By Sandra Guile
Better Business Bureau
April is Financial Literacy Month and it doesn’t hurt to review some tried and true strategies for dealing with money, from saving to spending to borrowing.
The key to balancing all three strategies is understanding the best practices for each.
Budget Carefully: Be realistic when budgeting for regular needs – like your house, your car, your food, and your unexpected issues. Experts recommend having three to six months worth of necessary expenses set aside in case of an emergency. It could be temporary unemployment, a big-ticket repair, or even an unforeseen illness. It’s best to have a rainy day fund, just in case.
Spend Occasionally: It’s also OK to balance that out with a little discretionary spending once in a while. Eat out, see a movie, or visit a museum – the problem we encounter nowadays is the constant bombardment of sales calls and emails. It makes it difficult to resist the urge to spend when we shouldn’t. Keeping yourself in check isn’t easy, but saving up and spending on something you really want can make it so that you don’t break the bank.
Choose Wisely: When choosing a credit card, decide how much money you need, what terms you’d prefer, and who’s behind the offer. Make sure everything is on the up and up. The Federal Reserve is starting to increase interest rates – which does impact borrowing rates – so it might be a good time to review your credit score. See if all of the accounts listed under your name are accurate and check your borrowing power at least once a year. Request a free report by visiting annualcreditreport.com or calling 1-877-322-8228.
Learn Proactively: Debt collection, debt management, debt relief, debt settlement – debt is a four-letter word that’s the subject of some complex laws. Learn how to exercise your rights under the Fair Debt Collection Practices Act and how to recognize debt-related scams and frauds. Scammers LOVE to use personal information to make you think you have outstanding debt when you really don’t.
Remember, sometimes things don’t always go right. But being financially literate and knowing how to work with what you have can make things a little easier.
Find out more about fiscal responsibility and consumer protections on ftc.gov, and research a business you’re considering using on bbb.org.