Wine, Women & Wealth Book

Debt

A MATTER OF LIFE AND DEBT

August 9, 2022 / All Blogs, Debt, Life Insurance

You might never have thought about this before, but how are debt and life insurance connected?

Well, the answer is very simple. Debt is one of the largest financial struggles in society today—total consumer debt has grown to a staggering $14.9 trillion as of 2020.  That represents a staggering financial burden on Americans throughout the country.

But what happens if someone in debt passes away? The debt doesn’t just vanish. The estate of the deceased is often responsible for repaying creditors. That means a family, already down an income, has to cope with the stress of managing debt.

That’s where life insurance can help.

Life insurance pays out a lump sum in the event of death. The money can help family members repay debt, care for children or other dependents, and provide financial security to those left behind.

So how much life insurance do you need? That’s something only you can answer for your own household. Typically, experts recommend 10X your annual income to provide a sufficient financial cushion for your family. But, depending on your level of debt or the particular needs of your spouse and children, you may require more coverage!

Life insurance could be critical for the financial well-being of your family if you’re carrying debt. It might provide the cash they need to pay your creditors and start building a new future.

If you’re looking for life insurance, contact me. We can estimate the amount of protection that’s right for your family!

IS REFINANCING WORTH IT?

July 12, 2022 / All Blogs, Budget, Debt

What do you think of when you hear the word “refinancing?”

If you’re like most people, your first thought might be that it has something to do with a mortgage. And you’re not wrong! However, refinancing can apply to many different types and forms of loans. In this article, we will explore what refinancing is, how it works, and when it can work to your advantage.

What is refinancing?

Refinancing is the process of transferring all or part of an existing loan from one loan to another. This is done in order to achieve a…

  • Lower interest rate
  • Lower monthly payments
  • More favorable repayment period
  • Or all of the above

Let’s consider an example. Say you have a $10,000 loan with a 5% interest rate and a 10-year term. You’ll pay $106 every month to service the debt, and over $12,000 in total once interest is included.

But you think you can do better! You find someone else who’s willing to loan you $10,000 at a 2.5% interest rate over a 10-year term. You’d save more than $1,000 in interest and pay less every month. That’s a far better deal.

So, you would borrow money from your new creditor and use that sum to eliminate your existing loan. You’ve used another loan to decrease your interest burden and increase your cash flow. That’s the power of refinancing in a nutshell. It’s often worth the effort if you can decrease your interest rate without increasing your term.

But it may not be a silver bullet for your debt.

Refinancing only works if you can score a new loan with a more favorable contract. There may be times when interest rates are high and finding lower rates simply isn’t possible. Even then, a lower interest rate may not offset the costs of a longer loan term.

That’s why it’s always best to work with a financial professional before you refinance any loan. Their expertise can help you determine whether refinancing will help or hinder your progress towards your financial goals.

 

CONSIDERING A HOME EQUITY LOAN?

June 13, 2022 / All Blogs, Debt, Investment

Home prices may be leveling off in some areas but they’ve had a healthy recovery nationwide, leading to massive amounts of untapped equity.

According to a recent report, the average homeowner gained nearly $15,000 in equity in the past year and has nearly $115,000 available to draw.[i]

This can be good news if you need to increase your cash flow to pay for a special project or unusual expense.

Home equity risks
It might be obvious, but a home equity loan is secured by your home, based on the equity you’ve built. Your eligibility for a home equity loan involves several factors, but primary consideration is going to be the difference between your home’s market value and the remaining balance on the mortgage. Keep in mind that missed payments due to a job loss, illness, or another financial setback may put your home at risk from two loans – the original mortgage and the home equity loan. Before you take out this type of loan, make sure you have a solid strategy in place for repayment.

Home equity loan costs
Funds acquired through a home equity loan can feel like found money, but keep in mind that a home equity loan takes an asset and converts it to debt – often for up to 30 years. As such, you’ll be paying certain fees to use the money.

