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The Good news about your Credit Score

We’ve talked about your credit score quite a bit here on our blog. The reason is that they are 3 numbers that can profoundly affect you financially. Whether it’s the interest you pay on your mortgage, your ability to get a car loan or being able to get a credit card with an excellent APR, your credit score,  and making sure that it’s a “good” one, is vital.

The reason it’s so vital is that your credit score takes into consideration practically everything about you credit wise. It looks at your credit cards, your car loan, your mortgage, your payment history, how much of your available credit that you are using and a number of other factors. Lenders then use your credit score to make an “educated guess” about the likelihood of you repaying the debt that they are preparing to give you in credit. Think of it as sort of like being graded in high school. If you want a  “smiley face” on your credit report you had best get an “A”.

There are some things that your credit report does NOT reveal however and that’s the crux of our Blog today. Take a look at some of these things below and sleep better in the knowledge that, while they certainly can affect your life, those 3 numbers on your credit report don’t reflect everything about you. Enjoy.

  1. What you earn. While lenders will ask you this question when you apply for any type of credit, it won’t become a part of your credit score. Of course if you get a raise at work that won’t be reflected in your score as well.
  2. Whether you are employed or not. If you have excellent credit and you lose your job, you can rest assured that your good credit will not be damaged, at least not initially. What we mean is that if you lose your job and you don’t get another one relatively quickly, the inability to pay your debts like your auto loan or your mortgage might then start to negatively affect your credit score.
  3. Whether you are married or not. Until the day that you apply for joint credit with your new spouse, getting married should not affect your credit score.
  4. How old you are. While your age, whether you are 25 or 65, is not factored into your credit score, it can  indirectly affect your score due to the length of time that you’ve been using credit. The younger that you are the more penalized, unfortunately, you will be for getting “new” credit and, conversely, the older that you are the more you stand to get rewards for having long-standing accounts in good order.
  5. The city or state that you live in. While some states might have higher credit scores on average than others, this fact alone has no bearing on your credit report whatsoever. The only thing that does is what you do with your credit and, good or bad, where you live doesn’t matter.
  6. Your debt source. If you’ve recently had a change in your payment history due to a divorce, health problems or loss of work, your score may change but the reason for that change will not be disclosed to credit reporting agencies.
  7. What interest you are paying right now. Whether you’re paying an above or below market rate, a prospective lender is unable to see that from your credit score. So while it’s true that your interest rate will be affected by your credit score, your credit score cannot be affected by your interest rate.

The simple fact is that your credit score makes a huge difference in not only how much money you will be able to borrow but how much interest you will have to pay on that borrowed money. What this means is simply that you need to be vigilant and diligent in repaying any debts that you have on time and meet any agreements that you have made.

Checking your credit score on a regular basis is a great way to make sure that everything is copacetic and, to that end, you are entitled to one free credit report per year from the “Big 3” credit reporting agencies which are Experian,  Trans Union and Equifax. Checking these three credit reports on a regular basis to find if they have errors is an excellent idea and allows you to dispute them quickly and get them cleared off of your record.

Don’t Worry about your Credit Score being affected by These 5 Things

There are quite a few things that can help a person’s credit score as well as hurt it but not everything is either “positive” or “negative” when it comes to your credit score. Indeed, there are quite a few things that simply don’t matter at all when it comes to credit, something that should be a relief for plenty of people.

With that in mind we put together a blog article that goes over some of these things so that you can, at least for the holidays, put your mind at ease about whether or not you are negatively affecting your credit score. Enjoy.

1) Being rejected for any type of credit. Whenever you apply for credit something called a “hard inquiry” is the result, and it can lead to a very slight drop in your credit score. Interestingly enough, approved or denied your credit score won’t be affected further. What that means is that, while you should probably avoid any unnecessary inquiries or applications, getting denied for those you do apply for won’t shave any points off of your credit score.

2) Getting a pay cut. While having your pay decreased may result in having to lower your standard of living or adjust your budget, since it’s not part of your credit report at all it won’t affect it at all either. Your debt to income ratio however is a factor that lenders consider and so, if you rush out and apply for credit after your income drops, your ability to get approved for a loan may be damaged even if your credit score itself isn’t.

