CommonCents Tools / Financial Freedom Tips

Financial Freedom Tips

Take control of your financial life! Follow these simple FDIC tips to help you stay ahead of your finances:

Responsible Credit Management

  • 1. Choose carefully. Don't choose a credit card just to get freebies (T-shirts or sports items) or because there's no annual fee. Look for a card that's best for your borrowing habit.
  • 2. Limit the number of credit inquiries. Every time you apply for credit, it shows as an inquiry to your credit report. Too many inquiries are viewed negatively by lenders.
  • 3. A large number of recently established credit accounts may hurt your ability to be granted credit.
  • 4. Always pay on time. Mail your check at least a week in advance of the due date.
  • 5. Keep in touch: If you change your name or address, notify your lending institution immediately. Your payment could turn into a late payment in the time it takes for a statement to be forwarded to your new address.
  • 6. Create a budget. By using a budget, your monthly bill will not be a surprise.

Avoid Overdraft Fees

  • 1. Manage your own checking and savings accounts. No one will be able to spot an error or fraudulent charge faster than you.
  • 2. Keep an eye on your account balance. Remember that some checks and automatic payments may not have cleared yet.
  • 3. Review your account statements each month. Between statements, you can find out which payments have cleared and check your balance by calling your bank or by checking online or at an ATM. Be sure to find out the actual amount in your account--your account balance not including any funds available to you through "courtesy overdraft-protection," or "bounce coverage," plans.
  • 4. Set up an overdraft line of credit with the bank. You need to apply for a "line of credit" just as you would apply for a regular loan. If you overdraw your account, the bank will lend you the funds by using your line of credit to cover the overdraft. You will pay interest on this loan, and there may be an annual fee. But the overall costs may be less than the costs for courtesy overdraft-protection plans.
  • 5. Link your account to a credit card you have with the bank. If you link your account to a credit card, any overdraft amount becomes a cash advance on your credit card.

Maximize Your Tax Return

  • 1. Consider using tax time to pay off high-interest debt or save for the future.

Finances Made Easy

  • 1. Arrange to automatically pay for recurring expenses, such as a mortgage loan, insurance premium or utility bill. Many merchants, such as insurance companies or utilities, will allow you to pay recurring bills with an automatic withdrawal from your checking account or through a charge to your credit card.
  • 2. Put some savings on autopilot. Arrange with your bank or employer to automatically transfer a certain amount into savings accounts or investments on a regular schedule.
  • 3. Consider consolidating accounts. Think about how many different financial institutions you use and how many accounts (savings, checking and investments) and credit cards you have. You may be able to simplify your finances, reduce mail and paperwork, avoid certain fees and even get better deals by consolidating multiple accounts. Consolidating accounts also can make it easier to monitor your entire portfolio and ensure that your money is properly diversified.
  • 4. Look into automated money-management tools. Software that you download to your computer or Web services managed by your bank or another third-party can give you an updated snapshot of all your account information from multiple institutions, in one place. The programs also can help you organize your finances, understand how you spend your money, and spot a potential fraud or theft (by providing a regular summary of account balances).
  • 5. Don't let a disaster catch you off guard. If an emergency were to occur and you had only few moments to evacuate your home, perhaps for several days or even weeks, would you have access to cash, banking services and the personal identification you need to conduct your day-to-day financial life? One strategy is to store copies of important documents — such as health insurance cards, your driver's license, bank account numbers and credit card information — on a secure Web site that you can access from anywhere.
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