Financial Advice: Ellen M. DeSarno

The do’s and don’ts of personal finance

Recently I developed a financial literacy program for my son’s technical school classmates. Sometimes the basics of financial planning are overlooked, so I thought I’d share them now. For our younger readers, getting off on the right foot can be “priceless” in your relationship with money.

Here’s my top “do’s and don’ts” for the financial ingénue:

1) Don’t play the lottery. Why leave your financial success to chance? Instead, play to win by saving $20 per week in a Roth IRA. At a hypothetical* eight percent return over 40 years, you’ll have saved $283,554!

2) If you borrow money, pay it back on time. That means school loans, credit cards, car payments, etc. Late fees are getting higher each year, and once you ruin your credit, you’ll pay more to borrow in the future.

3) Pay your other bills on time. That includes rent, utilities and other recurring payments.  The late fees can be more than you’d owe as a payment!

4) Don’t pay ATM fees. Go to the proprietary machines for your bank, or get a rebate program for the fees. A $3 fee on a $60 ATM withdrawal is a 5 percent cut of your money!

5) Drive carefully. Speeding tickets and moving violations are expensive, and can drive your car insurance costs way up.

6) Maintain your car. Oil changes and proper tire inflation are not expensive, and increase the longevity of your vehicle. I also recommend an inexpensive road service plan in case you break down on the highway and need to be towed.

7) Don’t smoke. Apart from all the health reasons, it’s pricey, and takes productive time away from your life.

8) Save 10 percent of what you earn in your company’s 401k for retirement. Your employer may even match some of your contributions, and that’s like free money!

9) Don’t lend money to friends and family. If you must do so, make sure you can afford to lose it!

10) Keep your credit card balance below one month’s take-home pay. If your credit card balance has a comma in it, and your bank account doesn’t, that’s a problem!

Last but not least, be kind and generous to those who are less fortunate than you. The universe will pay you back. Happy holidays to you all!

*For illustrative purposes only, does not reflect any actual investment