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Plan for a Sound Financial Future: 5 Do's and 5 Don'ts

An article on how to prepare for a sound financial future.

Being secure and prepared at retirement doesn't just happen by itself. The government, social security or your employer retirement plan aren't usually enough. Spending some time now to plan for the future may make the difference between a secure retirement and an insecure one. Take a look at some of these Do's and Don'ts and take charge of YOUR FUTURE.


1. Make annual contributions to Individual Retirement Accounts. You can contribute to either a Traditional IRA or a ROTH IRA. Check with your tax accountant or financial advisor to see what works best for you. As of this writing, you can contribute up to $2000 each for yourself and a spouse until April 15th. If your children have earned income, you can set up a ROTH IRA for them also.

2. Maximize your contributions to employer sponsored retirement plans such as 401(k), 403(b), or SIMPLE IRA's or other qualified retirement plans.

3. Practice dollar cost averaging. Invest consistently and over time. This takes the guesswork out of trying to time the market. Invest a fixed dollar amount at regular intervals no matter whether the market is up or down. You'll get fewer shares when the market is up and more when the prices are low. Averaged out, the returns are usually better that guessing and trying to time the market.

4. Determine your comfort level with risk. Can you tolerate the ups and downs of the financial market or do they keep you awake at night? Invest according to your comfort level.

5. Diversify your portfolio. Spread your savings across a number of different investments. Don't keep all your eggs in one basket.


1. Don't give away your future wealth by creating unnecessary debt now. Know the difference between good and bad debt. Good debt generates a positive cash flow. Bad debt generates a negative cash flow.

2. Avoid instant gratification. Think long and hard about each purchase you make. Do you really need that fancy new car now or can you save a few more years and drive the one you own?

3. Don't think short-term. We should all have major long-term goals that we are working towards. When thinking short-term, you lose the luxury of time, which usually offers higher rates of return.

4. Don't carry balances on your credit cards and don't get in the habit of taking out loans and credit advances. Pay off your debts and stay out of debt. Don't keep credit cards in your wallet if you can't pay them off each month.

5. Don't ignore your finances. Track them on a weekly/monthly basis. Make adjustments as necessary and there won't be any surprises waiting for you when your time finally comes to RETIRE!

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By Doris Dobkins, money saving expert Author of "Financial Freedom A-Z Home Study Course" and publisher of the free weekly ezine $mart Money New$ To subscribe, send an email by clicking on this link --> or sign up at her web site:

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