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The Wall Street Journal Guide to Starting Your Financial Life - Softcover

Buch 6 von 15: Wall Street Journal Guides

Blumenthal, Karen

 
9780307407085: The Wall Street Journal Guide to Starting Your Financial Life
Softcover
ISBN 10: 030740708X ISBN 13: 9780307407085
Verlag: Three Rivers Press, 2009

Inhaltsangabe

Your Road to Lifelong Financial Independence

It’s about time you felt empowered to better manage your money because–in tough economic times more than ever–your financial freedom depends on making smart choices. But it’s hard to know where to begin, especially when you’re just starting out. And of course, it only gets more complicated as you go through life: How do you establish good credit? Do you buy or rent? What kinds of health coverage do you really need? How do you actually stay afloat in an uncertain market?

The Wall Street Journal Guide to Starting Your Financial Life gets you off on the right financial foot, from tackling everyday choices like cell-phone plans and pet ownership to big decisions such as smart investment strategies and buying a car or a house. You’ll learn:

• How to open your first checking and savings accounts, get your first credit card, and establish good credit
• The ins and outs of starting a job, including information about taxes, choosing health insurance options, and saving for retirement
• How to budget for big purchases and expenses, such as paying off student loans, buying a car, and affording your housing
• Strategies for buying the little things you want and need without going broke
• The basics of investing, how to manage an inheritance, and the documents you need to protect your assets

This valuable resource puts you in the driver’s seat, so you will be in control of your money and on your way to achieving lifelong financial independence across any economic terrain.

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Über die Autorin bzw. den Autor

KAREN BLUMENTHAL, a veteran financial journalist, writes The Wall Street Journal’s Family Money column. She is also the author of Grande Expectations: A Year in the Life of Starbucks’ Stock, which was named one of the five best investing reads of 2007 by Kiplinger’s magazine. She lives in Dallas.

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Where Do You Want to Go?

For any journey, your goals are the starting point.

map it

Where are you headed? It’s a simple enough question when you’re going on a road trip with a clear destination. But it can seem daunting when you’re talking about those bigger milestones, such as those along your career path or on the way to financial security.

Here’s the good news: When it comes to your money, there are many “right” answers. And you don’t need to know exactly where you’re headed. It does help, though, to know generally where you’re trying to go. Do you want only enough money to buy the newest iPod? Or are you eager to buy a car? Do you need to pay for your further education? Would you like to own a house someday?

Down the road, what are your ultimate dreams? How important is it for you to feel financially comfortable? Do you have a burning desire to be rich—whatever that means to you?

What are your goals and financial aspirations? Spend a

little time thinking them through, or write them down if that works for you. If you have a spouse or partner, talk about or write down your mutual goals as well. Once you’ve identified them, it will be easier to see what you need to do to get there.

directions

To reach your money goals, you’ll need to do some advance planning. Unless you were blessed with a trust fund or won the Survivor jackpot, the first step toward a successful financial life will be building your savings. That means, of course, that you will have to save—and you’ll have to keep from dipping into your savings to pay your bills. The more you save now, the more options and the more flexibility you will have later.

As you reach for more costly goals, you’ll need to make other decisions about your comfort levels. Borrowing can help you buy big- ticket items, from a new couch or TV to a college education, a car, or a home. But each dollar you borrow is a dollar-plus that you’ll have to pay back, factoring in interest payments. How much do you want to owe to someone else? How much of your earnings are you willing to give up in interest payments to others for the right to use their money? And how long do you want to be in debt?

As you reach for bigger goals, you’ll also need to assess how comfortable you are with risk. Greater risks can mean greater rewards— and steeper losses. Playing poker may be fun when you’re winning, but how do you handle your losses? As you make each new financial commitment or borrow additional money, consider how many other commitments you have or how much you already owe. How will you feel about those responsibilities if you lose your job or fall ill? What kind of financial cushion do you need to sleep well at night?

