It can be customary in a new year to think about upgrades or enhancements to how we live our lives. In other words, to think about our New Year’s Resolutions! Following below are a few of my favorite financially-related resolutions that I strongly encourage everyone to adopt.
1. Secure Credit Card Usage
Credit card fraud continues to be a large problem in our society. However, there are ways to help protect yourself against this threat. First, set up your credit card to notify you via text or email EVERY TIME your card is used! In this way, you can stop unauthorized use of your card sooner than if you waited until the end of the monthly billing cycle. Yes, you are not liable for any unauthorized charges, but the sooner you stop them the sooner you can get your credit use back to normal.
Alternatively, you can freeze your card so it can only be used each time you unfreeze it. This process can be a bit cumbersome but is very effective to limit fraud.
2. Secure your Credit Identity
Identity theft is the next major problem. This is the case where someone poses as you and uses your credit identity to open new credit cards and accounts in your name. Fortunately, there are ways to help prevent identity theft.
The most effective way to limit identity theft is to freeze your credit identity with the three major credit bureaus. This is called a credit freeze and creditors cannot access your credit report. This will keep them from approving any new credit account in your name, whether it is fraudulent or legitimate. Best of all, to freeze your credit identity is free! Simply contact each of the credit bureaus (Equifax, Experian, and Transunion) to get it done. For more information on how to do this go to the official U.S. Government site: https://www.usa.gov/credit-freeze.
3. Have Emergency Fund
Life is full of uncertainty. To help smooth out the bumps in the road it is good to have an account that is liquid and ready to go for unexpected bills; things like car and housing repairs, medical bills, etc. With short term interest rates at a good level now, money market funds today pay about 4.2%, it is easy to earn a decent return with almost zero risk. A quick rule of thumb suggests an emergency fund holding about 3-6 months of after-tax income.
I am happy to discuss these and other topics in more detail at your convenience. Just let me know and we can set up a time to discuss. Here’s to a financially secure 2025!!