Sign up on right to get free WEALTH TIP’s Newsletter, and FREE bonus eBook; 20 Minute Guide to Investing! And be sure to pick up my RSS feed or email subscription and follow me on twitter so you get the word immediately.

READER PERSONAL FINANCE QUESTION:

“Hi, Barbara. I hope you don’t mind me reaching out to you. When I left my job, I
left $130,000 in a retirement account. I met with a financial advisor who
suggested an annuity, but I am not sure that is the best bet. I know you can’t
officially offer financial advice as an advisor, but what do you think of a
variable annuity from Allianz?

I would like to convert it all to a Roth IRA but know we can’t take the tax hit in one year. I would appreciate any insight you can give. Thanks!”

MY RESPONSE:

WHY DO FINANCIAL ADVISORS LOVE ANNUITIES?

Sign up on right to get free WEALTH TIP’s Newsletter, and FREE bonus eBook; 20 Minute Guide to Investing!

And don’t forget to pick up my RSS feed or email subscription and follow me on twitter so you get the word immediately. 

A method to grow your blog readership is to visit other blogs and comment on their articles. The theory behind that strategy, as I learned from the Problogger 31 Days to a Better Blog is that the more recognizable you are on line the more likely others will want to visit your site and read what you have to say. Krantcents has taken this strategy to the highest level and consequently is growing his readership quite substantially.

As I was visiting some of my favorite sites, Yes I am Cheap, My Multiple Incomes,  Budgets are Sexy, and Len Penzo dot com, I found a theme. Now, this theme is not new to me, but it got me thinking. There are a group of bloggers who choose to share their net worth, debt, and spending figures.

HERE’S MY SECRET; As a natural voyeur, I find this information fascinating. I am both amazed and curious about those who share this most sensitive data, and I can’t stop reading it! On top of that, I can’t help but compare my metrics to theirs. Sometimes I come out on top and other times, not so much.

My realization was that there are advantages and disadvantages of both sharing your personal financial information on line and reading about others who disclose this sensitive information.

Advantages

For the ones who put their information out there, I’ve heard it is motivating and serves to hold them accountable. That’s what Flexo of Consumerism Commentary shared with me during my Personal Finance Luminaries interview with him. For the bloggers sharing their earnings on line, it is a source of pride that readers enjoy their articles and advertisers support them.

For the readers of these financial disclosures, we get to peek inside others’ bank and debit accounts. This fulfills the prurient curiosity in us.

Disadvantages

With such transparency on line, there is always a possibility that some evil hacker will get access to someone’s identity or financial data and use it for themselves. If you use your own identity and share this personal information, it may be a bit uncomfortable when your boss, friends, and family have all of your financial statistics.

As a reader, you might feel badly if your net worth or blog earnings don’t measure up to those of another. After all, we all tend to compare ourselves a bit with others. This comparison might also cause you to neglect some responsibilities and devote more time and effort to blogging than is appropriate for your situation.

The Takeaway

In blogging as in life, watch out for the tendancy to compare yourself with others. You create uneccessary stress by worrying about the decisions and actions of those around you. Be mindful of your own goals and objectives and don’t be swayed either positively or negatively by what you read about others’ endeavors. After all, the only one keeping score is you!

What’s your secret take on this topic? Are you a financial voyeur? Or, what leads you to share your personal data?

image credit; photoshoparam Dan

Guest article by Briana of 20 and Engaged

If you’re an avid sports fan, or at least live with one, you are no stranger to the recent sports lockouts. The NFL has just begun its season after it was locked out for 135 days, and the NBA is suffering the same fate, threatening to cancel the entire season if the owners and players don’t come to a collective bargaining agreement. This has happened before to the NBA back in 1998, and fans weren’t happy about it. Let’s just say, pockets around the nation are affected by sports lockouts.

What is a Lockout?

A lockout is different from a strike, in the sense that the owners will not allow players to work. This is also known as a work stoppage. In a strike, the players would refuse to work.

This year, the NFL was locked out mainly due to revenue sharing between the owners and the players. Basically, the owners were saying they wanted more money for team upkeep and they were claiming to be losing money. The players wanted proof by having the owners show their records for the past 10 years, but the owners only showed 5 years worth of financial history. This extended the lockout for longer than it was originally anticipated.

