Finance | | Sep 02, 2015
End the Summer, Prepared for Fall
In our last week of summer, it is important to prepare yourself and your finances for the year ahead. Summer is great, shorter work weeks, weekends spent on the golf course and relaxing by the pool. But once those leaves start to turn reality begins to settle in. The kids go back to school, some off to college, and we are left with taking the jackets out of the closet.
But how can we keep track of our finances before the craziness begins? It only takes a few simple steps:
Find balance in your life: The concept of creating a personal balance sheet can seem like a large undertaking. But if you break it down one step at a time, it’s not so complicated.
Grab a piece of paper and on the left-hand side write on the top “Assets” on the right-hand side write “Debts”. Leave room at the bottom because that is where you put “What’s Left”.
Under your “Assets” column write down your possessions. For example your checking account, your 401(k), worth of your home, etc.
Under your “Debts” column write down what you owe. For example your credit card balance, student loans, mortgages, etc.
After adding up all your assets and then adding up all your debt, look to see if your assets are bigger than your debts. Place the difference between the two in the “What’s Left” box.
Over time you want to make sure that your assets increase while you debts decrease.
Getting the 411 on the 401(k): Your 401(k) plan is your one-way ticket to a life of leisure into the retirement years. There are three main components of your retirement plan: contribution rate, allocation, and your specific investments.
When it comes to your 401(k) plan make sure to speak to your employer or your plan provider for more information.
To purchase or not to purchase that is the question: We have all been there you run into Target to buy one thing and you end up leaving with 35 some odd items and you ended up forgetting what you actually needed. Financial planner Carl Richards suggests the “72-hour test”, meaning if after 72 hours you still are yearning and hoping for that purchase then yes go out and get it. But if you have already forgotten about it, that purchase really is not worth it.
Don’t be a Bud Fox: Remember the movie Wall Street, Gordon Gekko convinces Bud Fox to do his dirty work, getting tips on certain stocks. Don’t be that guy and ignore the “advice” from your friends.