July 17, 2019 · Budget, Credit, Insurance, Investment, Real Estate, Retirement, Security, Taxes, Wedding
Before you get started, be sure to read Part One of our 10 Steps to Financial Success blog series. And check back for the final steps soon!
Now that you’re paying yourself first by setting aside money for savings, another important part of money management should be your next priority. You’re ready to take Step 6, which is deleting your debt. Whether it’s credit card interest, a car loan, a home mortgage, college or a payday loan, if you can cut your debt even a little bit, it will benefit every other part of your finances and your life. The following are just a few approaches for managing debt:
This next step involves a major life event, but it’s not an activity that may be available or is appropriate for everyone. What is this big step? It’s buying a home—such as a house, townhouse, or condominium. There are well-known benefits to buying home; the first is that it generally is considered an investment, as real estate often—but not always—increases in value over time.
Another advantage to home ownership is that current U.S. federal tax regulations may allow you to deduct the interest you pay on your mortgage from your income taxes. This annual deduction is a terrific way to lower your taxes, but always keep in mind that tax laws change and we can’t know how those changes could affect this deduction.
We’ve discussed some of the advantages of home ownership, but why isn’t it right for everyone? Honestly, it’s simply not affordable for a lot of people. Prospective homeowners also need to think through their career and lifestyle factors such as job security, where they want to live, getting married, and starting a family before committing to buying a home.
An important part of managing your household finances is determining if—and then how—you invest your money. As with any investment, there are financial risks to investing, and they should be investigated and considered thoroughly. You may want to enlist the help of an investment professional to discuss your potential investment choices and their risks.