Financial Security

The American Tax Plan for the 21st century

Does it seem that the rich get all the breaks? Like most things in life, maybe they made their own breaks before they became rich. Plus if you look around you, many of your friends may be better off than you believe. They are the ones who get the 9.9% credit card interest rates, 6% home and new car loans. Their money goes further than yours but you can join their ranks. There is no magic, just some smarts and self-control. Even on a modest income, you can enjoy a great life if you can determine what is truly important and be willing to sacrifice what isn’t.

A recent study of our incarcerated population showed that most were of average intelligence and made solid, well informed long-range decisions. The problem was that they allowed impulse decisions to rule their lives instead of staying the course. Most of our impulse decisions don’t cross the line of being criminal but they do greatly impact our lives. It seems simple to go with the salesman who suggests that the leather would be great and only add $50 to your monthly car payment. But that $50 per month into a mutual fund from age 25 to 65 would result in over $600,000. Those are the little decisions that can make your life so much better.

I will share some tips on making better financial decisions but first the most important point. Know your credit score! That will determine the interest rate you pay on credit cards, houses, cars and other major purchases. By keeping that score high (>600), you will save thousands and thousands of dollars over your lifetime. In some states, it is still legal to tie credit ratings to insurance premiums. How do you get and keep a high credit score? Low debt, pay bills on time and keep only a few credit cards. It is really that simple. But here is the big hint on how to make that happen: don’t buy stuff you don’t need or can’t afford. I know, that is no fun but that is the difference between a good life and struggling paycheck to paycheck.