Even a minor mistake can drive your assets into the ground, and that is why it is always a good idea to err on the side of caution. Aggressively protecting your financial future could help you avoid common roadblocks and pitfalls that have destroyed countless lives over the years. Here is a look at five financial moves that you might want to consider making sooner rather than later.
Build a Safety Net
At just over halfway through the first year of our new presidential administration, we can expect to begin feeling the effects of some of President Trump’s reform initiatives very soon. One significant area of interest is related to a new rule recently finalized by the Consumer Financial Protection Bureau (CFPB) that would remove the ability of large financial institutions to require consumers to settle disputes with the company through arbitration.
The theory behind this rule is that it will give consumers the power to band together and file large class-action lawsuits if they are wronged. The problem is that most experts agree that consumers are more likely to be granted a settlement quickly and easily through mediation than through a lawsuit, meaning that it could potentially do more harm than good. The trump administration has decided to try and suppress this rule, and the battle is playing out as we speak. Whichever side of the issue you support, there’s a chance that the result won’t be what you were hoping for.
Due to a plethora of similar instances like this one that are unfolding as the trump administration seeks to repeal some of the legislation set by the previous administration, it’s a good idea to establish a safety net. Essentially what this means is that since you can’t guarantee that a coming policy change won’t throw a major wrench in your financial plans, you should set up an emergency cash reserve. Having a pool of readily available funds can make a huge difference if something you were counting on drops out from under your feet. There’s no better time to get started on this sort of safety net than today.
Turn Saving Into a Habit
A good way to get started on this safety net is to turn saving into a habit. Studies continue to show us that young adults who start saving money earlier on in life tend to have much stronger financial futures. Most experts agree that adults should start saving up for retirement in their 20s. When you are younger, getting into the habit of saving money is much more important than how much money you are actually putting away. If you’re a little older, you can catch up by saving aggressively starting today. The more you put away today, the more you have to fall back on later.
Tackle Your “Bad” Debt
Putting money into a retirement account might seem like a smart move, but you almost always want to erase “bad” debt first. Even a relatively strong investment account will most likely not outweigh your debt from a car, student loans, or a credit card. The only lingering debt that you won’t be able to pay off outright is a home loan, and that type of debt generally looks excellent on your credit score.
Consolidate Any Lingering Debt
Any debt that you are not able to pay off right away should be consolidated into a single account. Many consolidation companies offer excellent interest rates as long as you have a strong credit score and solid payment history. Having to make dozens of payments every month to different creditors can also be time-consuming and stressful.
Update Your Insurance Policies
Remaining uninsured could be one of the most expensive mistakes that you ever make. These policies will be your first line of defense against a variety of common issues ranging from long-term illnesses to auto collisions. You should take a fresh look at all of your insurance policies at least once a year to make sure that you have adequate coverage. Working with an agent like Northeast Insurance Agency or a similar company is a good way to look at a variety of options at once.
Now is the perfect time to start mapping out your personal financial future. Hopefully, these few moves will allow you to protect your assets in the coming years as you continue to build wealth and work toward a comfortable retirement.
Author: Kara Masterson