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In starting out on the road to financial health, set these three priority goals to achieve in 2011: positive cash flow, savings goals, and building up capacity to invest.
The first step is making more money and/or spending less, in essence achieving positive cash flow. This can be done by increasing ways to get active or passive income, or decreasing expenses (especially after identifying non-essentials that can be deferred or better yet, done without). Positive cash flow involves earning more money or spending less money, although the ideal state is doing both.
Savings goals involve setting up an emergency fund (equivalent to at least three months’ worth of expenses) then other funds for short-, medium- and long-term needs (ex. a new car or vacation abroad, further studies to advance in career or retirement). Building a separate fund for investments will take time, but so will capacity to decide which investments are suitable for the type of investor one is.
Your irresponsible financial decisions will affect you one way or another. Whether it's the unstable economy, less entitlement handouts, or more taxes, there is no greater time to start focusing on being self-sufficient, independent, or otherwise insulated from your governments. Wealth Tips
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