Enjoy a smoother financial road this year
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It’s always nice to get good news at the start of a New Year – and US government statistics show that average household income is up in Greensboro and all of North Carolina. Third quarter analysis shows that average NC household income has grown to $41,114 as of third quarter 2015 (July-September). This is lower than the national average of more than $48k for the same period, but North Carolina’s growth is faster than the national growth, so that makes up for it to some extent.
With growing income opportunities for North Carolina consumers in the coming year, it means that Greensboro consumers and families have a chance to get out of debt, buy a home, or beef up their retirement savings. Here are some things to consider to make the most of the new prosperity that Greensboro, NC is enjoying.
#1 Build up a rainy day fund
There are different types of savings that you should have set up. Long-term savings and investments are perfect for retirement, but you also need a liquid cash savings to help with emergencies. A car breakdown, major appliance failing, or another problem that needs immediate cash is best solved by a $1,000-$2,000 emergency account. If you don’t have one, set up an account that you can’t easily get to – such as a savings account with a separate ATM card that you don’t keep on you. That way the money is there when you need it, but you can’t dip into it casually.
#2 Increase retirement savings
If you’re not maxing out your annual 401(k) contributions or aren’t saving at all for retirement, now is the time to start, no matter your age. It’s never too early or too late to start saving for your golden years – after all, you’ll be getting older every day whether you’re saving or not. If your company offers a matching contribution, you’re giving money away if you don’t invest enough to get all of that match. Plus, using an employer 401(k) comes with the advantage of saving tax-free. That means your paycheck will feel less of a pinch because it lowers your taxable income.
#3 Pay down high-interest debt
If you ran up your credit cards over Christmas, tackle these right away, starting with the highest interest cards. It’s never a good idea to charge more on your credit cards than you can pay off that month. Interest charges can quickly make credit card charges unmanageable and can get you in over your head with debt. Plus, if you keep more than 30% of your credit line balances in use, your credit score will drop. That’s never a good thing.
#4 Get your spending under control
If you’re operating without a budget, that’s never a smart thing. If you don’t know what you’re spending, you won’t know if you’re overspending. Budgeting is something most American households don’t do, but should. There are many great free and low cost apps for your smartphone and tools online to help you set up a budget and track your spending so you can see where all your money goes. You may be surprised to see where all your money is going.
#5 Consider a fresh start with bankruptcy
If you’re earning a decent living, but just can’t seem to get caught up and are dealing with debt collections, past due bills, and are existing paycheck to paycheck, there is a better way. Chapter 7 bankruptcy can wipe out credit card debt, medical bills and more and offers a clean slate on many debts. Even if you’re earning a healthy wage, you still may qualify for Chapter 7 so long as your debts are out of proportion with your income. And Chapter 13 is open to all wage earners to give you time to catch up on past due balances and get your finances sorted.
To find out more about getting your debts under control, Greensboro consumers can contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 for a free Greensboro bankruptcy consultation near you at one of our North Carolina location in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington. Don’t start the New Year in debt – we can help.