Keeping your finances in check isn't always easy, but there are simple things you can do to improve your situation. Here are five helpful tips from your friends at North Country Savings Bank:
- Pay yourself first – start stashing 10% of your income in an "emergency" savings account and use it only for real emergencies. Keep the rest of your savings in a separate account designated for yearly expenses that you know are coming and you can estimate (e.g. Christmas, insurance, taxes, etc.). Allocating your savings to different accounts may help you save more and spend less.
- Don't borrow money unless you have to – experts recommend that you only borrow for necessities or for things that appreciate in value. However, if you do borrow money, make sure you are in a position to repay the loan. Failure to pay debts can result in severe financial ruin. And keep in mind, many lenders will loan you money you can't afford to pay back, especially high-rate lenders. Just because you're able to get a loan, doesn't mean you should.
- Never co-sign on a loan unless you are willing and able to pay it back. It's not uncommon for co-signers to end up paying off loans they aren't prepared to pay. If the primary borrower pays late or defaults, the co-signer is responsible for that debt. Also be aware that many lenders do not notify the co-signer before reporting delinquencies or repossessions to the credit bureau.
- Shop before you buy – before you decide who to borrow from, compare rates and look for the loan with the lowest APR. If you pay your bills on time, and you aren't over-extended, you can often find loans or financing arrangements at rates lower than 13%.
- Establish good credit – don't borrow too much and pay your bills on time. Inexpensive ways to establish good credit include: (1) Obtain a good credit card. When you charge things, pay off the balance each month on time and pay no interest. (2) Establish a revolving line of credit (an empty loan) as an overdraft protection against bounced checks, and don't use it as a loan. (3) Get a loan to buy a car, or furniture, etc., and pay it off within a few months.
For more information or to discuss your situation with one of our experienced banking professionals, stop by your neighborhood North Country Savings Bank.