Seven tips for handling your finances with care
President’s council on financial literacy provides guidance with seven tips
By Carrie Schwab Pomerantz
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Published: December 21, 2008
To say that the current economic times are challenging might seem like an understatement. With daily market swings and global financial uncertainty, people everywhere are concerned about protecting and preserving their money. While this uncertainty can make all of us feel a little lost as to what to do next, it’s more important than ever to be proactive about your personal finances and learn to manage your money with care.
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The council’s tips
1. Understand how your bank or credit union account is insured. The Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA) insures all deposits at insured banks and credit unions up to at least $250,000. To check whether your financial institution is insured, visit www2.fdic.gov/idasp/main_bankfind.asp or NCUA.gov/ShareInsurance/index.htm.
2. Understand how your investments are protected. Brokerage firms are required to be members of the Securities Investor Protection Corporation (SIPC), which insures customer securities accounts up to $500,000, including $100,000 in cash claims, when a brokerage firm fails. To learn more about these protections, visit www.sec.gov/answers/investoralert.htm or go to www.sipc.org.
3. Always keep lines of communication open with your mortgage lender. As soon as you know you may have difficulty meeting your mortgage or home equity loan payments, contact a counselor to work out a payment plan at HOPENOW.com or by calling 888-995-HOPE (4673).
4. Protect your credit score. Only put on your credit cards what you can afford to pay back. For other hints on improving your credit score, visit controlyourcredit.gov. Also, to protect against identity theft, get a free copy of your credit report at annualcreditreport.com.
5. Make sure you have a rainy day fund. Keep an emergency fund worth three to six months of your monthly expenses in an insured account. If you don’t have an emergency fund, try to start one. Visit the budget calculators on www.controlyourcredit.gov/html/debt_management.html.
6. Don’t try to cut costs by canceling your insurance. Learn more in the Life Events section on MyMoney.gov.
7. If it sounds too good to be true, it probably is. Watch out for scams trying to take advantage of all of the recent changes in our nation’s financial markets. Educate yourself at FTC.gov.
You may have heard some of these tips before, but now’s the time to really pay attention and take action.
Carrie Schwab Pomerantz is Chief Strategist, Consumer Education, Charles Schwab & Co., Inc., Member SIPC. You can e-mail Carrie at askcarrie@schwab.com.
Related Topics:
Business, Personal Finance, Home Financing, Consumer Credit and Debt, Personal Credit Ratings
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