With the current state of the economy, consumers are paying more for just about everything from the homes we buy to the food we eat.
Consumer Advisor Clark Howard says now is the time to buckle down, and if you want to buy something you don’t really need, don’t do it.
“Don’t do it right now. You really need to be careful and be mindful,” Clark says.
He says it’s hard to do but worth it. He adds that you should make sure you are putting money away in an emergency fund.
“Divert a portion of every paycheck straight into a savings account so you start building up money for the what-ifs. And if the what-ifs don’t happen, think about the benefit. You’ve already put your life in a better place,” he says.
Next tackle credit cards. Put away the plastic and start paying off any credit card debt. Clark recommends paying the minimum on your lower interest rate cards.
“Then throw every single penny and dollar at the one with the highest interest rate. What happens is over time you’re starting step by step to pay less of your money towards interest and more going towards the balance, and eventually you get healthy,” Clark says.
Stay healthy by living below your means!! Again, not easy. But Clark says doing the closet test can help.
“You go and you open up closet by closet and you see all the things in there that you bought that you’ve never worn. The shoes, the clothes, the sporting goods that you never played with. So, when you do the closet test it hits you right solid in the face that you’re spending this money that is really having no positive benefit in your life.”
When it comes to putting away money into a rainy-day fund, Clark says set up a savings account at an online bank since they offer the most interest, around four percent. They are FDIC-insured.
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