7 Strategies to Safeguard Your Finances
Financial stability is not just a luxury; it's a necessity. It provides a solid foundation for personal and professional growth, allowing you to pursue your dreams without worrying about making ends meet. By prioritizing your financial well-being, you're investing in a future where unexpected expenses don't derail your plans. A future in which you can enjoy a comfortable retirement, support your loved ones, make purchases without hesitation, and take well-deserved vacations.
Moreover, financial stability offers peace of mind that extends far beyond your bank account and buying power. It reduces stress and anxiety and can improve overall life satisfaction. If you are looking for ways to achieve financial stability, keep reading this Ameris Bank blog article. In it, we discuss seven simple and effective strategies to safeguard your finances.
1. Create an effective budget
It's no secret that creating a budget creating a budget and sticking to it can be challenging. In addition to recurring living expenses (e.g., food, rent, utilities, transportation, etc.), you might have unexpected expenses such as home repairs, car repairs, medical care, and pet care. Spending money on unnecessary items (e.g., lavish meals, expensive clothes, etc.) and impulse buying can also make it difficult to stay on track. That said, it is important to establish a budget that you can adhere to.
Start by tracking your monthly expenses to understand where your money goes. You use a budgeting app or spreadsheet to help simplify this task. Then, categorize your spending, set realistic limits for each category, and do your best to stay within your budget. With time and practice, budgeting will become second nature, reducing financial stress and increasing confidence in your ability to manage your money wisely.
2. Build an emergency fund
In an ideal world, we wouldn't have to face unexpected expenses or financial difficulties. However, they can arise suddenly and without warning. That's why it's crucial to have an emergency fund that is only used when needed. An emergency fund serves as a monetary safety net, offering funds for medical bills, vehicle repairs, home upkeep, or financial support in the event of unemployment.
Start building your emergency fund as soon as possible, even if you can only initially set aside a small amount of money. As time passes, you can gradually increase how much money you save, eventually growing to a more substantial amount. Every person's income, expenses, and financial situation is unique, but you should save enough to cover three to six months of living expenses.
3. Protect your credit score
Protect your credit score by paying your bills on time, keeping your credit card balances low, and checking your credit report for suspicious activity. You can request a free credit report each year from one of the three major credit reporting agencies: Equifax®, Experian®, or TransUnion®.
Upon receiving your credit report, review it thoroughly. Check for inaccuracies in your personal information, incorrect or missing account details, and unrecognized transactions. If you locate anything unusual, report it promptly to a credit reporting agency and ask to have it removed.
4. Keep your financial information secure
Cybercriminals are continually adapting and refining their strategies to target and steal sensitive financial information. As a result, safeguarding your financial data has become more vital than ever. Being aware of the risks and taking steps to mitigate them can help reduce the chance of becoming a victim of identity theft and financial fraud.
Start by creating and storing strong, unique passwords for each of your accounts (e.g., personal email, bank, e-commerce sites, etc.). This approach eliminates the temptation to use or reuse easily guessable passwords across multiple platforms. Next, enable multi-factor authentication (MFA) where possible for an extra layer of protection.
Additionally, avoid accessing your accounts when connected to public Wi-Fi networks, as they can be vulnerable to security breaches. Finally, regularly monitor your bank statements for any unusual or unauthorized transactions. If you notice any suspicious activity, you must report it to your bank immediately to prevent any potential financial loss.
5. Don't fall for financial scammers
Financial scammers are becoming increasingly sophisticated, using advanced email, telephone, and texting tactics to scam unsuspecting victims. Don't let yourself become a statistic. Beware of individuals or organizations that may try to deceive you into providing them with your financial information or investing in fraudulent schemes.
Remember, banks and legitimate businesses will never ask for sensitive information (e.g., social security numbers, bank account details, passwords) through unsecured channels. If you receive suspicious emails or texts, never click on any link they provide — ignore them and mark them as spam. Cyberthieves often send links to individuals and businesses that, when clicked, install malware on computers that can steal sensitive personal and financial information. If you receive a telephone call from someone you think is a scammer, hang up and block their number.
6. Shred your personal documents
Regrettably, there are identity thieves who rummage through trash cans in search of personal information. They only need your first and last name and home address to steal your identity. To protect your personal information, it is essential to shred and dispose of any documents containing sensitive details. A good rule of thumb is to shred any mail (letters and envelopes) with your name and address.
Perhaps most importantly, shred any credit card applications, loan offers, or other finance-related correspondence you receive. Identity thieves can use this information to apply for credit cards, make purchases online, and more, leading to costly and time-consuming financial issues.
7. Consider going paperless
Paper trails create vulnerabilities that savvy criminals can exploit. With just your basic information, they can steal your identity and cause significant disruption to your financial well-being. So, review your accounts to see if they offer paperless documents and correspondence options. By going paperless, you significantly reduce the risk of physical theft and financial fraud that come with paper documents.
Going paperless also streamlines document management, making it easier to organize, search, and retrieve information when needed. This efficiency saves time and reduces the chances of misplacing crucial documents.
Conclusion
The steps we've outlined aren't just suggestions but actions that can safeguard your financial future. We hope you find them to be informative and helpful.
Published July 2024
Ameris Bank is not affiliated with nor endorses Equifax®, Experian®, or TransUnion®. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
