The way we handle our money is a key part of financial wellness. Here are five signs that indicate you are on the path to financial success.
- You Put Your Goals in Writing. People with written goals are more likely to achieve them. It entails envisioning what you see for yourself and then using that goal as a reality. Financial goals can be both short-term and long-term. A short-term goal may be that you plan to pay off debt, whereas a long-term goal may be saving up enough money to buy a house. Be sure to revisit your goals at least once every 3-4 months and make adjustments when needed.
- You Use a Budget. Many people see budgeting as a distasteful duty. And it can seem that way if you are trying to correct years of financial problems in one day. But a budget is just a financial blueprint that shows income and expenses on a monthly basis. A budget will help you make informed decisions as to where your money goes.
- You Build Emergency Funds. Having an emergency fund to manage unforeseen circumstances can mean the difference between a financial disaster and a minor setback. Depending upon your budget, you can determine a set amount to put into a savings account from each paycheck. You may want your employer to directly deposit part of your paycheck into a savings account.
- You Work to Get a Handle on Debt. Borrowing money is a useful way to manage finances provided you have a plan to pay off your balances. Obtain low interest loans to acquire an asset or improvement -- like a house, car or student loan and shop around for a low-rate credit card. Depending upon your situation, there may be options to get out of debt more quickly. Also consider a debt management plan to get a handle on any outstanding debt.
- You Check Your Credit History and Score. One in three Americans has never checked their credit history, according to a Bankrate study. Keep tabs on your credit history, which is used to calculate your credit scores--those three-digit numbers that help determine whether lenders approve you for new credit and what interest rates will be offered to you. Annualcreditreport.com is a one stop shop to check your reports from Experian, Equifax and TransUnion, the three industry standard credit bureaus.