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Savings & Financial Planning Tips
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Savings & Financial Planning Tips
by Anne Pelini, CER, CET

No matter our age in life or our level of knowledge of financial planning, simple ideas can give us an advantage for saving and investing. Some of my favorite quick tips to focus on are:

Early Stage of Saving/Investing:

1. Do the work of creating a budget and live within your income.
2. Know the difference between a Want versus a Need. Fixed expenses are a
myth. If necessary, everything can be dialed down.
3. Pay yourself first. Do not wait to save until there is nothing left.
4. Start saving and investing as early in life as you can. Use the power of Compound
Interest – when your money makes money. It means interest paid on interest.
5. Having an emergency savings of 3 to 6 months is critical.

Mid Stage of Saving/Investing:

1. Continue to save and invest. Read and increase your knowledge of investing in
mutual funds and asset allocation or spreading your investments among different
asset classes: stock, bonds, real estate, cash.
2. Do not overspend on your children’s sports activities. You will put yourself at a
financial risk.
3. Focus on saving for retirement first and then funding your children’s college
education second. Children can get loans to fund their education. You cannot get a
loan to fund your retirement.
4. Keep in perspective that stock market declines are normal and will occur. Stay the
course for the long term.
5. Know the difference between Risk Tolerance versus Risk Capacity. Risk tolerance

is the amount of risk you want to take. Risk capacity is the amount of risk you need

to take.

Advanced Stage of Saving and Investing:

1. Know what you own and why you own it. Learn to monitor your investments.
2. Do not assume your financial advisor is putting your best interests first. Find out
if your advisor operates under “The Fiduciary Standard versus the Suitability Standard.”
3. Harvest tax losses to offset gains when you can. Pay attention to tax implications.
4. Find out and monitor the expenses and fees you pay in your investment portfolio
and to your financial advisor. These fees erode the value of your investments.
5. Trying to time the Market does not work for the majority. You never really know
when to get out and when to get back in. Nobody rings a bell at the bottom or the
top.

Some of my favorite go-to references are:

www.fidelity.com
www.vanguard.com
www.morningstar.com
www.kiplinger.com Kiplinger's Personal Finance


Anne Pelini, CER, CET was formerly a stenographer and obtained her education in court reporting from MacCormac College in Chicago. She transitioned to electronic reporting in 1981 and started AIM Reporting Service in 1985. Anne is a charter member of AAERT from 1994 and became certified with AAERT in 1996.After 25 years in the court reporting business, Anne is semi-retired from AIM Reporting; and financial planning has become her focus as she researches, invests, and takes a hands-on approach in managing her own investments.

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