3 . Set up an emergency fund . The same with increasing your savings and reducing expenses , setting up an emergency fund also strengthens your overall financial health . There will always be unexpected expenses along the way ; however , being prepared reduces any adverse effects . Financial experts recommend putting aside an emergency fund to cover three to six months of your living expenses in case you lose a job or need medical attention .
4 . Set aside money for a down payment . With the economic crisis limiting access to credit , buying a home , which is every non-homeowner ’ s dream , has become even more difficult . If you are one of those who have this long-term goal , save some of your money now . Be prepared to put down 10 to 20 % of the price of your dream house , depending on the real estate prices in your locality . Paying 20 % down payment allows you to waive a private-mortgage insurance ; so make this your target level . While it is harder to achieve , it will help you follow the save-more / spend-less mantra in the long run .
5 . Pay your big debts first . Although most people want to pay off all their debts , they fail to realize that not all debts have the same urgency . For instance , credit cards that charge high interests must be paid off ahead of others . Again , saving more money by spending less on interests is the rule .
6 . Plan for your retirement . For many young people , planning for retirement may seem too early in the day ; however , this misplaced attitude is actually counterproductive . In case you still do not have one , apply for an individual retirement account ( IRA ) – ask your CPA if a conventional IRA or a Roth IRA best suits your situation . Continue contributing to your 401 ( k ) if your employer matches your regular payments . That is free money you can avail of for your benefit ; so receive it by the good graces of your employer . Pay as much as you can on those contributions .
7 . Regularly check your income tax situation and estate plans . Do you get a sizeable tax refund ? Have you had changes in your tax payments ? Do you receive only one income even though you are a two-income couple because you lost your job or went through pregnancy ? Did you experience becoming self-employed after having been an employee previously or vice versa ? Did you or your spouse retire and begin getting pension income or reach the wonderful age of 70½ and must now get mandatory IRA benefits ? If so , you may have to adjust your withholding to avoid any adverse events . Moreover , you need not be so wealthy or own a yacht to need an estate plan . As long as you have assets , you need an estate plan . All the above questions will be answered sufficiently by your CPA ; so , pay him or her a visit .
8 . Be informed . Always be conscious about your financial well-being . Maintain a clean credit record , check your credit statements regularly and be aware of any changes . At the start of each year , resolve to read your credit reports . Monitor closely your bank account statements and credit card statements in order to avoid any imminent problems .
9 . Seek professional help if needed . Ask your CPA once in a while in order to find out if you are well on your way to attaining your goals . When you need expert advice , get it ; otherwise , do your share in keeping your finances on keel .
10 . Wizen up . Although it is good to seek professional advice when needed , make sure you also know enough to take care of important decisions yourself . Get to know your financial situation and various investment opportunities . Attend seminars and classes ;