The most important financial goals for 2010
These goals are all about getting back to the basics. As we have seen in recent years, the economy can be unpredictable. These goals are simple in nature, and hopefully can help you prepare for anything life throws at you.
1. Create an emergency fund
An emergency fund is one of the most important financial accounts you can set up. An emergency fund helps you deal with unexpected expenses ranging from car repairs to unemployment. A well stocked emergency fund can help you avoid going into debt.
How much should your emergency fund have? That depends on your personal needs, but for a single person I would recommend a minimum of $1,000, which should be enough to cover moderate car repairs or buy an airline ticket if you need to visit someone quickly. If you have a family or large monthly expenses, then you should increase that number accordingly. Many financial experts recommend an emergency fund that can cover 3-6 months expenses to help hold you over should you become unemployed. Start your emergency fund in an online savings account, and leave it there until it is needed. Hopefully it won’t be.
2. Get out of debt
If you are carrying debt, there is no better time to get rid of it than now. Why? Debt ties you down and takes away your freedom. It’s easy to see how it can take years to pay off high interest debt.
How do you get out of debt? Try paying extra on your payments each month, using a DIY debt consolidation plan, using a 0% balance transfer credit card, or finding other ways to either pay more on your principle each month, or lower your interest rates.
3. Invest
Do you already have an emergency fund and you have your debt under control? Great! Then your next step is to start putting away money for the future. There are dozens of ways to invest and thousands of places to put your money. Everyone has different investment needs and risk tolerance, so I will only recommend that you invest based on what is best for your situation. But I can recommend some investment vehicles for you. If you are eligible for a 401k plan with company matching, then it makes sense to invest to receive a company match (don’t leave free money on the table!). You may also consider opening a Roth IRA if you are eligible. [See where Should You Invest First - 401(k) or IRA for more information about deciding whether to invest in an IRA or 401k, and Best Places to open a Roth IRA.]
4. Live life and give back
This is the most important step. Money is not the end all, be all. Money is merely a tool to help you reach your goals. Save and invest for a reason, not just to have money. What’s the point of becoming a millionaire if you don’t enjoy life? Use your money to do the things in life you love, and use it to help others do the same. You will enjoy your year (and life) more and make the world a better place.
If you are planning on relocating to the area, I can make it easier for you. I can help you make your relocation here worryfree and more informative. There are many issues facing someone making a long distance move. My local knowledge will help make your move here smooth. I can help you find the right neighborhood and get moved into the San Jose Real Estate community, and help with any other issues.