My dear niece is getting married in March, 2011, to a wonderful young man. As I have been thinking of this wedding and the two wonderful people that will be starting a life together, I cannot help but think of the financial advice that I can offer them so they can have a prosperous life together.
Here are the top ten ways to keep financially sane, today and for the rest of your life together:
- The power of compounding interest is truly a miraculous thing but it takes time. Start saving now when you have nothing but time ahead of you and your money will grow exponentially.
- Always save 10% of your income—each and every year—no exceptions.
- Go slow on large purchases and always consult with each other. Set a dollar limit that each can spend on his/her own.
- Avoid credit card debt like the plague. Only charge what you can pay off when you get your monthly statement.
- Have money set aside for emergencies and believe me, they will happen. A rule of thumb is approximately 3 months of your monthly earnings.
- Be generous. Sit down together and decide what annual amounts you want to give your church or charities so that others can be blessed.
- Contribute to your employer retirement plans so that you always get the match. If your employer has no plan or no match, consider contributing to an IRA or a Roth IRA. Remember… compounding interest is phenomenal.
- Buy term life insurance only. Check with your employer about group term life, it is almost always the cheapest way to go.
- If you are having trouble with more expenses than income, seriously look at cutting out the extras such as expensive cell phone plans, cable TV, eating out etc… Taking lunches to work saves a lot of money!
And, of course, number 10...
10. Seek the wise counsel of your Aunt Judy. She knows what she is talking about!
