The Main Numbers In Your Finance

  Make sure you control them to have healthy and stable financial life.

People have always been interested in numbers. We created a grade system in schools and universities to assess our knowledge, women are always obsessed with their weight, and even our personality is linked to a Social Security number from our birthday.

And nobody can deny this tight connection.

However there are three numbers that you should pay much attention to. This can be easily explained because they influence your financial situation. And you should better consider them to minimize your payments, save more money, and avoid overcharges. If you have not controlled your finance yet, it can be really difficult for the beginning. However when you clean up your finance, you will get all the benefits of good money management. So take the further recommendations into consideration.

The Level of Debt

On the average estimation the total debt of citizens are above $57,000. I think this is quite impressive number.

The only good possibility is the zero interest rate. However in all the other situations you should cover the debt as soon as possible to avoid additional payments stretched over years. So if you have some debts, you should better deal with them.

What to do: If you have different debts, it’s better to create a definite plan for their repayments, instead of putting money on different accounts with no understanding of terms and conditions of each credit. There are some different systems for repaying the debt, so you can try one of them. According to the first strategy you should cover the debt that costs most for you. This means that the bigger interest rate is, the quicker you need to cover the debt. However if you have almost similar conditions for all credits, you can think about covering the smallest debt. In such case you will get necessary motivation, as you can repay it quicker, and you will be interested in achieving a good result.

Finally it doesn’t matter what plan you choose, you just need to start and don’t forget about your debts, or they can be increased and extra fees added. For example, when you deal with direct payday loan lender you can be charged additional fees for missing the due date. So you should be very careful with all your debts.

Credit Score

Today your financial situation can be simply described with just one number that sums up all your payment history. This is credit score and its’ significance isn’t overvalued. The interest rate you will be proposed in bank is determined by this number.

What to do: At first you should pay attention to your credit score and understand how it is formed. The main features that influence the number you get are the on-time history of your payments, the utilization rate of your credit card (it’s your balance of all credit cards divided by your total credit limits) and the total number of derogatory marks on your report. So now you understand that lenders are interested in those three indicators, and that it’s important to make payments on time and keep the balance low. Additionally, you should regularly control your report and notify the financial institution about all possible mistakes.

Improving your credit score is not a quick process, but you will get necessary financial habits during the way.

The Amount of Savings

There are different types of savings, but you should understand that having all of them is very important in order to secure yourself and make an emergency fund, or save enough for the retirement.

What to do: Begin making savings from the first job you get. In such case saving will become a habit and you will have good sum of money for the end of your working life. This will not just make you more financially flexible, but also creates you a happy retirement.