The start of the New Year is a great time to implement financial strategies toward improving your life. Whether you’re already saving or trying to pay off debt, making the right financial resolutions and working towards them can help you achieve your goals. Use these eight financial strategies to improve your financial health in the New Year.
Financial literacy is the confluence of the economic, credit, and debt management knowledge necessary to make financially responsible decisions that are integral to our everyday lives. A lack of financial education is one of the reasons why people struggle with saving and investing. The more you know, the more likely you will make good decisions. Here are a few financial literacy resources to keep in mind:
A budget lets you check your income and expenses over time, such as each month. It is a tool to help keep your finances on track as you adjust to changing financial situations. A budget is a simple but effective financial strategy.
A financial professional can help evaluate your financial situation and provide ideas to become financially well. Work with them to create a financial plan to help prepare you for the future by examining your financial stability today.
Interest rates and fees can negatively impact your finances, especially if you’re working toward a secure financial future. High-interest rates cost you more, so work toward paying higher interest rate debts off first or negotiating a lower interest rate. If appropriate, consider refinancing or finding a new lender to consolidate debt at a lower interest rate and then transfer credit balances.
Ideally, you should have three to six months of living expenses saved in an easily accessible account that you intend to use only for emergencies. Once you reach six months of emergency savings, continue to save. Right up until you reach another milestone, such as one year of living expenses.
Saving for retirement by participating in your employer’s retirement savings plan and on your own is essential. Ensure you save enough to receive your employer’s match and automatically increase your contributions yearly through automation. Consider contributing to a Roth IRA with after-tax dollars and work towards maximizing your contributions.
Your financial professional can help you by assessing your financial situation today. By offering suggestions to get your finances on track, and helping you prepare for the future with a financial plan. And develop financial strategies best for your situation.
Life insurance is one way to protect your family from financial hardship if you die prematurely. To determine how much life insurance death benefit you should have, factor in the cost of caring for your children each month and their cost after you are gone each year until age 21. Several types of life insurance to consider are term, guaranteed, or indexed universal. Financial and insurance professionals can help you find insurance that meets your unique needs and budget. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
Generally, a will determines who will care for your children if you die. While an estate plan details how your assets will distribute to beneficiaries. A power of attorney document gives someone the legal right to make decisions on your behalf while you are still living. Consider a medical directive or medical power of attorney document to handle your medical decisions. If you cannot do so yourself. Work with a legal professional to determine which documents are appropriate for your situation.
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First Fruits Asset Management has been in the financial services profession since 2007. We work together to create a personalized financial plan. We then review and revise the plan as situations and/or goals change over time. Contact us today to learn more about how we can build a partnership with you today.