3) Tying the knot.  If you are making plans to get married you definitely should sit down with your future spouse and talk finances before the big day. While the actual act of marrying someone won’t hurt your credit score, if your future spouse has a low score and you apply for joint credit in the future, it could hurt your chances of getting that credit.

4) Using debit cards. Like a credit card, a debit card has a number of conveniences that are certainly appealing. They allow you to make online payments as well as shop online and they also give you fraud protection and allow you to go out in public with little or no cash in your pocket. If you’re looking to improve your credit score, debit cards won’t be very much help. The way to do that is with responsible credit card use. However, with a debit card, there’s very little “buyer remorse” later because there aren’t any bills coming due  for the purchases you make today.

5) Putting away your credit cards.  If you want to lower your credit card utilization rate as well as pay down some outstanding balances, putting your credit cards aside for a while is an excellent idea. It certainly won’t hurt your credit score and, if you improve your debt to credit ratio, it could help it quite a bit. The one thing you do  NOT want to do is close any accounts or not use them for so long that the credit card issuer ends up closing them for you. This will actually diminish the amount of credit you have available and raise your credit utilization rate, something that could lower your score. Of course while you are taking your break you still need to make your monthly payments.

Hopefully these 5 bits of advice have put your fears aside, if just a little, about what can and can’t affect your credit report. If you have any questions about credit,  or questions about personal finances in general, please let us know and we’ll get back to you with answers and advice ASAP.

If you haven’t started thinking about your year-end finances, now’s the time to get started

As we move towards the end of the year it’s definitely time to start thinking about your year-end financial planning. Things like taxes, open enrollment options at work and reassessing your overall financial plan should be done before January and that’s only about six weeks away. Indeed, some of the plans that you need to make are sophisticated enough that starting them in September or October is probably a better idea, but it’s already a little bit too late for that.

Of course the main focus that most people will have is their year-end tax issues but there are other, more complex topics to be addressed like IRA distributions and 401(k) plans. Charitable donations should also be specified and recipients chosen as well as whether to give those recipients appreciated assets like stocks or simply to give them cash.

If you’re looking to convert your traditional IRA or your 401(k) plan into a Roth IRA, now’s the time to do it as well as re-characterizing a previous conversion. What this does is allow you to reverse a rollover or conversion that you made to a Roth IRA.

This is also the time of year to take a look at your open for health insurance and benefits at work as well as finding ways to make the maximum amount of contribution to your workplace retirement plan. Using up all of the funds in any flexible spending accounts that you have as well as other tax advantage workplace health benefit plans is also a must as the end of year approaches.

The simple fact is that, as 2014 looms in the not-too-distant future, now is the best time to sit down and take a long, hard look at all of your finances. From savings to 401(k)s, stocks to long-term bonds and even your emergency fund, many things can and should be taken care of now so that you’ll take complete of vantage of any benefits or breaks that you may be eligible for.

Of course for most people that means giving their financial advisor, accountant or financial planner a call and sitting down with them for a few hours. If that’s you, now is the time to make that call because, since many other people are doing it as well, you made need to give them a few days or even a couple weeks to be able to see you.

If that’s the case, spend this time getting all of your paperwork gathered and in order, writing down or somehow noting any questions or concerns that you might have and getting ready to meet with your advisor and get down to the nitty-gritty is an excellent thing to do.

It’s definitely a smart move financially and, come 2014, will also give you peace of mind of knowing that, if nothing more, your financial house is in order.

Personal Finance Tips you really should Avoid

Okay, we’ll admit it, there are literally thousands of blogs online giving personal finance advice these days. Not only that but your neighbors, your family and even the mailman seem to have personal finance tips that they think are ‘the best’. The problem is figuring out  which of their tips is good and, conversely, bad.

