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How to add financial security to your loan?
Friday, 06 September 2019

When you are young, checking your financial status may seem like something you can expect. But routinely assessing where you are can benefit you today and later.

Here are some steps to consider adding financial security to your loan -

1. Understand your assets and liabilities
The assets and debts or liabilities that you have determined your net worth. Assets can include cash, savings, stocks, bonds, retirement accounts, real estate and anything else of value, such as cars or collectibles. Liabilities may include a mortgage, student loans, car loans, accounts payable and credit card debt. Consider calculating your net worth each year by adding the value of all your assets and subtracting your liabilities. This can help you keep up with your overall financial landscape.
2. Evaluate your goals
Just oncea year, think about your goals. Is each of them still relevant? How much they cost? Are you on the right track to reach them? It is possible that some of your long-term goals, such as travel and retirement, may not change much from year to year. Short-term goals, such as finishing paying a credit card bill, and in the medium term, including saving for a home, may change more frequently. You may want to revaluate them every three to six months.
3. Check your credit report
Your credit report contains information about the status of your credit accounts and your bill payment history. A good credit score is critical to qualify for loans with the best possible interest rates. Review your credit report at least once a year to make sure it is correct and current.
4. Designate your beneficiaries
When you open a retirement account at, you will probably be asked to designate a beneficiary, the person who will collect the money in the event of your death. Getting married, the birth of a child, divorce, and death can affect your options. Usually, your spouse is automatically your beneficiary, but you may also want to designate your children or someone else. Although it is most likely that designations do not change frequently, it is a good idea to review your options annually to ensure they remain adequate.
5. Manage your taxes
It is important to make sure you reserve enough funds to pay your tax bill well before the annual deadline, usually April 15. The amount of federal income taxes you owe each year depends in part on your tax level. But many factors affect the final amount of federal income taxes you must pay in any year.
In most cases, your employer withholds taxes from your paycheck, although the amount withheld will often differ from what you ultimately owe. However, if you work on your own, you will surely have to pay an estimated tax amount, usually quarterly.
6. Check if your investments are aligned with your goals
The safest thing is that your investments, whether in retirement plans or taxable brokerage accounts, consist of mutual funds that cover various types of investments. Consider reviewing quarterly, in January, April, July, and October, to make sure your options are appropriate for your age and your financial goals.
7. Determine if you have the right insurance
It is important to evaluate once a year the type and amount of insurance you need. If you rent your home, you may want to consider rental insurance to protect your belongings. When you buy a house, you need homeowners insurance. Your policy should cover what it would cost to rebuild your home, which is generally more than the nominal value of your home, as well as the current price to replace your household items. You may also want special coverage for valuable items, such as jewellery and art pieces. Your insurance agent can help you assess whether you have the right type and amount of insurance coverage.
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