How to Become Financially Ready for My Future
Planning financially for your future can be challenging because of the demands placed on your earnings. These demands include the cost of living, inflation, the college education of your children and health care costs. In fact, an October 2008 article for CNN states that more than half of workers in the U.S. live paycheck to paycheck. Planning ahead financially can ease the burdens of living paycheck to paycheck, in addition to helping you plan for emergency expenses and retirement.
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Instructions
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Examine how much you have in your savings account for emergency matters, such as the loss of a job or the death of a family member. Plan to save for at least six months' worth of expenses.
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Spend less money. Ask yourself if you really need an item before purchasing it. Invest this money into your savings account or emergency fund.
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Create a structured plan to pay off any debt. Pay any current debt payments, such as credit card or student loan payments, on time each month. Avoid using credit cards; use cash only instead.
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Obtain a copy of your credit report by contacting the three credit bureaus directly (see "Resources") or by visiting Annualcreditreport.com, which is authorized by the Federal Trade Commission.
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Sign up for your employer's 401k plan to begin creating retirement income. Invest a portion of your wages into CDs or treasury bills. Consult a financial adviser on the best types of options for these investments. Refrain from tapping into your retirement savings.
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Tips & Warnings
Never spend money that you do not have.
Under the Fair Credit Reporting Act, the three credit reporting agencies -- Experian, Equifax and TransUnion -- are required to provide one free copy of your credit report every 12 months.
Not preparing financially for your future can lead to evictions or foreclosures in the event of a job loss or insufficient retirement income.
References
- CNN; Living Paycheck to Paycheck; Hope Gurion; October 2008
- Finance for a Freelance Life; What to Do When Laid Off; Emma Green 2011
- Money Under 30; How Much Do You Really Need in an Emergency Fund; David Weliver;
- Federal Trade Commission: Free Annual Credit Reports
- Lenpenzo.com; Quick Tips for Reestablishing Your Credit; Michael Wilson; June 2011
- U.S. Department of Labor: Top 10 Ways to Prepare for Retirement
Resources
- Photo Credit Thinkstock/Comstock/Getty Images
