Great Tips for Immediately Improving Your Credit

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When it comes to the category of “good” credit, you have two choices. You can either have a zero credit score or a high credit score. The zero credit score is easy to obtain – you simply pay off everything including bad debt and never use credit again. This method takes longer, but is the best way to go if you are a person who uses credit as debt (buying something you don’t have the cash for) instead of using it as a convenience, the reason for which credit was established.

A high credit score is just as easy to obtain and uses one of the same steps as the other. You need to pay off everything including bad debt. You will need to use credit in order to maintain a high score, but there are wise ways to do just that. You have one or two credit cards that you pay off every month, you have a reasonable mortgage (no more than 25% of your take home pay) on a house that has equity in it, you have a low % car loan (2% or less) that you use and pay off early instead of pulling money from investments – these are just a few of the examples. The key is that you are using credit, not accumulating debt.

Many of you are in that middle ground where you are trying to rebuild your credit. There are a few steps you can take right now and every month to boost your credit score.

1. Check you credit report for errors – go to http://www.annualcreditreport.com and get one free credit report from each agency (you get one free per year). Print them out and look over them for any errors. If you truly owe the debt, this is not an error. If the amount is higher, this is not an error (it is fees). An error would be something you can prove you paid off or settled in full in writing or something that truly isn’t yours. This happens a lot if you have the same name as someone else. Many companies don’t check social security numbers; they just match a name and move on. If you find an error dispute it with the agency directly (call them or visit their websites for instructions). Making your credit report accurate can boost your score (give it a few months to catch up).

2. Keep your balances low – a part of your credit score is your balance to limit ratio. If your limit is $500 and your balance is $400, that shows that you have an 80% usage ratio. You want to keep this number low. There are several ways to accomplish this:

A. Don’t charge more than 20% of your limit in any given month.

B. Make a payment before your billing date. Most companies report
your bill balance so if you make an extra payment or pay it off
before the billing date, it will report low.

C. Get a limit raise, but do not use it. This one is tricky, because
doing so makes you vulnerable to using it and causing bigger
problems. You also have to be careful because having high
limits can also affect your credit score.

3. Pay all of your bills on time. Once a bill hits 90 days overdue, it affects your score greatly. And once this has happened, it will take a while to rebuild.

Your credit score is your financial reputation. Whether you like it or not, it shows you and others how well you handle money. As you make wise decisions, the results of those decisions will transfer to your credit score. A zero credit score says you can handle money because you do not use debt in any form. A high credit score says that you are responsible and make wise money decisions and have great discipline when using credit (not debt). A middle score shows that you have made a few mistakes, hopefully from lack of knowledge and now that you have that knowledge, you are making wiser decisions.

We all have the ability to be wise when it comes to money. Some people, like myself, take a few wrong turns in the beginning, but it is never too late to turn things around. Take it from one who knows. I hope this helps you and I am sending you love and encouragement today and every day. Have a blessed day!

** Get any of Debbi’s award winning books at Amazon today.

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Are You Black Friday Ready?

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Decorations are going up, Christmas music is playing and Thanksgiving is 10 days away. All of this can only mean one thing – Black Friday is almost here. This year, stores are starting sales even earlier than that. So to make sure you are prepared for the biggest shopping time of the year, I wanted to share a few money tips with you to make this a happy holiday and not a bah humbug one.

1. Pay with Cash – this is more important this year than it has ever been before. I have always recommend to make a list of gifts with pricing for each person and put the total, in cash, in an envelope. This prevents you from overspending and paying for Christmas for months or years to come because you charged everything. But this year there is an even bigger reason to pay with cash and that is to protect yourself from hackers. Just this week, the news reported that hackers have found a way to crack through the latest protection used on new cards. So even if you are a person, like me, who uses cards and pays them off every month, I highly recommend that you use cash during this holiday season because this will be a very busy time and will leave you open to being hacked. By the way – this includes debit cards as well. Anything electronic is at risk.

2. Make a List – you want to make a list for 2 reasons: one is so you don’t forget anyone and two is so that you don’t spend more than you have. Christmas is not about gifts, but it is nice to give to the people we love. And I encourage you to do so, but just make sure you do so within your reality. And this list includes our kids. Every parent wants their children to have more than they did, but this doesn’t mean that you have to go into debt to do this. Things are just things. Remember that this year as you make your list and be sure to include a less fortunate child or family as well.

3. Don’t Forget the Trimmings – many times in our “budgeting” for the holidays, we list only the gifts and we forget about all of the other expenses that come with the holidays. Make sure to make a cost list of the tree, decorations, food, travel expenses and any other cost that may arise between now and Jan 1st.

Well, here we are. Just 10 days until the official start of the holiday season. I have shared my top 3 tips today in hopes of making this a happy holiday and to prevent you from becoming the Grinch. And I hope it works because only your money should be green, not you. Love to you all and Happy Holidays!

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The Business of Divorce

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Once a couple loses the spark in their marriage, that marriage can begin to feel more like a business arrangement than the loving and healthy marriage it was supposed to be.  This is happening way too much in this country where we currently have a 52% divorce rate.

