Top 10 Personal Finance Tips for the Long-Term
While complete financial independence is a difficult goal to reach, most people want to at least avoid spending their lives struggling to make ends meet. Planning can help you meet your money goals, but only if you put the plan into action.
Assess Your Net Worth
It’s always a good idea to know your bottom line. Gather all of your financial statements — bank accounts, bills, mortgage statement, credit cards, pay stubs — and enter the details into a financial software program. Include the current balance, interest rate, monthly payment and limit. Also enter the current value of your car, house and major pieces of jewelry or art. The financial software will subtract your liabilities from your assets to determine your net worth.
Develop a Workable Household Budget
Creating and sticking to a spending plan is one of the best ways to help you meet your financial goals. Be sure your budget is realistic and appropriate for your actual needs, cautions Lee E. Holland, CPA, CFP. “People have a tendency to slash their spending allowances far below sustainable levels and then give up on the entire budget when it doesn’t work for them.”