January 10th, 2017 5:22 AM by Jackie A. Graves
which phase of life you’re currently in, how much money you presently earn or
what level of assets you’ve accumulated so far, you can likely benefit from
improving some aspect of your personal finances.
Here are six key money rules to follow that will take your
finances to the next level.
#1: Practice tax efficiency. There’s
an old saying: “It’s not about what you make, it’s about
what you keep.” In other
words, your gross income is one thing, but it’s net income that really matters—not to
mention how you spend your income. Your net income is most important because it
reflects your take-home pay after Uncle Sam takes his cut of your
salary, wages or self-employment earnings.
By keeping a keen eye on your taxes, you’ll have more cash
available to build wealth. Slash your tax bill by contributing to a 401(k) or
403(b) plan, funding a health savings account or claiming tax deductions and
tax credits for which you qualify.
#2: Borrow wisely. Even
though it’s smart to avoid debt whenever possible, that guidance isn’t always
feasible. Most Americans will borrow money at some point in their lives. You
may need a mortgage
to buy a home, a line of credit to start a business or a student
loan to help fund a college education.
is to borrow wisely. When it comes to loans, always shop around for the best
deals available. Keep your credit
in tip-top shape so
you can qualify for the most attractive loan rates and terms. Limit borrowing
to only what you truly need. And finally, always have a written plan for how
you will repay your debts.
Rule #3: Negotiate everything. Too many of us shy away from negotiating, and
that failure to negotiate can mean a lifetime of squandered money. You can (and
should) negotiate everything from your monthly cable bill and the interest
rates on your credit cards to your annual salary and the financial perks
offered by an employer. Get into the habit of routinely negotiating and you’ll
save more money—and earn more money, too.
Rule #4: Commit to saving money consistently. Speaking of saving money, anyone striving to
take his or her finances up a notch should make a commitment to being a
disciplined saver. If you aren’t consistently putting away at least 20 percent
of your take-home salary, start working toward that goal.
You can begin by banking your next pay raise or a portion of it.
Another strategy is to determine a fixed dollar amount that you can set aside
for savings each month, and then begin saving that money without fail. If
you’re already saving money, gradually increase your percentage of savings to
continually boost your financial well-being.
#5: Protect your finances with insurance. Accidents, injuries, illness or various kinds
of disasters all represent threats to your personal and financial health.
Unfortunately, such setbacks can strike any of us. But you can guard against
these occurrences and other risks—like the driver who rear-ends your vehicle or
the storm that damages your home—by insuring yourself.
If you protect your family, property and assets with insurance,
it’s far less likely that a natural or man-made disaster will wipe out your
savings or leave you financially vulnerable. So evaluate your current needs and
make sure you have adequate health insurance, car insurance, homeowner’s or
renter’s insurance, as well as life insurance and disability protection.
#6: Don’t procrastinate. Procrastination
can cost you financially in ways small and large. Got an upcoming trip planned
next season? Waiting to buy your plane ticket may mean shelling out big bucks
for a more expensive last-minute airfare. Even worse, waiting to save money for
retirement can result in a huge economic penalty.
People who procrastinate about building long-term savings don’t
get the benefit of compounded interest over time. So procrastinating about
retirement planning could mean amassing a retirement nest egg that’s tens (or
even hundreds) of thousands of dollars smaller than it would have been had you
started saving earlier.
The six money rules above can aid you no matter what your income,
assets, age or background. Savvy individuals also know that managing one’s finances
wisely is not as simple as “set it and forget it.” It takes ongoing care and
attention to money matters in order to take your finances to the next level—and
stay financially strong at every phase of life.
Lynnette Khalfani-Cox - To view the original article click here