Tips on Improving Your Finances in 2015

January 8, 2015

With the economy improving and another year upon us, here are some tips on improving your finances in 2015:

  1. Bump up your paycheck contributions to your company retirement account. Even an extra $25 per paycheck can be beneficial over time, (that’s $1300 extra for the year).   You won’t miss the little extra out of your check; we all tend to mentally adjust our spending to what’s in our paycheck and checking account.  Every employee should take full advantage of employer matching contributions too.
  2. Pay extra on your credit card balances. Ever look at the calculations on your statement of how long it would take to pay off the balance by just paying the minimum amount each month?  Try to regain control of your credit card debt.  Focus on paying down the highest-interest rate cards first.  Interest rates in general won’t stay low forever.   Don’t get caught with high balances when rates rise.
  3. At the same time, put some discipline in your spending by lowering your credit card limit. Yes, that’s right – lower it.  If you’re the type that tends to impulse-buy or binge-spend, put a limit on that tendency so you don’t get yourself in debt-trouble.
  4. Shore up your emergency account. Stuff happens, often at inopportune times.  Cash-on-hand is a beautiful and reassuring resource to have when the car breaks down or you lose your job.  Most personal finance experts recommend about 4-6 months worth of ready money.  Forget about the low/no interest – your goal is available, secure liquidity.
  5. Life insurance – get it. Most people are under-insured and don’t even realize what it is needed to provide for their survivors if they don’t come home one day.  If you have a mortgage, children or someone depends upon you for financial support in any way, make sure you have enough life insurance.  If you don’t know what you need, give us a call and get calculations.  Term insurance can be inexpensive, depending upon your health and other factors.
  6. Umbrella liability insurance. We live in a litigious society.  You may not even cause a bad auto accident, but if you are involved, you could be sued.  If you own property, especially investment or vacation property, you could have some liability exposure.  Umbrella liability insurance may also be relatively inexpensive.
  7. Stop watching the stock market. Events happen every day that could influence what the market does or does not do, but could have little to nothing to do with your portfolio or your long-term financial goals.  All the bubble-vision activity tends to do is to influence people to make poor investment decisions when they should just sit on their hands.  Stop watching financial news.
  8. Finally, get a financial plan. A roadmap to your long-term objectives is the best way to stay on track.  If you cannot do this yourself, give a call for a free consultation to see how having a financial plan can help you reach your short and long term goals.