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Financial Tip of the Week - Weathering Tough Economic Times - Twelve Tips for 2012 (Part 1)

Tough economic times have taken a toll on many Americans over the last couple of years. But making sound financial decisions and saving for the future can help you weather financial storms. The start of a new year is a great time to take stock of your finances, so the FINRA Investor Education Foundation has put together these twelve practical tips that can help keep your finances on course in 2012.

  • Start a Rainy Day Fund. Set aside at least one month of your current salary (and work your way up to three months) in a federally insured savings account. This will give you a cushion to handle medical bills, a short job loss, a surprise car repair or other financial emergency - and help keep your finances under control.


  • Handle Credit Cards With Care. Keep your credit card spending in check and try to pay your credit cards in full. If you have accumulated holiday debt, pay it off as quickly as possible. If you cannot pay your whole monthly bill, at least pay more than the minimum due. Every dollar you pay above the minimum payment can reduce the amount of interest you will pay. Getting a handle on monthly bills and expenses can help keep you from overusing credit cards. Resources at can help you track your spending.


  • Check Your Credit Report and Score. Good credit and financial fitness go hand in hand. Start the new year by requesting a copy of your free credit report. Call (877) 322-8228 or visit Check to be sure your credit history is accurate and correct any discrepancies immediately. You can also request your score from the site. There will likely be a fee to obtain your score - but it's an important number to know, since it's what lenders use to help them decide not only whether you get a mortgage, a credit card or some other line of credit but also the interest rate you are charged for this credit. To learn more, read How Your Credit Score Impacts Your Financial Future.


  • Shop Around For Financial Products. Comparison shopping for financial products - including credit cards, loans and investments-is as crucial as shopping around for a television or phone plan. FINRA has resources to help you evaluate and compare credit cards, bank fees and loan rates. Saving even a percentage point or two on a loan can make a big difference to your bottom line. And when it comes to investments, be sure to visit FINRA Market Data Center, and use FINRA's Fund Analyzer to compare fees on mutual funds and exchange traded funds.


  • Don't Leave Money on the Table: Contribute to Your 401(k). Too many workers leave free money on the table by not contributing enough to their 401(k) to receive their full employer match. According to a recent study, nearly three in ten workers (29.4 percent)-and 43 percent of workers age twenty to twenty-nine - fail to contribute to the full extent of their employer's match. Here's another way of looking at it - taking full advantage of the match literally doubles your savings, even assuming no increase in the value of your investments. For more information, read FINRA's Investor Alert, Why Leave Money on the Table-Make the Most of Your Employer's 401(k) Match.


  • Avoid Payday Loans and Other Money Drains. During difficult economic conditions, some Americans might be more tempted to use alternative forms of borrowing, including auto title or payday loans, advances on tax refunds, pawn shops or rent-to-own plans. Steer clear, since these borrowing methods are likely to levy higher interest rates than those charged by banks, credit unions or credit card companies and can drain away your money.


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