Every year you say you are going to do it, but without a plan it's bound to fail. Here are 5 tips from financial professional Tayvon Jackson with First Financial Security, to get your finances straight and keep you in the black.
1. Create a Financial Plan
- One of the biggest fears I hear from people is that they are worried about running out of money in retirement. It’s important to find a financial advisor who takes the time to get to know your unique situation
- We just talked about saving with a purpose, but a lot more than saving goes into creating a financial plan. It should cover everything from retirement income to long term care and estate planning
- Play an active role in your finances and work with your advisor to create a comprehensive financial plan that is appropriate for your age and risk tolerance
2. Build an Emergency Fund
- Open an account at a different bank that is just for your emergency fund.
- Make it inaccessible. Don't get a bank card or have online banking.
- 3 to 6 months worth of living expenses
- A stat on emergency funds
- No point of investing if as soon as an emergency occurs you have to tap into your investing due to lack of savings
3. Systematically Invest
- Find an amount that you can do each month.
- By systematically investing you buy more shares when the market drops and make money when it goes up
- Takes the emotion out of the plan
- Use apps like Stash or Acorn
4. Understand Your Company's Retirement Plan
- Learn the difference between 401k, 403B, 457, and TSP
- Find out if your company will match your retirement contributions
- You can contribute to a max of $18,500 annually
- At least contribute up to the max
5. Prepare for Tax Season
No one wants to think about taxes just yet, but there are a few things you need to keep in mind.
- First, your taxes are due on April 15th but you don’t have to wait! Once the shutdown is over we will learn the first day you can file. Do it then! Don't let the government hold on to your money
- This upcoming tax season will be the first filing season under the Tax Cuts and Jobs Act
- Anyone itemizing their taxes should be aware of some significant changes to the deductions they can claim
- The standard deduction is nearly doubling (from $12,700 for married couples filing jointly to $24,000.) That means many households will lose their incentive to itemize, and will take the standard deduction
You can follow Tayvon Jackson on IG @iamtayjackson.