Tag: Life Hacks

 

How to KonMari Your Money

For a 4’ 7” human, Marie Kondo is huge.

More than 11 million people have bought her books, and still others are binge-watching her Netflix series “Tidying Up With Marie Kondo.” People are drawn to Kondo’s philosophy: You can change your life by getting rid of all the things that don’t “spark joy.”

Want to give it a try? You don’t need to limit yourself to clothing or books or Beanie Babies. In fact, nearly all of us could stand to tidy up our finances, too. Here’s how to “KonMari” your bank accounts, credit card purchases, and investments — and maybe even spark financial joy.

Envision Your Ideal Lifestyle

As Kondo wrote in “The Life Changing Magic of Tidying Up”: “The question of what you want to own is actually the question of how you want to live your life.”

So, take a moment to reflect. Do your expenditures and money habits reflect your ideal lifestyle? Or, are you, say, spending your money on bar tabs when you actually want to travel the world? Or living in an expensive city, even though you dream of retiring early?

Think about how you can align your finances with your ideal lifestyle.

“Start with the vision of your best financial life to help you shift your mindset and shape your criteria for what sparks joy,” says Kristyn Ivey, a KonMari Consultant who co-hosts the Spark Joy podcast.

Make a Money Mountain

If you were organizing your wardrobe, Kondo would tell you to make a “clothing mountain” by removing everything from your closet and piling it on the bed. This way, you’d get a full picture of what you own — and can therefore make better decisions about what you do or don’t need.

The same goes for your finances. While the results won’t be as physically impressive, collecting a mountain of data about your money habits will hopefully have an even greater long-term impact.

The most accurate way to assemble this information would be to track your spending and income for a few months. (That’s especially true if you often use cash to make purchases.) If you’re in a hurry to KonMari, however, you can get a decent overview by compiling your credit card, bank, and investment account statements from the past year.

“The reason we ask you to gather everything in one category all together is so that you see all that you have at the same time,” says Jane Grodem, a KonMari Consultant in the Bay Area.

“This is an opportunity to consider the state of your finances with clarity, and ultimately the goal is to let go of those [expenses] that do not serve you in your current or future life.”

Decide What Sparks Joy

Once you’ve created your money mountain, analyze the information.

  • Are you spending more than you earn?
  • Where are you spending the most money? Did those purchases spark joy?
  • Do you have enough saved to cover at least three months of expenses?
  • What have you saved for your future goals?

Unlike physical objects, finances are tricky because saving money often doesn’t spark joy in the moment. So, to help you feel that joy in your bones, visualize your financially secure future — whether it’s holding the keys to your first home or treating your grandkids to all the ice cream they desire.

You can also note the financial data points that definitely don’t spark joy, like an ATM fee from your bank, a spartan retirement account, or an expensive takeout meal.

Now that you know which financial behaviors do and don’t spark joy, you can look for ways to augment or disrupt them. For instance, you can spend more money on plane tickets instead of shoes, or you switch to a fee-free bank.

According to Liv Cloud, who blogs at Funding Cloud Nine, viewing her life and finances through the KonMari lens has saved her “thousands” of dollars.

“I no longer mindlessly spend money on unnecessary things,” says Cloud.

“I have become more intentional with my spending and with the items that I bring into my home. If it isn’t something that I really love, then I simply leave it at the store,” she says.

View Your Budget as Plentiful

Kondo is all about what your woo-woo friend might call an “abundance mindset.”

“The biggest mistake people make is to focus on what to discard instead of what to keep,” Kondo told Mic. “If you focus on this, you look for flaws… and cannot appreciate the things you own. The correct mindset is to keep what you love instead of throwing out what you don’t like.”

Although she’s talking about physical items, that’s the perfect way to look at your budget, too.

When you’re deciding which expenditures spark joy, don’t agonize over what you’re cutting out. Instead, delight in what you get to keep: rent for your (hopefully tidy!) apartment, groceries for next week’s potluck with friends, a splurge-y fancy coffee every Friday.

Organize Your Financial Paperwork

Being overwhelmed by paperwork is totally normal. In fact, Kondo devotes an entire clutter category to it, with her baseline rule being “discard everything.” (What a relief!)

Of course, some paperwork, like the past three years of tax returns, must be kept. Which is why Kondo recommends three folders, each with a different purpose: currently in use, needed for a limited period of time, or kept indefinitely.

You should also make a “pending” folder for papers you haven’t had time to organize yet. And then get in the habit of recycling paper as soon as you get it, so it doesn’t ever have the chance to — horror of horrors — pile up.

Be Grateful for What You Have

Before Kondo embarks on any decluttering mission, she sits on the floor and thanks the house. Before discarding an item, she thanks it for its service. Although it might sound loony, numerous studies have suggested that gratitude can vastly improve your outlook.

So, while you’re in the midst of KonMari-ing your finances, take a step back — and be grateful for what you have. Maybe you don’t have the latest designer handbag, but you have enough to eat. Maybe you don’t have enough money to take a vacation this year, but you have a job.

“I now surround myself with things, people, and experiences that bring joy to my life. Instead of focusing on what other people have, I focus on what is going to make me happy and make me the best person I can be,” says Cloud.

 

Chime’s Ultimate Guide to Building Credit

Your financial health is like a puzzle, with different pieces that fit together to create a complete picture.

One of the most important pieces is your credit history and of course, your credit score. (That’s the three-digit number lenders use to determine how likely you are to repay your debts.) FICO scores, the most widely used credit scoring model in the U.S., range from 300 to 850. The average FICO score recently hit an all-time high of 704.

This in-depth guide breaks down everything you need to know about engineering a better credit rating.

Where credit scores come from

Before you can have a credit score, you first need to have a credit report. This is a collection of information about your credit accounts, including who you owe money to, how much you owe, your minimum payments and how long you’ve been using credit.

