4 back-to-school season money moves for parents
There’s a part of my brain that still thinks the new year starts in September, not January. I may not be picking a new class schedule or buying a Trapper Keeper (Google it, millennials), but there’s still that hopeful feeling that things are going to be better this year.
This goes for parents, too. If you can relate, then this is the perfect time of year to give yourself some back-to-school financial goals—and to rethink and reset your priorities. Here are four easy things you can do to improve your financial life:
If you’re confused about what to do first with your money, follow the numbers. And by “numbers” I mean “interest rates.” In other words: Pay off your highest-rate debt first. Credit cards typically carry an interest rate of 18%.
Ignore people who say it’s dumb to keep money in a savings account
These accounts may not earn much interest, but at least you know your money’s protected. Ideally you’d have enough to last you about 9 months, which is how long a typical stretch of unemployment lasts.
Save for retirement
Believe me when I say that retirement plans aren’t just for retirement. Think of them as super-smart savings accounts: they’re a way to grow your money with tax breaks. The best place to save is a 401(k) with a company matching program—since that’s basically free money. If you don’t have matching, see if you can open an IRA, which offers tax breaks and features more flexibility than a 401(k) to withdraw money when you really need it.
Get to know your credit
To get a free version of your credit score, try creditkarma.com. You can also get a free copy of your credit report at annualcreditreport.com—it’s a good idea to do this once a year to be sure there aren’t any errors. And remember: The easiest way to have a good score is to pay your bills on time and in full, every month.