your credit usage down, (and your credit score up), while eliminating the need to pay high interest rates on those purchases.
Start A Financial Plan
Take the time to seek out a Certified Financial Planner (r) professional and begin to create a financial plan for your future. Seek professional advice and stop listening to your co-workers, your brother-in-law, or your best friend when it comes to financial advice. You won’t regret it.
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2023 Advisor Websites.