Smith Business and Finance

(ARA) – So, you were born between 1965 and 1978. Are you tired of the Generation X label and being portrayed by the media as a cynical, Xtreme sports-loving, body-piercing slacker? If you’re one of the 76 million Americans that are considered to be ‘Xers,’ you may see yourself more as an independent, career-minded, technologically savvy, young adult. As someone between the age of 22 and 35, ‘Xers’ most likely tune out the thousands of marketers with retirement messages geared towards ‘boomers.’ Insurance providers, investment companies and financial planners are virtually ignoring the millions of Americans considered to be ‘Xers.’ Meanwhile this misunderstood group continues to buy homes and select mortgage companies and retirement plans with little attention and relevant advice.

So, are boomers the only generation that should be concerned about their future? Absolutely not. Planning for your future can be tough for anyone, no matter what his or her age. But individuals between the ages of 22 and 35 need to recognize the important opportunity they have of starting early and understanding the basics, according to Randy Schuldt, vice president with IHateFinancialPlanning.com, a new Web site geared to the more than 75 percent of Americans who hate financial planning.

Schuldt offers some additional financial planning tips for Generation Xers:

Think Retirement

According to the 1990 U.S. census, the average American worker has only saved $1000 towards retirement. Pretty sad, isn’t it? To make matters worse, the average monthly Social Security benefit for a retired worker in 2000 was $804 (Source: U.S. Social Security Administration). You’ve heard it before, the sooner you start saving for your future, the better. So where do you start? First of all, just start. Consider putting away a little at a time — $25 or $50 a month – in a mutual fund or 401(K) account. If you’re 25 years old and put $25 away each month into an account earning 8.0 percent, you will have saved $58,099 by retirement at age 60. Compare this amount to the $14,940 you would save by starting when you’re 40.

Develop a Financial Plan

Whether you’re graduating from college, getting married or having a baby, you need to set specific goals (home ownership, vacation property, college education, retirement, etc.) and develop a financial plan for the future. To get started, consider meeting with a financial professional. A financial professional can help you get off on the right foot, by helping you develop a long-term financial plan that will make your hard earned money work harder for you.

Explore Life Insurance

If you’re still living the ‘Friends’ lifestyle and spend most of your time at coffee shops like Monica, Joey, Phoebe, Chandler, Ross and Rachel, you may not need to think about life insurance just yet. However, ‘Xers’ do settle down, get married and start families. If you have dependents (a spouse, children or aging parents) you need life insurance. The good news is that many employers offer life insurance as an employee benefit. But this may not be enough. First, talk to your benefits or human resources manager to learn more about their offerings and how to enroll. Then, see an insurance agent who offers insurance from major providers to determine if you may need more.

Deal with Debt

‘Debt is one of the biggest financial problems facing young adults,’ says Chris Newell, principal of Newell Financial Corp. in Little Rock, Ark. When it comes to paying off debt, Newell says to start high. Rather than concentrating on paying down a little of each credit card balance, find out the interest rate for each card — it should say on the monthly statement — and pay down the cards with the highest debt and interest rates.

‘First, make a pledge, ‘no more additional credit card debt,” Newell says. ‘Then, start paying off the highest debt cards. As soon as one card is eliminated, continue the same payments on the other cards. Never reduce this monthly debt payment amount until they are all paid off. You will have to be disciplined and pay substantially more each month than the minimum balance.’

Not Enough Money?

I believe that most people haven’t got enough money for everything they wish to have – the more you have the bigger your plans, and you have a feeling that you have less and less money.

Whether you have lots of money or just so-so, you need to economize and take proper care of your money ie your income, expenditures, savings and investments.

Below I give you 7 Golden Rules to a Financial Prosperity:

1) Always have several streams of income: never rely on one income from one source only.

2) As soon as you start to earn, start to put aside a certain amount to create an automatic money source: I remember I have always had my own portfolio since I was a child, and can tell you that I needed it several times. Even if you have property, you may find yourself in a situation when you need fast cash. In such a situation, you will not sell your property, but you can sell part or even the whole of your portfolio.

You don’t need to start your portfolio with thousands of dollars, you can develop it.

You only need to set a rule that you won’t touch it when you don’t need it, and keep it for vital urgencies. To buy a better car or a bigger house is not an urgency.

3) Always take care of your money personally: it’s not necessary to do everything personally as soon as you can afford it but never allow any other person to have a right to handle your money without your knowing, or your express approval. If you think that you don’t have time to supervise this or that it’s not important, you will have to find it later for much more unpleasant things when you lose your money.

Many of you will ‘hate’ me for what I’m going to say now and I will receive lots of disapproving messages but I have to say it: don’t even allow your spouse to do this – love and money is not the right association, and I know what I am talking about. Keep these apart.

Don’t supervise your investments and expenditures only – Always strictly collect your money. Never allow people to owe you – again: with no regard to how much money you have, always demand every dollar you earn to be paid to you.

4) Strictly distinguish between expenditures and investments: it’s very easy to put everything as cost or overhead: don’t do this. Apply an easy rule: expenditure or cost is money thrown out of the window – you can’t expect any return money on it, while investment is desirable (of course, not every investment is desirable): this should bring you more money, more property able to make you more money – the only questions you should carefully consider are whether you can/should afford such an investment at the moment, how much you’re going to get back, how fast and whether it is acceptable.

5) Keep your expenditures at the minimum with no regard to how much money you have: expenditures are killing for everyone. It’s useless to tell you stories about big fortunes lost by unwise costs. I’m sure you know many yourself from your neighbourhood.

6) Avoid loans, don’t borrow if you don’t know for sure you can repay. Never purchase anything on future incomes or promises.

Just a little example: if I have a notice that a payment is on its way to my account and I need the money today for some reason (however, I can’t see any reason like that – never mind), I can borrow. But, if I think I will sell 1,000 books next week, I mustn’t borrow.

7) You must always earn more than you spend. In case you don’t earn more than you spend, then you must spend less. In other words, you must always be in green.

If you think that you must swap your car every six months even if you should borrow, then it may easily happen that you won’t drive anything in a very short time.

I don’t want to waste hours of your precious time by long essays on savings and wise advice. Just adopt one principle and whenever you want to do something with your money (- whether it’s thousands or millions or just a couple of bucks), just think about it: take care of the pennies and the pounds will take care of themselves.