To get out of debt and start planning for the future, you need to take an honest look at your financial situation. Start by owning up to these five common financial lies in the New Year.
I’ll put back the money I took out of savings. If you have to tap into to your savings to afford a new pair of shoes, a TV or other item- you probably can’t afford it. It’s even more unlikely you will put the money back into your savings account. Avoid impulse purchases and save for the future, instead.
I still have time to save for retirement. When it comes to retirement, the earlier you start the better. Timing is key. For example, if you’re 30, and save 10 percent of your $50,000 salary in a tax-deferred account, you will have $1.1 million by age 67, assuming a 6 percent rate of return and salary growth of 1.5 percent and including Social Security. However, if you start at age 35, you will only have $717,021 by age 67.
I don’t need to worry about my credit score. While you shouldn’t obsess about your credit score on a daily basis, you should check it once a year. Look for any discrepancies, like suspicious activity or inaccurate reports of late payments. Fixing these issues can make a BIG difference when it comes to the interest rate you’re offered on a mortgage, car loan, or even on a washer and dryer you choose to finance.
The bank is the best place to keep my money. Having a savings account set aside for emergencies is a sound choice. However, many people put far too much money into these low-interest savings accounts. With these type accounts, when you take into consideration inflation, you’re actually losing money. Consider alternatives such as money market accounts that yield higher interest rates.
I will never be able to pay off my debt. As you consider your budget, put additional money toward paying down your loans and debts. Consider alternatives like transferring your current credit card debt to a zero percent introductory interest rate.
If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.