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Financial Planning is Essential for Survival

Financial Planning-

Today every nickel counts, especially in the light of the financial crisis that recently hit the United States (and Europe). Unless you manage your money well, money and you will not see each other much. In other words, you need fool proof financial planning to stay alive. However, here are some of the crucial arenas that need special attention.

Financial planning is essential for survival now

1.)    Avoid Overspending –

Good Financial planning means avoiding overspending. As long as your old sedan proves mechanically OK, hang on to it. Current model sedans will no doubt provide you with every conceivable comfort, but who cares?  Your home mortgage payments are still due. Do not overburden yourself unnecessarily.  Use your credit card sparingly. Remember, credit cards are meant for meeting emergencies, not for buying a diamond necklace on your wife’s birthday.

2.)   Make Hay while the Sun Shines-

Good Financial planning means, preparing yourself for retirement before you actually retire and are earning sufficient money. Remember, life expectancy rates have gone up much in the US and elsewhere. You may live another 30 years after you retire and unless you make provisions for a comfortable living post retirement days, you will be inviting trouble. One more issue, with inflation constantly compounding, prices will be much higher 10 year hence (on average prices double every 20-25 years).

3.)    Don’t Neglect Your Credit Score –

Good Financial planning means, improving your credit history as fast as possible. Maybe today you aren’t in need of extra cash, but who can say what will happen tomorrow. Moreover, having no credit oftentimes is considered the same as having bad credit. In order to build a good credit history, open a Retail Store Credit Account today and always keep it in good health.  This will be reflected in your credit history, raising the point to reputable figures.

4.)   Monitor Mortgage Rates –

Good Financial Planning Means Keeping an Eye on the Changing Mortgage Rates. Yes, mortgage rates change daily which can result in rather significant changes over time. Even a small percentage will make a big difference when the stake money is fairly high. The rule of thumb is to refinance whenever you can reduce your mortgage by 1%. But use an online mortgage calculator whenever in doubt. Often you will save enough to reduce the term of your mortgage without increasing your monthly payment significantly.

5.) Learn how to Save on your Car Insurance –  

Good Financial Planning Means educationg yourself about insurance. Saving on Car Insurance means that you can spend more money on home essentials. And you can do it with little effort. Look for discounts that are offered by your insurance company, compare insurance companies regularly, raise your deductibles to lower your premium. However, the most important issue involves changing your driving habits, especially if you are prone to driving fast in congested areas. Remember, even though the manufacturer assures you that you can drive the vehicle up to 100 MPH, you need not try it out on a city road. After all, a ticket or accident will increase your insurance premium. You can also save on Home Owners Insurance, Life Insurance, and Mortgage Insurance.

See Also:

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