1. Credit Card Debt
A record number of Americans are increasing their credit card debt. This personal finance trend can be dangerous because credit cards can have high interest rates. As a result, if you only make the minimum payments, paying off a credit card can take decades, and you end up repaying several times more than you borrowed in the first place.
To use credit cards effectively, you need to pay them off every month. Then, you can reap the benefits of rewards programs, without incurring unnecessary debt. If you need to borrow money, you should consider personal loans instead of credit cards. Personal installment loans have fixed monthly payments so you know exactly what you owe, and you can budget accordingly.
2. Saving for Retirement
Many Americans also aren’t saving enough for retirement. To prepare for your golden years, take advantage of the savings options available to you, especially the ones with high returns. For instance, if your employer matches part of your 401(k) contribution, that is a 100% return even before you earn any money on the investment. Also, when you put money in many retirement accounts, there can be significant tax benefits. Sign up for these programs if possible.
3. Following Budgets
To ensure you have enough money to cover your bills, budgets are extremely helpful. If you plan to take out any loans, make sure that you budget so that you can make your payments. When making a budget, always earmark some funds for fun and relaxation. That makes it easier to stay on top of your goals.
4. Car Loans
According to economic research, about 7 million Americans are at least three months behind on their car loans. To make sure you can stay on the road with your vehicle, budget carefully for your car loan payments, gas, and repairs. Keep in mind that most lenders will allow you to defray at least one or two payments until the end of the loan cycle, and that flexibility can be a lifesaver. If you ever anticipate that you can’t make a monthly payment, contact your lender to see what your options are before you get behind.
5. Preparing for Emergencies
A budget can also help you prepare for unplanned expenses and emergencies. If possible, try to find a way to have money in savings so that you can access the money as needed to cover emergency car repairs, medical bills, and more. The general rule of thumb is to have at least 3 months of fixed expenses in savings. Fixed expenses are things that must be paid every month such as rent, utilities, and groceries.
Contact Citizens Financial Services to Navigate Your Personal Finances
If you need help with personal finance, you may want to one of our friendly staff members at Citizens Financial Services to learn about our personal loans. We offer loans which can allow you to spread the cost of an emergency or a large purchase over time. To learn more, contact us or start the application process online.