Financial expert offers three ways to save in 2018
Making better financial decisions is one of the most popular New Year's resolutions. A local financial expert has a weekly checklist to help people get started and stay on track in the new year.
LOUISVILLE, Ky. (WDRB) -- Making better financial decisions is one of the most popular New Year's resolutions. A local financial expert has a weekly checklist to help people get started and stay on track in the new year.
According to Lonny Powell from Alliance Retirement Solutions offers the three ways to save:
1. Evaluate Budget
- It doesn’t matter what your financial goal is, take week one to evaluate your budget and take inventory.
- Most people will find their financial goals can be reached if they have a budget. It helps determine exactly where your money is going so that you see where you need to make changes.
- Check your bank accounts for spending habits, take a look at the debt you owe - student loans, car loans, credit card payments - make a list and keep track of your balances, interest rates and payment due dates to make sure you’re not racking up any unnecessary fees.
- Now look at all your other expenses - utility payments, cell phone bills, groceries and entertainment.
2. Start Small
- During week two, try to limit your spending and find ways you can cut back and save.
- One idea is to designate one a day week as the “no spend day.” Instead of paying for activities, find out what’s going on in your community for free. Enjoy the outdoors at a local park, visit a free museum or zoo or make dinner at home.
- The grocery bill and going out to eat is a huge expense for most families. The average family of four spends about $150 to $300 on a groceries a week. (source if you choose to use stat: USDA)
- You can cut down on this amount significantly if you take time to plan meals and use the ingredients you already have.
3. Review Retirement Accounts
- Week three is all about retirement. If you don’t picture yourself working in retirement you need to create a plan that will last.
- I recommend to my clients they put away 10-15% of their salary into a 401(k) or IRA.
- To quickly check if you are on track, there are four milestones:
- The first milestone is at age 30, you should have your annual salary saved in a retirement account, like a 401(k).
- By age 35, you should have double your annual salary saved.
- The milestones keep building on each other - You should have eight times your salary by age 60.
- Then your ultimate goal is ten times your annual salary by age 67.
Tax Filing Season
- The tax filing season opens January 29th.
- Start by getting organized.
- Get folders for all your income, expenses and deductions and your investments.
- You can break your deductions down by category, for example, create sections for medical, charity and business.
- You can even do a dry run on your taxes so you have a better idea of your tax situation.
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