invest in yourself Archives | Ovation Credit Repair Services

Financial Milestones – Roadmap For Success

By | Personal Finance

While there are many financial milestones to celebrate at every age, some of the most significant milestones could be life-changing.

From getting that first paying job to putting a college degree into practice, these milestones can form some of the greatest memories and set a financial foundation for success later in life.

Knowing what financial milestones are important will help you get a head start on planning and be able to work toward a successful financial life.

Your Financial Milestones Roadmap

Financial Milestones

Becoming an Adult (18-29)

What many people don’t realize is that between the ages of 18 and 29, you should be working on your first financial milestones. On top of landing your first job and buying a new car, you may take out student loans to attend college. To qualify for good interest rates, you’ll need to start building your credit. You could take out a line of credit or get your first credit card, as long as you use it responsibly. If you’ve already made some mistakes with credit, don’t stress too much, you are still fresh in the financial path so use this time to invest in credit repair to get yourself back on track.

Pay any loans or student debt on time each month, and be mindful that any debt you obtain will need to be paid back in the end. You may also plan to move out of your parents’ house and want to start looking for a home to rent or buy. Having good credit will make these goals easier to obtain. A great way to build credit while paying rent, is to use a rent-reporting service to get your rent payments on your credit report.

You should also start planning a budget and learn about investing. You may have the opportunity to start a 401(k) — especially if it is available through your employer and sometimes they will match a certain percentage, you should definitely take advantage of this. If a 401(k) is not provided through your employer you can look into a Roth IRA for your investments, if you have the option to do both, you should. This will give you a solid financial foundation that will carry you far later in life.

In Your 30s

By your 30s, you should be enjoying a comfortable place to live and perhaps owning your own home. You may have several retirement accounts, whether you have a 401(k) or a Roth IRA, continue making contributions to those funds and increasing that amount when you can in order to get the most return. If I said I would give you free money wouldn’t you take it? Keep improve your knowledge of investing by studying up on exchange-traded funds, stocks and bonds, as well as funds that can be matched by your employer. If you are fortunate enough to work for a company that has matching 401(k) make sure you are maxing out that opportunity.

This may be a good time to diversify your investments, choosing from a variety of stock options and markets, such as real estate or commodities. You should also be investing in yourself, pursuing an advanced degree or professional development that will accelerate your career.

In Your 40s

By your 40s, your retirement accounts will continue to accrue, and you should have started investing or saving money for your children’s college expenses. Look into a 529 plan or other college savings plans to see which one suits you best. Max out your retirement funds so that you can leverage them later in life, and contribute up to 6-8 percent of your earnings to get the most out of employer matches.

Reward yourself for achieving financial stability, make sure to make a “vacation” savings account so you can be enjoying this hard work you have been doing. Discuss health care needs with your parents in order to avoid surprises later on. Also it may be a good idea to start an investment account that is separate from other accounts, and set it up to automatically draw funds. With the help of a financial advisor, you can turn these funds into moderate-risk investments that you’ll benefit from down the road.

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In Your 50s

By your 50s, you may have started thinking about retirement and be counting down the years to the big day. Sit down and make some calculations to determine your family’s current financial needs, how much you will need in your retirement, and what your goals are for this stage and on in your life.

For your financial milestones, consider buying a vacation home, timeshare or rental property, which you can lease out in order to generate extra income. Learn about financial options available, such as Social Security, Medicare and pension benefits. Resist the urge to withdraw funds from your retirement accounts prematurely, unless you are prepared to pay large penalties.

In Your 60s

By your 60s, you may decide to retire. Your golden years can also be a time of resilience or unpredictable life changes, so each individual will face something different at this stage. You can start collecting Social Security and planning for the long term, so your retirement and health care funds last as long as you need them. Make sure your will is filed and updated. You may also want to consider changes at home, whether that means modifying your house to age in place or moving to a retirement home or supported community.

