Debt Free

Create a budget – It's very difficult to just wing it on this one. It's similar to starting a business with no business plan, something else all to many people attempt. To really see where you spend money every month, you have to have a written budget. That Excel sheet in your head doesn't cut it. There's an old saying in business; Fail to plan and you plan to fail. It's similar here.

Spend less than you make – It sounds pretty simple. The logic on this one is hard to defy. It's kind of like losing weight. Take in fewer calories than you burn and your weight goes down. Unfortunately, too many people use a similar strategy when spending their financial resources. It's supposed to be the other way around. Spend less than you make and your savings and investment balance goes up. It's much easier to accomplish this if you've created the budget recommended above.

Take a good look at your priorities. Do you really need the new dub dubs for that car you probably shouldn't have bought either? Ditto the new HD-DVD player, even if the picture is fantastic. If you really must have one, at least wait until they come down in price. If you've gotten all your goseintas and goseottas actually written down, you can spot those little leaks that can fly under the radar. Some of these smaller expenses can add up to a pretty substantial number.

Have an emergency fund - Let's face it. Sh*t happens. You may be pretty damn lucky and it hasn't happened to you yet, but the odds are it will some day. Home repairs, car repairs, and medical, job, or legal problems can all conspire to derail your carefully planned financial health. If you've got a few under the mattress, you can usually escape the worst of many of these problems.

Take advantage of whatever retirement savings plan your employer offers, especially if it includes matching funds. - This is a real no brainer. Too many people, especially younger ones, leave this money on the table. That's completely crazy. If you're are in sales, you know you never leave money on the table, if you can avoid it. It's free money, for god's sake! Take it. If your employer offers a 50% match on whatever funds you contribute, that's a 50% return your first year, right off the top, even if the investment goes nowhere. To make it even more attractive, you get that money tax free. (You may have to pay taxes when you take it out, depending upon the investment) That rate is pretty hard to beat. I've actually heard people say “I don't want them to take that money from me every month.” You dumb ass! They're not taking it from you. They're setting it aside for you, in an interest bearing investment with your name on it, and to top it off, they're chipping in some of their own money too. It's like getting a raise. When was the last time you turned down one of those?

Be properly insured. - Too many bankruptcies are caused by medical problems or disabilities. In 2004, over 797,000 of the almost 1.6 million bankruptcies were caused by medical problems. Having medical insurance is no guarantee against bankruptcy here, as a recent Harvard University study found that, in 2001, 68% of those who filed medical bankruptcies had medical insurance. To help out here, you can sometimes get supplemental insurance, such as AFLAC, through your employer. This is great for covering out of pocket expenses associated with lengthy hospital stays and other medically induced financial hardship. To make it even better, you can pay for this type of insurance with pre-tax dollars, making it effectively 20% - 35% more affordable. Don't neglect disability insurance either. This can get pretty pricey, but you are more likely to need this when you are young than life insurance. 12,000 people a week file for long term disability from social security. In most cases, you don't get nearly enough to live on from social security disability, so you need to supplement it with a private policy.

 There are many other things you can do to ensure your long term financial health. This is just a start. Remember. when it comes to money, you need to make it, save it and protect it. This is the key to your long term financial health.