Wednesday, September 03, 2008

How to Debt Free and Build Up Our Net Worth?

Be Debt Free and Build up your net worth!

When one has cleared all their debts, a new beginning has come and start building your net worth. Here are few tips to accomplish this:

Keep away from credit cards: Use cash, check or debit card whenever possible, stick with a budget.

Save More: Save as much as possible, a minimum recommended saving and investment will be 10% of your earnings.

Set-aside funds: Open an account and try to build up $3000-$4000 for various purposes including taxes, insurance, auto and home repairs, appliances, furniture, etc.. Ensure this is automatically detected from your checking account.

Create an emergency fund: For emergency purposes like job loss or illness, try to set aside four months of wages. One can invest in mutual funds with automatic deductions from your checking account.

Start Saving for Retirement: One cannot merely depend on social security alone, you’re your employer’s 401k, or open an IRA to start saving money for your retirement. A weekly contribution of $25 @ 10% interest earns $205,000 in thirty years.

Look after your family: Buy a “term” life insurance policy worth five times your income, a health-care policy covering your medical needs, a disability policy paying 60-70% of your income, an auto policy paying at least $100,000 per injury, $300,000 per accident, and $50,000 in property damage, fire, and theft, a home owner’s policy for 80% of your home value.

Invest in a home: Home investment is one of the best investments; value and equity increase, interest and property taxes are tax deductible. More than two thirds of all Americans own their own home.

If you or anyone you know has trouble managing debt, contact the nations leading debt management firm, who specializes in debt settlement, debt negotiation, and debt reduction.

Ps: I believe many people already suffer their debt right? So, why not you try to do something like this first. I believe it will help you a bit.

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