Back To Basics How To Establish Good Credit

Our society relies heavily on credit to make major purchases. Credit can even be used for smaller purchases. Even phone companies check your credit when you want to start phone service. Plus, prospective employers sometimes check your credit as well. It’s never too soon to begin building your credit.

It can take several month or even a few years to establish a good credit score. It’s smart to establish an excellent credit history before you need it. Learn about credit and how you can use it effectively to build a high credit score.

What’s Important for a Great Credit Score?

There are three primary components of a credit score:

      1. Your payment history. Do you pay your bills on time? Then you’re perfect. Late payments and collection actions seriously damage your credit.
      2. The length of your credit history. If you’ve only had credit for a couple of months, your score will be lower than if you’ve been using credit for several years, assuming everything else is equal. That’s why it’s important to get started today.

      3. Your utilization ratio. If your credit card limit is $2,000 and your balance is $1,000, your utilization ratio is 50%. Always keep your utilization below 35%. Any higher than this will result in a lower credit score.

By keeping these factors in mind, you’ll can figure out how to build a great credit score. Acquire credit, make your payments on time, and keep your credit card balances low. It’s also helpful to have a good mix of credit.

How You Can Build Your Credit

Build your credit successfully from scratch with these strategies:

      1. Open a bank account if you don’t already have one. This will help you with your local bank. When you’re a reliable customer, it will help in the future. Remember that your local bank has a credit card program. They also provide other types of lending.
          • While a bank account won’t affect your credit score, it can help you to acquire credit with your bank.

      2. Ask your bank for a secured loan. Ask for a loan against your savings account balance. You can easily borrow 90% of your current balance. Banks love to make these loans because they can’t lose money. If you default, they’ll take the money out of your account themselves.
          • Take the money you’ve borrowed and use this same money to pay off the loan. Make a few payments and then pay off the full amount.

      3. Acquire two credit cards. This can be very easy if you’re a college student. Fill out a few credit card applications and see what happens. If you can’t acquire a conventional credit card, look into secured credit cards. After using a secured card responsibly for several months, you should be able to get a conventional card.
          • Avoid getting two of the same type of card. Mix it up. Get a Visa or MasterCard and an American Express or store card.
          • Use the cards regularly, but only for small purchases. Be sure to pay your bill on time and avoid carrying a balance. Each month, pay off what you’ve charged.
      4. Pay all of your bills on time. Thirty-five percent of your credit score is related to your payment history. Late payments can be recorded with the credit bureaus and damage your budding credit score. This includes your utilities and even possibly your rent. Sit down once a week and pay your bills so you can keep a handle on them.

Building a good credit score requires time and a few simple steps. It’s important to be responsible and pay all of your bills on time. Avoid making unnecessary purchases. The best time to begin building credit is before you need it. A well-established credit history can make your financial life easier.

The 4 Expenses You Can Eliminate to Avoid Unnecessary Spending

If you’ve had the opportunity to earn an income and watch it slowly disappear, this was written for you. You’ve likely witnessed firsthand how unnecessary spending can result in a less than favorable financial outcome.

You’ve probably tried many ways to get your expenses under control without success. You convince yourself that you’ve “tightened your belt,” when in fact there’s so much more room to trim expenses.

So what’s the next step for you? What else can you do to keep expenses at a minimum?

The first step is to eliminate expenses that can be classified as unnecessary. If you’re honest with yourself, you’ll realize that you’re spending way more than you need to.

Here are four common, unnecessary expenses you might want to consider abolishing:

      1. Indulgence. Realistically, there’s no indulgence that’s worth unnecessary spending. If you’re rolling in money, you can spend it on anything you want. But if you’re undergoing financial pressure, avoid indulgence at all costs!
          • You probably love chocolate so much that you buy it in different forms. Chocolate cake, chocolate ice cream, chocolate bars. Curb yourself! Try to limit what you spend on chocolate. Your bank account and cholesterol could both benefit from your restraint.
          • Spa treatments are nice, but are you really in the financial position to be making weekly appointments?

      2. Any impulse purchase. The best way to avoid impulse purchases is to train yourself to look the other way. Do you go to the mall every week to “window shop” without making a purchase? How does that work out for you?
          • Avoid scenarios that usually result in unanticipated expenditure. Only visit the mall if you know what you want or need.
          • Look at infomercials objectively. Sure, the deals are sometimes too good to be true. But is the item something you really need?
          • Giving in to peer pressure can cause all sorts of issues. If your friend comes over and excitedly shows you a new purchase, just be happy for her. Her new outfit is probably really nice. But refrain from feeling like you have to compete by heading to the mall.

