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:
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.
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.
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.
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.
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!
In this world of social media, internet, and credit cards, we can have anything we want right away – whether it’s to know how old Taylor Swift is or to buy that Coach purse. Instant gratification is as natural as breathing.However, just because it is natural and all around us, doesn’t mean it is a good thing. “Back in my day”, we had to work for everything we wanted. When we needed to know when someone was born, we had to go the library, pull out a long drawer and find a resource that gave us that information. It took time and effort to get what we wanted. Today, it is easier, but as I have found out, easier isn’t always better.So, what have we lost in this instant gratification world we live in today? Here are just a few of the important skills we have lost with this change:
The work – When you don’t have to work for something, it doesn’t mean as much. When something is just handed to you or is easy to get, you lose the importance of the process. Working for something gives you the purpose that you need for the item to have value.
The filter – With everything being so instant now, we don’t take the time to run things through our filter first. We don’t take the time to think about whether we should buy something or not. We don’t take the time to think about whether we should post something or email something or not. And once it is out there, you can’t undo it. You need to make sure everything runs through your filter before you proceed.
The lesson of failure – With instant gratification, when something doesn’t work out right away, we give up. We lose the gift of time to try, try again. We expect it to happen immediately exactly the way we want and when it doesn’t, which most of life doesn’t, we give up. One of my mantras is never give up! I know some things work and some things don’t and I learned this lesson before the instant gratification era. But I never give up – I just try something different.
There are so many subjects, including personal finance, that have been removed from the schools simply because “they can look that up”. Personal finance is 10% math and 90% emotion – so Google can help with the 10%, but what about the 90%. With instant gratification, we have put ourselves in over $13 trillion – yes, trillion, of consumer debt. We believe if I don’t buy it now, I will never have it. How many of you have bought a house at the wrong time and have spent the last years in a nightmare? How many of you can’t live your dreams because you have a stack of bills filled with instant gratification? How do we overcome instant gratification when it is everywhere and seems to make life so easy? Here are a few tips:
Pause for 24 hours – for every decision, not just the money ones
Never give up – no matter what
Be willing to be the turtle
When you don’t get what you expect, try again or simply wait
Go old school and learn something not using the internet
Be ok if you don’t get your way right away
We may be an Instant Pot society, but you don’t have to live the Instant Pot life. Make one change today that will help you fight the instant gratification world we live in. You won’t regret it!
If you are in debt right now, odds are you have a shopping “situation”. For me, it was a full blown shopping addiction. (Yes – that is a real thing with a 12 step program and everything.)
But even if you aren’t addicted to shopping, your shopping “situation” is stymying you from becoming debt free and building wealth.So how did I get my shopping “situation” (addiction) under control? Here are a few things that I did that helped me turn it all around and even help me today when I find myself shopping more than my budget can handle.
Remove all of your credit cards from your shopping websites
Remove all of your shopping websites from your email
Cut up and close all of your credit cards
Only go to the store when necessary and when you go, take a strict list and cash
Be content with what you have – promise yourself you won’t upgrade unless what you have breaks and can’t be fixed.
When you start shopping online, get up and do something else. We shop out of boredom a lot and just doing something else for a few minutes gets our mind off of it.
Shopping gives many people a high – it makes us happy, gets us through rough times, and makes us feel good for a moment. But like every high, it doesn’t last. However, the debt does. We need to take a few seconds every time we feel like shopping and reprogram our brains to do something else – something that doesn’t cost money.
I challenge you to look at your credit card statements and your spending for the last 3 months. I think you will be shocked at how much you actually spent. Now, I want to challenge you to go on a 30 day spending freeze. This is how I retrained my brain 20 years ago and I still use it today when needed.
When you stop spending money on “stuff” and start buying only what brings value to your life, you will have more money to save and to use to pay off debt and build wealth. And that will give you a high that will stay with you always!