1Q2018  |  Ages 30 – 49

Three Financial Tips for 2018

As the new year begins, many of us make new year resolutions to find ways to improve our life. A common resolution for many of us might be to save more, but wonder how do we improve our financial situation in order to save more? When it comes to your personal finances, the following best practices will better guide your financial situation throughout the year and get you to saving more.

1. Build a Budget

Let’s start with the basic and talk about tracking your expenses with a budget. When you think of the word budget it doesn’t feel very exciting at first. According to a Gallup poll, one in three Americans actually maintain a monthly budget1. Now if you look at of the most successful Fortune 500 organizations, and how many of them have a budget or a process to track their finances, you’ll realize it’s probably all of them. So, who doesn’t want to run their finances like a Fortune 500 company?

In this day-and-age there are many easy options to run a budget – ranging from online tools, mobile applications, an excel spread sheet, or even writing everything down the old fashion way. Personally, for me, life is busy and time is of the essence. Using mobile applications like Mint or QuickBooks seems to be the most convenient when I am on the go. There is no right or wrong answer for how to maintain a budget – the most important thing is to find what works best for you.

The goal of keeping a budget is to know how much of your money is coming in and going out per month to ensure your spending is in line with your income. Once this is done, you can see if there is a shortfall or if you have additional income left over at the end of each month.

Some of us might feel overwhelmed if we see a shortage in our monthly budget, but by keeping a budget we are taking the rights steps to better our financial situation. In time you will see how easy it is to turn a shortage into to a surplus. For those who already have a surplus, there are areas of opportunities to increase your surplus by maintaining a budget:


How many of us have been caught up in paying for a monthly gym membership we have not used in months, or an entertainment subscription we only use during certain times of the year? Let’s face it, life gets busy and canceling HBO or Netflix after our favorite TV series has ended falls to the bottom of the priority list.

Monthly or annual subscriptions/memberships already have our credit card on file and unless you actively cancel or change the subscription/membership, it is very easy to continue to pay for these services on a regular basis and not realize the money is coming out of our account. Many entertainment subscriptions offer similar services. You might see some overlap in entertainment offerings or find out you’re only using some services during certain times of the year. Analyze each service and ask yourself if you can consolidate or cancel some services. The monthly cost of these add up quickly, for example: $10 per month for an entertainment subscription not being used for six months will easily add up to $60. This might sound like a small amount for some but just like anything else, it’s all the small changes that add up to make a big difference.


This is a necessity to many us in our everyday life, because we need insurance on our vehicles, homes, or ourselves. For that reason, reviewing any type of insurance coverage is a must in order to save. If it’s been awhile since you reviewed your car or home insurance, you might find out your monthly or annual premiums may have increased. Auto insurance rates increased an average of 2-3 percent in the U.S. during 2016 according to a study done by 2017 J.D. Power and associates2. A simple task would be to call your current provider, review your current insurance needs, see what you’re currently paying for, and if your needs meet the services you are paying for. Shopping for other insurance providers also might help you find some cost savings. In addition, if you have your home or auto insurance with different providers, you might save more if you bundle the services with one provider. I personally have found these approaches to be very effective every few years.


In reviewing a budget, we all will have some utilities that we must pay. The area of opportunity is to review if there are some utilities of which you can lower the cost. Depending on where you live, you might have more or less options. If you have more options in your area, you might see some cost savings with cell phone, television, internet, and electric providers. Similar to reviewing your insurance, shopping among other utility providers can help you save. You might also find savings by consolidating your services with one provider. Depending on the services offered in the area, you might want to go through this process every 12 to 24 months.

The items above are a good starting point to track your spending. However, you might find other areas of opportunities for more cost savings. Again, the goal is to minimize your shortage if you have one or more increase in your surplus. After this process, some of us might want to spend any additional remaining money on entertainment (this is my weakness), or shopping (this is my wife’s weakness). It is extremely crucial that we focus on our goals and think about what we are trying to accomplish. If sharing your income and expenses with your spouse or partner, it is also important the goals are set together, and the budget is reviewed together. This helps keep everyone on the same page, because the last thing you want is to have one person on board and the other person be counterproductive. Now that you’ve determined some areas of opportunities, the next question to ask yourself would be what do you do with the additional money? This leads us to the next area of finances to review.

