Pay Yourself First

Make a conscious effort to save at least 10% of each paycheck in an interest-bearing account. To ensure this, include this amount into salary negotiations before accepting a position, whenever possible. Many people arrange to have a set dollar amount deducted from their paychecks through their company’s credit union each pay period. Most find it easy to adjust to living without money that they never see. With life’s uncertainties, it is comforting to know that you have a nest egg available, should you need it.

Graduates and newly-weds are often inundated with credit card offers early on. To the banks, you are the Future Shopper of America. With ‘need more’ tugging at your ear, this enticement can be overwhelming. Discipline is key here. A hasty decision could be potentially dangerous to your financial future. Granted, it is wise to own a credit card and establish credit-worthiness for future purposes and emergencies, but follow these guidelines:

                        1. Shop vigorously for the lowest interest rate you can find.

                        2. Compare the introductory interest rate to the annual percentage rate.

                        3. Read all of the fine print.

                        4. Limit your cards to one, at least for the first year.

                        5. Charge no more than you can pay off in any one given month. 

 Some credit card companies off travel points for free airline travel with your first purchase; some match the dollar amount that you charge on your card with the same number of air miles; another offers a point for every mile flown on any airline. The first two options could encourage frivolous spending, for which you could pay interest. A better choice would be to open a ‘vacation savings account’ on which you could earn interest. However, earning points for previously flown miles on a company business account is a smart way to vacation virtually free.