Questions About Managing Money
What is it about the times we are living in that make financial health and money management so important?
What are specific actions people can take who are looking to better manage debt?
What is it about the times we are living in that make financial health and money management so important?
The recent years of the pandemic, with economic impacts such as rising inflation and expensive housing, are a challenging time for managing household finances.
People may be experiencing changes in income, perhaps a temporary reduction in hours or pay, or other financial trouble.
Many of us relied on the now expired relief programs such as the Advanced Tax Credit, credit card deferments offered by creditors, deferrals on student loan payments, temporary mortgage forbearance and other relief related to debt. The end of these programs might contribute to uncertainty when it comes to meeting a financial goal related to saving, preparing for retirement, building up an emergency fund or other improvements to the health of our personal finance.
Many people are looking to understand how to manage monthly payments when relief ended, as well as how to handle any increases in consumer credit card balances.
So the times we are living in, with all the uncertainty, make prioritizing monthly expenses important to get a solid footing on money management and financial health.
One of the biggest misconceptions people have about managing finances, including getting a handle on high credit card balances, understanding their options when facing foreclosure, or other issues, is that they must face the challenges alone.
People don’t have to face their financial stresses alone.
A financial counseling session is a chance for people to work one on one with a certified, HUD-approved counselor to understand their full financial situation, and get a specific action plan that works for their unique situation.
Housing costs are especially challenging. For those trying to avoid foreclosure, for instance, a certified HUD housing counselor is a powerful resource to understand the specific options to take. They can provide information about mortgage repayment options, engage with mortgage servicers or provide other solutions.
Another issue specific to the times we are facing is the challenge to keep up with savings goals, which helps when it comes time for financial goal setting.
Setting and sticking to a realistic savings plan is a key component of financial fitness. You can automate savings directly from your employer or put into place other tricks to make it a seamless savings process.
No matter the amount, setting aside a budget-friendly amount each month for savings builds fitness and financial health.
What are specific actions people can take who are looking to better manage debt?
A secure financial future depends on building healthy habits, especially around credit and debt.
How many consumer credit cards do you have? Do you know the interest rate for each one? As well as your outstanding balances? How much student loan debt do you have? What’s the interest rate? Would it be beneficial for you to refinance your home? These are the kinds of questions you must know the answer to if you are going to manage your debt.
Whenever you take on debt, there are usually options for repayment and interest terms for you to choose from. What might seem like minor details could mean a difference of several thousands of dollars, so make sure to shop around for the best deal available and know the implications of the terms you are choosing. If you don’t know what certain terms mean or how they could impact you, don’t rush into a decision.
None of this to say that all debt is bad debt. In fact, there is such a thing as good debt that you take on to finance the purchase of assets that could add value over time, such as starting a business, buying a home, or getting an education. But bad debt, with very high interest rates and obtained for something that adds no value over time, is something you should avoid taking on whenever possible, as it is counterproductive to our goal of building wealth.
And when it comes to credit history and credit scores, you can take action by knowing your numbers.
To get smart about credit, it involves taking the time to pull reports that show your full credit history, and your current credit score. Having a healthy credit score means you get favorable interest rates on any loans you might be thinking of applying for – like a car loan or mortgage. Using your Ascension CU mobile app, you can also see an updated credit score with SavvyMoney.
Also, Annualcreditreport.com allows weekly updates of all three credit bureaus. If something’s inaccurate, talk to your creditors first. If needed, dispute with credit bureaus.
