Wednesday, May 29, 2024
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Need a Personal Finance Makeover? Try These Tactics

Does your personal financial life need a makeover? Don’t feel alone. Many hard-working adults are discovering that 2024 is the perfect time to get their money situation organized. There’s never been a better time.

Inflation is nearing the double-digit mark, which hasn’t happened in more than a half-century. The good news is that there are numerous ways to fight against inflation, a volatile stock market, and runaway housing prices. What’s the solution? Millions of working people think investing in rental properties is the most effective way to empower their dollar power.

The reasoning is sound, and the investment is almost tailor-made for 2024. The real estate market for residential houses has been changing rapidly. Home prices are shooting up like never before. Investing in rentals can go a long way toward fixing your finances. But there are more ways than that to start a financial makeover.

They include getting professional advice about budgeting, slicing toxins from your balance sheet, getting an insurance checkup, joining a shopping club, eliminating high-interest debt, and creating a realistic retirement plan. Here’s how to get started.

Get Professional Advice

Don’t let the hourly fees keep you from hiring a money expert to help with budgeting. Most consumer counselors charge reasonable rates and can help put a comprehensive budget together in about an hour. Shop around for a licensed pro who specializes in working with everyday consumers and adults who want to revamp their budgets.

Consider Investing in Rental Properties

Nothing can ramp up your financial health more than wise investing practices. Everyone should consider using one or more approaches to enhance wealth returns. In today’s inflationary economy, doing so can be tricky because money left sitting in savings accounts tends to decline in absolute value. Investors can aim to earn equity returns by putting their capital into the rental property market.

Unfortunately, people shopping for houses are in a dilemma. Should they wait for prices to come down? If so, how long is a reasonable time to sit on the sidelines? After all, they have to live somewhere. If housing prices remain high, even for the short term, the demand for rental space will continue to grow.

That’s just one of the many reasons behind the wisdom of rental investing. Not only are apartments and other short-term properties in huge demand, but inflation has not let up throughout 2024, even in the year’s waning months.

Both inflation and home prices are acting to make rental property investing look better as time passes, inflation rates grow, and residential real estate markets continue to price everyday home shoppers out of the hunt. Many unlucky house hunters are looking and will continue to look for rentals.

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Eliminate Financial Toxins from Your Budget

Successful financial planning includes determining what spending categories you should aim to zap from your budget. Start with nonessential items like fast food, tobacco, convenience store purchases, frequent restaurant visits, coffee shop stops, and excessive alcohol purchases.

For most families and single people, it’s easy to eliminate all those categories and not suffer any consequences. Eat at home more often, brew your coffee, drink moderately by avoiding bars, quit smoking, don’t buy junk food in convenience stores, avoid the fast-food drive-thru’s on the way home from work, and limit restaurant meals to a couple of times per month.

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Get an Insurance Checkup

Money makeovers should include a close look at insurance coverage. That usually means sitting down with a licensed general agent you can trust. Decide if you have enough life, medical, car, home, dental, business, and other insurance.

Note that purchasing several policies from one agent can significantly discount premiums. Depending on your need, consider flood, fire, and personal property policies.

Join a Wholesale Club

One of the most straightforward fixes is forking over $75 to join a wholesale club. It’s a painless way to save on groceries, household goods, and gasoline. On average, single people can chop about $1,000 off their annual spending on those items lost by taking advantage of wholesale club bulk pricing.

If you have a family, consider purchasing a stand-alone freezer to store meats and other high-value foods. That way, you can get the most out of sales and short-term discounts without worrying about spoilage. Just be careful that it can be easy to get excited and buy too much, taking the risk of never getting around to eating the items by the expiration date.

Make a Realistic Retirement and Savings Plan

Take the time to speak with your CPA or tax preparer and flesh out a sensible retirement plan you can stick to. That includes dealing with IRAs (individual retirement arrangements), regular savings accounts, and emergency funds. The average working person should have about three months of income for emergencies.

Remember about IRAs is that even if you can’t afford to set aside the maximum allowable amount every year, it’s essential to set up an account and contribute to it regularly. Don’t rely on Social Security or work-based pensions to provide enough for your golden years.

Deal with Debt

Debt is the biggest obstacle preventing many working adults from achieving financial prosperity. If you genuinely want to redo your money situation, take a long, hard look at student loans, high-interest credit cards, mortgages, auto loans, and other outstanding debt. What is the most effective way of dealing with this pernicious burden? Consider refinancing a home and student loans if you stand to gain access to more favorable rates and terms. 

Some discover that refinancing education debt gives them room to breathe by consolidating several loans into one. Speak with a professional about how to refinance a mortgage or auto loan. It’s possible to significantly lower monthly payments on all types of loans by refinancing.

Finally, explore the potential of downsizing into a smaller, more efficient home. If your children have moved out, it’s possible to acquire a condo or smaller house and still have all the living space you need. Downsizing can mean a much lower monthly payment for housing.

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