One aspect of my firm is to help couples work out their problems and try to save their marriages.  It is reported that 80% of divorces happen due to financial issues, but usually the real issue is something deeper; it just showed up in their money.  However, many marriages can’t be saved because one or both parties are not willing or perhaps the marriage happened for reasons other than love and respect.

When a marriage can’t be saved, the relationship quickly turns into a business transaction.  Many of you have gone through this, as I have, and some of you are going through this now.  Here are a few tips I wanted to share with you on how to handle this huge business transaction:

  • It is always easiest to blame the other person.  But in order to come out of this transaction unharmed and healthy, you must take responsibility for your part and let go of what the other person has done.  I know you think this is impossible, but you need to do it – not for them, but for you (and your kids if you have any).  Anger, hatred and bitterness have no place in your life and your success so get rid of them immediately and move forward.
  • I see this happen a lot, especially in women – you completely rely on the other person to support you.  This can happen for many reasons:  maybe this is your first time being on your own and you are scared, maybe you lack the self-confidence to know you can make it on your own, maybe you are still holding on to the bitterness and you just want them to pay.  Whatever the reason, you need to know that you are awesome, you are strong and you can do this on your own.  Stop holding your spouse prisoner over a few dollars.  Take this time to go out and prove to yourself, the world, your kids and them that you don’t need a man (or woman).  You’ve got this.
  • Always be fair – even if the other person isn’t.  Even if you are left with nothing – financially speaking – you are something and no one can take that away.  You can start over and build up your life and your finances and never look back.  Most of the time, holding on is only hurting you, not them.

My divorce was bitter.  I was left suddenly with no support and an infant daughter.  And look where I am now.  For the first 5 years, I wallowed and I held on by refusing to sign the divorce papers.  Then my sister got in my face and asked me what was I waiting for – he wasn’t coming back, he had moved on and it was time for me to do the same.  She loved me enough to help me see I was only hurting myself.  A year later I met the man of my dreams and have had a wonderful life and marriage ever since. But I couldn’t do that until I moved on.

I love you enough to tell you that if you are going through this today, forgive and move on.  Become everything you were put here to be.  Don’t let someone else stand in your way.  And if you feel like you are headed this way, I hope you can work it out and get the support you need.

Everyone should be happy and have someone who loves them unconditionally.  That is my sincere wish and hope for you today.

http://www.absofpersonalfinance.com

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Why 90%?

90%

I have always said that personal finance is 10% math and 90% emotion.  This statement could not be more true.  However, many people don’t understand this statement and many of those who do understand still question the 90%, saying it is too high.  But it is not too high.  The emotions involved in personal finance can be crippling if not acknowledged and controlled.  I tried to better my financial situation right after my bankruptcy and still failed, month after month, and the emotional part is what stymied me.

Once I discovered this secret, however, my life changed forever.  Let’s take a moment and talk about these emotions and how you can acknowledge them and turn your situation around.  The math is easy – your monthly income is $4000, your monthly expenses are $3800, which leaves $200 extra every month.  Simple right?

So why do you have a low balance in your savings and retirement accounts?  Because of the emotions of money.  I am going to list just a few examples with a brief explanation, but this doesn’t even begin to cover everything.

  • Expectations – Are you expecting an awesome life and a life of prosperity or are you believing you will always be where you are?  Odds are what you expect to happen will happen – good or bad.  Believe in yourself.
  • Habits – This was a big one for me.  If you have bad money habits, they will not go away just because you want them to.  You have to work very hard to replace bad money habits with good ones.
  • Attitude – Attitude is a lot like expectations.  You control them and they are your choice.  And what path you choose will decide your results.
  • Perspective – Do you see the glass half empty or half full?  How you look at your situation and your solutions will dictate whether or not you succeed in the area of your money and your life.
  • Keeping Up With the Joneses – This one can destroy you – always do what is best for you and not what everyone else is doing.  Make the right financial choices for your goals and dreams and stop worrying about everyone else.  If you need to rent or drive an estate sale car for a little while, do it.  Other people don’t have to live with your choices.

This is just a small sample for this blog post.  This is the main reason I wrote my first book “The ABC’s of Personal Finance“.  This was a major lesson that I learned in my financial comeback and I wish I would have known how important it was sooner.  If you are struggling to make your finances work, but believe you are making all of the right decisions, take a few minutes and consider some of these emotions and how they are holding you back from your success.  You are awesome!

