Financial Tip #1: Plan A Fund

Here at FedSavvy we’re ending the year with 10 Financial Tips for 2016! We’ll be posting one every day until the full list is available on January 2nd. Be sure to check back for more tips and have a Merry Christmas!

Did you ever wonder what you did with your money? Make 2016 different by being proactive and making a plan to fund what is important to you.

Maybe you want to pay off credit card debt. If you have a $12,000 credit card balance and want to pay this off in two years, use a financial calculator that will incorporate the interest rate to get your monthly payment. You must make this a priority. The best way to make this happen is to schedule automatic payments from your bank account. Or maybe you want to redo your kitchen which will cost $15,000. How much can you afford to save every pay period? If you get paid bi-weekly and want to have this done by next summer, you will have to save $416 a pay period. If you can’t do this, don’t throw in the towel.

It may take you two or three years to fund this goal but at least you will have a plan in place. Longer term goals such as college planning and certainly retirement planning take a little more consideration since you are likely to invest in stocks, bonds, mutual funds, exchange traded funds, annuities, etc. You also need to know how the various retirement plans work and the tax laws associated with them. Schedule a meeting with a financial advisor to create or review your retirement strategy.

Check back tomorrow for another tip and have a Merry Christmas!