Just as individuals must follow certain diet and exercise regimens to maintain physical health, keeping one’s finances in good condition requires time, attention, and dedication. In this two-part article, I discuss simple methods of keeping finances stable while simultaneously nurturing investments and avoiding common pitfalls.
First, focus on living within your means. Most individuals encounter financial difficulties due to spending more than their income allows. You should budget to pay off vital expenses and store money away for retirement or unforeseen circumstances such as car repairs or medical bills. After these expenses are taken care of, you may set aside a small amount of income for non-essential items or activities.
Second, realize that every financial decision you make comes with positive or negative consequences. A wise investment might reap great rewards, but selling or liquidating assets like stocks, bonds, or mutual funds may come with penalties such as an early withdrawal fee. Before making any financial decision, perform research to learn the pros and cons of your intended actions.
As your financial portfolio goes through dips and rises, you will need to keep wills and other important documents up to date. For example, should your financial worth exceed a certain point, general wills naming guardians and such may not prove adequate for dealing with more complex investments. Should your funds dictate terms and conditions in your will that you feel fall outside your purview of understanding, contact a financial advisor for help.
About the Author
Salim Admon has served as a Financial Advisor at Strategic Financial Group since 2005. Respected among his colleagues and clients, Salim Admon has received prestigious recognitions such as the Western regional award for the most productive new financial representative.