Why is this information important now more than ever? According to a Bankrate.com survey (1), Americans scored a "D" in financial literacy. So if you really want to avoid a real scare, consider the following 10 personal finance management tips brought to you by Intuit's Quicken:
1. Don't let your future turn into a tale from the dark side - get started on your financial planning with reliable advice from a professional, a trusted family member or an online source. Resources such as the SEC's Investment Advisor Search and the Financial Planning Association can help consumers search for an investment adviser or certified financial planner.
2. Credit card fraud is a monster that costs consumers hundreds of millions of dollars each year. One way to protect yourself is to monitor and track purchases daily. Tips on how to prevent credit card fraud are available at the Federal Trade Commission Web site.
3. Does all that red in your monthly budget make you feel like your cash flow is bleeding to death? Become aware of your spending habits. How much you are spending? Where does the money go?
4. Plan ahead to avoid having to sell your soul to the devil. Create a budget and keep it current by updating your expenses every two full moons.
5. Pay off high interest credit card demons first! By eliminating monstrous finance charges (often 20% or more), you are essentially earning the money back. According to the American Bankruptcy Institute, personal bankruptcy filings totaled 1,613,097 -- an all-time high for any 12-month period, up 10 percent from the previous year.
6. Unexpected expenses, such as losing a finger or a job, can be a real nightmare. Develop a three to six-month cash reserve fund to cover unforeseen emergencies.
7. When shopping for big-ticket items that depreciate quickly, such as magic carpets and cars, consider buying used instead of new. This can help save you money, sometimes up to 40%.
8. If your crystal ball won't help you see your financial future, try tracking your investments regularly to see your complete financial picture, evaluate your asset allocation and monitor your net worth to avoid an unnecessary scare and help eliminate nightmares.
9. Send high monthly payments to the grave by searching for a more competitive deal on insurance, medication, phone service, gym memberships, etc. Research competitive deals through alternate vendors and on the Web.
10. Build a solid, diversified retirement plan and track your performance results to prevent working yourself to death and becoming one of the 2.3 million households that will have to delay retirement (2). In fact, 53% of all U.S. worker households have not calculated how much money they need to save for retirement (3).
Footnotes:
1 - Bankrate.com survey - January 2003
2 - Quicken Fiscal Literacy Survey - March 2003
3 - Employee Benefit Research Institute 2003 Retirement Confidence Survey - January 2003
