As the new year is just starting up many people are starting to make new year resolutions about their health and their finances, and why not? What better way to jump-start your year by getting on track for financial success?
So why not make 2012 the year you start your journey to getting rich? Here is a simple 4 step plan to prove that retiring young needn’t be a luxury afforded only to the super rich.
Step 1: Get Out Of Debt
The first step of course for financial success is getting rid of expensive debts like overdrafts and credit cards and if you have these it really doesn’t make sense to worry about anything other than clearing it.
If this sounds like you, consider starting 2012 with a resolution not to go out or spend any money you don’t have to. It won’t take forever and if you work hard you might clear your debt faster than you thought possible.
Step 2: Start Investing
The next step is to start building a savings fund – start with a little amount in a savings account but also start looking at other ways you can invest, there are more options than I can list in this post and it might be worth asking for financial advice if you are unsure.
Interest rates might be low right now, but that means that mortgage payments are low too – any money you can invest at a rate higher than you pay on your mortgage is money well invested. Any savings (above an emergency fund) that earn less than your mortgage costs should be paid off the principal or invested.
Step 3: Write A Budget
I mean a long term budget too. Start by planning your daily finances – you know how to do this already I’m sure. Figure out how much you can save/invest/pay-off each month and then create a cash flow forecast for yourself. It doesn’t need to be super accurate, just a guide.
Plot your mortgage payments (or hypothetical payments if you don’t yet own a house) and your investments and figure out what sort of income (in today’s money) you might actually need to live off come retirement age. This might seem like a way off, but knowing what you need to achieve is very motivating.
Step 4: Go Live A Little
The curse of the rich (in most cases) is workaholism, so once you have a plan, make sure you take the time to do fun things (within your budget of course), get exercise and learn new things. A large part of retiring young is staying young as you age.
In 2012, start your journey to long term financial success, but also take up a hobby that will benefit you now. Enjoy your year!
About The Author
This post was written by Mark from www.currencyconverter.co.uk