1. It is difficult for fund managers with years of experience to beat the market so why not just invest in S&P 500 index funds or whole market index funds with low fees. Investors will beat out actively managed funds most of the time.

2.Fire your full service broker that charge really high fees or a percentage of your assets. If your paying 1.5% on $100,000 your paying $1500 per year in fees. This means that you will have to make 1.5% more on your money to just break even before inflation. Get a low cost broker like Ameritrade or Etrade.

3. Dollar cost averaging can help smooth out the roller coaster that is investing. Invest fixed amounts of money over a period of years to invest more when the market is lower and less when the market is higher.

4. Escape taxes by investing in municipal bonds. Municipal bonds pay lower rates, but they are tax free from state and federal taxes if you buy municipal bonds from in-state issuers.

5. Save for college in a 529 college savings plan. The sooner you start saving in this account the sooner it starts to earn tax free returns for your child’s future.

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Some ideas for reducing your student loan debt and repayments:

1.Consolidate your student loans into one loan that spreads the payments over a longer period of time. Sometimes this enables you to receive a better interest rate on the consolidated loan.

2.Work out a plan with lenders to extend payments.

3.Work with a lender to pay less now and more later as your income grows.

4.Work with a lender to defer payments until your financial circumstances become better. If you are expecting a better job with more money then perhaps they may be willing to work with you.

5.Get a higher paying job or work extra hours for your employer to get the debt paid off.

With any of these ideas make sure that you read the paperwork completely. If you don’t understand ask questions. Check with your financial advisors, or parents or whomever you trust. You don’t want to make things worse by getting into a loan that doesn’t work out for you.

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Money from paycheck to paycheck

Paying off your mortgage, putting the kids through college, amassing an emergency fund, are you serious? For some, having any cash left over from paycheck to paycheck is a tall order.

You can break out of the paycheck to paycheck whole, pay off debt and actually start setting aside money. The key is to start tracking your spending, develop a budget, and setting goals.

Unfortunately people get bogged down in short-term needs and then get caught short when the big expenses hit. If you haven’t taken the time to determine your goals, it’s hard to be motivated to watch your current spending.

Track your spending and watch your expenses

The first step toward breaking out of the paycheck-to-paycheck cycle is to track your spending on a daily basis. Make sure you keep track down to that muffin you had at breakfast. Carry a notebook or a pda with you for a month to write down everything you spend money on. The list needs to be very detailed. Don’t guess how much you are spending actually write down everything you spend money on.

Keeping track of your expenses will be an eye opening experience. You will be surprised to find you spent $50 a week on breakfast, or $100 a week on happy hour. This exercise can be time consuming and frustrating, but you need to know how you’re spending your money before you develop a spending plan. Enter all of your expenses an income into an excel spreadsheet to see how you are doing and where the money is going.

Look for out of the ordinary expenses such as utilities, gasoline, food and recreation. High fees on checking, savings and retirement accounts can eat away at your earnings. High interest rates on credit cards and loans can force you to pay more than you have to over time.

Set short and long term goals

Once you know how much you’re spending each month and on what, you can set achievable goals, such as paying off debt, saving for a house or building an emergency fund, and create a budget. If you don’t establish goals, you won’t be motivated to change your spending habits. Achieving goals shouldn’t require you to make drastic life changes or cut out all the things that make life fun. Make your goals attainable and something you can get excited about (like retiring in a certain amount of time), and celebrate your progress with some short term inexpensive goals also.

When establishing goals, be sure to differentiate between wants and needs. Short-term needs, like buying a new car to replace one that’s toast or paying for a necessary medical procedure, are top priority. Long term needs, such as retirement funds, are secondary goals. A vacation to the Bahamas, falls to the bottom of the wants not needs list.

If you’re married or have a significant other, make sure you set and prioritize your goals together. Each of you should write some goals and compare lists to see which you agree on and how to prioritize them. You need to know what direction you want your financial lives to take before setting a budget to get there.

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