Financial Future Forecast

By: Bob Guy

Planning for your future can seem overwhelming at times, but it doesn't have to be. If you don't know anything about investing, then start small and learn little by little. Make simple choices and stick to a plan. If you are starting out with a large sum of money, then you may want to seek professional advice before making a move. If you are just thinking about saving, then here are some tips to help you ensure you financial future.

The first rule of thumb is to put away as much as possible. No amount is too small to start saving. You may only have a bowl of change on your nightstand to start, but many savings accounts don't require more than five dollars to get started. Shop around town and find a savings account with the best interest rates. You can also find financial institutions online that have less overhead than a traditional bank and can pay out a little more. Consider fees and rules that may not fit well with your plan. Sometimes more restrictions can prevent you from dipping into your savings, but sometimes they can cost you the interest that you've earned in one fee for withdrawal.

Money market accounts generally pay more than regular savings accounts, but the interest rates can fluctuate a little more. Institutions that offer money market accounts usually have minimum amounts that you can deposit and a minimum to open an account. They can be great for automatic investments that come out of your checking account right after your direct deposit has cleared. Setting up an automatic investment can help you save money quickly. If you never had the money available to you in the first place, then you're less likely to even consider keeping it for spending money a possibility. Many people find that when they have an investment coming out regularly, they just learn to cut back on other expenses to make up the difference in their pay.

If your job offers a 401K or other retirement savings plan, take advantage. Employers match your contributions up to a certain percentage and you can quickly build up substantial savings. Contributions are usually taken out of your check before taxes and are figured on a percentage basis. This helps you build the amount that you save because your contributions increase as your pay increases. Another option is a Traditional or Roth IRA. You can participate in these plans whether you choose to use an employee sponsored retirement plan or not. These plans have tax benefits, either upon retirement or in the contribution year. The restrictions on taking money out of any account designated for retirement can help you put money away and not be tempted to use it before retirement. A financial advisor can help you determine what your risk tolerance is and help you make a sound investment. They'll take into consideration the amount that you have to invest, how tolerant you will be of fluctuation and how long you have until retirement.

Saving for your future has to start somewhere, so just start where you can and take it one step at a time. You can educate yourself as you go along and secure your financial future, even if it is five dollars at a time.

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