When was the last time you checked your credit report? How about the last time you listed out and added up your debt? When did you last look at the total cost of your monthly subscriptions? If you weren’t sure of the answer to those questions, now might be the perfect time to give yourself a financial checkup?
1. Check your credit report
Did you know you can request your credit report once a year for FREE at www.annualcreditreport.com. Royal also offers your FICO credit score FREE in online banking or your mobile app. Checking your credit report helps you understand a few key things –
- It can be the first indicator of fraud or identity theft. If you see names, social security numbers, addresses or accounts that are not yours, you might be a victim.
- Helps you identify inaccurate information. Making sure accounts are recorded properly and that your personal information is correct helps you make sure lenders are using the best information to make decisions if you apply for new credit.
- Gives you a full overview of your financial picture. Your credit report is a great place to see all of your existing accounts, debts owed, collections and more. Having this information at your fingertips can help you visualize your future and set SMART goals.
For more information about checking your credit report watch this quick video.
2. Analyze debt
Paying off debt is a popular financial goal, but how do you start? Here are 3 steps to get started.
- List out all of your creditors with the amounts you owe and the interest rate, to each along with the minimum monthly payment.
- Add up the balances of what you owe and the total minimum monthly payments.
- Try the debt snowball or avalanche method to pay down debt quickly. Check out the differences and how to get started in this video.
3. Evaluate your income.
Did you get a year-end raise, earn a bonus, or start a side hustle for some extra cash? Knowing how much money you are bringing in bi-weekly or monthly is key to gaining control of your cash flow. List out all of the money you are bringing in and add up the total to know what you are working with.
4. Take a look at your spending
Spending is where our money goes, right? Well, this is arguably the most important part of controlling your cash flow. Knowing where your money is going helps you make a plan and adjust where needed. Log into your online banking or get a print out of your account for the last year and evaluate these areas.
- Subscriptions! Have you been paying for something you no longer are using? You could save hundreds of dollars a year by canceling it.
- Insurance. When is the last time you considered the cost of your insurance? Shopping around for a lower rate can save you tons!
- What are you paying for your basic expenses? Food, utilities, entertainment, housing and transportation are just a few areas to look it. Have you been forgetting to turn off the lights? Or had one to many takeout meals? Decide how much you are able to spend in these areas and then work on sticking to it.
5. Review savings goals
Paying yourself first is the most important “bill” you have. By automating this process you can use the “out of sight, out of mind” mentality and forget you have that extra money. Setting realistic savings goals is key. Are you saving too much that you feel strapped for cash? Do you think you could save more? Making sure your savings are realistic for you is what will up your chances of success.
If you are looking for a one stop shop, use Royal's Money Management tool to set goals, build a budget, analyze your debts and more. Use online banking or the mobile app to access Money Management to get one step closer to reaching your financial goals.
Our financial experts are here to help! Schedule a free financial review with one of our experts by visiting rcu.org/appointments to set up an appointment.
Looking for more resources to help you achieve financial wellness? Check out Enrich Online Learning, our free financial education platform with personalized tools, courses, and more!
