By: Mike Earl, CFP®, CPWA®
1) Increase your 401k contribution rate by one percentage point.
If you have the Roth 401k option at work, use that bucket for your one percentage point increase. You will not miss that extra 1% of your annual pay.
2) Increase your monthly mortgage payment by $100.
Log on to your mortgage provider’s website and update your auto-pay settings. It’s very simple to increase your monthly payment by $100. That extra $100 is immediately applied to principal. It will save you thousands of dollars of interest and speed up your mortgage payoff date.
3) Start investing $100 per month into a non-retirement investment account.
For our most successful clients, investing money beyond their 401k (or 403b) has been pivotal in helping them build wealth. We can help you get started with such an account in a matter of minutes.
4) Fund a Roth IRA for 2017.
If you’re unsure whether you are within the income limits for a Roth IRA contribution, talk to us.
5) Review your spending in just one category over the past 90 days.
If there is an area in your life where you might be susceptible to over-spending (e.g. eating out; clothing; etc.), take a look at how much you have spent in that category over the past 90 days. Your bank or credit card company likely has great online tools to help you review your spending in that one category.
After reviewing your spending in that category, consider setting a monthly budget for that one category. Once you determine your goal for monthly spending in that category, use the envelope system. Set aside the pre-determined amount of cash in an envelope, then only spend on that category out of that envelope.
6) Consider increasing your property & casualty insurance deductibles.
One piece of our service offering at The Wealth Group is providing comprehensive insurance reviews for our clients. We are almost always able to save our clients money in annual premiums, while simultaneously improving their coverages.
7) Ask The Wealth Group what your retirement savings percentage has been thus far for 2017. Determine a goal for 2018.
8) Review your charitable giving. Consider increasing your giving.
Little known fact: 97% of millionaires donate to charitable organizations. As you continue to build your wealth, continue to think about how your resources can be a blessing to others. Counter-intuitively, those that give generously often find themselves financially successful.