The NBA’s main issue for their lockout this year is their salary cap, which is the limit to the total amount of money that NBA teams are allowed to pay their players. If a team goes over that cap by a substantial amount, they are required to pay a luxury tax, which is $1 to the NBA for every dollar you go over the cap.

What Happens During a Lockout?

Players are not allowed to interact with management of a team which includes the owners, the general managers, the coaches, the doctors and trainers, scouts or any other executive staff of their teams. This could be very frustrating for all parties involved. Imagine not being able to talk to your job’s executive team, but having your union speak for you.

No trade talks mean you’ll be clueless about whether or not you should be preparing your family for a move to a different city. In this economy, selling your house on the fly is a miracle, so players needed to have a good real estate agent on standby if they want their home sold or need to purchase a new home when the lockout is lifted.

Players don’t get paid which is probably the hugest financial disadvantage for those affected by the lockout. Of course, the players aren’t getting paid because they’re not playing any games. Hopefully they had an emergency fund saved up to handle things while they were out of work.

More than just the players lose money due to games not being played. Just think of all the people involved in a sporting event. You have the doctors, trainers, venue employees and the entire team’s staff not earning a dime. Everyone at this point is temporarily out of work, from the team’s water boy, to the team’s mascot, down to the ticket taker and concession worker at the stadium. Not to mention, television networks like Fox Sports and ESPN lose money for not airing these games.

More injuries occur during a lockout because you don’t have access to team doctors and trainers. Players like Indianapolis Colts quarterback Peyton Manning did not get to receive proper treatment during the regular off season, and had to schedule surgeries and appointments when the lockout was lifted, causing games to be missed.

While the NFL’s lockout was lifted just in time for the season to begin as scheduled, the NBA has a history of not being so lucky. In 1998, professional basketball experienced a 204 day lockout, causing the season to be shortened from 82 games per team to 50. 464 regular season games were missed. Think of how much money was lost combined by everyone involved.

Financial Lessons from the Lockouts

Lockouts are a serious burden for everyone involved. The NFL season is underway, but the future looks grim for the NBA. Here’s what I learned:

1. Have an emergency fund in the unfortunate event that you lose your income, even temporarily. A lot of NFL players voiced their concerns about how they were going to provide for their families if the lockout continued.
2. Have additional sources of income so that if your main source is diminished, you’ll still have money coming in. Some athletes like Kobe Bryant, LeBron James, and Kevin Durant are lucky enough to have endorsement deals that are worth even more than their contracts.
3. Prepare a retirement plan: 70% of NFL players are broke 3 years after they retire. This is because they have not planned out their retirement with their lifestyle. You have to save aggressively if you want to retire early.
4. Live a lifestyle you can afford: Sure, when you become a millionaire you’ll want to buy multiple houses and cars, and take care of your family and friends, but once that money is gone, your bills will remain the same.

I’m glad I’m not an athlete, as this has truly been a great example of the saying “more money, more problems”. I hope that each person affected by these lockouts has had a change of heart financially.

For a quick overview of Investing Strategies, pick up my FREE eBook; 20 Minute Guide to Investing (top right of the page). If you like what you’re reading, sign up for my RSS feed or email subscription and follow me on twitter so you get the word immediately

Do you think the super wealthy have fewer money problems than the middle class?

image credit; Ed Yourdon

VIDEO SERIES; Part 2

News Flash; I’m nominated for a Plutus Award in the Best New Ebook Category for my ebook 20 Minute Guide to Personal Finance (download for free on the right)!! Please vote for me here!

Welcome to Part 2 of my video series. In Part 1, I talked about how I went from a scared girl to a confident and successful adult. The video I showcased was a first attempt project with hints for Holiday shopping. The tips work well for any season. And the article championed getting started now!

Todays video, dedicated to those just starting out, lays out money ideas for the 20-somethings and smart money reminders for the more established.

“Never spend your money before you have earned it.” Thomas Jefferson

Follow Jefferson’s advice, add in a bit of saving, and you are on the right path. Watch the video, consider the tips, pass them along to your friends, and help them become money smart!

