Sometimes, you can dread seeing the envelope of your financial statement. Even when the markets are doing well, you can have that cold feeling that you don’t really know what you are doing. Well, finances don’t have to be spooky. Here are a few tips to keep the monsters away.
- Always work with a financial professional who is a fiduciary. Advisers should always put your interests before their own. Since it’s a legal description, ask them to put it in writing.
- Know what investments you own. Review your investment portfolio to be sure that you understand all your investments. Sometimes, your situation changes, and your portfolio should reflect holdings that will help you reach your financial goals.
- Know the costs. Everyone gets paid, and all investment products have fees associated with them. Know whether your financial professional receives a commission, gets a fee, charges an hourly rate, or is paid a combination. Look at the costs associated with any annuity, mutual fund, exchange traded fund, or other financial product. They can be hard to find, so read the prospectus!
- Participate in your company’s retirement plan. Retirement is expensive. Participate in your company’s retirement plan, especially if your employer offers a match. Talk to your HR department and the plan’s investment adviser, so you know you understand the details.
- Save an emergency fund. Emergencies happen, but if you have the money, they don’t need to be scary. Start by trying to save two weeks of your expenses in a bank account. Then, add to this amount until you have saved several months’ worth of bills.
Now, don’t you feel better? If only there wasn’t something sneaking up behind you……