Your Money Matters: Paying Down Debt, Retirement Plans, & Reserve Funds

In a recent broadcast, we explored what some Tulsans would do with an extra $1,000.

Related Story: Oklahoma's Own Originals Special: Maximizing Your Money

To provide expert guidance, we were joined by CBS News business analyst Jill Schlesinger, who shared her “big three” components of sound financial planning.

Paying Down High-Interest Debt

Jill's first recommendation is to focus on eliminating high-interest debt, such as credit card balances or auto loans.

“It doesn't mean you should be paying down your 3% mortgage,” she explained. “It means that you really should focus on high-interest debt,” said Schlesinger.

Building an Emergency Fund

Next, Jill emphasized the importance of building an emergency reserve fund.

“I recommend that you keep six to 12 months of your living expenses in a safe, accessible bank account, a short-term CD, a money market account,” she said. “And if you can do that, you're going to feel a lot better when something bad happens,” said Schlesinger.

Saving for Retirement

With any remaining funds, Jill advised putting the money into a retirement account, whether through an employer-sponsored plan or a personal IRA.

“Any dollar amount that you can add to your retirement today will help you long-term in the future,” she noted.

Saving on a Tight Budget

Addressing a viewer's question about saving when living paycheck to paycheck, Jill acknowledged the challenge but encouraged reviewing spending habits.

“There are certainly people who really have no extra money, but there are others who might be able to look through their spending and say, 'Well, wait a minute, maybe I do spend a little bit of money,'” she said.

Jill emphasized the value of automating savings, similar to how retirement contributions are deducted from paychecks.

“Use the tools that the technology has given us, and I think you'll be a lot happier for automating your systems,” she advised.

Retirement Planning Fundamentals

Discussing the basics of retirement planning, Jill highlighted the concept of the time value of money.

“The dollar that you put away today is so much more valuable in the future,” she explained. “That's why we want to encourage people to start as soon as they can, to put money into retirement,” said Schlesinger.

Jill encouraged viewers to develop the habit of saving for retirement, even in small amounts, as soon as possible.

“When you get into that habit of saving early for retirement, you just keep up that habit, and you don't notice it as much when you're younger,” she said.

Claiming Social Security Benefits

Finally, Jill cautioned viewers nearing retirement age to carefully consider when to claim their Social Security benefits.

“Be careful about the way you choose your Social Security benefits,” she warned. “Try as much as you can to wait until your full retirement age. For most people, that's 67, and you can max out your Social Security benefits at age 70.”

By following Jill's guidance on managing debt, building emergency savings, and prioritizing retirement contributions, viewers can take meaningful steps toward financial security and long-term stability.