Establishing good financial health is probably a high priority for you, but finding the time to learn what you need to know and take action can be difficult. This lack of time coupled with the seemingly complex subject matter of personal finances can make financial planning feel overwhelming. This site is designed to give you the foundation you need to take control of your financial life.
How to Establish Credit
There are several ways to establish your credit. Here are some approaches that could help get you started:
Put your apartment and utilities in your own name. This will establish a regular payment history under your own name and social security number.
Apply for credit with a local business. Department stores and oil companies often have lower criteria for giving credit.
Apply for a secured credit card. Available at local banks, your credit limit is equal to the amount you deposit into an account. If you deposit $500, then your credit limit is $500.
Report credit history information. Make sure all of your creditors or lenders report your information to one of the large credit bureaus so you can build your credit history.
Build Your Credit
A good credit rating is key to many financial decisions. Learning how to establish and maintain good credit is crucial to fulfilling your financial goals. Your credit can determine what kind of car you drive, what neighborhood you live in, and in some cases, whether or not you get the job you want. With so much riding on your ability to manage debt and pay bills on time, it's important to learn as much as possible about how to establish and maintain good credit.
Maintain a Good Credit Rating
Maintaining a good credit rating isn't difficult but it's important and should be taken seriously. Since credit information will follow you for seven years, make it positive so it won't negatively impact your future credit needs.
Pay your bills on time. This is the best way to keep a strong credit rating and be considered a good credit risk by your future lenders.
Talk to your creditors. You should always contact your creditor immediately if you fall behind in your payments. Most are willing to set up alternative payment options, especially if you inform them right away of your situation.
Review your credit report. It's best to review your report annually -- that way you can catch and correct any errors or negative information right away. You can also order a report combining information from all three major credit agencies.
Saving for the Unexpected
We are often faced with unplanned expenses. Creating an emergency cash reserve protects you from life's expensive surprises. What if your car transmission goes out, your home computer crashes or your washing machine is on its last leg? These unexpected scenarios require immediate cash. Roofs leak and people get laid off--it always seems that something expensive is sure to happen when you least expect it. That's why you need to be prepared by building an emergency cash reserve. Saving for the unexpected protects and prepares you for life's expensive surprises.
How much saving is enough?
Saving the proper amount will vary depending on your individual circumstances, but as a rule of thumb anywhere between two to six months of expense money should be sufficient to create an adequate cushion for emergencies. But everyone has a different financial comfort level and the amount you should keep in reserves depends on two things: your monthly expenses and the stability of your income.
Monthly expenses. How much do you and your family need to function comfortably each month? This figure should include not only your fixed expenses--such as your mortgage and car payments--but also your variable expenses--such as phone, utilities, food, etc. Once you've determined your monthly spending, you need to decide how many months of expenses you need to set aside in your reserve.
Job stability. People with secure jobs, or families with double incomes, may not need to put more than two-three times their monthly expenses into an emergency fund. However, if you are single with inconsistent income or work in an extremely specialized field, you may want to save more than six months of expenses. The point is to put enough away to get you through rough times.
Take control of your money
It's not what you make but what you do with your money that matters. By cutting out a few minor expenses, you can make a big difference in your savings. It's the end of the month and you've just finished paying your bills--rent, insurance, credit cards, utilities, car payment, etc. And after everything is paid and your checkbook is balanced, you see once again that there isn't enough left over to put into savings. It's just too hard to find any extra money to save, so your savings plan will just have to wait another month.
Sound familiar? For many of us it does. But contrary to popular opinion, financial security can be based on a very modest income and saving money can be much easier than you think. What it comes down to is knowing how you spend and learning how to spend less than you earn.
Credit Repair Services
Before making a significant purchase, you need to inspect your credit report so you will know about your credit history and so you can check to make certain it is accurate. Just one blemish on your credit report can have a considerable negative impact on interest rates or loan approval. Knowing about your debt to credit ratio, payment history, and accounts can help you prepare for acquiring new debt.
If you have had problems with your credit history, you may want to try to fix your credit rating by using the service of a credit repair agency. They will work to get your credit history cleaned up, and get delinquencies, charge offs and excessive debts removed from your report and out of the view of potential creditors.
Credit repair services can improve your credit enough to lower interest rates, which in turn, can save you thousands of dollars on a loan. When making a significant purchase, such as buying a home, it is important to make sure your credit rating is at its best in order to get the best rate and terms possible.
Additional Financial Information
Managing Daily Finances
There are many ways to turn daily financial organization from a time-consuming management headache into a more streamlined, and even pleasant, process. Here are some ideas to help you get started:
Consolidate your accounts. Balancing brokerage and IRA statements with savings and checking account details can mean a pile of paper that seems insurmountable. Putting all your nest eggs in one basket can significantly reduce the hassle of managing multiple accounts from different banks and brokers.
Use online banking. Need to check your balance from work? Want to make a quick transfer between accounts but don't have time to stop at the bank or ATM? Online banking allows you to manage banking and investments from anywhere, anytime. You can also review recent ATM and debit card transactions instantly to see if you need to be thriftier with your plastic cash.
Pay bills electronically. Through online banking, you can make credit card, utility, and mortgage payments--even some landlords will accept rent electronically. Recurring payments can be scheduled for automatic deduction from your account, making late fees a distant memory. And the money you save on postage can really add up over the course of a year.
Request a change in billing cycles. If your major bills come due at different times, you can request a change in the billing cycles. This will enable you to set aside a time each month to review and pay your bills.
Everyone Can Afford to Save Money
Finding money to save is easier than you think. If you decided to make your own coffee and bagel in the morning, you could save that $3.00 a day and put $90 dollars into your 401(k) or IRA account monthly. The sooner you start, the faster it all adds up.
Little Things Add Up
Many of your large monthly expenses are probably fixed, such as your rent/mortgage, car or student loan payments. But it's the variable expense category that can easily get out of control. It's so easy to pick up a daily coffee and bagel, magazine, or a new DVD because individually they don't cost much.
But if you pick up a coffee and bagel every day for $3.00, over the course of a year that $3.00 could grow to almost $90 monthly and $1,100 annually. The little things can really add up and cost more than you realize.