This article was originally published on Monday,28 January 2013 as the Money Matters article in the Guam Pacific Daily News (PDN). Click here to subscribe to the PDN.
Many polls have shown that one of the top concerns for 2013 is personal finances. Many of us are leery about the uncertainty of the economy and making ends meet. The last three weeks I have given some tips to a reader wishing to improve his financial status. Here are a few more.
•Consider saving for education. You may be considering saving money for your children’s college education or for you to return to college.
There are many ways to go about saving for an education. The traditional way is a savings account or savings bonds.
There also are government incentives such as a Coverdell Education Savings Account or if you’re a resident of one of the fifty states or the District of Columbia, you may consider using the state 529 plan.
There also are many grants and scholarships offered. You can learn more at savingforcollege.com.
•Diversify your investment portfolio. You may want to think about investing the money you are saving.
Deciding on how to invest your money depends on what your saving goals and timelines are.
If you plan to retire in 30 years you may decide on a higher yielding investment, this usually is a riskier investment.
If you retire in the next five years you may want to consider a safer investment.
Either way, investing in stock or bonds depends on your comfort level with the ups and downs of the market. Rely on your financial planning and investment strategy during periods of market turmoil. Overreacting to the crisis of the day and shifting your investments around is usually a bad idea.
•Tie your New Year’s resolutions together. Merging your New Year’s resolutions to your financial resolutions may give you an extra incentive to achieve both goals.
For example: Quitting smoking saves you hundreds of dollars by not buying cigarettes. It also may save you money on your health insurance and medical bills.
I don’t expect all these tips to apply to your situation and I understand that I have given quite a few tips over the past few weeks.
It would be very stressful to do these all at once.
Prioritize them and work on them one at a time. Many very capable people do not feel comfortable with finances. If you feel overwhelmed look for a good, fee-only financial adviser to provide the help you require, whether it’s just one time or on an ongoing basis.
Remember, just like with any other goal, if you make your goal unachievable you will not succeed.
Reward yourself from time-to-time; enjoy your money occasionally. You worked hard for it. I hope by this time next year, a few of these tips have paid off. I wish everyone a very Happy New Year and a prosperous and 2013.
Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at email@example.com. To read past columns visit the Money Matters blog at https://moneymattersguam.wordpress.com.