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Spring Clean Your Way to Extra Money

As you know, today is the first day of Spring and if you have had a winter like I have, you couldn’t be more excited.  With the change of seasons and the beginning of warmer and longer days, there is no better time than right now to do a little spring cleaning and make yourself a little extra dough in the process.  Below are some great examples of how you can spring clean your way to extra money:

  • Literally spring clean – By spring cleaning your house and organizing your closets, you are sure to find many items that you are no longer using – items that you can sell.  If you have just a bunch of odds and ends, have a garage sale or two in order to get rid of your treasures.  If you have more expensive items, list them on eBay or Craigslist.  Either way, stop holding onto items that you are no longer using and let your “trash” be someone else’s “treasure”.
  • Spring clean your expenses – This is a great time of year to spring clean your expenses.  Look at your budget and reduce every item that you can.  And never be afraid to shop around or ask for a discount.  The worst thing that will happen is that they will say no, but you won’t know until you ask.  I recently reduced my monthly expenses by $60 just by making 2 phone calls and receiving loyalty discounts.
  • Check your taxes – We are only a few weeks away from April 15th and many of you are receiving or have already received tax refunds.  A tax refund is simply your money that the government has been holding for you.  Stop letting them keep your money and start taking your money home with you every month.  For example, if you received a refund of $2500, you overpaid $200 a month to the government that you could have brought home.  Use the withholding calculator on the IRS website to determine what your true deduction should be, adjust your W-4 with your employer accordingly and start keeping your money.
  • Learn to enjoy free – During the winter it is harder to find inexpensive or free things to do with your spouse or your kids.  But now is a great time to begin to take advantage of the weather – whether it is going to the park, bicycling, having a picnic, or any of the other great things that the outside offers.  Spending money isn’t the only way to enjoy life and this time of year is the best time of year for that.

These are just a few of the many ways that you can make a little extra money this spring.  I hope you find these suggestions helpful and I hope everyone has a happy first day of Spring!

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What Do You Know?

I have always loved the quote from Maya Angelou – “When we know better, we do better.”  This had significance in my life because for so many years I didn’t have the knowledge that I needed to succeed in the area of money.  I knew I was supposed to save and I knew certain things, but I didn’t have a deep knowledge of how to win with money.  I wish I knew then what I know now.

But for many of us, just because we know better, doesn’t mean we do better.  I teach people everyday, people read my books everyday, other teachers bring forth knowledge everyday through radio, television and other sources.  Yet our personal finances are a disaster.  Only a very low percentage of people in this country actually have money in savings and even fewer are saving for their future (retirement).  But we know, don’t we?  We know that we are supposed to live on less than we make, we know that we are supposed to save and invest, we mathematically know that debt is just throwing money away, yet we continue to do it.

Why?  Why is it in the area of money that we know better but yet we do not do better?  Simple – personal finance is 90% emotion and 10% math.  You see, the knowledge is only 10% of the formula.  It is the 90% that we have to get under control if we are ever going to have money.  That is the knowledge that I have today that I am most proud of and that is why my latest book “The ABC’s of Personal Finance” is my favorite.  Because it addresses the 90% as well as the 10%.  I still struggle with the 90% – it will never go away – but knowing that it exists, knowing what the big monster is that I have to slay, helps me to fight it everyday and win in the end.  Yes, my emotions still get the best of me, more than I am happy with, but knowing makes me stronger to fight the daily battle of emotions with my money.

If you feel like you are not winning in the area of your money, maybe this knowledge is what you are missing.  Maybe you need to start doing what you know and not what you feel.  Is living paycheck to paycheck making you happy?  Is that huge mortgage or car payment bringing you joy?  You shouldn’t work as hard as you work and be miserable.  Here is one more kernel of knowledge for you today – the 80-10-10 rule – give 10%, save 10% and live on 80%.  Using this formula, you will always have money.  Start there – start somewhere – you do know better – you just need to start doing what you know.

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Mind Your Own Business

This sounds harsh when someone says it to us, but it can actually be sound advice.  Minding your own business can effect all areas of your life in a positive way including your finances.  One of the reasons you may not be seeing the success that you would like to see in your finances may just be that you have your hand in other business and not your own.

When we are not happy with our lives, we have a tendency to peer into other people’s lives, sometimes secretly hoping that they are having a worse time than we are and that somehow this knowledge will make us feel better.  But this is just a temporary feeling.  Eventually, our own reality pops up again and you either have to face it or stick your nose somewhere and hope for that small feeling again.  It is a vicious cycle that gets you nowhere in the long run.

The best thing that you can do for your happiness, your finances, your marriage, your relationships, your job and your life is to mind your own business and focus on you.  And if you turn your story into a happy one then you won’t need that “feeling fix” you get when you are in someone else’s business.  And let’s be truthful, we don’t like it so much when other people are in our business, do we?

And parents, this goes for our adult children also.  I am the mother of  five children and four of them are grown and own their own.  It is very easy to always want to know everything they are doing so you can make sure they are doing it “right”.  But the truth is, they have to decide what is right for them and when they make mistakes, they have to learn.  And as a parent, it is very hard to sit back and watch sometimes, but it really isn’t any of our business.  We are the author of our story and our story only.  Everyone else is the author of their stories and we need to respect that.

You can’t run away from your problems by sticking your nose into someone else’s.  You will still have your problems and now be burdened with the knowledge of someone else’s as well.  Focus on you – focus on your life – focus on your story.  When you focus on one thing and focus well, that is the thing that you will have success in.  So focus on your life (marriage, finances, job, raising great adults, health, etc.) and see great positive changes happen.  I guarantee it!!

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