There was a news story some years ago titled 20 Personal Finance Do’s And Dont’s. It was a pretty good story, and though I’m not going to quote it, I am going to list the 20, and add my own commentary. I recommend you go to the story to see what they had to say for each of them.
1. Don’t try to predict the future.
nvodicka via Pixabay
This one is a no-brainer, and yet it’s not how most of us live. If we didn’t, would there be a stock market? The smart thing is to plan for the future instead of predicting it; you protect yourself better that way.
2. Do keep enough cash available.
I like this one a out, but even if you’ve saved six months worth, it won’t be easy. That’s always been the standard for protecting oneself, but you never know if it’s enough.
3. Do invest internationally.
This one’s dicey without working with someone you trust who knows a lot about foreign investing. It seems the foreign markets go as our market goes, and ours can be flaky.
4. Don’t try to pick one winning investment. Diversify.
This one is brilliant, although, if you’re in more control of your investments, looking at certain industries over other industries may be the way to go. Health care product makers seem to be weathering the storm just fine, but even there it’s hard to know when a health care company might get fined for something.
5. Do think about energy efficiency.
This should be the case at all times. Turn off lights when you can, don’t keep the heat on too high, look for leaks, think about solar… it all can add up.
6. Don’t stop contributing to 401(k) and other retirement accounts.
Investing can feel like a scary proposition, but as I mentioned above it’s smart to plan for one’s future. If you’re an employee and your company offers this opportunity, jump all over it.
7. Do live below your means. Save.
This is always sound advice. Live below your means, but save enough to pamper yourself every once in awhile.
8. Don’t make sudden moves.
Another piece of key advice. Don’t spend money indiscriminately just because you’ve gotten a windfall. Don’t close out investment accounts if the market is a little shaky. If your stocks have lost a lot and you’re young enough to weather the storm, leave it there.
9. Do pay off expensive debts.
Debt always costs you more than earning money grows it. If you’ve got debt that’s costing you more than 15%, try to whittle down the most expensive stuff first. This is sound budgeting advice also.
10. Don’t give up on stocks.
As I said above, this one is tough, but if you can afford it, ride out storms.
11. Do track your spending.
Once again, always good budgeting advice. If you know what your money situation looks like, you’ll spend it wiser and it’ll last longer.
12. Don’t pay high management fees.
This is sound advice, no matter the industry you’re working with. The internet is a wonderful place to not only get reasonable advice but to compare prices.
13. Do review your credit reports.
The federal government allows everyone to get a free credit report yearly from Annual Credit Report. You might be scared to see what’s on the 3 you get but it’s always better to know than be surprised later on.
14. Don’t follow the herd.
One should always follow their own hunches and do the research for themselves before acting on something, especially as it concerns your
finances. Sometimes a good deal is a scam.
15. Do write down an investing plan and budget, and stick to them.
If it’s not written, it’s not real. Judge Judy said that about contracts, but it applies to everything in one’s life.
16. Don’t forgo necessary insurance.
I wrote about health insurance, but it’s important to have other insurance for your family’s protection. Pay for what you can afford.
17. Do check out your financial adviser.
How many people are wishing they’d known more about Bernard Madoff now? The problem with him was that so many people recommended him without knowing what he was actually doing, but his numbers also looked way too good; that should have set off someone’s Spidey senses.
18. Don’t invest in anything you don’t understand.
Once again, this is a tough one because most people really don’t understand investing all that much. That’s why we hire people to take care of us, and hopefully we trust them with our money. Still, learn something about money markets and how they work, and occasionally open up that statement that comes from your broker to at least see if your investments are going in the right direction.
19. Do make sure safe investments are actually safe.
What’s considered safe? Sometimes long term companies with familiar names are in financial distress. Do the best you can and if you need to, talk to your financial adviser about your concerns.
20. Don’t take more risk than you can handle.
Once again, very sound advice. Don’t jump on something you’re told will make you a lot of money without investigating it first, but even at that moment, don’t hurt yourself. Remember #19!
Quick advice all around; what are your thoughts?