If you choose to put money into a savings account, your balance won’t shrink, but it won’t grow very fast, either. By contrast, investments in the stock market are far riskier: They can rocket up as well as slide down almost as quickly. Over time, stock-market savings should grow faster than other savings. But on any given day, or in any given month, you may actually lose money. How comfortable will you be with that? Understanding risk and your stomach for it is an important part of your planning.

the direct route

The easiest way to save is to make saving automatic and regular. Whenever you have income, whether it’s a paycheck, birthday money, or contest winnings, automatically set aside some of it. A few dollars is a good start; putting away 10 percent would be much better.

If you don’t yet have a checking or savings account, see page XXX on how to open one, then start making regular transfers to a savings account. If you don’t have enough money to open an account, at the least, stash your “savings” cash in a secure place away from your wallet. If saving becomes a habit, you won’t miss the money and your savings will grow much faster.

Experts often recommend that you have, at a minimum, savings of three to six months of living expenses at the ready. If that seems unfeasibly high to you, then you should at least try to set aside enough to cover emergencies. Ask yourself, If

I couldn’t work for three months, how much would I have to pay for rent, food, and basic needs? How much money would I need to cover a big car repair or pay for a hospital emergency room visit? That’s your minimum cash cushion.

figuring your minimum cash cushion

Write down how much you spend on these basics each month. Then multiply the total by three, six, or twelve to determine how much you need in reserve to get by for three or six months or a year. (For more insight, see “Budgeting,” page XXX.)

Housing:

Rent/mortgage and property taxes__________

Utilities (water, electric, gas, heating fuel)__________

Condo fees/property taxes__________

Food, transportation and other basics:

Groceries__________

Telephone__________

Medicine/prescriptions__________

Drugstore basics (toothpaste, soap)__________

Car payment__________

Car maintenance__________

Gasoline__________

Insurance:

Renter’s/home insurance__________

Car insurance__________

Health insurance__________

Other (disability, life)__________

Debt:

Student loan payments__________

Credit card payments__________

Other necessities:

______________________________

______________________________

additional directions

The CNN Money Web site has a “prioritizer” to help you resolve the inevitable conflicts between your various goals and your means, as well as good advice in its “Money 101” section. Go to http:// money.cnn.com/magazines/moneymag/money101/

lesson1/.

Cash

Greenbacks, moolah, bread, dough, bills, or bucks—

cash is accepted everywhere.

map it

Cash is King. Almost everywhere you go, for almost everything you want to buy, you can pay cash for it.

But, duh, you already know that, right? Well, there’s more.

As basic as it is, cash has a few challenges of its own. It’s bulky to carry around, and if you lose it or it’s stolen, it’s gone. By contrast, the amount you lose from a stolen debit or credit card is limited if you report the theft right away.

If you don’t have a bank account, it can be tricky to turn someone else’s check into your cash.

In certain situations, you may prefer to stick with plastic and skip the green stuff. But even in an electronic world, it’s crucial to have cash on hand, just in case. A natural disaster, a prolonged power outage, or even a terrorist attack could leave you unable to buy food or other basics with your debit or credit card or a check.

directions

If you don’t have enough cash going in and out of your life to justify a checking or savings account, you may still occasionally receive checks from friends or for work you do for others. The easiest way to cash a personal or payroll check when you don’t have an account of your own is to go to the bank listed on the check. (Most banks will cash checks written from their accounts.) Once at the bank, you’ll need to endorse the check by signing your name in the marked space on the back exactly as it is written on the check. (Why do this at the bank? Because once a check is endorsed, anyone can cash or deposit it.)

Check-cashing stores and other outlets will cash government or payroll checks for a fee that can run from a few dollars to 5 percent of the check amount, or $25 for a $500 check. Some stores may also make you purchase a...

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Verlag
Three Rivers Press
Erscheinungsdatum
2009
Sprache
Englisch
ISBN 10 
030740708X
ISBN 13 
9780307407085
Einband
Taschenbuch
Anzahl der Seiten
316
Kontakt zum Hersteller
Nicht verfügbar
Verantwortliche Person
Nicht verfügbar