With interest rates remaining at historic lows and a renewed optimism about the economy many renters will again become owners
Scottsdale, Arizona (PRWEB) January 07, 2015
Dr. Jack Singer says the continual accumulation of debt may be a psychological disorder. At Ash Brokerage Corporation, getting your financial house in order is the key to financial freedom.
Pay the Breadwinners First
Most people have monthly bills with no monthly budget. Creating a budget will help manage spending on goods and services. Paying the breadwinners first, before any other budgetary commitment, can deliver financial peace of mind, which is worth much more than empty self-esteem through the purchases of unnecessary items. If there's no money leftover at the end of the month, then it’s time to reduce monthly spending and have a garage sale. Paying the breadwinners first is the most important check to write. And when you get to the point where the breadwinners getting a check first, where does the money go?
Pay Down Debt
Reducing debt not only creates more cash flow, but it also can begin to create net worth. Second mortgages, credit card debt or car payments can destroy cash flow and make it practically impossible to create personal wealth. Paying down debt with a systematic pay off plan is the only way to get out from under the weight of debt and the stress it causes. And it’s not just the price tag of meds for insomnia, but also the price tag of relationships that can end in divorce over money. So start managing down debt and start experiencing cash flow, then create an emergency fund.
Create an Emergency Fund
Life just happens. And life happens without warning. If it’s not some sudden home repair, it’s fixing the car. And if it’s not replacing possessions, it’s about personal health. Trips to the ER and medical problems seem to surface out of nowhere. And keep in mind a breadwinner's income is not guaranteed. Anyone can be downsized out of a job overnight. So creating an emergency fund that covers all insurance deductibles is absolutely necessary, including a rainy day fund for at least 90 days of unemployment. Establishing both of these accounts can help weather a sudden financial storm. Then it’s time to start saving for the long haul of retirement, providing your not renting a home or apartment.
Stop Renting & Buy a House
Renting versus owning a home is more important than ever. 35 year veteran Realtor Michael Bodeen was recently said, "Demand and price appreciation in the Phoenix-Scottsdale metro market will begin to hit another stride this Spring. With interest rates remaining at historic lows and a renewed optimism about the economy many renters will again become owners." So now’s the time to scrimp, scrape and work overtime for a down payment on a home. Throughout most of the country, it’s a buyers market; so there are deals to be had. And lenders are loosening their grip on issuing mortgages. And for most of the middle class, mortgage interest and property taxes are deductible, so that’s an additional incentive. Now back to saving for the long haul.
Start Saving for Retirement
No one works forever. Eventually, everyone slows down and stops working altogether. Social Security can help, but no one really knows what benefits will be available decades from now. So it’s important to take responsibility for the future. It's important to start saving for retirement, especially in a 401(k) plan, where the employer matches employee contributions and/or the plan participant is in a high effective tax bracket. But if either of those scenarios don't exist, then you should consider a Roth IRA or a cash value life insurance policy designed for optimum accumulation. They're not deductible like a 401(k) plan, but can generate tax-free distributions if designed correctly.
Getting the old financial house in order can bring a renewed sense of accomplishment, but it requires a plan and will power.