The Start of a New Year is a Great Time to Take Control of Your Financial LifeIf you worked hard and the parents rewarded your good work with a holiday bonus, don’t spend the extra income frivolously. Use the extra money to pay-off debt, build an emergency fund, make some investments, or even give to charity.
Pay-Off Debt:
First, if you have outstanding credit card debt use the money to pay-off as much debt as possible. Determine which card has the highest interest rate. That is the debt you want to satisfy first. See how to pay off credit card debt with our article, "Who to Pay First - Yourself."
Build an Emergency Fund:
Once you have paid-off your credit card debt then look for the best possible savings account. Financial planners have been warning Americans to build a three-to eight-months worth of emergency cash in case they get laid-off. If something unexpected and expensive were to happen, that's the cushion that will soften your blow. The savings is for emergencies (like if you are unemployed or sick) only. Click here to learn more about building a savings.
Make Retirement Investments:
If you have no outstanding debt and already have a savings account for an emergency fund then you should consider making some investments. An Individual Retirement Account (IRA) is a personal retirement savings plan available to anyone who receives taxable salary during the year. Click here to learn about retirement plans.
Give to Charity:
If you're already debt-free, have fully funded your investment accounts, and have your emergency funds are in order, you've got it made. There are plenty of deserving, but under-funded, charitable causes that could use some support. Stop by next Friday to learn how to get tax write-offs when donating to charities. Click here to learn more about getting tax write-offs by donating to charities.
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