Measure Your Financial IQ with Bills.com's BillsIQ
BillsIQ helps improve skills with debt, credit and more in just 5 minutes
SAN MATEO, Calif., July 29, 2009 — Most people work hard to be responsible with their money and debt management, but sometimes they wonder if they are "doing it right." Others are seeking new ways to make the most of their income and minimize expenses. And still others try, but might have a sneaking suspicion that they are making some major mistakes. Fortunately, for all of these people, online consumer portal Bills.com offers a free online assessment tool to measure personal finance IQ.
BillsIQ measures five areas of money management:
1. Credit: Credit is an important part of financial management because it affects whether consumers are able to get loans for a home, a car or an education, and the interest rate payable for any borrowed money. Every consumer may order a copy of his or her credit report at no charge once a year at AnnualCreditReport.com or by calling 877-322-8228. Review the report carefully to check its accuracy. To improve a score, and maintain a good one, always pay bills on time. Also, be aware of credit utilization, an important term in credit score determination. For example, on a credit card with a limit of $10,000 and a balance of $3,500, the credit utilization is 35%. Anything over 35% is considered high and can impact credit scores. Over 50% will have a definite negative impact on a credit score, and a maxed-out card will very negatively impact the score. "Above all, work hard to pay credit card bills in full every month; in other words, do not purchase what you cannot afford," said Bills.com president Ethan Ewing.
2. Debt: Debt is not like childhood monsters under the bed — closing your eyes does not make it go away. It is important to know total balances owed, the cost of debt in fees and interest or finance charges, and how to make a plan to repay debts. "Keep track of bills so that you will notice if a bill does not arrive, and mark due dates on the calendar so you can plan to have money available and pay on time," Ewing said.
3. Budget: For financial health, it is very important to plan before spending money. With any budgeting tool, it is important to know both earnings and expenses and to live within those means. Also, keeping a budget can help anticipate expenses and save for them. With a savings plan, a higher-than-expected bill will not result in a crisis or a rush to the credit cards. Budgeting need not be complicated, either. While plenty of software and online guides (such as the free, downloadable Bills.com budget guide) are available, simple pencil and paper can work just as well.
4. Wealth: Wealth is ultimately not about seeming rich or accumulating flashy purchases, but about preparing for the future and building a safety net. "Do you own a home, or are you on the road to home ownership? Are you planning for retirement? Are you covered with appropriate insurance? By looking ahead and planning accordingly, anyone can build his or her wealth," added Ewing.
5. Life plan: Another important part of financial smarts is matching resources to goals. Having an established career path helps anticipate both income from future work and costs, such as returning to school. Knowing what expenses are on the way will help plan for major life events such as marriage, a child’s education or retirement.
For more insight into managing personal finances and to learn how your progress compares to other people like you, assess your personal finance IQ.
Based in San Mateo, Calif., Bills.com is a free, one-stop portal where consumers can educate themselves about complex personal finance issues and comparison shop for products and services including credit cards, debt consolidation, insurance, mortgages and other loans. Bills.com holds the No. 257 spot on the Inc. 500 list for 2008, and the No. 3 spot on Entrepreneur Magazine’s Hot 100 list of the fastest-growing U.S. companies.
Bills.com and its sister companies, Freedom Debt Relief and Freedom Tax Relief, are wholly owned subsidiaries of Freedom Financial Network, LLC. The company has served more than 50,000 customers nationwide since 2002 while managing more than $1 billion in consumer debt. Its RSS feed is available at /news_releases/.