Home equity loans often have closing costs of 2% to 5% of the loan amount.[ii] It might be worth it to shop around, however, to see if you can find a lender who won’t bury you in fees and loan charges. Interest rates may vary depending on your credit rating and other factors, but you can expect to pay about 6% or higher. If you were to borrow $100,000 of the $115,000 the average homeowner now has in equity, the interest costs over 30 years would be $115,000 – $15,000 more than you borrowed. If you can manage a 15-year term instead, this would drop the interest costs down to about $52,000.[iii] Carefully consider what you’ll use the funds to purchase. A new patio addition to your home or a pool with a deck may not add enough value to your home to offset the interest costs.

Tax benefits
Once upon a time, the interest for a home equity loan was tax-deductible, much like the interest on a primary mortgage. Now, there are some rules attached to the tax benefit. If you use the loan funds to make improvements to the home you’re borrowing against, you can usually deduct the interest. In the past, the tax benefit didn’t consider how the funds were used.[iv]

Home equity loans can be a powerful financial tool. But as with many tools, it’s important to exercise caution. Before signing on the dotted line, be sure you understand the long-term cost of the loan. With interest rates climbing, a home equity loan isn’t as attractive a source of funding as it once was.

Depending on how the funds are used, a home equity loan can make sense. If you’re buried in high-interest debt, like credit cards, the math might work in your favor. However, if the money is spent on a shiny, red sports car and a trip to Vegas, it might be tough to make a financial argument for that – unless you win big.

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This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies that may be available to you. Before taking out any loan or enacting a funding strategy, seek the advice of a financial professional, accountant, and/or tax expert to discuss your options.

[i] https://www.cnbc.com/2018/07/09/homeowners-sitting-on-record-amount-of-cash-and-not-tapping-it.html\ [ii] https://www.lendingtree.com/home/home-equity/home-equity-loan-closing-costs/\ [iii] https://www.mortgageloan.com/calculator/loan-line-payment-calculator\ [iv] https://www.cnbc.com/2018/05/21/5-things-to-know-before-taking-out-a-home-equity-loan.html

DIG YOURSELF OUT OF DEBT

June 29, 2022 / All Blogs, Debt, Financial Education

I hate to break it to you, but no matter what generation you are – Baby Boomer, Generation X, or Millennial – you’re probably in debt.

If you’re not – good on you! Keep doing what you’re doing.

But if you are in debt, you’re not alone. A study[i] by the financial organization, Comet, found:

  • 80.9 percent of Baby Boomers are in debt
  • 79.9 percent of Generation X is in debt
  • 81.5 percent of Millennials are in debt

There are some folks whose goal is to eliminate all debt – and if that’s yours, great! But one thing to keep in mind while you’re working towards that finish line is that not all debt is created equal. Carrying a mortgage, for example, may be considered a “healthy” debt. Student loan debt may feel like an encumbrance, but hopefully, your education has given you more earning power in the workforce. A car loan may even be considered a healthy debt. So, there are some types of debt that may offer you advantages.

Any credit card debt you have, however, should be dealt with asap. Credit card debt can cost money every month in the form of interest, and it gives you nothing in return – no equity, no education, no increase in earning potential. It’s like throwing money down the drain.

So, let’s get to work and look at some of the best tips for paying down credit card debt.

1. Get to know your debt
Make a commitment, to be honest with yourself. If you’re in denial, it’s going to be hard to make positive changes. So take a good, hard look at your debt. Examine your credit card statements and note balances, interest rates, minimum monthly payment amounts, and due dates. Once you have this information down in black and white you can start to create a repayment strategy.

2. Get motivated
Taking on your debt isn’t easy. Most of us would rather not confront it. We may make half-hearted attempts to pay it off but never truly get anywhere. Need a little motivation? Getting rid of your credit card debt may make you happier. The Comet study asked respondents to rate their happiness on a scale of one to seven.[ii] It turns out that those who selected the lowest rating also carried the highest amounts of credit card debt. Want to be happier? It seems like paying off your credit card debt may help!