FICO scores focus on five specific factors to calculate your credit score:

  • 35% of your score is based on payment history
  • 30% is based on your amounts owed
  • 15% is based on the length of your credit history
  • 10% is based on inquiries for new credit
  • 10% is based on the types of credit you’re using (i.e. loans and credit cards)

Knowing what affects your score can help you adopt the habits that you’ll need to build good credit. But what if you’re one of the 62 million Americans with a thin credit file?

“A thin credit file just means that you don’t have an established credit history,” says personal finance expert and Money Crashers contributor David Bakke.

“Maybe you’re younger and just have never had a need for credit, or possibly in general you’ve never signed up for credit cards or taken out a car loan or a home mortgage,” says Bakke.

With a thin credit file, you may not have enough credit history to generate a credit score. Fortunately, that’s a situation you can remedy. Opening a bank account is a good first step. You can use your account to get a handle on your spending, keep track of bills and start growing your savings. Once you begin using credit, you’ll already be in the habit of keeping your spending in check and paying your bills on time. Both of these positive habits can help your score.

How to build credit from scratch

If you’re starting from square one with building credit, there are a few different routes you can take. Here’s a look at some of the most common ways you can build credit as a beginner:

Secured credit cards

Opening a secured credit card can be a great option to build credit for someone who’s new to credit or has a thin credit file, says Steven Millstein, a certified credit counselor and editor of CreditRepairExpert.

“Unlike other credit cards, a secured credit card requires that you make a cash deposit upfront. This deposit will usually be your credit card limit, which serves as collateral if you fail to make payments,” Millstein says.

The major pro of a secured credit card is that your payment history and spending can help to establish your credit history. That’s because many secured card issuers report your activity to the credit reporting bureaus. With a card limit of only a few hundred dollars, this can keep you from racking up debt.

Credit builder and savings secured loans

Credit builder and savings secured loans offer a slightly different take on building credit.

“These are basically small installment loans where the loan is secured by a certificate of deposit or a savings account,” says Jeff Smith, vice president of marketing for Self Lender, which offers credit builder loans.

“As the person repays the loan, the payments are reported to the credit bureaus so they can impact the credit history. At the end of the term, the CD or savings are unlocked and returned to the account-holder.”

Essentially, you’re repaying a loan to build credit, but you don’t get the proceeds of the loan until it’s paid in full. That’s a reversal from how loans usually work, where you get the money upfront.

There are also other drawbacks to credit builder loans. For example, you may not get immediate funds to make a purchase. On the other hand, this may not matter if your main objective is to build credit.

Become an authorized user

Instead of getting a credit card in your name, you can ask a friend or family member to add you to one of their cards as an authorized user.

“The implication is that their (the main card holders) good credit practices will start to build your credit,” Millstein says.

According to Equifax, being an authorized user allows you to make purchases with the card and have the account’s activity show up on your credit report. Yet, you’re not the one liable for the card’s balance. If the primary card holder practices good credit habits, those habits would be reflected in your credit report and score.

There’s a catch, however. If the primary card holder falls behind on payments or maxes the card out, this can hurt your credit.

Ask someone to co-sign a loan with you

Co-signing on a personal, student or auto loan is another way to build credit. Unlike being an authorized user, however, you share responsibility for the debt with your co-signer.

Asking someone to co-sign can help you qualify for a loan that you may not be able to obtain on your own. Once you’re approved, you can work on repaying the loan and building credit history.

But there is some risk involved. If you default on the loan, both your credit history and that of your co-signer can be damaged. And, this can potentially ruin your relationship, Millstein says.

How long will does it take to build credit?

“Building good credit is probably not going to happen overnight and getting a solid credit score as well isn’t going to happen immediately,” Bakke says.

So, just how soon can you expect to see results?

According to Experian, it can take between three and six months of activity to get enough history on your credit report to calculate a credit score. Millstein says it can take about 12 months to grow a fair credit score, which is in the 580 to 669 range for FICO scores. He says working towards a perfect 850 score, on the other hand, can take several years.

Bottom line? You’ll need to be patient and give your good credit habits time to pay off.

Check in with your credit regularly

If you’re hard at work on building credit, don’t forget to track your progress. You can get your credit report three times a year for free through AnnualCreditReport.com. Free credit monitoring services help you track your score month to month.

In the meantime, set up alerts for your bills and schedule automatic payments through your mobile banking app so you never miss a due date. When you make payments on time and keep your balances low, your credit will eventually improve!

 

5 Job Interview No-Nos from the Experts

You’ve scored an interview for your ideal job with the dream salary you want to get paid. Yes! “I can’t mess this up,” you think. So you start preparing and figuring out how you can ace the interview and make it to the next step.

But before you let your nerves get the best of you, it’s important to understand that interviewing for a job is more of an art than a science. And, there are some definite no-nos to avoid at all costs. To help you out, we talked to human resources experts and hiring managers to learn more about what you absolutely should not do. Take a look at these 5 things to avoid in a job interview:

1. Don’t talk trash about your current employer

If you’re on the hunt for a new job, it’s likely that your job interviewer will ask about your current employer. But, even if you’re itching to leave your job because you hate it, you don’t have to dis your boss or the company you currently work for.

“There is nothing worse than hearing an employee bad mouth a current employer during an interview; not only is it awkward, but it also instantly makes a bad impression,” says Matt Dunne, hiring manager at Africa Travel.

Also, talking trash about your current employer is unprofessional, and this won’t win you any bonus points.

“Slandering your current employer to prove you’re ready to move onto the next step in your career may sound great in your head, but that’s where it should stay. After all, an employer expects you to speak highly of their company, no matter what the circumstance,” says Dunne.

2.  Not having questions ready

After any interview, a standard question is, “Do you have any questions for me?”

You might think you covered everything and you’re good to go. Nope. You should always come up with some good questions to either ask in the interview or afterwards. This proves you are truly interested in learning as much as you can about the employer and prospective job.

