If you want to plan for your financial future, you need to plan to build up your long-term wealth so you can take care of yourself in the future. To build long-term wealth, you need to get started making decisions daily that will lead to a wealthier and more prosperous future.
1. Pay Off Those Credit Cards
Credit card debt is so easy to accumulate, and it can easily multiple over. Credit card interest can easily grow your normal balance. Having high credit card balances can lower your credit score as well. As such, you should make it a priority to pay off your credit card. You can start with your smallest balance and pay it off first. Or you can start with your card with the highest interest and pay that off. Just make a plan you can follow and work to pay off your credit card debt.
Once you pay off your debt, don't just cancel your credit cards. Having credit cards can help your credit score. Just put them somewhere where you can't easily access them.
2. Create an Emergency Fund
Next, you are going to need to create an emergency fund. An emergency fund can help you when you lose a job or your hours at work or cut, or if something breaks in your home. For instance, having an emergency fund will allow you to pay for your water heater when it needs to be replaced and fix the brakes on your car or help you get through a transition between jobs.
Start by trying to save up to one month of income and work your way up to a year over time.
3. Non-Retirement Plan Investments
A retirement plan is not the only way that you can invest. With a retirement plan, there are limits on how much you can invest, what you can do with the money, and how you can access the funds. If you want to invest outside of your retirement, you will want to start a non-qualified account that will allow you to invest and grow your money outside of your traditional account.
4. 401(k) or IRA
Finally, you are going to want to have a traditional retirement account as well. A traditional retirement account will allow you to start building wealth specifically for your retirement. With a traditional IRA or with a 401(k)-retirement account, you can deduct the money you put into your retirement account from your taxable income.
If you want to build your wealth, get rid of your credit card debt, and keep it away. Create an emergency fund, and work to build it from a month to a year worth of emergency funds. Consider also putting money into a traditional retirement fund and a non-retirement plan as well. For more information, contact a financial planning service.
Share17 March 2021
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