Financial Hour: New Year, New Financial You

New Year, New Financial You – Improving Your Finances Today

Simple decisions & new habits might lead you toward a better financial future.

Use Less Credit:

Every time you pay with cash instead of credit, you are saving pennies on the dollar.
At the beginning of December 2016, the average ‘low interest’ credit card in America charged 12.45%, while the average ‘cash back’ card charged 17.15%.

Set Up Automated Contributions to Retirement Plans & Investment Accounts:

By automating your per-paycheck salary deferrals to your workplace retirement plan or to an IRA, you remove the chore (and emotional hurdle) of having to make lump-sum contributions.
You can bolster invested assets with regular inflows of new money without even thinking about it.
Often, arranging these recurring contributions takes less than 20 minutes of your time.

Bundle Your Insurance:

Many insurers will give you a discount if you turn to them for multiple policies (home, auto, etc.)
This may help reduce your overall insurance costs.

Live Somewhere Less Expensive:

Whether its down-sizing or relocating, it might be time to look into cutting housing expenses.
This is especially popular for new retirees.

Look into Refinancing Your Largest Debts:

Perhaps your student loans could be consolidated.
Perhaps you could qualify for a refi on you mortgage (while rates are still low).
Refinancing debt could free up money to leave you with more financial ‘breathing room’ each month.

Spend Less Money on ‘Stuff’ and More Money on Yourself:

Many people associate possessions with well-being – the more ‘toys’ you have, the richer your life becomes.
That kind of thinking can quickly put you deep in debt. You may find yourself living outside your means as you ‘toys’ depreciate.
A wise alternative: pay yourself first and direct more of your income into retirement or savings accounts.
Or, if you like, use some money you would normally spend on creature comforts to attack your debt.
Instead of simply entertaining yourself today, make money moves on behalf of your financial future.
Too many people give their financial future little thought and may be in for a shock when the reach retirement age.
We all want to splurge now and then, but try spending money on memorable experiences rather than flashy items. The value of a memory can be greater than that of a possession.
Try forgoing several purchases a month and see what happens.
- A SunTrust Bank survey found that roughly 1/3 of households earning $75,000 or more live paycheck to paycheck.
- In 2016, Money noted that the average household credit card balance was nearly $16,000.
- In short, people are spending too much.
Some expenses are obligatory, others are spur-of-the-moment and unexamined.
- Pause and think before you buy something, do you really need it?
- If you separate your needs from your wants and say no to several of them, you may find yourself living a simpler life with less debt and more cash.