“When an employer ends an interview with “do you have any questions for me?” try not to make up questions on the fly. This shows a lack of preparation and often the answers could easily be found with a quick search,” says Alex Robinson, hiring manager at Team Building Hero.

“Instead, say ‘I do have some questions, and I’d like to spend a little more time thinking about them. Would it be okay if I follow-up by email?’ This approach shows strong critical thinking skills and gives you an opportunity to connect with the interviewer again.”

3. Lacking passion and interest

Have you ever been around someone who is so passionate about a particular topic that you can’t help but get drawn into her magnetism? It’s infectious and makes you listen, right? In a job interview, you want to be this person.

“If you’re a job candidate, I recommend you tell the person interviewing you specifically why you want to work at that company. Do you use their products or services yourself? Do you know someone who works there and loves it? What is it about the company that gets you excited?” says Richard Blazevich, author of Interview Prep Playbook.

Sharing your passion for the job and/or company can win you a lot of points, especially if your resume may need a little padding in the skills department. Many skills can be taught but passion can’t be bought. Having a genuine passion and illustrating that in an interview may help you get to the next round.

4. Not following-up with a thank you

Should you or shouldn’t you follow-up after a job interview? Trick question.

You should always follow-up after an interview. Yes, always.

“Send thank you notes. Email a different/unique thank you note to every person you met within 24 hours. You will need their email address, so be sure to get business cards from everyone. And don’t be lazy and copy/paste the same message to everyone, they might chat and share your note. Tweak each one to be a little different,” says David B. Nast, CEO and managing partner of Nast Partners, a human capital management and talent optimization firm.

If you want, you can go to the next level and send a handwritten note. Be sure to mail it that day so it can get to your interviewers ASAP.

5. Being late

There’s a huge cardinal sin when it comes to interviews: being late. Arriving late for an appointment is disrespectful to everyone and doesn’t give off a great first impression. So, avoid this at all costs by preparing ahead.

“Scout the location a few days before the interview and plan to arrive 15-30 mins early.  Program the main number or the admin’s number into your phone, so that if you are running late, you can call ahead and let them know you are running late and why you are late,” says Nast.

On the day of the interview leave extra early. Being early is always better than being late. And besides, if you arrive early, you can relax a bit. Maybe you can even grab a cup of coffee or a snack and make notes before heading into your interview.

Final word

Nailing a job interview is just one step in the hiring process. But it’s a necessary one and a step that you must pass in order to move on in the process.

In order to boost your chances of landing that job you’ve had your eye on, avoid these 5 interview no-nos at all costs. This will help you achieve both career and financial success in the new year.

 

Should You Take a Pay Cut?

Do you always have the Sunday Scaries before the work week starts? Do you dread Monday morning or let’s face it, every morning during the work week?

Perhaps this means you’re sick of your job and ready to jump ship. Or, maybe you’ve already found what could be a pretty awesome next job. There’s just one catch — the prospective job pays less. You really want to move on but is it a good idea to take a pay cut?

Read on for more information to help you decide whether you should stay or go.

Be honest

First things first: Be honest with yourself. Is this just a rough patch at your job or is it really a bad fit? Everyone has stressful periods at work that can wreak havoc on their lives. Yet, there’s a difference between a rough patch and a bad fit. So which one is it? To find out, start by asking yourself these questions:

  • How long have you been unhappy?
  • Have you spoken up about your needs?
  • Is what (or who) you’re unhappy with fixable?

If you’ve been miserable for more than a few months, your needs are likely not being met and the situation may be unfixable. In this case, it may be best to leave your current job. If you’ve only been unhappy for mere days or a couple of weeks, try having a pow-wow with your boss to see if you can smooth over the situation.

Remember, every job has its own set of issues. It’s all about figuring out what you can handle.

Look at your current expenses

If you’re considering taking a pay cut, it’s key to take a look at your current expenses. Why? Because earning a lower salary will require some changes to your budget.

How much do you spend each month? What expenses can you cut back on or eliminate completely? For example, if your new net salary will be $3,000 per month but your expenses every month are $3,500, you’ve got an issue. You will either need to find a way to cut back by $500 or you just won’t be able to swing it on this new lower salary.

Pro tip: When you review your expenses, look at everything with a fine tooth comb. If you don’t need to spend the money, don’t.

What other perks are on the table?

If you have another offer lined up or are just poking around, see what other perks are on the table. In some cases, these benefits can help offset other costs in your budget.

For example, maybe a new job comes with a free monthly transportation pass which will help you cut down on gas or eliminate the need for you to buy a public transit card. Some companies offer a health and wellness stipend that will cover a gym membership. If you’re lucky, you may even score a student loan reimbursement.

So, take a look at what extra benefits you are offered that can help you stay on budget. From there, you can truly figure out how much your bottom line will be affected by a lower salary.

Look at your health and happiness

In some severe cases, your job is not just miserable or boring, but is wreaking havoc on your health and happiness. If you feel like the stress is too much to bear, maybe a pay cut isn’t so bad. For example, if you can barely get out of bed or are resorting to destructive behaviors just to survive work, take the pay cut.

You only live one life. Being severely unhappy will hurt your mental and physical health. So, take care of yourself!

How to make up for the shortfall

What if you’re determined to make the job leap but you’re still faced with a small shortfall of cash?

Here’s an idea: If there’s a little gap that needs to be covered, take on a side hustle for a couple hours a week. You can do a variety of tasks like babysitting, driving for Uber or Lyft, pet sitting, etc. You can even check out sites like TaskRabbit to do various tasks that align with your skillset. Here’s another thought: You can try raising money by downsizing some of your stuff and selling your items on OfferUp, Craigslist, or Facebook Marketplace.

In addition, here’s our best pro tip: You can use Chime’s get paid early feature to help cover some cash flow issues. And, you can save money automatically by taking advantage of Chime’s round up program. Every time you use your Chime debit card, your transaction amount will be rounded up and that extra cash will be deposited right into your Savings Account.

