1. 8 Ways to Getting on Solid Financial Footing: The Cheat
Sheet
This report gives you a quick lowdown on how to get on solid financial footing. It’s
a cheat sheet so that means that we won’t be doing a detailed itemization of
each step. Rather, this part is for those who are in a hurry and just want basic
information on what to do now. Getting an idea on how to manage your finances
way will get you started towards a much better future and a comfortable
retirement. These 8 ways are not necessarily written in any order of importance
so you can choose where to begin depending on what your situation calls for and
what your priorities are.
If you’re ready, here’s the quick rundown on how you can get into solid financial
footing fast:
1. Get health insurance.
One of the things that put people in financial ruin is illness. If you’re unprepared,
one serious and debilitating disease can get you up to your neck in debt and yes,
even bankrupt you and your family’s coffers. You want to protect yourself against
this possibility by getting health insurance coverage. Those working with
employers who offer healthcare insurance are fortunate as any contributions you
make are bound to be less costly than if you were to buy coverage on your own.
Now if you are one of those who have to get health insurance yourself, be sure to
compare plans first. Inquire about the illnesses that are covered and if you are
limited in seeing doctors or specialists that are members of the plan. Do they
charge extra if you go to a non-plan doctor? How much are the deductibles and
copayments? If you are still on the hunt for a job, perhaps you can get temporary
insurance that will shield you for a few months from very expensive medical
issues. If you’re young, perhaps you can still be covered by mom and dad’s
coverage so check this option out as well. Going without health insurance is a
sure way to invite bankruptcy and financial ruin in so no matter how limited a
coverage you can afford, make it a point to take care of healthcare insurance
first.
2. Take care of your debts.

2. Who doesn’t have debt? It seems that this is a common thread that runs among
majority of American families and is one of the reasons why it’s very difficult for
many to manage their monies. Well, if you are not yet in debt, don’t go into it. But
if you already have financial obligations to take care of, start freeing yourself from
them right away. Begin by paying off those high-interest loans. If you have other
debts, ask for a time extension or maybe even lowering your interest rate. Some
debtors may not be as kind but some will give you consideration so it never hurts
to ask.
Now you may be tempted to invest your money or put it in a savings account. But
if you are still burdened with high-interest rate debts, you stand to “earn” much
more if you paid off your 18 percent interest credit card loan first than put your
money in an investment that pays only 5 percent interest.
3. Save for retirement.
Retirement may seem so far off into the future when you’re young and healthy
but the best time to prepare for it is now. Most employers offer a 401k plan to
their employees which give a matching contribution to what the latter puts in. So
if your employer matches your contribution 100 percent then every dollar you put
will also mean receiving another dollar for your retirement fund. That’s free lunch
money that comes at no extra effort from you except, perhaps, to see to it that
you have that extra money to contribute. There are also tax benefits for putting
money into a retirement fund. One is that it grows tax-free—that is, you only get
taxed when you withdraw that money later on. You can also borrow from your
401k although it is best at all not to so that your money grows undisturbed.
If you are self-employed or working for a company that does not offer a
retirement plan, you can still prepare for retirement by opening an individual
retirement account or IRA. There are maximum contributions to an IRA adjusted
each year by the Internal Revenue Service. For 2013, it’s $5,500 ($6,500 for
those aged 50 or older). Try to give the maximum contributions as much as
possible.
4. Save money for emergencies.
You must make it a point to save three to six months of living expenses in case
life catches you unawares and throws you those unexpected blows, like the loss
of a job or the death of a spouse. If you want to be “forced” to save money, you
can have a certain amount of your paycheck each month sent automatically to
your savings account. This way, you don’t have to worry about spending it. You
may also opt to put your savings in a money market fund which offers higher
interest rates than traditional bank accounts. The more unstable your job is, the

3. more you should beef up your savings. If you’re the only breadwinner in the
family, you should also strive for a fatter emergency fund.
5. Invest in stocks, bonds, and mutual funds.
With your savings account firmly in place for emergencies, you can choose to be
savvy by building your wealth portfolio. Investing in stocks, bonds, and mutual
funds has always been the traditional way of building your nest egg and growing
your wealth. These three investment vehicles are considered risky (well, all
investment is) but the riskiest of all are stocks. However, it is also the one that
gives the fastest growth over the long-term so it would be unwise to avoid it
because you are afraid of losing money.
To diversify your portfolio and balance the volatility of stocks, you can invest in
bonds. Here, the government or company borrows your money in exchange for
interest and the promise of paying it at a certain time in the future. The safest
bonds are those guaranteed by the federal government as it is highly unlikely that
the government will go out of business. However, bonds issued by companies
may also be safe provided that you check out the ratings from independent
companies which give you an idea of the stability of the bond issuer.
Mutual funds are the best way to invest if you only have limited funds and cannot
possibly put on a diversified investment mix by buying individual stocks and
bonds. In mutual funds, your money together with thousands of other investors
are gathered and the mutual fund manager invests it in a variety of stocks,
bonds, and money market accounts. For only a fraction of what you would spend
for individual stocks and bonds, you get a diversified portfolio in a mutual fund.
Moreover, you also enjoy the benefit of having a professional manager who has
years of training manage your portfolio. Do look for no-load mutual funds so that
you can maximize the return of your investments.
6. Improve your credit score.
Your credit score is based on your credit report, which details whether you are a
good debtor or not. Your credit history matters a lot because it affects almost all
aspects of your life. Of course, an unblemished history of on-time payments and
good credit will give you a good score and enable you to take advantage of
competitive interest rates when acquiring any type of loan. On the other hand, a
marred credit history and low credit score will be detrimental, not only in your
chances of getting approved for a loan. It will also lessen your chances of getting
a job or renting an apartment.

4. You are entitled to a free copy of your credit report once a year at
www.annualcreditreport.com. You may also contact any of the three credit
bureaus—Experian, Equifax, and TransUnion—to get a copy of your credit
report. Review your credit report carefully and see if there are any errors on it. If
you spot anything that is erroneous, be sure to communicate with the credit
bureau right away so it can be corrected.
7. Get your own crib.
We’re talking about buying your own home, if you don’t have one already.
Getting your own crib is a good investment because real estate values always go
up, no matter how unpromising the housing sector has been in the past years.
It’s a good idea to pay up for your home in cash but since this is not really very
possible for a lot of people, strive to save more for the downpayment.
Commercial mortgage lenders require at least 10 percent for the downpayment
but if you can give more then you are much better off financially because that
would mean lower monthly payments. As much as possible, avoid adjusted rate
mortgages and balloon mortgages.
8. Figure out ways to legally lower the taxes you pay.
We need to pay our taxes to keep the government working. But if you’re not
smart about handling it, you can end up paying more than you should. Find out
ways that you can legally lower the taxes you pay to Uncle Sam. Putting money
in retirement accounts and in college savings funds yield tax advantages so be
sure to acquaint yourself with them. Some expenses are tax-deductible too, so
learn what these are. The website of the Internal Revenue Service gives the
most comprehensive source of information. You can also ask a financial adviser
on ways to lower your income tax.
Check out www.adamscapgroup.com for more Information on How
to Get the Best on Mortgage Deals.
Other related info you might be interested in:
Your Finances: The Reality Check (Part 1)
Your Finances: The Reality Check (Part 2)
Marriage and Your Financial Compatibility