![]() The truth is the earlier you start investing for retirement the better off you will be. So many of us try not to think about it and put off saving for retirement. Retirement is a major concern for everyone. We know these expenses are coming, so saving for them is a must. Larger upcoming expenses could be purchasing a new car or saving for college for the kids. Small ones would be kids clothes or minor taxes. There are two main areas that you need to save for the future. In teaching my kids about money, if I could get across that saving money for the future HAS to be a major part of a financial plan, I would consider that the biggest win. We recommend using a high interest savings account for your emergency fund, because it will get much higher rates and hedge against inflation. This allows you to not have to play a game of paying off debt, getting out of debt, back to paying off debt and round and round.Ī beginner emergency fund is usually $1,000 while you are paying of debt and then once all your consumer debt is paid off, three to six months of expenses. Build an Emergency FundĪn emergency fund allows you to not turn to debt when an emergency happens. Once you prove to yourself you are getting out of debt, then consolidation can be an option to turbo charge your debt payoff. ![]() This is because consolidation loans can take the pressure off of a bad situation and make it easy to continue the in debt lifestyle. I always encourage people to go through the process of seeing how to get out of debt without debt consolidation. Put in a plan of action the allows you to get out of debt so you can start the process of wealth building. These are the ones you want out of your life because they restrict you from growing wealth. These would be credit cards, car loans, student loans, and most personal loans. Good debts are ones that result in long term assets, think business debts and home loans (within reason).īad debts are debts that cost you interest and don’t result in any meaningful assets. At the root of it, you will see the best thing you can do is get all your debt paid off. ![]() That is really the basics of understanding what your credit is. Your credit score is a single number that measures how trustworthy you are to handle new debt. Your credit score can make it easier to get good rates on a home loan or even better premiums on your insurance. It seems like credit is getting more and more important in our lives. OR maybe your income is pretty good and your spending was the main problem with your finances. Maybe your current job isn’t as lucrative as you thought and you need to find another way to make more money. Maybe you need to get a side hustle or a part time job. Most people know how much they make each year or per hour, but does that translate into getting to the goals you want?īefore anyone learns how to manage your finances, they are usually in the dark as to how far their income is really taking them. So much of the reason why people feel poor or feel stressed with their finances is not knowing what is going on with their money. For us that meant switching to cash envelopes for groceries, dining out, entertainment, and personal care in our budget. We were able to immediately able to identify our overspending and take steps to reduce our spending in the right areas. When Amy and I did our first month of budgeting, we realized we were spending way too much money on food. The biggest advantage to having your budget in hand is that it will detail where you are making mistakes with your spending. Once you understand how to make a budget it gives you all the information you need to win with your finances.Įven if you are living paycheck to paycheck, budgeting is necessary part of getting your finances in order. In fact, the budget is the first strategy that anyone should use to get their finances in order. Now you may hear alarm bells with a flashing giant word NO when you think of a budget, but a budget is just a tool that tells your money where to go.
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