How’s it going with that New Year’s Resolution to be better with your money? For some, being better with money may mean putting another $100 in the bank every month. For others, it may simply mean skipping the $5 coffee in the drive-thru every morning! To us, being better with your money means making intentional decisions about saving, spending, and investing. Let’s get started!
#1 Get out of debt
The credit card bills from Christmas may not have even shown up yet, but now is the time to start plotting and planning a way to pay it all off! You may have scoured sales to get the best deal on that toy to put under the tree, but you’ll end up paying more in interest if you don’t pay it off right away. CreditCards.com reports the average credit card interest rate is 17.3 percent!
You may also have a car loan, a student loan, a home equity loan… and on and on. Get a good solid picture of how much total debt you are carrying (even if the number is scary), and then, consider how to pay it off. If you’re stuck, our Compass advisers are here to listen, walk with you, and help you. Contact us to get started today.
#2 Put more money away
My grandmother always said, “Pay yourself first!” When I got my first job at the age of 15, she encouraged me to take a little bit out every month and put it in the bank before I did anything else. Its good advice that unfortunately, many people just don’t follow. A Bankrate study found more than half of Americans couldn’t cover a $1,000 expense from their savings accounts. And what’s more, the same study found the average financial emergency cost at least $2,500! At some point, you will find yourself in an unexpected and expensive situation: hospital stay, broken-down car, job loss. Having an emergency fund of three to six months of expenses turns a crisis into an inconvenience.
Once you have your emergency fund built up, you can put more money towards your retirement and other investments. Planning a summer vacation? Start saving now! Think you’ll need a different car in a year or two? Put a little money away every month to start building that fund.
#Adopt a smart investment strategy
Investors enjoyed big gains in the stock market in 2019. Now, many analysts say we’re overdue for a bear market, leading to uncertainty as 2020 begins. If the market pulls back, you want to be prepared. Look at your allocation strategy with your financial adviser and consider the risks you may be taking. Is it time to take a more conservative approach? Examine your portfolio with your adviser and discuss the possibility of a re-balance. Compass advisers are here to listen and help you pursue your financial goals.