Financial Awareness Day
We all need a yearly wellness checkup to make sure our physical forms are operating correctly. Similarly, everyone should thoroughly examine their financial plans and make adjustments based on what’s changed from last year. August 14th is Financial Awareness Day. To help celebrate, we’ve put together a list of six things to consider when you re-evaluate your financial situation.
- Credit Score
Have you taken advantage of your free credit report? There are several ways you can look at your credit score. Many of these sources have fees; some come as a free bonus as part of other services you may have signed up for. You’re entitled to one free credit report annually by federal law. The only federally authorized website to get it is annualcreditreport.com.
According to the Consumer Financial Protection Bureau, you should save 10% of your paycheck and keep three months worth of living expenses saved up in case of emergency. That’s easier said than done. But if you take a look at disposable income expenses and find a couple of things to cut, you could devote that money to savings and build up your emergency account. It’s better to have it and not need it than to need it and not have it.
- Retirement Savings
“Carpe diem” means “seize the day.” There is no time like the present. But just because you’re living your best life right now doesn’t mean you should ignore the future. The earlier in life you start saving for retirement, the better off you’ll be. There’s an old saying that “you can’t outwork money.” If you invest in a 401k or Individual Retirement Account (IRA) over a long enough period, the rate of return on compounding interest can potentially earn much more than you can put away by saving money. Start a retirement account early and let your money work for you. But bear in mind, no investment is 100% risk-free.
- Fixed Incomes
If you live in retirement on a fixed income, you can do a few things to help lower your living costs. Consider downsizing your home to something with fewer maintenance needs and lower property taxes. Re-evaluate your transportation needs. If you’re driving a late model automobile with a hefty note, you might want to consider trading in for an affordable and efficient used model. If you have more than one automobile, reducing it down to one could save payments, maintenance and insurance costs. If you live in a bicycle-friendly area, a good bike could also be a healthy way to get around without fuel and insurance costs.
- Refinancing Your Loans
What’s the interest rate on your car loan or home loan? If you signed up for a note that’s several years old, odds are there could be potential to save money by refinancing when rates are comparatively lower. Refinancing does come with paperwork, fees, and a possible ding to your credit score. It may not be suitable for everyone, but you won’t know if it makes sense to you if you don’t take a look. Make it part of your financial awareness check-up.
- Teaching Youth
Perhaps you’re already a financial wizard and have everything in order. If so, it’s important to pass along this knowledge to the next generation. If you have children or other young family members with whom you are close, make it a point to take time and teach them good financial habits early. Teach them how to use an ATM, what to do if they should become victims of fraud, how to build and maintain good credit and the importance of emergency funds. Once they have this knowledge, nobody can take it away.
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