How to Prepare for Financial Success in 2018
2017 has come to an end and it’s time to focus on the new year. People often make resolutions that pertain to their health or social lives, but what about resolving to plan for financial success?
Even if you don’t have any concrete financial goals for 2018—like purchasing a new home or going on an overseas trip—it pays to be prepared. After all, you never know what’s around the corner.
Here are some strategies to help you to prepare for financial success this year.
Create a Plan to Reduce Debt
Freeing yourself from debt might seem like an overwhelming task, but it’s important to realize you’re not alone—you have numerous resources at your disposal and many different kinds of experts with insider knowledge to consult.
The first step in resolving your debt is to figure out exactly how much you owe. Gather all of your loan statements, including your credit card bills and personal loans, then assess how much you can reasonably afford to put towards your debt each month. Once you have these numbers, you can determine how long it will take you to get debt-free by using calculators like this one from CNN Money. Additionally, there are several useful apps available that can help you get you back in control of your savings.
If you’d rather steer clear of the DIY approach, it pays to seek out a debt counselor. Debt management services are specifically designed to help you pay off your debts, with providers acting as mediators between you and your lenders.
Think Big and Invest
Reducing your debt is a great place to start on your road to financial success. But why not think even bigger and consider investing any hard earned dollars you can spare? Opening an investment account is a great way to grow your money behind the scenes.
The first thing to make clear, though, is that investment accounts are not the same as savings accounts. Savings accounts are useful only for short-term goals, as their interest rates are typically so low that they do not keep pace with inflation. Investment accounts, on the other hand, are a much better choice for people wanting to grow their money rather than spend it, as these accounts have the potential to achieve high returns when they go untouched.
Despite the possibilities investing offers, many people are still cautious about taking their money out of the perceived safety of a savings account and doing something “risky” with it, like investing. Of course, investing is not without risk, but it’s not a case of just buying stocks in a business then sitting back nervously without any control over what happens next.
There are plenty of different ways to invest your money, including low risk alternatives like bonds and dividend stocks. To help you sort through your options, speak with an experienced professional. Citadel’s Financial Planning Services will help analyze your financial situation and help you implement strategies to build your wealth through various investment channels.
Fund Your Retirement Account
It’s never too early to start thinking about retirement—the earlier you start contributing to your pension, the more money you’ll have to enjoy in your twilight years. Yet despite this, one in three Americans report not having anything saved for their retirement, with a further 23% claiming to have saved less than $10,000—the minimum amount considered adequate for retirement.
It’s understandable why some people procrastinate planning for retirement—a 2016 survey showed that 56% of adults struggled to picture themselves as older people, and that saving for retirement felt like saving for a stranger. But looking to the future now will ensure you can continue living the lifestyle you want well after you retire.
Check with your employer to see how much they match employee contributions, and consider opening an IRA account. If you choose to go down this route, you will need to decide whether a Traditional or Roth IRA is better for your situation. In short, a Traditional IRA provides tax deductions for contributions, with withdrawals in retirement being taxed at ordinary income rates. Roth IRAs however provide no tax break for contributions, but withdrawals are generally tax free. If you’re unsure of the right move for you, talk to us; schedule a complimentary consultation at a Citadel Wealth Management Center or branch near you to learn more.
Update Your Budget
Having a sound budget in place is crucial to getting in control of your savings. And with the new year around the corner, this is the perfect time to assess your current budget and identify places where you can reap a few more rewards. After all, a budget doesn’t need to feel restrictive—rather, view a solid budget as a great way to help you save the money you might have spent on frivolous items that you never think twice about.
Preparing your finances doesn’t need to be a chore—you just have to make it a priority. Take the time to sit down, review your financials and identify places where you can improve. After all, being on top of your savings means you have more freedom to indulge in things like overseas holidays or home renovations.
If you start building strong saving habits now—and stick to them—2018 will be the year you finally start seeing a financially successful future on the horizon.