It’s a new year, check these items off your list
As you head towards retirement start the year off right and check these items off your list, helping you be better prepared, gain greater confidence and better success in your retirement.
Adjust your spending plan (or “budget”) -
Knowledge is power. A spending plan can help you decide beforehand how you are going to spend, or use money to accomplish your unique goals. As Christians, the Bible speaks wisdom on being faithful in the 5 Uses of Money - Lifestyle, Giving, Debt, Taxes and Saving. There are 4 biblical principles that we can all apply to our spending decisions; spend less than you earn, avoid the burden of debt, build reserves and liquidity, think and plan long term.
After all, by controlling your spending on lifestyle and debt expenses you can reduce spending so that you have the excess needed to fund your goals, including retirement and children’s college… and keep in mind, knowing your lifestyle costs, how much you spend each year on living expenses, is the biggest part of the equation in determining how much you need to retire.
Review account beneficiaries -
Confirming or setting beneficiaries on your retirement accounts, and using a Trust or PODs (Pay on Death) on other accounts, can save your heirs money, time and lots of headache.
Create a plan to reduce debt -
Debt can be simply stated as money borrowed today that must be repaid tomorrow. Careful and deliberate use of borrowing can help us acquire an important asset we might not otherwise be able to purchase such as a home. The question is how you will repay it? The less debt you have always means you will have more to spend on other things in the future. Making the sacrifice today to accelerate paying off high-interest short term debt will provide a more secure and enjoyable future.
Increase saving and investing for retirement -
How much should you be putting into retirement? A good rule of thumb is you should be saving at least 10% of your salary into a well-diversified retirement account. By the time you are in your mid 40s you should have saved 3 times your salary. If you have less, consider how you might save 15% towards retirement without incurring extra debt. Saving for retirement should be balanced with your other goals through careful planning and prayer.
How might you make a difference, or help the poor and needy? -
We know there’s more to life and it’s not all about us. Whether your generosity comes in the form of time, skills or your finances consider how you might increase your impact this year. As Christians, we are called to give regularly, proportionately and cheerfully.
"If I could boil down everything I have learned into one sentence or thought, it would be this: Generosity and financial freedom are inextricably linked. If you want to replace fear, guilt and frustration with freedom, confidence and joy, you have to hold your treasures―your money, your possessions, your time and talents―with an open hand." Ron Blue, Generous Living”