<< Back to all Blogs
Login or Create your own free blog
Layout:
Home > Archive: June, 2011
 

Archive for June, 2011

Financial Fitness Takes Practice

June 22nd, 2011 at 06:32 am

Americans need a regimen to get their finances in order. In a Capitol One study, they found that the majority of Americans lack a basic understanding of credit scores and the fundamentals of personal finance. In other words, Americans can talk all the prosperity talk they want, however, if they do not put forth the actions, behaviors, and practices to become financially fit it is wishful thinking.

Know your credit score
A large number of Americans (52 percent) do not regularly review their credit report each year. The same Capitol One study stated that twenty-three percent of Americans have never reviewed their credit report at all. Being financially fit means paying attention to your credit and money. A credit report is simply a rundown of your payment history, listing your accounts, balances and your payment behavior. Not paying attention to credit can affect your interest rates. Unfavorable credit can affect your ability to own property, rent, and can cause you to have higher premiums for many types of insurance. In some states you can get a free credit report annually from all three credit bureaus by calling 1-877-322-8228 or get a free FICO score at www.freescoreonline.com.

Know what you make
You would be surprised how many Americans do not know how much they bring home each month or year. Many discover how much they make in January or April when their taxes are done. If you do not know how much you make, how can you plan and reach your financial goals? Just so you know, the gross amount is before taxes, insurance, medical, and social security is taken out. The net amount you bring home is what you have to live on and work with in your budget.

Know what you owe
Unfortunately, many Americans feel comfortable living in denial regarding their debt. Listen up; you cannot become financially fit if you do not know your financial reality. One way to do that is to write down on a piece of paper everyone you owe money to. You must include creditors, vendors, loans, friends, family, co-workers or neighbors. In order for you to be “real” about your financial situation, you have to be honest about who you owe. Next, based on your debt amount, come up with a plan and time-line to pay it off. Your plan must be realistic, doable, and attainable.

Bottom line: if you want to lose weight you accomplish it by having a fitness plan. In order to get financially fit, you use the same concepts. First you admit you have a problem. Then you identify the problem. Next, you come up with a plan to correct the problem. Finally, you connect with like-minded people to help you stay accountable to your goals to be financially fit. Like anything else in life, financial fitness takes practice and work.

What are you personally doing to get financially fit?