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8 Things Couples Must Do Now for a Financially Secure Future

8 Things Couples Must Do Now for a Financially Secure Future

Whether you’re newlyweds, in a long-term relationship, or several years into a happy marriage, there are many steps you can take to ensure a financially secure future.

It’s wise to look at this from two points of view; first, what can be done to help the two of you remain secure throughout life, including your retirement? Secondly, determine what needs to happen right now for each of you to have financial security if one of you were to pass away at a young age.

Fortunately, this process doesn’t have to be nearly as difficult or time-consuming as most people fear. By making a few simple lifestyle changes and taking care of some critical paperwork, you can have a better future.

1. Make Wills

It’s always important to make a will in order to protect your partner. However, this is especially true if you aren’t married. After all, the state will be given the duty of dividing your estate if you die without a will, and this process always favors blood relatives.

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This doesn’t mean that married couples don’t need to worry about a will, though. Although your spouse is most likely to get the majority of your estate from the state if no will is present, the process of dividing everything could impose costly taxes on them that can often be avoided with a legal will.

2. Get Life Insurance

Both of you should have life insurance that names your partner as the beneficiary. There are many types of life insurance available, so be sure to take some time to research your options. For example, the Ladder online life insurance calculator helps you look at many aspects of your financial needs that may otherwise be forgotten.

By factoring in your remaining mortgage amount and other existing debts, you can get a clearer picture of how much coverage will be necessary for your partner to survive financially when you pass away. Doing this for each other is one of the best ways to show love because it ensures you’re each safeguarded and won’t need to sell your house in order to survive.

3. Determine Your Priorities

Most people could easily blow through millions of dollars if given the opportunity, but since this isn’t likely to happen, the two of you need to determine what your top priorities are. For some couples, this means living in a cheap apartment so that they can travel and build a retirement account. For others, a nice house is more important. By deciding what your top priorities are, you can adjust the rest of your life to continue saving money, while simultaneously improving your quality of life.

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4. Take Care of Your Health

A study by the American Heart Association indicated that exercising 30 minutes a day, five times a week, can reduce your annual healthcare expenses by $2,500. If you add in a healthier diet filled with vegetables and fruit, you’ll be in a good position to save even more money!

Commit to exercising and eating right to bulk up your retirement savings account, boost your life expectancy, and make it easier to enjoy your twilight years. After all, no one wants to spend the latter portion of their life feeling physically debilitated by medical issues that could have been avoided with a proactive approach.

5. Simplify Your Lifestyle

Take a look around your home. Is it filled with objects you don’t need and never use? Do you have a cable plan that includes hundreds of channels you’ve never watched? Is it common for you to buy new clothes before your current ones get anywhere near worn out? If you answered yes to any of these questions, you can save money by simplifying your lifestyle.

Reduce your cable plan or cut the cord entirely to save money. Start buying items only if they have a truly useful and practical purpose. Stop spending so much on clothing, especially if most of it hangs in your closet untouched for months at a time. Instead, put the money you would have spent on these things into your retirement account. You’ll thank yourself when you get older.

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6. Set Up an Auto Transfer

For many people, the process of taking money out of their paycheck and moving it into a savings account is where everything breaks down. People forget, or they end up spending the money on something frivolous.

Stop this breakdown in its tracks by setting up an automatic transfer. This will take the money out of your checking account and move it into your savings account for you. Experts recommend putting 10 to 15 percent of your net income into your retirement account. Overall, saving 20 percent is best because this allows you to also build a nest egg for emergencies.

7. Chip Away at Your Debt

Whether it’s a mortgage, credit cards, or old debt that’s hanging around your neck like an albatross, you must clear away this financial responsibility to boost your ability to save for retirement. It’s common for people to pay the minimum due on their debts, but this will drag your payments out for an extremely long period of time. Instead, even if you can only afford an extra $5 to $10 per month, be sure to always pay more than the minimum due.

It’s also wise to pick the debt with the highest interest and work on paying that one down as quickly as possible. Once you zero out a balance, start paying extra toward the next debt in line. According to Bank of America, paying just $10 more per month on a credit card balance of $1,500 with an APR of 18 percent will save you $1,202.41 in interest fees. The card will also be paid off in less than 4 years, instead of it taking an astounding 13 years.

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8. Make Wise Financial Decisions

One of the things that makes it heartbreakingly easy for people to lose everything is the tendency many of us have to overextend ourselves financially.

A great example can be found with people who agree to a mortgage that leaves them with no wiggle room for emergencies. In other words, if you and your spouse make a combined $7,000 a month, but your mortgage, bills, and other necessary expenses cost $7,000, you are setting yourself up for disaster.

Always make sure that you set up your expenses with a cushion of at least 20 percent. This makes it possible to build a savings account, and it also makes it less catastrophic if someone gets sick or loses their job.

It may seem daunting to make lifestyle changes and take on vital steps such as writing your wills, but this is the best way to have a happy, financially secure future. Don’t forget that exercising and eating healthy are also critical for future financial and physical health. As an added bonus, there are many proven ways to save money while eating healthier.

Begin implementing these changes right now to reduce your future risks.

Featured photo credit: Kan Wu via flic.kr

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Holly Chavez

Writer, Entrepreneur, Small Business Owner

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Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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Featured photo credit: Pexels via pexels.com

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