      3. Prizes and treats. For some reason, there’s now a culture of achieving milestones in order to get rewarded. When did the achievement itself lose merit? If you think about it, you probably reward yourself every time you complete your exercise routine!
          • Be self-motivated. Avoid letting external “rewards” be the driving factor for you to perform as you know you should.
          • Perform stocktaking. Determine just how much you’ve spent on prizes and treats. How many of them resulted from you doing what you ought to do anyway?

      4. Late fees. Do you constantly leave your mortgage and utility bills until last? If yes, you’re subjecting yourself to unnecessary late fees. Late fees are one unnecessary expense that can also wreak havoc on your credit!
          • Without even realizing it, you’re setting yourself up to lose out on credit-related opportunities. Bear in mind that how you handle credit now impacts the access you’ll have to credit later on.
          • Take the time to run through your bank statement. Add up all the times you’ve had late fees imposed. What’s the dollar value on those? Could that money have been used for something more worthwhile?

It’s very easy to spend more than absolutely necessary. But it’s also very easy to curb expenditures if you really want to. Take the time to assess where you’re going overboard with your spending. Identify areas where you can tighten up your budget. You’ll enjoy having more income to spend on the important things!

6 Ways to Save Big with a Simple Savings Jar

A simple glass jar can help you save a lot of money in one year. The savings jar provides motivation to stay on a plan. It’s an easy way to put money aside for a vacation or home renovation.

Any glass jar will work. It’s important to keep the jar see-through because seeing the money grow will encourage you to keep going.

      1. The $5 bill plan. This plan involves saving a $5 bill by putting it in the jar each time you receive one back as change. The plan can be modified to be a $10 bill, $20 bill, or even quarters.
          • Instead of spending the $5 bill, you save it and slowly build up the contents of the jar.

      2. The 52-week money challenge. This method increases your savings gradually each week of the year.
          • Start with putting $1 in your jar during the first week of the year. Then, add an extra dollar each week. The savings grow until they reach $52 for the last week of the year. You can save $1,378 using this simple method.
          • A print or online calendar can help track the savings. Each week can be labeled at the beginning with the amount that needs to be added to the savings jar.
          • It may be easy to save $1 or $2 at the beginning of the plan, but how will you find an extra $52 at the end of the year? This savings method encourages you to think ahead and plan.

      3. The traditional change method. Saving your change by adding it to the jar is a traditional method, but it can provide results. After work or running errands, add all of your change to the jar.

      4. The paycheck plan. Consider adding a set amount of money to the savings jar after you cash your paycheck.
          • The paycheck plan. Consider adding a set amount of money to the savings jar after you cash your paycheck.
          • Are you trying to save for a trip or a new electronic gadget? Figure out how much you will have to save each month from your paychecks to pay for it.

      5. The inspiration plan. The inspiration plan works best if you have a picture of the item or goal you are trying to achieve. It can be placed near the savings jar or attached to the lid, so you see it every day. Put money in the jar each time you’re inspired to do so. Include the whole family.
          • Place the jar in the living room or kitchen, so it stays highly visible.
          • The inspiration photo depends on your goals. It can vary from pictures of vacation spots to new television sets. You can also write the goal on a piece of paper.
          • The photo serves as a constant reminder of why you are saving money.

      6. The $20 weekly plan. The $20 weekly plan is an alternative to the 52 week money challenge. Instead of slowly building savings during the year, you put a set amount of money in the jar each week.
          • Similar to the 52 week money challenge, you can track the savings on a calendar or chart.
          • At the end of the year, you can save $1,040 in the jar using the $20 weekly plan.

A glass jar can help you save more than $1,000 a year. A commitment to saving money will help you achieve your goals.

Using the Law of Attraction to Boost Your Income

We’ve all heard about how positive thinking can benefit you in many ways, but did you know that positive thinking and the Law of Attraction can help boost your income as well?

These days we all could use some extra income! This article will give you an understanding of how positive thinking and the Law of Attraction are interrelated, as well as explain how you can use these principals for your financial benefit.

Positive Thinking

Positive thinking is more than just being upbeat all the time. The term “optimistic” comes to mind; however, positive thinking is much more than just being hopeful, also. Positive thinking is the opposite of negative thinking.

Sounds simple right? Well it’s easier said than done!

