Today’s uncertain economic environment has left many Americans feeling unstable. A strong majority feel their family is affected by the current economic conditions. Taking steps to better your overall financial well-being is more important than ever.
The national economy is largely dependent on the economic well-being of the everyday consumer. The way you manage your personal finances has an impact on the overall financial well-being of the country. What are you doing to ensure your family enjoys a strong and stable financial future?
Consider the following steps to help weather the storm of a struggling economy:
- Be familiar with your financial situation. Write down all sources of income from each wage-earner in the household. Next, subtract all of your monthly living expenses: things such as rent or mortgage, utilities, food, insurance, etc.; followed by secured debt payments and then other credit obligations. When times are tough, it’s critical to pay priorities first.
- Pay down existing debt. High interest credit card debt takes money that could be going to a better use. Devote any extra money to freeing yourself from the bondage of debt. This is a good time to consider a part-time or weekend job with all of that extra income dedicated to debt.
- Don’t take on any new debt. Hard times won’t last forever. Unless you have home or vehicle repairs that won’t wait, delay any large expenditure until you’re on more stable ground. Be willing to forego the luxuries for a while.
- Start or add to a rainy day fund. Everyone should have a liquid savings account for the inevitable emergency. Without it, you’re one trip to the emergency room, one flat tire, or one leaky roof away from financial distress. Understand that it’s not “if” the emergency is going to come along, but “when.” Prepare by socking away 10 percent of each paycheck. That’s a small amount of money that you’ll never miss, but certainly will be glad you have it when you need it.
- Adjust your withholding allowances. No one wants to end up owing Uncle Sam. Nor do you want to give him your hard-earned money all year only to have him give it back interest free. The average income tax refund in recent years has been well over $2,000. If you’re used to receiving a refund, adjust your withholding allowances and start putting $200 in your pocket each month, not the government’s.
Finally, pay attention to national economic stability. Many studies are done to gather information on consumer spending and debt levels, as well as how debt is being handled to help predict economic stability and trends for the future.