3. Develop your strategy
There are many strategies for paying off your credit card debt. Once you understand all your debt and have found your motivation, it’s time to pick a strategy. There are two main strategies for debt repayment. One focuses on knocking out the highest interest debt first, and the other method begins with tackling the smallest principal balances first. Here’s how they work:

  • Start with the highest interest rate: One of the items you should have noted when you did your debt overview is the interest rate for each account. With this method, you’ll throw the largest payment you can at your highest interest rate debt every month, while paying the minimum payments on your other debts. Utilizing this method may help you pay less interest over time.
  • Start with the smallest balance: As opposed to comparing interest rates, this method requires you to look at your balances. With this strategy, you’ll begin paying the smallest balance off first. Continue to make the minimum payments on your other accounts and put as much money as you can towards the smallest balance. Once you have that one paid off, combine the amount you were paying on that balance with the minimum you were paying on your next smallest balance, and so on. This strategy can help keep you motivated and encouraged since you should start to see some results right away.

Either strategy can work well. Pick the one that seems best for you, execute, and most importantly – don’t give up!

4. Live by a budget
As you begin chipping away at your credit card debt, it’s important to watch your spending. If you continue to charge purchases, you won’t see the progress you’re making, so watch your spending closely. If you don’t have a budget already, now would be a good time to create one.

5. Think extra payments
Once you are committed to paying off your debt and have developed your strategy, keep it top of mind. Make it your number one financial priority. So when you come across “found” money – like work bonuses or gifts – see it as an opportunity to make an extra credit card payment. The more of those little extra payments you make, the better. Make them while the cash is in hand, so you aren’t tempted to spend it on something else.

6. Celebrate your victories
Living on a budget and paying off debt can feel tedious. Paying off debt takes time. Don’t forget to take pride in what you’re trying to accomplish. Celebrate your milestones. Do something special when you get that first small balance paid off, but try to make the occasion free or at least cheap! The point is to reward yourself for your hard financial work. (Hint: Try putting up a chart or calendar in your kitchen and marking off your progress as you go!)

Reward yourself with a debt-free life Getting out of debt is a great reward in and of itself. It takes discipline, persistence, and patience, but it can be done. Come to terms with your debt, formulate a strategy, and stick to it. Your financial future will thank you!

 

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[i] & [ii] https://www.cometfi.com/details-of-debt

THE KEYS TO PAYING YOUR BILLS ON TIME

May 13, 2022 / All Blogs, Credit, Debt, Financial Education

Not paying your bills on time can have significant impacts on financial health including accumulating late fees, penalties, and a negative hit on credit scores.

But maybe you – or a friend – learned about those consequences the hard way. Most late bill payers fall into 1 of 3 camps: they forget to pay on time, they don’t have enough income, or they have enough income but spend it on other things. In case you – or your friend – are stuck in 1 of these camps, consider the following tips to help pay the bills on time.

I forget to pay my bills on time.
If this is you, you’re actually in a more advantageous position. Many easy fixes can help get you back on track.

  1. Use a calendar. This is a tried and true, but often underutilized, method to track your bill due dates. When you get a notice for a bill – either by email, text, or snail mail – jot the due date on your calendar. You can also set a reminder if you use an electronic calendar.
  2. Fiddle with your due dates. Many companies offer flexible due dates. Experiment with what due dates work for you. Some people like to pay their bills altogether at the beginning of the month. You may find that you like to pay some bills at the beginning and some in the middle of the month. It’s up to you!
  3. Take advantage of grace period/late fee waivers. If you do forget about a bill and have to make a late payment, give the company a call and ask them to waive the late fee. Late fees can add up, ranging from $10-50 depending on the account. It’s worth a try!

I don’t have the money to pay all my bills.
If your income doesn’t cover your outgo no matter how diligently you pinch those pennies, it won’t matter what type of bill payment method you use, you’re going to have trouble. If you’re in this situation, there are 2 solutions: increase your earnings or decrease your expenses.

