Tips for Financial Planning
Financial planning, something we all know we need to do, but
always put off to the future. Financial planning is hard simply
because it requires financial discipline, which is difficult to
have in this consumer society. However, financial planning is
very important because you want to retire one day, be
financially stable in the event of an accident, or unexpected
loss of a job. Financial planning will help you rest easy as you
age.
The following tips will help get you in gear to start your
financial planning. Once you have made financial planning part
of your routine, it won’t seem so difficult. But getting your
financial planning started can be the most difficult thing.
These tips will help motivate you to make financial planning one
of your main goals.
Financial Planning Tip #1 Pay off Debt One of the biggest
factors fighting against financial planning is debt, especially
credit card debt. If something starts off as a small debt it
turns into a big one simply because you were not paying off the
debt. Financial planning means you have a plan and paying off
debt should be the first goal of your plan.
Financial Planning Tip #2 Invest Another financial planning tip
is to invest. Financial planning means you are saving for the
future in many cases, so you will want to take money you earn
today and invest in the stock market, in bonds, IRAs, 4019k) or
a mixture of all of the above. Saving your money with the help
of financial planning will help money grow all on its own.
Financial Planning Tip #3 Spend Less than You Earn This is tough
for people to understand and often times what they resist most
when they begin financial planning. This is because Americans
always want what is bigger and better. Regardless, financial
planning is more important than consumerism. Make spending less
than you earn part of your financial planning.
Financial Planning Tip #4 Budget A great financial planning tip
is budgeting. You won’t be able to save unless you know what you
spend. Make budgeting part of your financial planning and you
will realize saving is not so hard.
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Help answer the question about financial plan
How do I write a personal financial plan?What are some general guidelines to writing one? What are some topics that can be included in writing a personal financial plan? Give me a good website if you know of one.
March 13th, 2009 at 3:37 pm
With your income, there is no reason you shouldn't max out your 401(k). The maximum contribution you can make is currently $15,500. With the company match you described, this should be around 6% (maybe a little bit more- I'm not sure if that includes the signing bonus you described or not.)
I would also opt for an IRA- a Roth IRA is the best, but you won't qualify for one if you make more than $114,000. You can, however, get a regualr IRA and convert it to a Roth IRA in 2010 thanks to some new laws going into effect.
That $35,000 signing bonus has "down payment" written all over it, in my humble opinion! This is a great time to start building some equity. If you live in a super-expensive area and need to beef up your savings first, opt for a high-interest rate money market account. It will be safe for your short-term financial goals, but still keep your money growing. I use ING Direct online, but I hear there are some even better rates. Shop for one you like at http://www.bankrate.com.
Now, about those investment choices- there is good risk (choosing stocks when you are 23) and stupid risk (putting all of your eggs in one basket, going for the trend-of-the-month stock.) If it was me (and I'm 27, so I've put my money where my mouth is here) I would put 80-100% of my money in mutual funds that buy stocks, depending on how nervous you are about stock ownership. The the rest can go in bonds. As you get closer to retirement age, increase the amount in bond funds.
I would also very strongly recommend you choose a low-cost index fund for your stock selection. It's really shocking how much an extra 1% in fees can eat up your returns over time. You're making a great salary, so you're likely going to end up very comfortable, but wouldn't you rather retire 10 years earlier, very, VERY comfortable? The Fidelity Spartan funds and Vanguard index funds are great, low-cost choices. You may not have as much flexibility for your 401(k) but you can pick whatever you want for your IRA. Check out The Little Book of Common-Sense Investing by John Bogle- it's AMAZING! I recommend it to all of my 20-something friends.
March 13th, 2009 at 3:37 pm
Try Florida.
