5 tips to make 2014 a financially fit year
Even the most well-intentioned maker of financial resolutions can face a siren’s song of temptation in the face of January white sales or discounted beach vacations. Follow experts’ advice to stay strong in the face of warm and luxurious lures, and make a solid financial plan with attainable goals.
1. Build a budget
It sounds basic, but according to an April 2013 Gallup poll, not quite a third of Americans prepares and maintains a detailed household budget despite the fact that experts routinely recommend this as a first step for achieving a financial peace of mind. Online tools at kiplinger.com or mint.com can set you on the path to budget acuity.
2. Ditch debt
Would you take out a bank loan for groceries or gasoline? How about concert tickets? If you buy tickets or anything else with a credit card you don’t pay off at the end of the month, you’re doing exactly that. Forbes.com says the average American who uses credit cards carries about $3,500 in credit card debt. Retiring debt can take years and add thousands of dollars to your original expense if you make only minimum monthly payments. Get a plan to tackle your current debt, then stay debt free with help from groups including the National Foundation for Credit Counseling, online at nfcc.org.
3. Lock away some loot
Whether you have debt or not, make sure to save for emergency expenses. Ideally, household emergency funds should cover at least six to nine months’ worth of expenses, but starting small is better than having none at all. Even setting aside $1 a week helps establish an important and healthy habit of saving.
4. Find free money
If your employer offers some type of retirement plan, they likely match your contributions. Talk with your company’s human resources department or enlist the help of an independent certified financial planner so that you’re doubling-down on those dineros when possible. Check your potential planner’s credentials at cfp.net.
5. Make a will
Don’t unwittingly leave your heirs harried by putting off making a will. Even those with fabulous financial planning skills can make an inheritance more complicated if tax liabilities and other related legal matters aren’t mitigated in advance. Consult a certified financial planner or tax attorney to make sure you don’t leave a mess behind when you bid the world adieu.
Sources: Fidelity, Kiplinger’s, Federal Reserve, Mint.com, NFCC, CFP Board