Only a quarter of U.S. adults are satisfied with their current financial situation, according to a U.S. Financial Capability Survey released by the FINRA Investor Education Foundation. Here are six tips to help you take charge of your finances.
1. Get a grip on spending. It's difficult to make ends meet when you don't know where your money is going. List your monthly bills and track your daily purchases for a week. This will provide a clear picture of your spending habits and help identify ways to spend less, or spend smarter. Resources at SaveAndInvest.org can help you track your spending.
2. Don't overdraw your accounts. Overdraft charges can be costly, so balance your checkbook regularly and opt out of programs that automatically approve ATM withdrawals and debit card transactions. Be sure to check your balance before you withdraw funds.
3. Dial back your debt. Avoid costly credit card debt by paying your balance in full each month. If you can't, pay at least the minimum and any more you can afford. Learn more about how to deal with credit card debt.
4. Start an emergency fund. Weather unexpected financial shocks by building an emergency fund. Aim to set aside three to six months of your salary in a federally insured savings account, and don't touch it unless absolutely necessary.
5. Plan for known expenses. Use tax-advantage accounts to save for major expenses. For example, save for a child's college education by contributing to a 529 Plan or Coverdell Education Savings Account. And save for retirement by contributing to a 401(k) or IRA and watch it compound over time.
6. Shop around for financial products. Before you choose a financial product—whether it's a credit card, auto loan or mortgage—compare costs and terms to save money.
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