Advantages of a 401k plan

Basically, if you have the option to use a 401(k), you'd be crazy not to. Your employer puts in dollar for dollar what you put in, so that with a maximum contribution, you could be investing $30,000 a year without paying for half of that total. That's more than 7 times the annual contribution to an IRA, and you'd have to pay all of that yourself. Now, if you leave before a predefined period of time, you may lose some or all of your earnings, but your plan should provide for you to take with you what you put in, so you can roll it over into an IRA or put it into the 401(k) at your next employer's. Rollovers are one great way to keep saving for retirement even in a "portfolio career".

Because the 401(k) is paid of pre-tax earnings, you reap some significant benefits. First, you don't pay taxes on what you contribute until the time comes to take it out of the account; second, your Adjusted Gross Income is reduced by the amount you've contributed to the 401(k), so your income tax for the year will be lessened.

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How to stick to a household budget
and have extra
money for investing

1. Customize your budget with your current needs, wants and future goals in mind.

2. Try to think if your budgeting plan as a "spending" plan rather than penny pitching.

3. Sit down and rationally discuss budget goals and spending limits with your spouse. You are bound to disagree somethere, but it important to take the time to find common ground.

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