Did you spend too much over the holidays? Did the kids’ gift lists get a bit carried away? Ready for a fresh financial start?
Martin Cole, Certified Financial Planner with Thrivent Financial in downtown Waconia, has some tips for those of us who may have some buyer’s remorse after the holidays.
“If you overspent over the holidays, it’s important to pay off high-interest credit card debt as soon as possible,” Martin says. “Interest rates can be 15-20% or higher. Prioritize future spending to focus on paying off these debts.”
Martin also recommends that to prevent this from happening next time, set a budget for gifts and set aside money each month. This way, you can pay cash for gifts next holiday season.
If you’re shocked looking at your credit card statement, or even if you’re feeling pretty good about your holiday spending, Martin can help you get in better financial shape. Here are some recommendations to get you started:
Save
“Some think that in order to save, you need to invest large amounts,” Martin says. “This isn’t true. You can start investing with as little as $50 per month. The most important thing is to start saving. Then, as your budget allows, increase this amount over time. Once investment momentum starts and your accounts are growing, it’s easier to increase your investments.”
Prioritize
Prioritize spending so you’re spending less than your income.
“Spending $15 per day going out to lunch during the work week or $5 for a coffee every day can really add up over time,” Martin says. “It may not seem like a lot, but over a month, this can add up to $300. In a year, that’s $3,600.”
Budget
Set a budget so you don’t overspend and go into debt. Track your spending so you’re conscious of where your funds are going.
“This way, you can direct your funds toward your most important financial goals,” Martin says.
Change Your Habits
Get in the habit of saving every month.
“Some people save whatever is left over at the end of the month,” Martin says. “Treat yourself as a priority and save first. Then spend what’s left.”
Prepare for Emergencies
Have an emergency fund of three to six months of income set aside.
“If there’s a large unexpected expense,” Martin says. “Your emergency fund allows you to pay for this with cash instead of putting it on a credit card.”
And speaking of credit, Martin urges you to maintain your credit score by making your payments on time.
“Generally, a score of 750 or more is considered a good score,” he says. “Check your credit score on an annual basis.”
Be Ready for the Unthinkable
Be prepared for the what-ifs by having enough life, disability, and long-term care insurance so that you have it if you need it.
“If there’s a premature death of a spouse or other family member, this can significantly impact your finances,” he says. “In the event of a disability, your income could stop or be greatly reduced, which can also harm your financial health. Disability income insurance can help protect your income.”
Ready to get financially healthy in 2025? Set up an appointment with Martin (the first one is free!). You can get as little or as much help as you want. He has 25 years of experience in financial planning, so he’s ready to help clients at all levels of income and phases of planning. Call the office at 952-999-7686 or email at martin.cole@thrivent.com
Some think that in order to save, you need to invest large amounts. This isn’t true. You can start investing with as little as $50 per month. The most important thing is to start saving.