Date: 04 Jan 2017
Cat: Audio, Financial Hour (WMT)

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.