Jumat, 01 Januari 2010

Financial Resolutions for the New Decade By Miriam Caldwell, Guide

The last ten years have changed the ways that Americans look at their finances. The credit crisis, and recession have put a higher focus on saving and planning for the future. People in their twenties are beginning to look more seriously at planning for retirement and handling their money wisely. Here are five great financial resolutions for the new decade.

1. Create a Financial Plan

The last decade has taught us the importance of having a solid financial plan in place. A good financial plan looks at both short term and long term goals and helps you to prioritize them. The first goal should be to get out of debt. Then you should work to build an emergency fund and begin saving for retirement. Take the time now to prepare a good solid plan that will get you through the next decade. You should consider buying your first home as part of your plan as well.

2. Master Budgeting

Another essential goal in financial management is to be in control of where your money is going. Going back to basic budgeting enables you to take control of your spending. This will help you to control your expenses while the cost of goods continues to rise over time. A basic budget can be adjusted as your expenses and salary changes, but it should include saving for an emergency fund, sinking funds for cars and home repairs and other goals that fit into your financial plan.

3. Cut Spending and Increase Savings

One major goal is to spend less and save more. The rising costs of goods have caused Americans to really consider which purchases are the most important and which ones are unnecessary. A good goal is to lower your spending across your budget so that you can put an additional ten percent per month into a savings account. This will help to create better long-term habits and help you to provide the protection you need during difficult economic times. Plan on saving six months worth of expenses and then begin to invest the additional money that you save each month.

4. Stay on Top of Career Planning

The last decade has created a much more competitive job market, which is not as stable as it used to be. For this reason it is important to have good career goals in place. To begin with you should take advantage of every training opportunity you can through your employer. This makes you more valuable to your current company and it makes you more competitive when you enter the job market again. You may also consider going back to school to get a Master’s degree so that you can earn more money and stay competitive in the job market.

5. Plan for Retirement

It is important to start saving for retirement now. People in their twenties have a huge advantage if they begin saving for retirement now. The longer you have to save the easier it is to ride out the ups and down of the stock market. Start now with a long-term financial plan. This should include contributions to your 401(k) and a Roth IRA. You may want to make additional investments on your own with a financial planner. You may also want to consider diversifying into real estate with rental properties as well, but you should do this with cash and start slowly.

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