Money doesn’t have to be complicated. Develop consistent habits, don’t spend what you don’t have, be patient, and your money will grow. And don’t forget to create additional income streams to grow your wealth.

• This is part 2 of a series showcasing my YouTube Videos. Learn personal finance and life skills from these instructional videos. Make sure to check out Part 1; Achieve Your Perfect Life With Goal Setting.

Check out these websites dedicated to those just starting out:

• The College Investor
• Financial Success for Young Adults
• Young and Thrifty
• Thousandaire

What money advice do you wish you knew when you were starting out?

UPDATE; Over the next month my family is moving across the country to a new home. Please enjoy a variety of guest articles from top notch bloggers and sponsors. Also, catch up with earlier favorites from Barbara Friedberg Personal Finance.  

 The following is a guest post by Kevin from Invest It Wisely.

Many personal finance blogs have different themes; some focus on investing, while others focus on retirement. Some look at the lifestyle aspects which others focus on getting out of debt. I personally look forward to financial independence and getting out of the rat race.

I write a lot about my thoughts and beliefs and where I would like to end up, but sometimes leave out the process to get from here to there. I’ve taken it for granted that everyone has good financial records and can thus easily plan for the future, but if that hasn’t always been true of myself, how could I expect it from others?

Data is information, and information is power. Before we can make decisions about retirement, where to invest, or which debt to pay off next, we need to have a good sense of where we are, and where we’re heading. I want to share what I have been using as my own personal compass, as well as learn from you, the reader, on how you keep track of your bearings.

I’m a young guy, but I’m pretty old school when it comes to tracking my finances. I personally didn’t track anything until around 2004 or 2005 or so, when I slowly started to accumulate a bit of savings and I actually had something in the bank worth keeping track of. From then on, I made good use of plain old spreadsheets using Excel and later Open Office.

WHAT I LIKE ABOUT A SPREADSHEET

A spreadsheet is simple, but it can be a powerful way to keep track of your finances. It shows all of your expenses, income, assets, and liabilities at a glance, even if you update it only once a month and only keep track of aggregate data. When you keep track of it at this level, it doesn’t take much time but you have easy access to a record and history to see where you’ve been, and where you’re going.

Income and Expenses

• For individual expenses, rough data is okay. Keep track of how much you spend on gas, food, debt repayments, and other regular expenses. (Barb’s comment; don’t let perfectionism keep you from this step, ballpark the numbers.)
• I also like to keep track of my total gross income so I can see how much I am losing to income taxes. (Barb’s comment; For Canadians like Kevin, this is even greater than those in the USA)

Assets and Liabilities

• For assets and liabilities, it is more important to have a good record of the most recent balances. (Barb’s comment; Assets are what you own and include your investments, and real property. Liabilities are what you owe, like loans and mortgages.)
• Usually this will be no more than recording the balances from your online banking and investment accounts.
• You can further categorize your investment assets by type of asset; stock, bond, real estate, etc.
• It can be helpful to include additional assets such as cash and bullion you have at home or the current value of your car. As your car depreciates, you can see the impact it has on your net worth and the necessity of putting money aside to save for a newer car.

Make Better Decisions

Once you are armed with the basic knowledge and data, you’ll be in a much better place to make decisions. You’ll know if something is eating up too much of your money and time, and you’ll see if your investing strategy is still in line with your goals. By recording this data month after month, you can also chart your progress over time.

Kevin’s dream is to get out of the rat race and achieve financial independence. He writes at Invest It Wisely, where he shares his thoughts and experiences and loves to receive feedback and learn from others.

For a quick overview of Investing Strategies, pick up my FREE eBook; 20 Minute Guide to Investing (top right of the page). If you like what you’re reading, sign up for my RSS feed or email subscription and follow me on twitter so you get the word immediately.

So, reader, what is your own preferred way to keep track of your finances? Spreadsheets served me well for many years and I still make use of them. I also use GnuCash these days, which is a free and very powerful financial accounting tool. Which tools do you use, and why? I would love to hear your thoughts.

image credit; nist6ss

For a quick overview of Investing Strategies, pick up my FREE eBook; 20 Minute Guide to Investing (top right of the page). If you like what you’re reading, sign up for my RSS feed or email subscription and follow me on twitter so you get the word immediately.  

