 | Mark Kolarik is the President of the Kansas Teachers Community Credit Union, located in Pittsburg, KS, since 10-2002 and is a board member of the Kansas Corporate Credit Union located in Wichita, KS . He has been employed in the financial service industry for the last 31 years, having worked in several credit unions for 21years and 10 years in the banking industry. He holds a Bachelor of Business Administration degree from the University of Wisconsin-LaCrosse and is a Certificated Credit Union Executive. |
Banking & Finance
2012-10-02 15:00:58
Planning future finances
Q- I never seem to have enough money, how can I plan my future finances?
A- The following are 10 Way to Improve Your Financial Health.
1. Grow Your Emergency Fund
If you don’t have an emergency fund it’s a good idea to start one, even if you can sock away a small amount every month. At a minimum, try to accumulate at least 6 month of monthly expense. Try to handle emergency from savings, rather than having to dip into retirement accounts or on high interest credit cards.
2. Pay Off Credit Cards
Interest paid on credit cards is to high. If you have a $5,000 credit card balance and an 15% APR, and you make only the minimum payment each month, you’ll be stuck paying off that debt for 24 years. And you will pay over $7,000 in interest.
3. Put 10% of Your Income Toward Retirement
Target to save and invest at least 10% of your income, no matter how little or how much you make. The sooner you start the more wealth you’ll be able to build. If you save and invest just $5,000 a year when you are 25 and earn a 6% rate of return, that will have grown to $773,809 by the time you are 65.
4. Pay Off Your Mortgage Before Retirement
After you retire, your income will probably drop. If you eliminate the burden of a monthly mortgage payment, you will have more flexibility to handle any rising costs.
5. Track Your Expenses
Write down every cent you spend over the course of a week will give you a very clear picture of exactly where your money is going.
6. Envision Your Future
Develop a single exciting mental picture of where you want to be in five years. Each day as you pull out of your driveway on the way to work think about that image. When the same outcome is kept top of mind for a sustained period of time, your attitude shifts and over time real progress is made.
7. Improve Your Credit Score
A higher credit score will get you lower interest rates that can save you hundreds of thousands of dollars over your financial lifetime. The first step to improving your score is to know what your credit looks like. Get a copy of your credit report at www.annualcreditreport.com.
8. Live Below Your Means
Just because you can afford to buy something doesn’t mean you should. Save for retirement and invest for the future.
9. Act Like You Can’t Just Throw It Away
We are spending our hard-earned dollars on highly packaged products that are easily disposed of. Our homes and landfills are cluttered with depreciated junk. The solution to saving more money is to stop wasting it on consumer items that quickly become garbage, and switching to quality items that endure.
10. Move Your Money Around
Take a couple of hours to figure out how to cut spending across your budget, make use of online apps and price-comparison sites to find cheaper alternatives on everything from gasoline to cell phone service. Then, move those savings into an emergency or retirement fund, put them toward credit card debt.
