Personal Financial Planning
Should you save your money or invest it? This has always been a hard question to answer. With today’s low rates, you hardly get any interest in saving money. And the continuing bull market looks like a very inviting place for your money. However, here are some tips that should help answer this question.
Before investing in anything, you should have an emergency fund. An emergency fund should be money that you can get to at any time. The best place to have an emergency fund is in a separate saving account not to be touched unless absolutely necessary. It shouldn’t be considered a nest egg account, savings for the kids’ college, or savings for a new car. This account is only for emergencies. Once your savings fund is built up, you can turn your attention to other things.
The rule is that you should save between three and six months of living expenses in an emergency fund. An emergency fund is your safety net. Losing your job or emergency car repairs are two examples when you may need to pull from this fund.
Having self-control when it comes to spending is necessary. Getting into credit card debt is one of the worst things you can do financially. The only time you should use a credit card is when you can pay it off each month.
If you can’t pay cash for it, you shouldn’t buy it at that time. Instant gratification is another bad habit to avoid. If you keep buying items that you don’t need, you won’t be able to save enough money for your emergency fund or for investing.
Once you’ve saved enough money in your emergency fund, savings account, and college funds if you have kids, it is time to start investing. There are many investment opportunities out there, though some of them are easier to use than others. If the company you work for has a 401k program, sign up for that, especially if it is a matching program. You can also open up your own Individual Retirement Account (IRA).
If you have financial questions, you can call for a personal financial advisor. They can answer your questions about dividing your income between saving for various purposes, bill paying, and when and where to invest your money.
Between paying bills on time and trying to invest wisely, finances can be confusing and time-consuming. A financial management services company can help you make a plan and stick to it.
Your first investment could be buying a house. Or you might be more interested in investing in the stock market. The stock market is not a place to gamble your hard-earned money. Invest in blue-chip stocks, index funds, and exchange-traded funds (ETFs).
Saving and investing your money takes self-discipline. But once you have a plan that you can stick to, it gets easier to maintain your personal financial plan. You can talk to a financial advisor for recommendations on where you should start with your plan.
By Anita Ginsburg
who is a freelance writer and residing in Denver, CO. She studied at Colorado State University, and now writes articles about health, business, family and finance. A mother of two, she enjoys traveling with her family whenever she isn’t writing. She recommends talking to a financial management services company like Luckie Seven Solutions Inc for advice on saving and investing your money.
Member since July, 2019
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