Just think: Automatically saving, getting paid early, side hustling, and selling your stuff can help you make enough money to take that job you want – pay cut and all. Better yet, these solutions can help free up some mental, physical and emotional energy to pour into your new job and side hustle.

Final word

If you are entertaining a job with lower pay than you currently make, take a look at the big picture. Crunch the numbers, assess your current situation and evaluate your health and happiness.

After you look at all of these factors, you are then in a position to make a responsible and informed decision.

 

How to Set Intentions for the Year That Will Make You Wealthy

With the new year quickly approaching, this is a great time to consider your goals for 2019.

With this in mind, have you ever considered setting intentions instead of resolutions for the new year? Intentions are anticipated outcomes. They help to guide your actions, both big and small throughout the year. Intentions also allow you to push yourself beyond simply thinking about desirable outcomes.

Want to learn more about intentions and how they can lead to personal growth and financial wealth? Read on to see how you can implement intentions into your life.

Resolutions versus intentions

Still confused about the difference between resolutions and intentions? To further explain, here are the definitions from Vocabulary.com:

Resolution: A decision to do something better or to behave in a certain manner.

Intention: An anticipated outcome that is intended or that guides your planned actions.

Based on these definitions, resolutions are based solely on desirable outcomes, while intentions use desirable outcomes to guide your actions. For instance, instead of setting a resolution, such as losing 10 pounds this year, you can set an intention to focus on your health. This intention, in turn, may result in you losing weight – maybe even 10 pounds. In a nutshell, intentions guide your actions, which may include committing to exercising, eating more wholesome foods, and focusing on self-care. See the difference?

Tips for setting intentions for the new year

Now that you know how intentions differ from resolutions, you can start to set them. Here are 6 tips to get started.

1. Split your life into categories

Not sure where to start? Consider focusing on an area of your life that you’d like to improve upon this year. Life categories are different for everyone, but some may include:

  • Relationships
  • Finances
  • Career
  • Personal Development
  • Religion/Spirituality
  • Health
  • Personal Interest/Hobbies

2. Find your why

Next, pick one of the life categories above. It’s not enough to just say you want to improve something – you’ll have to discover what you’d like to improve and why.

So, say you want to improve your finances this year. Then ask yourself “why”? Take some time to really think about this. If you journal, you can even try writing out your answers.

Once you find your why, write it down and make it visible. This is the fuel that will drive you throughout the year, so refer back to it often to stay motivated.

3. Set goals

Let’s continue to use the example of improving your finances. Now it’s to time to break this down even further to consider what specific areas you want to improve upon. For instance, you may include outcomes such as:

  • I want to pay off my debt
  • I want to build my emergency fund
  • I want to pay all of my bills on time

Now that you know what you want to do, you need to set SMART goals. SMART is an acronym that suggests goals that meet the following criteria:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time bound

An example of a SMART goal would be to pay off $10,000 of student loans in 12 months. That goal is specific (it indicates what kind of debt you will pay off), measurable (it specifies how much debt), achievable (assuming you have some income this year), relevant (it provides results), and time bound (to be achieved within 12 months). Got it?

4. Break down your goals

Now that you have a SMART goal or two, break it down to determine what specific actions you must take every month, week, and even day in order to achieve your new year’s intention.

For instance, if you want to save $6,000 in an emergency fund this year, you will need to commit to saving at least $500 a month. That equals $125 a week, or about $17 a day. By doing this, you’re more likely to stay on track throughout the entire year.

5. Commit to rejuvenating yourself

You’ve been down this road before: You commit to a goal 100 percent, and then a few weeks later, you find yourself tired, bored and burned out.

If you can relate, you likely didn’t give yourself enough breaks. It’s hard work to achieve all your goals, so give yourself some rest!  Need some self-care tips? Check out this article from Psychology Today for a few ways to get started.

6. Create space

Having a hard time concentrating on your goals? Try creating space.

Creating space helps eliminate clutter. Whether it’s physical or emotional clutter, ridding yourself of it can only help clear your mind and surroundings to focus on what really matters.

With fewer distractions, you can focus on your intentions. You’ll be less likely to become run-down, give up or get distracted. To create space, Prevention Health suggests starting small. Even decluttering a single drawer can go a long way in reducing stress.

Take advantage of helpful tools

Whether your new year intention is to grow your finances or improve yourself in another way, Chime’s mobile wallet and money transfer features are here to help. By socking away your hard-earned dollars into a fee-free online savings account, you can watch your cash grow.

And just think: Saving more money allows you to more readily reach your financial intentions this year. Are you ready to make this year your best year?

 

What is A Good Credit Score To Buy A Car?

Ready to buy a car?

A car may be one of the most expensive purchases you’ll ever make – second only to a home. The average car price is $36,000, according to Kelley Blue Book. That’s a whole lotta dough.

While you can certainly save money by buying a used car, you will still need to come up with enough cash to drive away in your new wheels. If you don’t have the money on hand, your other option is to get a car loan.

Car loans can certainly help you buy a car, but in order to get approved for a loan, you’ll generally need a good credit score and money in the bank for a downpayment. Read on to learn more about car loans and how your credit score can help you buy a car.

How Do Car Loans Work?

Car loans are similar to other types of loans. You usually have to come up with a down payment and you can then apply to borrow the rest. You can get a car loan at an auto dealership, or at a bank or credit union. There are also some online lenders that specialize in car loans.

Some car dealerships will allow you to trade in your current car and use the value as a down payment for the new car. They will then run your credit and shop around for the best lender for your loan. This can take some time which is why it’s not uncommon to spend several hours at the car lot as you wait for a financing decision.

Once you have been approved for a car loan – either at a dealership or through another lender – you can review loan terms and sign paperwork. You’ll be given an interest rate based on your credit score, income, and debt-to-income ratio (how much you already pay toward your debt each month compared to how much income you bring in.)

