At Budget Challenge, we work with our teacher partners to help create the next generation of financially capable young adults. But in our busy lives, it is easy to neglect our own finances. This might be a good time to do a quick financial tune-up by considering the four suggestions below.
Get a free credit report
It is good to know your credit score. It is even better to routinely review your credit report. Reviewing your credit report for errors takes only a few minutes but can be well worth the time. Every year, you're entitled to one free credit report from each of the main credit bureaus: Experian, Equifax and TransUnion. By law, you are entitled to a copy of each report once a year for free at annualcreditreport.com. The smart move is to request a report from one now, and then set reminders on your calendar at four-month intervals to request the other two.
Check what you're paying for your home mortgage
If you have a mortgage, do you know the interest rate you're paying? Because this might be a good time to refinance. Over just the last four years rates have ranged about 1.5%. If your mortgage is over 10 years old, you're likely paying over 5% interest regardless of term. 30-year fixed rates are currently about 3.6% while 15 year-rates are hovering around 3%. Refinancing could equal significant cost savings over the life of your loan. And you may be able to refinance at a lower rate and a shorter term, helping you build equity faster while paying less in interest. If you are in an extreme cash-flow situation, refinancing also might allow to you draw equity out of your home.
Put your bills on auto-pay
Budget Challenge teaches the importance of paying bills in full on-time. Make your bill paying automatic for monthly bills like utilities, cell phone, cable, etc. Almost all bills can be automatically paid with a checking account. Some will even allow autopayment with a credit card. And how about that credit card bill? If you are worried that automatically paying the full amount might result in an overdraft, set-up autopay to pay the minimum balance. You can always pay more, or pay the bill in full, but with automatically paying the minimum you will never incur late fees or interest penalties for missing a payment. Read more about auto-pay here.
Comparison shop your insurance
Every insurance company has its own formulas for determining premiums. Consequently, premiums for the same coverage can vary significantly. And insurance is a recurring payment, so even small savings can add up. Don't assume that the popular internet sites will offer you the best deal. An insurance agent can determine if you qualify for additional discounts and independent agents could find you a company that offers better rates for customers like you. Like the ads say, a phone call might save you hundreds of dollars and costs nothing.