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By Candance Kita

I remember graduating college and wondering, “Now what?” Not only did I not know exactly what my career was going to be, I had very little understanding of managing my finances. Whether you are just starting out, building a business, or in the prime of your career, it is vital you understand how to properly take care of your money long term.
How much do you invest? And where? What about retirement?

Between watching two financially savvy girlfriends of mine invest their money and reading Suze Orman’s “Women and Money”, I began to understand how to make my money work for me. One of the first things I learned was how to manage my own finances. Don’t rely on anyone else to do this for you. My best friend’s mother said, “The most important thing you can do in life is to learn to take care of yourself. Don’t rely on others. And don’t expect others to take care of you. Learn to do it yourself and this includes your finances.”

Women often make the mistake of relinquishing financial control to the men in their lives. Whether it is a partner or family member, they let go of the financial reigns. Sometimes they do this because they are old-fashioned or because they simply don’t want the responsibility. Later in life, these women are not in a good position to handle their own finances. Why? They didn’t learn about managing money at an early age and therefore don’t have the tools to do it in later life when they need it.

Another important financial goal is to focus on retirement even at an early age. Make a commitment to dedicate 10% of your income to retirement starting in your 20’s. Did you know that saving 10% of your income starting in your 20’s at a $50,000 a year salary could become $2.2 million dollars at retirement? Start building your nest egg early and it will pay off for you in the long run.

This may seem harsh, but don’t make emotional money mistakes. This can include a friend, loved one, or co-worker asking to borrow money from you. I can’t tell you how many times I’ve seen this happen to people I know and they always regret it. I’ve even made this mistake myself only to later regret it when I was never paid back. If someone can’t pay a debt off to a lender, what makes you think they can pay YOU back? Not only is this stressful, quite often it leads to the end of the friendship. It is difficult, but don’t loan out money unless you are OK with losing it for good.

Along these lines, never co-sign on a loan for anyone. Co-signing basically means if, for any reason, they can’t pay back the loan, you are responsible. Unless you are willing to assume the payments for this loan and a lowered credit score, don’t do it.

If you are getting married, get a prenuptial agreement. I know this may counteract romance, but marriage is a legally-binding contract and must be looked upon this way. Remember, you are entering into a financially-binding contract between two people. You need to protect your assets. For example, if you have been working on an IRA, make certain he is not entitled to it should you get a divorce. And this goes for all assets accrued during the course of your marriage. Once again, I have seen friends of mine lose a large amount financially because they didn’t have a prenuptial agreement in place. Also, don’t take on your spouse’s debt when you get married. Make certain both members are debt-free before deciding on marriage. Don’t be afraid to talk freely about both of your financial situations before you get married. You need to know this information and it should not be considered rude or intrusive for you to ask. Make certain you know who you are dealing with and what their financial situation is before you enter into marriage. Remember, choosing a fiscally irresponsible partner will ruin your financial well-being.

Throughout my investing, I have learned to find financial friends. These are people that I have learned about investing and saving from. Whether this is a trusted friend, family member, or someone you can call a mentor, it is important to have someone to confide in and ask financial questions. For example, one of my friends was the Valedictorian at Harvard and was a former day trader on Wall Street. I am always emailing and calling him for financial advice. He is someone I go to when I am making financial decisions and I feel confident in his advice because I have known him for almost 20 years.

Also if you are in your 20’s or 30’s, keep 80% in stocks and 20% in bonds because you have time to ride out the stock swings. If you are in your 50’s and 60’s, keep 40% in bonds to help your portfolio when stocks are slumping. Don’t stop investinginto your retirement accounts even if you have a difficult year. As much as you can, continue to invest yearly.

And finally, have a financial nest egg for emergencies. This should be enough to cover all of your expenses for up to eight months in case something comes up. I know this sounds like a lot, but you don’t want to rack up massive debt, and the interest payments that go with it, because of an unexpected emergency. If you are married, put this emergency fund in a separate place so no one has access to it except for you. This is something for you to fall back on just in case you need it.

By following these simple steps, you are off to a good start towards your financial destiny. Remember, you can control a secure financial future and there’s nothing more valuable than that.

Culled from Viva Glam Magazine

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