How are you upholding those New Year resolutions you made? Have you been hitting the gym or volunteering more often? Don’t forget to take care of your personal and business needs. Here is a quick start…and we can help you along the way!
1. Create an emergency fund to cover unexpected expenses. While one rule of thumb suggest the fund should include enough to cover six to 12 months of household expenses, others suggest as a starting point to set aside enough to cover insurance deductibles — health, auto, homeowner’s/renter’s, etc.
Set the money aside in an account you won’t be tempted to raid, such as a CD (certificate of deposit), which typically offers an interest rate slightly higher than that of a savings account, with negligible penalties for withdrawing funds early.
Tip for success: Build an emergency fund incrementally. By the end of the first quarter of the year, save enough to cover your health insurance or homeowner’s/renter’s insurance deductible, for example, then in each quarter thereafter set aside enough to cover other deductibles.
2. Save (more) toward retirement. If you don’t have an IRA (individual retirement account) or some kind of work-based retirement plan, such as a 401(k) or pension, establish one yourself or get involved in whatever plan your employer offers. The Grossmiller Agency often sets up IRAs for those that do not have an employer sponsored plan or work for themselves. Even setting aside (or increasing your plan contribution) a little bit can make a major difference down the road. To find a plan that’s right for you, contact us to discuss your options.
Tip for success: Through your bank and/or employer, set up automatic contributions to your retirement plan.
3. If you have a child, start saving for college. Tax-favored college savings plans (such as a state-sponsored “529” plan) typically are simple to set up and maintain, with contribution requirements as low as $25 a month. Life Insurance is also a vehicle that may be used to help fund college when the time comes. Whether it’s for an infant or a teenager, it’s worth setting up a plan.
Tip for success: Make it your goal to set up a college savings plan by the child’s next birthday, and set up automatic contributions.
4. Review last year’s tax returns and, if you received a refund, work with your employer to adjust your tax withholding rate so extra money stays in your paycheck rather than going to the government in what amounts to an interest-free loan from you. According to research, the average federal tax refund in 2012 was $3,000. Who wouldn’t want an extra $250 a month to save, spend or to pay down debt?
Tip for success: Put that extra money to constructive use (to pay down a credit card balance or put toward retirement, for example), but use some of it to reward yourself, too, with a meal at your favorite restaurant, a golf outing, a spa treatment, etc.
5. Review your insurance policies — homeowner’s, health, auto, etc., and assess whether that coverage is appropriate to your situation. Are you missing out on discounts? Do you have more, or less, coverage than you need?
Tip for success: Consult a Grossmiller Agency Representative for a complimentary review of your individual/ business insurance and financial needs. Just one hour of their time can result in hundreds, even thousands, of dollars in savings.
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