My family and close friends believe I am never worried about finances. And although they haven’t vocalized it, I think that they think I either make more money than the Government can print, or am completely financially irresponsible or that I am God.
Neither applies to me, and there is no SECRET either in my opinion to how to live a healthy financial life. Now I am not a personal finance Guru, but I do follow a fair share and have yet to come across a secret recipe.
Everyone seems to preach conscious and responsible financial behavior. I don’t think it gets simpler than that. And without getting into the fine details and turning this into a 9 page post, I have summarized the steps that I feel one must take to rid of financial stress.
What: EDUCATE YOURSELF ON BASIC FINANCES (Your FICO score, saving, investing, income taxes)
How: Pick up a book on personal finances. Subscribe to one of many blogs and podcasts series. Watch the candy they show on CNBC. Make it an ongoing quest to learn about a new topic each time.
What: PREPARE AND STICK TO A BUDGET (Be a smart & responsible consumer)
How: Income minus expenses = savings. Put it on paper/computer, revisit often and do not abuse it.
What: GET OUT OF DEBT (Learn what is good debt and what is bad and avoid BAD)
How: Depending on the type of debt you are in, pick up a book on the topic.
What: BUILD A RAINY DAY FUND (6-8 months recommended. This money can be in a savings, CD or money market account)
How: Put the left overs from the income minus expense equation aside until you hit this
What: INVEST IN YOUR FUTURE (Retirement planning)
How: Put away 10% or more of each pay/earnings in a retirement vehicle. Set up auto deductions if possible.
What: PROACTIVELY ENGAGE IN TAX PLANNING (Reduce your effective tax rate)
How: Visit the IRS.GOV website or one of many tax tips blogs and learn everything you can about maximizing tax benefits for individuals in your situation.
What: PROTECT YOUR WEALTH AND ASSETS
How: This is a relatively advance area of personal finance. When you get there, pick up some books and read up, then go get yourself a good attorney.
What: START A SIDE BUSINESS AND DIVERSIFY YOUR INCOME STREAMS
How: Read every single post on my blog
Do you see an overarching theme? It’s education, and not one that you find in the classroom either. Take the time to educate yourself. Learn the basics and then go down this list.
It is not a comprehensive list by any means and I might be missing things here and there. Generally however, these steps should take you closer to living a stress free life with financial peace of mind.Previous: Directory Maximizer Review: Get Quality Back Links from Directory Submissions