  1. Find a side gig. Take a temporary part-time job to make some extra income. Delivering pizza in the evenings or on weekends might be worth doing for a few months to make some extra dough.
  2. Shop around. Shop around for savings. Prices vary on almost everything. Take a little extra time to make sure you’re getting the rock-bottom best prices on your insurance, cable, phone plans, groceries, utilities, etc.

I overspend and don’t have enough left to pay my bills.
Managing income and expenses takes some practice and persistence, but it is doable! If you find yourself consistently overspending without enough left over to cover your bills, try the following:

  1. Create a budget. Get familiar with your income and expenses. This is the only way to know how much disposable income you’re going to end up with every month. You can track your budget daily on an app like PocketGuard, Wallet, or Home Budget.
  2. Stash the money for bills in a separate account. Put your bill money in a separate checking or savings account. This will keep it quarantined from your spending money and help make sure it’s there when the bills come due.

Good Financial Habits
If you feel bill-paying-challenged, or you have a friend who is, try some of the above tips. Taking care of your obligations when you need to can relieve stress, build good credit, and reinforce healthy spending habits for life!

WHY DEBT IS A BIG DEAL

May 11, 2022 / All Blogs, Debt, Financial Education

Debt is a word that strikes fear in the hearts of many. It ruins fortunes, causes untold stress and topples governments.

Just ask a millennial about their financial struggles—student loan debt will certainly top their list.

But why? Why is debt so bad, anyway? After all, isn’t credit just money you can use now and then pay back later? What’s the big deal?

Well, actually debt is a very big deal. In fact, it can make or break your personal finances.

This article isn’t for hardened debt fighters. You already know the damage debt can do.

But if you’re just starting your financial journey, take note before it’s too late. At best, debt is a tool. It certainly isn’t your friend. Here’s why…

It begins by lowering your cash flow. All those monthly payments bite into your paycheck, effectively lowering your income.

And that has consequences.

It can make it a struggle to afford a home. You simply lack the cash flow to afford mortgage payments.

It makes it a struggle to build wealth. Every spare penny goes towards making ends meet.

It makes it a struggle to maintain your lifestyle. You may find yourself choosing between the pleasures—and even the basics—of life and appeasing your creditors.

And that brings the risk of bankruptcy. It’s a last-ditch effort to erase an unpayable debt. It comes with a heavy price—creditors can take your home and possessions to make up for what you owe. And even if bankruptcy erases the debt, it will have a lasting impact on your credit score and financial future.

It can change your life forever, throwing your life into chaos.

Think about it—when was the last time someone smiled and fondly recalled that time they went bankrupt? Never. It’s a traumatic experience. This is something you want to avoid at all costs.

This isn’t to scare you into a debt-free life or guilt you for using a credit card. Rather, it’s to educate you on the stakes. Debt isn’t something to be taken on lightly. It can have lasting consequences on your life, family, finances, and even mental health. Act accordingly.

 

 

3 EASY WAYS TO SAVE FOR RETIREMENT (WITHOUT INVESTING)

March 22, 2022 / All Blogs, Debt, Retirement, Saving

Our retirement years will be here sooner than we think.

 

Ideally, you’ve been putting away money in your IRA, 401k, or other savings accounts. But are you overlooking ways to save money now so you can free up more for your financial strategy or help build your cash stash for a rainy day?

1. Pay Yourself First.
If you’re making contributions to your 401k plan at work, you’re already paying yourself first. But you can also apply the same principle to saving. (If you open a separate account just for this, it’s easier to do.) If you prefer, you can accomplish the same thing on paper by keeping a ledger. Just be aware that paper makes it easier to cheat (yourself). With a separate account, you can schedule an automatic transfer to make the process painless and “fuhgettaboutit.”

Here’s how it works. Whenever you get paid, transfer a fixed dollar amount into your special account – before you do anything else. If you don’t pay yourself first, you might guess what will happen. (Be honest.) If you’re like most people, you’ll probably spend it, and if you’re like most people, you might not really know where it went. It’s just gone, like magic.

