One of the best ways to save money without decreasing your standard of living is to pay less for services you already pay for anyway - such as auto insurance.  One area that can play a major role but is often overlooked is debt service.
Most of us carry debt.  Student loans, credit cards, auto loans, […]

The next step on the road to financial freedom is to audit your expenses and income.  The fundamental idea is that the easiest way to accumulate money in savings is by reducing the cost of things that you already pay for or by increasing your income.  This step is not once-and-done, but rather is a process […]

We have discussed in detail how to save for retirement, one of the biggest and most costly goals that you could have.  Now let’s talk a bit about other goals, such as buying a new car, taking a big vacation, saving for an engagement ring, a down payment for a house, or becoming financially independent.  
In essense, what you […]

Congratulations! If you have followed the steps we have laid out thus far, you have built a solid foundation for your retirement.  Stick to your retirement savings plan and you have guaranteed yourself comfort in your golden years, 30 or more years from now.
To summarize the retirement savings strategy that I have posed:

Set up a Roth 401(k) or 403(b) plan […]

So you have a Roth IRA, you are saving $333 per month or thereabouts, you understand the principles of dollar cost averaging, and you have have a target asset allocation.  Now it is time to choose a group of investments that will make up your retirement portfolio.
You have a wide variety of investments available to […]

You don’t need to be a great stock-picker or have a degree in investment banking to make money through investments.  In fact, study after study has shown that the vast majority of the returns from any given portfolio result from the asset allocation of that portfolio.  In other words, by simply choosing a nicely diversified […]

The most basic principal of investing is to “buy low, sell high”. Unfortunately, putting that into practice is at best difficult and at worst a dangerous gamble. However, by using a strategy known as “dollar-cost averaging”, you will automatically buy more shares of a stock, mutual fund, or ETF when the price is low and […]

In this article, we’ll determine how much you need to save each month in order to adequately fund your retirement.
The first task in planning for retirement is to determine how much money you will need to live comfortably in retirement. To accomplish this, we’ll use the Time Value of Money calculator that I posted […]

In the next few posts, we will explore the many facets of saving for retirement, in detail.
Earlier, we discussed how to set up a 401(k) or 403(b) plan and Roth IRA. I expect that by now you have enrolled in your employer-based plan, if available, and opened an account to hold your Roth IRA. […]

The first account that you need to fund is your Emergency Savings.  Your emergency savings (which can live happily in your savings account) holds enough cash to allow you to weather any temporary financial downturns - an accident that keeps you from working, losing or changing jobs, replacing the brake pads and rotors on your […]

The next major step on the road to financial well-being is to start saving to reach your goals.  To take that step, you must to accomplish one simple task each month:
Spend less than you make.
“Easier said than done!” you may think.  It is true that Americans in general are horrible at saving.  However, our generation needs […]

So you’re enrolled in your company based retirement plan, if available, and you have established a Roth IRA. Great! There is only one brick left to lay in your financial foundation, and that is a non-retirement investment account.
“But I’ve already set up a checking account, a savings account, a 401(k), and a Roth […]

There are two key features that you need from your Roth IRA account:
1) the ability to automatically invest in stocks and/or mutual funds.
2) low fees.
You will hold the investments in your Roth IRA for at least 30 years. Over such a long time horizon, stocks and/or mutual funds will offer you the best return […]

By now, you should be the proud owner of a convenient local checking account and an interest-bearing savings account that will keep your short-term and emergency funds safe from inflation. (if not, read my last post on Cash Flow accounts.)
We have only just scratched the surface. To really put your money to work, you will […]

Moving right along on the road to financial security, let’s look at how to best structure your accounts to reach your goals. Grab your balance sheet and let’s get started!
For now, we are going to look specifically at your Cash Flow accounts.
The purpose of your Cash Flow accounts is to hold money that you […]

As we discussed last week, the first step towards taking control of your finances and building a solid financial future is to take stock and get organized. What do I mean by that? Quite simply, set financial and life goals, take the time to evaluate your current situation, and set up your accounts […]

At our age, getting your financial life in order is one of the smartest decisions you will ever make. Let’s face it: many Americans have poor financial habits. How can you avoid making the same mistakes your parents made? As a young American, it might seem impossible to reach financial goals like early retirement, buying […]