The 5 Keys to Conquering Your Credit
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How would you answer these questions: “Do you have healthy finances?” “Do you often spend more than you make every month and dip into your savings?” “Do you know where the BULK of your income is going?”
Chances are good you said “yes,” to the first question, “maybe” to the second, and “no” to the last. Everyone wants to think that they are doing well (or at least OK) financially, but we also innately avoid looking at the nitty gritty dollar details. The ones that make us do a double take and realize, maybe our finances aren’t actually that healthy. The cost of living is high (!!) and that can be hard to stomach.
So, what’s a modern working millennial woman to do? Rip off your blinders and look. According to Brittney Castro, Certified Financial Planner™ and Chase Financial Education Ambassador, it’s the only way for you to secure your future and status as a financially wise woman.
“As a Certified Financial Planner™,” Castro shares, “I talk to modern millennial women all the time, and I think it’s important to recognize that women in this age group have a diverse mix of financial goals, from paying off student loans, to increasing their income, to improving their credit, to saving for a down payment on a house.”
What you do with your money today drastically impacts your future. If you’re wondering where to begin, read through Brittney’s five keys to conquering your credit and achieving financial health below. Then, check her out at #CreateCultivateNYC this May where she’ll be speaking on a panel on behalf of Chase Slate.
MAKE A MONEY DATE WITH YOURSELF
You make regular dates to check in with friends and family. See how they’re doing and what’s going on in their lives. The same concept can (and should) be applied to your finances. If you don’t know where your money is going, there’s a good chance you’re not doing the best at saving.
So, make a date. Put it in your calendar and don’t flake!
Brittney suggests this plan of action:
- Schedule a specific time, once a week, to review and plan your budget. This can empower you to keep tabs on your spending habits.
- During your money date, plan for upcoming expenses, such as birthday gifts or special outings, and adjust your budget accordingly.
PAY YOUR BILLS ON TIME
“Another simple but powerful way to improve your financial health – pay all your bills on time,” says Brittney.
“Payment history is the most important factor when it comes to calculating your credit score (generally 35 percent of the score),” she says.
Building credit is an important part of financial health. There are many big steps (ahem, buying a home) that aren’t possible without good credit. Even if you think you’re going to be renting forever (get financially savvy and you won’t!) you need to take the steps right now to secure your future.
According to Brittney, “The credit information that a lender requests could mean the difference between paying huge interest fees and potentially securing the deals we want.”
The gist? “Set up payment reminders or enroll in automatic payments so you’ll never forget,” says Brittney.
USE THE TOOLS THAT ARE READILY AVAILABLE TO YOU
The internet actually wants you to succeed. It’s true! The information superhighway is literally an information SUPERHIGHWAY that charts ALL OF YOUR SPENDING. You don’t have to balance a checkbook or tally up receipts. It’s all there waiting for you to explore.
Brittney says, “Take advantage of tools that empower you to make savvy financial decisions and manage your credit and finances with confidence.” Whether you’re using your smartphone or your laptop, there are numerous services and apps that want you to succeed!
“For example,” says Brittney, “The Chase Slate Credit Dashboard gives cardmembers access to their FICO® Score and a graphical analysis of their 12-month score history.”
Knowing your credit score helps you assess where you stand and how close or far you are from achieving your goals and creating the life you want.
GO ONE STEP FURTHER BY CHECKING YOUR CREDIT REPORT
In addition to monitoring your credit score, checking your credit report is essential to making smart financial decisions.
“Visit www.AnnualCreditReport.com to get a free, in-depth overview of your credit history,” says Brittney. “Review the report closely for any errors – late payments or amounts owed that are incorrectly listed – and immediately remedy with the credit bureau.”
And if you think checking your credit report might negatively impact your score – think again! When a lender makes an inquiry – a request for your credit report information – there is a small impact on your credit score. However, these so-called “hard inquiries," which can happen when you apply for new credit or a loan, begin to fade in impact after the first 12 months and drop off your credit report completely after two years.
WHEN IN DOUBT, USE THE 50-30-20 RULE
What’s that? Brittney explains, “Using this rule – 50 percent of what you earn (net income after taxes) is allocated to living expenses, 30 percent is spent on nonessentials (like eating out and shopping) and the remaining 20 percent goes to your savings account. This approach is easy to implement, and can be adjusted to your personal money priorities.”
While we tend to notice the big expenses (as they make the biggest immediate dent in our savings), it’s often the little ones that get us in the end. Every time you order takeout, press BUY on the pair of shoes you’ve been eyeing, or opt for a morning latte at your local coffee shop instead of making coffee at home, you’re spending money that could easily be put in your savings, or go toward paying your bills.
Let’s think about the coffee example for just a second (and actually do the math). If you buy a latte every morning at $4/cup, seven days a week, 365 days per year, that’s over $1,400.00 dollars in lattes (!). The cost of pressed juice is even higher.
Use the 50-30-20 rule to determine exactly how much of your income you can safely allocate to these types of non-essentials. Then, you can move forward with confidence, knowing you’re making steady progress toward your financial goals.
Have other financial questions? If you’re heading to NYC, write them down and be ready to ask Brittney during the Q&A when she joins us on “Just Do It: A Real World Guide to Channeling Your Entrepreneurial Spirit” on behalf of Chase Slate.