Don’t Let Financial Infidelity Ruin Your Relationship

Imagine this, you get an overdue call alert from the video store for a movie (porn) you never rented. Up in arms, you visit the store to dispute the charge where you uncover your hubby’s financial infidelity. He has separate credit cards to fund his porn rentals, downloads, and has amassed $30,000.00 of debt!

Bethany and Scott Palmer, “the money couple”, have a combined 35 years of financial planning experience. Their extensive experience chronicles the pitfalls of money dishonesty between couples and what to do about this grave chasm of trust. If you are in a relationship, read this book and circmvent the travails of money mismatches.

Highlights:

• The money is a symptom of underlying marital problems.
• To circumvent money infidelity couples must practice healthy communication.
• Money attitudes affect every decision we make.
• This solution oriented approach helps the reader not only define and understand the problem, but offers actionable solutions to prevent and solve couple’s money problems. 
• The book is filled with colorful anecdotes and stories illustrating the devastating problems of money and relationships.

The Quiz

I love quizzes! Take this questionnaire to find your Financial Infidelity Quotient and see if you have a problem. Sample questions include:

• Do you have a credit card your partner is unaware of?
• Are you comfortable with the amount of debt you have?
• Do you have a secret stash of cash?
• How often do you and your partner discuss money?

The quiz is a conversation starter and an excellent way to uncover disparate money attitudes. If you don’t know how you differ and what is causing a rift, you and your partner can’t begin to solve your money problems.

Money Personality

The first rule of human behavior is that you must understand a problem before solving it. By determining your money personality styles, you and your partner can begin to deal with the accompanying problems.

Kim, the daughter of missionaries grew up dirt poor. Husband Ed came from an affluent family, had a good job, and made a good living. Kim believed she since she grew up poor, and Ed made enough money, she should get everything she wanted NOW. Ed had more conservative ideas for their cash and resented Kim’s relentless spending. Their problems were deeper than the dollars and cents, but went to the core of their belief systems. Their money personalities were at odds.

• Saver: These penny pinchers hate spending money and are thrifty on all fronts.
• Spender: All money is spent. If she/he has it, the money gets used!
• Risk taker: Believes in order to gain large rewards, you have to take big risks.
• Security seeker: Planners are security seekers. These folks like to have their ducks in a row and their future in order. (This is my type -along  with a bit of the saver and a smidge of the risk taker)
• Flyer: They just don’t think of money and fly by the seat of their pants. Many creative types fall into this type of category.

Can you see how certain types and combinations of money personalities can lead to big financial problems?

Solutions

A review wouldn’t be complete without a taste of the solutions section. After all, it’s great to know you have a problem, but not so good if you don’t know how to solve it!

Continuing with the step-by-step tone of the book, the Palmer’s outline several solutions to get out of financial infidelity. At no time do they imply that this is an easy path and on occasion discuss couples who dig themselves out of a mountain of debt and infidelity, only to return to their former state! To whet your appetite, here are a few of their solutions:

• Stop overspending! (Barb’s note; easier said than done)
• Accept your situation and realize there is no shame in having money problems.
• Do not blame! It’s easy to blame one partner or another, but that does not get you out of trouble.
• Accept responsibility for your problems. You got yourselves into the mess and only you can get yourselves out.
• Plan- create a plan to get out of financial trouble and stick to it.

 This book is for both those couples just starting out who want to begin their relationship on a strong financial footing and couples in long standing relationships. Those committed to solid communication and honesty will find the resources here to obtain a strong money relationship.

If you are already in a relationship with open and honest communication, you don’t need to read it! Just keep it up.

Book Details

• Title: First Comes Love Then Comes Money; A Couple’s Guide to Financial Communication
• Authors: Scott and Bethany Palmer
• Publisher: Harper One
• ISBN 978-0-06-164991-2
• Price: $14.99
• http://www.themoneycouple.com

STOP BY YAKEZIE.COM AND READ THE MY AUTHOR INTERVIEW WITH THE PALMER’S.

What are your biggest “couple money” stressors?  Not a couple, how do you and your friends struggle over money? Do you and your partner talk about money?

