Developing a Game Plan
So where are you on your path to financial well-being? If that question makes you squirm, there is good news. Regardless of how much you earn, you can start building small habits each day to achieve your financial aspirations.
This section of the course will lay out a checklist of short-term and long-term items for you to consider when you’re trying to bolster your credit score, increase your retirement savings rate, shore up your emergency fund(s) and boost your net worth (the four main numbers that comprise your financial health).
Eunice Diaz noticed that, although she and her husband had a good income, they were living paycheck-to-paycheck with little to show for their hard work. They needed a plan to start saving and building toward their future. Read more about how Eunice and her husband put themselves on track with a savings game plan.
$2,500 - the median balance of retirement savings for all working U. S. households
Source: National Institute on Retirement Security (NIRS)
Are you beginning to think you should have saved more when you were younger? Perhaps you simply spent everything you earned, didn’t contribute to an employer retirement savings plan, or experienced a major financial setback such as illness, divorce or unemployment. You’re not alone.
It’s not too late to take action to secure your future. Here are some helpful tips to consider:
- Pay down your debt. Keep making minimum payments on all your debt, but pay even more on those with the largest balances and/or interest rates.
- Pay off your mortgage. If your mortgage balance is small enough, pay it off. If not, try to restructure it so you are making a larger payment over a shorter amount of time.
- Increase your contributions to retirement plans at work. At the very least, contribute up to the maximum of what your employer contributes (e.g., 6 percent of your pay).
- Defer taxes using an IRA. You can contribute up to $6,000 per year if you under 50 and $7,000 per year if you are older.
- Stash away money from raises or bonuses. There’s no need to spend more than you currently do, so put this money to work for you.
- Delay retirement. If you can work until age 70, your Social Security benefits will increase.