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11 Smart Money Moves to Make Now

11 Smart Money Moves to Make Now

Heather Hetterick | DivineCaroline

August 09, 2010

Set up a Roth IRA right now. Hopefully you realize you need more than your work 401(k) to retire. The first thing you want to get is a Roth IRA. It’s a tax-free investment, so it grows tax-free, and you won’t be taxed when you withdraw at retirement. My husband and I both have one. Each month we have money automatically withdrawn from our checking into it, just like our other expenses. By automatically withdrawing the funds we never miss it and it’s treated as another monthly expense.

Avoid car payments. Contrary to popular belief, having a car payment is not something you have to have. Just because you can doesn’t mean should go buy a new vehicle. I cringe just thinking about all that interest people pay on vehicles. You can get a decent vehicle for around $10,000. This will easily get you through your twenties. When you don’t have a vehicle payment, you can withdraw money as if you did into a savings account and pay cash for the next one. I say this from experience. I bought a brand new GMC Acadia two years ago and it’s paid for now. I absolutely love my vehicle, but shouldn’t have bought a brand new car. That money (and interest) I paid for two years could be sitting in my new-home fund right now. Even purchasing a vehicle that’s just a few years old saves a lot of money.

Get money mentors. Find people who you admire or look up to when it comes to how they manage their money. Ask them for advice or what has been successful for them. Keep in mind many of the people with all the nicest things are often the ones farthest in debt and the least financially secure. Seek out people who have made good decisions and have similar goals as you.

Keep you standard of living under control. The more you make the more you have to spend or so you think. Since my first job right out of college, I make twice what I did then and my husband, three times what his first job paid. You’d never know it. We still live in the same house and except for the mistake of buying a brand-new vehicle we really haven’t changed the way we live or save. The longer you can keep your standard of living down, the faster you can accomplish your saving goals for the purchases you truly want.

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