| Anyone who has ever run in a race knows that | | | | income now, consider the effect of a job loss or |
| every lap counts. A mistake early can force you | | | | extended sickness and its impact on your |
| to work hard to catch up, an error late can wipe | | | | household finances. |
| away precious time and energy. Things are no | | | | 2. Establish goals - The old adage of "If you aim |
| different with your finances. The decisions that | | | | at nothing, you'll hit it every time" is especially true |
| you make early will have lasting implications to | | | | with finances. Take time to create a written plan |
| your peace of mind and financial security. This | | | | that has SMART goals - Specific, Measurable, |
| article will focus on areas that will help you get | | | | Achievable, Relevant, and Time bound. Define |
| your finances on the right footing in your race to | | | | financial goals in categories of short term (1-3 |
| riches. | | | | years), medium term (4-10 years) and long term. |
| Beginning Your Race | | | | Set aside time to regularly review your progress |
| Many people start the first lap of life with | | | | and adjust your course of action as necessary. |
| excitement and optimism. You've just settled into | | | | 3. Educate yourself - With all of your new |
| a job and you're excited about the prospects of | | | | responsibilities take time to learn about your |
| your career. You're ready to use your money to | | | | options. Don't end up doing what your parent or |
| create an established life, upgrade your car, buy a | | | | best friend did just because you don't want to |
| new home, start a family or simply maintain your | | | | take time to research what's best for you and |
| independence. It's a relief to finally have the | | | | your situation. Get resources from the internet, |
| finances to purchase things that you once | | | | benefits department, or bookstore. Take a |
| dreamed of. But obstacles can quickly appear. | | | | finance course or hire a professional to help you. |
| School loans, mortgage payments and a whole | | | | Don't be afraid to ask a lot of questions. There |
| series of bills suddenly turn excitement into | | | | are plenty of resources to turn to. |
| confusion. You ask yourself, "If I'm making a good | | | | 4. Save for long term goals now - Buying a new |
| income, why are things so tight?" With so many | | | | car next year may seem to be more important |
| choices and responsibilities, finances suddenly | | | | than saving for retirement 35 years from now. |
| seem to be spread thin. Here are some financial | | | | But use time to your advantage. Consider this: If |
| tips to help you navigate the first lap. | | | | person A saved $2,000 at the end of each year |
| 1. Live by a budget - This is one of the most | | | | from age 25 through 35 into a 401k or IRA (total |
| helpful exercises anyone can do. Create a list of | | | | of $20,000) and person B saved $2,000 per year |
| fixed and discretionary expenses. Plan for variable | | | | from age 35 to 65 (total of $60,000), who would |
| expenses such as travel, gifts and home | | | | have more money at age 65 assuming an 8% |
| improvements. View yourself as a bill and set | | | | annual return? Person A ends up with $291,547 |
| aside money each month into a savings account. | | | | while Person B ends up with $226,566. Surprised? |
| Work on building a cash reserve. Pay off credit | | | | It's true. Save early and save often. |
| cards monthly. Although you may have a steady | | | | |