In Your 70s and Older

By your 70s, you will likely be well into your retirement years. It might even be beneficial to produce hobby work on the side and sell it at community fairs. This is a crucial time to look at your finances to decide if you need to cut back on spending or if you can be generous with charitable gifts. Ensure that any withdrawals follow a predictable, stable plan, and use your money wisely. By your 80s or 90s, your life will have changed more than you ever imagined it could. This might be a good time to downsize and move into a smaller home that suits your life as it is now. If your retirement funds have made it this far and you can still afford some degree of charitable giving, you’ve done well.

Tracking your financial milestones and setting goals, will help relieve the financial stress that pursues when you have not prepared yourself. With careful planning, saving and investing, you can ensure that both you and your family will be cared for well into the future.

The Balance

Make Your Tax Return Work for You

By | Credit Cards, Credit Repair, Credit Reports, Credit Scores, Debt, Revolving Debt, Save Money

Just like the stores had Easter candy out before Valentine’s Day was over, tax time is coming soon. April 15 – or 17 – thanks to that oh-so-generous government extension that was granted for the filing of 2011 returns – is only a couple months away.

For many families, tax time is not as painful as it could have been, since last minute measures were enacted to protect some tax credits that may put money in your pocket. But before you get too excited about how to spend that money, we’d like to suggest doing something painfully responsible with your tax return.

We know, the dream vacation or the new car would be a lot more fun.

But a good tax return can really help to turn a bad credit score into a good one, and taking advantage of tax time in such a practical way doesn’t mean you have to give up your dream – just postpone it for a year. You’ll not only improve your credit score, but what financing you do get the next year will cost you less because of it. And really, given how quickly tax time comes each year, the time will fly by.

Depending on the size of your return, you can either pay off some smaller credit card balances completely or you may want to pay off enough on the balance of each of your credit cards to make sure they are each at less than 50% of the limit available. There is no one measure more critical to your credit score than keeping at least 50% of the credit line free.

In the short term, your tax return might by you some fun, but in the long term, if you put it to work for you by putting the return toward your credit card balances, it can significantly change your financial future. Better credit scores mean lower interest rates, better auto insurance rates, and better refinancing options for your home. Better credit ratings can even mean getting that job versus being overlooked (except in California, where it is now illegal to use credit scores in making hiring decisions).

This tax season, invest in yourself and your financial future. And next year, you can send us a postcard from Europe as you enjoy your dream vacation that is costing you less thanks to better credit!

Windfall Management – Investing in Yourself

By | Debt, Save Money

If your boss offered you a $100 a month raise, would it make a difference in your life? Almost certainly, no matter what your current income level, an extra $100 per month would come in handy.

You don’t have to wait for your boss to offer you a raise to change your standard of living, and tax time gives you a chance to give yourself a raise.

If you have survived the tax season and the check really is in the mail – or more likely, headed by direct deposit to your account within a couple of weeks, think fast – how are you going to spend the money?

Do you have a list of things you’d like to buy? A big screen TV? A used car you’ve had your eye on?

When a windfall comes your way, the first thing you may think of doing is spending the money, but there’s something better you can do with the windfall that is almost like giving yourself $100 a month raise: pay off or pay down a credit card.

Why? Paying off a credit card with high interest rates not only immediately affects how much you’re spending each month on high interest minimum payments, but it also improves your credit rating, and when you improve your credit rating, the money you do have to borrow costs you less.

Consider trying to purchase a new car with a credit score hovering around 560. The car dealership can either laugh you out the door, or offer you a payment plan that includes a 7.5% or higher interest rate. With better credit, you could get a 2.9 – 3.5% interest rate. The difference? $1200 per year or more!

Raising your credit score is a slow process which means that you will have to wait to buy the things you want right now, but consider the things you’ll afford in the future, without going in to debt for them.

Rather than spend the tax refund money immediately, take some time to go through the pile of bills on your desk and make a note of the ones that have the highest interest. Pay as much as you can afford into the one with the highest interest rate, paying it off completely if you can.

One tax return or financial windfall can be enough to get you started on the path to debt freedom. Once there, you can reward yourself by using your free cash to buy that TV or a brand new car. Invest in yourself now, so you can actually enjoy your money later.

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