WORK SMARTER NOT HARDER: Tax Time = Perfect Time to FIX Your Finances

Now that we’re all pulling together paperwork and putting together our taxes, it’s the perfect time of year to make a few small changes, to make big gains.

To get your finances in noticeably better shape, for 2020 and beyond, an investment advisor may be a very good idea, and well worth a fee.  The money could come back to you, big time.  Charles Farrell is such an expert, who can help you save here, and not spend there.  Farrell has a couple more worthwhile suggestions.  But the first one is, get an advisor.  You wouldn’t necessarily do your own major plumbing – you would hire a plumber, for something really important.  And your money is.

Next:  Farrell says, saving for retirement is a lot different now than it was before.  It used to be that people died within a few years of retirement; and the rest got by on pensions and social security.  These days, most of us will have to rely on our own savings during our golden years.  As life expectancy rises, Farrell says we need to figure out how to live off of our investments for 20 to 30 years.   Here’s how:

• Figure out your net worth. You wouldn’t start a diet without knowing your weight, right?  It’s the same idea.  Simply subtract what you OWE from what you OWN.  Stephen Brobeck, the executive director of the Consumer Federation of America, says if you don’t do this to gain perspective, it’s easy to get swallowed up by debt.  Too many people think they can afford a loan if they can make the minimum monthly payment.  That’s not true.  Your goal should be working toward having a positive net worth, and savings on top of it. So do the math.
• Don’t buy into the notion of “good” debt. We sometimes hear that home loans and school loans are good debt – because owning property and being educated tend to grow your wealth. Brobeck says don’t fall for this.  Today, millions of families could lose their homes because dodgy brokers convinced them to take out “good” debt on ludicrous terms.  The bottom line is that your debt needs to be kept in proportion to your income.