Need to Do More About Your Financial Wellness? Start With These Six Tips

Dec 05, 2018

Financial wellness is developing a financial plan that will create the best possible outcomes for yourself and your family. Here are a few tips to get you started.

Tip 1: Build an Emergency Fund. If you had an emergency and the cost was more than 400 dollars, could you pay for it? According to a report on economic well-being issued by the Federal Reserve in 2015, 46% of Americans said they would have difficulty doing so. Every household should have 3-6 months of income put aside for emergencies.

Tip 2: Reduce and Manage Debt.  An overall plan to manage debt is essential – especially credit card debt. If you have multiple credit card balances, start paying them down systematically. Pay off the card with the highest interest rate first. If necessary, pay the minimum amount on all other cards first.

Tip 3: College Funding.  You and your children can borrow for college, but you can’t borrow money to fund your retirement. 529s can be a great way to save for college, while using your 401(k) could be detrimental to your retirement. College costs vary greatly depending on scholarships, the family’s financial condition and whether the child goes in or out of state. The 529 plan has tax advantages and can be passed from child to child.

Tip 4: Buying Vs. Renting.  Renting may be more affordable given you are not paying for maintenance, taxes or insurance, however these factors are driving both options higher. Before you jump into a mortgage, consider the following. Did you build that emergency fund? Do you have a 20% down payment? Will the mortgage payment be 25% or less of your total income each month? Answer yes to these questions and you could be ready for home ownership!

This is an excerpt from an article that was featured in the 2017-2018 Ganim Financial Annual Report. Click below to view the entire report here.

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