Want to get a great credit score? You need to understand how credit scoring models examine how you handle debt.
Then there’s the economy. Despite many positive economic indicators, people do not feel financially secure. Because of inflation, they are still paying more for groceries than they were before the pandemic. This summer, mortgage rates rose to the highest level in 20 years.
Credit card debt has reached an all-time high of $1 trillion.Delinquent payments on credit cards or car loans I also climbed.
new Bankrate.com The survey found that 59 percent of adults feel the economy is in recession. In fact, in many families, the following analogy is used: “Quiet recession.”
There are many things you cannot control. But there are some steps you can take to start 2024 on better financial footing. Here are 8 easy ways to prepare.
Check your monthly bank account and credit card statements
Looking back can be painful. But please watch it anyway. You need to figure out your financial truth for yourself. And you can’t do that without accurate information.
People always tell me, “I don’t spend that much money.” But a look at your bank account or credit card statement tells a different story.
Do you remember what you bought with your credit card six months ago, three months ago, or even last month?
Before you make your New Year’s financial resolutions, evaluate your spending in 2023.
Total emergency savings
Sure, this number may not exist or be pathetic, but look at what you’ve saved and honestly ask yourself, “Could I have done better?”
If you can’t do it, it’s okay. It may be best to live paycheck to paycheck.
But for those who can do better, aim to increase your savings for 2024. And you can’t do that unless you’re honest about your spending and how you cut back to save more.
Many people hesitate when asked how much they owe. I understand that they feel embarrassed to say it.
The truth of what they owe, all of which is often unpleasant. But what you don’t acknowledge can remain unchecked.
accept debt in full Credit card balances, loans, and yes, even your mortgage can be a powerful motivator to make aggressive plans to pay them off.
Check the security strength of your financial account
Please admit that. I use the same password for many accounts. This leaves you vulnerable on multiple sites. One data breach can give hackers the information they need to attack other accounts.
Or maybe you haven’t yet set up the verification steps your bank tells you to use when you sign on to your online account.
Before the end of the year, make sure you’ve put enough barriers between criminals and cash.
Check your credit report and credit score
By law, you are entitled to one free credit report every 12 months from a major credit bureau such as Equifax, Experian, or TransUnion.
At the beginning of the pandemic, the three major credit bureaus launched a service that allows people to view their credit reports for free each week. The departments had planned to eliminate the stipend, but instead decided this year to make it permanent.
Free weekly reports are available by visiting: annualcreditreport.com.
Checking your credit score is one of the best ways to understand your overall financial health. If your score is low, start taking steps to improve your score, such as making sure to pay your bills on time and paying off debt.
Additionally, checking your credit report regularly can help you spot mistakes and signs of potential fraud or identity theft.
look at your social security statement
When was the last time you looked at your Social Security statement?
It’s important to review this document because it contains a lot of information about your income, estimated benefits, and how much you or your family will receive in disability, survivor, or retirement benefits.
Sign up for an online account before the end of the year. www.ssa.gov/myaccount.
Check your retirement account balance for the past 12 months
Frequently checking your retirement account balance can increase your anxiety. You may also be tempted to take rash actions that will cost you money.
However, the end of the year is a good time to see how your accounts are doing and whether you have enough savings.
If you don’t have enough savings, consider increasing the percentage of your paycheck invested in your retirement fund.
Rate your financial highs and lows in 2023
The reason why cars have rearview mirrors is as follows:
As you move forward, you need to look at what’s behind you. If you’re paying attention, you’ll notice when a reckless driver approaches you.
Looking back can help you safely change direction. The same goes for your money.
Checking the rearview mirror can help you identify your mistakes and make better financial decisions going forward.
By checking your bank and credit card statements, you can see if you’re eating out too much and if you have money you can use to grow your emergency fund.
When you find yourself in a lot of debt, you may want to take some weight off your shoulders.
In her book, What I Know for Sure, Oprah Winfrey praises Maya Angelou’s words:
But you won’t be able to do better if you don’t take steps to assess what needs to be done.