5 Tips from Accountants to Increase Your Financial Security

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These are challenging and uncertain financial times for sure. What would those who work in the business of money — accountants, for instance — suggest we do to increase our financial security for now and into the future? Here are five very doable recommendations from the pros:

1. Make paying off high interest debt a priority: This includes credit card balances and loans. Even before you deposit money in any type of savings account, make every effort to get out from under as much debt as possible. In essence, paying down debt is saving because the result of lessening your debt is less money going out for payments and more money staying in your pocket. Keep the big picture in mind and you’ll witness the increase in your spendable income as you eliminate those pesky monthly payments to your debtors.
2. Save: It goes without saying that saving is a wise idea. Any buffer in a budget leads to financial peace-of-mind so be sure to set some money aside for saving before you pay any of your other bills. Taking savings seriously — as seriously as any other financial commitment you have — is a smart way to turn a financial buffer into a tidy nest egg that can, in turn, earn you even more with interest.
3. Revisit your budget yearly: Our circumstances and expenses can and do change rapidly. That’s why it’s a prudent idea to sit down and make adjustments to our budget once a year. Expenses go up or get redistributed. Invariably some expense slips in under the radar and doesn’t get reflected in our current budget. Even pay increases, if not reflected in our budgets, can disappear, rather than contributing to those areas mentioned earlier, decreasing debt and increasing savings. Having an accurate picture of where our money is going leads to greater financial empowerment and wiser spending.
4. Review/reevaluate your savings and investments: It’s a great wealth-building opportunity to contribute to a 401k, money market or stock account. Once you set one up, however, it’s not a case of “set it and forget it.” Several times each year, examine exactly how your particular investments are performing and redistribute funds as you see fit. Seeking the wisdom of a financial advisor may be worth the expense if you don’t feel qualified to evaluate their progress yourself.
5. Check your credit score: In many ways, your credit score is your financial report card. It tells creditors (and anyone else with a vested interest in your financial life) how responsible you are in the handling of your finances and credit. If your credit report shows that you aren’t paying your bills, pay late or have an inordinate amount of debt, you will lose out on opportunities such as lower interest rates or getting credit to make a major purchase. It’s not uncommon for a credit report to contain inaccurate information that could reflect badly on you as, say, a credit risk or even as a potential employee. Check your credit score with the three credit reporting agencies once a year for free: Go to experian.com, transunion.com and equifax.com, register and supply some personal information and you’ll find out exactly what others can find out about your financial situation.

Take it from the financial pros — there’s plenty you can do to increase your financial security. Take the time to be vigilant about your money and you’ll steadily grow more and more fiscally strong, able to withstand tough times.

Tips provided by the financial experts at Wegner CPAs and Consultants and Sheryl Woodhouse-Keese, founder of Twisted Limb Paperworks who disseminated advice from her accountant.

What do you do to shore up your money so you’re ready to weather financial storms?

Tagged as: Tax