12 Basic Financial Do's and Don'ts

April 13, 2018



✓ Realize that there are only 3 things you can do with your money: Spend it, Service Debt with it, Save & Invest it 


✓ Pay off debts with the highest interest rates first: it’s the same as earning that return on an investment 


✓ Know your 2 Saving & Investing priorities: a Contingency Fund and a Retirement Fund 


✓ Have 3 to 6 months of living expenses in cash in your Contingency Fund: in case of job loss, medical expenses, car repair, etc 


✓ Put your Retirement Fund in your 401k (even if no match), then in a Roth IRA (if you can have), then in a Traditional IRA 


✓ If you have more than 10 years until you’ll retire, most of your Retirement Fund should be invested in stock funds and the rest in bond funds: think 90% and 10% 


✓ Don’t have “all of your eggs in one basket”. Investing in mutual funds that track the S&P500 (stocks of the 500 largest companies in the U.S.) and Barclay’s U.S. Aggregate Bond (1,000s of investment-grade bonds) indexes provides terrific diversification 


✓ Review all the fees & expenses you’re paying on your investments: every fraction of a percent subtracts from your returns 


✓ Consider 3 things when thinking about exercising your employee stock options: that you’re risking your own money, the likelihood of a liquidity event, and the impact of income taxes 


✓ Make a will: a document where you address many things, including naming a guardian to raise your minor child should you die before she turns 18 


✓ Do not get income tax refunds: you’re loaning your money to the government interest-free 


✓ Be sure and claim the “Excess Social Secu