by Jim from Bargaineering.com
With the recession in full swing, every little bit counts. With half the year over, a lot of people are doing their mid-year reviews, seeing how they’ve progressed relative to their goals. Part of that process involves looking at your finances. Here are a few things you can do right now to have a big impact on your finances, if you aren’t doing them already.
Check Your Credit Report & Score
One of the best things you can do for yourself is review your credit report, free by virtue of the Fair Credit Reporting Act, once every twelve months. Go to AnnualCreditReport.com to request a report from each of the three credit reporting agencies. Review the report thoroughly and make sure it’s 100% accurate, dispute anything that is incorrect, no matter how inconsequential it seems. Accuracy is paramount.
You might also want to review your credit score. You can get a free FICO credit scores if you are willing to sign up for a trial membership to credit monitoring, which you can cancel later. Knowing your score is important because it’s being used more and more by other companies.
Start An Emergency Fund
If you don’t have an emergency fund yet, start one! It’s very very simple, just start putting money away for a rainy day and then put that fund into an online savings account. You ultimately have to decide how much to save but for now just start saving. A general rule of thumb is six months of expenses, so that you can weather losing your job for half a year, but in our current economic situation, you might want to increase that.
Start A Roth IRA
If you don’t have a Roth IRA and your emergency fund is on track, consider starting a Roth IRA. It is a retirement investment account that grows tax free and one of the most valuable things you can do for yourself, especially if you are young. The contributions aren’t tax deductible but the growth is, which is why it’s so powerful.
Simplify Your Finances
If you’re like me, you probably have a bunch of bank accounts, a bunch of credit cards, and other financial accounts. Consider trying to consolidate as many of those as possible. Don’t cancel credit cards just yet, as that will impact your credit score, but bank accounts and brokerage accounts can be safety consolidated. The fewer accounts you have, the less you have to manage. The less you have the manage, the fewer mistakes you’ll make and that can save you money down the road.
Jim writes about personal finance and other money issues at personal finance blog Bargaineering.com.