Summary on Personal Finance

DRAFT - ARTICLE IN PROGRESS; NOT FINISHED - DRAFT

I've put this together to serve me as a reminder and to use it as a reference for those friends who ask for a clue. I've read a couple of personal finance books and found many useful websites.
What follows is gathered from those two sources and from my own mistakes and experience.

Get Organized: Points 2, 3 & 4.
Budget
Debt: 1 (notice that I start on getting organized FIRST)
Investing:
Life Insurance (http://ptmoney.com/2009/10/05/term-life-insurance-policy-why-purchase/)
Living: (Budget for vacations and leisure)
Leaving something behind: (Retirement & Estate Planning)

1 - If you have credit card or any other kind of non-mortgage debt, you need to attack that first. Loans that you have made to yourself from your own 401K account are debts as well and will have an impact on your financial life. Take care of them quickly using the following plan:
a - Stop all new purchases.
b - Make a list of all the cards and places you own money and start paying the cards with the highest interest FIRST. Pay the minimum to the others (this is the only time in which paying the minimum balance makes sense). Once the first card is paid, do the same on the next until all are paid.

2 - Create a budget. Most people don't know how much their weekly/monthly expenses are and they end up using credit to cover. Next thing they don't pay their credit card in full and that's when they get in trouble. Mathematically, if you pay with your credit card in the first place, it's probably because you didn't have the cash. You then did the next stupidiest thing which is put on your card. (this doesn't apply to those fortunate who pay their cards in full every month, less than 10% of the population). Anyway, a budget will show you if you are overdoing it , where and how you should adjust, if you are courageous enough. If you already have accumulated debt, go back to point 1.
3 - Set up a portion of your salary for savings (pay yourself first). Have this money deposited into a savings account or a brokerage account or a CD automatically. If you let it go to your regular checking account you will end up spending it because something will come up. Something always will. Avoid temptation and pay yourself first.
4 - Stay away from credit cards as much as you can. Credit cards are the quickest way to get in trouble, but you need them to create a credit history, which creates a conundrum. The smart way to use them is as follows. (read carefully). Set up your automatic billings to be paid with a credit card, stuff such as apartment maintenance, rents, car insurance, telephone bill, cable or internet bill, gym membership, etc. These are basic necessities you have to pay one way or another, only that by using your credit card. Make sure you pay it in full every month. About the rest of your expenses, use a debit card. That's right, a debit card. The first thing it will give you is discipline. If you set aside 300 bucks for "incidental" expenses, then 300 or less is all you can spend on debit. If you try to do this on a credit card, it just won't happen. I don't care how much willpower you think you have, avoid temptation and just go with a debit card.
Your debit card may still have access to your other accounts, but you are going to set up one account for monthly expenses only, and it is to this account that you are going to tie your POS purchases to. POS stands for "point of sale". a)set up the account, b) as for the change to your debit card, and c) setup an auto transfer on a monthly basis or each time you get paid.

My top tip on personal finance: if you want to get out of debt and build wealth, all you ever need to do is spend less than you earn. [WEALTH] = [WHAT YOU EARN] - [WHAT YOU SPEND]