Financial Stability

Plunging into Financial Trouble - and Climbing Out of It

Many Floridians report that their debt significantly outweighs their savings, and a startling number of Floridians say they spend more money than they earn.

Here are some signs that you are encountering financial turbulence - followed by some tips to help you make a safe landing in the realm of financial stability.

Signs of financial trouble:

Paying your bills eats up all or most of your after-tax income and - to cover shortfalls - you find yourself regularly depleting your savings.
You make only the minimum payments on your credit card debt - which leaves you perpetually behind the eight-ball. Even if you never charge another Happy Meal to that card, sky high interest rates on the remaining balance can keep you in debt for decades.
You can't maintain an emergency fund. Experts recommend that you squirrel away a minimum of six months of your salary in a separate account. If you can't do that, try to set aside funds equal to three months of basic expenses - rent or mortgage, food, car payment, insurance and so on.
You and your spouse or significant other frequently argue about bills and financial resources.
You have trouble sleeping because you're worried about money.
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Steps to improve financial stability and your credit rating

Use today's money, not tomorrow's. In other words, stop using credit cards. Pay your normal monthly expenses (rent, utilities, etc.) first, then select one credit card on which you'll make larger payments until it's paid off. Make the minimum payment on the others. When the first card is paid off, select another on which to make larger payments. Continue this until you're out of debt. Then consider canceling some or all of your credit cards.
Think about your credit rating, which is a crucial measure of your financial stability, and do everything you can to achieve the highest possible credit score. High scores on credit reports earn you relatively easy credit with relatively low interest rates; low scores mean you will be charged more for auto and other loans. Blemishes on your credit report also can affect your employability.
Pay your bills on time. This is the most important thing you can do to build a solid credit history. Late and missed payments are included in credit reports and can significantly diminish your credit score.
Reduce outstanding debt. The amount owed on installment loans and credit cards, as well as how close you are to your credit limit, also affect your credit rating.
Under federal law, you now are entitled to one free copy of your credit report every year. To apply, go to: www.annualcreditreport.com. Be sure to apply only for the free credit report; avoid additional offers that carry additional charges.

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