7 Signs of a Strong Financial Foundation ...


Do you have a strong financial foundation?

If you have to think about this question, chances are that your financial foundation needs work.

Personal-finance 101 is not taught in many high schools and many people don't learn the basics, such as saving money, budgeting and credit management, until their adult years.

But whether you're just graduating high school or you're a fully grown adult, there are ways to build a strong financial foundation.

Here are seven signs that your financial foundation is on the right track.2

1. Your Savings Account Increases

Even if you can’t deposit a lot into your savings account, the fact that your account is steadily increasing is one sign of a strong financial foundation.

Having a savings account is important for various reasons.

It provides emergency cash if you lose your job or have an unexpected bill;

and if you're saving up for a house or retirement, a savings account can put you closer to your goals.2

To grow your account, deposit something from your paycheck each week, and save free money like work bonuses or tax refunds.

2. You Have Multiple Eggs in Your Retirement Basket

If you're relying on 401(k) or social security for retirement, you need to make improvements to your retirement plan.

Both are a good start, but to ensure a comfortable retirement and to maintain your lifestyle, you need to diversify.

For example, in addition to a 401(k), get an individual retirement account or look into other investments, such as stocks, bonds and certificate of deposits.2

3. No Credit Card Debt

I recently read that the average household has approximately $13,000 in credit card debt.

Consider yourself on the right track if your credit card balances are much lower or zero.

And if you have huge balances, get a plan to pay off debt.

Some people take extreme measures to get out of debt, such as not shopping for an entire year and selling personal belongings.2

Once your debt disappears, pay off new charges in full each month.

Aim to Pay off Loans Early
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