Why It’s Important to Think Positively

I’m sure you know someone who’s a negative thinker. They’re usually down most of the time, get depressed easily, and have negative things happen to them recurrently.

Have you ever wondered why this happens? It’s because the negative thinker surrounds himself with negative energy, which attracts more negative things. His thoughts are in harmony with negativity, so that’s what he gets – more of the same!

Positive thinkers, on the other hand, think about encouraging things and surround themselves with positive energy. Their thoughts are in harmony with good things, so they attract more positive opportunities.

Whether you’re aware of it or not, you gravitate toward the outcome of situations because of your thought processes.

Therefore, when you think positively, you’ll make decisions based on that type of outcome, consciously or unconsciously. The same goes if you think negatively.

How to Use the Law of Attraction to Attract More Money

If you dwell on the negative – such as how bad the economy is or how tragic situations are – your thoughts, and therefore your decisions, take you down a path to negative outcomes.

However, when you think positively, you now have a fresh start to do something you really enjoy and your thoughts and decisions move you toward those goals.

Now is the time to start thinking positively in this financial downfall.

What are some skills you already have that you could use to bring in some extra cash? How can you take advantage of current trends to boost your income?

Here are some suggestions to help get your thoughts moving in the right direction:

      1. Are you artistic or do you enjoy making things with your hands? You might enjoy graphic arts. Now is the opportune time to start your own online business selling graphics, covers, designs, and page layouts.

      2. Are you social and do you love interacting with people? Social networking is HUGE and growing by leaps and bounds!
          • Social networking platforms like Twitter, Facebook, Digg, Stumble Upon and De.lic.ious are changing the way businesses of all types market their products and services. Many companies are hiring people to market their business on these and other social networks.

      3. Do you like to write? Blogs are fast becoming the way to update a website consistently, driving more and more traffic to it. Companies are looking for writers to fill their sites with content.
          • Posting blogs, article writing, and copywriting are just a few of the ways you can earn money online using skills you already have and a pastime you enjoy.

      4. Boost your income at your current job. When you think positive things about your job, you tend to perform better. And when you excel at your work, your boss is more likely to recognize you as a valuable, or even indispensable, team member!

Positive thinking will help lead you in the right direction toward a positive outcome. If you’re naturally a negative thinker, turning those thoughts into positive ones may be a little more difficult, but it can be done.

When you start to have negative thoughts, try to catch them before you’re already on the path to destruction in your head. Then, turn them around and focus on positive outcomes.

Over time and with practice, positive thinking can become natural to you. Even better, you’ll be attracting positive outcomes as well. Through positive thinking, the Law of Attraction can bring you many things to be happy about, including financial freedom!

Exploring and Developing Additional Income Streams

Exploring and developing additional income streams are worth your time and effort. As a person who cares about your financial affairs, surely you’ve tried to think of different methods and strategies to keep money flowing in. After all, the more income streams you have, the better life you can live and the more prepared for the future you’ll be.

So how do you go about trying to find ways to bring in more money on a regular basis?

Use these ideas as your inspiration to discover your own strategies for getting additional income streams flowing into your bank account:

      1. Do a thorough self-evaluation. List every talent or skill you have. Be open-minded during your self-evaluation. Then, explore how you can earn money using these skills.
          • Are you good with numbers? A fast typist?
          • Have you often written lyrics to songs or recorded your original short stories?
          • Maybe you can sew, make a yard look great, or think creatively.

      2. Consider how you might use the internet to bring in money. You can start your own website with only a few extra dollars.
          • Get a domain name and hosting and use for excellent, easy, and free website management software to set up and run your site. A domain name at costs less than $15 and you can host your website at for only a few dollars per month. There are plenty more excellent places to acquire domain names and hosting as well.
          • Add on advertising to bring in some income.
          • If you like to write poems or report on local news, you can write articles and post them at one of a number of websites and earn money for your page views.

      3. Also using the internet, take on work you can do on your computer during your spare time. The number of worksites online is mind-boggling.
          • Sites such as oDesk, Elance, and others provide listings of work that is available immediately.
          • If statistical typing, writing short blurbs, or helping internet entrepreneurs to organize their website information are skills you have or can develop, your financial future is rich with opportunity using the internet.
          • Bringing in steady money online is a realistic income stream to start developing today.

