In my last blog post I wrote about investing in your personal self through self-care. In this post I'm going to discuss financial investing 101 - how to make your money work for you in the easiest way possible.
Let me remind you that I am not a Financial Advisor (read my other blog posts about the difference between a Financial Advisor & a Financial Coach) but there are a couple of simple ways that we can all invest money.
Company 401k - Do you work for a company that provides a 401k/403b? Does your company match your contribution? Do you know what that match is? If you are unsure about any of these answers, please schedule a quick chat with your company's HR rep. They will be able to provide you all of the information you need in a few short minutes. If you find that you company does offer a 401k match, make sure you are investing at least what they are matching. Let's break it down - if your company matches 3%, then ensure you are contributing 3% of your salary to your 401k. That means that you are only spending 3% of your salary on your retirement, but 6% of your salary will be invested for you - I call that FREE MONEY!
No company 401k - If you find that your company does not provide you with a 401k/you are self-employed, call a trusted Financial Advisor & ask that they set up an IRA for you. Make sure the Financial Advisor you choose asks a lot of questions about what you want out of your retirement, & that you feel comfortable with them. If not, then move on to someone else. There are plenty of wonderful Financial Advisors out there, so don't settle. Once you get an IRA set up, create a payment plan where a percentage of your salary (your Financial Advisor can help you understand how much makes sense for you) goes into your IRA every month. The best case scenario is to "max out" your IRA, meaning you are contributing the maximum amount allowed each year. If you can't do that, then just get started anyway - a small amount is better than no amount!
High interest savings account - There are some savings accounts out there that are earning 4% or more. If you notice that your savings account is offering 0.01% (yes, this is a very real possibility!) then it's time to upgrade your savings account. I personally like Ally (www.ally.com) but that's not the only one. My personal PNC account is also offering over 4% interest. Do a little research & ask around to find one that offers at least 4% & move your emergency savings into this new account. Then decide what you want to do with the interest you earn - will you keep it in there to grow your savings, or spend it on something fun?
If you feel like you don't have enough money to invest, remember it's mathematically proven that it's better to start small than to wait until you have more. So get out there, and take these simple steps to start making your money work for you!
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