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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