March 13th, 2009 at 6:27 pm
Because cost is such a high consideration and weddings in general are notorious for skyrocketing budgets, keep your budget number one. If you've set aside x-number of dollars for the wedding, don't go a penny over — you have your whole future to consider, after all! Consider trade-off's — for food, do a buffet over a sit-down; don't bother with favors (no one really remembers them anyways); pay for a professional photographer, but have a friend do the video (or vice-versa if video is more important). If you're having it at a rented venue, pick a place where September is an off-season month, and look at doing a daytime wedding on either a weekday or a Sunday; weekends and evenings are most expensive. If your hubby-to-be has a nice suit, have him use that instead of renting a tuxedo — I've seen beautiful weddings where the groom just wore a lovely dark suit and a white silk tie. Instead of getting a traditional wedding gown, department stores have lovely, simple dresses in their formal wear area that are a fraction of the cost of a dress you'll only wear once. If you've had your heart set on that satin ballgown, go to consignment stores or look for trunk sales by wedding dressmakers. Online is an option as well; try on a dress at a wedding gown store, make note of the size, designer, etc., and then look online for it — my friend saved over five hundred dollars when she did just that. Make your own bouquets of flowers that are in season, or choose something different, like a single calla lily. Instead of elaborate centerpieces, use gatherings of tealights — you can buy the holders and tealights in bulk online or go to IKEA. Don't get an elaborate wedding cake; pick a simple, tiered cake that doesn't taste like cardboard and use flowers in your color scheme to decorate it simply and elegantly. Don't hire a DJ — make playlists on an mp3 player, use/borrow good speakers, and just have that as your DJ for the reception. Weddings are so overdone and laden-down with excess; the simplest ceremonies and receptions have been the most memorable and enjoyable because it didn't make it all feel like a big floor show. And just remember, whatever you have to sacrifice for the sake of budget, put it on the list for the real celebration down the line: anniversaries!
March 13th, 2009 at 10:06 pm
You need to be involved in the community. Fortunately there are lots of ways to do this. You can do several.
If you have kids, you can get involved with their school. That's a great way to get to know other parents. If you don't have kids, you can coach a team in soccer or basketball. If you treat the kids good, the parents will be impressed with you. You can join a civic organization like the Jaycees. Where I live, the chapter has 500+ members – all between 22 and 40. How is that for a demographic. Are you a member of a church. If so, are you in a small group or sunday school class. Also, great ways to get to know people.
Bottom line, if you are sincere, people can tell. Then it is just a matter of putting yourself in front of enough new people.
March 14th, 2009 at 11:53 pm
You should interview several candidates before making a decision since it is a very important relationship you will be entering into. During these meetings or interviews be sure to ask each one of them how they get paid. You want to know the answer and see how they answer the question. You need to be aware that some of them may be willing to sell you a product that might not be the best fit for you because it gives them the biggest commissions. These are the ones you want to avoid.
Make sure you know what your financial goals and needs are before meeting with anyone, you don't want to have someone else decide your priorities.
Good luck.
March 15th, 2009 at 12:47 pm
The first, and I would argue most important step is to clearly define your goals. Whatever you're planning for has specific shorter-term goals attached to it. If you're planning to send children to college, then there are steps to planning for that that are different than those you need to complete in order to retire or buy a home.
If you want a whole-life plan, it's going to include any major financial goals and the individual plans attached to them. Without a definite, well-defined goal in mind, you can't plan at all.
March 15th, 2009 at 8:30 pm
contact a broker like edward jones and they will give you more reading material than you care to read!!!
March 15th, 2009 at 9:05 pm
The first thing you want to make sure of is that your financial planner is a Certified Financial Planner (CFP). Next, you will want to meet with the advisor to make sure you are comfortable with them. If you don't like and trust your advisor, the relationship won't work.
Good luck in your search.
March 16th, 2009 at 5:08 pm
Credit card companies love the college students. STAY WAY AWAY FROM CREDIT CARDS!!!!!!!!!!!!!!! Here's what happens. Credit card companies send you a low interest student credit card with $5000+ dollar limits. they entice you with a 4% interest for the first 3 years or something like that. No payments for your first year and things of this nature. They know you are in college. They know you can't make payments. At the end of the low interest rate, the interest rates go up to like 25% or more. I've seen them as high as 32%. If you borrow $1000 on that card your interst will rack you another $250 a MONTH!!!! Even if you're making your minimum payment. So My advice is stay away from credit cards!!!!!