Generally, you’ll be asked what your budget is for a monthly car payment. Lenders can shorten or lengthen your loan repayment term based on this preference. For example, you can get a 36-month car loan or even a loan that will take you seven years to pay off. The longer the loan, the more interest you’ll typically pay over time.

What Type of Credit Do You Need?

Your credit score is the number one factor that will determine whether you get approved for a car loan or not.

Of course, if your credit score is excellent or above average, you can rest assured that you’ll likely get a loan with the best terms. If you have no credit whatsoever, you probably won’t be approved for a car loan and it’s time for you to build your credit.

Each quarter, Experian publishes a report detailing the state of the automotive finance market. This is how Experian, as well as most lenders, rank borrowers’ credit scores:

Super Prime: 781 – 850

Prime: 661 – 780

Nonprime: 601 – 660

Subprime: 501 – 600

Deep Subprime: 300 – 500

If you have super prime credit, meaning your score is excellent, you can expect a low interest rate around 2.6% for a new car and 3.4% for a used car. With nonprime credit or an average score, you can expect a rate around 6.39% for a new car and 9.47% for a used car.

With deep subprime credit, which are the lowest scores, you may not get approved for a loan at all. If you do, your interest rate will be the highest, averaging around 13.3% for a new car and 18.9% for a used car, according to Bankrate.

Clearly, having a higher credit score will get you the best terms and the lowest interest rates. And this can save you a ton of money as you repay your loan. If your credit score is subprime or worse, it’s probably a better idea to work on building your credit before applying for a car loan.

Getting Your Credit Ready For a Car Loan

If you want to build your credit score or improve it, you first need to understand how credit works. Lenders look at your FICO score when considering whether to approve your car loan application. FICO is a specific credit scoring model, but it helps to understand how it works so you’ll know which areas of your credit report to focus on.

According to MyFico, credit scores are calculated by using these five main factors:

Payment History – 35%

Amounts Owed (overall utilization of your credit limits) – 30%

Length of Credit History – 15%

Credit Mix – 10%

New Credit – 10%

As you can see, your payment history and amounts owed hold significant weight in terms of determining your score. If your score is low, odds are your payment history is not good.

So, how long does it take to improve your credit? Depending on how much work you need to do, some experts state that you can improve your credit in as little as a few weeks on up to 18 months. To start making improvements, you can do the following:

  • Try monitoring your credit and tracking your improvement by using free sites like CreditKarma and CreditSesame.
  • Use your credit cards wisely, which includes paying off some debt to lower your balances.
  • If you see missed payments or defaults on your credit report, contact the lenders to find out if you can settle the balance.
  • If you have no payment history whatsoever, consider getting a secured credit card and putting a small monthly charge on it. Then, pay it off in full each month to build some positive payment history.
  • Keep your credit utilization under 30%. This means that if you have a credit card with a $2,000 limit, for example, you shouldn’t carry a balance of more than $600. Going above and beyond that amount tells lenders that you can’t control your spending and rely on credit too much. If you aren’t making consistent payments on your balance on top of that, this makes you look like a risky borrower.

Temporary Alternatives to Financing a Car

If you have bad credit or no credit at all, now is a good time to try transportation alternatives to buying a car. For example, while working on building your credit, you can give public transportation or carpooling a whirl.

Or, you can try buying an older used car with cash just to get you from one place to another. You can use windfalls like a tax refund or bonus payments from your job to help you round up the money to buy a cheap car. This might hold you over until you can beef up your credit score and apply for a car loan for a new car.

Working for a Better Credit Score is Worth It

Don’t lose hope or patience if your credit score needs to be improved before you finance a car. The benefits of working your way up to an excellent credit score will be well worth it when you get a car loan with the better terms and a lower interest rate.

Remember: A lower interest rate for your car loan will potentially save you thousands of dollars. Are you ready to start building your credit?

 

Should You Donate to Charity If You Are in Credit Card Debt?

Donating to charities and nonprofits is one of the most fulfilling uses of your money, but should you hand over your hard earned dollars to a nonprofit if you have big debt? Probably not. Let’s take a look at why, how you can have a greater long-term impact, and other ways to contribute outside of your checkbook so you can put your finances first.

Why credit card debt should keep you from donating

Finance experts often argue about whether or not any type of debt could be considered “good debt,” but there is a nearly universal agreement that credit card debt is bad for consumers. If you have credit card debt, you’re likely paying upwards of 20% APR on your balance.

If you have an $8,000 credit card balance with a 20% interest rate, that means you will pay around $1,600 per year in credit card interest. When you have to pay hundreds or thousands of dollars per year in high-interest payments, you should not be giving generously to a religious organization or anywhere else.

If someone from your church pressures you to give up to 10% of your income when you can’t afford it, they don’t really have your best interest in mind. They have their own interests at heart. While writing a check to your church may give you a warm fuzzy feeling, it just puts you in more debt!

Turning around debt so you can make regular donations

If you don’t have any debt and want to donate to a favorite cause, that’s wonderful! If you do have debt, you should focus on getting out of debt so you can confidently contribute to a meaningful cause.

When you have credit card debt, you generally have to make big interest payments in addition to your efforts to pay off your balance. If you give $100 per month to charity, that is $100 per month you could use for your debt freedom efforts. Each month, that $100 could get you closer and closer to a debt-free lifestyle.

Once you have your debt paid off, you may find you have enough to easily donate to your comfort level without the struggles you had before. After all, you no longer have any interest or principal payments due. That credit card payment of hundreds of dollars per month can turn into a combination of savings and charitable contributions that better align with your long-term financial goals.

Giving is good, but be careful

Bill Gates and Warren Buffett started a movement of more than a dozen billionaires who have pledged to give away at least half of their wealth. These philanthropists are great inspiration for all of us non-billionaires, but we need to take a more pragmatic approach to giving.

