SHERMAN, Tex. (KXII) -- Q: WHY IS SEPTEMBER NAMED SELF-IMPROVEMENT MONTH?
• September has an energetic “back-to-school” feel for many of us.
• It’s a time to take advantage of new opportunities and get a jump-start on any New Year’s Resolutions we’re thinking of setting in January.
Q: HOW CAN WE GET STARTED ON MAKING BETTER FINANCIAL DECISIONS?
• When it comes to money,there are 3 things most people wish they could accomplish: spending less, saving more and paying off debt.
• I recommend breaking it down week by week.
WEEK ONE: EVALUATE YOUR BUDGET
• It doesn’t matter what your financial goal is, take week one to evaluate your budget and take inventory.
• Most people will find their financial goals can be reached if they have a budget. It helps determine exactly where your money is going so that you see where you need to make changes.
• Check your bank accounts for spending habits, take a look at the debt you owe - student loans, car loans, credit card payments - make a list and keep track of your balances, interest rates and payment due dates to make sure you’re not racking up any unnecessary fees.
• Now look at all your other expenses - utility payments, cell phone bills, groceries and entertainment.
• Then compare that against how much you make. If your expenses outweigh your income, you’re going to have to take a hard look at where you can cut.
• I have a budget worksheet you can download on my website, retirementdesignersfg.com.
WEEK TWO: LOOK FOR WAYS TO SAVE
• During week two, try to limit your spending and find ways you can cut back and save.
• One idea is to designate one a day week as the “no spend day.” Instead of paying for activities, find out what’s going on in your community for free. Enjoy the outdoors at a local park, visit a free museum or zoo or make dinner at home.
• You can also look at your extra costs. If you’re not using that gym membership, it’s time to cancel!
• A recent survey found 69-percent of Americans have less than $1,000 in their savings account, including 34-percent of people who have no savings account at all.
• When families don’t have money to face an unexpected expense, like a broken-down car or a medical bill, they may have to borrow to cover the tab - and that can lead to a cycle of debt.
• I recommend my clients have at least 3-6 months’ worth of savings in the bank.
WEEK THREE: REVIEW RETIREMENT ACCOUNTS
• Week three is all about retirement. I recommend to my clients they put away 10-15% of their salary into a 401(k) or IRA.
• If you started the year at the lower end, work your way up to that 15% by increasing your savings by 1% every year. Some retirement savings plans will allow you to automate increased contributions, so you don’t even have to think about it.
• Depending on your age you will be looking at your retirement accounts differently.
• Younger workers are capped at saving $18,000 per year in their 401(k) and $5,500 in their IRAs for 2017. However, older workers can save an additional $6,000 in a 401(k) and $1,000 in an IRA.
• If you’re serious about retiring, maxing out those savings is the way to go.
WEEK FOUR: KEEP GOING
• Use week four to review your plans and keep forging ahead! Keep the momentum you’ve built during this month and keep it through the end of year!
• Roadblocks and setbacks are bound to happen.
• If you find yourself struggling to make a budget or find ways to save for retirement, visit a financial professional. It’s okay to ask for help!