Posted in Buying Your Dream House, Credit Cards, Debt Free, Financial Freedom, Winning with Your Money, You and Your Money

The Credit Score Game – Part 1

credit-score-report-historyWhen I was getting out of debt, I was told numerous times, credit scores mean nothing.  However, I learned that that is not exactly true.  Your credit score is your financial reputation – plain and simple.  When necessary, it shows people how you handle your finances – the good, the bad and the ugly.  I agree that your primary focus in your financial life should not be your credit score.  However, when you make positive financial decisions, your credit score will reflect that and in essence take care of itself.

In order for you to understand how that happens, you need to understand how the credit score works and what positive, on purpose money decisions you can make to help your score along.  So for the next 3 blog posts, we are going to cover the top 3 most important factors of your score and I will share tiny tips that you can do to raise your score simply and easily.  When I started focusing on getting out of debt and making positive decisions, my score went up 100 points in just one year – some take longer, some are quicker, but you have to start somewhere.  So here we go!

Part 1 – 35% of your score is your payment history.  That is over 1/3 on just this one thing.  And this is where many of us go way wrong.  Anytime you are overextended financially, someone doesn’t get paid.  If you don’t have the right health insurance and emergency fund, medical bills don’t get paid and end up in collections.  When you go credit card crazy and look up and owe hundreds every month that you don’t have, bills end up in turmoil.

Your payment history is very important to your financial reputation.  It shows people whether you have it together or not.  People don’t have to look at your bank accounts to know if you have a proper emergency fund – they simply need to look at your credit report.  You don’t have to show anyone your budget for them to know if you are doing one or not.  It is all reflected in your credit report.  Many people fall on hard times and if you are not properly prepared, it will affect your credit history and your financial reputation.

But don’t worry – it is never to late to fix it.  The first thing you need to start doing is get on a budget and pay every bill’s minimum payment every month on time or early.  If a bill is due on the 20th, pay it no later than the 15th – I mean the payment posts on the 15th.  Online payments usually posts within a day, but mailed payments can take 10-20 days to post.  Take this into consideration.  If you have to start with one, then another, then another and so on.  This is better than every single bill being late every single month.

Once you have everything being paid on time or early, begin to work on cleaning up any collection items that may be sitting out there.  They are already being reported as not being paid, but once you settle them (even if it is for a written settlement partial) it will show paid and raise your score.

The one thing you need to know about all of the parts of your credit score is that what is done is done.  You can’t go back and change it.  However, you can make better decisions going forward which will begin to outweigh the bad ones.  Trying to do it all can seem very overwhelming which is why I wanted to talk about the top 3 factors so that you can begin there.  You may not be able to start paying everything on time immediately if you have struggled with this for a while, but there is no better time than today to sit down, list out all of your bills with their minimums, set up a budget and begin to make it happen.  You can do it!  I was $200,000 in debt making just $10,000/year with a 560 credit score when I started the process.  And look at me now – debt free, making way more than 10 grand, and my score is over 800.  It is not impossible and I hope that these small tips that I will be sharing will help you to start the journey now.

Credit is a part of life – we need it for things other than debt in today’s world.  It is your financial reputation.  And it’s okay if your reputation is scared a little right now.  Just make the decision to start over – start today making one better financial decision, pay one bill on time, anything!  Today is your day!

Posted in Building Wealth, Car Buying, Debt Free, Financial Freedom, You and Your Money

The Day Before

o-thanksgiving-prayer-facebook

I am so excited for this week!  My daughter is coming home from college and every moment spent with her is a blessing.  I consider myself one blessed lady.  Blessings that would take up hundreds of pages if I listed every one.  But I made a habit years ago of celebrating those blessings everyday of the year, not just the 4th Thursday of November.  This is one of the reasons I have no issue with listening to Christmas music now and singing at the top of my lungs.  Because I have made everyday Thanksgiving Day.

Thanksgiving for many is about Black Friday shopping and all of the deals you find – I do love a good deal and usually that is what my blog post is about this week.  For many it is about seeing family that you haven’t seen in a really long time.  And for some it means deer season is just a few days away.  All of those are great and all of those are fun, but I wanted to focus this week on helping you see the many blessings you may not know you have.  When asked “What are you most thankful for?”, most answers are the same – family, specific people, animals, and food.

But I want to take a journey with you to another part of your town, city, state where people actually have less than you.  Many of us talk about all the things we don’t have and all the things we can’t afford.  Many of us are stressing over finances right now because we have bought things without having the cash to back it up.  But I want you to please read the list below of just a few of the things I am thankful for everyday because I know that there are people on my street, in my town, and in my area who don’t have what I am blessed to have.

  • Food – there are children everyday whose only meal is at school.
  • Clothes – there are women with just one pair of shoes and they have holes in them.
  • Water – there are people who do not have running water right here in the U.S.
  • Toilet – there are people who have to use outhouses and buckets even in 2016
  • Heat – I remember when my grandmother would heat the living room only and when we went to bed, we used an electric blanket.  The whole house was never heated.  My husband deals with clients everyday who choose to use their ovens for heat because they do not have any.
  • Jackets – many kids go to school with just the shirt on their back, many times a t-shirt in the middle of winter.
  • Transportation – a pet peeve of mine is when people say they need a car to justify a huge car payment they can’t make.  There are many people who would love just an old used car to get somewhere without having to walk.
  • Bible – I have many Bibles all around my house including on my iPad and phone.  There are people who would love to have just one.
  • Electronics – we all say that we “need” computers, internet, phones, TV’s, tablets, etc.  These are actually the last things we need.
  • Washer/dryer – I am washing clothes right now in my heated house – doing 4 loads.  Do you remember the scene in “The Blind Side” where Mike would go to a laundromat at night, hand wash his “other” shirt, slip it into someone else’s dryer and then spend the night there?  That is not fiction.
  • Income – you may not like your job (and I hope you will pursue your passion), but be grateful you have some source of income.  Many people, more than we realize, are one check or emergency away from having nothing.

