As we ring in the New Year, we all will make plans to do things a little better than in 2015. Some of us wish that our financial health was a little better. The Motley Fool article, "3 Smart Money Moves You Should Consider Making in 2016," says that the good news is that it can be a lot better, if we take action now. Here are three smart money moves to consider making in 2016.
Get Credit-Healthy. It's pretty tough to be financially healthy if your credit-related life is in the dumpster! What can you do to fix it? Well, there are several things, like if you have high-interest rate debt, pay it off. Maybe a temporary second job can help. Consider cutting out the unused gym memberships and take walks instead. You may be able to call the credit card company and negotiate better payment terms.
You also should take some time to review your credit report from the three major credit agencies (Experian, TransUnion, and Equifax). You might boost your score just by having errors fixed. A good credit score is important in many situations, like getting a mortgage or purchasing a new car. The better your score, the better your interest rate and the less you'll have to pay.
Get Serious about Your Retirement Accounts. If you're just socking away a few percentage points of your salary each year, you may be under-saving. This can under-develop your retirement nest egg. Figure out how much money you'll need in retirement, the amount you can expect from Social Security and other sources, and how much you'll need to accumulate. When you have created your plan, save aggressively, in your retirement accounts and elsewhere, and invest effectively. Think about Roth and traditional IRAs and 401(k)s if you haven't already.
Get Your Affairs in Order. As morbid as it sounds, it's critical to plan now so as not to leave your loved ones in the lurch. If your spouse, children, or parents depend on your income, be certain to have life insurance. And if you already have a policy, update your beneficiaries if needed, as well as specifying beneficiaries for your various investment accounts.
Talk to an experienced estate planning attorney and have your will drawn up. He or she might suggest a trust or other strategies that can save you or your loved ones time, effort, and money. For example, a living or revocable trust may allow you to avoid the potentially long probate process by directing how your property is to be handled before and after your death. You should also have a durable power of attorney, a living will, and advance medical directives.
Address these financial topics in 2016, and you'll sleep better in the years ahead.
Reference: Motley Fool (December 19, 2015) "3 Smart Money Moves You Should Consider Making in 2016"