My fellow Americans, it’s June and 2018 is nearly half over. It’s a great time to take stock of where your personal finances are and check in on your financial goals. Here at newcashview.com, I can tell you we’ve been watching old financial issues rear their ugly heads recently in a big, big way. Just to keep you in the loop, let’s take a few minutes to talk about the big issues that are still on table for 2018.
First, let’s talk about the new tax law. If you haven’t touched base with your tax professional about what changes you should make to your W-4 to get prepared for the 2019 tax season, there’s no time like the present. You don’t want to end up holding the bag (read, having to pay), in April of 2019. That would really not be fun. There’s still time for you to make meaningful adjustments to your withholdings so, do yourself a favor and make sure you are updated. If you want a little background about what to consider when adjusting your withholdings, check out the NCVTV episode where we talk about the basic changes to the tax code for the 2018 season. Remember, small actions matter and there’s still time for you to make the small changes that could add up to big savings for you later on!
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Second, where are you with your secured debt accounts? If you don’t know what that means, it’s time for some basic financial literacy education, stat! In a nutshell, a secured debt is a loan that has collateral the creditor can take if you don’t make your payment. For most people, this is your house or your car. Recently, I’ve done some videos about mortgages that you may want to watch to sharpen your mortgage chops, you can check them out here and here. This is great info so don’t miss out.
The best tip I can give you about your mortgage is to make bi-weekly payments, if possible. This means you are making half of your payment in the first part of the month and half in the second part of the month. You have to make sure your mortgage company will authorize this payment change and credit the payments as soon as you make them in order to get the full financial benefit. Making bi-weekly payments will shorten the length of your mortgage and save you thousands and thousands of dollars in interest.
A good rule of thumb is any time you have debt with an interest rate, the quicker you can get out from under it, the more money you’ll save. (I know, duh! Right?) This is never more true than with secured debt. If you’ve ever looked at the full amount you’ve paid for a house or car after you’ve made every payment, you’ll see what I mean. Do yourself a favor and pay down your debt as soon as you can, it can’t be said enough.
Last, but by no means least, let’s talk about student loans. Student loan debt has crept up to well over a trillion dollars, nationally. If you’ve been paying attention to any of my content, you know that student loans are an issue I’ve talked about a lot. My concern about student loan debt is that it continues to climb and there does not appear to be any substantive relief on the horizon. It’s on us 99%ers to get this craziness under control before things go south economically.
Diane Sawyer did a great news story recently about the underlying issues with student loan debt, recently. Here’s the link, give it a watch if you can. Three thousand people a day are defaulting on their student loans. That is an astounding statistic especially since student loan debt, in most circumstances, MUST be paid back. For some reason, people don’t see student loan debt as an issue, until they are suffocating under a ton of it.
In order to get student loan debt under control, we need to attack it on several different levels. You can start by helping your kids make good choices about accumulating student loan debt in the first place. Also, parents should avoid co-signing for student loan debt, if at all possible. I know how hard that is but, and trust me on this, you’ll thank me later. Even though it’s unsecured, student loan debt is almost never dischargeable in bankruptcy.
Another important thing to remember is budget, budget, BUDGET! This is how you build wealth, anyway. However, it’s even more important when it comes to student loan debt. Once you have your basic living expenses under control, pick the debt with the highest interest rate and start hitting it with as much cash as you can (a good rule of thumb is make the minimum payment plus the interest rate every month). Then see if you can negotiate a lower interest rate. You may get a little knocked off if you pay by auto-draft, for example. The old adage is true, ask not, have not.
Remember, do your research before consolidating and make sure you keep your servicers on their toes. They tend to be less than accurate so, you need to be the responsible one and keep track of EVERYTHING! Look at it as taking control of your finances. Be empowered! Take charge of your debt and show it who’s boss!
So, that’s the State of the Debt Address for 2018. I hope this has inspired you to revisit your financial goals and see what kind of progress you’ve made on the road to wealth. It’s important not to forget that small actions matter. They matter so much that it’s really the overall accumulation of small right actions that matter far more than your mistakes and slip ups. The goal is to get it right more often than not and you’ll live a life you never dreamed possible. I guarantee it.
Spend well, my friend!
The Dollar Lama
P.S. Make sure you check out my online courses, books and resources, too! Investing in your money management education is an investment in yourself. That’s the best investment you’ll ever make, I guarantee it! Don’t forget my weekly Facebook live videos on Facebook.com/newcashview, Instagram @joyalfordbrand and on my YouTube channel NCVTV. You can catch me twice, on Mondays between 3:00 p.m. and 4:00 p.m. for my Monday Money Management Minute and Thursday evenings between 7:00 and 9:00 (Eastern Standard time), for my weekly NCVTV episode. They are packed full of useful and entertaining money management information! If you’ve missed any NCVTV episodes, you can see the latest on newcashview.com or you can check out my YouTube channel and get caught up! You can get there by clicking here. Remember, like and share the NCVTV videos on Facebook and all your social media platforms, so others can benefit from them, too!
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