      4. Consider turning your hobbies into income streams. Maybe you sew well or can design and make purses to sell. Or maybe you’re a fix-it person and actually like doing repairs for others. Arts and crafts projects also sell well.
          • Even 4 or 5 hours per week of a marketable hobby will provide an additional income stream.
          • Plus, you’ll improve your skills and level of creativity by continuing to make and sell your crafts.

      5. The key is to think out of the box. Refuse to allow your anxieties to get in the way of trying something new or different to get an income stream going.

      6. Be brave. If something doesn’t build the way you hoped, start another new income stream.
        Confidence is an important aspect of finding and developing additional income streams.
          • Remember that when it comes to the internet, the possibilities for earning money are endless. Keep working at it and don’t give up.

Open your mind to the many possibilities that you have all around you for additional income streams. If you push yourself to go forward and start 2 or 3 different activities to bring in a trickle of cash and keep it going, a few years from now you’ll be surprised at the impact you can make on your budget as each income stream grows.

Explore and develop at least two additional income streams over the next year and watch your income soar.

6 Ways to Minimize the Cost of Your Auto Loan

Let’s face it, cars are expensive. It’s not only the price of the car, but also the gas, insurance, maintenance, car washes, and more. For most of us, there are also considerable costs associated with the auto loan. With the economy as it is, every expense is worth examining.

Use these strategies to save money on your next auto loan:

      1. Improve your credit. Nothing has more impact on the terms of your loan than your credit score: the better your score, the lower the interest rate. If your credit history is sketchy, it’s going to cost you. So if you have credit problems, put off buying that new car until you’ve done some work on your credit.
      2. Avoid small loans. In many cases, interest rates tend to be higher on small loans. If the car costs less than $5,000, then it’s best to simply save up ahead of time and pay cash for the car. If you’re desperate for a vehicle, however, this may not be an option.
      3. Refinance. You can refinance an automobile at a lower interest rate if interest rates have fallen since you bought the car. This especially makes sense if you’ve also been able to improve your credit since you obtained your loan. You could easily save $100 per month by refinancing.
          • With the subsequent reduced payment schedule, you can apply the extra you’re saving toward other investments or you can pay off your car sooner.
      4. Shop around for financing. It might be easiest to get your financing at the dealership, but it’s rarely the best place. Finding a better financing offer means extra money that could be in your pocket instead of the dealer’s.
          • Check out what the dealer has to offer, but get some other financing quotes and see what makes the most sense.
      5. Consider leasing. While leasing is usually considered to be more expensive in the end than purchasing, it can make sense if you never own a car long enough to get it paid off.
          • Your monthly payment will likely be less and the taxes are less, since you usually only pay tax on your payments, not on the value of the car.
      6. Find a less expensive vehicle. Cars today are almost universally quite reliable. There’s almost no practical difference between a modern $10,000 car and a $100,000 car. All the extra cost has little to do with how reliably or safely the car will get you from point A to point B.
          • Consider purchasing a slightly used automobile to really save some money. If you can find a car that’s almost new with low mileage, you get all the advantages of a new car, including the warranty, without the new car cost.

There are several ways to save money on your next auto loan. If you have the luxury of time on your side, fix any credit challenges you may have and shop around for the best financing terms. Where there’s a will, there’s a way. Do what you can to keep as much of your money as possible.

Discover the Ideal Age to Start Saving for Retirement

Most young adults don’t think about saving for retirement. There are other financial priorities, including marriage, paying off student loans, buying a first home, or preparing for the birth of a child.

Typically, people start preparing seriously for their retirement once they reach their 40s. If you wait that long, though, financing your whole retirement will take some hefty saving. Starting your savings as early as your 20s makes a real difference. By starting in your 20s, you can put away smaller amounts plus you’ll amass a larger nest egg in the long run.

Saving for retirement early in life gives you the possibility to gain hundreds of thousands of dollars in free interest before you retire!

Ideally, you should start saving for your retirement as soon as you can afford to. Let your first regular paycheck mark the beginning of your retirement savings. Saving a little bit at a time makes a difference if you start early, and you’ll be glad you got a head start on putting money aside as retirement approaches.

Advantages of Getting Started Early

Consider these advantages of saving for your retirement in your early 20s:

    1. Affordable deposits. Saving for your retirement won’t put a drain on your finances as long as you base your savings on what you can afford. Saving now will allow you the smallest possible deposits because they’ll have many years to grow.

    2. Retirement accounts are a great safety net. Cashing out a retirement account early certainly isn’t recommended, but you’ll always have this option if you find yourself in a difficult situation.

