Owning your finances and investing in your future sounds like a great idea, but starting can be the hardest part. Here are some practical steps that can be taken to own your finances so they don't end up owning you heading into the new year.
A good budget doesn't need to be complicated. For those who want to take the first step, seeing how and where we spend money helps us identify areas to begin saving. The more attention we pay to where our money is going, the better job we can do at saving it.
2. Emergency Fund
Set your first goal of $1,000, then continue saving until you reach enough in reserves to cover 3-6 months of expenses.
If debt is a problem, ignoring it doesn't make it go away. Take a serious look at your consumer debt and start paying more to eliminate small balances or focus on high interest rate lines of credit.
4. Saving for Retirement
The first place to start is with the "free" money your employer offers in a 401k as a company match to your contributions. After you have taken this step, think about increasing your contribution. If your employer does not offer a 401k, think about starting an IRA.
We all think about car and homeowners' insurance but adequate life insurance is often overlooked. How would something like the sudden passing of you or your spouse affect your financial picture? The answer to this question helps determine the amount of coverage one should have.
A will is the first step in estate planning. Who better than you to specify who gets what and choose the person to oversee your estate as an executor? This is particularly important if you have minor children in deciding who would be trusted with their care if the worst were to happen while raising kids.
7. Healthcare Directive
A healthcare directive can remove the burden of difficult medical decisions from our loved ones by specifying our wishes now for down the road when we are not able to make those medical decisions for ourselves.
If you couldn't act on your own behalf for basic financial transactions, who could? A financial power-of-attorney answers this question when you choose someone that is trusted to act on your behalf to sign checks or handle financial transactions.
No one plans to fail, but many people fail to plan. The financial advisors at FSB Premier Wealth Management are here to answer any questions that you may have and develop a personalized plan.
"If it is to be, it' up to me."
- William H. Johnsen
Written by: Bob Hansen
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