Understanding how much money you have coming in and where that money goes are the two most important factors in managing your day-to-day finances. Thinking about what you really need to spend now and what you should be putting away for the future are key. But how much should go where, and how do you get started?
Taking the first steps to getting your finances under control can be hard. That’s where a financial advisor can help. I can work with you to do everything from helping you set goals, to making a budget you can stick to and creating a personalized financial plan just for you.
Managing your money can sometimes feel overwhelming but it doesn’t have to. The right plan can give you the confidence you need to make your future vision a reality.
Most of us start our work life with the future in mind. The goal is to build our net worth so that we can live comfortably, give our kids a good education and enjoy our post-work life any way we please. Making that happen comes down to some very practical, immediate realities: keeping track of the money you have coming in and going out, paying down most expensive debt first and building up assets.
When you analyze your spending, you may find that you’re paying a lot in interest charges on your credit card, car loan, or line of credit. Most of this is what financial advisor consider “bad” debt. Bad debt is debt that you take on to buy personal items, such as cars, vacations and appliances. These items depreciate in value and do not contribute to your net worth. Furthermore, the interest you pay isn’t tax deductible, so it’s a very expensive form of borrowing.
Good debt is debt you incur to buy things that go up in value or add to your earning power; like real estate, investments, and education. With the exception of your principal residence, the debt you incur for these types of purchases is usually tax deductible.