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8 Tips to consider for your finances

Strategies that may help your financial outlook.

Young couple uses their credit card for a purchase.

Whether you're collecting your first paychecks now or have a few years under your belt, you're making important decisions about where your money goes. Developing good money management skills can help boost your bottom line, now and down the road.

"Starting with a solid financial foundation makes it easier to build a strong financial future," says Don Hammond, MBA, CFP®, executive vice president of Maritime Financial Group in Sheboygan, Wisconsin.

Try these tips:

1. Gather information. Read as much as you can about personal finance, and consider talking to a financial professional. "He or she can help you create a budget and build an asset allocation strategy in line with your future goals," says Hammond.

2. Rein in expenses. Track every single thing you spend money on. Review the list every couple of weeks and adjust your budget so it's on track with your goals. It's possible to cut daily spending without curbing your lifestyle. Case in point: Brown-bagging your lunch rather than eating out every day can save you approximately $1,300 a year, according to MSN Money.*

» Check out our savings calculator.

3. Invest in the future. Start saving in your organization's retirement plan early on. Try to contribute at least enough to take full advantage of your organization's match, if offered.

4. Create a rainy day fund. Stash away six months' worth of living expenses in an emergency fund—nine to 12 months' worth is better. But don't dip into the fund for unnecessary items: "Many people think they'll replace money later, and then the emergency fund is gone," says Hammond.

5. Pay yourself first. If you pay all your bills first and yourself last, there may be nothing left over for things like emergency funds and retirement savings. Learn how to juggle financial priorities with these suggestions.

6. Manage debt. Make debt reduction a priority, knocking out highest-interest debt first. Hammond advises keeping your debt load to no more than 35 to 40 percent of your income. If a significant portion of your take-home pay is going to debt reduction, use our budget calculator to help determine what it may take to retire the debt.

7. Keep tabs on your credit score. Review your credit score annually by requesting reports from the three credit reporting companies. Low or dropping scores may indicate a high debt-to-income ratio or a history of late payments.

» Learn more about factors that affect your credit score and what you can do to raise it.

8. Practice risk management. Disability insurance may not be top of mind right now, but it's important to consider. "You need to ensure that you can pay your bills in the event of a long-term disability," says Hammond. "If not you may have to deplete savings, including retirement accounts."

Manage your money wisely.

Use our budgeting calculator. Do you know where your money goes? Track your spending with the help of our budgeting calculator.


Don Hammond and Maritime Financial Group are not an affiliate of any company of the Principal Financial Group.

The subject matter in this communication is provided with the understanding that The Principal® is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392.

© 2013 Principal Financial Services, Inc.

t131001017m – 10/2013

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