Good Money Habits Make a Market Slump Less Scary

The key is to have three or four guidelines and follow them daily or weekly. It actually takes a bit more will power in flourishing economic times, but then your habits are set and you can stave off fear in a down market. Many people don't even know where to begin to manage their personal finances and tackle their investments, especially for their retirement plans.

Keep It Simple -- Your Financial Life That Is

I have seen clients walk in with 401(k) statements from five different companies, IRAs at three separate financial institutions and checking accounts at two or more banks. Would you feel inspired to tackle your money matters in this situation? I wouldn't!

Also, how can you expect to do a proper asset allocation when your investments are all over? Start by consolidating all your investment accounts to one no-load mutual fund company, such as Fidelity Investments, and if you have more than one bank account, pick one bank in your neighborhood that offers free checking. Commerce Bank(TD Quote) has become known for this benefit.

Have a Weekly Plan with Your Money

Every week figure out your weekly spending for your bills, discretionary income, short-term savings and retirement savings. Don't just deposit the cash into your checking account and let it languish. In addition, set-up automatic monthly transfers from your checking account to online savings accounts that generate higher interest rates than your local bank and to diversified no-load mutual funds. A target date mutual fund, such as Fidelity Freedom 2030 (FFFEX Quote), is an excellent option, which combines instant diversification and investing your money based on your time frame, especially for retirement.