Imagine your best retirement
Step 1 – Setting financial goals:
It’s important to set goals that are beneficial to your financial wellness, but it’s equally important to know what you’re setting goals for. Put a price on your goals. Are you putting money aside for a down payment on a car, saving for the trip of a lifetime, or planning for your retirement?
It’s your future, your finances, and you know what’s important to you. Separate your short term, medium term, and long-term goals so that you can prioritize. Good planning starts by asking yourself:
- What’s most import to me?
- What do I want to accomplish?
- What do I want to have or do in the future?
Whether you’re just starting out or transitioning toward retirement, you can set appropriate financial goals that will fit your stage of life.
- If you’re under 30 and just starting out, you may want to find out how employer matching contributions in your employer-sponsored plan may be beneficial.
- For individuals in their 30’s with children, a college saving account can help prioritize higher education.
- People in their 40’s are balancing many competing priorities and might want to review their life insurance coverage.
- If you’re 50-65 you are probably starting to think about and plan for transitioning to retirement. You might consider taking advantage of catch-up contributions to further build up what’s in your retirement plan.
- Those in retirement may be thinking about when to start their social security benefit…sometime between the ages of 62 and 70.
Put your goals in writing. This is important to staying on track!
Step 2 – Starting a budget that supports those financial goals
Now that your goals are established and you’ve set a dollar value you can use that information to create savings and investment plans. Exciting goals and good intentions need cash to back them up. This is where starting a budget comes in. Starting a budget and sticking to may have a big impact on reaching your goals.
Step 3 – Managing your debt
Debt is a burden that most people will face at some point. Unfortunately, you can quickly find yourself in a debt-filled situation. The good news is that you’ve started your budget! This gives you the opportunity to use some of the money you’ve set aside to chip away at your debt. These tips can help you manage your debt:
- Higher interest loans cost you more. Paying off high-interest loans first may help you pay down debt faster.
- You may want to decide to keep funding your retirement accounts. If you don't have access to a retirement plan through your employer, you may want to find out how. Explore options such as IRA, SIMPLE and SEPIRA as a way to reduce your taxes while saving for retirement.
- Paying off credit cards by borrowing against your home or 401(k) may not be the best move.
- Calling your creditors to negotiate better terms may have benefits. If you have a number of problem debts and your credit score is marginal, this may not be possible. But if you’ve been a long-term customer of the creditor, they may lower your interest rate. If your balance is quite high and long past due, you might be able to get more favorable repayment terms. It’s not unheard of for credit card companies to accept less than full repayment in return for prompt payment of a reduced balance. But YOU would have to get this conversation started.
- Use cash for everyday purchases and be disciplined with your credit cards.
- You may want to contact a Financial Professional
Step 4 – Using your credit to your advantage
- Credit cards can put you in a position where you’ll quickly end up with debt. If you want to stay on track, then managing your credit effectively is essential.
- Before getting a credit card educate yourself with the rewards program it offers and which one will fulfill your biggest need (gas point, travel, cash back, etc.). Be cautious, resist the urge to open a new credit card every time you walk into a store or receive an offer.
- If you are just starting out, it may make sense to pay off your credit cards each month. In doing so, you’ll not only be ensuring that you don’t spend more than you bring in, but you’ll be creating good financial habits for life.
- Making credit card payments on time can help you avoid late fees and prioritizing which ones to pay off first could help you pay them off faster
Taking small steps today can help you plan ahead for tomorrow. Her are some important things you can do today to get organized!
- Set your goals. Make sure to have a conversation with your partner
- Start a budget. Check out https://www.voya.com/tool/home-budget-savings-calculator
- Organize and prioritize your debt. Create a plan to eliminate it.
- Check your credit report
- Contact a financial professional