If you are not where you want to be money-wise, a financial checkup is in order. Rather than wish for a better situation, make judicious moves to bring your finances in line with your vision.
There is no time like the present to improve your money. With these four money moves, you can take your personal finances to the next level:
Pay off debt
Stop viewing debt as a way of life. Understandably, you can’t avoid all debt, as most people rely on loans to purchase a house or buy a car. But if you have tons of credit card debt, devising a strategy to eliminate balances can have a tremendous impact on your financial future. For starters, lowering your credit card debt can improve your credit score. And with less debt, you will have more cash for saving.
Plan for a rainy day
A financial emergency can catch you off guard, and if you do not have funds in the bank, you may have to borrow from friends and family. Rather than burden others with your money problems, get serious about your own savings account. Even if you do not have a lot of disposable income, there are ways to boost your personal account.
For example, taking 10% off the top of your paycheck can build your savings quicker. Do you get a tax return or work bonus each year? Instead of wasting this money on things that you do not need, put this money toward your emergency cushion.
Get a retirement plan
There is never a good reason to put off retirement planning. And if you put off planning for the future, you could end up working well into your 60s or 70s. A financial planner can help you explore options available (such as a 401(k), IRAs, a money market account and other investments). Additionally, a Schwab retirement calculator is an excellent online tool for estimating the future value of your savings account.
Plan for your child’s college years
Like planning for your retirement, the earlier you start planning for your child’s educational costs, the better. There are several ways to approach this. You can set up a designated savings account and set money aside each pay period. Or you can look into 529 college saving plans as a way to meet future college expenses. Contact a broker or financial planner to open a 529 savings plan. Once your plan is set up, contribute funds to this account like you would with any other savings account. But unlike your regular savings account, 529 contributions are invested in stocks, bonds and other securities. This can maximize your return, creating a sizable fund when your kid is ready to attend college.
The financial decisions you make today have a huge bearing on your future. Even if you’ve made mistakes, it’s never too late to educate yourself and get on the right path. Learn how to manage debt and credit, and make saving a priority.