Six Tips for Financial Health

The average American family has been challenged to make ends meet in the midst of this struggling economy. It's been a tough couple of years for many folks. Belts have been tightened, excess has been trimmed, and we are learning to do without the extras that we've all been used to enjoying (anyone else missing their morning Latte from the corner coffeehouse?) In times of economic strife, it is a good idea to take a realistic look at spending habits, financial responsibilities, and where discretionary income is going. Here are six tips to help get your financial health into top shape.

1. Pay with Cash - Paying interest on a purchase can increases actual cost dramatically, so unless you are paying off credit card debt in full each month, save up first and pay in cash when making a purchase. Practice patience!
2. When others panic, buy - With every financial crisis to date, the market sags. Late 2008 through early 2009, with a 43% drop in the Dow, was a great time to load up on long term investments. If you can afford it, this is a great time to invest.
3. Debt can be dangerous - Credit is a valuable tool, but it must be used sparingly. This is where many people dig themselves into deep financial holes. Get rid of the shovel. Pay off revolving debt and cut up credit cards. Keep a minimum number of cards. Many financial experts recommend having no more than three cards to be used only for emergencies.
4. Your home is your shelter, not an investment - Home prices can rise and fall, like any other assets. Don't expect appreciation in the value of your home to be a substitute for retirement savings in traditional investments. Start retirement planning early, and consider long-term care insurance.
5. Manage your paycheck - More than 70% of Americans overpay their taxes each year. While a refund is nice, it's even nicer to earn interest on your money instead of giving the government a free loan. Check your withholdings with the Form W-4 Assistant at paycheckcity.com. You can change your withholdings at any time. Do you really want to give Uncle Sam have a free loan? At PaycheckCity you will find the tools to put this money back into your pocket.
6. Do not live beyond your means - Was this ever a good idea? It seems to be a problem for many Americans. In the U.S., personal savings is practically non-existent. Too many of us are living paycheck to paycheck. Find a way to spend less than what you bring home and your finances will slowly improve.