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Basic Tips for Taking Control of Your FinancesThe more in control you are of your finances, the more confident you will feel in making financial decisions. Even more importantly, by controlling your finances, you will be less likely to lose money due to high interest rates and poor decision making. Here are a few basic tips for taking control of your finances and secure your financial future.
Keep Track of Your Credit Report and Score
Keeping track of your credit report and score is one of the most important steps you can take in taking control of your finances. A single, small mistake on your credit report can cause you to be denied credit or to even be assessed a larger interest rate on your loan. You can obtain a free credit report once per year by visiting AnnualCreditReport.com. Take advantage of this free service and check your credit report every year to make sure there are no mistakes or, worse yet, to make sure no one has gotten a hold of your personal information and applied for a loan or credit card under your name.
Keep Track of Your Spending
If you keep tabs on your spending, you might be surprised to find where your money is going. Keep track of where your money is going and see if there are expenses that you can avoid or that are unnecessary. You can also purchase software such as MS Money or Quicken to help you keep track. This software will even help you estimate next year’s taxes as well as keep track of your investments. It will take a few hours for you to get the software all set up, but it will be quick and simple to use once the set up is complete.
Make a Plan
The key to taking control your finances is to have a plan. You might need to talk to a financial advisor in order to develop a plan, but the cost will be worth it when it pays off in the long run when you are set for retirement and have set up a workable college savings plan. At the same time, hire a lawyer to create a will and other legal documents such as a living will, power of attorney, and healthcare proxy. This can save your heirs thousands of dollars down the line. Similarly, if you have extra cash, give it to your heirs before you pass. Up to $11,000 can be received per year without being taxed, so you will actually be able to give your family more now than if you wait until your passing.
Get Automated
You can also make your finances easier to keep track of by automating them. Set up your utilities, cell phone, and other monthly payments to be automatically paid from your account. Do the same for any of your monthly investments. That way, you do not have to physically write the checks for each of these payments and you can be certain these bills and payments will be sent on time. This is far more convenient for you and ensures you will never pay a late fee as all of your bills are taken care of.
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