According to a recent Bankrate.com study, more than 60 percent of Americans don’t have enough funds to cover unexpected expenses like emergency room visits or car repairs.
This is shocking to me so, with tax time coming and New Year’s resolutions still fresh in our minds, I thought I’d share some tips from Taylor Schulte, CFP®, CEO of Define Financial. I like these because they’re actually very practical and easy to do.
“Just cutting out your morning coffee run isn’t enough,” says Schulte. “If you really want make changes to your personal finances this year, it’s important to write down a plan and know how to tackle each area. There are a number of small things you can do that will generate great results. Jot them down on a to-do list and cross each item as you complete it. You’ll be surprised how quickly it all adds up.”
· Increase 401(k) Contributions. In 2015, the limit on employee contributions to a 401(k) plan will increase to $18,000. For those participants over 50 years old, the limit will increase to $24,000. Take advantage of this opportunity and elect to increase your contributions starting in January. This will reduce your taxable income and increase your retirement savings. And if you haven’t started contributions, now would be a good time!
· Review Debt. Contrary to analysts’ predictions, interest rates have remained low for an extended period of time. With rates at historical lows, the trend might not last much longer. Review your current debt obligations and see if you can restructure them at a lower rate. This includes credit card debt, home loans, auto loans, and even student loans.
· Reduce Fees. Every fee you pay means less money in your pocket. Banks are often changing their rules and you might be surprised to learn you are paying a fee for something you previously received for free. Sites like Mint.com will help you track the fees you are paying and alert you when a fee has hit your account. Challenge yourself to see how many fees you can reduce or remove this year, then invest the dollars saved into a savings or retirement account.
· Review Your Investments. Take a close look at your investment portfolio. When contemplating a change in your portfolio, make sure you consider how long you’ve owned each investment. Assets held for a year or less generate short-term capital gains, which are taxed as ordinary income. Depending on your tax bracket, your ordinary income tax rate could be much higher than the long-term capital gains rate, which applies to the sale of assets held for more than a year.
Aren’t these simple?
I’m definitely checking out my bank accounts today to make sure I’m not paying any hidden fees, and I’m going to check my cell phone bill and cable bill to see if we can reduce them in any way.
With the extra savings, sorry, but I’m keeping my morning Starbucks.
My husband is the master of retirement savings. We’d better be zillionaires by the time we retire.
Wouldn’t that be nice, and hopefully not taxed again and again. Who knows what will happen by the time we retire.
Financial check ups are smart! Helps keep a handle on reality. Sometimes I think I am sticking to my budget much better than I am!
It is definitely better to check in every once in a while to make sure everything is on track.
We’re well-fixed in retirement now because we were smart about living below our means the whole time, which is always good advice And no debt at all. Thankfully! Those are key components to good financial health.
The tip that I definitely need to work on most is reviewing our fees. We have difficulty saving, and I know that it is a spending problem.
All doable. We need to work on investments.
This stat doesn’t surprise me. Sad, but true. Good advice here. For the longest time I never looked at the interest rate being charged on my monthly credit card bills. When I did…I flipped. No one should ever pay 27.95% interest on anything. Paid that sucker off and never returned to their doorstep. Gotta keep an on this stuff, or it will get the best of you. Thanks for sharing!
Thanks. Great ideas and I usually need a financial spanking once in a while. But I’m not giving up my Dunkin’ either!
Those hidden bank fees, so true and so bad of them. I’m giving up Starbucks due to their raise in prices. Sigh.
I always check my bank statements to make sure I’m not getting charged for anything that I can get for free. Or that I used to get for free.
My husband and I are getting ready to print our credit report and clean up our credit. This will lead us to being able to start saving more money.
Those are indeed very simple tips. I always check the fees and review them
Ugh. I always feel like we never get ahead! Maybe by the time my husband retires….
Hidden fees are so annoying. Sometimes they pop up and throw off the budget.
I am just in the process of doing this – and my savings plan, if all goes well after paying off credit cards will start mid-year! So exciting! and this was even more inspiring 🙂
Great ideas! I’m all about saving money any way I can!
Sounds good! I plan to share this via twitter. I wish I had a 401K.
The most obvious way to ensure you have money for an emergency is start putting money into an emergency fund. Maybe take the money you save from these ideas and put it into your emergency fund until it reaches at least 2K.
we are one of the unfortunate zillions wiped out completely by the recession. We are trying to renegotiate with some companies, not too much fun, and reinventing ourselves by starting a business. The stress has been huge, sleepless nights etc. but we will not give up, and long for the days we can save again.
Great tips, thank you for sharing!
Great tips. I know just who to pass this along to. Thanks much!
I did not know about the increase in 401k contributions, thank you so much!
I really need to learn more about things like IRA and 401k. I’m not even sure if my husband’s job offers a 401k.
Great tips! I’ve got to learn more about 401k. I know very little about it.
These are all very practical tips to help make retirement a little easier. I am so thankful my husband stays on top of our finances so we have a little set back for our retirement too!
working for the school district I do not receive much in returns for retirement it is a give or take. If you want this you have to give up that and my family right now is important.
Good ways to save. Reducing debt is so important
These are goid tips for saving money. Sometimes simoke ways are surest.
Really great tips! We are really trying to cut back and build up our savings! This is super helpful!
I am the master of finance and would freak if we didn’t have a good savings. 🙂 It is so important.
I don’t have 401k just yet, but there’s not time like the present to start using it! I need to look into what I can do as a self-employed business.
These are really great tips to save. I agree, it is always better & safe enough to have an eye on finance, so everything is right on target. Hidden fees are something which you need to have an eye as well.
Reviewing debt is very important. I am working towards becoming debt free as we speak.
This is so important. We really need to be aware of what we are spending. I’d keep my Starbucks too!
It is smart to do financial check ups. It can be east to get away from a budget and spend more then you think you are.
We are desperately trying to pay off our credit card debt so we can make bigger chunks in our student loans. It gets to be overwhelming at times.
We’ve toyed with refinancing, but our rate is good already and we’re wondering if the down payment and extended length of payments would be worth it. Still thinking. 🙂
Great tips. We are really focusing on our spending this year.
Thank you! Hubby and I are always looking for ways to boost our savings.
I need to go through and review what fees we’re paying!
4 good points. My husband takes really good care of our accounts. I know we’ll be in good shape (or at least I hope we will) 🙂
I am working on my savings. I need to get serious about it. But I am not ready to give up my morning coffee!
Living with one paycheck is tough so I ill definetley be folowing these great tips.
Great tips for saving more. I need to look closer at my contributions!