The fact is, what sounds like sensible advice can sometimes turn out to be the worst advice you’ve ever gotten, at least financially. Sometimes what is considered to be the best conventional wisdom is nothing of the sort and, when wide held beliefs turn out to be bad ideas, it’s sometimes good to know what they are  so that you can avoid them. The following 4 personal finance tips that you might already have heard about (and maybe even have used our for that matter) should be completely avoided because they aren’t nearly as good as they might sound.

  1. Using a debt settlement company to pay off your debts. If you are struggling under heavy debt any advice might seem like good advice. Indeed, many debt settlement firms will give you what appears to be a very appealing  pitch: sign up with us and we’ll  cut down your debts greatly.  All you need to do is send them your monthly payments (instead of sending them to your creditors) and they’ll battle those creditors and also banks and credit cards on your behalf.

 

The fact is, while settling debts is an excellent option for those people who are delinquent on their payments and to have access to a large lump sum of money that they can offer as a settlement, very few people actually fit this criteria. In fact, if this is you then you hardly need a debt settlement company at all.

 

Even worse, most of debt settlement companies will actually hold onto your payments for several months in some cases before they actually start your settlement process. What this means for you, as the consumer, is that you’re going to have to endure a few months more phone calls from annoying and sometimes rude bill collectors.

 

  1.  Paying whatever you can pay. Many consumers are under the false assumption that they can pay any amount that they like on a debt that they owe and that this show of ‘good faith’ will oblige their creditors to work with them. The fact is, there’s no such thing as getting ‘extra credit’ for your effort when it comes to debts that are delinquent.

 

The mistake that people make is that they rationalize that any payment is better than no payment. The fact is, unless you’ve actually worked out an agreement with your creditor to pay a lesser amount than what you should, you’ll find that there’s no automatic agreement that will kick in and protect you if you just send in whatever amount of money that you can orient you want to.

 

At the end of the day, no matter what arrangement that you’ve made with your creditor you’d best to have it in writing.

 

  1. Carrying a credit card balance with the hopes of improving your credit score. One of the biggest misconceptions that many consumers have is that carrying a balance on their credit cards and only paying the minimum payment will be helpful in terms of their credit history. While it is definitely a good idea to regularly use your credit cards for small purchases  so that your timely payment history is recorded on your credit report, it’s much better to carry a low or zero balance from month to month.

 

Carrying a balance doesn’t particularly hurt your credit but, because you’re going to be paying interest on that borrowed money every month, it can actually end up being quite an expensive mistake. Not only that but, if you carry a balance that’s greater than 30% of your credit limit on any single card, your credit may well suffer due to the fact that your utilization ratio is too high.

 

  1. Using your 401(k) to pay off your debt. We saved the worst for last as using your 401(k) or 403(b)  or, for that matter, any retirement savings to pay off debts is a very bad idea. Indeed, this should be the choice of last resort, even after bankruptcy.

 

The problem is that all too often many consumers are shocked to find that the taxes they need to pay because of their early withdrawals are very high. Not only that but, once a retirement fund is drained, it could take anywhere from 15 to 30 years to get it back to where it was and, in many cases, a consumer just doesn’t have this luxury of time.

These four personal finance mistakes are repeated on a daily basis all over the United States because, in most cases, the people who are making these mistakes believe that they’re doing the right thing because they’ve been advised to do it by a well-meaning friend, family member or grocery store clerk. (Okay, that last one is a stretch.)  If you’re contemplating following any of the four relatively awful tips above, we urge you to reconsider and talk to a real financial expert before you move forward.

Why You shouldn’t Ignore Your Credit and Credit Score

The phrase that’s certainly getting the most buzz these days is ‘living debt-free’ and, while it’s definitely something that most people should aspire to, many people make the mistake of thinking that living debt-free means living credit free. Indeed, many people still consider credit something that ‘happens’ to them rather than something that they can build, manage and protect like an investment portfolio.

