50 Simple Steps You Can Take to Improve Your Personal Finances

by Glink, Ilyce R.

• ISBN13: 9780812927429
• ISBN10: 0812927427
• Edition: 1st
• Format: Trade Paper
• Copyright: 2001-05-22
• Publisher: Three Rivers Press

Summary

Everything you need to know about personal finance -- whether you're just starting out or starting over. The hardest part of attaining personal financial freedom is getting started. Ilyce R. Glink makes it a snap. The smart, simple strategies presented in50 Simple Things You Can Do to Improve Your Personal Financeslet you take immediate control of your money. With her trademark wit, friendly style, and crystal-clear examples, Ilyce Glink helps you set financial goals and reach them. Topics include: * Starting Out * Budgets and Savings * Credit, Credit Reports, and Debt * Investing Yourself in Investments * Big Purchases * The Ins and Outs of Insurance * Taxes * Marriage, Partnerships, Children * Planning for Your Retirement

Author Biography

Ilyce R. Glink is the money and real estate expert for WGN-TV in Chicago and the money guru for Lifetime Live. She is the author of the bestselling <b>100 Questions Every First-Time Home Buyer Should Ask</b>, <b>100 Questions You Should Ask About Your Personal Finances</b>, and others.

Table of Contents

Preface	xi
Introduction	xiii
Starting Out
Create a Personal Finance Space (and Streamline Your Financial Life)	2	(3)
Throw Away What You Don't Need	5	(6)
Invest in a Computer	11	(2)
Take a Day of Reckoning	13	(4)
Calculate Your Net Worth	17	(3)
Dream Big---and Write Down Your Financial Goals	20	(4)
Budgets and Savings
Live Below Your Means	24	(6)
Kick a Bad Habit	30	(2)
Save the Change	32	(3)
Create an Emergency Fund	35	(3)
Pay Yourself First and Last	38	(2)
Make Your Money Work Harder for You	40	(3)
Make Technology Work for You	43	(3)
Credit, Credit Reports, and Debt
If You Can't Pay Cash, Don't Buy It	46	(3)
Consolidate Your Loans	49	(4)
Prepay Your Credit-Card Debt	53	(4)
Choose a Credit Card That Offers Something for Nothing	57	(3)
Check Your Credit Report at Least Once a Year	60	(6)
Investing Yourself in Your Investments
Open a Brokerage Account	66	(3)
Take Enough Risk	69	(4)
Choose Investments That You Understand	73	(3)
Don't Take Hot Tips from a Cold Call	76	(2)
Don't Put All Your Eggs in One Basket	78	(3)
Take Responsibility for Your Investments	81	(3)
Big Purchases: Cars, Homes, College Tuition, and Weddings
Never Lease a Car	84	(2)
When It Comes to Cars, Buy Used, Not New	86	(3)
Set Up a House Fund	89	(3)
Buy the Smallest, Cheapest House on a Very Good Block in the Best School District You Can Afford	92	(3)
Be a Landlord	95	(2)
Get Smart About Your Financing	97	(3)
Prepay Your Home Loan	100	(4)
Maintain Your House and Landscaping	104	(2)
Saving for College? Consider Prepaid Tuition or Prepaid Savings Plans	106	(4)
Don't Bankrupt Your Future to Pay College Tuition or Wedding Bills	110	(4)
The Ins and Outs of Insurance
Buy Term Insurance and Invest the Rest	114	(3)
Raise Your Deductibles	117	(2)
Consolidate Insurance Companies and Save	119	(5)
Taxing Taxes
Do Your Own Taxes at Least Once	124	(2)
Don't Give Uncle Sam an Interest-Free Loan	126	(3)
Fight Your Property Taxes Each Year	129	(5)
Marriage, Partnership, and Children
Share Your Family's Money Management Duties	134	(4)
Hire Your Spouse or Children	138	(2)
Talk About Money with Your Spouse, Kids, and Parents	140	(5)
Give Significant Gifts	145	(3)
Write and Sign Your Will	148	(4)
Planning for Your Retirement
Start Saving Today	152	(3)
Open a Roth IRA	155	(3)
Take Full Advantage of Any Employer-Matching Programs	158	(2)
Don't Borrow from Your Retirement Accounts	160	(2)
Start a Part-Time Business Out of Your Home	162	(5)
Appendix 1 Ten Personal Finance Mistakes You Can't Afford to Make	167	(4)
Appendix 2 Where to Get Professional Help	171	(4)
A Guide to Commonly Used Financial Terms	175	(40)
Acknowledgments	215	(2)
Index	217

Excerpts

Ten Personal Finance Mistakes You Can't Afford To Make

When it comes to money, we all make mistakes. And, surely there are more than ten mistakes to be made. But if you're nimble, you'll not only avoid these mistakes, you'll probably avoid others as well.

