Here are the top proven effective ways to get your financial house in order now and through your retirement.
First, Pay off your Debt. Consumer debt like credit cards and car loans will literally eat you out of house and home. You will not be able to properly grow your future or take care of your family, thus the bad debt needs to go. First, pay off any student loans, then pay off your credit cards, then tackle your mortgage. I will have an article soon on how to best do that.
Second, Make and Stick to a Budget. Managing a budget is all about telling your money what best to do; not allowing your desires to ‘defund’ you. How to Make a Family Budget
Third, Control of Your Credit Cards. Or, they will control you! If you can’t manage a credit card, do not have one. Stick to a debit card and have a good budget to guide you. How to Handle Credit Cards
Forth, Understand Good Debt and Bad Debt. Good Debt is a leverage towards improved value in the long term like a mortgage or business loan with the potential to increase your net worth. Bad Debt takes away your cash savings just to buy something you can’t afford and that you do not need. To add insult to injury, its value will be gone sooner than it is paid off. Bad debt uses your future money to purchase depreciating assets that are worth nothing in the future.
Fifth, Maximize Retirement Savings. If your employer offers a matching 401k or similar program, take it and contribute to the maximum. Only a fool will give up this free money. So, take advantage of this contribution. Then, any older retirement accounts like an IRA or 401k get them out of their holding cell and their low minimum interest and shrinking value, and get them to work for you. I will have an article on why and how to do that soon.
Sixth, Manage Financial Hazards. Your single most valuable asset is your future earnings potential. This can be taken care of by budgeting, proper investing, good health, and insurance services that I can provide you with.
Seventh, Have Good Insurance. Review any life insurance, health, and disability protection that you have. 90% of the time, they are the wrong plan and won’t be helpful. For your future and your family, get this done. Also, do not rely on any coverage offered through employee benefits, they are usually not sufficient and rarely payout. Good insurance can be so much more than just protect against catastrophes. I am in the process of a massive research project on this and will have the best plans from the best most stable companies for you soon. You can make an appointment with me, and we can go over what you have, what you need and what can work best for you. This will be a free service.
Eight, Have an Emergency Savings Account. Start with a $1,500, then build it up to three or more months of your income. You never know what can happen, so be ready for those unexpected expenditures or job loss.
Ninth, Have an up to date Written Will. Better yet, a Living Trust. If you don’t have a will, our government may take most of your assets through probate court and inheritance taxes. I have seen and been an Executor of large estates that were wiped out to nothing for the survivors because of no proper will or trust or insurance!
Tenth, Have a Savings Plan. You can automate a long-term savings plan, and some companies offer a matching plan, so take advantage of any maximum benefit. The more you put in, the more you have to invest for your family’s future. Do not leave it up to change, I have never seen this work out.
Bonus, Give Back. Make giving a top financial priority. The Bible calls us to honor the Lord with the first fruits of our wealth. Keep your financial priorities in order, this honors God, yourself, family and allows you to give back to your church and others.
If you do not get your debt under control and on a good budgeting plan, any investing and retirement planning will be seriously hampered. Also, do not live above your means and future planning, that never will work out for you. So, sit down and carefully review each of these ten steps and you will be in a much better position for the coming decades and beyond.
For real help without the salesperson, contact me. I am a licensed and experienced professional that will work for you, not a Broker or Company. You can make an appointment with me or come to one of my seminars and we can go over all of these above steps and can work best for your family or business. This will be a free service, whereas others will charge $2,500 or more for this.
Dr. Richard Krejcir is a licensed and experienced Financial Consultant with over thirty years of experience. He has worked for major banks, insurance companies, nonprofits, and families too. He is also an author, pastor, Special Ed teacher, and financial blogger and holds a doctorate in Stewardship.