Guest Author - Olga Marquez

Investing goes hand in hand with setting a personal financial plan whether it is retirement, college education, a bigger home, or a combination of these. The second step would involve tracking your personal cash flow. This step is tricky because we can all identify the bills, but don’t forget those hidden costs such as ATM fees, your morning coffee, the $20 dollar bill you give your child on a weekly basis, etc.

If you are spending what you earn, make an effort to cut back in certain areas. When you find the extra money, make it a habit of paying yourself first and putting the money into your savings and investments.

Saving money means putting a portion of your money away for emergencies or a short-term goal. The easiest way to be prepared for these emergencies is to open a regular savings account.

Investing requires you to use your money to make more money for you by earning interest. The more interest paid, the greater the risk or the longer period of investing.

If you keep your money at home, instead of investing it, you'll never have any more money than what you put away. It’s safe, but I recommend putting it away even if you earn 1%, it’s free money!

Your money should work for you. Placing it in the perfect investment for you, plus adding deposits to your investment will increase the worth over time. Keep in mind that the higher the rate of return, the higher the risk of investing. But also keep in mind that risk may also be reduced via long-term investing.

Day-trade investments are investments that you watch daily and most of us do not have that luxury. You may need to consult an advisor to find out what type of investments are right for you, so I recommend consulting with a few investment advisors and pick the one that you relate to the best.