We all want financial health but achieving it can sometimes be daunting to get started. But, pushing yourself to move forward with a plan can pay off big. There are many things you can do, but keeping it simple can help jump start the process and give you some definite objectives that are both reachable and easy to put in motion. Because financial health has such a positive impact on our daily lives taking the steps towards your goals should be a very important priority.
To help, here are five easy steps to get you going:
Begin with a Budget
Budgets get you thinking about your money and help you take control of spending. First, identify how you’re spending your money now. You might be surprised to see that morning cup of coffee is costing you over a $1,000 a year when it would cost pennies to make it at home. Second, decide what you could live just fine without, and what is necessary like your mortgage payment and groceries. Use available websites or apps to help. Set a goal to spend no more than 80-90% of your total income with 10-20% left to save.
Pay Off Credit-Card Debts
Tackling your credit-card bills can be daunting, but it’s necessary for financial health. Begin by making a list of your credit cards as an extension of your budgeting process above. Then, set a plan to pay off the one with the highest interest rate first, regardless of the amount owed on the card. Once done, move onto the second card and so on, but continue making at least the minimum payment on the other cards as well. If you are able, try to transfer balances from high interest rate cards to lower rated ones.
You should also be checking your credit report at least once a year and checking for any inaccuracies, identity theft, etc. Under the Fair Credit Reporting Act, you are entitled to a free credit report every year at annualcreditreport.com. If there are inaccurate items on your credit report, you can use our Free Credit Report Dispute Kit to make sure you get them items corrected and protect your rights.
Build Your Emergency Savings Fund
Because you never know what the future holds, it is important to build a financial cushion or emergency savings fund in cased you lose your income or have an unforeseen expenditure. Credit cards should not be the fall-back since using them for life expenses can end up costing you much more in the long run. Begin by saving 5 – 10% of your income until you have at least 3 – 6 months’ worth of basic living expenses set aside. A low impact way to get there is by saving a tax refund, a bonus, or the difference in income from a recent raise.
Target Your Savings
A great way to help you save is to take the thinking about it out of it. Have a portion of your paycheck direct deposited into your savings account each pay period. You are less likely to spend it if you never see it in your regular account. Instead of having your entire paycheck deposited to your checking account, have 5-10% put directly into your savings account.
Save for Retirement
It is never too early to start saving for retirement and permanent financial health. If you have access to a 401K plan with a company match, it’s an easy choice to participate and make sure you are getting the full benefit. Start by setting aside 3% of your salary to the 401K. This deduction is pre-tax so you will hardly notice, plus, it will reduce the amount of taxable income you are bringing home. Increase your savings by just one percentage point a year until you get to 10% and you’ll hardly feel a pinch. It’s also good to start saving your emergency fund before your retirement fund because if you get stuck and need to use some of the money, you will be taxed on the withdrawals and may even be hit with penalties. If you’re self-employed or your company does not provide retirement benefits, opt for an individual retirement account (IRA). For specific advise on your particular financial situation, you should consult with a reputable financial planning professional to help you make the most of your money.
Start moving towards financial health using these steps and an overall savings plan that works for you. As with any positive step forward, soon you will begin to feel the benefits and greater peace of mind.
Culik Law is a Massachusetts Attorney / Law Firm. The post is not intended as legal advice.
Culik Law is a BBB Accredited Business located in Woburn, MA. They have been Accredited since 2010.
If you receive Social Security Benefits, in almost all instances creditors are not allowed to take these funds to pay a past-due debt. Under federal law, Social Security benefits may only be garnished in order to collect debts owed to the federal government (like taxes or student loans) or past due alimony/child support. No other creditors can force you to pay them directly from your benefits.
The protected status of Social Security benefits also extends to your bank account, but you must be able to prove that they money in your account came from Social Security. This is referred to as “tracing.” If you can “trace” your money back to your Social Security benefits, then those funds are also exempt from collection.
The intent of these federal rights is to protect elderly individuals from overzealous creditors. Actively defending collection lawsuits in state court is often the best way to assert these rights.
However, debt collectors are aware of these rights, and their business models often seem to rely on default judgments. Because they cannot collect from your Social Security benefits directly, they often convince people establish monthly payment plans with them. These payment plans often allow creditors to receive more than they would otherwise be allowed to collect under law.
Even if you are fully judgment-proof, a bankruptcy filing may be also desired in order to ensure a stop to all collection calls, letters, lawsuits, etc.
In bankruptcy, the protected status of your Social Security benefits remains intact. Income from Social Security is not counted for purposes of determining Chapter 7 eligibility. Similarly, in a Chapter 13 context, Social Security benefits need not be counted in the calculation of your monthly plan payment. And courts have made clear that the exercise of these federal rights does not create any good faith issues.
If you receive Social Security and have debt collectors contacting you for payment, please contact us today for a free consultation. You may be able to fully protect your income.
Culik Law is a Massachusetts Attorney / Law Firm. The post is not intended as legal advice.
Culik Law is a BBB Accredited Business located in Woburn, MA. They have been Accredited since 2010.
Your credit report plays a huge part in big life purchases, employment, and helping you appear financially fit for lower interest rates, credit approval, and funding for personal or business needs. It’s important that it’s correct and reflects an accurate portrayal of your payment and credit history. Under the Fair Credit Reporting Act (FCRA) of 1970, consumers are protected against fraudulent information on their credit reports, unauthorized distribution, and unsolicited pre-screenings of information.
To keep your information correct and safe, here’s five big rights you have under the Fair Credit Reporting Act:
- You have the right to know what is in your credit report file. Under the act, you can collect a copy of your credit report once every 12 months for free. The three biggest firms (Experian, Equifax and TransUnion) offer one convenient report, which can be found at AnnualCreditReport.com. In some cases, you can review this information more often: if you are a victim of identity theft, you are unemployed but expect to apply for employment within 60 days, your file contains false information as a result of fraud, a person has taken adverse action against you because of your credit report or you are on public assistance.
- You must give your consent for distributing credit report information. Your credit report information may not be given out to just anyone who asks. There are specific criteria for viewing a credit report. Your report can only be viewed if: a court order has been issued, if you are applying for some form of credit, an insurance company is working on your behalf, or a government agency is determining whether to give you a license or other benefits. Other cases include a landlord considering you as a tenant or an employer wanting to check or verify information before offering you a job. These cases, however, require written consent from you. And if for some reason you are turned down for an application of credit, insurance or employment due to your credit report, you have the right to find out why.
- You have the right to dispute any incorrect information on your credit report. After you receive and review your report, if you find there are blatant errors in your history, you can do something about it. By law, the consumer reporting agencies must investigate all claims of false information. Inaccurate information must be removed or corrected within 30 days. You can know dispute credit report information online or in writing, but sending your dispute in writing by certified mail ensures you have a record of the dispute in case they refuse to remove an incorrect item you can show proof should be removed.
- There is a time limit on negative information reported on your credit report. If there are authentic negative items on your credit report because of past-due payments or a bankruptcy, and you are working to build your credit up, there is a time limit on how long negative items can remain on your credit report. Credit reporting agencies may not report negative information that is more than 7 years old or bankruptcies that are 10 years old.
- You may limit “prescreened” offers for credit and insurance. Have you received a tempting, pre-authorized offer in the mail lately for a new credit card? You have the right to opt-out of this prescreening process for five years or for life by calling 1-888-5-OPTOUT (1-888-567-8688). This helps keep your information safe and secure.
Culik Law is a BBB Accredited Business located in Woburn, MA. They have been Accredited since 2010.
