You may be planning to shed a few pounds in the new year, but I’m sure you’d like to put some extra pounds on your wallet. Below are my 12 tips for fattening up your bank account in 2010.
1. Pay yourself first.
Save 10%. Set up systematic withdrawals directly from your paycheck to your savings account.
2. Live within your means
Simply don’t buy things you can’t afford. African American’s spend $15 trillion per year and have on average less than $10,000 saved towards retirement.
3. Create a Budget
You need an emergency cash fund equivalent to 6 to 8 months of living expenses. If you’re always short at the end of the month cut back spending, if you’ve got extra, save it.
4. Social Security
Don’t count on it. Recent reports project it will run out around the year 2037.
5. Pension Plans
Even if your company still offers one it won’t be enough to retire on. Your retirement income will be about 71% self-funded.
6. Start a Business
Is there an entrepreneur hidden within you? What would happen if you lost your job? Think about hobbies and other skills and consider ways they could earn you a living. Striking it out on your own is not for everyone, but it’s the only way to have total control of your income.
7. Purchase a Home
Homeownership builds equity and reduces your tax liability. Interest rates and housing prices are currently very low.
8. Consider Refinancing
Investigate refinancing your current mortgage. Lower interest rates mean increased cash flow.
9. Reduce Credit Card Debt
Look to consolidate your debt to lower interest rate cards and work to pay them off.
10. Legacy Planning
Everyone needs a will. Wills makes it easier on your loved ones, both psychologically and financially.
11. Purchase Life Insurance
Life insurance helps pay for the significant expenses associated with passing on, and covers debts such as mortgages and car notes not forgiven when you die.
12. Consider New Tax Laws
Several notable changes in the current tax laws could impact your financial health. First-time homebuyer credit increases up to $8,000 for homes purchased before August 1, 2010. There are also changes to long term capital gains and dividends, estates, Roth IRAs and College Tuition Tax Credits. Consult your tax preparer for more information.
Begin taking responsibility for your financial future by following all (or some) of these 12 steps and 2010 may be the first year of the best years of your life!
Tamara Haskins has over 20 years of experience in accounting and financial planning. She founded Haskins Wealth Management Group to “build, manage and preserve wealth for generations.” The investment firm not only provides comprehensive financial services, but also takes the mystery out of investing by educating, empowering and inspiring clients to achieve their financial goals. Mrs. Haskins has shared her expertise on “Good Morning America” and New York’s WABC Channel 7 and FOX Channel 5. She has also been a contributing writer for “The Source” and “Black Enterprise” magazines. For more information or to schedule a speaking engagement, visit www.haskinswealthmanagement.com.