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It’s that time of year again when you feel like the slate is wiped clean and you get to start over again. Whether you've resolved to get more exercise, go on a diet or take the vacation you never got around to last year, the New Year is a great time for new beginnings. Consider committing yourself to making 2008 the year you shape up your finances.
Reduce Debt
Excess debt is one of the biggest obstacles in financial planning. Too much debt in the form of credit cards can hurt your credit rating and cause loan applications, such as for mortgage financing, to be denied by the bank or lender. One option would be to consider paying off your high-interest credit card debt or transferring the balance to a lower interest loan until the amount is paid off. If you're already a homeowner, you may want to consider consolidating debt with a home equity loan or line of credit (available in most states). In addition to possibly getting a lower interest rate, the interest you pay may be tax deductible. You should contact a financial advisor regarding the deductibility of interest on home equity credit.
Set Your Financial Goals
You may already have your financial objectives in mind, but just aren't sure how to achieve them. Or perhaps the goals you previously set have now changed. Your needs may no longer be the same now as when you were just beginning your career, or buying your first home, or even getting married and starting a family. Basically as you move through your life stages, your financial needs - long and short term - can change. It's a good idea to periodically review your financial plan to make sure it's still in line with your financial goals. Consulting a financial advisor can help you formulate a plan that may include both short- and long-term goals. Short-term goals focus on more concrete objectives, for example, setting aside $100 a month for a vacation. Long-term goals relate more to abstract objectives, such as saving enough to retire when you are 55.
Treat Your Savings as a Bill
Most people pay their bills and save what's left. That strategy is fine, as long as there is something left over. For many, a better system is to try and save or invest a portion of your money every payday. Even better, many employer-sponsored 401(k)s make your investments automatically. Or, you can put a portion of each paycheck into savings with direct deposit. Then, sit back and watch it grow.
Consider adding planning your financial future to your list of New Year's resolutions for '08. Whether you're just starting out, or getting ready to retire, having a financial plan in place is a goal well worth achieving. These are just some ideas to get you thinking about your financial well being, and thinking about it is one step closer to achieving it. At GMAC Mortgage, we have a wide variety of home financing products to help you achieve your homeownership goals. I welcome the opportunity to discuss these goals with you. Happy New Year!
mailto:cindy.kingree@gmacm.com
Cindy Kingree
Senior Loan Officer
590 Neff Avenue
Suite 4000
Harrisonburg, VA 22801
Office: 540-810-4888
Fax: 866-316-9893
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