Despite my excellent new year’s article on retirement resolutions, it’s easy to still feel lost with money management as we head into 2016. One great article on getting back to basics ran in last week’s New York Times: “How Should You Manage Your Money? And Keep It Short,” also known as “A 4×6 Financial Blueprint” for those of us with the NYT print edition. (The image for the printed Business Day cover was far superior to the internet comic, but I digress.)
A young Retirist such as yourself may not identify with 1/3 to 2/3 of this article based on the life stages and situations that author Ron Lieber covers. However, the opening premise, and the slideshow of index cards, form a very useful guidepost: What does a regular person need to know in order to put her money to work and reach financial security and fulfillment? A handful of simple ideas, as a start. You need to determine your financial basics and values before you can get far in achieving happiness, and Lieber has pulled together “four commandments” that seem to be at the crux of the matter (and the first two are very closely tied to retirement savings):
- Have an emergency fund
- Index funds should make up most of your investment portfolio
- Buy a home, but only one that you can afford
- Don’t forget life insurance … basic term insurance is the answer for most people
He also explores why people fail at these things, as well as the index card idea and advice from the experts.
Take a look and let me know what you think. One of my goals for the end of January is to have my own index card – likely one card for my money at this stage in life, and then others for other life pursuits. Do you have your own bullet points ready?