Scour Your Financial Reports
Especially if you are planning to make a big purchase like a car or home, launch your efforts to freshen up things financially by checking your credit score. More than one in four Americans have a “potentially material error” on one of their three major credit reports, according to a Federal Trade Commission study. Errors can lead lenders to demand higher interest rates, offer less favorable terms or downright deny you a loan.
Also, check your auto insurance score. Although insurers have used the figure to set rates for some time, not all of them share it with consumers. Missouri-based Say Insurance offers a free online tool to help everyone get a better grip on their financial life. Knowing what goes into your rate can give you some power over it.
Financial Products & Services
Consider available resources to help you manage your finances. Talk to me or your Financial Advisor whether any of the following products may help you with your financial strategy. These products could include:
- Life Insurance
- Disability Insurance
- 401k, 403b, SEP IRA
- College Savings Plan
- Long Term Care Insurance
- Annuities
- Estate Documents
Sweep Debt Out the Door
Excluding home mortgages, the average American now has about $29,800 in personal debt*. Unless your part of the lucky few to carry no debt, your next priority should be paying back your creditors.
Start by paying down debts with higher annual percentage rates first, which will save you money on interest. Short-term loans and credit card debt tend to have the highest interest rates, while student, home and other long-term loans tend to have the lowest. If you have multiple high-APR debts outstanding, consider debt consolidation. Beware, though, that creditors often extend payment timelines to lower monthly bills, which can cost you more over the life of the loan.
Source: Northwestern Mutual, Planning & Progress Study.
Trim Your Budget’s ‘Big Three’
Financial professionals recommend that Americans have $1 million or more saved by the time they retire, but one in five Americans have less than $5,000 reserved for their golden years, according to the Northwestern Mutual study. More worryingly, a study by the Stanford Center on Longevity discovered that almost a third of baby boomers, at an average age of 64, had nothing in their retirement accounts.
If you are within a few years of retirement, your best strategy might be to get a second job or cut the three expenses described earlier. Members of younger generations should regularly invest in market-based retirement accounts, regardless of recent volatility.
Systematically investing means not trying to time when you invest your money. As should be clear at this point, timing the market is a pointless activity since no one knows what the market is going to do tomorrow.
Plan Solid Retirement Plans
Financial professionals recommend that Americans have $1 million or more saved by the time they retire, but one in five Americans have less than $5,000 reserved for their golden years, according to the Northwestern Mutual study. More worryingly, a study by the Stanford Center on Longevity discovered that almost a third of baby boomers, at an average age of 64, had nothing in their retirement accounts.
If you are within a few years of retirement, your best strategy might be to get a second job or cut the three expenses described earlier. Members of younger generations should regularly invest in market-based retirement accounts, regardless of recent volatility.
Systematically investing means not trying to time when you invest your money. As should be clear at this point, timing the market is a pointless activity since no one knows what the market is going to do tomorrow.