The new year is about to start, and with it comes resolutions of all types. Consider adding these five steps to your financial resolution for 2020:
- Save More – Try automating your savings so that you don’t have to think about it. Pay yourself first, then cover your other bills.
- Spend Less – Simple. Get a budget, spend less than you earn, and watch your bank balance increase.
- Pay Off Credit Card Debt – Americans owe over $13 million in credit card debt. There is no amount of benefit to borrowing that makes this worthwhile. There are two common and effective debt-payoff methods. First is the debt snowball, which requires you pay off your smallest debts first and gradually pay down the larger ones. Second is the avalanche method, which attacks the highest interest debts first, working down to lower interest debts towards the end.
- Build an Emergency Fund – Almost half of all Americans don’t have $400 to cover an emergency. It’s time to start saving.
- Save More for Retirement – Social Security doesn’t typically cover the entire cost of retirement, so start saving today so you can retire on time. Starting young allows the magic of compound interest to take over, so don’t wait! If you are under the age of 50, you can contribute up to $6000 annually to your IRA and $19,500 to a 401(k). If you are 50 or over, you can contribute the additional amount of $7000 annually to your IRA and $26,000 to your 401(k).