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Rebuilding your financial life

June is the national rebuild your life month which makes it a great time to reflect on your financial situation and make changes if necessary.  Rebuilding your financial life is an important step to take if you are not where you hoped to be financially.  Now is always the best time to start, putting if off only makes it more difficult to accomplish.
 
Where is the first place to start to determine if we need to do anything to rebuild our financial life?
Start with your credit report.  Make sure you have a high credit score and that there are no derogatory items on your credit report.  These two items make a huge difference in the interest rates you will be charged and the amount of credit you will receive. Rebuilding your credit is extremely important if it is not where it needs to be.
 
What is a good score and how can one get there?
A good score is anything over 700 and the goal is to get as close to or over 800.  The best way to achieve a better score is to pay your loan obligations on time.  You can improve your score by not having too many credit cards or other revolving debt.  You do need some credit because you need to establish that you can wisely use credit.  And finally avoid having judgments or other negative credit situations on your credit report.
 
What might be another area that needs rebuilding?
One area that many need to look at rebuilding is their budget.  Most people don’t have a solid budget that starts with savings first.  And not having a budget leads to living paycheck to paycheck because there is nothing that stops the monthly spending.  Just tracking a few key categories can be a very powerful tool in helping you not live beyond your means.
 
When rebuilding savings habits, what are goals that one should have?
There are two types of savings goals everyone should have. The first is short term, which is having an emergency fund that will cover 6 – 9 months of living expenses.   The second is longer term goal which is related to retirement savings. We should all have a goal of saving at least 10% to 15% of our income towards retirement. The later one starts saving for retirement the higher the goal will need to be to have the retirement you want.


Posted: 6/10/2014 with 2 comments

Categories: Financial, Money Matters



Comments
David Donlan
This is perfect to my situation. Thanks so much for the information. I am just now recovering from some difficult financial issues and this is very helpful.
6/16/2014 at 3:18 PM

Stephen
This is great advice! I'm actively working on paying down my debt with the goal of getting out of debt. But this budget and savings advice will surely help me with that! Forum CU has been a huge help to us during our endeavor to reduce debt and interest expenses!
6/16/2014 at 12:59 PM

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