There are quite a few people who just don’t like the idea that banks and other financial organizations collect information about them and use it to figure out whether or not they are worthy of being borrowers. Not only does it feel unfair but it also makes correcting mistakes rather difficult. That being said, consumers should also realize that having a solid and positive credit history can have a positive impact on their lives  and in most cases it is much better to have this credit history then to have no credit history. Here are a few reasons why;

Without any type of credit history your possibility of getting a home mortgage is going to be greatly reduced. In some cases the only choice that a person with no credit history has is to either rent an apartment or home. The extra problem here is that, when renting, many times you will be forced to pay a huge upfront fee in order to be able to move in if you have very little or no credit history. If this is the case you may be forced to put down a huge deposit, find one or more roommates or possibly even convince a friend or family member to cosign the lease agreement with you,  All problems that could be avoided with a decent and positive credit history.

Without a solid credit history, if you get into a financial crunch such as losing your job or getting hit with a big medical bill, you may find that you have very few options to get emergency cash and stave off bankruptcy. Without a solid credit history you may be forced to consider a car title loan with its annual interest rate of approximately 300%, or a payday loan which can A whopping 400% interest rate to keep you out of the poorhouse. In many cases these will be the only options available for people with poor or no credit history.

If you’re planning on going on vacation and you’d like to book a hotel in advance, purchase airline tickets online or reserve an automobile, it’s going to be very difficult to do that if you don’t have credit and at least one viable credit card. In many cases you’ll have to  jump through all sorts of hoops in order to be able to reserve your room and your car and, in general, you’ll end up paying more money than if you were able to make these purchases using your credit card and booking online as well as in advance.

Are you looking for a job? In today’s economy, with unemployment at a very high rate, it’s very possible that you said ‘yes’. If that’s the case, not having a solid credit history may make it harder for you to find that job and, although some states have enacted laws to limit it, many employers are accessing credit reports today as a prerequisite to hiring a new employee.

If you’re keen on opening your own business and you need capital, finding that capital is going to be very difficult if you don’t have a solid line of credit and at least a decent credit history. The fact is, if you have a strong credit profile you’ll be able to borrow money at  a more attractive interest rate and leave more of your disposable income to invest in something else.

Simply put, credit can be used as a powerful wealth building tool. If you can qualify for an auto loan you may well be able to get a better car and a better paying job because of it. Credit will help you to get a mortgage and become a homeowner, one of the cornerstones of wealth and long-term financial stability. Tracking your spending, earning rewards and building a solid credit profile can easily be done when you have a credit card or two and you promptly pay them off at the end of every month. This can also help you  to get through tough times when cash is tight, if necessary.

The only thing that you need to do in order to build good credit is to spend responsibly. That means not using credit cards like they’re cash (because frankly they aren’t) and realizing that, if there’s no cash to pay for what you want to purchase, you  should definitely consider not making said purchase.

Yes, managing your credit requires a bit of hard work and diligence but the payoff can be quite high and lead to a  better life on many levels. It’s for that reason that you should make an effort to build a solid credit history, even if you’re not a huge fan of credit cards.

Financial Tips for College Students – Part 2

Welcome back for Part 2 of our money tips for college students 2 Part blog series. If you’re just joining us welcome and if you are returning for more after having read Part 1 welcome back. We have quite a bit more excellent financial advice for you today so let’s jump right in and get started shall we? Enjoy.

While these first few tips may not exactly save you money right away they are certainly worth keeping in mind because they will definitely save you money in the future. One of the first is that you should, at least for the most part, take good care of your health. Yes, we know that college includes frat parties and keggers but that should (hopefully) only occupy about 2% of your time. The rest of the time you should definitely make sure to eat right, brush your teeth and otherwise take care of your body because you’re going to need it for the next 50, 60 or 70 years. (The way science is going maybe even longer.)

Another way to save money is to go to class. Sorry to sound like your parents but, quite frankly, you’re at college to learn and if you skip class too often you’re going to fail classes which is going to cost you money when you inevitably have to retake those same classes a second time. Remember, it’s only in the movies that failing classes and public drunkenness are funny.

Speaking of drunkenness, you’d do well to at least limit the amount of beer, cigarettes and other, ahem, things that cost you money because, quite frankly, vice fueling stuff like this is quite expensive. We have no problem with going out once a week and having a good time and drinking a couple of beers with the gang (and whatever else you might want to indulge in) but if you overdo it you’re going to waste money and waste yourself.

