We are living in a consumerist economy set against a super competitive world. You have to keep your personal finance in an impeccable state to survive in such a world. But how much thought do you spare for your financial planning and how many times do you bother to analyze the state in which your personal finance presently is? Not very frequently I presume. But it is important to evaluate our personal finance achievements and failures from time-to-time to maintain a consistent growth. It creates preparedness for unpredictable future and gives us confidence to fight it out in the adverse situations.
Now if you are among those who are easily bored by handling the tax papers, insurance polices or other financial documents, then you are in greater risk than the others with a regular habit of checking with the personal finance matters. You have to rectify your attitude towards handling your personal finance and to initiate the changes you should start with locating the stumbling blocks of your financial plans.
The first and foremost stumbling block to a healthy personal finance is the absence of planning in an organized manner. The common people, as they are escapist in nature often unnecessary delay making investment in the proper place, clearing debts or starting retirement funds and pay extra taxes that could have been saved by making proper investments, etc. Remember, the more you delay in chalking out a financial plan, the tougher the task becomes towards achieving a healthy personal finance.
Saving less than adequately has become a national problem for the Americans. As opposed to the other countries in the developed world, the average Americans have a savings habit of 5% of their tax-deducted income. This means, they have the propensity to spend more. But according to standard practice, you should save at least 15 to 20% of your earnings if you want to keep a healthy personal finance. Beware of handling the plastic money. In todays world, where it is extremely easy to get more than one credit card within a matter of hours, you are tempted to spend more than you can actually afford.
Delaying in starting an effective retirement plan may prove to be really costly. The average Americans retire in their mid-sixties. But you should start your preparation right from your early thirties if you want to maintain a decent standard of living even after retirement. You must save at least 10% of your income annually to meet with this goal. The more you delay in starting a retirement plan by making tax-friendly investments, the harder it becomes for you to reach your retirement goals.
Another vital mistake most of the Americans tend to do is to invest in the wrong financial products, either driven by emotion, tension, spousal pressure and so on or by not doing enough research on the purchase of a product that promises an unbelievably high return within a short time span. So always take a well-informed and well-thought out decision and trust only the time tested products.
Another mistake most people tend to make is not spending enough to buy insurance coverage. But covering your family, as well as, your property by the right policies is a must as you do not know what may happen tomorrow. To have a secure future, you have to pay for the insurance premiums today.
Last but not least, many people set an unrealistic financial goal for themselves only to fail in achieving their goals and losing motivation by this failure. So work out a practical plan first and stick to it. Once you are secured about your finances you will be able to concentrate on your career and family life; thus you will be able to live a satisfying life.