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Celebrating Black History Month is a tremendous opportunity to acknowledge our past achievements, address present challenges and dream about future possibilities. The legacy of Dr. Martin Luther King Jr. inspires us to dream about a future that affords us to live in comfort and prosperity. He encourages us to build a legacy of hope and freedom that can be realized in every aspect of our lives. It is in that spirit that we encourage you to evaluate your dream of financial security.
AARP is here to inspire you! Here are several steps that can help work toward a fresh new perspective about your finances.
Establish a plan: Set short- and long-term financial goals. Planning is important to any goal you set — and your money is not any different. One of the first things you might want to consider is developing a budget. AARP’s Budget Calculator can help you achieve your savings goals. It all begins with tracking your spending — knowing what’s coming in and what’s going out.
Clean up your debt and improve your credit. Debt can be the primary cause for not reaching your financial dreams. Start now by examining your outstanding debt — credit cards, student loans, car loans, etc. If you find you are spending too much on wants and not needs, identify ways to cut your spending. Attempt to reduce your credit card debt by first paying down those balances with the highest interest rates, and then work from there. AARP’s Credit Card Payoff Calculator can help.
Build your reserves. Building your nest egg today will help you achieve financial freedom in the future. When something unexpected happens — a sudden illness or job loss — it’s important to have money on hand to help you get through it. Work on building up savings that will cover six months of expenses. When you finally reduce your credit card debt, you can put money toward your savings or retirement accounts. Your bank and/or credit union is a good place to start to build on your short-term savings goals.
Invest for the long haul. Have you considered how much it will cost to live in the future? The cost of living, health care costs and ultimately the lifestyle you want to maintain will determine how much you will need. AARP’s Retirement Calculator can help you determine just how you need to save today, for when you decide you no longer want to work, tomorrow.
If you have access to a defined benefit plan through your employer, make sure you are contributing the maximum to receive the employer match. Don’t leave free money on the table. If you don’t have an employer plan, consider opening a Roth IRA that can help you save.
No matter how intimidating the mountain may appear, you can conquer it. Develop a plan of action and implement it. We all have dreams. Will you act to make yours a reality?
Lee Baker is a certified financial planner and financial expert for AARP Financial Freedom.
AARP helps people turn their goals and dreams into real possibilities, strengthens communities and fights for and equips Americans 50 and older to live their best lives. Discover all the ways AARP can help you, your family and your community at AARP Black Community.
Photo: Getty Images
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- Celebrate Black History Month and Get 20% Off Membership Dues Plus a Free Gift When You Join AARP.
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