Top Ten Financial Tips

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Keys to Financial Success
Although making resolutions to improve your financial situation is agood thing to do at any time of year, many people find it easier at thebeginning of a new year. Regardless of when you begin, the basicsremain the same. Here are my top ten keys to getting ahead financially.

1. Get Paid What You're Worth and Spend Less Than You Earn

It sounds simplistic, but many people struggle with this firstbasic rule. Make sure you know what your job is worth in themarketplace, by conducting an evaluation of your skills, productivity,job tasks, contribution to the company, and the going rate, both insideand outside the company, for what you do. Being underpaid even athousand dollars a year can have a significant cumulative effect overthe course of your working life.

No matter how much or how little you're paid, you'll never getahead if you spend more than you earn. Often it's easier to spend lessthan it is to earn more, and a little cost-cutting effort in a numberof areas can result in big savings. It doesn't always have to involvemaking big sacrifices.

2. Stick to a Budget

One of my favorite subjects: budgeting. It's not a four-letter word.How can you know where your money is going if you don't budget? How canyou set spending and saving goals if you don't know where your money isgoing? You need a budget whether you make thousands or hundreds ofthousands of dollars a year.


3. Pay Off Credit Card Debt

Credit card debt is the number one obstacle to getting aheadfinancially. Those little pieces of plastic are so easy to use, andit's so easy to forget that it's real money we're dealing with when wewhip them out to pay for a purchase, large or small. Despite our goodresolves to pay the balance off quickly, the reality is that we oftendon't, and end up paying far more for things than we would have paid ifwe had used cash.


4. Contribute to a Retirement Plan

If your employer has a 401(k) plan and you don't contribute to it,you're walking away from one of the best deals out there. Ask youremployer if they have a 401(k) plan (or similar plan), and sign uptoday. If you're already contributing, try to increase yourcontribution. If your employer doesn't offer a retirement plan,consider an IRA.


5. Have a Savings Plan

You've heard it before: Pay yourself first! If you wait until you'vemet all your other financial obligations before seeing what's left overfor saving, chances are you'll never have a healthy savings account orinvestments. Resolve to set aside a minimum of 5% to 10% of your salaryfor savings BEFORE you start paying your bills. Better yet, have moneyautomatically deducted from your paycheck and deposited into a separateaccount.


6. Invest!

If you're contributing to a retirement plan and a savings account andyou can still manage to put some money into other investments, all thebetter.

7. Maximize Your Employment Benefits

Employment benefits like a 401(k) plan, flexible spending accounts,medical and dental insurance, etc., are worth big bucks. Make sureyou're maximizing yours and taking advantage of the ones that can saveyou money by reducing taxes or out-of-pocket expenses.


8. Review Your Insurance Coverages

Too many people are talked into paying too much for life and disabilityinsurance, whether it's by adding these coverages to car loans, buyingwhole-life insurance policies when term-life makes more sense, orbuying life insurance when you have no dependents. On the other hand,it's important that you have enough insurance to protect yourdependents and your income in the case of death or disability.


9. Update Your Will

70% of Americans don't have a will. If you have dependents, no matterhow little or how much you own, you need a will. If your situationisn't too complicated you can even do your own with software likeWillMaker from Nolo Press. Protect your loved ones. Write a will.


10. Keep Good Records

If you don't keep good records, you're probably not claiming all yourallowable income tax deductions and credits. Set up a system now anduse it all year. It's much easier than scrambling to find everything attax time, only to miss items that might have saved you money.


Reality Check

How are you doing on the top ten list? If you're not doing at least sixof the ten, resolve to make improvements. Choose one area at a time andset a goal for incorporating all ten into your lifestyle.