On last Thursday, B.M.M.O. Consulting attended a networking event sponsored by Ms Career Girl. This event was very informative and gave some great financial tips. We wanted to share this information with you, so that you can go from being young and chic to mature and elegant. Set yourself up so that you can live the same life today, tomorrow and forever! Make decisions today that will allow for an even greater tomorrow.
Use your credit wisely – You should only carry a balance that is 30% of the total allowance. Also, find out what day the credit card reports to the credit bureau are due and pay your bill before that day, even if its early, this keeps the balance that is reported to the bureau down, thus providing higher credit scores.
Savings – If your company offers a 401K and matches it, contribute at least up to what the company will match. Pay yourself 20% of your income each pay period; the goal is to have 3-6 months of your income saved in case of job loss. Diversify your savings: keep a regular savings for emergencies, a portfolio of investments if you decide to retire early and a 401K for retirement. Your 401K should be used for long term investing, but if you have come into a situation and need to pay off a bill, only use your 401K if the total of the bill is more than the amount it would cost you to borrow including the 10% penalty.
Insurance – There are two types of life insurance, term life and whole life. Whole life provides better benefits. Term life insurance is only for a set period, after you pass that time period you are no longer covered. Whole life allows you to build a cash benefit amount that can be withdrawn for a low repayment interest. Essentially you don’t eve have to pay it back, it's your money, but it is wise to do so. This money can also be used for emergencies that come up, at no penalty.
Housing – Housing expenses should account for 35% of your income. Every year you should meet with your insurance agent and make sure all of your coverage is up to date with changes that have occurred over the past year.
We hope that we have provided you with good tips to stay financially savvy. Please post any additional tips or comments you have.