Top 5 Personal Finance Tips

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There is a lot of financial advice floating around in cyberspace, but sometimes it’s a good idea to simplify and get back to the basics. After all, a solid foundation is a must if you are going to build anything in life, including a strong financial future. Here are five basic money tips to help guide your life:

  1. Start investing early. In order to ensure a stable future and to stay on top of your retirement goals, it is essential to start investing as early as you are able. The sooner you start, the more years you will have to experience the impact of compound interest.
  2. Avoid conspicuous consumption. Before making any sizable purchase, ask yourself if you really need what you are planning to buy. What are your reasons for wanting to make a purchase? Are you trying to keep up with your neighbors? Do you just enjoy the rush of a buyer’s high? If you purchase items you don’t need or can’t afford, your financial goals will be delayed and you will always feel like you can’t get ahead, regardless of your income.
  3. Don’t pay interest. Some types of debt are inevitable, such as a mortgage, a reasonable car payment, and student loans, but credit card debt is something that must be avoided at all costs. If you want something you can’t afford, save for it. Financing only delays the cost of the purchase, adds interest to the balance, and ultimately makes it much more expensive when all is said and done.
  4. Have an emergency fund. Life is all about the unexpected. When you are hit with a financial emergency, avoiding the use of loans or credit cards is critical if you want to stay on track financially. Having an emergency fund gives you the freedom and flexibility to handle the unexpected without going broke.
  5. Budget for everything. Budgeting isn’t just for the big things in life, it’s also for life’s everyday expenses. In fact, it’s often small financial leaks that cause the biggest damage over time. Budgeting doesn’t just include expenses, it also directs your savings goals, so be sure to tell your money what to do instead of letting it control you.
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About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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