I personally give to a few causes, including religious ones, but I have never had any credit card debt. In the days I had student loans and car loans, I was not in the habit of donating to any nonprofits or charities. These days, however, I only have a mortgage. That allows me to give to my favorite organizations without adding extra financial strain to my family.

Tithing is a common practice at churches around the world. The worth tithing comes from the same root as a tenth, or 10%, of your income. If you have credit card debt, donating 10% of your income is very irresponsible.

When you board a commercial flight, the flight attendants remind you that “you should always put your oxygen mask on yourself before helping others.” If you are unconscious, you can’t help anyone else let alone yourself. With your money, it works the exact same way. Credit card debt is the same thing as a depressurized cabin. If you can’t afford to pay off your debt, you can’t afford to take care of anyone else.

With the right financial discipline, you can turn around financial struggles and get your donations underway. But always be sure to pay off your high-interest debt before giving away money to others.


This article originally appeared on Due.com

 

5 Coupon Websites That Will Save You Money

Who doesn’t want to save a few bucks? Ever consider couponing?

Luckily, the days of clipping and sorting through coupons is over. Nowadays, you can simply search online for insane coupon deals. Plus, coupon sites are easy to use and allow you to keep more of your hard-earned cash so you can meet your savings goals.

Ready to give it a try? To get started, here are 5 of the best coupon sites to help you save money.

1. Ibotta

What is it?

Ibotta is both an app and a website. While it doesn’t provide traditional coupons, it does give you cash back on groceries and other goods.

Ibotta works closely with retail chains to offer cash back on everyday items, like milk, produce, meat, frozen foods and more. Most regional supermarkets accept Ibotta offers, as do many big box-stores, like Best Buy, Target and Walmart.

Here’s how it works: Once you login, you will see a variety of digital coupons and offers. You then click the offers you want. After you go shopping, you simply scan your receipt with your phone so that Ibotta can verify that you bought the products eligible for cash back. Once verified, you will see the cash back hit your account. Once you have earned $20 in cash back, you can then deposit this cash into your bank account.

What kind of online coupons does it have?

When Ibotta first came out, it primarily offered cash back on grocery items and some other goods. Nowadays, Ibotta has expanded to offer cashback on Amazon purchases, electronics, pharmacy items, restaurants, and even travel.

Coupon examples

2. Ebates

What is it?

Ebates is also a cash back site. You simply log into the Ebates website and find offers there. Ebates partners with most major retailers, including Amazon, Nordstrom, Walmart, Bed Bath & Beyond, Kohl’s, Ann Taylor, Loft, Gap, and Petco.

Here’s how it works: While you do have to login to the Ebates website at least once, you can install a simple toolbar app that will automatically find cash back offers whenever you visit a participating retail site. If you make a purchase, you will then receive cash back through Ebates. Depending on the purchase, you will receive between one and 40% cash back (based on your total purchase price). Ebates is free to use.

What kind of online coupons does it have?

Once you download the Ebates toolbar, you don’t have to do anything else – the toolbar will automatically notify you of any cashback offers available to you.

Coupon examples

3. RetailMeNot

What is it?

RetailMeNot is one of the original coupon websites and has been around since 2006.

Here’s how it works: You can either use the website or download the app to find coupons prior to making purchases at leading retailers. Whether you shop online or in-person, RetailMeNot has coupons available for download. Once you find a coupon that applies to you, you can either take it to a store or go to the retailer’s website to shop. If you’re a first-time user, you will need to supply your email address in order to use the coupons.

What kind of online coupons does it have?

RetailMeNot offers a wide array of coupons at businesses ranging from Ulta to Hotels.com. No matter what you’re buying online, RetailMeNot makes it easy to do a last-minute search for coupons to see if you can save a little bit of cash.

Coupon examples

4. Honey

What is it?

Honey is one of the newer online coupon sites available. Once you sign up on the site, you can install Honey’s toolbar on your web browser of choice. Then, every time you shop online, the Honey extension will work to find you discounts and cash back offers automatically.

Here’s how it works: Simply download the browser extension. When you go to purchase an item online, you don’t even have to think twice – you can automatically receive a discount, even if you forget to search for coupons.

What kind of online coupons do they have?

Honey boasts a wide variety of coupons, including deals to eBay, Macy’s, Coach, Microsoft, AT&T, and more. Honey is the perfect extension to use when shopping online as it can scan for any coupons before you buy a product.

Coupon examples

5. Coupons.com

What is it?

If you like the idea of traditional coupons, then check out Coupons.com. With this website, you can search and “clip” for coupons for free. Coupons can be used at most major retailers.

Here’s how it works: You can print out coupons from the Coupons.com website or you can apply the coupons to your online orders. You can sort coupons by category, making it easy to find a discount for the specific product you’re looking for.

What kind of online coupons does it have?

Coupons.com is a great resource. Before you pack up to run to the grocery store, be sure to check out the site to see if you can save a few bucks on products you need. Coupons.com can help you save money on pet food, kitchen paper products, canned goods, toiletries, and more.

Since it’s free and easy to use, it never hurts to check for money saving opportunities before you go shopping.

Coupon examples

Couponing made easy

With the rise of online coupons, it has never been easier to save money on your everyday purchases. All you have to do is sign up for a couple of sites, and you’ll be on your way to putting more money back into your pocket.

Who knew saving money could be this easy?

 

How to Throw Your First New Year’s Eve Party on a Budget

As the year winds down, you may be ready to ring in the new one with a bangin’ celebration. What better way to do that than by hosting a party at your place? Except there’s one little wrinkle in your plans: You don’t have a lot of cash to spend.

Not to worry. You can still throw an amazing New Year’s Eve party, even with a tiny budget. Take a look at these 6 tips to help you pull off a successful soireé.

Create a Dedicated Party Account

Keeping track of your spending over the holidays can get crazy and having a separate bank account just for party purchases can make it easier.