1. Procrastinating. It's so much easier not to deal with serious issues like death, taxes, and money. Unfortunately, they're a part of life. Make a list of all your money chores and tackle the hardest one first, in the morning, when you're fresh and full of energy. Then move onto the easier tasks. You'll find that once you get the ball rolling, you'll have to run to keep up with it.

2. Spending more than you earn. If you want to be wealthy, you have to spend less than you earn. And then you have to invest your earnings wisely. It's that simple. If you live above your means, you'll always be in debt and you'll always be stressed about the fact that you're in debt. Debt weighs heavily, and can bring down the sunniest of souls. Don't let that be you.

3. Not saving enough. Most Americans save less than a half a percent of their annual income. Of those who do put away something, the majority have saved less than $100,000. That isn't going to get you too far, particularly since most of us need anywhere from 80 percent to 120 percent of the annual income we were earning on the last day we worked. To get there, try to save twice what you think you'll need. What's the worst thing that can happen? You'll end up with too much money at a stage in your life when you have the time to enjoy it.

4. Overusing your credit cards. If you can afford to pay off your credit card in full at the end of the month, no matter how much you charge, then feel free to use that card as much as you like. Unfortunately, most of us can't afford to do that. And so, month after month, we continue to pay outrageous sums of interest (anywhere from 16 to 30 percent is common), none of which is deductible. If you're in debt up to your ears (other than mortgage debt), you'll never get ahead financially. So pay off all your non-deductible debt as quickly as possible.

5. Looking for the big kill. Yes, it's possible you will win the next $300-million Powerball lottery and collect more than enough money for several families to live on in style. But I wouldn't count on it. Nor would I count on picking a stock, putting everything I own into it, and counting on it soaring 2,000 percent in six months. If you're always looking for the big kill, you might miss out on some attractive but less aggressive investing opportunities that will, over time, significantly improve your personal finances.

6. Letting your emotions interfere with your investment strategy. Your investments are not your children, your parents, your best friends, or your pets; nor should they be your sole reason for living. But some folks get so caught up in the investment of the moment that they forget to check their emotions at the door. You want to manage your money with a cool head and plenty of research to back up that gut feeling.

7. Trying to time the market. No one can time the market. Even people who think they can time the market, who are paid millions of dollars each year by investment firms on Wall Street to do so, can't. If they can't do it, you can't either. The best way to invest in the stock market is by dollar-cost averaging -- that is, investing the same amount each month, no matter what the market is doing. It's the safest and best way for most people to invest.

8. Failing to diversify your investments. The stock market goes up and the stock market goes down. And when it goes up and down over and over again within a short period, this is called market "volatility." The only way to keep yourself insulated is to invest in a wide range of companies in various market sectors, such as technology, energy, and telecommunications, that you can expect to move somewhat out of step with each other. The best reason to diversify: It'll let you sleep at night.

9. Chasing the investment "flavor of the month" (or week, day, or minute). Don't chase "hot" investments -- or mutual-fund managers, for that matter. What you want to do is find solid companies and invest in them after you've thoroughly done your homework. Choose mutual funds that have good ten-year or fifteen-year track records. If they've performed well in the past, it's more likely they'll do well going forward.

10. Not taking enough risk. If the thought of taking risks keeps you awake at night, you'll need to temper those feelings. When it comes to investing, you'll need to take some risks or you'll never be able to grow your money. At best, you'll be able to keep it in a bank account that's FDIC-insured. Or, perhaps you'll invest in tax-free municipal bonds. But with risk comes reward in the stock market, the kind of gains that will keep you in cups of gourmet coffee throughout your retirement. The best time to take a risk is when you have twenty or thirty years until you retire, and a retirement account you can't touch. Start slowly, investing a little bit here and there until you get used to it, and then hang on for the ride. When it's all over, you'll probably have earned at least the 10-percent average annual return that the market has generated for the past seventy years -- if not more.

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Excerpted from 50 Simple Steps You Can Take to Improve Your Personal Finances: How to Spend Less, Save More, and Make the Most of What You Have by Ilyce R. Glink
All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.