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You think you are doing a great job with your finances and your money management skills are fine. Then you apply for a mortgage or credit card and you are turned down and are surprised. You thought your credit score was high enough and you have not had any late payments recently. But in the eyes of some creditors, you are not exactly stable. How do you achieve financial stability in 2018?
It begins with the credit score
Even if you are not buying a house or applying for new credit, you still need to know your credit score. A survey by MoneyTips last year revealed that one in seven Americans have never checked their credit score ever and only 47% had during the last six months. Only three in 10 had checked their credit reports in the past six months. Why is this not good news? First, in today’s world of financial fraud, a hacker may have used your information to open up accounts without your knowledge. This possibility is more likely than you think. Equifax, one of the three credit reporting bureaus, reported a security breach affecting millions. And if you don’t know if you were affected, check now.
Second, your credit score provides a complete look at your outstanding debt. You can make a list of what you owe and begin paying off your debts. But be sure you check all three credit bureaus—Equifax, Transunion and Experian. You may find some differences.
Save, save, save
You may have very little money at the end of the month but you need to put back a little bit each month. Find places where you can cut back. This could be two $10 lunches once a week. It may only be $80 a month but that equals $960 a year. Find $40 more dollars and that is $1,000. That amount of money could cover a car or home repair or pay part of a medical bill that you would otherwise had to put on a credit card. If you have trouble manually saving on your own you can always use the app Rize to help you automatically save money.
Get deals on cable, insurance, etc.
Utility and insurance companies are very competitive. Think of how many offers you get in the mail and throw away. But you could be throwing away money. For example:
- While most communities are only served by one power company, those companies may offer budget billing. The company will allow you to pay a set amount each month instead of what is read on the meter. This allows you to budget your power bill amounts with no surprising high bills. The amount of your bill is an average of your year’s usage. You could save some money at the end of the 12 months if you are able to cut back on your usage. But be careful—you could owe more at the end of the year.
- Consumers are switching from traditional cable television services. You have many options. If you don’t watch a lot of television, consider combining two of the subscription services like Netflix and Hulu. You can still see your favorite shows and get access to movies and original programming. The costs of both will be less than $20 a month. If you have to have live sports and love your cable provider, ask them for a new package or better deal. You could save $30 to $40 a month.
- Insurance is a necessity and sometimes you feel like you are throwing your money away. Make a point to shop around each year to see if you can save some money on your car and home insurance. Another important point—make sure you are getting the same coverage. Cheaper insurance is not really cheaper if you are getting less service.
Curb your spending
Here’s a rule of thumb—if it’s not a necessity and you can’t purchase it without using a credit card, don’t buy it. It’s not just the big-ticket items that can destroy a budget. You can spend a lot of money at the grocery stores on impulse items. How to avoid that—pay for your groceries in cash and only take the amount of money you need to the store.
Check your tax return
Tax laws have recently changed but many of those changes will not take effect until next year. But the Internal Revenue Service allows you to make changes to previous returns that are less than three years old. Ask an accountant to go over your returns and make sure you are claiming the right deductions. Don’t do it on your own—you don’t want to run afoul of the IRS. But you could save hundreds each year by taking that second look.
Money management takes some work. But with the right effort, you can make steps to financial stability in 2018.
Guest Post: Paul J Paquin is the CEO at Golden Financial Services and the author of the book called; “A Complete Debt Consolidation Guide to Become Debt-free”. Paul spent the last 15-years engulfed in debt consolidation, as the CEO at Golden Financial Services, learning about the most effective debt relief options by researching and testing different methods.