With so many ways to spend your income, it can be difficult to set priorities. Here are a few tips to help get you started with your financial plan.
Pay off high-cost consumer debt first. Paying off an 18 percent credit card is like getting a tax-free 18 percent rate of interest on your money. Pay off the card with the highest rate first.
After that, save enough cash to live on for three to six months in case of emergency or job loss. And save at least something for retirement.
With a cash cushion in place, invest in your retirement 401(k). Invest at least as much as the company will match.
Put retirement savings before saving for your kids' college expenses. You can borrow for college costs, but you can't borrow for retirement.
Don't prepay your mortgage unless you are saving 15 percent of your income for retirement.
Insurance: Make sure homeowner and auto insurance are up-to-date. A full-time worker should have life insurance equal to six to 10 times their income. Consider long-term care insurance which will help pay for time spent in nursing or assisted living care.
Make a will to ensure that your wishes are carried out. Have a durable power of attorney and a health-care power of attorney.
If you would like to learn more regarding preparing for your retirement or a free review of your insurance policies please call me at 630-232-9811 or drop me a note at deanakey@allstate.com
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