2019 started with some positivity thanks to a post-Christmas surge of investor confidence, but markets in the second half of this week have shown that volatility is still a factor. In addition to smart investment decisions, a better approach to personal finances will benefit you this year. Here are five money tips to minimize financial uncertainty.
Money Tips to Reduce Your Debt
It’s time to get aggressive with debt reduction. Consumer debt in the United States hit a peak in 2018. Reducing your debt will free up credit for future purchases and emergencies. Prioritize debt based on interest and other fees. The most expensive debt should be paid first, while maintaining minimum payments on all other accounts.
Take Your Savings to High Interest Online Accounts
The local bank that you’ve been using for years or even decades may not be the best choice for your savings accounts. Shop around for online accounts that have low fees and higher interest rates. Choosing more competitive savings accounts will significantly benefit your long-term finances.
Freeze Your Credit File if You Aren’t Planning to Borrow
Identity theft has become a serious problem in the last decade. High profile data breaches have reinforced the need to protect your identity and your finances. If you aren’t planning to borrow in the coming months, then you can freeze your credit temporarily. All major agencies including Experian and Equifax will freeze your credit file without charge, and your file can be reactivated in minutes when you need to apply for a loan, credit card, mortgage etc.
Build an Emergency Fund
The job market is currently strong and unemployment figures are at record lows. However, no matter what your situation is, you should always plan for the unexpected. A money tips is to have a personal emergency fund, is essential for providing relief in the event of a job loss, medical emergency, or any other serious financial event. Financial advisors recommend saving at least three months’ worth of income in a high interest standard savings account.
Develop a Structured Investment Policy
Consider hiring a financial advisor this year to help you develop a structured investment policy. This policy will include your goals, details of your portfolio, and the kind of risk that you are willing to accept on future investments. A policy can be used to guide your investments. It will also be invaluable in times of market uncertainty, keeping you grounded and focused.
Taking the time to reevaluate and streamline your finances will help you to protect your investments and ensure stability in the long-term.
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