Do You Have A Personal Financial Plan?

letter writing

What is your plan? Do you have a plan for building savings? Do you have a proper emergency savings fund should you lose your job or run into more significant difficulties?

I was talking to a good friend of mine and we were talking about how easy it is to fall into credit card debt. We talked about how “we all know” what we “should” be doing, but time slips away.

DO THE REVIEW

This is why you must take some time to sit down and review your expenses over the last three (3) months. Have you done this? Look at all your spending and put your spending in categories.

Look at what spending you might be able to cut out in the future.

PUT YOURSELF ON A MANDATORY REDUCTION

Then, treat yourself like a business in a recession. Put yourself on a mandatory 10 – 15% expense reduction across the board. Call every company that sends you a bill (yes, even cable and electric). Tell them that you have to cut your expenses by 10 – 15% in the next thirty (30) days and ask for their help. You might be surprised at the good results.

Remember: this is an across the board reduction. You are taking this away from cutting a specific bill. Everyone reduces and you get to save more. That’s the idea, and it works.

Take any money you save and “earmark” that money for a monthly automatic withdrawal from checking to savings (money market or certificate of deposit).

COUPONS, SAVINGS

Spend an hour of your time three (3) days a week to research coupon codes and savings on the internet. Any money you save must be removed from your checking to your savings. You can do this as the savings occur. If you don’t take this “savings” from checking to savings, you are NOT really saving.

RETIREMENT

Are you enrolled in your company 401k plan? Do you have opportunity to enroll? If you do, make it happen. This is an excellent way to partially pay for retirement. Did you see that word PARTIALLY?

In the old days, your parents believed that Social Security would pay for their retirement. Then, we all began to believe that Social Security would go bust. Over the past decade, people have believed that a 401k would be enough to help you retire with strong income. Now we know that you will need a 401k and either a Roth or individual IRA. It should be a part of your “plan.”

NO PLAN – NO FUTURE

It’s easy to get off track. You must manage your finances with an eye on the future. Good things and bad things happen to everyone. If you save automatically each paycheck and you take money out of your checking at any excuse to build savings, you will be in a good position to help yourself when bad things happen.

WHAT SHOULD YOUR EMERGENCY SAVINGS BE IN 2009?

This is why your emergency savings fund goal should be to build 15 to 18 months of expenses in savings. The first six (6) months should be liquid in money market savings with an FDIC-insured bank with the highest possible interest rates. Then, the balance should be in certificates of deposit (six month cds only).

With automatic savings, your emergency savings will build a lot faster than you think. Focus on the fact that time will move along and you will build this money over time.

BEYOND SAVINGS

Once you have built your emergency savings fund and you are contributing to your company 401k and either a Roth or individual IRA, you should begin to seek ways to purchase assets that generate dividends or other assets. This is the true path to wealth.

THE KEYS TO YOUR FINANCIAL FUTURE

The greedy rich want us to continue to use their credit cards. They want us to see our liabilities as assets so they continue to grow wealthier while the common man remains poor.

If you don’t take any advice from anyone, take this advice. Develop your own plan for saving and investing regularly. Avoid credit cards and other debt. Focus on building the correct emergency savings fund for today’s complicated job and financial market. If you have opportunity to contribute to a 401k AND either Roth or indivual IRA, DO IT.

The bottom line is this: Purchase assets that make money themselves. This could be stocks, mutual funds, or real estate. If you focus on purchasing things that make more money on their own, you will build wealth. That should be your goal.

Do you have a plan? If not, sit down and begin right now. You can do this – and you can find ways to save money. More than this, you will reach a point when you can focus on only on purchasing money making assets. This will allow you to build true-wealth.

If you’ve not signed up for our FREE monthly e-saver, you can do so by signing up in the e-mail window at http://www.stickyasset.com/blog. It can save you thou$ands more in the next few years alone!

Good luck!

Loyd Ford
http://www.stickyasset.com/blog

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