If you’re aiming to be smart with your money there are many ways you can approach it. Here are three smart money moves you definitely won’t regret in the long run.
Smart Money Moves #1: Pay down high interest debt
The most important (in our opinion) of smart money moves is paying off high-interest debt. High-interest debt is easily one of the first forms of debt you should work to pay off quickly. Loans with lower interest rates like mortgages, student and auto loans are generally manageable with their month-to-month payments. Carrying around high-interest debt is difficult for many reasons, and it often feels like you’re not making any progress with the principal when you’re making the minimum monthly payments. It can feel like you’re only pay toward the interest and in many cases you’re paying very little to the principal on a high-interest loan and paying more toward interest.
Work to pay off high-interest debt quickly, so you can work toward our next step. Creating an emergency fund.
Smart Money Moves #2: Create an emergency fund
Once you’re out of debt, it’s important to create an emergency fund to avoid getting back into debt if an emergency transpires. Medical emergencies, a job loss, your car breaks down, your roof leaks, emergencies come in all shapes and sizes. You want to be prepared.
There is a lot of chatter about how much you should have in an emergency fund. The average is anywhere from $1,000 as a small goal to six months of living expenses in the event of a job loss. You have to figure out where you land in terms of the amount you aim to save for your emergency fund.
Smart Money Moves #2: Check your credit report
A staggering amount of people have material errors on their credit reports. According to the Federal Trade Commission 21% of people in the US have errors on their credit reports. By checking your credit often, (monthly or bi-monthly) you can gain valuable insight into not only the health of your credit, but any misleading, incorrect or inaccurate information on your credit report.
If you see any errors, work with a reputable credit repair company. Credit repair is still a young industry and there are skeptics, but the investment pays for itself if you work with the right company. Having good credit can prove invaluable when you’re applying for new credit saving you money in the long run.