Friday, February 03, 2012

Sound Financial Advice for Any Age...

If you're feeling uncertain about your financial condition, you're not alone. In fact, a majority of Americans report feeling anxiety about money issues on a regular basis. Starting at about the college age, people begin to worry about debt and how loans will affect them in the long run. From Discover student loans for college degrees to hefty credit card balances accrued purchasing books for school, students these days are faced with a variety of financial concerns. These concerns don't completely dissipate as you move into your twenties, thirties, forties, and beyond. In fact, for many people the worries accelerate. Even after you've established a career and a family, the need for financial responsibility does not go away. Here are a few things you can do from an early age that will help you and your family for decades to come:

Know your interest rates. A surprising number of people do not know what interest rates they pay on their credit cards, student loans, money market accounts, and home loans. Interest rates aren't just arbitrary statistics that only matter to banks, they determine how much money you pay to your lender. A high interest rate on your credit card or home load means more of your monthly payment is going toward the bank's pockets. Conversely, a high interest rate on a savings account means you're saving more money. Know your interest rates so that you can look for financial institutions that offer the best deals.

If you invest in stocks, make sure you diversify your portfolio. Many inexperienced and first-time investors throw their money at big name blue chip stocks that may not carry the best risk/reward balance. Especially in this rocky economy, when the market seems to be fluctuating without rhyme or reason, it's important to balance out your investments so that you don't lose everything because of a big hit to a certain industry. Spread your money across multiple industries, and don't scoff at small stocks. Sometimes they can pay the best dividends.

Purchase life insurance. Term life insurance is relatively affordable and will give you peace of mind that your family is taken care of in the event of the unthinkable. Life insurance plans will also frequently offer you additional coverage on things like flight insurance, credit life insurance, mortgage life insurance and others.

These are rough times for the American economy, but there are still practical financial steps you can take to assure yourself of a retirement nest egg and a solid future. Start by assessing your interest rates, investing maturely, and protecting your family with life insurance.

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