CHARLOTTE, N.C. (FOX 46 CHARLOTTE) - What’s the Frank Sinatra lyric? “Regrets, I’ve had a few…” and when it involves finances, that applies to all of us. You can’t change the past but in Money On Your Mind, we’re tackling your top money regrets and getting results that work.
We asked you to share your regrets. Overwhelmingly, you said not having an emergency fund was your top regret. Financial planner Abby Bennett with South Park-based Carolinas Investing says it’s easy to change that by starting with a budget.
“No one likes the ‘b’ word, but there really is power in knowing where your money is going. It’s worth the effort to put some sort of budget or plan in place as a family and then decide where you can make cuts to build that emergency fund,” she says.
How much you save really depends on who’s working in your family. Bennett says, “What you’re aiming for if two people are working, maybe it’s three to six months of living expenses. If it’s one income, maybe it’s more like six to 12 months.”
Forget using credit cards in an emergency, she says.
“If you are in a position where you feel it’s hard to find the cash flow for an emergency fund, you are going to have a hard time coming up with the cash flow to pay for that credit card.”
Speaking of credit cards, that’s regret number two.
“The first step is to organize all the credit cards you have by interest rate, and then I would suggest tackling the highest interest rate first. You’re going to pay off your debt faster that way.”
It may seem impossible to overcome that credit card debt but what’s important is that you start TODAY, Bennett says.
“And just chip away at it, like anything else in life that’s worth working for, do it a little at a time. And then it’s gone and that relief is worth it, it’s absolutely worth it.”
Maybe it’s student loan debt you’re drowning in.
Bennett says there are two things to focus on. One is payment plans, the other is interest rates.
“What the federal student loan programs allow you to do is pick payment plans that are income based, or can be graduated. Some of those may be eligible for forgiveness.”
And if your interest rates are high, she says, “You may want to look into refinancing.”
Finally, we’re not getting any younger, and retirement is a big worry for our viewers. That’s why your plan should include several action steps.
“Make sure if you have a retirement plan at work that you are at least contributing up to the match. It’s a 100 percent return on a dollar you put in your account so do that, you don’t want to turn away free money.”
Then Bennett says look for tax advantaged saving such as health saving accounts or flexible spending accounts.
“One less dollar to the tax man is one more dollar that can work for you.”
And scrutinize your cash flow for places to cut spending to save for later, she says.
“It may be a little painful but if you can do a little bit at a time, you can over time build that balance and allow that compound interest to work in your favor and hopefully put you in a better position.”
As always, if you’d like to work on these regrets and build a solid financial plan, you can go to Diana Alvear’s facebook page. That’s where you’ll find Abby Bennett’s contact information and get results!