Getting solid financial footing requires you to focus on the most important elements of your money – SAVING AND INVESTING.
Key tasks you should focus on:
- Keep at least 3 months of living expenses in saving account. This is a starting point, if you are self employed, work on commission or work in unstable industry, double or triple that baseline.
- Save a minimum of ten percent of your salary. Start as young as possible, when the power of compounding returns in the greatest.
- Spend not more than twenty five to thirty percent of your income on your home. That should include all your home related costs. If you’ve never owned a home before you are probably vastly underestimating how much home maintenance will cost.
- Avoid any investment you do not understand, for obvious reasons, if someone using fancy words and making big promises, be cautious. It is better to stick to tried and true, get rich slowly methods than to gamble your future on something you are not ultra familiar with.
- Avoid high fee funds; the highest fee you should pay is one percent but aim for the lowest fee quality fund you can find.