Friday, July 6, 2012, AM | 5 Comments
You should always try to maintain a good tracking system of your finances and keep them in good balance. Keeping your finances balanced brings peace of mind and keeps you organized financially. Below are some great tips for balancing your finances.
Never put off the fact that you are going to retire one day. Don’t put off putting money into a retirement savings and always take advantage of a 401k if you have an employer offering one and contributing to one. Always be sure you are optimizing your contributions. If you have a Roth 401k, you do have the ability to take money out without a tax penalty if needed.
Try investing in something you love or something you use. The stock market and businesses are very hard to figure out and they can seem to be very unpredictable. Think about making a plan to invest in some stocks for the long run and not just because you want to make some fast money. Pick a company that has been in business for a long time and maybe one that you use some of their products and enjoy them. This makes you feel more comfortable and you will have an interest in what their stocks do and how they perform.
Maintaining a good credit report is very important. One of the ways you can do this is by only having two to four credit cards. Start out with only two credit cards and then build your credit with those and then add another if and when you need it. Using only one card will take you a long time to build credit, but if you have more than four it will be hard to balance your finances the way they need to be balanced.
If you are working on repairing your credit report and credit score, it takes some time and patience. Just because you pay off a credit card, it won’t change your credit rating or score immediately. Keep paying your bills early or on time and you will finally get there. Sometimes it can take about ten years to have an old debt taken off of your history.
Store Credit Cards
Store credit cards are a bad financial decision. They just don’t have a good cost or benefit at all. When you pay a store credit card before or on time, it does not help your credit score or rating, but if the account goes into arrears or collections it is going to damage your credit history a lot. Use a major credit card if you have to use one at all for your credit.
One of the best ways to gauge your financial health is the FICO score. You should always know what your score is. This is the score that creditors look at when they are trying to decide how much risk would be involved in giving you credit. The major three credit bureaus are the ones that assign scores for you. The score number will change as you use credit and depending on your payments and history of paying bills.
Having a good FICO score can be what identifies the type of interest rate you get on credit cards, on the purchase of a new home or even a car. Before you go to make a major purchase, you should check to see what your FICO score is so you can figure out what you’re going to be offered.
Balancing your finances can give you a good peace of mind and help you prepare for the future.
Daniel Solomon enjoys writing about business, financial health, and the importance of maintaining a good credit score.
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