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Build Your Financial Stability By Doing The Following

1. Set up a budget that’s realistic and will allow you to follow it consistently. Make a budget that can absorb the unexpected. A budget is a work in progress. Your financial situation will constantly change and if your budget has the flexibility to accommodate plenty of variables you can save, pay off debt and invest to make your money grow.

Track your expenses. Log all of your expenses for a month so that you’ll know where your money is going. You can use an App or pen and paper but account for everything.

Allocate about 10% of your income for savings. Better to do a direct deposit so that you won’t be tempted to spend.

Be patient and consistent. Depositing $100 per month means you've saved $48,000 after 40 years. Assuming a seven percent annualized rate of return, your $100 per month deposit would equal more than $260,000.[17]

Long-term savings should go toward a 401(k). Aim for maximizing your 401(k) deposits.

Apply about 35% of your savings to housing and utilities.

Put aside another 10% if you have specific goals in mind, such as buying a new car or paying for you child’s college education.

Cut back on unnecessary spending. Rent a movie instead of going to the theater. Drop your land phone line. Don’t sign up for cable TV services you don’t need.

Use the remainder of your income in whatever way you see fit. Food, entertainment, vacations etc.

2. Reduce credit card debt. Credit cards place you at one remove from your purchases. The process insulates you from your spending because you’re using a card (and not money) and don't have concrete "proof" that you're actually spending money. Credit card debt can accumulate quickly.

Implement a plan to pay off credit card debt using your budget. Know exactly how much you can afford to direct toward your credit card debt.

Pay off the card with the highest interest rate first, while meeting the minimum payment requirements for other cards.

Be consistent in your payments. Many people reduce the amount they're paying toward a credit card debt when they see the balance going down.

Pay with cash to avoid accumulating more credit card debt. Use cash for groceries, clothes, vacations and non-essentials.

3. Grow your money by investing wisely. You can use your budget surplus to invest. Invest regularly over time in a diversity of places.

Apply 10% of your income to investments. Alternately, the money you’ve budgeted for savings can be split between savings and your investment needs.

Invest in stocks using an investment firm if you’re not stock-savy. Over the past 70 years stocks have gained an average of 10% per year in value.

Mutual funds are a good choice for the average investor.

Offset the potential volatility of stocks by also investing in bonds and CDs. You’re loaning your money out at interest so the balance is growing although usually not at the same rate as stocks.

Consider using an automated investment service. Their fees are low. They match your time horizon and goals with your investment.

Try regular monthly direct debit investing. It guarantees you’ll be putting money aside for investments, taking the decision about where the money goes out of your hands.

Content created and supplied by: News13 (via Opera News )


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