Paying yourself first helps to avoid the “disappearing money” trick. Hang in there! After a while, as the money starts adding up, you’ll impress yourself with your savings prowess.

2. Got A Bonus From Work? Great! Keep it.
What do you think most people are tempted to do if they get a bonus or a raise? What are YOU most tempted to do if you get a bonus or a raise? Probably spend it. Why? It’s easy to think of 100 things you could use that extra cash for right now. Home repairs or upgrades, a night out on the town, that new handbag you’ve been coveting for months… Maybe your bonus is enough for you to consider trading in your car for a nicer one or getting that new addition to your house.

Receiving an unexpected windfall is fun. It’s exciting! But here is where some caution is wise. Pause for a moment. If you had everything you needed on Friday and then get a raise on Monday, you’ll still have everything you need, right? Nothing has changed but the calendar. If you hadn’t gotten that bonus, would your life and your current financial strategy still be the same as it was last week? Consider putting (most of) that extra money away for later, and using some of it for fun!

3. Pay Down That Debt.
By now you’ve probably heard a financial guru or two talking about “good” debt and “bad” debt. Debt IS debt, but some types of debt really are worse than others.

Credit cards and any high-interest loans are the first priority when retiring debt – so that you can retire too, someday. Do you really know how much you’re paying in interest each month? Go ahead and look. I’ll wait… Once you know this number, you can’t “unknow” it. But take heart! Use this as a powerful incentive to pay those balances off as fast as you can.

The cost of credit isn’t just the interest. That part is spelled out in black and white on your credit card statement (which you just looked at, right)? The other costs of credit are less obvious. Did you know your credit score affects your insurance rates? Keeping those cards maxed out can cost more than just the interest charges.

Every month you chip away at the balances, you’ll owe less and pay less in interest. (You’ll feel better, too.) And you know what to do with the leftover money since you knocked out that debt. Hint: Save it.

But keep this in mind – life is about balance. It’s okay to treat yourself once in a while. Just make sure to pay yourself first now, so you can treat yourself later in retirement.

TOP REASONS WHY PEOPLE BUY TERM LIFE INSURANCE

April 18, 2022 / All Blogs, Debt, Insurance, Life Insurance

These days, most families are two-income households.

That describes 61.9% of U.S. families as of 2017. If that describes your family (and the odds are good), do you have a strategy in place to cover your financial obligations with just one income if you or your spouse were to unexpectedly pass away?

Wow. That’s a real conversation-opener, isn’t it? It’s not easy to think about what might happen if one income suddenly disappeared. (It might seem like more fun to have a root canal than to think about that.) But having the right coverage “just in case” is worth considering. It’ll give you some reassurance and let you get back to the fun stuff… like not thinking about having a root canal.

If you’re interested in finding out more about Term insurance and how it may help with your family’s financial obligations, read on…

 

Some Basics about Term Insurance
Many of life’s financial commitments have a set end date. Mortgages are 15 to 30 years. Kids grow up and (eventually) start providing for themselves. Term life insurance may be a great option since you can choose a coverage length that lines up with the length of your ongoing financial commitments. Ideally, the term of the policy will end around the same time those large financial obligations are paid off. Term policies also may be a good choice because in many cases, they may be the most economical solution for getting the protection a family needs.

As great as term policies can be, here are a couple of things to keep in mind: a term policy won’t help cover financial commitments if you or your spouse simply lose your job. And term policies have a set (level) premium during the length of the initial period. Generally, term policies can be continued after the term expires, but at a much higher rate.

The following are some situations where a Term policy may help.

Pay Final Expenses
Funeral and burial costs can be upwards of $10,000. However, many families might not have that amount handy in available cash. Covering basic final expenses can be a real burden, especially if the death of a spouse comes out of the blue. If one income is suddenly gone, it could mean the surviving spouse would need to use credit or liquidate assets to cover final expenses. As you would probably agree, neither of these are attractive options. A term life insurance policy can cover final expenses, leaving one less worried for your family.

