Staying on top of monthly expenses and emergencies that crop up—while trying to save for longer-term goals—can be overwhelming. It doesn’t have to be that way. Here are five easy steps you can take to get your finances in order.
Get Your Credit Report
It’s good to get in the habit of checking your credit report to make sure the information is correct and up to date. The three major credit reporting companies—Equifax, Experian, and TransUnion—are offering free weekly credit reports through April 2021. Visit annualcreditreport.com to get started.
An inaccurate report could affect your ability to get a job or a loan. Review your credit report carefully for any inaccurate or false information, such as:
- A misspelled name, outdated phone number or address, or a wrong employer.
- New accounts in your name that you didn’t open or addresses you’ve never lived at attributed to you.
- Incorrect account balances or credit limits.
- The same debt listed more than once, or an account listed more than once with different creditors.
- Closed accounts reported as still open or accounts incorrectly listed as late or delinquent.
Protect Your Identity
Millions of people each year report that their identity has been stolen. In addition to regularly checking your credit report, there are steps you can take to protect yourself against identity theft or fraud:
- Review your bank account and credit card statements carefully. Contact your financial institution right away if you see any errors.
- Log into your email and online banking accounts regularly and change your passwords every few months. Use passwords with letters, numbers, and special characters that are difficult to guess.
- Don’t click on links or download files from unknown senders or sites.
- Avoid using public Wi-Fi to receive or send sensitive information or access your bank accounts online
- Keep sensitive documents in a safe place and shred the ones you no longer need.
Save for Emergencies
An emergency fund is money you’ve set aside for—well, emergencies, those big expenses no one plans for or expects but inevitably happen. Car accidents or repairs, a hospital visit, a flooded basement.
Most financial experts recommend between three and six months of living expenses in your emergency fund. Here are some ways to get started:
- Set up an automatic transfer to move the money into a savings account.
- Gradually increase the amount if you can.
- If you get extra money—such as a tax return or bonus—put it directly into savings.
- Keep the change. Save your coins and $1 and $5 bills in a jar. When the jar fills up, deposit the money into your emergency fund.
With online and mobile banking, you can view your statements, accounts, and transactions anytime rather than just once a month. This is a huge help if you struggle to keep accounts balanced, as more frequent checking may help keep spending in check. You can transfer money among accounts if you’re running low or face an unexpected expense.
Avoid late payments and fees by scheduling automatic payments for your monthly bills. For bills with amounts that vary from month to month, set up reminders so you never miss another due date.