The first and second week of August, 2011 has witnessed some significant changes in the American financial history - sealing of debt deal, stock market crash, drop of US credit rating, etc. While the threat of another recession is looming in the country, it is the perfect time to stabilize your financial footing. It is true that you may not be able to take some bold financial steps at the moment. However, you can easily take some baby financial steps to build your financial health slowly. Read along to gather knowledge on 4 financial steps you can take now.
4 Financial steps you should take post debt deal
Here are the 4 financial steps you must take now:
1. Renovate your financial house: The interest rates have been remained low during the past few months due to financial turmoil in the country. It has given a financial relief to the citizens of the country. However, the interest rates may start escalating very soon. This is why if you have huge balances on cash advance loans and plastic cards, then pay them off now. It will help you save a substantial amount of money in the long run.
2. Start property planning: The housing market has not yet recovered from the rough patch. The price of the houses is still low. It keeps dropping and creates new record. You may feel like the happiest man on the earth for not having a house right now. You may have even given up your dream to buy a home seeing the predicament of most of the homeowners.
But if you start saving some money in your bank account from now onwards, then you can buy a house in future. You'll get a plenty of time to save money for making big down payment. The price of the houses may reach rock-bottom by the time you gather money for making a big down payment. Apart from that, the strictest financial institutions will not be able to reject your loan application.
3. Secure your golden years of life: If you live from paycheck to paycheck, then it will be hard for you to save money for securing the golden years of your life. But post deal, significant changes are expected to be made on the Social Security benefits and health care plans such as Medicare. The federal government may cut down the money supply for these programs. So, it is better to take the responsibility to secure your retirement years on your own instead of depending upon the government.
Contribute money to the retirement accounts - IRA, Roth IRA, 401(k), etc. You may even ask your employer to deduct a certain amount from your wage each month and contribute it to your retirement account. After the stock market crash in the second week of August, 2011, the price of the shares are quite low. Purchase good stocks to make money in the long run.
4. Create financial plan for your kid: Creating a fund for your son's higher education may not be there in your wish list right now, especially when he is only 2 years old. But financial experts are of the opinion that it is the right time to start saving money for your child's education.
You can research on the college saving plans and choose the one that will be best for your child. Some of these plans will enable you to get tax breaks on the money you earn from various investments. If you spend the earned money for funding your child's education, then you won't have to pay any tax to the government.