Your Financial Reputation

Your Financial Reputation

I get asked all the time “Do I need a credit score?”

Do you need a credit score to live? No. But is a good credit score beneficial – absolutely. Your credit score and credit report reflect how you handle your money. They are your financial reputation. And just like in life, we all should strive to have a stellar reputation. So what can you do to make sure that your financial reputation is stellar.

Here are a few tips:

1. Make all your monthly payments on time – Being prompt on your payments shows that you take your committments seriously. You made a promise to pay a certain amount by a certain day and you followed through on that promise.
2. Keep your credit utilization low – This shows that you can handle whatever is given to you and that you don’t need to spend everything you have access to. Just because you have a total credit limit of $10,000 doesn’t mean you need to spend $10k. 10% or less is considered excellent in the credit world and is just the smart thing to do. Don’t overextend yourself – it won’t end well.
3. Keep your accounts low – You don’t need 10 credit cards to make your point. All it takes is one card paid every month on time to build your credit – as long as you keep your usage below 10%. Don’t have so many accounts that you need a “beautiful mind” to keep up with it all.
4. Be patient – Building credit takes time and repairing credit takes even more time. Just keep doing the right thing and your reputation will speak for itself.
5. It is not about debt – You can build credit without ever going into debt. Debt is owing more than you have. Credit is a source of payment. Using credit is not a bad thing – as long as you have the funds to back it up.

These tips work whether you are building credit or trying to rebuild your credit. I went from a 585 at the beginning of my journey to over an 800 now. It takes time and commitment but it is worth it for a stellar financial reputation. Remember the tortoise wins every time you read the story!

Biggest Tool in the Toolbox

We all need a financial toolbox – tools we can use to win in the area of our finances. And as much as you are going to hate to hear this, a budget is your biggest wealth building tool in your financial toolbox. Give me a moment of your time and I will explain why in hopes that by the end of this blog, you will agree and begin to take seriously the budgeting process.

First, let me clear up a huge misconception – a budget is not designed to tell you no. Actually, the opposite is true. Of course, if you are living paycheck to paycheck, you are going to have to say no to some things. At least, you should say no to some things. However, when you have a budget, you know exactly where your money is going; therefore, you are able to say yes more. Maybe not in the beginning – it depends on how big your hole is. But as you begin to dig yourself out of debt and build wealth, the budget will allow you to say yes – a lot!

A budget (or spending plan as I like to call it) is simply a way to look at your income and your expenses. When you can see it visually, it helps you to see where to cut back on expenses, when to raise your income and helps you make awesome financial decisions that will move you forward in your getting out of debt and building wealth goal.

Now, if you don’t want to build wealth and you are okay where you are currently in your finances, then budgeting probably won’t work for you. However, if you are looking to get out of debt, save money and build wealth, then you definitely need to budget.

Budgets are a snapshot of your finances. Having this snapshot every month will help you walk in your truth and begin to make better financial decisions in order to reach your financial goals. So stop avoiding a budget! Now is the time to start – it will take a few months to get the hang of it and that’s ok. And if you have no clue where to start, head over to our short, easy course and learn everything you need in just a few short minutes.

It doesn’t matter how you learn or what methods you use. The main thing is that you start! Today is your day! You’ve got this!

Is My Spouse Committing Financial Infidelity?

We know that cheating and affairs happen everyday in marriages – even the strong marriages can be affected. However, did you know that financial infidelity is just as common in marriages today?

What is financial infidelity?

Financial infidelity is when you do anything financially that you hide from your partner. Some common examples are:

• Opening a credit card without their knowledge
• Buying something and then hiding it
• Having a secret bank account
• Giving or lending someone money without your spouses knowledge

Financial infidelity isn’t about asking permission. It is about making a financial decision without having a conversation with your spouse which then leads to having to hide it from them. Financial infidelity has grown in recent years in conjunction with more people being independent minded. I saw some statics in researching for this blog as well as this week’s podcast that completely blew my mind.

• 39% of people think that financial infidelity is ok
• 16% think it is ok if it involves bigger sums
• 56% spend money without their spouses knowing
• 27% hesitate to talk about money with their spouses

Just like sexual infidelity, financial infidelity has no place in a marriage and will destroy a marriage just as quickly. If you feel the need to hide anything financial from your spouse, there is a much deeper issue looming that needs to be addressed.

In my first marriage, I was judged for everything I bought. He and I had very different taste, but he was so controlling that if I bought something he didn’t like, he was very mean about it and indirectly would forbid me from wearing it. Because of this, I would hide anything that I bought that I knew he would hate. And then I would wear it only when he wasn’t around. The issue in our marriage wasn’t money – it was a control issue. It was all about his need to control everyone around him – his way or the highway.

If you are committing financial infidelity or suspect your spouse of it, take a step back and try to figure out what the bigger issue is – control, selfishness, low self esteem, etc. The deeper issue has to be addressed before the infidelity can stop. Otherwise, you are just putting a band aid on a big wound.

I need to say it one more time – financial infidelity is just as harmful to a marriage as sexual infidelity. There is a trust that is broken in both situations and it can be challenging, if not impossible, to mend. Secrets kill everything – relationships, careers, health, etc. It’s not worth it. No purchase or secret bank account it worth what it will do to your relationship. Be brave enough to stop the secrecy and address the bigger issue! You’ve got this!