“If you know you’re going to be hosting a party for the new year, start a party fund as soon as possible,” says Jacob Lunduski, financial industry analyst for Credit Card Insider.

You can easily do that with a Chime Spending or Savings Account. It takes less than 5 minutes to open a free bank account with Chime. You can fund your account by setting up a direct deposit through your employer or transferring money from an existing bank account. From there, you can manage your account through the Chime mobile app.

Once your account is open, you’ll need to add something to it.

“Consider putting aside a small amount from each paycheck towards your party,” Lunduski says.

He says budgeting $20 to $50 per payday is a good rule of thumb to follow, depending on how big of an event you’re planning.

Nail Down the Guest List Early

A party isn’t a party without guests and as you plan your New Year’s Eve blowout, think about who you’d like to invite. You might want to call up everyone you know but that can add to the cost. On the other hand, capping the guest list at a certain number can help you manage your costs.

Another tip: Clue in your invitees and tell them you’re planning a party. “Ask them to tentatively RSVP whether they can make it or not,” Lunduski says.

“This will give you a general idea of how much food, seating and alcohol people will need, and the cost associated.”

This step is important for planning your budget. For example, if you have $300 to spend and you want to invite 30 people, that breaks down to $10 you can spend per person. Paring the guest list back to 20 people bumps your per-person spend up to $15. You can then decide how that $15 should be divvied up between food, alcohol and other party supplies.

Buy in Bulk (and Ask for a Deal)

If you’re planning to hit a party supply store or shop online for cups, plates, napkins or even wine, buying in bulk can be a money saver. Finance expert and founder of Fiscal Nerd Stacy Caprio says getting to know your local party suppliers can work in your favor if you’re able to negotiate a bulk discount.

“Often, the owner of a small shop or business will be happy to accommodate a loyal customer as well as encourage bulk purchases, since that can be the bread and butter of their business,” she says.

“This makes them more willing to give you a discount when you ask.”

Consider BYOB or Potluck to Save on Food and Drinks

Food and alcohol can eat up a big chunk of your party budget. Greg Jenkins, partner and co-founder of event planning company Bravo Productions, says you can make party planning less stressful — and less expensive — by asking guests to contribute something for dinner and drinks.

For example, you might supply beer and cocktail mixers but ask attendees to bring a dish or a bottle of wine for everyone to share. If you’re planning to prepare food, Jenkins says it’s always better to keep it simple.

“Sit down dinners cost more to host,” he says. Even with just appetizers, you could overspend if you let the menu get away from you. So, stick with basic, inexpensive choices like ham sliders and mini desserts. Most importantly, “don’t waste money on things guests won’t eat,” Jenkins says.

Repurpose and Reuse Party Items Whenever Possible

Your first New Year’s Eve party is a big deal and while you may be tempted to go all out, your wallet will thank you if you think practically instead. Repurposing things you have around the house for your party or thinking about how the items you’re purchasing can be useful beyond New Year’s Eve can help you make smarter buying decisions.

For instance, say your favorite grocery store is running a sale on wine. If you drink wine year-round or if wine is something you can gift to friends and family, stocking up on it while it’s on sale might be a good move.

Also, consider what you plan to do for decorations to make the party complete. Jenkins says you can save money by using things you already have around the house. Fitted sheets, for example, can double as tablecloths. Or, you can leave up holiday decorations and lights and think about adding in some inexpensive paper streamers or confetti to capture the party mood. If you don’t have any twinkle lights handy, candles can create a similar effect.

If you’re planning to buy plastic or paper plates, cups, party hats, whistles or similar items, you can scoop those up at a dollar store. Stick with solid colors instead of ones that have “New Year’s Eve” printed on them and stash away any extras to reuse for your next party. If you need an extra table or chairs for seating, check your local thrift stores for low-cost finds.

Serve Up Affordable Entertainment

While you’re waiting for the clock to countdown to midnight, you’ll need to keep your guests entertained. Since it’s your first New Year’s Eve party, hiring a band may not be feasible, but there are still plenty of ways to enjoy yourself as the hours tick by.

For example, you could set up a DIY photo booth for your guests. You just need a plain sheet or a curtain for the backdrop, some party props and a camera. The props may be things you’ve already purchased — think silly glasses, paper top hats, bead necklaces and noisemakers. Toss everything in a shoebox or a plastic bin and let your guests snap away.

Other low-key, low-cost options include board games, cards, charades or taking turns sharing your New Year’s resolutions. If you’re stumped for suggestions, poll your guests to see what inexpensive ideas they have for the big night.

All the New Year’s Eve Fun, Without the Financial Hangover

While you still may need to spend something on your first New Year’s Eve party, you don’t need to spend everything.

The more you plan your spending ahead of time and follow these 6 tips, the easier it is to keep your budget locked down. And when the ball drops, you can enjoy the moment knowing that you won’t be starting the new year off with money regrets.

 

How to Rebuild a Damaged Credit Score

There are many avenues that lead to damaged credit. You might have missed a few payments on an important loan. You might have opened too many credit cards. You might have even defaulted on a mortgage or car loan.

However you got here, your personal credit score is damaged, and it’s likely affecting your life in several negative ways; you might find yourself turned down for loans, getting worse rates for mortgages, and/or being rejected for apartment applications. Fortunately, you don’t have to stay in this situation forever. With the right techniques and the proper commitment, you can rebuild your credit score from the ground up.

