Five Tips for Becoming Financially Stable

One of the most important ways of getting your finances under control is to set financial goals. Where do you want your finances to be in a year? In five years? What about in six months? Don’t set unreasonable goals, either—being debt free in a year is probably not possible unless you have very little debt. But decide on something like “I want to save $20 a month for the next year.” That’s very realistic, and it’s a goal you can probably accomplish.

You don’t have to do this for every expenditure for the rest of your life, but for a month or two, track everything you spend. Then take a good, hard look at each item. Is there anything you can get rid of? For example, do you need cable television? How much do you actually watch it? What about your cell phone plan? If you don’t use a lot of minutes or data, maybe you can downgrade. Can you refinance your home to a lower interest rate? Do you eat out three or four times a week? If you want to get financially smart, you have to know where all of your money is going.

If you want to protect your credit, there are two things you need to do: pay your bills on time and monitor your credit report regularly. Most people do the first, but very few check their credit on a regular basis. It’s important that you know what has affected your credit score since it lets you see if someone has stolen your identity and is trying to get a loan or line of credit in your name. It also lets you see if any of your accounts are reporting incorrect information such as saying you’ve missed a payment when you have not.

Why should you take credit monitoring seriously? Because credit card debt can have a major impact on your credit score and that can make it impossible to get a loan for a new house or vehicle. But your credit cards can often do more damage than you realize. If someone happens to find a credit card application in your trash, they may be able to get a card in your name and then charge up a lot of purchases that you can be liable for. Keeping your credit secure should be one of your financial goals no matter what state the rest of your finances are in. If you’re trying to get out of the hole your credit cards have put you in, you don’t want to add identity theft and a load of fraudulent charges on top of everything else.

One of the most important lessons you can learn is that the price you see isn’t always the price you have to pay. You can shop around or even check online to see if you can find the item cheaper. While you will have to spend extra time and gas going to several different stores, that expense may be more than offset by what you can save. Remember, too, that many stores will lower their prices if you show them a competitor’s ad.