There are some things in life that, when they get out of shape, you notice it: our bodies, our homes, our cars. However, knowing when you need to get (and how to keep!) your finances in shape isn’t quite as obvious. The financial advisors here at Creative Financial Planning have four ways you can get your financial house in tip-top shape this year, so you can feel good about them!
Stay on Top of Credit Usage
With not much to do and not many places to go, using your credit card for online purchases is far too tempting these days—you just have to type, submit, and you’re done. However, no matter how big or small those credit card purchases may be, it all adds up quickly, which is why it’s crucial that you track every credit transaction you make. As you’re tracking your transactions, your statement’s balance should be payable in the next month—or two to three months—so you can avoid high interest rates.
Create an Emergency Fund
If 2020 taught us anything, it’s that life is unpredictable, and while it’s difficult to be prepared for everything that life throws your way, it certainly doesn’t hurt to prep as much as possible! When it comes to an emergency fund, your goal should be to save enough money that you’ll be able to cover your expenses for a minimum of one month. And no, having to buy holiday gifts last minute does NOT constitute as an emergency—medical issues, car problems, and home repairs do.
It’s Never Too Late to Save For Retirement
Far too often, people think that if they haven’t been saving for retirement since their 20s, then what’s the point? But the truth is, it’s never too late to save for your future! So, if you’re not already contributing to a 401(k) account, there’s no better time to begin than now. However, if you’re already contributing to that account every month, now is the time to increase the amount you contribute.
Pay Down Debt with the Debt Avalanche Method
Paying down debt often seems like an insurmountable task, but utilizing the avalanche method can help make it feel more manageable and help you pay it off quicker. Simply put, the avalanche method is when you pay off your debt that has the highest interest first. Over time, this will help reduce the money you pay in interest, which can help you save money in the future.
Whether you need help getting your financial house into shape, are looking to start putting your money into investments, or need help creating a financial plan, our financial advisors are here to help! Give us a call at 845-634-6050 or click here to contact us today.