When it comes to buying stuff a question that you should definitely ask yourself, especially if were talking about something that costs more than a couple of dollars, is simply; do I need this? If you think you do that’s fine but we suggest that you hold off on impulse buying and wait a week or two. If, at the end of that time period, you decide that you still need it then go ahead and make your purchase. Truth be told, in many cases you will probably change your mind and in some you might even forget about the purchase completely, a sure sign that you didn’t need it to begin with.

A good bit of advice and something that we would advise any adult to do whether in college or long since finished is to spend less than you earn. Sure, in college you are not making very much but if you can still manage to spend less than you earn you’re going to create a financial habit that will serve you well, well into adulthood. People that spend less than they earn are the same people that, generally speaking, are the most successful at saving for retirement and other important future costs.

If you can do it, starting your own business while you’re in college can be an excellent way to not only make a few extra bucks but to get an idea of what it takes to, well, start your own business. For example, if you have access to a small truck and a couple of your frat buddies you can help people move from one apartment to another. Are you great at making PowerPoint presentations? There is a huge
need for those by other students so why not set up a small side business making them? You can do the same with computers, car repairs and many other services and, if you are any good, word will spread and you may actually graduate college with a business already up and running. That would certainly put you ahead of the crowd don’t you agree?

While you’re in the learning mode you may also consider learning how to invest. Discount brokers like Sharebuilder are an excellent choice and for very small investments you can start learning how to trade.  In 10 years you will definitely look back and thank yourself for taking the time to do it.

That wraps it up for this 2-Part class on money tips for college students. We hope you enjoyed both parts and that, when you have a break between classes, you come back to join us again.  See you then.

Financial Tips for College Students – Part 1

With summer vacation just around the corner and many college students going back into the job market for a few months we decided it was a great time to put a blog together that would help college students better handle their money. The fact is, with just a little bit of advice and help, personal finance isn’t really that big of a mystery. With that in mind we put together a number of concepts, ideas and advice that we wish we had when we were in college. Enjoy

One of the biggest mistakes that young adults make is, when they finally get out from under mom and dad’s rule, they start spending on all of the things that they weren’t able to spend on before. New clothes, new gadgets and so forth. While this may be enjoyable for a time it can definitely set up a person to have money troubles in the future. Better to seek some financial advice and, if you’ve made the Dean’s list, treat yourself to something but don’t spend everything.

Joining a credit union is an excellent idea. Try to stay away from the ones that are giving away free T-shirts or Frisbees and instead find one in your town that has excellent services and fits your needs as a new saver.

Unless you absolutely, positively need one you might want to stay away from getting your own credit cardin at least for a while longer. A debit card is a much smarter idea and will allow you to have instant access to your money if you need it but won’t let you spend any more than you actually have in the bank.

If you are really keen on getting something, say a new laptop, Xbox or smart phone, you’ll be better off saving for it and paying for it with cash than putting it onto any sort of credit line that the store selling it to you will undoubtedly offer. Keep in mind that they don’t offer these credit lines out of the goodness of their heart but because they realize that most young people won’t pay it off directly and that they will make money in interest fees and possibly late payment fees as well.

Organization and planning will serve you well in the future so start organizing and planning now to keep your finances in order. Both are an important financial skill that you will use frequently as an adult. If you have Quicken on your computer you should also track your spending to make sure that you don’t overdraw any of your bank or credit card accounts (if you have them). This will also help you to see what your spending habits look like and, if they’re not so great, change them before they ruin you financially.

Very few successful adults don’t have a budget to guide them. If you want to be a successful adult as far as finances go you’ll thus obviously need a budget, even if it’s just a simple one. This will help you to not only keep track of your spending but see where your money is going and help you to save more of it than you thought you could.

