JUST IN TIME | Smart money moves to make now for retirement

When looking at your financial stability, there are so many factors to consider, and sometimes it’s difficult to know where to begin. Often, people wish they would have made those tough decisions to plan ahead earlier.

To help avoid being an unhappy statistic at retirement, consider these smart money moves:

•Start a retirement fund — Ornella Grosz, author of “Moneylicious: A Financial Clue for Generation Y,” says the easiest way to save is to set up automatic deductions —either by percentage or dollar amount — from your paycheck.

How much? “I say start small and build on it,” Grosz says, advising to try reserving 5 percent of your paycheck for retirement. If you don’t miss that money, try 7 percent, and if that works out, increase your savings to 10 percent.

•Develop a strong credit score — The higher your score, the lower your interest rate may be on loans, from your mortgage to your car. You can save thousands of dollars over your lifetime by keeping your credit score as high as possible.

The surest way to a high credit score? Pay your bills on time, in full. And be sure to review your credit report each year.

•Evaluate the real cost of purchases — If you buy a $2,999 TV on a credit card and you make minimum monthly payments of $119.96 (4 percent of the debt), you’ll need 41 months to pay off the purchase. That means you are actually spending $4,918.36 on the TV — and, by the time you retire the debt, your TV may need to be replaced.

Another money mistake: incurring late fees. Many credit cards charge 10 percent of your balance if you miss a payment deadline. On a $5,000 balance, that 10-percent fee represents a significant penalty.

•Fund an emergency account — Unexpected expenses will always be a part of your life, but having money available in an emergency account can help soften the blow. A commonly held belief is to have three to six months’ living expenses available, but accumulating that amount may be difficult when you’re first starting out.

The important thing is to create the account and fund it regularly. Set an initial goal of putting $2,000 in an interest-bearing account, then build up the fund as your income grows.

It’s best to have realistic expectations but also know that a curve ball can come when you least expect it. The age-old phrase “Expect the unexpected” is easy to brush off, but there is a reason it’s been around for so long. You’ll thank yourself later if you start today.

EMILY WANG HAWKINS is a State Farm agent in Madison Park. To suggest future topics or more information, visit www.myagentemily.com, or call (206) 588-0416. To comment on this column, write to MPTimes@nwlink.com.