A smart start to 2016 will put you on track for a great 2017 and beyond.
New year, new you? Here’s how to start things off right financially, and boost the odds of having a prosperous 2016.
Pay off high-interest credit card debt
Sure, you hear this every year, but paying off high-interest credit card debt is particularly relevant now, since the Federal Reserve has started raising rates.
In December 2015, it announced the first rate hike (of 0.25 percent) in nearly a decade. Three or four more hikes are expected in 2016, and while these hikes will be incremental and gradual, you’ll feel them in your wallet.
Establish an emergency fund
Financial emergencies can and do come up — with such frequency, in fact, that they really shouldn’t be unexpected. Four in 10 people said that they, or an immediate family member, experienced a major unplanned expense in the past 12 months, according to a newBankrate survey.
Granted, it’s not easy to save enough to weather a setback, particularly when you’re trying to manage student loan payments or earn a modest income. According to the survey, 63 percent of Americans don’t have enough saved to cover even a $500 financial setback.
Make your emergency fund a priority in 2016, even if you start small. If you set aside a little more than $5 a day, you’ll have a $2,000 emergency fund in one year.
Prepare for market volatility
Remember the first few days of trading in 2016? We started the new year off with a thud. And more thuds are expected in 2016.
After all, China’s growth is slowing (sparking worries of a global slowdown), commodity prices are falling, and terrorism fears and geopolitical tensions are continuing to make headlines.
The only thing that’s certain for 2016 is volatility. If you can’t stomach the ups and downs, consider reworking your asset allocation. If you’re nearing retirement and feel that you’re too heavily weighted in high-risk equities, moving a portion into fixed income will steady your portfolio’s swings and eliminate some of those sleepless nights.
Line up some ‘gigs’
This is the year the ‘Gig Economy’ will take off, say the experts. Why? In large part, it’s due to the employer mandate to provide health insurance to full-time workers. This year, 95 percent of companies with 100 or more employees will need to be insured, and companies with 50 to 99 employees will have to insure full-time workers.
It’s an expensive proposition, and most employers would rather bring on part-timers and contract workers. Get your resume ready.
Boost retirement savings
Are you paying yourself last — that is, after you’ve paid for everything else from housing to utilities to groceries? Stop making this all-too-common mistake.
Paying yourself last never works, because no matter how much money you make, you tend to spend all of it. This year, get into the habit of paying yourself first. Set aside a portion of your income the day you get paid, before you spend any discretionary money.
How? Here’s the best strategy: Have someone else save for you. Get your employer or bank to automatically take money off the top of your paycheck for your retirement plan.
While it’s often recommended that you try to set aside 10 percent of your income for retirement — or 15 percent, including any employer match — you can start with much smaller amounts if this feels too overwhelming. The important thing is to get into the habit.
Always ahead of the highly competitive RGV real estate market, Marilyn Cortez is a Spanish speaking native of the Rio Grande Valley. Born and raised in Mission, Marilyn is committed to her clients, and is recognized as a Top Agent in the Greater McAllen Real Estate area, and within Keller Williams Realty. Since the start of her Real Estate career in 2007, she has sold over 40 million dollars of real estate. Known by her fellow real estate agents to be hardworking, honest, dedicated and motivated, Marilyn is knowledgeable in all areas of Real Estate and has built her business on results, with more than 70% of her clients being repeat clients.
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"Marilyn helped us buy our first home, and we never felt like we were out of the loop. I was always informed about every single step of the process, and if I had any questions or concerns, Marilyn answered all my questions in a timely manner. I highly recommend her as an Agent, and I can't wait to do business with her again."