The biggest thing I realized years ago was that even at my bottom – in debt with 5 zeros and making $10,000/year, I still had way more than other people.  I want to ask you today – don’t ever say you are broke.  Don’t ever say you aren’t blessed.  Don’t just be thankful for family and people.  Take a look around, focus on things you never saw as blessings, and start being thankful for everything.  There are treasures in every trial.  There is something to be thankful for in every situation.  2 1/2 years ago, my dad had a massive heart attack and basically left us – until God stepped in and saved his life.  Not for one moment did I focus on the heart attack and what could have happened.  Until this day, I focus on every blessing that came out of that and make sure I tell God and my daddy everyday that I love them to the moon and back.  I don’t know why daddy had to go through that, but I know that for me, only good will come from it.

You are blessed.  You have someone who loves you – God and me.  You are an awesome person!  I hope you have a blessed Thanksgiving and from my family to yours – thanks for everything!  We love you!!!

happy-thanksgiving-clip-art-pictures

Posted in Budgeting for Everyone, Building Wealth, Debt Free, Financial Freedom, Marriage and Money, Winning with Your Money

Budgets – The Key to Financial Success

budget-planner

 

When you hear the word budget, do you think freedom or prison?  Many people lean on the side of prison, but as I found out, a budget is the key to financial success and freedom.  For the first 28 years of my life, I never did a budget – I mean I didn’t even write a list of my bills down each month.  Then, as many of you know, I found myself $200,000 in debt, a single mom making $10,000 year.  In order for me to get out of that situation and move forward in my finances, many things had to change.  The first thing was budgeting.

All budgets need to be written – at least until you reach the level of financial freedom where you automatically have set limits and can always stick to them.  I know millionaires who still write down budget items such as donations, medical expenses, etc. – items that they need to keep in check to make sure they don’t go over what their boundaries are.  And that is all a budget is – a list of your expenses and what your boundaries are in each category.  Your true boundary is your income – if you spend beyond that, you will head into dangerous territory.  The best way to avoid doing that is to set up a list of every dollar you are bringing in and where you want it to go including savings, retirement, fun, etc. – a zero budget.  Everyone can do this – whether you have regular income or irregular income.

Regular Income – When you get paid the same thing every month, it is easy to do a budget.  You know ahead of time what your take home will be so you can sit down a week or so before the beginning of the month and write out your budget.  You can use pen and paper like I do, or you can use a spreadsheet or one of the many apps out there.  It doesn’t matter how you do it – the important thing is that you do it.  As I mentioned before, make sure you do a zero budget – this is where every dollar has a home.  If something changes throughout the month, you can switch money around, but when you leave extra money floating out there, you have a tendency to forget about it and spend it on something you shouldn’t.  You are in charge of your money and if you don’t tell it where to go, it will literally go and you will never see it again.

Irregular Income – It is a little more challenging to do an specific budget when you have different amounts of income coming in each month.  However, it is just as important that you do one.  The first step is the same – write down all of your expenses.  Then rewrite them in priority order – let me help with this one – food, housing, utilities, transportation come first.  Then you can worry about credit cards, debt, etc.  Never pay a credit card before your rent/mortgage.  When your money comes in, simply start at the top of the list and pay down the list until you run out of money.  Everything else gets moved to the next check.  Here is a major tip that will help you if you have irregular income:  Have a cushy emergency fund.  If you have one, you will be able to cover all your expenses every month no matter what the income.  And when the months are good, you can rebuild the fund with the extra.  This will keep you from missing payments, being late and racking up extra fees.

Many people don’t like doing budgets because they believe that doing one will make them have to say no to something.  However, not doing one will make you have to say no to a lot of things in the near future.  A budget is a wealth building tool.  A budget is you being the boss of your money.  A budget is your key to financial freedom.  If you are scared to start budgeting, I understand.  I was right where you are.  Let me put your mind at ease – you will fail multiple times.  Not because you can’t do it, but because budgets are emotional things.  You will have to face your truth doing a budget.  You will have to say no sometimes doing a budget.  But without doing both of these things, you will never reach the financial freedom you so desperately want.  Start by doing a spending journal.  Learn where your money is actually going.  Then use that spending journal to do your first budget.  And I would also suggest continuing the spending journal in conjunction with the budget for several months or forever.  It is a great tool to have in your wealth toolbox. And my last tip – add a G.O.K. (God Only Knows) category to your budget.  All you need to put in it is $20-40 per month, but this will help you with those tedious expenses that pop up out of nowhere.

Budgets are not hard, but they are emotional.  Just remember, with a zero budget, you only have what you have.  Therefore, if something changes, the money has to come from somewhere – either another category or the future, meaning it may have to wait until next month.  After a few months, you will begin to build your muscles and you will get stronger with each month – and wealthier too.

Always remember – budgets are our friend!

Find all of Debbi’s award winning books on Amazon and BN.com.

Join in the conversation on Facebook and Twitter.