Best Finance Personal

There are so many productive ways to spend our money: saving for retirement, paying off the house, paying down consumer debt, and don’t forget about reasonable spending to make life more enjoyable. So what should take priority? Here are some things to consider.

401(k)

First, determine whether your employer’s 401(k) has a match. For instance, many 401(k)s match your contributions dollar-for-dollar up to 4% of your salary. A match like this is simply too beneficial to resist. Think of it this way — we hope to obtain a rate of return of 8 to 10 percent on our investment portfolio, but if our employer offers the match described above, we are guaranteeing ourselves an immediate 100% return on our investment.

However, depending on circumstances, it may or may not be wise to contribute more to your 401(k) than your employer will match, and if your employer offers no match, there are other factors that need to be considered.

Consumer Debt

I frequently see individuals with credit card debt with interest rates between 20 and 30 percent. If we are not getting an additional match from an employer on retirement savings, does it make sense to invest in the market where we hope to obtain a 10 percent return when we can essentially guarantee ourselves a rate of return of 20 to 30 percent by paying off these debts? One would be better off paying down debt with these high interest rates before investing elsewhere. Continue reading ‘The Best Use of Your Money’ »

Many people discount the importance of having an emergency fund in much the same way as they try to avoid buying insurance. They are so sure that nothing will ever go wrong and that such efforts are a waste of time and energy that they lack the desire to look ahead at the unexpected. We all know somebody that has fallen on hard times through no fault of their own and yet if they had prepared for their crisis they may have been better equipped to weather the unexpected that comes their way.

We never know when crisis will strike; it could be in the form of a lost job, illness, injury or even a car breaking down. None of these events are things that we can control; in fact most often they happen without warning and if we are not prepared for them they can devastate our lives. This is where having emergency fund money set aside becomes essential, by having between 3-6 months of living expenses set aside you can be well prepared for most emergencies.

There are plenty of reasons to have an Emergency fund set aside in the form of liquid investments that you can reach quickly should you need to, but here are 3 top reasons for setting aside money for emergencies that may change your mind about having one. Continue reading ‘3 Important Reasons Why You Should Have an Emergency Fund’ »

Many people are not sure what is meant by Emergency fund so I wanted to explain what that is. An Emergency Fund can save you from many different life changing events and everyone should have one.

An Emergency fund is money that you have set aside for only emergencies. You don’t use it for anything other than serious emergencies and if you ever use it or even a portion of it, you repay everything you take from it as soon as possible.

The size of the fund depends on your family and the expenses your family has. No family has the same fund as no family has the same expenses or needs. When I was talking with a family about credit and building an emergency fund I would sit down with them and explain how this works. You setup an Emergency Fund to help you pay for unexpected emergencies. Those emergencies can include the loss of a job by either a one or two income family. Continue reading ‘Building an Emergency Fund’ »