10 Important Financial Tips For 2008

What steps have you taken to improve your financial picture for
this year? When looking to improve your personal financial
situation for the year, it is never too late to begin taking
action. Saving more money is at the top of everyone's New Year's
Resolution list each year, yet only a handful of us put our
ideas into motion. Whether you have started to take action or
are just getting started, these 10 financial tips will enable
you to improve your financial situation before the end of the
year.

1. Don't spend more than you make. It is better to live below
your means than right at or above. If you make $200,000 per year
or more and you spend every bit of it, you are not well off
financially.

2. Create a savings plan. You need to come up with a system
that works for you. Many people don't believe that they can save
hundreds of thousands of dollars – but these are the same
individuals who believe that they are going to grab that one in
ten million chance of winning the lottery. This usually means
that the money they could be saving is spent buying lottery
tickets. If you would invest $50 every week for 40 years with 9%
interest, you could have yourself over a million dollars. If you
still fell you'll have a hard time saving, it may be a good idea
to have money automatically withdrawn from your paycheck and
deposited into a savings account.

3. Invest in mutual funds. The annual return on investment can
be up to 12%, which is the return that the S&P 500 has averaged.
Obviously, that is better than your average passbook savings
account.

4. Opening a Roth IRA. This is something you can do if you
qualify. You don't have to pay tax on any gains you receive if
you follow the rules correctly. Start a Roth IRA for the kids by
hiring them when they're working age, paying them $5,000 a year,
and then investing that money in the IRA.

5. Pay off credit cards. Don't keep open balances on any of
your cards.

6. Set up a trust or a will. Only 50 percent of Americans have
wills. Set up a trust account for your family and make a will to
properly divide up your assets.

7. Open a life insurance policy. If you love your family and/or
you have debt, you will get a life insurance policy. There are
many options. Only you can decide the right one for you.

8. Take advantage of all tax breaks. Many individuals do not
know what tax breaks are available to them. Because of this,
business owners tend to be the individuals who overpay their
taxes the most. Be sure to review all existing and new tax
breaks that come about each year.

9. If you tend on living in your area for a while – buy a
house. Not only do you get to enjoy your home, but you are able
to build equity.

10. If something sounds too good to be true, then it probably
is. In this case, it pays to trust your instinct. If it is too
good to be true, then it is. If something makes perfect business
sense, then go for it. Don't hold back.