Reset For Success: Sharon Epperson's Finance Tips

Recommendations from CNBC's Senior Personal Finance Correspondent.
Posted on Jun 9, 2021 | 11:00am
CNBC Senior Personal Finance Correspondent Sharon Epperson joined the show for The Talk’s "Reset for Success” series and shared her finance tips as we emerge from the pandemic.

Here are a few of her tips:

Pay down your debt. 
Come up with a plan for paying down your debt.

Do you want to pay off high-interest debt first or focus on the debt that’s easiest to get rid of the fastest? One of the most important steps you can take is to knock down your interest rate. If you are able to reduce the interest that you're paying on your mortgage, student loans, credit card debt, car loans, or other debt, it could potentially save you thousands of dollars.

With student loan debt, keep in mind that even though you don't have to make federal loan payments until October 1st, if you pay off some of those loans now the money will go directly to the principal (the main balance) since there's no interest on those loans through September 30th.

You could also make a huge dent in your credit card debt by simply calling the card issuer and asking them to lower the rate. If you don't ask for it, you won't get it—and research shows overwhelming consumers who ask for a lower interest rate on their credit card usually get it. The reduction in the rate is about 10 percentage points on average. Paying $200 a month on a $5,000 credit card balance at 15% interest instead of $25% could save you more than $1,100 and help you pay off that balance in less than 3 years.

Create an estate plan.
Start planning now for your financial legacy.

While the pandemic has prompted more people to create wills, nearly two-thirds of Americans still don’t have one—even fewer people have taken care of other parts of their estate plan. You don't have to be rich to have a will. A will spells out who you want to give your assets to after you die. If you have minor children, it also allows you to name a guardian to care for them.

A will is just one part of your estate plan. Other key documents that you should have in case you become incapacitated by an illness or injury include: 
 
Durable Power of Attorney
If you are sick and unable to do things like pay your mortgage, rent, and other bills, a durable power of attorney enables you to assign someone to make financial decisions for you. This can be a spouse or another family member or a friend. You can also name a backup in case your first choice is unable or unavailable to fill the role.
 
Health-care Power of Attorney
This designates someone to handle your medical decisions if you become sick and can’t make them for yourself—from the emergency room to ongoing hospital care, rehabilitation, and outpatient visits. It is also called a healthcare proxy. 
 
Living Will 
This should not be confused with a last will and testament. A living will is a document that lets you express your wishes for medical treatments you would or would not want to be used to keep you alive, including resuscitation and intubation. Your health-care proxy must abide by what you have spelled out in your living will. In some states, a living will is called an "advanced directive" for medical decisions and may be combined with the form for a health care proxy.