cents & sensibility for 2007!
http://business.inquirer.net/money/personalfinance/view_article.php?article_id=40345
NEW YEAR RESOLUTIONS YOU CAN'T AFFORD TO IGNORE
experts’ tips on what you can do (with your money) in 2007:
1. Watch closely where your money goes. Often, people complain, “I don’t have any more money. I don’t know where it went.” A close scrutiny would show that aside from necessities, their cash went to eating out, shopping during the last sale, parking fees for weekly trips to the mall, movie tickets, and a new gadget. It’s not bad to treat yourself once in a while, but keep a close tab on where your money is going. Then be honest and see if you’re overspending on things that are not really necessary.
2. Decide where your money will go. What is it that you want to save up for? A new car, tuition for the kids, a trip to Boracay? Once you have set your goals, decide where your money will go by making a financial plan. (Click here for story on How to make a financial plan )
3. Make a spending plan. Allocate your earnings wisely by making a written budget every month. Experts say pay yourself first — meaning, set aside some amount for savings first before you settle bills and spend money. A good starting point would be 10 percent, but do make it bigger as your income improves. Then set a ceiling for your regular expenses and live within your means.
4. Start an emergency fund. Use your savings for an emergency fund that you can use for unplanned but necessary expenses. Make it your goal to have at least six months’ worth of salary in your emergency fund. This will tide you over if you lose your job or meet any emergency.
5. Be serious about investing. Those savings that you have put aside can earn more when placed in the proper investment vehicle. Leave some in a savings or checking account, but put the bulk in higher-yielding time deposits, mutual funds, unit investment trust funds, stocks or bonds, depending on your appetite for risk. It’s not difficult to understand how these investments work. Read personal finance books or articles or talk to your bank manager or financial adviser.
6. Manage your debt. Don’t go into debt that you cannot pay. Charge to your credit card only what you can pay comfortably. And before getting a car loan or housing loan, compute if your budget can allow you to pay these additional amortizations over a number of years.
7. Protect your name. Your credit history is tied to your name, so do all you can to have a good record. Pay bills on time, file income tax returns promptly. Your good name will allow you access to more credit later on should you need it.
8. Look for ways to grow your income. If you can have a sideline on top of your fulltime job, then go for it. Or invest your money in a business. If the business succeeds, use the extra income for investment.
9. Have the essentials. These include life insurance if there are people who depend on you, and health insurance (including hospitalization, disability, accident). You also need to make a will and take out a memorial plan or buy a plot in a memorial park. Make it easy for your loved ones someday.
10. Share your blessings. Help other people in need so they can get back on their feet and be on the road to financial security themselves.
Not everyone is born rich, but everyone, with discipline and foresight, can retire comfortably.
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