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by choice or circumstance, people are finding they have more
time and more need to ponder finances these days. Very few people
are making their way out of this recession completely unscathed
and most are trying to be a little wiser about money in the
process. In these times of layoffs and pay cuts, giving yourself
a financial check-up is a good way to save money and perhaps
change some bad habits.
Accounts
Take a look at all of your accounts, starting with the savings
account. Either through past paper statements or online, take
some time to check balances, interest rates and make a savings
goal. If the savings account is near empty, make a goal to
save £1000 over the next six months, or perhaps start
a new monthly savings goal, say £150 a month. Many financial
counselors recommend having as much as six-months' worth of
expenses saved. Job uncertainty is high these days and having
a just-in-case cushion is not a bad idea.
Whatever
the amount in a savings account or individual savings goals,
it's important to check interest rates. New York Times financial
columnist Ron Lieber recommends looking into Internet savings
account that offers better-than-average interest rates. Compare
interest rates at banks and other savings sites. If the savings
goal is very long term, then money should be put into a different
kind of account with a higher rate of return (although there
are usually penalties for withdrawals, so make sure the money
is not needed in the short term).
Next,
take a look at checking and other accounts to assess the fees.
Banks can charge different fees for different types of accounts,
as well as penalty fees for overdrafts or ATM withdrawals.
If the fees seem excessive, talk to someone at the bank about
how to restructure the accounts to avoid fees. The same goes
with credit card fees and interest rates. Be sure to read
the fine print and make payments on time to avoid fees, which
can add up very quickly.
Another
way to get your accounts to work for you are cash-back credit
cards and bank savings plans like keep-the-change. Doing some
web research will garner all kinds of offers for credit cards
with perks. Start with the companies of the cards in your
wallet and see what kind of cash back incentive programs they
have. Also, banks offer ways to bolster your savings by automatically
depositing the "change" from any debit card transaction
into a savings account.
Insurance
An important part of the overall financial health picture
is insurance coverage. Look at the deductibles on all forms
of insurance coverage: car, homeowners, health, etc. Consider
how the insurance was used in the last year, i.e. did you
have a car accident or hospitalization. If insurance coverage
is used minimally, consider raising deductibles and lowering
monthly payments. Also, check into good-driver discounts and
other ways to get a better deal, which are usually not offered
unless asked for.
Will
If you haven't written a will, especially if children are
involved, get one done. Start by pricing lawyers and getting
recommendations from friends. It is a relatively easy process
and could save headaches and heartaches down the line. Also
consider putting in advance directives for future major health
decisions.
Gift cards
The last part of your financial check up is fun. Spending
gift cards is one of those things that people mean to do and
then forget. The cards sit around, sometimes losing value,
and more often than not accidentally get tossed out. Take
some time to find the cards and then go have some fun spending
them.
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