Taking control of your finances now is critical for your future stability into retirement. There’s no way to know what the future holds. However, the more prepared you are, the less likely that unforeseen circumstance will devastate you. There are numerous tips and strategies you can use to build your financial wealth. Here are legal tips and financial advice to help you secure your future.
Make Plans For Your Estate
It’s not pleasant to think about planning for the end of your life, but it’s necessary. The first thing you may want to consider is creating or updating your will. If you don’t have this important legal document in place before you die, the state will determine how your assets will be distributed through probate. The probate process can also cost your loved one a significant amount of time and money trying to settle your estate. You should also have a living will in place that gives a person of your choosing the legal right to make medical decisions for you if you become unable to do so.
One of the most important estate planning decisions for you to make involves who you choose to give power of attorney to. This person will be given the legal right to make financial decisions and handle your estate when you’re deceased. Another aspect of estate planning you may want to consider is minimizing your tax burden. This will allow more money to be passed on to your loved ones. It’s a wise idea to consult with an estate planning lawyer for advice for your specific situation.
Eliminate Debt With Bankruptcy Filing
Filing for bankruptcy can help give you a fresh start for your future financial stability. It can remove old debt and help you build your credit back up in a better way. It’s possible to go through the bankruptcy process and have full access to credit again within three years. You can seek financial advice from local bankruptcy agencies to help you figure out if this process makes good sense for you.
You may want to file for bankruptcy if it will take you more than five years to pay off all your debt. It can take up to six months to complete the bankruptcy process from beginning to end. You’ll need to compile all your financial records and complete credit counseling within six months of filing your case. You may want to seek legal counsel regarding the different types of bankruptcy to determine which one best applies to your situation.
Certain debts are exempt from bankruptcy filing. You’ll still be held responsible for student loans, child support and alimony, and tax debt. Bankruptcy also doesn’t protect any co-signers for any loans you may have. You should consider filing for bankruptcy only after you’ve exhausted all other available options. Filing for bankruptcy can potentially impact your eligibility for certain types of employment and your ability to acquire loans for a long period of time.
Deal With Debt Collectors
If you can’t or don’t want to file for bankruptcy, then debt negotiation is something you may want to seriously consider. It’s important to deal with your debt as soon as possible to avoid serious financial complications and consequences in the future. Creditors will often accept less than the amount owed in order to settle the debt and avoid expensive legal fees. When you contact creditors to negotiate your debt, make sure you get any agreements in writing before you send them money.
If you get served with a debt collection lawsuit, you may want to consider hiring a consumer law attorney. Some debt collectors file lawsuits with little or no proof of the original debt amount or the statute of limitations has expired. If this is the case, a consumer law attorney can help you avoid wage garnishment. Keep records of all payments you make, even long after they are paid in full.
Focus your attention on eliminating high-interest debt. Typical culprits include rent-to-own payments, payday loans, and credit cards. The interest rates for these items end up costing you up to three times the amount you originally borrowed. Consider consolidating these revolving debts into one loan with a lower interest rate.
Lower Your Taxes
If you want to develop future financial stability, you may want to learn how to take advantage of strategic tax planning solutions. Contributing to a retirement account can reduce the amount you owe when filing your tax return. If you own a business, you can be eligible for numerous tax deductions to save money for your retirement. It’s wise to hire an accounting firm to keep an accurate track of your financial records. You can also get tax credits for going back to school.
You may also be able to deduct private mortgage insurance premiums if you have more than 20% equity in your home. Making charitable contributions can also significantly reduce your tax bill. Another thing you can do to lower the amount of taxes you owe is develop a strategy for the capital gains tax. Speak with a financial advisor on the best strategies for your situation.
Maximize Workers Compensation
Workplace injuries can be devastating for your household financial situation, both now and in the future. If you get hurt at work, workers compensation kicks in to give you some cash to live on and covers your medical expenses until you’re able to do your job again. However, most work injury claims are decided by for-profit insurance companies with vested interests to avoid issuing large payments to claimants. It may be wise to consider hiring an attorney from a law firm experienced with workers compensation to maximize the payment amounts you can receive.
Reduce Your Household Expenses
If you want to secure your financial future, one of the best ways to do that is to find ways to save money on household expenses. Any money that you save can be invested to earn interest towards your retirement expenses. One way to do this is to reduce your monthly HVAC energy bills and use those savings towards your retirement. Shut off lights when not in use and adjust your thermostat. Invest in energy-efficient appliances and use them only during off-peak hours.