Welcome to the, “Quick Personal Finance Tip.” This feature gives you access to quick tips to further your financial goals. Look for these tips periodically. Better yet, pick up my RSS feed or email subscription and follow me on twitter so you get the word immediately.  

FREE BANKING

Free Banking Still Exists

I’m a huge fan of FREE. It really cuts down your expenses!

I recommend getting free banking a lot. But researching and finding out where these “free” banks are is a lot of work. Here’s a tip sheet to get you started! Leave the work to me, or actually to an article from the April 10, 2011 WSJ Sunday by Rachel Louise Ensign.

NO MINIMUM BALANCE REQUIRED & NO SERVICE FEES:

• State Farm Bank
• Ally Bank
• Charles Schwab Bank

They even refund ATM fees!

NO INITIAL DEPOSIT REQUIRED

I didn’t believe this one. Ally Bank’s interest checking account and Charles Schwab bank’s high-yield investor checking accounts can be opened without an initial deposit. How great is that?

INTERNATIONAL TRAVELERS?

Both State Farm and Charles Schwab Banks refund foreign ATM fees as well. Great if you’re heading out of the country.

WANT TO EARN INTEREST?

Schwab and Ally offer interest and State Farm will give you interest if you maintain a $2,500.00 minimum balance.

WHAT’S THE DOWNSIDE?

DEPOSITS! You need to mail in deposits or transfer from another bank. Although, you smart phone and android users can mail in photos of the deposits. Others can scan in their deposits. You decide if the hassle is worth it!

Charles Schwab is looking better and better with investment account minimums of only $100.00 and no minimum deposit checking!

image credit; wave music studio

Where do you bank? Online or bricks and mortar? How have you changed your banking?

teach children about the world & money

Guest post, by Charles Tran 

Financially responsible adults are usually grown from financially responsible children. If you want to give your child the best chances of financial health, then begin teaching them financial lessons today. Financial responsibility can never be taught too early. 

Even if your children are years are away from heading out into the world on their own, there are a number of ways you can begin teaching your children about finances. Here is our list of the top financial lessons to teach your child: 

1. Hard work pays off – Let your children see you work. Show them your paycheck, and explain to them that they must work to earn money. Set a good example by paying them a small amount for accomplishing chores around the house. Although some parents feel that allowances are not important, they are a great learning tool, as they allow children to understand that working hard pays off – and that money does not come easily. Once they have a few dollars to their name, it opens the door to further teach them financial lessons.
2. Saving is important – Saving for a rainy day is a lesson that even the youngest child can understand. Make saving more enticing for your little ones by paying them “interest” on what they save in their piggy bank. Giving them a dime for every dollar saved can quickly illustrate to them the value of saving (and even compound interest for older children!).
3. You must spend within your means – One of the most important lessons we can teach our children is the importance of spending within our means. If you teach your child to spend no more than she “makes” in her allowance, she will likely make the same prudent decisions as an adult – using her credit card wisely and paying off the balance each month. Learn to make a debit card purchase also. 
4. Budget yourself – Teach your children the benefits of making a budget, and help them to make a budget based upon their allowance. Show them your household budget and how you work to pay your bills and save each month. Showing your children your household budget will also likely give them a better understanding (and perhaps a newfound appreciation) of the sheer cost of maintaining a household. They will more easily understand why you are saying “no” to the $40 collector’s edition Barbie!
5. Borrow responsibly – Teach your children the benefits of borrowing money to achieve large financial goals, such as a home, car, or even a fancy watch. However, also teach your children the responsibility that comes with borrowing money. From credit card bills to car notes, teach your children that borrowing comes with its share of responsibilities, and that repaying debts is vital for maintaining a good credit score. If your teenager asks to borrow money from you, then lend it to them – with interest. This will quickly demonstrate the importance of borrowing responsibly. (Barb’s comment; I’m not a fan of lending to family memebers as it can get messy really fast. I would rather give a gift. If they want to repay, okay, if not, it hasn’t damaged the relationship)

It is never too early to begin instilling financial prudence in your children. By using their allowance, spending, and borrowing habits as learning tools, you will raise financial responsible children who will carry monetary wisdom into their adult years. 

