By Cindy Trillo
How Elk Grove Families Can Get Smart About Their Finances
Families in Elk Grove have a median family household income of $83,141, which sounds like an impressive amount of yearly income and certainly is when compared to the rate for Sacramento County as a whole. However, when you take into account that the average California resident has over $5,000 in credit card debt and nearly $30,000 in student loans to pay off, this doesn’t seem like a manageable income. The great news is that, by being smart about your debt management and personal finances, there are ways to ensure that you are living a happy, debt-free life while still enjoying the comforts you need and want.
Assessing Your Financial Situation
To do this, you will need to compile a list of all of your assets, bank accounts, debt and income statements. Part of assessing your finances is also being aware of your credit score. Seeing as more than 90% of banks in the U.S. use ChexSystems as part of the application process for a new checking or savings account, it may be wise for you to order your ChexSystems report to see what’s listed if you are planning to open a savings account in order to put money aside. By combining all of these documents you should be able to gain a clear understanding of what needs to be paid off and how much money you have available to do it.
Creating a Family Plan
Once you understand what you expenses are, you can get together to creates a plan that not only suits everybody’s needs but includes their upcoming expenses such as the need of new car, braces or even college tuition. This financial plan could include things such as reducing unnecessary expenses, increasing employment income, or investing in the stock market. If your employer offers a company-sponsored retirement plan such as a 401(k) then you can start by increasing your percentage contribution to the plan.
Effectively Managing Debt
If you are currently using credit cards to make payments on other debts, ensure that you don’t allow your credit payment to exceed 20% of your monthly paycheck and always make an effort to use cash whenever you can. However, it is not generally recommended to use credit cards to pay off other forms of debt. Instead, focus on increasing your savings to reduce your debt-to-income ratio little by little.
Financial Freedom is Attainable