1. Pay Down Credit Card Debt
42% of Americans have racked up more credit card debt over the last 18 months.
Two methods to pay down credit card debt:
- Debt Avalanche - paying off your highest debt first
- Debt Snowball - paying off your smallest amount of debt first
Consider credit counseling, a low-interest balance transfer, or a personal loan if you're struggling with payments.
2. Automate Your Savings
Automating your contributions helps build savings - you wont have to think about how much money to set aside or be tempted to set aside less each month.
3. Start an Emergency Fund
Experts recomment saving three to six months of living expenses. Here are the steps to take:
- Start by opening a seperate and dedicated high-interest savings account.
- Evaluate your spending and look for areas where you can save.
- Set a savings goal.
- Set up automatic contributions.
- Increase your contributions over time.
4. Boost Your Retirement Savings
- If your employer offers a 401(k) match, be sure you're contributing enough to get the entire match.
- Review your investments.
- Consider investing in a diverse portfolio of assets to reduce your risk but still achieve attractive returns.
- Your retirement savings will grow quicker if you pick a solid long-term plan and then stick with it.
5. Improve Your Credit Score
- Pay all bills on time and in full.
- Keep old accounts open.
- Lower your credit utilization ratio.
- Don't apply for new accounts too often.