For a quick overview of Investing Strategies, pick up my FREE eBook; 20 Minute Guide to Investing (top right of the page). If you like what you’re reading, sign up for my RSS feed and follow me on twitter so you get the word immediately.    

Barb’s question; What tactics are you using with your children, or did your parents use with you to impart smart money strategies? 

image credit; Zephy-zoo

& LINK ROUND-UP

I NEED HELP

One driving force for Barbara Friedberg Personal Finance is to offer personal finance and life management help to those without models or mentors. As told in My Story, I am fortunate to have the perfect combination of strong financial management models and an undergraduate degree in economics and a masters degree in business. I WANT TO SHARE MY KNOWLEDGE AND INFORMATION WITH OTHERS.

I am happy with my blogging progress so far and for the month of February, I did okay:

• 2,973 Visitors
• 70 Countries represented
• Most popular articles in February:
• An Investing Story with a Big Lesson
• Is it Time to Sell?
• Wealth in Life; 25 Cheap Ideas for Fun
• How to Cope with Buyers Remorse
• Why You Must Start Saving Now

Overall, I’ve grown the site quite quickly:

• International Alexa rank (measure of visitors to the site) - 98,631
• USA Alexa rank - 20,344
• Google page rank – 2
• MOZ rank – 5

It looks like I’m going quite well, then what’s the problem?

I NEED YOUR HELP TO REACH MORE PEOPLE WHO NEED TO IMPROVE THEIR PERSONAL FINANCES

I take complex subjects and break them down into easy to understand topics. I’m also writing simple, easy to read books on personal finance. I already have a FREE eBook, 20 Minute Guide to Personal Finance which can be downloaded from the top right of the site. My next book, 20 Minute Guide to Personal Finace for New College Grads, is coming out soon!

I want to reach a greater audience!

Pass the web address of Barbara Friedberg Personal Finance on to ANYONE WHO MIGHT BE INTERESTED IN LEARNING PERSONAL FINANCE BASICS!

What’s in it for you?

Obviously, you would be doing a good deed.

1. More than that, anyone who signs up for my RSS feed will be entered to WIN A $25 AMAZON GIFT CARD & THERE WILL BE 2 WINNERS.
2. That means, you can sign up and win. Your referral can sign up and win!
3. Refer someone else to Barbara Friedberg Personal Finance & get an additional entry for each person you refer.
4. How will I know? Tell me in the COMMENTS SECTION, the initials of everyone you referred & if you SIGNED UP FOR MY RSS FEED.

ENTRIES CLOSE MARCH 30, 2011

Thank you for helping me help others!

BARB RECOMMENDS:

Here are some of the outstanding personal finance articles I’ve been reading recently. Check them out and boost your wealth and information.

YAKEZIE BLOG SWAP EVENT (Round 3); Narrow Bridge. This is a really cool event where a group of bloggers all write on one topic. This month’s topic-A TIME I SPLURGED & I’M GLAD I DID. The individual perspectives show that everyone splurges once in a while!

100 Things I learned from Blogging; Faith and Finance. If you are interested in blogging, you must read this article.

First blogoversary HUGE Giveaway; Budgeting in the Fun Stuff. You must enter, great odds (AND I’M A SPONSOR!)

Investing in Oil; Why the Middle East is a Breeding Ground for Black Swan Events; Beating the Index. Some thought provoking ideas about oil and global economics.  

How Important is Financial Balance to You? Invest it Wisely. Who does what in your relationship? Do you think about fairness? Kevin offers some great insights here.   

Sensuous Value is the Worst Kind; Consumerism Commentaryguest post by the Weakonomics. Acting from your gut (like a monkey) or following sound financial principles, which is better?

Graduated from College; Financial Tips for the New Graduage; The Digerati Life. Great tips for those starting out and others!

A Sobering Reality, Where Did All My Money Go? Frugal Confessions.

Today I Solved Student Debt Forever, Money Mamba. Great tips for the young and inexperienced! This site has some great content.

Yakezie Member Post; First Generation American. Read this heartwarming story about in immigrants transition into financial prosperity.

There is More to Risk Than Meets the Eye, GenX finance has an excellent and instructive article,  detailing the many faces of RISK.

