No one looks forward to it, but an annual medical checkup is necessary for good health and to catch any potential threats. After all the tests, diagnoses and prescriptions, most people leave the the doctor's office better off than when they entered.
Millions of Americans are due for a fiscal checkup. Rising debt levels, high credit card usage and a lukewarm economy has left families searching for answers around the kitchen table. A 2012 survey from the National Foundation for Credit Counseling revealed that 56 percent of Americans don't have a personal budget. If so many Americans lack this basic financial discipline, it stands to reason that many haven't taken a close look at their financial health in years. It's time for your annual fiscal check-up — and a plan for better financial health.
I'm Going to Check Your Credit Rate
Whether you want to take a out a mortgage or sign up for cable, your credit score is an important component of your financial identity. Annualcreditreport.com provides a free report once every 12 months from each of the three major consumer credit reporting companies (Experian, Equifax and Transunion). Experian explains that most credit scores fall between 600 and 750. Anything above 700 is considered a strong score. These scores will give you an idea of much credit capital you've built, and how you can take steps for better financial health. To boost your score, use credit cards responsibly and pay them off on time.
You Should Quit Spending
It seemed like new and grim personal debt statistics came out every week. The latest returns are more encouraging, however. The rate of late credit card payments fell 19 percent in the first quarter of 2013, according to Cbsnews.com. Still, while millions of Americans are climbing out of debt, millions more are digging the hole deeper. Not all debt is harmful, but without a repayment plan, borrowers will remain cash-strapped.
You don't have to take on debt on your own. Banks and lenders can help you consolidate debt, whether by lowering your interest rate or raising the amount of time you have to repay a loan. Explore all your options and factor debt relief into your monthly budget. Paying down debt is one of the best ways to move toward better financial health.
A Prescription for Security
Even financially stable citizens can benefit from a fiscal checkup. The growing threat of identity theft is causing average Americans to keep closer tabs on their finances. According to a study conducted by Javelin Strategy & Research, 12.6 million Americans were victims of identity theft in 2012, roughly 1 million more than in 2011.
Precautionary measures can reduce your risk of identity theft. Credit monitoring services will alert you to any unusual activity and offer identity theft insurance up to $1 million. Most reputable providers charge $10-$15 per month, a small price to pay for peace of mind and financial security.
The Vitals are Most Important
Financial stability usually comes down to healthy habits. As you review your financial situation, take a step back and consider whether your income supports your lifestyle. If you're not saving, you're probably losing. Make a detailed budget by subjecting all expenses from your monthly income. You'll be surprised how much a visual representation of your money influences your decision making. Join the minority of Americans who track their spending, and you'll have the relief that comes with financial freedom.