Pay Off Debt
The average household in the U.S. is carrying nearly $140,000 in debt. For households with a large mortgage balance, the debt figures could be much higher. Couple that with a median household income of under $60,000, and it’s clear that many families would be in trouble if one income is lost.

Term life insurance can be closely matched to the length of your mortgage, which helps to ensure that your family won’t lose their home at an already difficult time.

But what about car payments, credit card balances, and other debt? These other debt obligations that your family is currently meeting with either one or two incomes can be put to bed with a well-planned term life policy.

Income Protection
Even if you’ve planned for final expenses and purchased enough life insurance coverage to pay off your household debt, life can present many other costs of just… living. If you pass unexpectedly, the bills will keep rolling in for anyone you leave behind – especially if you have young children. Those day-to-day living costs and unexpected expenses can seem to multiply in ways that defy mathematical concepts. (You know – like that school field trip to the aquarium that no one mentioned until the night before.)

But Wait, There’s More
A well-planned term life insurance policy can provide other benefits as well, including living benefits that can help prevent medical expenses from wreaking havoc on your family’s financial plan if you become critically ill. One note about the living benefits policies, though: If the critical and chronic illness features are used, the face value of the policy is reduced. But which might be more prepared to take a financial hit: the face value of the life insurance policy that just helped you cover your medical expenses… or your child’s college fund?

In some cases, policies with built-in living benefits may cost more than a standard term policy, but they may still cost less than permanent insurance policies! And because a term policy is in force only during the years when your family needs the most protection, premiums can be lower than for other types of life insurance.

Term life insurance can provide income protection to help keep your family’s financial situation solid, and help things stay as “normal” as they can be after a loss.

HANDLING DEBT EFFICIENTLY — UNTIL IT’S GONE

March 22, 2022 / All Blogs, Credit, Debt

It’s no secret that making purchases on credit cards will result in paying more for those items over time if you’re paying interest charges from month to month.

 

Despite this well-known fact, credit card debt is at an all-time high, rising another 3% this past year. The average American now owes over $6,300 in credit card debt. For households, the number is much higher, at nearly $16,000 per household. Add in an average mortgage of over $200,000, plus nearly $25,000 of non-mortgage debt (car loans, college loans, or other loans), and the molehill really is starting to look like a mountain.

The good news? You have the potential to handle your debt efficiently and deal with a molehill-sized molehill instead of a mountain-sized one.

Focus on the easiest target first.
Some types of debt don’t have an easy solution. While it’s possible to sell your home and find more affordable housing, actually following through with this might not be a great option. Selling your home is a huge decision and one that comes with expenses associated with the sale – it’s possible to lose money. Unless you find yourself with a job loss or similar long-term setback, often the best solution to paying down debt is to go after higher interest debt first. Then examine ways to cut your housing costs last.

Freeze your spending (literally, if it helps).
Due to its higher interest rate, credit card debt is usually the first thing to tackle when you decide to start eliminating debt. Let’s be honest, most of us might not even know where that money goes, but our credit card statement is a monthly reminder that it went somewhere. If credit card balances are a problem in your household, the first step is to cut back on your purchases made with a credit or stop paying with credit altogether. Some people cut up their cards to enforce discipline. Ever heard the recommendation to freeze your cards in a block of ice as a visual reminder of your commitment to quitting credit? Another thing to do is to remove your card information from online shopping sites to help ensure you don’t make mindless purchases.

Set payment goals.
Paying the minimum amount on your credit card keeps the credit card company happy for 2 reasons. First, they’re happy that you made a payment on time. Second, they’re happy if you’re only paying the minimum because you might never pay off the balance, so they can keep collecting interest indefinitely. Reducing or stopping your spending with credit was the first step. The second step is to pay more than the minimum so that those balances start going down. Examine your budget to see where there’s room to reduce spending further, which will allow you to make higher payments on your credit cards and other types of debt. In most households, an honest look at the bank statement will reveal at least a few ways you might free up some money each month.

