Brent Arends just wrote a piece in The Wall Street Journal on the topic of a stimulus package and personal finances. He rightfully turns the issue around to focus on how one can manage costs, which is much more insightful than figuring out the indirect impact of new infrastructure investment on one’s bank account. Here’s a quick summary of some of his best advice:
- Review and update (or create) a will and estate plan.
- Focus on paying down all credit card debt now, and especially before placing additional funds in any type of investment vehicle.
- Review and trim your expenses, and focus specifically on reducing any recurring monthly items.
- Adjust insurance plans to ones with higher deductibles to cut costs, unless you have a solid reason to believe that higher deductibles will cost you more.
- Go over and understand your existing investments despite the recent turmoil in the markets. Accounts should be periodically rebalanced irrespective of market conditions.
- Sit down with a blank piece of paper and write out all of your long-term goals. This is an excellent exercise for planning anything, including a debt reduction strategy and personal finances more broadly. It will encourage you to think about what cuts in expenses you will need to make now in order to stay on course towards becoming debt-free, retiring, or paying college expenses.
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs. DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.
Tags: debt, Debt Management, personal finance, stimulus package
