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This is part 2 of a three part series regarding Money and Your Financial Health.  There are five common mistakes that everyone at all economic and employment levels make and these can be easily rectified.

Mistake #1 – Ignoring Your Credit Report and Score:

Often potential employers as well as lenders will request your credit report and score.  The report and score indicates your past performance in repayment of debts and your debt structure.  It is used as a tool to evaluate your ability to repay current and future debts.  It is imperative that you obtain a copy yourself.  If there are inaccuracies or errors, immediately take action to correct them.  You can receive a free copy once per year.  There are fee for service providers as well as free services such as Credit Karma (INSERT<-www.creditkarma.com).

Mistake #2 – Maintaining a Strict Money Budget:

Once you established your income and expenses as determined by your 90 day analysis described in Part 1, you then implement a monthly spending plan.  Just as a diet to lose weight can be initially difficult, this spending plan will probably be uncomfortable at first but will become easier with time.  Incorporate a reward system into the budget.  Any extra money saved can be used as a reward for a dinner or movie.

Mistake #3 – Not Having Adequate Insurance:

Remember that there are four areas in your life that require insurance coverage.  They are: automobile¸ health, home or rental, and life.  All of these areas require some amount of coverage.  You need to evaluate the appropriate levels of coverage in your situation for all these types of insurance.  The use of a qualified insurance broker can be essential to assist in the determination of appropriate levels required in your individual circumstances.  The internet is extremely useful in obtaining comparative costs.

Mistake #4 – Not Paying Your Bills on Time:

No payment or late payments will negatively reflect on your credit report.  It is imperative that you contact the creditors if you have problems with the current payment structure.  Most people have repayment issues sometime in their life.  You are not alone!  Face the issue and attempt a resolution with the creditor.  On-line banking has allowed immediate payment of most bills. Utilize the auto-pay features to reduce the stress of remembering to pay bills.

Mistake #5 – Not Having a Savings Plan:

There are three specific areas for saving plans. They are: large expenditures, emergency, and retirement.  Large expenditures include foreseeable expenses such as vacation, home repairs, or others.  Emergency savings should include money to cover three months of expenses.  Even if you don’t have the entire three months initially, start saving and you can reach that goal. Retirement savings should probably be done with the assistance of a professional financial planner to evaluate your individual situation.

 

 

 

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