1. Enhance your credit score
Improving your credit score enables you to land better interest rates on your car, personal, and home loans. This is because borrowers with a lower credit score are more likely to default on their payments. Thus, banks would give out loans with a higher interest rate to offset the risk of default.
Take a look at Buying A Home – How Much Am I Able To Borrow to educate yourself about the factors that affect your borrowing power, and How To Improve Your Borrowing Power for creative ways to improve your credit score. In the meantime, ensure that you do not make any late payments.
2. Refrain from committing tax errors
Waiting till the last minute, forgetting to update their household status, and not fully utilising their tax reliefs are some of the common blunders made by people when filing their taxes. These could be costly mistakes as it means you don’t get your tax rebates on time, or you overpay the tax authorities.
For more information about tax reliefs, give Understanding Tax Reliefs a read and take a look at How To Submit Your Personal Income Tax Return to ensure you’re well-informed of the latest tax filing procedures and how to do so efficiently.
3. Strive to be financially literate
Children who are brought up to be financially aware tend to make better financial decisions as adults. Financial literacy is a key factor when it comes to adults building wealth over time. Understanding the basic concepts of saving and compounding interest makes them more likely to sit on a significant nest egg as they get older. It’s never too late to educate yourself.
Familiarise yourself with some financial terms from 7 Financial Jargons You Should Know, then go through How To Become Your Own Financial Planner for a basic guide on planning your finances.
4. Prepare to have sufficient funds for retirement
Think You’re Too Young To Think About Retirement? Think Again. Although it is never too late to start planning for your retirement, it is always best to start early. When you are younger, you tend to have a higher risk tolerance, so it’s a good time to make your investments grow. Always ensure that your investments are aggressive enough to outpace inflation. Read through Investment For Retirement: Unit Trust to see if this investment method tickles your interest.
5. Stay on top of your insurance policies
Life insurance is an essential tool for securing your and your family’s finances, especially if you are the primary breadwinner. Do yearly checks on your insurance policies to ensure they are in good standing and you have enough coverage. Additionally, you could check with your workplace to see if they have options to take out supplemental coverage. Read through Common Mistakes People Make With Life Insurance to ensure you are not making the same mistakes, and What To Look In Your Next Life Insurance Review for pointers when you do your yearly checks.
Consistency is the key!
Building a good financial status isn't overnight; you have to be consistent! Don’t wait till you have more money to start managing it better. Start where you are, with what you have, and before you know it, you’ll be living a little closer to that “rich man’s world” ABBA was singing about.
*The article above is intended to provide information only. Loanstreet is not responsible for any losses that may arise if there is you take any action with the information contained in the article.