Seth Godin has lots of free stuff, here. If you haven’t met Seth yet, here’s your chance.

Financial Advice is Everywhere, 50 Plus Finance. There’s so much advice out there, but how to get people to follow it? He’s on the same campaign that I am!

DON’T FORGET TO REFER YOUR ACQUAINTANCES AND FRIENDS, SIGN UP FOR MY RSS FEED AND ENTER TO WIN ONE OF TWO $25 AMAZON GIFT CARDS.  Why not follow me on twitter so you get the word immediately?   

image credit; Keoki Seu

Guest post from Bailey Harris. Bailey writes about insurance and other topics for the Home Insurance Blog.

It’s finally here…graduation day. You received your diploma. You’ve taken a few days to celebrate, and now it’s time to move on to what comes next–the rest of your life. If you’re like most new grads, you’ve probably promised that you’ll be smart about your financial future, but still aren’t sure where to begin. Here are some financial tips to help you get off on the right foot.

Stay Focused

Because you’ve been strapped for cash for the last four years, you may be tempted to take the first thing that comes along. Remember, you’re planning your future, and the first opportunity may not be the best choice. You more than likely began your job search long before you graduated, so you already have a basic idea of where you’re headed. Don’t get sidetracked by something that sounds good, but may not be in the field you studied for. If you’re looking for a career in banking and take a job in another field just because it looks like easy money, you may become stuck and never reach your goal. Yes, you have bills and need to start somewhere, but taking an entry level position in your chosen profession may be better in the long run.

Get Covered

Since it’s your future being discussed, keep in mind that you should be thinking long-term. That means protecting yourself with a good insurance policy in case something happens. Until now you’ve probably never considered medical bills or auto insurance. Your parents always took care of that. Now you’re a grown up and need to start acting like one. Making sure you’ll be able to make ends meet if something unforeseen should happen is part of becoming a responsible adult. Sure, you’re young and strong and healthy, but that’s no guarantee things will remain that way. Protect yourself. And take time to shop around–every company charges different rates. One insurance provider may charge hundreds of dollars more than another for the save coverage levels.

Repay Those Pesky College Loans

You’re doing well these days. You’re getting a steady paycheck, with higher numbers than you’ve ever seen with your name on it. After four years of scrimping and scraping to come up with pizza money, you’re suddenly (by comparison) fabulously rich. The temptation is to splurge, to go out and buy a new computer, the latest and greatest stereo or cell phone, or replace that old clunker with a brand new sports car. Maybe a couple of small “toys” would be okay, just to maintain your sanity, but if you want to be smart, start paying off your college debt immediately. Budget your income to include repayment of student loans or any other debts you accumulated during your college years. The sooner those are taken care of, the sooner you can enjoy the perks of your new position without the debt hanging over your head.

Start Saving For Your Future

Hand in hand with paying off your college loans should be planning for your future. The years will fly by quickly, and before you know it people will be asking you what you plan to do when you retire. It may sound laughable now, but it’s never too soon to start a savings account. Your life will more than likely include a spouse and family. There will be numerous places for your money to go throughout your life, more than you ever dreamed of, including a college fund for your own kids. Preparing now is the smart approach. Putting a little aside from every paycheck and making a dedicated effort not to touch it unless it’s absolutely necessary, is something you’ll be grateful for when the need arises.

What Is Your Destination?

Although this is listed as the final tip, it could actually be considered the most important. Where do you see yourself in 5, 10, 20, or 50 years? What will life be like when you’re 30, 40, 50, or 70 years old? It may sound funny to think about yourself in those terms when you’re young and just out of college, but before you know it you’ll have a house, a dog, a family and belong to the Parent Teacher Group at your son’s school. You’ll have a mortgage, insurance payments, car payments, dental bills…the list goes on and on, because that is life. Be prepared for it. Plan your future. Decide where you’re going, what your destination is, and make and follow plans to achieve the goal. Your education was difficult to get. You studied hard, made sacrifices, and now that you’ve graduated make sure it was all worthwhile. Plan ahead!

Barb’s remark: Make sure to welcome those pitfalls and failures along the way. The road to success is paved with stumbles.

Barb’s question; What advice would you give a new college grad?

image credit; David Smith Photography