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.