Have a sale. To get a jump-start if money is still tight, you might want to turn some unused household items into cash. Having a community yard sale or selling your items online through eBay or Offerup can turn your dust collectors into cash that you can then use toward reducing your balances.

Transfer balances prudently.
Consider balance transfers for small balances with high-interest rates that you think you’ll be able to pay off quickly. Transferring that balance to lower interest or no interest card can save on interest costs, freeing up more money to pay down the balances. The interest rates on balance transfers don’t stay low forever, however – typically for a year or less – so it’s important to make sure you can pay transferred balances off quickly. Also, check if there’s a balance transfer fee. Depending on the fee, moving those funds might not make sense.

Don’t punish yourself.
Getting serious about paying down debt may seem to require draconian measures. But there likely isn’t a need to just stay home eating tuna fish sandwiches with all the lights turned off. Often, all that’s required is an adjustment of old spending habits. If your drive home takes you past a mall where it would be too tempting to “just pick a little something up”, take a different route home. But it’s important to have a small treat occasionally as well. If you’re making progress on your debt, you deserve to reward yourself sometimes. All within your budget, of course!

MAKING MONEY GOALS THAT GET YOU THERE

March 18, 2022 / All Blogs, Budget, Debt, Financial Education, Life Insurance

Setting financial goals is like hanging a map on your wall to inspire and motivate you to accomplish your travel bucket list.

 

Your map might have your future adventures outlined with tacks and twine. It may be patched with pictures snipped from travel magazines. You would know every twist and turn by heart. But to get where you want to go, you still have to make a few real-life moves toward your destination.

Here are 5 tips for making money goals that may help you get closer to your financial goals:

1. Figure out what’s motivating your financial decisions. Deciding on your “why” is a great way to start moving in the right direction. Goals like saving for early retirement, paying off your house or car, or even taking a second honeymoon in Hawaii may leap to mind. Take some time to evaluate your priorities and how they relate to each other. This may help you focus on your financial destination.

2. Control Your Money. This doesn’t mean you need to get an MBA in finance. Controlling your money may be as simple as dividing your money into designated accounts, and organizing the documents and details related to your money. Account statements, insurance policies, tax returns, wills – important papers like these need to be as well-managed as your incoming paycheck. A large part of working towards your financial destination is knowing where to find a document when you need it.

3. Track Your Money. After your money comes in, where does it go out? Track your spending habits for a month and the answer may surprise you. There are a plethora of apps to link to your bank account to see where things are actually going. Some questions to ask yourself: Are you a stress buyer, usually good with your money until it’s the only thing within your control? Or do you spend, spend, spend as soon as your paycheck hits, then transform into the most frugal individual on the planet… until the next direct deposit? Monitor your spending for a few weeks, and you may find a pattern that will be good to keep in mind (or avoid) as you trek toward your financial destination.

4. Keep an Eye on Your Credit. Building a strong credit report may assist in reaching some of your future financial goals. You can help build your good credit rating by making loan payments on time and reducing debt. If you neglect either of those, you could be denied mortgages or loans, endure higher interest rates, and potentially have difficulty getting approved for things like cell phone contracts or rental agreements which all hold you back from your financial destination. There are multiple programs that can let you know where you stand and help to keep track of your credit score.

5. Know Your Number. This is the ultimate financial destination – the amount of money you are trying to save. Retiring at age 65 is a great goal. But without an actual number to work towards, you might hit 65 and find you need to stay in the workforce to cover bills, mortgage payments, or provide help supporting your family. Paying off your car or your student loans has to happen, but if you’d like to do it on time – or maybe even pay them off sooner – you need to know a specific amount to set aside each month. And that second honeymoon to Hawaii? Even this one needs a number attached to it!

What plans do you already have for your journey to your financial destination? Do you know how much you can set aside for retirement and still have something left over for that Hawaii trip? And do you have any ideas about how to raise that credit score? Looking at where you are and figuring out what you need to do to get where you want to go can be easier with help. Plus, what’s a road trip without a buddy? Call me anytime!

… All right, all right. You can pick the travel tunes first.

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