In sort of a carry-over from Friday’s Keep Investing Simple post, I was thinking this morning about what’s most important with personal finance. There’s a ton of information here at Prime Time Money. But if someone were to visit this site just once and never learn any more about personal finance, what’s the stuff I’d want them to take away? I’m not talking about philosophies or ideas. I’m referring to specific steps. What are the specific, simple steps everyone generally needs to make to make sure their financial house is in order. Here’s what I came up with (feel free to add more):
Don’t Carry High-Interest Consumer Debt – If you’ve got this kind of debt on a credit card or personal loan it’s costing you. Therefore, it’s a good move to try and get rid of it ASAP. If you ever have to use credit cards to finance something, make sure you pay it off completely before the end of the month.
Avoid Future Debt by Saving Money in a High Interest Savings Account – So that you don’t have to go into debt in the future because of an unexpected (job loss) or expected (vacation) expense, set up a free savings account at one of the online high-interest savings accounts and set aside some money every month. Do this automatically and it will be easier.
It’s Important to Get Term Life Insurance – If you’ve got people dependent on your income (and they will be for quite a while) it’s likely a good idea to get life insurance on yourself. Term life insurance is the best choice for most people. You can get an adequate policy for less than the cost of your cell phone plan.
Open up a Tax-Advantaged Retirement Account - Saving for retirement has never been easier. There’s plenty of good options out there to help you achieve retirement savings success. Most people have a 401k they can contribute to. Contribute enough to get your employer match every month. If you don’t have one, open a Roth IRA and begin automatically contributing. Shoot for the max every year. Like short-term saving above, this works best if you set it up automatically.
Know Where Your Money is and Where it Goes – At least once a month, take some time to review all of your checking, savings, and retirement accounts. Also review your credit and loan accounts. Do this all at once using a tool like Mint.com. Also, you might want to make sure all your credit accounts are in good standing by reviewing your credit reports for free at AnnualCreditReport.Com.
That’s about it. I think if you only did those things you’d be in pretty good shape when it comes to your personal financial situation. What do you think? Did I miss anything that’s most important?
Here’s some of the better articles I’ve read in the past week:
- 99 Painless Ways to Save Money
- Controlling the Paper Monster
- Building Confidence When You Have No Money
- Divorce and Financial Planning with Jon and Kate Plus Eight
- How to Ensure You Can (Not) Retire
- Employer-Sponsored Health Insurance Isn’t Necessarily the Best Deal
- Cash: Your Wallet’s Best Friend
For more good reading check out these blog carnivals:
- Carnival of Pecuniary Delights: Epicurean Delights Edition
- Money Hacks Carnival: Staying Cool Edition
- Carnival of Personal Finance #212
- Festival of Frugality #185: Barbecue Edition
- Carnival of Debt Reduction
Thanks and have a great week!