If you’ve been reading my blog all this week, you know I’ve been going through a list of tensteps to get your financial life in shape. If you don’t feel like going through five posts to review my suggested steps, here is the whole list, collected and put in the proper order:
0) Help Those Who Are Less Fortunate – Even before you have your own finances under control, give what you can to charities and others who need help.
1) Earn More Than You Spend – Cut your expenses or increase your income so you have a surplus.
2) Have Adequate Insurance to Protect Yourself and Your Family- Make sure that you have homeowner’s/renter’s insurance, car insurance, health insurance, and life insurance to cover you in emergencies.
3) Fund Your 401(k) or Equivalent Plan Up to the Match Provided by Your Company – Not doing so is essentially giving up free money from your bosses.
4) Create a Small Emergency Fund – Put at least enough money to cover one month worth of expenses, more if your job situation is shaky or you generally need more protection.
5) Pay Down Your High Interest Debt – Pay off any debt that charges more than six percent interest.
6) Bulk Up Your Emergency Fund – Save at least enough money to cover six months of your expenses.
7) Increase Your Retirement Savings if Needed – Increase your retirement savings (if necessary) in IRAs, your 401(k) and taxable accounts so that you are on track to meet your retirement goals.
8 ) Buy A House (If You Want to Own a Home) – By this point, you should be ready to save up for a house down payment and start on the path to home ownership.
9) Start Donating to Charity (If You Aren’t Already) – If you haven’t already started to give back to others who are less fortunate (preferably as early as you are able without jeopardizing your own financial situation), do it now!
10) Save and Invest for Other Long-Term Goals- Now’s the time to consider where you want to go in life, and meet whatever goals you desire:
-Pay down low interest debt
-Invest for your childrens’ education
-Invest more to retire early
Once you complete these ten steps, you will be in great shape financially. And that’s a wonderful thing.
- Investing 101: Five Types of 'Cash'
- Small Business 101: Which Business to Start?
- Ten Steps to Control Your Finances: Steps 9 & 10
Related Websites
Matt Jabs
on May 21 2009
I’m glad you put the summary post together, otherwise it can be an overwhelming read overall.
I REALLY like the way you ordered the top 10 here, w/the exception of giving, I put that as numero uno.
An excellent set of steps that I am also following to a tee! IT WORKS PEOPLE!!
Roger
on May 21 2009
@Matt: Glad you liked it. I struggled a bit about where to put giving in the order as well and said as much in my comments on donation. My logic is that, by the time you’ve completed the first eight steps, you have built a pretty solid foundation for your financial life and should have no problem donating a portion of your funds.
Of course, if you can and are willing to donate earlier in process of getting your finances in order, I would highly encourage you to do so. But I didn’t want to put it earlier in the list of priorities, for fear that doing so would cause people to neglect their own financial needs in order to donate to charity. (Not that I believe I’m the only source someone would use for financial guidance, but just in case.)