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Getting startedThere may be times when you may not have much money—but an abundance of time. That is is incredibly valuable. Take the time to understand the importance of living within your means, establishing good credit and getting a jump on retirement savings. When you do, you’ll be taking the most important steps to ensure your financial future. Don’t let your current income - small or large - keep you from establishing the basics.You should set aside enough cash to cover your essential expenses for three to six months. Put it in a safe, relatively liquid account like a short-term certificate of deposit (CD) or money market fund. If you stick with that 10% during your working years, you’ll likely be in good financial shape come retirement. (At this point in your career, a Roth IRA or Roth 401(k) may make the most sense.) short-term certificate of deposit (CD) or money market fund. Seven in 10 college seniors who graduated in 2012 had average student loan debt, of $29,400 and about 9 % of what is owed in past due 90 days. Be different and buck the trend and stay on top of your loans. You’ll be in much better shape down the road. A strong credit history is essential when you’re ready to purchase a new car or your first home.
Enroll in comprehensive health insurance.Charge only what you can afford to pay off each month.
If your employer doesn’t offer medical benefits, shop around for the best plan. Good health coverage is a must, no matter what your age. Make a budget and stick to it. Also, do yourself a favor by setting up automatic payments for savings and regular bills. Over time....schedule your initial consultation today.
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Increasing responsibilitiesFor many people, financial responsibilities start to mount in their 30s: marriage, kids, homeownership and retirement savings. Can you manage it all? Yes, if you prioritize. Carrying credit card or other high-interest non-deductible debt is one of the biggest mistakes you can make. Not only are you wasting your money on a potentially high interest rate, but you’re also undermining your ability to borrow money at a reasonable rate in the future. The Federal Reserve found that 38% of all households carry a balance on their credit cards, with the average balance coming in at $5,700.3 Never, ever walk away from your employer’s retirement match, if offered. And if you didn’t begin in your 20s, you need to save 15–20% of your annual salary starting now. After that, you can direct your savings toward a home down payment, a child’s college education or another long-term goal. Invest for growth.Open investment accounts and choose investments that offer you an opportunity for growth. Investing doesn’t have to be complicated—exchange-traded funds and index mutual funds can be a good start—but you do have to be in it for the long term. en you’re ready to purchase a new car or your first home. Invest for growth.Protect yourself and your familyNow that you have more money working for you, make sure you’re protected. Look into disability insurance and consider life insurance if you have dependents. Invest for growth.Make sure your asset allocation is in line with your risk tolerance and goals. Look for the Riskalyze app on this site for guidance. <Invest for growth.Start your estate planAt the very minimum, you should establish a will that names a guardian for your children. You should also make sure you name beneficiaries for all retirement accounts, as these designations will take precedence over your will. |
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Financial planning in our 40sSalaries may be growing, but so are the pressures: family, bills, and on and on. It’s easy to get distracted. But you have to stay focused—now more than ever.
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Focus on the details of life after work.
Decide when to take Social Security.
Many people file for Social Security too early, leaving thousands of dollars on the table. Remember, the longer you wait up to age 70, the bigger your check once you begin collecting—so it pays to do some calculations. Sign up for Medicare. Unless you’re still working, you must sign up by age 65 or face a penalty. Medical costs can be a big part of retirement expenses, so look into a supplemental policy, as well. |
Consider gradually moving to a more conservative asset allocation, but don’t walk away from growth—retirement can last a long time!
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