Tuesday, April 24, 2012

The Road to Personal Financial Wellness

We're well into the new year and hopefully on a good footing to perosnal financial success. The economy is recovering, new markets are opening up and the opportunities are available to us all for enjoying a profitable 2012. But as with everything that we do well, it all starts with a well thought-out plan.

Step One: Investing in Your Future
A good place to begin is by realistically evaluating your financial goals. Where do you want to be six months from now? And what about six years from now? What do you need to do today in order to be prepared for tomorrow? The first item in your plan should address a savings plan; some sort of an investment scheme that is funded straight from the top of your monthly income. Don't wait until you have a little extra money to put away for the future - take a regular investment plan seriously by funding it first.

Step Two: Living Within your Means
In today's consumer-driven society, maintaining a lifestyle that we can afford is not always as easy as it sounds, but keeping your credit card debt to an amount that can be paid off every month is essential to making financial headway. So the bottom line here, as boring as it may be, is to prioritize your expenditures and to not spend money that you don't have.

Step Three: Preparing for Emergencies
No matter how careful we are with our financial planning, bad stuff happens and there's nothing we can do about it. As great as it is that we're now saving money on a regular basis, we need to go one step further and tuck some cash into a liquid account that can be used for emergency expenses. By having cash on hand, there won't be a need to pull out the old credit card with the words, “charge it” the next time your water heater goes out or your car's muffler sounds like it's going to drop off.  This little emergency fund could actually be the ultimate piece of the financial puzzle that will keep you off the credit crisis roller coaster.