Pay for items with cash instead of relying on your credit cards. Cut out monthly subscriptions for things you don’t use such as gym memberships and magazines. Shop around for lower premiums on your home and auto insurance. Take the amounts you save from each of these things and invest the cash into your 401k or health savings account.
Invest In Protection Insurance
A life insurance policy can be one of the best financial investments you make for your future. If you die unexpectedly, the policy will pay out a lump sum or monthly payments to your loved ones and help pay for funeral and burial expenses. You may also want to consider income protection insurance. This will help you pay for expenses if you become seriously ill or injured. You can get income protection insurance on either a short-term or long-term basis.
Another type of protection insurance that you may want to consider is a policy that covers identity theft. Approximately 15 million consumers were affected by this crime last year. Identity fraud can ruin your finances and it can take years to clean up the mess left behind.
Make sure you fully research any insurance policy before signing any agreements. Make sure you fully understand what’s covered and what isn’t. Compare rates and keep your policies up-to-date. You can save money each month by bundling some of these insurance protection policies together. Knowing you have these protections in place can give you greater peace of mind when it comes to your future financial stability.
Build An Emergency Fund
To ensure financial stability, it’s important to prepare for unexpected expenses by building an emergency fund. Around 70% of people have less than $1,000 stashed away as savings. Even a small amount of $500 can be enough to pay for appliance or vehicle repairs. Ideally, you’ll want to have six months worth of living expenses stashed away to provide you with a comfortable finance cushion. Set aside approximately 15% of your weekly paycheck to be automatically deducted into a savings account for emergencies.
Work With A Finance Advisor
To help you plan for your future, you should consider working with a financial advisor to create a retirement plan. Working with a professional financial planner can help you figure out how much money you’ll need to save and what investment vehicles will best help you achieve your goals. A financial advisor can help you with debt management, budgeting, long-term health planning, estate planning, tax planning, and investments. You can create a customized plan that factors in your future expenses, inflation, taxes, and the rates of return on your investments. You’ll want to review this plan with your advisor at least once a year to keep you on track towards achieving your future financial goals.
Establish A Finance Budget
It’s difficult to plan for your future financial stability if you don’t know what’s happening with your money right now. The best way to track your spending is to establish a budget. You can use free budgeting programs on your computer or smartphone where you can keep track of all your accounts in one place. Once you know where your money is going each month, you’re able to make better decisions on how to handle your finances.
Pay Off Credit Cards
The interest rates on credit cards can take up a significant chunk of cash you could use for your retirement. One strategy you can use to pay off your credit card debt is to make a list of all your debts from the lowest interest rate to the highest. Start by paying only the minimum amounts on all your cards except the one with the highest interest rate. Whatever extra funds you have left should be applied to this credit card.
Another way you can pay off your credit card debts is to start by paying the lowest amount owed and working your way up to the largest debt. This can help you build confidence and motivate you to continue paying off your debts. You can also transfer and consolidate all your debts onto one main credit card that has a lower monthly interest rate.
Pay Off Student Loans
Student loans can be a significant strain on your monthly household budget. Finding a way to lower or eliminate your monthly student loan payments can free up cash towards your retirement goals. One way you can pay off your student loans is by refinancing it into a newer loan featuring a lower rate. The downside to doing this is that you may lose certain benefits you have with your student loan private lender. These benefits include things such as forbearance, deferment, and income-based repayment.
Estimate Your Retirement Needs
It’s helpful to know what you’ll need for your retirement in order to secure your financial future. You can start by estimating how much you think your desired living expenses will be when you retire. Then subtract the income you’ll receive from Social Security, pensions, and retirement plans. This will tell you how much you’ll need to fund your investment portfolio.
Figure out how much you’ll need to have invested in your retirement assets by your desired retirement date. You can use an online retirement calculator to help you figure out the math. You are on the right track for your retirement if 4% or less of this balance covers the number of expenses your retirement income doesn’t cover. If you don’t understand how to do this, you can consult with a financial advisor who can assist you.
Following these finance tips can go a long way towards securing your financial future. Proper planning will help ensure that your expenses can be paid when you retire. You’ll also have peace of mind knowing that there won’t be a financial burden placed on your loved ones when you die. Take action now to secure your financial future today!