October 7, 2014 in Credit

8 things to put on your financial bucket list

Most items on your bucket list, or list of things you’d like to do before you kick the bucket, probably don’t have much to do with finance, other than that they’ll need to be paid for. After all, climbing Mount Kilimanjaro or scuba diving the Great Barrier Reef doesn’t come cheap.

But for those who are passionate about getting their finances in order, there probably are some items on their list that relate to perfecting their financial picture or achieving a big money milestone. Which of these are on your list?

The median FICO score in the U.S. is 711, but that’s not good enough for some. While reaching the top doesn’t mean better loan terms (the best rates are achieved at a FICO score of 740 or above), the quest for a perfect 850 credit score drives credit perfectionists to scrupulously pay every bill on time and even try tricks like signing up for credit cards they don’t need just to reach this milestone. It can be a goal to strive for, but be careful not to get in more financial trouble trying to hit the top.

It used to be commonplace for Americans to hold mortgage burning parties to celebrate paying off their mortgages, but that event is becoming increasingly rare, thanks to cash-out refinancing and other modern-day phenomena. Today, just 34 percent of owner-occupied houses are mortgage-less, according to the Census Bureau’s 2011 American Housing Survey, but many hold on to that goal of one day living in a home that’s free and clear of a loan.

Whether it’s showing up to a car dealership and buying the latest model with cash or getting a cashier’s check from the bank for a new home, some people prefer the idea of using cash to own a major purchase outright over making loan payments. It’s a lofty goal that many don’t do, though, as 85 percent of new vehicle sales are financed, according to the National Automobile Dealers Association.

The average student loan borrower graduated with $29,400 in student debt in 2013, according to The Project on Student Debt. Student loans can’t be expunged in bankruptcy in most cases and can dog borrowers for decades, so paying them off is a major achievement.

If paying off a major debt like a mortgage is a huge undertaking, there are those who go a step further: paying off everything. The prospect of being completely debt-free may seem out of reach for the 69 percent of households who have debt, according to the latest statistics from the U.S. census, but it remains a goal for many.

Putting together an emergency fund may not seem like a big deal if you have one already, but less than a quarter of Americans have enough savings on hand to cover six months’ worth of expenses, according to Bankrate’s June 2014 Financial Security Index survey. For those trying to turn their finances around, saving up an emergency fund is a milestone worthy of celebration.

In the old days, being a millionaire meant being on a short list of the wealthiest people in the country. Now, according to a survey by Phoenix Marketing International, about 1 in 20 households have a net worth of over $1 million. While it’ll take hard work, it’s not impossible for diligent savers with modest incomes.

Ever dream of quitting your job and not having to work again? The average retirement age in the U.S. is 61 and rising. According to a 2013 Gallup poll, being able to retire early while having enough income-producing assets to meet your living expenses is tough. A Credit Suisse report published in 2014 found that the median wealth of an American adult is just $44,911 — not nearly enough to stop working forever.