I am not a prophet. Nor do I have a crystal ball in my office.
But here’s a scenario that WILL unfold in a few weeks.
Credit card companies will send out December statements…and millions of stunned Americans will gasp.
They—maybe you too—will stare at all those Christmas purchases and moan, “Good grief! I spent THAT much?! Where am I going to find the extra cash to pay for all these shopping excesses?”
Here are four places I suggest you look: Your savings account, your desk drawer or file cabinet, your pay statement, and your refrigerator!
- Your savings account
Currently, the average bank savings account pays .43% in interest. Meanwhile, the average credit card interest rate is 20.35%.
You don’t need a PhD in economics to see that the smart move is to take money out of your savings account and pay off that credit card. (And then maybe put that plastic in a drawer!)
And don’t stop there. Redirect the money you were sending to your credit card company to your savings. Believe me, it will add up fast.
- Your desk drawer/filing cabinet
(Or wherever you keep your insurance policies.) If you haven’t had a thorough insurance review in the last three years, do it. Sit down with an agent you trust and go over your coverage. The savings could be significant.
- Your itemized pay statement
Your pay statement will show you how much of your wages are going into a company savings plans or a 401(k).
Since paying off high-interest debt is often the wisest “investment,” you may wish to temporarily reduce your withholdings in order to pay off debt and avoid exorbitant interest charges.
Also, if you normally get a big tax refund every spring, adjust your withholding. Why give Uncle Sam what amounts to an annual “interest-free loan”?
- Your refrigerator
Here’s a surprising place to find some “cold” hard cash.
Fact: Almost 60% of shoppers go to the grocery store more than once a week. (And isn’t it true that the more you go, the more you buy?) Fact: Most families throw away hundreds of dollars of food annually.
By planning more carefully—and NOT grocery shopping on an empty stomach—you can substantially reduce your food bill.
May Christmas bring you joy this year—not stress!
P.S. One more thing I know about the future (even though I’m not a seer).
When you get close to retirement, you’re going to want a smart plan for turning that 401(k) or your IRA retirement savings into steady retirement income.
If you don’t yet have such a plan, I’ve got a free tool that can get you started. It’s called the RISA (i.e., Retirement Income Strategy Assessment). In less than 10 minutes, it can show you what kind of retirement income plan best aligns with your personality, goals, and lifestyle. There’s no obligation, and you can access it by emailing me (bmoore@argentadvisors.com).
Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.
