Personal Finance Tip: Creating a Nest Egg

Birds use their nests as a place of safety for their unborn eggs. They warm them and watch over them until they are ready to hatch. This is about what you do with your financial nest egg. Here are some tips for nurturing your future savings.

Everyone needs something set aside for the days when they will eventually stop work. Life doesnít stop then and neither does your money if you plan right. It is never too late to put something aside and help it to grow until you need it.

Start with a plan. All good ideas usually start with a plan. It gives you somewhere to go and something to strive for.

* Map out your future needs: This will be based on monthly bills (mortgage, utilities, car payments and insurance at least) and retirement plans. Do you want to travel or have a house at the beach? Maybe you want to start a farm or an online business. These things require money. Create a ballpark figure of how much money you will need each month to handle your dreams.

* Read about financial options: No one knows about financial things unless they take the initiative to learn about them. Read books, go online and talk with a financial advisor. Itís okay if you have a dozen questions. It is their job to answer each one of them to your satisfaction so you can make an informed decision. What are stocks and mutual funds? What is better: Roth IRA or traditional IRA? The only stupid question is the one you donít ask.

* Use as many financial vehicles as you can: Now that you know about all of these options, consider which ones are best for you. The old proverb says that it is not good to put all your eggs in one basket, so spread your money around to help it grow. Make your decisions based on advice and also based on how far you are from retirement, your children, your age and your after retirement plans.

* Minimize your lifestyle: To invest you need money. If there are ways to cut costs, the extra money can be put to work for your future. Here are some suggestions: Stop smoking, cancel cable television (Netflix is cheaper), downsize your home, consolidate services, renegotiate insurance premiums, brown bag your lunch, stop gym memberships, and use utility equal payment plans.

* Check and recheck: This is important to keep an eye on your investments. Different circumstances can lead to changes in the portfolio, so check it regularly to stay on top of new developments.

Is your nest egg healthy? If not, here are some options to help you improve it before full maturity. It may not be easy to make all of these changes, but over time the benefits will hopefully outweigh present sacrifices.