Categories

Debt Management Personal Finance

Tools

  • Economy & Politics
  • Investing
  • Personal Finance
  • Related Posts


    What Your Lawyers Don’t Tell You About Bankruptcy
    Step-By-Step Guide: How To Pay Off Debt For Good
    9 Things That Surprisingly Won’t Affect Your Credit
    A $1,000 Loan Can Balloon Into A $40,000 Debt — And It’s Legal
    FICO Exec’s Tips For Boosting Your Credit Score
    Three Reasons The Average American May Be Worse Off Than Greece
    Strategies To Pay Down Credit Card Debt
    What’s The Least Invasive Approach To Managing Your Debt?
    The Big Car Conundrum: Should You Buy Or Lease?
    How To Get Ahead Of Your Debt (Without Eating Ramen)
    The Ultimate Guide To Getting Out Of Debt
    Five Costly Credit Score Myths
    Four Tips For Cleaning Up Your Credit Score
    FICO Rehab: Three Stories Of How People Rebuilt Low Credit Scores
    Living Debt-Free Just Got Easier


    Resolving The New Year: Back To The Basics

    Happy New Year! It’s a brand-new start on our calendars, the chance to start making better choices and stop doing the things that weren’t very good for us in the first place.

    Not surprisingly, 46 percent of consumers are making resolutions to improve their finances in 2013. That is wonderful, and I certainly hope they are successful. One of the best ways to get started on this life-changing journey is to review and renew the basics.

    The Basics

    It should be no surprise to anyone that my advice is simplistic. It is founded on the basic principles of saving, spending and doing something smart with the difference.

    Most people want to read articles about the “doing something smart with the difference” part. I agree; those are fun and they stretch our minds to the possibilities of how taking our little bit of savings can turn it into an income stream that will afford us the ability to do anything we want. Hope, excitement and dreams are wrapped up in the future of our money, aren’t they? Who doesn’t like to dream?

    No matter what age, income level or marital status, good financial health begins with the basics. In my opinion, everyone should have:

    Insurance And A Will

    Wow! Jump right into it, Steve. Go right for the mortality angle. If you are single and nobody is depending on your income, then you can skip right past this important topic.

    The basics of personal finance include planning for the inevitable. None of us gets out of here alive, so it would be nice to leave some money for our heirs. They’ll remember you more fondly because of it.

    A will is super important, too. My wife and I didn’t do one until our daughter was 4 years old. We put it off, thinking there was plenty of time. Thank God we were right. What is funny is how relieved we were once the notary validated our document. What were we worried about?

    It sure feels good to have a will. It’s also cool to think that we can give gifts in the afterlife.

    A Spending Plan

    Successful businesses forecast their spending, and Americans feel like they got a raise whenever they stick to a pre-determined spending plan. A monthly dose of vitamin B would prevent anyone from having a visa headache, especially in January, if they just spent 10 minutes creating a budget and a few minutes every week to makes sure they are on track.

    An Emergency Fund

    Nobody can predict the future, and nothing on this Earth is without flaw. Things deteriorate, break or disappear. People get sick, cars have flat tires, and things get misplaced or stolen. Having an emergency fund — even $1,000 — can give anyone the confidence to weather a small storm like missing work because of a cold or paying the deductible from a fender bender.

    A Debt-Elimination Or Debt-Avoidance Plan

    Want to become wealthy someday? Get out of debt and stay out of debt. Don’t let the banks pull one over on you; nobody is getting rich off their credit card reward points or benefiting from a car loan. Yes, free stuff is fun. And a new car is a wonderful thing, but car payments are not.

    A debt-avoidance plan is simply a savings or investment plan where money is put aside for things you need, want or will have to replace in the future. Have you ever paid cash for a car? We haven’t yet, but our next vehicle purchase will be paid in full before we ever turn the key. I can’t wait for that conversation on the drive home.

    What’s your 2013 resolution? If you are one of the 46 percent who decreed improving personal finances, then I encourage you to spend a couple hours reviewing the basics.

    Have I left anything out? Please leave a comment, and let’s start a conversation.

    — Steve Stewart

    Steve Stewart is a Personal Finance Architect who helps families design their house of financial freedom. His experiences in the market swings of 2000 and 2009 brought him to a powerful realization that the key to wealth is to live on less than you make and doing something smart with the difference. His philosophy is a simple one: Spend wisely and purposefully, invest regularly but don't chase the market, and pay attention - not interest. Steve has a show which regularly ranks in the Top 20 iTunes Investing category, the MoneyPlan SOS podcast, and he has been coaching couples with their personal finances since 2007. If you are looking for ways to Cash-Flow So You Can Go Pro then contact Steve through his website, http://SteveStewart.me/

    | All posts from Steve Stewart

    Discuss this Story:

    Comment Policy: We encourage open discussion. Comments including racist statements, profanity, name calling or spam will be removed at our discretion. We use filters for spam protection. If your comment does not appear it is likely because it violates the policy.

    Pending Home Sales Miss, NAR Says Stock Plunge Is Good For Housing Affordability
    Donald Trump Says He’s Fine With Raising Taxes On Himself
    Can Downsizing Save Your Retirement?
    Is College Even Still Worth It?
    Homebuyer Demand Loses Momentum For Fourth Month
    Unfunded Pension Debts Of U.S. States Still Exceed $3 Trillion
    Health Insurance Is Staggeringly Uncompetitive, And Poised To Get Worse
    U.S. Housing Market Seen Strong Enough To Handle Fed Rate Hikes
    Mortgage Applications Inch Up In Latest Week
    Case-Shiller Home Prices Dip In June, Miss For Third Month In A Row
    Another Powerful Benefit Of Spending Money On Experiences, Not Things: Community
    Obamacare Is Facing Another Big Threat: Accounting
    It’s Official: India Is A Terrible Place For Expats
    How To Spot A Good Obamacare Replacement
    10 Common Myths About Social Security
    The Truth About Social Security’s Long Term Finances
    Fed Rate Hike Impact On Mortgage Rates
    Hackers Publish Ashley Madison Data, Huge Growth In Mobile Banking
    8 Things You Didn’t Know Could Affect Your Credit
    Older Americans Gearing Up For The Shared Economy
    Put Your Money Where Your Soul Is
    Ones To Watch: 3 Companies Attacking Familiar Problems In New Ways
    Wall Street Sees Hope In Home Sales
    The Science Is Clearer Than Ever: Long Work Hours Increase Your Risk Of Stroke And Heart Disease
    The Next 11 States To Legalize Marijuana
    Three Hidden Costs Of Investing
    This Startup Is Developing An Electric Car Battery That Can Charge In Minutes
    Housing Provides Much-needed Lift To Wall Street
    This Uber Driver Sells His Handmade Jewelry Out Of His Car, And Made A Quarter Million Dollars Last Year.
    Mid-Career Checklist On Your Financial Progress
    Read more from Personal Finance...

    Liberty Investor Digest

    Get today's most important
    financial headlines all in
    one place by email!



    Sources


    close[X]

    Sign Up For Liberty Investor Digest™!

    Get Liberty Investor Digest FREE By Email!

    Input your name and email address in the fields below and get today's most important financial headlines sent straight to you inbox!

    Privacy PolicyYou can opt-out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.