You’ve probably seen mom and dad putting receipts into shoeboxes and, while this may seem a bit silly, it is actually a great way to keep track of not only what you are spending but also make sure that you are not being overcharged for purchases, even if by accident. Of course you don’t have to go ‘old school’ like mom and dad, especially with the plethora of receipt apps available for your smart phone. Get one of these apps and get rid of the shoeboxes.

As far as campus life is concerned here are a few quick tips on saving money that will help you.

  • Buy used textbooks and, when you’re done with them, sell them back or sell them to another student.
  • Skip going on spring break. Frankly, unless you can afford it it’s a huge expense and there are probably dozens of things that you can do around campus that will be just as much fun and much less costly.
  • Keep your car at home. Unless you live home and commute to campus every day you really don’t need one on most American college campuses. Not having a car will save you a ton of money on gas, maintenance, parking, insurance and so forth. If you need to get around on campus use your feet, a bicycle or find a friend with a car and chip in for gas once and a while.
  • Do you hang out with guys and girls who spend big bucks all the time? If you do, but you don’t have the same access to cash as they do, you’ll be more prone to spend your money and end up much more broke than they are.

We hope that this blog has been a valuable lesson in adult finances. (Yes, we know you’re sick of lessons but this one is important.) Anyway, do yourself a favor and use some of them to hold on to your money, get a handle on real-life finances and get a jumpstart on becoming a successful adult. In a few years, when you’re there, you can come back and thank us.

Top Three Reasons to Repair Your Credit Score Today

The number one way in which you can boost your credit score is to pay your bills on time, but there are numerous other ways to bump up your score as well, such as keeping your credit card balances low, checking for credit report errors, refraining from opening multiple credit cards at once, and avoiding bankruptcy.

Chloe Mulliner is a writer and editor for www.CreditSources.org, a credit related website that provides loan options for people with poor or no credit.

You’ve probably heard that a bad credit score could cause limitations when you apply for a credit card or take out a mortgage, but did you have any idea that it could be the reason why your dreamy blind date doesn’t ask for a second date? Or how about the fact that you could be paying higher insurance premiums just because of the low number on your credit score?

If this is all news to you, it’s worth checking out the following three reasons why it’s a good idea to build good, if not excellent, credit.

A Good Credit Score Could Lead to a Second Date

Credit scores are becoming a huge make it or break it factor in the dating world. So important in fact, some daters turn to online dating websites to find compatible matches with similar credit report values. These people in search of love have begun putting more emphasis on each other’s personal credit scores than the more traditional aspects such as religious or political views.

Finding a soulmate is difficult enough before involving your credit score, so why not focus on building your credit so you can worry less about your score and more about making a love connection?

A Good Credit Score Could Mean Lower Insurance Rates

A high credit score won’t only help you receive low insurance rates when you’re buying a house, but it could also benefit your auto insurance rates as well.

When it comes to auto insurance, the Insurance Information Institute found that consumers with low credit scores file 40 perfect more claims than those who have high credit scores. Because of this, those who have poor credit sometimes end up paying higher insurance premiums. Conversely, those who have good and excellent credit scores generally receive more favorable and lower premiums.

Long story short, build and maintain good credit, and in response, insurance companies will reward you.

A Good Credit Score Could Land You Your Dream Rental

Have you found your dream rental apartment overlooking the beach? Or have you stumbled across a quaint little country house looking for a suitable renter? Whether you’ve found your ideal rental property, or you’re still in the market, we hope you have good credit!

Good credit will come in handy if your landlords asks for your credit report to see your payment history. If you have a tendency to miss payments, the landlord might not want to approve your application for your dream rental.

Best way to receive those house keys? Work on building your credit or ask if the landlord will accept proof of other payment history such as your utilities bills.

The number one way in which you can boost your credit score is to pay your bills on time, but there are numerous other ways to bump up your score as well, such as keeping your credit card balances low, checking for credit report errors, refraining from opening multiple credit cards at once, and avoiding bankruptcy.

Chloe Mulliner is a writer and editor for www.creditsources.org, a credit related website that provides loan options and information for people with poor or no credit.

