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Your Financial Future... Page 2
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So what can I do?
The first step in any financial decision making strategy is to find out where you are now
and where you would like to be. You basically take a "time out" from life
to "plan" for life.
Here are some suggestions to help you get started:
1. Sit down and figure out where you are spending your hard earned money. What you really
want out of life? what you want to do at retirement?
2. Do you have debt? Most people do. Let’s take a look at the breakdown of
interest paid on that debt. How much are you paying in interest each month, for all your
debt? Now take that number divide that number by the number of days that you work each
month and this will tell you how much money you have to make, each day that you work to
pay your interest.
Example: You pay $1400 a month in interest (including your house, car and
credit debt). You work 20 days a month. That means that if you take $1400 and divide it by
20, you will have to make $70 in one day just to pay the interest on your debt. By doing
this, you're basically wasting your money. Think about what $70 could do for you if it was
invested instead.
3. So how should you save for retirement? First you should optimize your company
401K plan because it reduces your tax-burden. Let’s face it. If you wait until
you are debt free or have an emergency fund, you will never take advantage of yout 401K.
Every day that you do not invest is lost money. Second, you should do whatever it takes to
pay off your debt. Third, you should start saving for those rainy days, so that you will
not have to rely on credit cards. And finally, once you’ve maxed out your 401K
plan, consider making a contribution to a Roth or Traditional IRA.
Remember. You cannot afford to put off for tomorrow what needs to be done today. If you
do, you're only hurting yourself. If nothing else, it will give you a little
perspective on your financial future and where you will be when you are ready to retire
and sail around the world.
Alyice Edrich is a freelance writer
from Corona, CA. She is a mother of three.
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