Tips to Put Your Financial House in Order

Every day GreenPath counselors help families regain their financial stability by learning how to manage their money more effectively. The first step to achieving financial freedom is to have a clear picture of your current financial situation. Check out the following “Top Ten” financial basics from the National Foundation for Credit Counseling (NFCC) to see whether your financial house is in order.

1. I open my bills the day they arrive.
   Every day people walk into one of GreenPath’s offices with grocery bags filled with unopened bills. Ignoring the problem won’t change anything, but facing the facts and developing a plan will.
   
   
2. I review my monthly creditor statements thoroughly.
   Not only do you need to be aware of the amount you owe and the payment due date, but you should check
   your statement for unauthorized charges which could indicate ID theft, rate changes, credit limit changes, and any additional fees.
   
   
3. I pay my bills on time.
   Late fees can be in the $40 range, and one late payment can ding your credit score by as much as 100 points. Setting up an automatic bill payment system can help eliminate late payments.
   
   
4. I record each check I write, along with any ATM withdrawals.
   Overlimit and non-sufficient fund fees can be as high as credit card late fees. Even if your financial institution allows you to exceed your balance, you’ll pay a hefty price for that courtesy. Record all transactions and know where you stand at all times.
   
   
5. I do not max out my credit card limits.
   Creditors like to see people responsibly manage their credit by using only 30 percent or less of what’s available. Maxing out your cards could indicate that you’re a financial risk, thus equaling higher rates and lower credit lines moving forward.
   
   
6. I track my spending and know where my money goes.
   Take back control of your financial future by tracking your spending for 30 days, organizing the results by category. Once you see your spending in black and white, it will put you in the financial driver’s seat where you belong.
   
   
7. I have at least one month’s income earmarked for emergencies.
   Without a rainy day fund, an emergency forces you to either pay for it with a credit card or by grabbing cash away from other bills that need to be paid. Start by putting 10 percent of each paycheck into an emergency account. At the end of the year, you’ll have a little more than one month’s income stashed away.
   
   
8. I have three to six month’s income saved in the event I lose my job.
   Job losses have affected almost every employment sector, thus no one is immune. The time to prepare is now so you will have significant savings to fall back on during hard times.
   
   
9. I conduct an annual insurance check-up.
   No one should be over-insured or under-insured. The way to avoid this is to review your policies once each year with your insurance agent. Inquire about ways to save on your overall insurance costs without sacrificing coverage.
   
   
10. I prepared a well thought through plan for tomorrow, and am executing it.
    People have short-term and long-term goals, and we need to plan for each. An example of a short-term goal is a summer vacation. Long-term goals are things such as a college education for your children and your retirement.