January is Financial Wellness Month and a great time to set yourself up for financial success in 2024. Regardless of the economic environment, The Washington Post columnist Michelle Singletary suggests you can improve your finances by implementing the following tips:
- Review monthly statements for your credit cards and bank accounts. — Not only do you want to track your balances, but you should also review all activity to ensure that it accurately lists your expenditures and credits. If you find errors, report them immediately to the specific holders of the incorrect credit card and bank accounts.
- Total how much money you have in reserve for emergencies. — Financial experts suggest having a minimum of three months' worth of cash to cover all living expenses during that timeframe. Many of us don't have that much money saved, so start a rainy-day fund if you don't already have one and build it slowly.
- Tally all your debts. — This tip may be painful, but you need to assess how much debt you have so you can develop a plan to start paying it off.
- Ensure the strength of passwords for any online financial accounts. — This tip goes hand in hand with No. 1. The more complicated your passwords are, the harder it is for fraudsters to access your accounts. To prevent hacking, IT professionals strongly encourage you to use unique passwords for each account. Don't use the same password more than once.
- Request your free credit report from the three key credit bureaus — Equifax, Experian, and TransUnion — and check your credit or FICO® score. — Before the pandemic, you were permitted to obtain a free report from each of the major bureaus annually. However, that has now changed to monthly. The better your credit score, the better your credit is, which can help you secure a loan for your first home or other big-ticket items. A lower interest rate means it will cost you less to borrow funds.
- Review your Social Security statement, if applicable. — If you've worked in a job eligible for Social Security benefits, you'll receive a statement in the mail annually of how much you've paid into the system. You can use this information to help you plan for retirement.
- Assess retirement account balances. — It may seem far in the future but start saving toward retirement as soon as you can. Some employers offer pensions whereas others provide investment opportunities in funds, such as 401k's or 403b's, often with a company match.
- Learn from your financial experiences — good and bad — during 2023. — The only way to make improvements is to view your mistakes as teaching moments to make better choices moving forward. If a strategy is working for you, keep doing it.
Financial wellness is a marathon, not a sprint, so take one step at a time and be patient with yourself as you work toward your goals.