If you are looking to be smart with your money, here are a few tips:
- Spend less than you earn and
avoid excessive debt. If household income is reduced and/or household expenses
continue to rise, adjust your spending plan (budget) accordingly or prepare one
for the first time. Too much debt? Go to powerpay.org and find out how to pay
off your credit cards and save finance charges.
- Be future-minded. People who are
planners are more successful financially and feel better about their financial
situation than those who do not plan ahead. Planners also experience less
financial stress because the act of planning provides an increased sense of
control. Planning for the future includes calculating the savings required,
achieving future financial goals and addressing potential future challenges
such as the cost of long-term care and estate planning.
- Save and invest regularly. Make
regular deposits to savings plans (e.g., 401(k) or credit union) available
through your employer. Dollar-cost average by making regular deposits at
regular time intervals (e.g., $50 a month) to purchase investments. In declining
markets, you’ll buy more shares with your fixed deposit. The best way to save
money for most people is to make saving automatic. This can be done through a
tax-deferred employer retirement savings plan or via automatic investment plans
for stocks or mutual funds.
- Protect against large financial
losses. Purchase adequate insurance to protect against potential “big dollar”
losses. These include disability, liability, catastrophic medical expenses, the
death of a household earner or family caregiver and major damage to, or the
total destruction of, your home and/or personal property.
Reduce the risk of identity theft. Request a credit report annually from each of the three major credit bureaus: Experian, Equifax and TransUnion. Review it carefully and look for unusual listings, which may indicate that credit accounts were fraudulently opened in your name. To get a free credit report, go to www.annualcreditreport.com.
- Follow recommended financial practices. Studies indicate that many people do not put into practice actions that are frequently recommended by financial experts. These include making a written list of financial goals with a date and a price, setting aside three or more months of expenses for emergencies, calculating net worth (assets minus debts) periodically, preparing a will and living will and following a written spending plan (budget).
If you need help in managing your money, contact the Denton County Extension Office at 940-434-8812 to find out when the next money management class will be held.
MAGGIE JOVER is the family and consumer sciences extension agent with Texas AgriLife Extension. She can be reached at 940-349-2882.