Dishing Dollars:4 Financial Goals

The management of personal finances continues to be very difficult for the typical American family. According to cnbc.com, the average American family has $90,460 in debt. We have been programmed to spend or borrow without understanding the ramifications on our actions. Financial literacy is not taught in most schools and graduating from college with an enormous amount of debt can present its challenges.

“Does this idea of financially free really exist? Maybe, but balancing your life with a healthy diet and exercise can also be rewarding on so many levels. Health is wealth and exerting fiscal responsibility can be part of a bigger picture.”

The way you deal with money can affect you in all walks of life. In fact, we may be entering a society where money is digital. The inability to see money does not change your responsibility with money.

All Hail the Mighty Dollar

The great truth about money is that world still revolves around the mighty US dollar although the Chinese Quan may overtake it in 2050 or so. The first financial goal is to pay off your debts whether student loan or personal or credit card. Unlocking these financial chains can put you in a place where you are financially free. This debt can be challenging, but it is all about taking accountability for your financial actions. For example, you need to develop a plan after you figure out how much debt you owe. Furthermore, make sure you pay all payments before the due date to stay on course.

The second goal is create an emergency savings account. According to investor.vanguard.com , many experts believe that you should have enough money in your emergency fund to cover 3 to 6 months of expenses. An emergency fund will protect you from anything that arises in your life such as unemployment or a natural diaster. If you are living check to check, you may find yourself in deep waters if you encounter an emergency without the emergency money.

The third goal is to invest your extra disposal money every time you get paid. You do not need to be a financial wizard to put money into the S&P 500 index fund. Warren Buffet, one of the greatest investors of all time, has said that an S&P 500 index fund is the best investment most Americans can make. The average annual return for the S&P 500 is close to 10% over the long term. Real estate can be another opportunity that can potentially provide cash flow and appreciation. Owning a rental property can also be cash-intensive and highly illiquid. Repairs and maintenance needs to be take into account so it definitely requires more time, planning, and expertise. The opportunity cost of sidelining all the cash should be estimated in a cash flow projection.

The fourth goal is to get your credit check. The first thing you need to do is figure out what how you score. According to www.consumer.ftc.gov , The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. You need to check them for accuracy and recitify any errors as quickly as possible. This may require more time, but it will pay off in the long run. Raise your score by paying down high balances and make sure you autopay so you can maintain your consistency.

The fifth goal is to prepare your taxes early. This can help you plan accordingly especially if you owe taxes. You have time to pay by the due date. Taxes are changing every year and preparing them early can be resolve any potential tax issues because you have more time.