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Are You a Financial Procrastinator?

It’s easy to put off certain financial tasks, whether they be paying a specific bill, creating an emergency fund, or writing a will. The simple truth is that nothing good can come from procrastinating on these items. A late bill incurs interest, and you unfortunately never know when a will or emergency fund will be needed.

Discussing these topics is the easy part. Taking action, or knowing what steps need to be taken, is the challenge. You can improve your financial proactivity by starting small and gaining momentum. You won’t completely solve your financial situation in one day, but these small steps lead to improved financial awareness and readiness.

See below for some pieces that should be a part of your financial journey, and the steps you can take to accomplish them.

Starting an Emergency Fund

Life’s unpredictability requires an emergency fund. Starting an emergency fund ensures you have the coverage you need for any of life’s unexpected challenges, from a car repair to a sudden job loss. Experts recommend that you have enough funds to cover three to six months of expenses.

While you should consider keeping some cash at home in a fireproof or waterproof safe, consider keeping the bulk of your savings with your financial institution. With American Heritage’s high-yield savings account or money market account, you’ll earn more interest than you would in a traditional savings account. You can also set up automatic transfers, forcing these funds to be “out of sight and out of mind” and ready for when you truly need them.

Paying Off Debt

Debt is often a major stressor that can hold you back from reaching your financial goals. If you aren’t already, plan to pay off your debt as quickly as possible. It’s always best to pay more than the minimum payment, to shorten the length of time you’ll be in debt and avoid higher interest payments.

Tackling debt requires developing a debt repayment strategy. You’ll need to make a list of how much you owe, the interest rates, and minimum payments. The debt avalanche method is a great format to use.

With the debt avalanche method, you work on paying off the debt with the highest interest rate first, while making minimum payments on your other debts. You would then trickle down to the debt with the next highest interest rate, once you’ve paid off the initial debt. There is also the debt snowball method which may work for you, where you pay off the debt with the lowest interest rate and make minimum payments on the other debts.

With debt, the bottom line is that it’s best to eliminate it as quickly and as reasonably as you can. This will help you improve your financial situation and allow you to focus on your goals.

Planning for Retirement

While saving for retirement may sound like a far-off goal, the truth is that it’s never too early to start. The earlier you start saving, the more time your money has to grow. Here are some common methods you can follow to save for retirement:

• Employer-sponsored retirement plans: Take full advantage of the retirement plan your company offers, whether that be a 401(k) or a 403(b). Contribute as much as you can and consider increasing your contribution each year to account for bonuses, incentives, and inflation. Your company may also match your contribution, meaning if you contribute 5%, they’ll also contribute 5%, effortlessly transforming your overall match to 10%.
•  Individual retirement accounts (IRAs): The two most common types of IRAs are traditional IRAs, which offer tax-deductible contributions, and Roth IRAs, which allow for tax-free withdrawals in retirement. With federally insured Traditional and Roth IRA Certificates from American Heritage, you can choose the term length and tax advantages that best fit your goals. This allows you to enjoy a guaranteed rate of return with no risk of market loss.

   

  The team in American Heritage’s Investment & Retirement Center are ready and eager to help you in achieving the retirement you dream of. Schedule a complimentary consultation today. By taking advantage of this service and these retirement offerings, you’ll be ahead of the curve on avoiding some of the most common retirement mistakes.

Writing a Will

While most people may not want to give serious thought immediately to writing a will, it’s a task that shouldn’t be placed on the back burner. A will outlines your wishes for how your assets should be distributed after you’re gone. Even if you’re young and healthy, having a will is important. If you pass without a will, your assets will be distributed according to state law, which may not be in line with your preferences.

An attorney can help you write a will, or you may decide to use an online will-writing service. Be sure to store your will in a safe place once written and consider going back to it every three to five years to apply any changes you may wish to include.

We’re Here to Help

If you need help with any of these tasks, American Heritage Credit Union is here for you. We offer a variety of financial products and services to help you reach your financial goals. Be sure to contact our Investment & Retirement Center for a complimentary consultation today to begin planning for your retirement. Now is the perfect time to get started in developing the financial future you see for yourself and your family.