| By now you’re probably finished with your education and
are ready to get started with your career. This is the time
when it really pays to establish good money management
habits. You want to clear your financial slate by paying off
school loans and credit card debt, while also setting aside
some money for your retirement.
Remember that getting an early jump on saving now means
you’ll have a better chance to retire on your own terms.
Most Common Mistakes
It’s never too early to start building your retirement
fund. Begin by contributing to your employer’s retirement
plan, where you may be eligible for a matching contribution.
You may also be eligible to boost your savings by opening
either a Traditional or Roth IRA.
Not making a budget: Making
a budget and sticking to it is a great way to learn
financial discipline. Listing your expenses shows exactly
where your money is going and can help identify areas where
you can save.
Not creating a disciplined
investment plan: Find an investment plan that
matches your long-term goals and stick to it. You should
have a definite asset allocation strategy that provides a
level of risk you’re comfortable with. Invest with
discipline – don’t dive into any stock just because it’s
been hot recently.
Not paying off debts: Get
rid of your high-interest rate debts as quickly as possible.
This increases your financial flexibility and frees up more
money for important goals such as saving for a house and
retirement.
Not starting an emergency fund: Don’t
get blindsided by unforeseen problems. Having the equivalent
of three to six month’s worth of salary in an easily
accessible account can help you make it through a crisis
without tapping your longer term investments. |