2. Build an Emergency Reserve

Have you thought about what to do if something currently went wrong in your home, your car or you have an unexpected emergency? We all typically experience a time in our life where we will have an emergency that can be a financial surprise. The question is, how are we prepared to handle it? In order to be prepared to manage an unexpected financial surprise, we should have some money saved up to specifically pay for these types of events.

The general rule of thumb based on financial planners is we should have about three to six months of expenses saved. Everyone’s situation is different, and some might even prefer to have one year of expenses in savings, in case you happen to lose your job and it takes a full year to find a new one. In some cases, if you happen to have a large amount of debt, it might make sense to have a smaller emergency reserved saved up in order to pay off your debt first. You still need to have something saved so you do not gain more debt during a future emergency. The last thing you want to do is rob Peter to pay Paul.

Once you have determined a comfortable savings amount, it’s important to have quick access to your emergency reserve and save it in a short-term savings account at a bank or online savings account. Your interest will be low, but again, the point of this emergency reserve is to have quick access to it in case you need it.

3. Pay Off Credit Card Debt

If you have any credit card debt, know that you’re not alone. We are a culture of instant gratification and use credit cards to our detriment at times. According to Nerd Wallet, the average household credit card debt account balance is about $16,000. In 2017, American’s total credit card debt had increased by nearly 8 percent to $905 billion.

Due to credit card debt being a major issue in our country, it is important you track it just like having a budget or spending plan. The first step is to make a list of all your credit cards, include total balances, monthly payments, and line them up from the highest interest-rate credit cards to the lowest interest rate credit cards. Similar to tracking your budget, there are many online tools or mobile applications, or you can track it in an accessible notebook.

The next step will be to pay off your highest interest-rate credit cards first with the objective to help minimize your long-term interest charges. Next, go back to your monthly budget, consider your monthly surplus, and start sending extra payments to pay off your highest interest rate credit cards. Keep in mind you will still want to continue to make your minimum monthly payment on all other credit cards. Once you have paid one credit card completely, work on paying off the next highest interest rate credit card. At times you might receive promotional interest rate credit card offers that allow you to transfer balances from higher interest rates to a lower promotional interest rate. These promotional interest rate can typically come with a time restraint so keep track of when the offer ends. In addition, you might have to pay an additional 2 percent to 5 percent flat rate for the dollar amount transferred. All factors should be taken into consideration to ensure this option makes sense for you.

Keep in mind that paying off credit card debt does not happen overnight, however, if you consider budgeting and tracking expenses you will see the results overtime. You will enhance your financial situation and have a larger surplus. It is extremely important once you have paid off your credit card debt to discontinue using your credit cards by all means.

Reviewing these three areas of your finances will put you in a better financial situation than when you started. Ultimately, the goal is to save more and to be able to accomplish your life’s dreams and goals. This New Year is for a new resolution, I challenge you to use these tools to improve your finances and better your financial situation throughout the year!





Marco Melero, C(k)P®
Multicultural Education Strategist
[email protected]


  1.  Gallup News, “One in Three Americans Prepare a Detailed Household Budget,” June 2013
  2.  J.D. Power, “Facing Modest Rate Increases, Auto Insurers Increase Reliance on Service, Agents,” May 2017
  3.  Nerd Wallet, “2017 American Household Credit Card Debt Study,” November 2017

Advisory services offered through Prime Capital Investment Advisors, LLC. (“PCIA”), a Registered Investment Adviser.  PCIA: 6201 College Blvd., 7th Floor, Overland Park, KS 66211. PCIA doing business as Qualified Plan Advisors (“QPA”).

This commentary is provided for information purposes only and does not pertain to any security product or service and is not an offer or solicitation of an offer to buy or sell any product or service.

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