Wednesday, January 11, 2012

Useful Web Find: Shortcuts to Getting Richer

Maybe not exactly rich just yet, but at least a guide to help you move forward at where you are financially... I found this true and motivating article on what you can do to be financially fit.

(Disclaimer: Modified as necessary for this post's purpose.)

TIPS TO HELP YOU SAVE MORE OR SPEND LESS


1. Saving More

Problem: You want and should be able to save more, but it never seems to happen.

Solution: Take your discipline (or lack thereof) completely out of the equation by automating your savings. Save before you see the money by transferring it automatically from every paycheck into savings, either regular or retirement. If your employer can't make it happen, talk to your bank, broker, or mutual fund to schedule regular transfers to savings or investment accounts. Instead of trying to find the money every month, you set it once and watch the money pile up.

Not only is saving automatically more efficient, it's more effective. If you take the traditional approach—waiting until you've paid all your bills before saving what's left—there's often nothing left to save. There's a reason "pay yourself first" has been the mantra of the money-enlightened for decades: It works.

2. Paying Bills on Time

Problem: Forgetfulness leads to late bills, which leads to fees and potential damage to your credit score.

Solution: Most banks and credit unions offer automated bill payment you can set up online. Utilities and other companies offer this service too, and might waive convenience fees or offer discounts for the right to suck money directly from your account. If your monthly bills include debt payments, automatically pay more than the minimum to work off debts faster. Remember: Minimum payments are for losers.

Warning: Make sure you maintain a sufficient checking balance to auto-pay all your bills without over-drawing your account. If there's even a chance you might, set up an auto-transfer from savings or a credit line to cover any potential shortfall.

3. Creating a Budget

Problem: You see the advantage of budgeting, but feel overwhelmed by the idea of creating spreadsheets, then tracking and recording where your money's going.

Solution: Traditional budget worksheets are so 2011. It's time to throw out the paper and pencil and let your computer or phone do the heavy lifting. Use free services to establish goals and automatically track your spending, and give you a complete picture of exactly where you are 24/7. For even more convenience, look to the dozens of apps—many free—that can put your computerized budget into the palm of your hand.

4. Allocating Assets

Problem: You'd like to invest part of your retirement or other long-term savings into stocks or other risk-based investments, but have no idea how much to put where.

Solution: Take your age from 100. That's the percent of your savings to at least consider investing in stocks. So if you're 25 years old, you'd put up to 75 percent in stocks. If you're 60, your stock percentage should be around 40 percent. As for the remaining portion, split it equally between a money market account and an intermediate term bond mutual fund. For specific investments in each of these categories, use low-cost index funds.

Warning: The solution above isn't a rule, it's a rule of thumb. Don't ever put money into any fluctuating investment that you'll need within five years, and don't ever risk so much that you lie awake at night. There's no amount of return worth sacrificing your peace of mind.

5. Spending Less

Problem: You pay more than you have to because you don't check promos and other discounts that you can possibly avail of.

Solution: Don't ever buy anything without first looking for those sold at discounted or lower prices.

6. Saving More, Part 2

Problem: You don't make enough to automate your savings and never seem to have anything at all saved.

Solution: While tracking and analyzing your expenses is the only way to know if there's really any money hiding in your budget, the time-honored technique of using a change jar is a low-tech and simple way to save. When you come home, simply empty your pockets or purse of change. The amount you save can be astonishing. Try it.

You may read more as applicable to your daily living from the original/reference article here.

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