Are You In Good Shape Financially?

Published by Linda Brown on

Are you in good financial shape?  The following are some questions you need to ask yourself!

Do you have a “saver” mentality or a “spender” mentality?  Unfortunately, today, many Americans seek instant gratification.  Many are not willing to save and wait for the things they want.  There are individuals that admit to being big spenders.   Our own government encourages us to “spend” to keep the economy going and discourages us from “saving” by taxing our hard-earned dollars!

Do you have emergency cash savings set aside?  Most financial experts recommend saving at least 3-6 months salary.  It is important to have these monies in a “liquid” account at a bank, such as a money market account or savings account, so you can access the funds quickly if necessary.  For example, you may need the funds for “unexpected” expenses such as a leaky roof or perhaps a “pricey” car repair.  Or, if these unforeseen expenses occur will you be forced to take out a short-term loan or use your credit cards? Unfortunately, doing this would be simply racking up more debt!

Many Americans are overextended with credit card debt!  According to a 2018 study by Experian:  “The average American has a credit card balance of $6,375, up nearly 3 percent from last year!”  And, in a separate 2018 report by the Federal Reserve:  “Total credit card debt has reached its highest point ever, surpassing $1 trillion in 2017!” 

How much credit card debt do you have outstanding?  If you carry more than one card do you know what interest rate each one is charging you?  Ideally, your goal should be to pay your credit card balances in full each month.  However, if you are unable to pay in full are you making every effort to pay “more” than the minimum payment each month?

Do you own more than one credit card?  Many individuals today do!  If so, popular financial advice recommends paying off your “highest” interest rate credit card first.  This way you are paying “less” money long-term.  Of course, you would continue making your monthly payments on your other credit cards.

Do you have a monthly budget in place?  Do you know “exactly” how much income you earn and the amount of your expenses?  Many individuals dislike creating, and sticking, to a monthly budget, and it does require discipline, however, there is no better way to keep track of your money!  Always be aware of how you are spending your hard-earned dollars. 

Are you investing in stocks long-term to grow your money?  Or, do you have your money in a “low” 1% interest-bearing account at a bank?  After deducting inflation and taxes saving this way can be a losing proposition!

Do you know how to get started investing in stocks?  If not, it is important to take the time to learn how! However, before you start investing in stocks, make sure you have your credit card debt paid off and an emergency savings account set aside! Stocks have historically outperformed every other investment long-term!

“According to historical records, the average annual return for the S&P 500 since its inception, in 1928 through 2017, is approximately 10%.”  And, with the right financial skills, it is definitely possible for individuals to earn a much higher return than the S&P 500!  

Does your workplace offer a 401k, or 403b, retirement plan?  If your employer offers a “matching” dollar amount, are you contributing the maximum to it for your future retirement?  Do you know what assets are in your plan?  You want these dollars to be invested in the right investment vehicles!  Do you know the amount of fees you are being charged for your retirement plan? If not, ask your human resources department.  

In conclusion, you need to ask yourself all of the above questions!  Being in good financial shape is a must today!  To learn “how to invest in stocks” check out my website

Linda Brown

I'm an Accountant, Blogger & Investment Consultant with a "Bachelor of Business Administration"degree. Teaching women how to invest in stocks successfully! Men welcome!