If you don’t have any financial goals, what are you waiting for? The comfort financial security offers aren’t something to be taken lightly. Money is difficult to come by, yet disappears so easily. The good news is, it’s never too late to learn tactics to make your money go farther.
When trying to be more money savvy, the first thing you should examine is your outstanding, unsecured debt. Credit cards should only be used within your means; meaning, don’t charge more than you can pay off in full when the bill comes. Until you get to that point, consider consolidating your debt for a lower interest rate. After consolidation, don’t use your credit cards. If you do, you’ll never escape the situation you’re in.
Ideally, you should save 10% of your income. If you work that amount into your budget you won’t feel the pinch of a lower disposable income. Think of your savings account as a safety net to protect you and your family. It’s not uncommon to have life insurance with an appointed primary beneficiary to take care of your family when you’re gone. Why not put something in place to take care of them while you’re still living?
If your employer offers a 401k, be sure to take advantage of that tax-free savings for retirement. The amount you allocate to your 401k plan isn’t taxed, so it lowers your annual taxable income. Keep in mind, the IRS dictates how much of your income you can contribute to this retirement plan, so be sure to look into any limitations.
When it comes to how you should spend or save your money, everyone has an opinion. Keep in mind your friends and family have the best of intentions for offering the financial advice they do but are they qualified to point you in the right direction? Everyone’s circumstances are unique. Because of that, not all advice is created equally. Consider meeting with a financial advisor.
Financial planners are experts who will take your specific income, needs, and goals into consideration and devise a budget. They’ll also examine your current financial situation and help you to fix any money matters. Additionally, they can help achieve your current and long-term goals.
If you were drowning in credit card debt, once you get them paid off, your knee-jerk reaction may be to say “never again” and try to never use credit again. Although it seems like a good approach to staying debt-free, it’s not the most sound financial decision. When used correctly, credit cards will improve your credit score.
Your credit score is a thumbnail sketch to potential lenders of how likely you are to pay your debts as agreed. In short, making at least the minimum payment by the due date. Chances are if you struggled with credit card debt, your payment history may be a bit hit and miss. By using credit again, responsibly this time, you can increase your credit score.
In today’s world, you can’t live without credit. You need it to buy a new car or house, get a loan or even rent an apartment. If you have poor credit, you may still be able to do all those things, but at a higher cost than someone who has a better credit score.
Achieving your financial goals isn’t impossible. To stay focused, concentrate on what benefits your hard work will offer you. In the long run, you’ll be glad you did.