A Dozen Excellent Money Rules To Live By

It goes without saying that everybody is trying to make more money these days.  The problem however is not that people aren’t trying but that they don’t actually know how to handle money. In some cases have very little clue at all. That’s not a condemnation it’s just the way it is.

For the people who realize that they don’t have any money handling skills there is hope however as today we are presenting a blog on that very subject. Aren’t you lucky?! We’ve got for you today a dozen money rules that, if you use them and live by them, will help you in every facet of your financial life. Enjoy.

1)       Spend less money than you earn. If there was one rule that is more important than any other is this one. The person who can spend less than they earn is the person that will always have money available when needed, will never run into financial problems such as bankruptcy and will have a nice nest egg set aside for themselves once they reach retirement.

2)       Start saving right now. Any way that you can, any place that is possible and using any tool that you have available start putting money away for emergency funds, for your child’s college education and for your retirement.

3)       Rather than waste time overthinking your investments just invest.

4)       No matter what it is that you’re purchasing try to avoid high interest debt at all costs.

5)       Talk to a money expert about money. Your banker, a successful friend or family member or anyone else who you can think of. We’re not necessarily saying that you should take this person’s advice, just that talking about money will open up your mind to new ideas that you might not have otherwise heard of.

6)       Stop trying to keep up with your neighbors and family. Be happy with what you have.

7)       Keep an eye on your financial progress but don’t go crazy overanalyzing it.

8)       Anything that you purchase, from a new plastic spoon to a multimillion dollar house, take good care of it will and maintain it well.

9)       When you can, do everything yourself. Of course there are limits to what you can actually do but there are many tasks that people pay someone to do that they could easily do themselves, some of which will save thousands of dollars.

10)    Make a plan on how you’re going to spend your money before you go to the store. (Any store.)

11)    If possible, do something that you feel true passion for and follow that rather than following the money. Usually what will happens is that the money follows you.

12)    Do something on a very regular basis to improve yourself. Learn a new language or a new skill.

If you can really take these 12 Money rules to heart and use them throughout your life we guarantee that by the time you retire you will be more than well prepared to live in a comfortable lifestyle.

10 Ways to Improve Your Financial Situation

If your financial situation isn’t what you’d call ‘optimal’ we have 10 ways that you can use to improve it starting ASAP so that, by the end of 2013, you’re in better financial shape.  Take a look, use them as you see fit and enjoy.

  1. Decide what your big goals are and stick to them. Whether it’s a bigger portfolio, to be able to retire at 55 or to increase your retirement savings by 10% every year decide what you want to do and then get started doing it.  Brainstorm with your spouse or other family members if you need help.
  2.  Automate your savings.  This is probably the most powerful thing you can do to increase your savings and net worth over time.  Directly depositing part if your pay into savings, and IRA or other vehicles to save will generate big rewards over the life of your career.
  3. Get rid of junk mail and spend less on junk. That new gadget that you can’t live without.  We bet you can. Don’t get it and stash the money in savings instead.
  4. Make a diary to keep track of your spending. Even doing this for just 2 weeks will open your eyes to some amazing facts about your spending habits and how you can change them.
  5. Start eating more home cooked meals.  In fact, take a cooking course so that you can learn to cook fast, nutritious meals instead of eating out all the time because of the convenience factor, wasting money on fatty, salty foods.
  6. Make an effort to use less gas, less electricity and less gasoline.  If you truly make a conscientious effort to do this the savings could equal hundreds over a year and thousands over a lifetime.
  7. Ask the entire family for help with saving money, especially if your adult children are living at home with you.  If they have a roof over their head they should pay for that privilege, not just their parents.
  8. Don’t obsess about the market.  If you have made good choices and your portfolio is diversified you should be able to weather the small daily ups and downs just fine.
  9. Use the right credit card for you, don’t abuse it and always pay it off as fast as you can.  Of course make sure you pay the bills on time as well to avoid finance charges and other penalties.
  10. Get rid of all your unused junk that’s collecting dust and stopping buying new unused junk as well.

Do all 10 of these things regularly and diligently and your financial situation will have nowhere to go but up.  Good luck and we’ll see you back here soon.

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