The Five Best Financial Moves for 2007

Here's a list of Suze Orman's five best financial moves for 2007:

1. Pay-off your credit card balance.

2. Get a high rate on your savings.

3. Be sure to contribute enough to your 401k to get the company match..

4. Insure your life so those you leave behind are provided for.

5. Teach your kids about personal finance.

How could I disagree with Suze? This is a great list. Here are my thoughts on each of these:

1. Don't think you can simply pay the minimum amount on your credit card and the debt will go away. Doing this will cost you a fortune. For a comprehensive review of debt and credit cards, see Best of Free Money Finance: Debt Posts and Best of Free Money Finance: Credit Card Posts.

2. Not an "out-of-the-park" sort of tip, but a decent one. I keep my emergency fund cash in a Vanguard money market account.

3. Of course. Contributing to your 401k to get the full company match is step #1 in having a great retirement.

4. I agree with Suze -- buy term life insurance (and invest the difference.)

5. Much of personal finance blogging is due to people being in bad financial shape and detailing how they are getting out of it (or making sense of their finances.) A good portion of these problems is due to the fact that their parents didn't teach them about money. Let's stop the cycle of financial ignorance with our generation and be sure our kids know at least the basics of finances before they go out into the world.

Comments

[Dus10]

Your comments on item five are probably dead on. I don't see many PF bloggers out there espousing that they never had financial problems or that they were affluent from the beginning.

[Clever Dude]

They all make sense, except in my case. I have had 0% on my credit card balances for the best part of 5 years now, so I've carried 20k on those cards up until I started paying it down faster a year ago.

However, I also have 2 newer cars, and 2 student loans. I'm planning on paying off one car by September ($15k) and might use a 0% offer for that.

I think #1 should be to pay off your highest interest debt, which may not be your credit cards.