With the start of a new year here and the realities of last year still settling in it is time to take control of finances. By making sound financial decisions in 2009 we all can enjoy the feeling of complete peace of mind.
Twenty "Dos" and "Don'ts" to jump start the new year from BusinessWeek include:
- Don't try to predict the future.
- Do keep enough cash available.
- Do invest internationally.
- Don't try to pick one winning investment. Diversify.
- Do think about energy efficiency.
- Don't stop contributing to 401(k) and other retirement accounts.
- Do live below your means. Save.
- Don't make sudden moves.
- Do pay off expensive debts.
- Don't give up on stocks.
- Do track your spending.
- Don't pay high management fees.
- Do review your credit reports.
- Don't follow the herd.
- Do write down an investing plan and budget, and stick to them.
- Don't forgo necessary insurance.
- Do check out your financial adviser.
- Don't invest in anything you don't understand.
- Do make sure safe investments are actually safe.
- Don't take more risk than you can handle.
While a lot of these are fairly obvious, some of them serve as good reminders. In general the idea is to play your cards smart and always plan for the future. Always live below your means and the phrase, "knowledge is power" cannot be exasperated when it comes to your own broad financial educational.
Tips like investing internationally, not giving up on stocks, and to continue contributing to your retirement fall on the belief that emerging markets will continue to grow and the overall stock market will start moving up again in years to come.
17 - 20 are taken directly from the lessons being learned through the Bernard Madoff ponzi scheme, and I couldn't agree more. Any extra effort to research your adviser may prove to be a sound decision.
Personal Finance: Dos & Don'ts for 2009
BusinessWeek, December 18th, 2008