Building and maintaining financial health is important for you and your family. It can mean being able to provide the right housing, schooling, nutrition, and other necessities for your loved ones. So how do you build and maintain good financial security? Below are some actions you can take to ensure you are providing for your family by keeping your finances in order.
This word, to some, may sound tiresome or overwhelming, but it does not have to be. Keeping an updated and accurate budget is an important thing to do to make an impact on your financial wellbeing, and the basics to budgeting can be quite simple. Either digitally or on paper, write down your monthly take-home pay. Subtract your fixed expenses, which are any expenses you pay every month in the same or similar amount. Whatever is left is your disposable income, but do not let that term fool you. While you can dispose of some of it on entertainment, such as going to the movies, it is important for you to allocate a set amount to savings or any financial goals you have.
A savings account can be critical to maintaining a secure financial status. It can serve different purposes, such as a cushion for unexpected expenses or as a place to save your money to reach financial goals. When you make a savings account you can give it a label so you are reminded of the purpose it serves, which may make you less likely to take money out of it for other things. If you open one, it is a good idea to shop around for different interest rates and maintenance fees. In general, you can find the best interest rates and lowest maintenance fees at credit unions and online banks. However, it is smart to compare rates between banks, credit unions and online banks to find the best deal.
The Importance of Your Credit Score
Your credit score can impact your ability to do things such as taking out a mortgage on a house or getting a good interest rate on a loan. That is why it is important to look after your credit score and research ‘how to fix my credit' to ensure you are protecting this important financial asset. There is basic advice, such as paying your credit card and loan bills on time, and more detailed advice, such as how to use your credit card and credit limit wisely. There are also tools you may not know about, such as requesting a free credit report from one of three authorized credit bureaus to check your report for errors and fraudulent activity. Maintaining a good credit score and remaining knowledgeable of what is on your credit report can pay off in lower interest rates on loans and a mortgage, which means more savings to put towards your family.
Shopping for Deals on Loans and Accounts
A less explored topic is the importance of comparing rates at different financial institutions. It is common for people to work with the bank they have a checking or savings account and use that same place for loans, mortgages, other savings or checking accounts and credit cards. However, not all financial institutions are created equally. When it comes time to take out a loan, a mortgage or open an account, compare rates at different places. You can save money by getting lower interest rates on loans, higher interest rates on savings and lower maintenance fees on accounts if you take the time to do your research. This savings can be added to the savings you will get by taking care of your credit, and together these actions could save you thousands of dollars.
It is important to take an active approach to your financial health, especially if you have a family to support. Keeping a budget, having a savings account, being vigilant about your credit report and comparing rates at different financial institutions are great ways to get started on your pathway to financial security.