If you want better financial health, consider a regular checkup. This goes beyond just an end-of-the-year evaluation. Consider a mid-year checkup.
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 doctor's office better off than when they entered.
In fact, it's a good idea to check in with your finances mid-year as well as at the end of the year.
Better financial health: elements to your fiscal checkup
As you review your habits and try to make the most of your money, here are some of the elements you should cover.
I'm Going to Check Your Credit Rate
Whether you want to take 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). Anything above 700 is considered a strong score. These scores will give you an idea of how 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.
Is it time to cut back on spending?
It seemed like new and grim personal debt statistics came out every week.
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.
But don't forget to reduce your own spending. Carefully consider your spending priorities and stop using your money to buy things you don't care about.
Review who has your information
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.
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.