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Take control of your money

Your best asset is YOU! Your talent, knowledge, dedication and work habits are used to make your money. It has been said, ìWhether you are rich or poor, it is always good to have money.î A person can become wealthy by TAKING CONTROL OF THEIR MONEY.Here are a few ideas toward the goal of taking control of your money.1. Develop plans for using, spending and saving your money. Every member of the family should be involved in the planning process. Set aside time. Make an appointment for all of the family to review the successes of the family money plans and to talk about the next month’s plan.2. Plan to pay yourself 10 percent of your net paycheck each pay period. Set that money aside in a savings account not to be used under any circumstances until you have a reserve of at least three months expenses. Keep the money in an account that is easily available but restrict its use. These are the funds to meet all regular monthly payments. Include mortgage payment, food costs, utilities, insurances, clothing and any other monthly payments.3. Only use these funds in the event of a real emergency such as layoff from a job or health issue. DO NOT use these funds to make regular monthly payments while still earning an income, unless that income is significantly lower. Replace the funds as soon as possible.4. Continue to pay yourself 10 percent of your net salary (income), investing the money into your reserve account. A 30-year-old working for $10 an hour, putting $135 per month for 35 years into the account with interest at 5 percent would have $194,974.51 from which he or she could have a monthly draw of $1,170.34 for the next 20 years.5. Invest the reserve funds exceeding the three-month emergency amounts in a safe investment, where you can never lose your principal, such as an FDIC insured Roth IRA certificate of deposit. This investment accrues interest tax free. There are penalties for withdrawing funds before the age of 59 Ω.6. Plan before borrowing money. The use of credit cards has become an easy source of consumer borrowing and spending. If you DO NOT pay your card balance in full each month, when using the credit card for a purchase, consider the total cost of the purchase. A $500 purchase using a credit card with an interest rate of 15 percent paid in 36 monthly installments will have a total cost of $687, $187 of which is the interest-cost. Moreover, interest on consumer purchases is not tax deductible. The question you should be asking yourself prior to the purchase is whether you are willing to pay $687 in cash for that purchase.7. Plan to pay cash for consumer purchases. Cash usually talks even though it does not have a voice. With cash, you can negotiate many purchases, saving additional money in addition to the interest. Put the $187 into your savings account, along with any funds you save by paying cash. By saving $187 a quarter for 30 years at 4 percent you will have about $43,000. But if you save $187 per month in those interest payments, you will have about $130,000 in 30 years.8. Use the power of compounding interest to grow your wealth.Do not spend your money without a plan! Take control of your money to accumulate wealth.

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