Question: I want to make my financial health a priority in 2013. What are some easy ways to improve my finances?
Answer: The new year is a great time to start fresh and begin putting your finances in order or back in order. Here are some ways to improve financial health in 2013.
• Make a budget and follow it. Kick off the new year with a new set of spending rules. Develop a monthly budget by determining all income, expenses and debt. If you're not sure where to begin, try a free online budget tool, www.onlinebudgetadvisor.com. Creating a monthly budget and sticking to it will you help identify where your money is going each month and will help you control spending.
• Track your expenses. If you're not sure what some of your monthly expenses, a good way to figure it out is by tracking all of your expenses for 30 days. This includes large expenses, like your gas and groceries, and also small expenses, like stops for coffee or vending machine snacks. Tracking monthly expenses will help you identify areas in your budget where you can or want to cut back.
• Cut back on spending. After you have tracked your expenses and have identified exactly where your money is going each month, look at an area where you want to cut back. It could be grocery expenses or eating meals out. Come up with a strategy to accomplish it. It may be shopping at discount grocery stores or planning meals in advance to avoid the temptation of eating out regularly.
• Check your credit report. Checking your credit report should be a routine activity once a year or once every four months. All consumers are entitled to a free credit report from each of the three credit bureaus once per year. You can receive all three at one time, or you can elect to check one every four months. The only place to get your truly free credit report is through the website www.annualcreditreport.com or by calling toll free 1-877-322-8228.
It's important to routinely check your credit report for several reasons. The first being to ensure you're not a victim of identity theft and the information that is on your credit report should be on there. You also want to make sure the information on your credit report is accurate. Errors could be costly. If you believe there is inaccurate information on your credit report, contact the credit bureau in writing and include proof that the disputed information is incorrect. The credit bureau is required to investigate your claim and respond to you in 30 days.
• Set financial goals. It's important to identify areas of your finances you want to work on in the upcoming year. Some suggestions for financial goals include establishing an emergency fund, paying off a loan or a credit card, or paying off a delinquent item you find on your credit report. Achieving any of these goals will help improve financial stability.
• Check your insurance coverage. Make sure you have adequate life insurance for any one dependent upon your income and disability insurance to cover you in the event you are injured and lose your income.
• Save for retirement. Consider ways to begin or increase your retirement savings. Look for options on where to start saving for retirement, or -- if you are already setting aside money -- figure out a way to increase your savings in 2013.
Whatever your financial resolutions may be in 2013, remember any of the above items is a good place to start.
Heather Murray is manager of education and resource development for Advantage Credit Counseling Service (dba Consumer Credit Counseling Service). For more information about the agency's services, please visit www.advantageccs.org. If you have money or credit management questions, you can email Ms. Murray at firstname.lastname@example.org. Please provide your name, address and daytime telephone number with all inquiries. Ms. Murray tries to reply to all inquiries but, because of the volume of questions she receives, she cannot always respond.