Now that the summer fun is over, it’s back to reality. With the kids back in school, this can be a great time to do an assessment of one’s personal finances and make a plan for future spending. Consolidated Credit is urging consumers to evaluate their expenses to make sure their personal finances are in order for the rest of the year.
In the first half of 2011, the average national mortgage debt per borrower increased to $190,115, according to TransUnion. The average credit card debt per borrower was $4,679.
With debt in the United States continuously growing, it is extremely vital to seize control of your current finances. The best way to end the year is to achieve financial prosperity through knowledge of your assets, money management and proper savings.
Consolidated Credit is offering a Fall Financial Check-Up to help consumers remain on top of their money situation before the Christmas crush is upon them.
Steps consumers should follow to do a financial check-up:
- Get a free credit report. The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – to provide a free copy of your credit report, at your request, once every 12 months. Visit annualcreditreport.com to request yours immediately. Knowing your credit score will be a valuable asset for any future large purchases or employment opportunities.
- Pay off debts. Don’t put off your debt any longer. If your debt is becoming a burden, enroll in a debt counseling agency to get help. Certified financial counselors can offer advice that can lower your payments by consolidating your debt, enabling you to become debt-free faster and easier.
- Manage your finances. Create a budget so you know how much you’re able to spend each month. Do not charge more than you have; it’s much better to pay for items in cash to avoid credit card troubles. Also, start a savings account in case any emergency expenses turn up.
- Do your taxes early. Gather your documents and receipts now. It’s better to start on your taxes early to allow time for changes. Do a bit of research on allowable deductions so you can take advantage of the ones you’re eligible for. For example, medical expenses that exceed 7.5 percent of your income can be deducted.
- Identify your goals. You will be more encouraged to save money if you have a goal in mind. A trip to Hawaii or a cruise in the Bahamas can serve as an incentive to putting away savings. Buying a newer car in full can also be a great aspiration as there is no need for financing or any associated interest.
- Protect your assets. Look over insurance plans and see if any policies have changed. Review your homeowner’s or renter’s insurance to make sure your home is well-protected. Don’t forget about auto insurance and health insurance. Also, do a quick check-up on the warranties associated with expensive electronics to determine whether purchasing a newer model is better than extending the warranty.
- Review your retirement plans. One of the best tax-reducing strategies is to contribute the maximum to your 401(k) plan. The Internal Revenue Service (IRS) has announced that the 2011 maximum pre-tax contribution to the 401(k) is $16,500. If your employer doesn’t have a 401(k), you may want to set up an Individual Retirement Account (IRA) on your own to ensure funds for retirement.