Ready, set, go! Win the race to financial freedom

There’s a way to gain control of your finances, and it’s not as hard as you think. Find your starting position on these challenging routes and push through to the next level until you’re victorious!

Budgeting

Get real: If your first reaction is, “What budget?” you’re in trouble. If your budget is non-existent, it’s probably reflected in your rising credit card balance. Review the stages of building a budget to learn more.

	Get moving: Start by spending less than you make — even if, week to week, you feel like you’re behind the eight ball. You’ll get used to it sooner than you think.

	Take the lead: Track your spending. Consider using a budgeting app to help.

	Cross the finish line: Employ a simple system for the long term, such as the “50/30/20 rule”: Spend 50% on essentials, 30% on discretionary items, and 20% on priorities (e.g., retirement, savings, debt paydown, etc.).

Emergency savings

Get real: Emergencies — isn’t that what credit cards are for? Of course, the answer is a resounding NO! You may take care of an immediate crisis with plastic, but you could leave yourself saddled with a debt that costs much more over time. Review the stages of building emergency savings to learn more.

	Get moving: An important first step is to keep one month of living expenses in the bank — and add to it whenever you can.

	Take the lead: Next, keep three months of expenses saved and make a deposit every time you get a “bonus” — like a tax refund.

	Cross the finish line: Finally, continue to set aside funds until you’re able to cover six months of expenses. Consider setting up auto-transfer to feed a savings account every payday until you get there. Explore your savings account options at BankofAmerica.com.

Credit card debt

Get real: Carrying a balance on your credit card(s) and just paying the minimum? You may know others doing the same and hope that you’re on the right track. But if you’re employing this strategy, depending on the size of your debt you may not reach a zero balance for a very long time — if ever. Review the stages of alleviating credit card debt to learn more.

	Get moving: If you only pay the minimum on your credit card, it takes you much longer to pay it off, so pay a bit extra each month. Every dollar over the minimum payment goes toward your balance, and the smaller your balance, the less you will pay in interest.

	Take the lead: Make the minimum payment on all your cards except the one with the smallest balance — throw every dollar you can at that one until it’s paid off. Then repeat with the next card in line. With this tactic you can aim to be debt-free in three years or less.

	Cross the finish line: Get a 0%-interest card and transfer your balances to it for the life of the offer (usually 12–18 months). Then pay it off before the interest spikes. To find the right credit card for your situation, try the Bank of America Credit Card Finder. And remember — once you’re debt free make sure to stay that way by paying off your balance every month!

Retirement savings

Get real: If you haven’t been maximizing your opportunities to save for your golden years — even if you’ve been using your available dollars to save for your kids’ college instead — it’s time for a reality check. Consider the simple fact that your kids may be able to get loans toward their goals — but you won’t. Review the stages of retirement savings to learn more.

	Get moving: Make sure you contribute at least 3% of your annual income to your employer’s 401(k) plan. And if the plan offers a matching contribution, make sure you contribute enough to get the full match amount.

	Take the lead: Sign up for your plan’s automatic increase program,1 which lets you increase your 401(k) contribution gradually on a regular basis. Set a personal goal to increase your contributions to 10%, or more.

	Cross the finish line: Contribute the max to your 401(k) every year — for 2018 that means putting in $18,500, plus an additional $6,000 if you are age 50 or older (subject to plan limits). If your plan is through Merrill Lynch, log on to Benefits OnLine^® to increase your contributions today.

Winning the race to financial freedom can certainly be challenging. But, with some focus and diligence in each stage, you will find that victory is well within your grasp.

Learn more and take action

Want to learn more about budgeting? Visit BetterMoneyHabits.com for strategies and tips to better manage your money.
Not enrolled in your 401(k) plan? If your plan is through Merrill Lynch, get started today at Benefits OnLine^®.

1 Not available in all plans.

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