Top Financial Habits of Wealthy People – Part Six

Have you ever discovered an unauthorized charge on your bank statement? If not, chances are good that it’s because you haven’t been looking closely enough. While identity theft is one way this can happen, your bank could also be the culprit. If you aren’t aware of your bank’s policies for maintenance and overdraft fees, now is a good time to take a closer look at the fine print. Most of us know (or think we know) what will happen if we accidentally overdraw our checking accounts, but it’s still a good idea to review this information and to understand what (if any) maintenance or other fees are charged annually.

The reason to take time now to review this information is that many banks have been increasing fees substantially in recent years. Obviously the best way to avoid overdraft fees is to avoid overdrawing your bank account at all costs. While this is always the best course of action, vacations and holidays, as well as unexpected occurrences, can throw a wrench in even the best laid plans, and one simple mistake can wind up costing you hundreds of dollars. One way to minimize the amount you are penalized is to balance your checkbook at least five times a week. Doing this will ensure that you never grossly overestimate the amount you have available, therefore making sure you never overdraw your account by too much.

Many banks will transfer money from your savings to your checking automatically as a form of overdraft protection, while others will cover up to a certain dollar amount as long as you make a deposit within a predetermined amount of time.

Keeping a close eye on the fine print, and shopping for a new bank if need be, will help you to avoid costly and unnecessary fees, thereby increasing your financial well being!

Top Financial Habits of Wealthy People – Part Five

When was the last time you checked your credit score? Hopefully your answer to that question fell within the last month or two. If not, take a moment to consider these important points about your credit score and how important it is to your overall financial wellbeing.

Years ago, the credit score was something that could not be seen – a mysterious numerical decider that either worked in your favor to help you get something you needed (like a house or a car) or worked against you to prevent you from either getting a loan or getting a loan with a decent interest rate. Today, things are quite different, with the advent of the Internet being the primary reason. These days you can easily view your credit report and credit score online for a small fee. In some cases, you can even access this information for free when you sign up for a credit monitoring service or a new credit card. Credit monitoring services also charge a fee, but could make sense if you plan on checking your credit score and credit report regularly (something I would encourage everyone to stay on top of). One advantage of knowing your credit score and watching your credit report is that you will catch identity theft immediately, thereby preventing some thief from making off with too much of your hard earned cash or reputation.

While it is almost impossible to have a perfect credit score, understanding your score and what is impacting it will help you gauge the likelihood of being approved for a loan and will help you to realize the importance of paying your bills on time.

Top Financial Habits of Wealthy People – Part Four

If you want to know what’s really going on with your spending and savings accounts, you have to make time to take an active role in monitoring and tweaking your budget and your spending habits. Hopefully you’ve read the first three parts on this series about good financial habits, and therefore you have already taken the time to sit down and create a budget that you have begun to put into practice in your daily life.

Even though the goal of your budget is to outline the things you have to spend money on every month as well as the things you want to spend money on every month, there’s no way you can create a budget that will work forever. In fact, in order to keep on top of your finances and to have a realistic budget, it has to be a living, breathing plan that grows and changes with you.

To accomplish this, you need to set aside time every day (I’m only talking about five to ten minutes – I prefer doing it in the morning before I begin my work day) to monitor and record your spending habits. There are many ways to do this – Quicken is a great program if your finances are complicated, and today some banks even offer free budget software online when you open a checking and savings account. I do this simply by taking the amount in my entertainment budget that I have allotted to spend on whatever I want or need each month in addition to my bills (I include gas, food and sundries in with this amount) and writing it at the top of a sheet of paper. Five mornings a week I subtract whatever I’ve spent in the previous 24 hours from the total and make a small note about what I bought – groceries, makeup, shoes, etc. This allows you to know exactly WHAT you are buying and, if necessary, to determine what things you can do to cut corners.

Top Financial Habits of Wealthy People – Part Three

If you’re trying to think of ways to consolidate your finances and still cover all the bases, there are some simple ways you can get ahead while being smart. One way is to take a closer look at your credit cards and make sure that you aren’t falling into the multiple cards trap that credit card companies would love for you to participate in.

If you have good to great credit, you probably receive credit card offers every day. Even if you have mediocre to poor credit, you still probably have a few credit cards and receive offers at least once a week. This is how most of us wind up with more than one credit card, not to mention the fact that most of them offer specific rewards that are geared to cause overspending at specific retail outlets. In fact, many retailers have also begun to offer proprietary cards that encourage you to ‘earn’ rewards by spending more at their stores.

In order to avoid overspending and to simplify your finances, consider instead the possibility of cutting up all but one card and transferring the balances to the remaining card and paying off the balance. Your new card should have zero or low interest and good rewards and be able to transfer ALL of your existing cards to it for no extra fee. Once this is done, cancel all the old cards and concentrate on paying off the remaining card. Afterwards, keep the balance low, using it only for emergencies or to take advantage of the rewards program.

Top Financial Habits of Wealthy People – Part Two

Sometimes it’s the little things that really add up to make a difference in hitting your long-term financial goals. Even if some of the advice in this series may seem to address things that are too small to worry about, these are the healthy financial habits that are used by some of the wealthiest people in the world today. Taking the time to consider these money saving tips can help you to save extra cash with just a little bit of thought and planning.

If you added up the ATM fees people have paid in the last year, it would probably make you sick. Think about it – why does a bank really need to charge a fee? It’s nothing more than a money making scheme that capitalizes on our impulsive ‘must have it now’ nature. I mean, it’s not like they are doing it to protect themselves – if you don’t have the funds available in your account, you can’t withdraw the money.

That’s why, when you head out to an ATM machine, don’t just head to the closest one. Instead, make a point to plan a bit more, or drive an extra couple of miles if at all possible to hit a no fee ATM or to go to your own bank. You may even want to consider switching banks to one that is more convenient or to PNC who reimburses other bank’s ATM fees if you have at least a $2000 balance. At the very least, try to get into the habit of stopping by a conveniently located ATM machine along one of the routes you travel once or twice a week if you need cash. Plan ahead and stick to your budget – don’t withdraw extra money unless it is a real emergency!

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