What Steps Can I Take To Ease This Financial Burden?

What Steps Can I Take To Ease This Financial Burden?
During this economic crisis, we have seen retail sales drop, prices on food rise, and the inability to obtain loans from our banks.  To this end, here are some steps you can take to ease the financial burden that may cause you great stress.

* Establish a household budget and stick to it.  Keep contributing to your 401K.  Pay down your credit card debt.  Utilize cash:  if you can’t afford an item, don’t buy it.  Limit any wasteful spending such as dining out once a week, buying morning coffee, or lunching out. 

* If you have CDs at your local bank, AARP advises that you not to automatically roll over your CDs.  Instead, maximize the growth of your CDs, always call or visit the bank to review current interest rates, including any promotional rates that might be available.  Banks often run promotions offering interest rates higher than their regular rates.  You can be certain that an automatic renewal won’t get that rate unless you ask.  Millions of CD owners take that easy road at renewal time.  Banks love customers like that, but those people are making a mistake that you should avoid.

* If your bank has closed, or has merged with another bank, contact the bank to ensure that procedures are still the same.  If you are opening a new account, research the many banks in your area.  Ensure they are insured by the FDIC for $250,000, and compare bank fees as well.

* Make sure you have not overdrawn on your checking account.  The fees can quickly add up.  Balance your checking account immediately upon receipt of the bank statement.  In addition, if you are paying bills on line via your checking account, record the payments into your checkbook immediately.  In this way, you know exactly what your balance is at all times.

* As far as your yearly taxes are concerned, AARP also advised that you do not overpay your quarterly estimates or increase your tax withholding to avoid owing the IRS money.  In reality, it’s a sure way to get less than zero interest on your money.  The least expensive way for you to pay your tax liability is to have estimated payments come out as close as possible to the amount owed.

* You are allowed to check your credit report annually for free.  This is a good time to determine if there is anything on the reports that seems unfamiliar.  If so, you can contact each credit report agency directly.  Check your FICO scores with each agency as well.

* Now is the time to put aside one credit card for emergencies only.  If you do have several credit cards, ensure that you make payments on time to avoid late fees or an increase in interest rates.  Call your card companies to ascertain if any of the interest rates can be lowered.

Finally, since no one knows how long this crisis will last, it is a good idea to put aside enough money to cover your household expenses including doctor and dental visits, and any other necessary expenditure for the next 18 months.