We all need reminders about how important our financial health is especially in the current economic climate. So here are 5 steps to take to check up and improve your financial health.
1) Budget. I know this is a dirty word to some of us but if you have no idea what you spend your hard earned money on, how can you justify the spending? Try tracking your spending. This does not have to be a forever exercise. Try it for 30 days, 2 weeks, 1 week or even one day. The idea is to see how and where you spend your money. There will not be a quiz or anyone looking over your shoulder but honesty is what you need here. Keep a small notebook is your pocket or purse to jot down what and when you make purchases. Also make note of how much you spend.
2) Get a 'handle' on your debt. Debt needs to be under 36% of your total income with your mortgage and all installment debt included. Pay off your highest interest rate debts first.
3) Save. This is another dirty word. Do not stop living but for one month try paying only in "bills" or paper money and save all the change in a jar. At the end of the month, count what you saved. It will likely be more than you imagined and now you can put it away for a rainy day.
4) Pay yourself first. This seems silly I know but you pay everyone else, why not yourself? The trick here is to put the money somewhere you cannot regularly "see" it. Try to put your money in a special account.
5) Keep working. Your employment history can have an impact on the interest rates on loans. You need to be on the job and working for at least 2 years.
Good luck!
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