With the presidential elections right around the corner, there is a lot of discussion and debate about our national economy.
Over the next few months, there will be promises of a better financial future for Americans, but it is vital that individuals and families understand that no matter the election results, they have the power to protect their personal economies.
While you should take steps to understand what is happening with our nation’s economy, your focus must remain on what you can control — your budget and spending.
The basic fundamentals of smart money management still apply no matter how confusing things get on a national level. The financial educators at Money Management International offer the following advice for protecting your personal economy:
- Know your financial situation. Determine monthly living expenses, occasional expenses and monthly debt repayments. Reevaluate your budget and spending plan by comparing outgoing expenses to monthly net income, and make changes when appropriate.
- Deal with the big issues. If you have large, looming financial issues, such as unpaid medical debt or tax liens, it is time to deal with them head-on. Contact your creditors and make acceptable repayment arrangements. Implementing a plan to remove these stressors from your life will be good for your mental and financial health.
- Expect the unexpected. Now is a great time to start paying yourself first. Strive to establish an emergency savings account equal to at least three months of your income. If this goal seems too lofty, try having a small amount automatically deducted from your paycheck into a savings account. Also, instead of spending your raises, add any additional income to your savings account.
- Perform a credit check-up. A clean credit report equals better loan terms and more borrowing power. If you haven’t requested your credit report in a while, now is the time to do it. Experts recommend that you pull a copy of your credit report at least once each year and before making any major purchase. Plan to pay off delinquent accounts and dispute any errors. The three major credit bureaus are Experian, Equifax and TransUnion.
- Plan for your future. Secure your financial future by participating in a qualified retirement plan, such as an employer-sponsored 401(k). You can also contribute up to $5,000 each year into an Individual Retirement Account (IRA), or $6,000 if you're 50 or older by the end of the year.
Taking steps to improve your current financial position is always a good indicator of future success. A solid financial foundation will help you to weather any future ups and downs of our nation’s economy.