    3. Time for your money to grow. You’ll have more funds available when you retire, thanks to interest and investment returns adding up over the years.

    4. Time to recover if something happens on the markets you invest in. The stock market can crash, but your position might gain value again in the future.

    5. Having time to recover also means you can afford to take more risks. This means you can pick high risk investments with a much higher potential return and see your portfolio grow faster than it would if you stick to safer investments.

    6. Tax advantages. Your contributions to qualified retirement plans or IRAs can reduce your income taxes.

Great Ways to Save and Invest at an Early Age

There are some very good options available to you to start saving in your early 20s:

    1. A 401(k) through your employer. This is a great option, especially if your employer matches your contributions. There are two common mistakes to avoid when it comes to 401(k) accounts:
        • Opting out of a 401(k) account. A 401(k) account is really the easiest way to start saving for retirement. Plus, if your employer matches your contributions, you’re just leaving free money lying on the table if you opt out. After 40 years of investment returns, this free money could be worth $10,000, $100,000, or even more.
        • Cashing out or losing your 401(k) when you change jobs. Instead, you can either roll this account over into an IRA or to a new 401(k) through a different employer.
    2. Open a Roth IRA if your employer doesn’t offer retirement benefits. Go over your budget to figure out how much you can realistically contribute to this account on a monthly basis and stick to this goal. Even if it’s a small amount, go for it!

The key is to get started saving on a monthly basis. Develop this habit and it will serve you well for the rest of your life. Later on down the road, as your income increases, you can always increase your savings amounts.

Getting started early, making saving a habit, and keeping track of how your investment accounts are performing will help you save up enough to retire comfortably.

There are no excuses not to save, since you can get started with small monthly contributions and can open an IRA account if your job doesn’t offer a 401(k). Get started today and fund a retirement you can really enjoy – all with small contributions! You’ll be glad you did.

Tips for Getting the Most From Your Savings Account

Do you feel like you’re saving your money with a financial institution in vain? Does it seem like you’ve had your money there forever but you’ve earned very little on your investment?

Even though banks pay very little interest, there are some simple strategies you can use to get the most out of your savings account.

Easy Ways to Improve Returns

If you prefer regular savings accounts to more complex investment arrangements, there are a few things you can do to ensure you make the most returns on your money:

      1. Choose online savings. Online savings accounts are fast becoming the popular choice of people who want to keep it simple where their savings are concerned, yet get good returns.
          • Online savings accounts offer the option for you to earn good interest rates on your deposit. These accounts would certainly take care of that concern!
          • You earn your interest safely. As long as your account has $250,000 or less, it’s automatically insured by the FDIC. This means that you won’t be negatively impacted by any financial crisis that could affect monies saved.
      2. Look for higher interest rates. Believe it or not, not all savings accounts are the same. There are actually some that offer better interest rates for depositors and these are the ones to consider if you want to see your money working for you. At the end of the day, your mission is to be able to earn money on your savings, so why not earn all you can?
          • The more you save, the greater the impact of a higher interest rate – even if it’s only slightly higher. As your savings grow over time, the difference could be significant.

      3. Look for accounts with high opening bonuses. Some savings accounts offer high bonuses once you open a new account. These accounts give you a good head start where your savings are concerned and can end up working for you, especially if you leave your money to grow.

      4. Know when interest is calculated. If you’re able to study the pattern of your savings account, you should be able to determine at what point during each month interest is calculated on your savings.
          • A trick to ensuring you collect higher interest each month is to ensure your balance is as high as possible right before interest is calculated. That way, you’ll get the satisfaction of seeing higher interest amounts in your savings account.

Take Your Savings One Step Further

If you have a bit of an adventurous streak, you could consider those savings accounts that are fixed term and offer higher interest rates. These include viable options like certificates of deposit and money market accounts. Of course, there is more risk involved, but nothing that a little focus and research can’t overcome!

Having a fixed term savings account can be challenging, especially if there is an emergency need for the money. However, if you’re able to hold out until the end of the term, then you’ll reap better rewards in more interest earned.

Fixed term savings options like certificates of deposit guarantee higher interest rates the longer you save your money untouched. That might be the option for you if you’re not getting what you feel you deserve from your existing savings arrangement.

It’s frustrating to save with a financial institution for your entire life without seeing positive returns from it in a reasonable timeframe. Put a little thought into the process as well as the options available so you can find the most practical and attainable way to earn on your savings.