SMART MONEY MOVES
Don't wait! Make these smart money moves
When you reflect on your financial decisions of the past year, maybe there are some things you'd do differently. You're not alone.
Just under a quarter of millennial's say they have done nothing to prepare for retirement. Even more alarming, 4 in 10 Americans don't have enough money saved to cover a $400 unexpected emergency.
Although we all wish we could be debt free, the average person would need almost $59,000 to pay off their debt in full.
Want to turn that around? Here are six simple money moves you can do to improve your financial health and set yourself up for success in 2020.
6 Money Moves:
1. CLEAN UP YOUR CREDIT
Look up your credit report as a jumping off point to getting your finances in order. Free services allow you to monitor all things on your credit report. Be on the lookout for changes in the terms and conditions on any lines of credit.
2. PRIORITIZE PAYING OFF HIGH-INTEREST DEBT
Figure out which loans or credit card debts have the highest interest rates. Make sure you tackle the ones with the highest rates first. Don't let the snowball effect of compounding interest sneak up on you.
INCREASE YOUR CONTRIBUTIONS
Even increasing your 401(k) by as little as 1 percent each year can make a dramatic difference by the time you retire.
Note: Assumes a $50,000 salary, an initial 3% payroll deduction, a 1 percentage-point annual increase (up to 15% cap), and a 6% average annual rate of return.
Graphic: Kiersten Schmidt/Grow Source: Vanguard
4. PLAN FOR THE UNEXPECTED
Prioritize building an emergency fund. Ideally, you'd want to have enough to cover three to six months of expenses - in cash - set aside in a checking, saving, or money market account. It seems daunting, but start small. Even $500 set aside gives you some flexibility during tough times.
5. CONSIDER UPCOMING EXPENSES AND PERSONAL GOALS
Looking at your calendar, there are probably expenses you can anticipate in advance, such as rent, car notes, and average food expenses. In an hour or two, you can probably figure out what unavoidable expenses you'll be incurring in 2020.
6. CHALLENGE YOURSELF
Look yourself in the mirror and be honest with yourself. If you didn't reach your financial goals in 2019, challenge yourself to put away a little more in 2020. Shifting your mindset around spending can be extremely beneficial. Save today so you have money to do what you enjoy in the future.