December 19, 2008
Many folks are happy to see 2008 fade into the distance. Between the rollercoaster stock market, tightening credit availability and falling home values, most of us have taken a financial beating.
With a new year upon us and plenty of opportunities to learn from past mistakes, here are a few financial resolutions that make sense for these troubled times:
Trim expenses. Many people have gotten out of the habit of watching their spending. A few relatively painless ways to save hundreds – or thousands – of dollars a year include:
Track your credit. A bad credit rating can disqualify you for a mortgage, car loan and credit cards, or raise your existing interest rates; plus it may prevent you from renting an apartment or getting a job. Order one free credit report per year from each of the three major credit bureaus at www.annualcreditreport.com.
Review your credit reports for errors or fraudulent activity and report any you find to the bureaus immediately. For tips on ways to improve your credit score and to get a free estimate of your score, visit What's My Score at www.WhatsMyScore.org.
Use credit cards wisely. Some banks and retailers have begun tightening eligibility requirements and lowering credit limits for their credit cards, so it's important to use your existing accounts wisely. A few tips:
Stick to your budget. Spending more than you bring in is a recipe for disaster. Plus, you should have several months' living expenses set aside in case you should lose your job, have a medical emergency or experience other unplanned events. Visa Inc.'s free personal financial management site, Practical Money Skills for Life, features an easy-to-use, downloadable tool called My Budget Planner that can help you track income and expenses and make spending adjustments where necessary (www.practicalmoneyskills.com/mybudget).
Prepare for the worst. If something terrible happened to you, would your family be protected financially? Make sure you have a valid will, durable power of attorney, health care proxy and a living will, along with adequate disability and life insurance.
No one can accurately predict when our economy will turn around. So take a few steps now to protect your family's financial security in the meantime.
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