Page 52 - Book3E

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Time Is on Your Side
Think for a moment. What you may be lacking right now in income level or earning power pales in comparison to your greatest asset— time. The financial decisions you make now will significantly impact your future and your ability to retire in a manner that’s unrestricted, rewarding, and fulfilling. Indeed, each dollar you save in your 20s can be worth many more times as much as a dollar saved in your 40s, so now is the time to start saving for retirement. Should you postpone saving, you won’t be able to catch up without socking away much more money later, when you’ll have other demands such as raising a family and funding your kids’ college education.
The Federal Deposit Insurance Corporation (FDIC) recommends that you contribute as much as you can to IRAs, 401(k)s, Keoghs, and other retirement savings while meeting other goals, such as buying a home or starting a family. Keep your debt from credit cards and other sources manageable. If you don’t already own a home, consider if this is a good option for you. While a home purchase can be expensive, it also can be an excellent investment and source of tax breaks.
Given your years until retirement, you probably can afford to be fairly aggressive with your investments. A possible portfolio could be: 60% to 80% in stocks or stock mutual funds and most of the rest in certificates of deposit (CDs), bonds, bond funds or money market accounts.
Here are some additional suggestions for what you can do today to help ensure a brighter financial future.
1. Establish a workable budget—Using a budget will help you balance your spending and saving within the constraints of your income level.
2. Pay off credit card debt—Minimizing the effects of compound interest by paying off your credit card debt should be Job #1. That’s why the FFEF debt elimination plan makes such good sense. By following the program, especially while you’re young, you’ll be able
The Different Stages of Life and their Financial Demands