5 Quick (and Easy) Money Tips to Remember

Here are some quick suggestions for better managing your money—no matter how much money you have.

What’s the difference between good debt and bad debt? Mortgage debt that is less than a quarter of your gross income is unlikely to be bad debt, unless you are paying an out-of-market interest rate on the loan. Student loan debt is often among the best types of debt because it generally carries a low interest rate. But credit cards are almost always bad debt, no matter how many airline miles you may be earning.

Address your debt as swiftly and directly as you can, but not at the expense of future planning. Differentiate between long-term “good debt,” and high-interest-rate “bad debt”; the latter should be paid off as quickly as possible, whereas the former can be managed alongside a solid investing strategy. Make sure you aren’t accumulating new debt, though, as it will counter your strategy.

Understand your financial past to map your financial future. The Intelligent Investor, by Benjamin Graham, is cited by legendary investor Warren Buffett and many others. Its inspiration will give you a great feel for investment basics and is considered by many to be the bible of value investors. Value investors are great investors to emulate.

The general rule of thumb in retirement investing is to try to replace 70% to 80% of your pre-retirement income during retirement, with appropriate adjustments for the expected inflation rate. But for most people, spending will peak in their mid-40s to early 50s. From there, income may still increase, but spending is likely to decline. If you base what you need in retirement on what you’re spending now, you may be overlooking an overall dip in your expenses as you near your late 50s.

When was the last time you adjusted your tax withholding? Don’t let the federal government borrow your money at no interest while you could be putting it to work. If your life situation has changed, either through marriage, divorce, or the birth of a child, or even if you’ve simply had a significant adjustment in your veterinary practice’s revenue, you should update how much you set aside for federal and state taxes.