Time to Make Cents

• Set goals and stick by them: It is important that there are things in life that you constantly work towards. Right now, take the time to think about your long term goal(s) (example: retire by 55 with $1,000,000). This is a pretty intimidating goal, and left as is, there is no foundation on which this is going to be accomplished. This is why it is just as important to set many short-term goals, all which help you on your way to realizing your long-term goal. You may decide as a short-term goal that each month you will save $1000 from your paycheque to use to invest. This will allow you to reach your next goal of saving $12,000 per year. A savings of $12,000 per year can then be used to reach your next goal until eventually you have accomplished your long-term goal. The most important rule when setting goals is to make them realistic and to always stick by them. By breaking away from your plan for just one month, you may lose the ability to reach your long-term goal when you want to. It can be helpful to write down your goals in chronological order, so that you can see what you must do at each stage to ensure you are staying on track to reach your goal.
• Always plan ahead: Whether it is determining a budget, paying off a credit card, or ensuring a movie is returned on time to avoid a late charge, it is always best to plan ahead. By focusing on what you want in the future, you can prepare today to ensure that no surprises occur later. If you take the time to set a monthly budget, you can ensure that you are saving enough money each month for a vacation or special purchase. Without proper planning, you can very easily lose control over your finances. By simply forgetting to return a video rental for a few days, you can cause yourself to be over budget by $15, which will have to come out from money that was meant for savings or something else. If this is done often enough, you will not be able to meet your goals. If you do not properly plan you will be left to make many decisions impulsively, which is where you can easily lose focus of your goals and make decisions that are very detrimental to your short and long-term goals. By planning ahead of time, you can make purchases with more confidence and without guilt.
• Do your research: It may not be fun but this is an essential step for all of your decisions. It is not enough to open up the first bank account that is offered to you. By taking the time to look over your options, you can find the account that best fits your needs. The Internet makes it so easy to comparison shop that there is no reason not to spend some time comparing prices on any significant purchases you made. There can be differences in pricing for even inexpensive objects like DVD's. Spending some time to look over your options can end up saving you money to allow you to best meet your needs. Research is very important for all investments, as you need to understand what your goals are and how your investments meet these goals. You need to understand the risks that each investment comes with, as well as factors that could affect your investments (both positively and negatively).

These three basic concepts set a good foundation for your to start mastering your financial dreams. Please feel free to include any more concepts you want in the comment section, as we are all hear to help each other. If there are any topics that you would like to see covered as well please just write it down and I will cover that topic.

Thanks for joining me on this first day of 2006 and please continue to come back often for daily updates.
Take care,
Michael

# posted by mikeyarmo @ 5:17 AM