Pin this up on your wall.
posted in goal, tips, tools |Golbguru at Money, Matter, and More Musings has a link to Financial Fundamentals for 2k7.
This list may be common sense to people, but as a rule I never rule out that *somebody* hasn’t thought about some of these. I’ll sum it up for you:
Personal Finance Bloggers have been touting these since the first day I started following them.
1. Know where you are.
This is perhaps one of the most overlooked, undervalued tidbits of advice. I know plenty of people first-hand who have no clue what their finances are, or have such a skewed view of how their budget and expenses should be - $100 jeans because of a raise of $.50 at work, a new computer because someone is ‘…tired of using a year-old machine.’ Seriously.
2. Look out for hidden expenses.
I love this - my wife and I have the Video On Demand service. How many times have we used it? Twice. In four months. 99% of the time it isn’t working anyways, but my wife is the one who told me “I like watching movies with you anyways, why don’t we get rid of it?” I love this woman.
3. Take control of your debt.
If anything, my job has let me kick my debt in the arse. Where-as I was in college working a student job, delaying the inevitable (I had 0 credit cards when I returned to school - another post, for sure) student loan repayment while scraping by in a crummy campus apartment at wits end with my room mate. Defer those school loans! Avoid the minimum payment! You can always make up for it later, right? Wrong! My job has given me enough leeway that I am kicking down loans, and thanks to a 0% interest card from Capital One, my wife and I should have nearly all our debt eliminated by the end of the year (however, we are house hunting and I’m still in school, which could play an integral factor in our near future).
4. Pay yourself first.
Well, shuckeedern! I swear I’ve read this a dozen times all ready - starting with J.D. at Get Rich Slowly. He is the first personal finance blog I came across, and it wasn’t the last. J.D. can be blamed for me getting inspired to start this blog, and focusing on finance! But to focus on the point at hand - SAVE. I have ING referrals left, one friend ended up not using it, so I’ve got plenty to give and you get $25!
As well - if you have a 401k and your company matches it - put in the amount they will match! AT LEAST. More is better. To my understanding - 401k to the match, max out your Roth IRA, then max out your 401k. Retire well, relax well.
5. Build your emergency fund.
If you lost your job tomorrow, would you suddenly be hit by worries of not being able to even buy groceries next month? What about other bills? Don’t rely on living on credit cards, it *will* bite you in the long run. Get a buffer setup. Start small - get at least a month’s worth of expenses saved - then keep it growing until you’ve got several months you can job search, knowing your bare necessities will be met. Married or have kids? Plan on braces, emergency room trips, and any other ‘uh-ohs’ that may happen in life.
6.Start a retirement account/max it out.
See? Even Key Bank agrees. Start one now if you can afford to. If your company matches and you aren’t at that limit - you are throwing free money away -who doesn’t like free money? I know I do. Remember - when you retire you probably won’t need to be taking out what you’re making now, and you’ll also probably have some medical expenses come up - this means that $250,000 may not be that much when you retire, but it also means if you live on $40,000 a year when you retire (after making six-figures, I’m sure 
you’ll be in a lower income bracket = tax savings!
7. Pay ahead on your mortgage.
I’ve seen this contested. Pay more because you can afford to (and you own your house faster), or take that extra money and invest it. JLP at All Financial Matters has covered this. I’m no expert, but the feeling of paying off a property would give me that overwhelming relaxation of getting that monkey of your back (I can see why some people hesitate - it’s all a matter of income and how much you buy your house for - I’m looking in the $160k range, some people talk of $300k+ for something that I’m living in now!)
8.Analyze your workday expenses.
Parking pass, gas, maintenance on the car, your morning latte factor - they all add up! Of course, sometimes it’s a matter of cutting back - not cutting out. I wouldn’t be where am I today if it wasn’t for the occasional pizza outings I took with a couple guys I work with - but my my finances wouldn’t be as under control as they are if I hadn’t cut back on eating out!
9. Keep your mortgage/rent at 30% of your income.
Very simple - live within your means. This goes with cars, too - do you really need that new corvette when your ol’ trusty civic will do?
10. Mange your way out of late fees.
Talk to your debtors. They want their money, but sometimes they may help you out.
11.Create/Review your estate plan.
This is essential for everyone - unless you like the Government getting your stuff.
12. Be properly insured.
Another post for the future for me, make sure you are covered where it counts, and make sure you aren’t overpaying! (If your car is worth $500, is a $500 deductible really necessary?)
Wow - start strong and taper off. I’ve been given fodder for a few more posts, I’ll try and get them up tomorrow. Paz mi amigos!
