Saving vs. Debt Elimination, Prioritize Your Way to Success
(Vocus/PRWEB) January 25, 2011
Everyone wants to be debt-free and financially secure, yet this American Dream continues to elude many. Paying only the minimum on credit cards is a bad habit that consumers find hard to break and few people make regular contributions to their saving account. Ted Hunter, author of Money Smart: How to Spend, Save, Eliminate Debt, and Achieve Financial Freedom believes it’s critical that consumers create a plan that will build their bank account and not their credit card balances. One of the cornerstones of such a plan is having a smart and effective priority sequence for how you use your money. “Anyone can create a spending and saving plan, it’s not difficult once you know how to prioritize,” says Hunter.
Hunter recommends making a commitment to save and, unless there is a very good reason not to, adhering to the following priority sequence:
1. Stop using credit cards and pay only the minimum payments until step four is reached.
2. Aggressively save for an emergency fund starting with at least one month’s expenses. This will create a cash cushion for emergencies rather than needing to pull out the credit card.
3. If an employer will match contributions to the company 401(k) plan, save the amount necessary to get the full matching dollars.
4. Allocate 50% of savings to an emergency fund, and 50% to debt reduction until four to six months’ of living expenses are covered in the emergency fund; four months for a two-income family, six months for one income.
5. Now focus on eliminating all debt except for home and car loans.
6. Build up annual savings until the maximum tax-deferred savings allowed by IRS guidelines is reached.
7. Pay off any car loans, then start saving $ 250 a month in a new car fund.
8. Increase saving to at least 15% of pre-tax income. Save for home ownership If not currently in a home. Homeowners should also accelerate mortgage payments and continue until it is paid off. Also, during times when fixed-interest rates such as CDs have fallen below 3.5%, be aware that making extra mortgage payments provide a better after-tax return on your money.
9. Families with children might want to start a specific education fund based on the child’s abilities, needs and desires.
“Small monthly changes can have a huge impact on savings and debt reduction, especially when you follow the right sequence,” states Hunter, “Start prioritizing and your saving and spending plan will put you on the path to financial freedom in no time.”
Combining Hunter’s sixty years of experience and a common sense approach, Money Smart shows readers that they are capable of managing their money better than anyone else. Presenting easy-to-use tools and a clear list of rules to follow, Money Smart teaches readers to make solid, educated decisions so they can effectively eliminate debt, manage their money and make their dreams a reality.
Money Smart can be purchased online at http://www.MoneySmartOnline.com and Amazon.com.
About the Author
Ted Hunter has been a successful businessman and entrepreneur for over 60 years, including several decades as an insider in both the real estate industry and on Wall Street. Thirty years ago, he built a successful real estate brokerage with over 100 agents, which went bust in the real estate crash of the late ’80s. Learning from this experience, he entered the world of Wall Street at the end of 1990. He helped his clients to consistently outperform the market, and then advised them to get out of the stock market in early 2000 before the market started to dive. In the fall of 2005 he did it again by warning all who would listen of the coming crash of the real estate market. He is passionate about exposing the problems with the current money management system and sharing a better approach.
Ted is a native of the New York City area and now resides in Davis, California, with his wife, Suchit, and their daughter, Kat. Ted is also the proud father of three adult sons: John, Dave, and Dan.
MEDIA CONTACT:
Email: connie(at)georgeacommunications(dot)com
Phone: 708-715-2079
Web: http://www.MoneySmartOnline.com
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