Personal Financial Planning - Balance Your Own Savings and Avoid the Pitfalls of Financial Disaster

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We are in one of our worst recessions with no signs that it will turn around anytime soon, and with the housing boom in stock market boom all over people are trying to go back to more fiscally conservative ways, which means that there is a greater need for understanding how to have proper personal financial planning. Another reason why you should learn to balance your own finances is that there are so many so-called professional financial planners out there that promise to handle your cash with great care and make you a certain percentage on your savings. What a lot of them have done these days is invest money into complex Ponzi schemes that are very risky to say the least, and a lot of their accounts and outgoing to zero and you are virtually bankrupt.

It is not so hard for any individual to learn how to plan their finances the right way and this involves just staying away from a few of the big pitfalls that are out there today and we will go over a few of them right now.

1. The first thing you should do when you are planning your financial future is to strip away all of your emotions, which means you shouldn't go at it with cold hard numbers. As a former daytrader I may some very big mistakes by getting too emotionally involved with my trades which blinded me to the signals that were out there that told me to get out of the market. I know we are not machines but when we are planning ahead , especially with our hard-earned cash we should strive to be almost machine like in our thought processes.

2. You should always have a goal planned ahead complete with what you will need to do just in case certain pitfalls happen. The ones who plan ahead will always be ahead.

3. Always try to pay off your credit card balances and the shortest times possible. This will save you tens of thousands of dollars over your lifetime because the longer you take to pay off your credit cards the more money you will end up paying in the end because of the high interest rates that each card carries with it.

4. Always try to save as as much money as you can even when you are at a young age. Most of us in our 20s these days don't feel the need to save any money at all because we feel that there is always time later to do this. In no time flat you're 35 years old and you had wished that you had saved a little money every month when you were in your 20s. No amount of money is too small to be saved because over the long term, small savings here they are can equal a large amount.

5. If you are working for a reputable company that has a 401(k) program that will not only save or invest a portion of your salary but will also match it, then you should take a damage of it as soon as possible. The fact that they are matching your investment means that you can lose up to 50% of it and still be at breakeven, and another benefit of a 401(k) is that you aren't taxed at all on your investment until you are ready to pull it out during your retirement.

6. Just make sure that if your company has a 401(k) program that they will allow you to invest in other companies besides the company that you are working for. Always try to diversify your investment. Let's say you working for company XYZ, and you invested $40,000 into your company's stock which your company then matched with its own $40,000 investment for you. Company XYZ then comes out with sudden news that it is going to go bankrupt. Your $80,000 investment is now essentially worth nothing, so don't be fooled by a company that offers a matching 401(k) program. Make sure that they allow you to invest in the stocks of other companies.

Financial Planning is something everyone should learn about. Read more about this subject at

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