How to Rebuild a Damaged Credit Score

Step One: Understand Your Score and Look for Errors

First, you need to understand what affects your credit score, and how those factors manifest in your final number. There are actually a few different types of credit scores, but your FICO score is by far the most common. Your FICO score is affected by the following factors, in order of most important to least important:

  • Payment history. The biggest percentage of your FICO score depends on your payment history—in other words, do you have a long history of making your payments on time? Late and missed payments can accrue quickly, devastating your credit score, while consistent, on-time, in-full payments can strengthen it.
  • Amounts owed. Your credit score will also consider how much money you owe, across all your accounts, including your mortgage, car loan, student loans, credit cards, and other sources of debt. The more you owe at any given point, the lower your credit score will be, especially if you have a high debt-to-income ratio.
  • Length of credit history. Though less important, credit reporting companies still want to know how long you’ve held your various sources of credit. The longer you’ve had your accounts active, the better, because it sets a precedent for your patterns of behavior.
  • Credit mix. Your credit mix is also important. In other words, what types of credit do you have open, and how many accounts do you have open? Having 12 credit cards doesn’t look too good while having two credit cards, a mortgage, and a student loan looks much better balanced.
  • New credit. What percentage of your credit is “new” (i.e., opened within the past several months)? The newer your credit mix is, the more inherently risky or volatile it will be considered.

You can check your credit score once a year from each of the three major credit reporting companies (TransUnion, Equifax, and Experian) at AnnualCreditReport.com and see a breakdown of how you’ve performed in each of these categories. With that information, you’ll know which areas you need to improve on most.

While you’re doing this, be sure to check for any errors that may be negatively and unfairly affecting your score, such as lines of credit you don’t remember opening up, or missed payments that were erroneously recorded.

Step Two: Commit to Avoiding New Credit (and New Debt)

Your first real step in making a better credit score is stopping the bleeding—in other words, not making your credit score any worse than it already is. Try to keep most of your current accounts open (especially the oldest ones), since account history plays a role in shaping your credit score, but make it a point not to open any new accounts unless absolutely necessary. This will help you keep your ratio of new credit low, and decrease your temptation of tapping into those new loans or credit cards.

While you’re at it, avoid taking on new debt, if possible. Don’t buy a new house or a new car, and don’t rack up new debt on your credit cards. This is a relatively easy step to take, so long as you can make ends meet, and it will set you up for success when you start rebuilding your credit score.

Step Three: Set Up Reminders for Payments

The most important factor for your credit score, unfortunately, takes the longest time to build or repair—your payment history. If you want your credit score to increase, you’ll need to make all your due payments on time, and preferably, in full, for several months to a few years. The best way to do this is to set up automated reminders, to let you know when a payment is coming up, and when that payment is officially due. That way, you won’t have to worry about remembering to make those payments—you’ll get a handy prompt to do so.

Step Four: Start Reducing Your Debts

So far, you’re not opening new credit or taking on new debt, and you’ve got your payments covered. Now, your job is to start reducing your current debts:

  • Consolidate what you can. Debt consolidation isn’t always a good idea in pursuit of a better credit score, but it could be valuable in reducing your monthly payments. For example, if you have one credit card with an interest rate of 30 percent and another with a rate of 20 percent, transferring to the 20 percent card can save you a ton of money, especially over the long term. It can also make your payments much simpler and easier to remember.
  • Negotiate your rates. Take the time to renegotiate some of your interest rates, especially on credit cards. If you’re trying to take a proactive role in eliminating your debts, you’ll be surprised to learn how much you can reduce your interest rates and monthly payments just by asking. The worst they can say is “no.”
  • Restrict your budget. Start a budget if you haven’t already, and take a good, long look at it. Chances are, there are several items you don’t truly “need,” such as trips to restaurants and bars, entertainment purchases, and ongoing subscriptions. If you want to get serious about paying off your debts, you’ll need to treat these with a scrutinizing, minimalistic eye. Cut everything you don’t need, and find lower-cost alternatives for what you do need.
  • Focus on high-interest debts first. Interest rates compound over time, forcing you to pay far more money than you need to when paying off a debt. That’s why it’s important to focus on your highest-interest debt first, paying that down before moving to your lower-interest debts. This won’t improve your credit score faster, but will reduce the total amount of money you spend to eliminate your debts.
  • Acquire new sources of income. If you still need help paying off your debts, your best option is to acquire a new source of income (or two). Depending on your skill set and current sources of income, that could mean anything from taking on a new part-time job to starting a side gig selling crafts on the internet.

Step Five: Establish Better Long-Term Habits

After you’ve eliminated or reduced the majority of your debts, you can start building better long-term habits, to keep your credit score inching higher and prevent another disaster:

  • Pay everything you can on time. Never take on more credit card debt than you can feasibly handle, and pay all of your bills on time. If you set up automated reminders when establishing better payment habits, keep them on, and do your best to never miss a payment.
  • Keep a good mix of credit. You might be tempted to close out your credit cards if you’ve been frustrated by credit card debt in the past. However, it’s better to keep those accounts open. Keep a good mix of credit, and use those lines of credit on an occasional basis so the activity can contribute to your new credit score. Good sources of debt, like student loans and mortgages, can get you something truly valuable and give you payments you can use to build your score at the same time.
  • Establish an emergency fund. Many people end up in debt because they can’t afford to pay for an emergency, such as a car repair or a medical bill. Proactively prevent this by creating an emergency fund of several thousand dollars, or a few months of expenses, and only tap into it when you really need it (replacing it as soon as the emergency is over). That way, you can avoid going into more debt, and make your finances more consistent.
  • Check your credit score periodically. You can check your credit score for free once a year, but you can also get your credit score for a low rate from other providers. Checking your credit score won’t affect your credit much, but it’s still not something you should do weekly, or even monthly (especially considering your score won’t change that fast). That said, it’s good to keep an eye on your score to check for inaccuracies and see how it’s progressing—so consider checking in once or twice a year to monitor your progress.

Damaged credit doesn’t mean you have to give up a reasonable lifestyle, and it doesn’t mean there’s no hope for your financial future. It may take months, or in some cases years, to get your credit score back in good order, but your efforts will be worth it whenever you apply for a loan, make a major purchase, or attempt to make a major life change.


This article originally appeared on Due.com.

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