5 Tips for Getting your Personal Finances in Shape

The start of a new year is always a good time to review your personal finances.  Here are five things to help you get your financial house in order:

1. Project your future. Where do you want to be one year from today? How about 5 years, or maybe even 10? Time goes by so much faster than you could possibly imagine. If you want your world 5 years from now to look significantly different than the one you currently inhabit, start making your savings and investment decisions with the end goal of making that fictional world a reality
2. Don’t wait to start putting money away. If you have the opportunity to stash money away in a 401(k) through your employer, don’t let that chance get away. Also, many employers offer a match of anything you contribute up to a certain amount. Don’t leave that money on the table, even if you can only swing a small percentage of your salary.
3. If you don’t have the option to contribute to a 401(k), open a Roth IRA. While the maximum contribution level is lower with a Roth IRA,  it will allow you to save. Although your contribution to a Roth IRA is with after-tax funds upfront, this means there is no tax due on withdrawals, and any gains to the account are tax-free as well.
4. Use your credit card wisely. This means only using it for purchases that can be paid off at the end of the month. This will keep your credit usage down, (and your credit score up), while eliminating the need to pay high interest rates for purchases you can't pay off. Some credit card holders only make a small purchase each month to keep their card active, and just put it away for an emergency. Not a bad plan.
5. Take the time to seek out a financial advisor that you feel comfortable with, and begin to create a plan for your future. In the meantime, avoid listening to your co-workers, your brother-in-law, or your best friend when it comes to financial advice.

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