Well, that went by fast! 2017 went by in a flash, and now we’re into the first week of 2018, so if you are looking for an outside the box resolution that doesn’t include losing weight, then finances are a good place to focus on this year. Most of us give up on our resolution after a few months, which you can tell because if you have set foot into a gym in January it’s slammed, and by summer it’s back to normal, so let’s start ignoring the myths that are out there about finances, start a 52 week savings plan, and really get ahead by paying off debt, establish an emergency fund, and really save for the future.
You Need to Have Lots of Money to Invest
Sure, you always hear the suit-types talk about the stock market, watching the guy on TV with his sleeves rolled up screaming about the market buys and sells, but actually you don’t need to be rich to invest in the stock market, let alone a 401k account for retirement. You can open a brokerage account with as little as you want, contribute as often as you’d like, and buy a stock here and there and build up as you choose. Same goes with your retirement account at work, but take a look to max any employer contributions so you don’t leave free money on the table.
Cash is Better than Credit
Using cash can be good when it comes to avoiding not charging up your credit card balance and risk not being able to pay off and go into debt by paying interest. What credit cards can trump cash is when you get into being able to book hotel and rental cars, not to mention rewards, where you can earn points, miles, and dollars just by making the purchases that you would be making anyways, so it’s essentially free money that you’re getting in return that you wouldn’t otherwise get by using cash.
Too Many Credit Cards are Bad
Again, you can get into trouble if you start charging up multiple credit cards, but by having multiple credit cards open, it can actually help your credit score, because the score is based on the credit utilization, so even if you have balance on one card and zero balance on the rest, your score will be in good shape because you won’t be maxing out your available credit. Having one card and charging on it can actually hurt your score and jeopardize getting the best interest rates on the market if you are looking for a mortgage, loan, or these days, your job if the potential employer looks.
Always Buy on Sale
If you plan your shopping out right, you can purchase birthday and even Christmas shopping during the great sales of the year such as Cyber Monday, Black Friday, not to mention the many weekly sales that continue to come up to bump retailer sales. Some of the problem with sales though is that it can get you to buy items that you don’t need in the first place and just buying because they’re on sale, whether that comes to groceries, clothes, or household items. Online shopping is really where your wallet can get in trouble, with the ease and free shipping, and everything is virtually being on sale.
Need Three to Six Months of Reserves
While experts have said that in order to give yourself a nice cushion to prepare in case of an unexpected auto repair, vet bill, or floating yourself if you have had a sudden job loss while you search for a new one, whether that is more or less than three to six months is where it depends on you. You may not want to keep more than three months’ worth of expenses in an account due to the fact that the money that is sitting could be growing in a brokerage or 401k account, but if you do not have a steady job or will take you a while to find a new one, you maybe want to even have more than six months’ worth to give yourself more than enough cushion.
Debit Cards are Safer
Debit cards may be safer from protecting you from going into debt due to the fact you can only spend what you have in your bank account compared to a credit card, but actually a credit card can provide greater protection from fraud so that you can dispute the charges without risking wiping out your bank account in the meantime.
