Staying on top of your personal finances is essential. To help you become focused and motivated, here are my top 4 suggestions on areas you should consider.
Fully Fund Your Emergency Fund
If you do not already have a fully funded emergency fund, then you need to add this to the top of your list.
In case you are wondering, an emergency fund is simply a savings account (preferably one that yields a high rate of interest) that is easy to access in case there is an emergency that requires cash ASAP. The general rule of thumb is to save up 3 to 6 months of your living expenses, however depending on your circumstances you may want to save even more than that.
For instance, before I left the corporate world to run my own business, I made sure I had at least 9 months of living expenses socked away in my savings account. That amount of savings made me feel safe and comfortable, and let me tell you, it definitely came in handy once or twice during my first year on my own!
Check Your Credit Report & Score
Checking your credit report should be something you do on a yearly basis to make sure all the information reported is accurate (and if it is not, correct it). Luckily, you can request copies of your credit reports by mail from both credit bureaus, Equifax and TransUnion, at no cost.
If you have plans to take out a loan one day, such as a mortgage on a new home, then you may also wish to find out your credit score. Your credit score is the grade each credit bureau gives you that indicates how responsible you are when handling credit. The higher the score, the better you look to creditors, who may then be more open to lending to you. That’s why it’s important to know your score, because if it’s not as high as you expected you can start taking steps to improve it before applying for a loan.
Do a Review of Your Credit Cards
Do you know what credit cards you have in your wallet? Better yet, do you know why you have those cards? It is important to do a regular review of your credit cards to make sure they are still worth keeping. Key things to look for are if they offer purchase protection, have a decent rewards program, and if they charge you an annual fee.
Then, consider what else is out there to see if there are any better credit cards to replace your current ones. You may end up finding that getting a President’s Choice Financial® Mastercard® would actually help because you can earn free rewards* for no annual fee.
Get a Will
No one likes to think about the inevitable, but getting a will and making sure your estate is set up properly is something you should do as soon as you have any significant assets and/or dependents.
This is something my husband and I delayed for a few years after getting married because at the time we thought we were too young. Eventually we realized it has nothing to do with age, but is something that responsible adults needs to take care of for the sake of their family and other dependents.
And you know what was shocking? It was not hard to do at all! It took hardly any time to find a qualified estate lawyer, and then once they were hired they walked us through everything step-by-step.