Tip #45: Keep track of your money

Most people are surprised by how quickly their money seems to be spent.  This is because impulse spending and small-change spending really adds up.  Small-change spending is small spending we do without even thinking about it - buying a coffee or a newspaper we don’t need. 

Impulse spending refers to simply buying things we don’t use or need.  In both cases, we end up spending too much unnecessarily, and this is a problem in credit repair because you want to be channeling as much money as you can into savings and debt repayment so that you can repair your credit. 

For a month, try keeping a daily record of every penny you spend - including the money you spend on phones, the money you spend on tips, everything.  You will be amazed where your money goes. Keeping track of your money this way does two things:

1) It automatically cuts down on spending.  If you have to write down where you spend your money, you will be much more careful what you spend your money on.

2) It allows you to see where you waste your money and take steps to stop the bad habit.  If you notice that you always buy the newspaper on Saturday but never read it, for example, you can stop buying the paper on that day.  Small savings can add up over the years and can put you in good financial shape which will be reflected in your credit risk rating.

Tip #46: Take out one pleasure and save it up

-Do you have cable? 
-Do you subscribe to lots of magazines? 
-Do you build your DVD collection so fast that you can’t even watch all the movies you collect? 

We all entertain ourselves with money, but most of us have at least one or two entertainments that we have either outgrown or don’t enjoy as much as we once did.  Cutting that expense out and investing the savings can put us well on our way to saving for retirement or paying off our bills.  If you give up your cable television, for example, you can pay off your credit cards that much faster, improving your credit score. 

Tip #47: Build assets and capital

Whether it is buying a car, a home, or creating an investment portfolio, having assets can help improve your credit score by allowing you take out secured credit, or credit in which your assets are used as collateral. 

When you take out secured credit (such as a mortgage) you enjoy lower interest rates and easier approval.  As you repay your secured debt, your credit score will improve.  Even better, lenders do look at the types of credit you have.  If you have a mix of secured and unsecured credit, you will enjoy better risk rating scores as it will indicate that you have the means to repay your debts.

Building assets and capital is also a way of building financial stability which can help protect your credit score.  If you have assets such as savings or investments, then you have a way of generating income or repaying debts in case of an emergency.  You also have ready money you can use in case of unexpected medical bills or other problems.

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