Understanding How Credit Works In Your Life

Let’s talk about credit.

First, loans / credit cards are when you use someone’s else’s money (borrowing). You are receiving goods or services now that you have agreed to pay for later (either in full or with a series of payments). This will help you to establish or re-establish your credit. This is different from a debit card, which is using your own money and not building your credit.

Now that we have that straight, credit is an extremely important part of your finances. It gives you that ability to purchase goods or services when you need it and pay for it later. Sometimes life requires you to make a purchase now (even when you don’t have the funds of your own to do it now). Last month, I came home from work to find our smoke and carbon monoxide detectors beeping – not a good thing. It wasn’t the batteries, which meant it had been 10 years since we replaced them. Ugh! There was an immediate need to have the electrician come and replace all 11 smokes and carbon monoxide detectors now. It wasn’t something we planned on in our July budget, but it needed to be done now. That’s where credit comes in. They were replaced and we will pay the bill in August.

Credit is something you will find you need in your life, whether it be for emergencies or planned purchases. Having good credit will be an asset to you in your time of need. Having good credit will give you more favorable terms (lower interest rate) for your repayment terms. The higher your credit, score the better chances of getting credit at the best terms. Putting it a different way, your credit score is as important to your finances as your GPA is to getting into college – both numbers are an important in your life.

To have the best credit, you need to use it but not abuse it. It’s easier said than done. You need to use your credit and make purchases as needed, but only purchase what you can afford. You need to make your payments on time and not max out your debt.

In my next newsletter, I’ll talk about credit and some frequently asked questions.

Simplifying Our Finances

We simplified our accounts. First, we transferred accounts so that we have less organizations to keep track of. We not have rolled over retirement accounts to once institution. One statement with all the accounts on it for each of us. Simple! Less to keep track of monthly and at tax time.

We have consolidated some debt to zero percent credit cards to get the balances paid off faster with all the payment going to the principle. We carefully chose the zero balance offor the longest time frame and no fees. Once it was done, we divided the balance by the number of months at zero percent interest and that is our monthly payment. Each and every month that payment will be made to have the total balance paid in full without any interest.

Okay, this did take sometime to research, but it will be well worth it in the long run. Now that it’s done, it simple to make one payment each month.

How many institutions do you have accounts with?

Credit Report Reminder From Jill Russo Foster

Time To Order Your Second Credit Report Of The Year

For your 2nd report of the year, use Equifax

Hello, it’s Jill again, reminding you to get your finances in order so you can relax this summer.

How to Order Your Credit Report

The only authorized source for your report is AnnualCreditReport.com. You won’t be charged and they won’t force you to sign up for “credit monitoring

”. It’s yours to review by law for free!

To Learn More, Visit www.AnnualCreditReport.com:

Select your state, then click Request Report.
Fill out your information, then click Continue.
When it asks you to select a service, select Equifax.

Not comfortable ordering online? There are other ways to order your report:

Mail your postal order by downloading the form at AnnualCreditReport.com
Call in your order at 1-877-322-8228 FREE

What should you do with your report?

Review it for accuracy!
Follow the instructions to correct any errors.
And, always remember to keep copies for your records.

Were you hoping for your credit score instead? One option is to take a look at CreditKarma.com, Quizzle.com or CreditSesame.com. They won’t give you a FICO score, but they come close by providing a close approximation of your score. And, there’s no charge for you.

May you have a relaxing and successful summer!

Financial Literacy Month – Tip #19

Lower Rates

Here’s the tip from August 20 – Debt Reduction month:

If you find that you can’t open a new credit card, call your credit card company and discuss your options. Can they offer you better terms? Mention how long you have been a customer and that you have always paid your bills on time. If the first person says no, then ask to speak with a supervisor. This is not scary, they are people too.

To purchase a copy of either of my books Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day or 111 Ways To Save

#JillRussoFoster #30WaysToSave

Financial Literacy Month – Tip #18

Your List

Here’s the tip from August 13 – Debt Reduction month:

What came up on your list? Did you think you need to generate more income? Do you think you need to spend less? Either way, you need to take action. Start to put your plan in motion. When you get extra money, pay it towards your debt. Don’t let it sit in your pocket. Money will find a way to be spent. Make a payment as soon as you get the money. Yes, you can make multiple credit card payments in one month to pay the balance off faster.

To purchase a copy of either of my books Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day or 111 Ways To Save

#JillRussoFoster #30WaysToSave

Financial Literacy Month – Tip #17

Game Plan

Here’s the tip from August 12 – Debt Reduction month:

Let’s start to payoff this debt. Since you have been working on trimming your expenses and generating more money, can you use that money to pay down this debt? If you still don’t have the money to pay down this debt, you need to have a plan.

How are you going to get more money? Do you need to cut back more? Do you need to sell more? Write down twenty ways to get more money to pay down this debt. Write down anything that comes into your mind (don’t worry that it’s not possible). See what your mind is thinking. Write you lis ton the Appendix.

To purchase a copy of either of my books Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day or 111 Ways To Save

#JillRussoFoster #30WaysToSave

Financial Literacy Month – Tip #16

Making A Choice

Here’s the tip from August 8 – Debt Reduction month:

Yes, everyone needs a plan. You can’t get from point A to point B without a map.

There are two schools of thought out there on paying off your debt. Option 1 is to pay off your debt starting with the smallest balance and working your way towards the bigger debts. In my experience, people who want a sense of accomplishment, who like to see things crossed off as they are completed, do well with this method. Option 2 is to pay off the debt with the highest interest rate and work your way down to the lowest interest rate. This works well for the person who is bothered by seeing their money go out the door.

The choice is yours, but you must make a choice today.

To purchase a copy of either of my books Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day or 111 Ways To Save

#JillRussoFoster #30WaysToSave

Financial Literacy Month – Tip #15

Clear Picture

Here’s the tip from August 3 – Debt Reduction month:

Okay, this is the time to face reality. You need to get out all your bills today and make a list of each and every debt that you owe. I want you to list the creditors name, the amount owed, the minimum payment amount and the interest rate. See Appendix for today.

To purchase a copy of either of my books Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day or 111 Ways To Save

#JillRussoFoster #30WaysToSave

Financial Literacy Month – Tip #14

Mail

Here’s the tip from July 30 – Credit month:

Sounds simple enough, we use the mail all the time for legitimate purposes. But others don’t and you have to be aware and take precautions.

Don’t put your outgoing mail (especially bills) in your mailbox for someone to steal. Take it to an actual postal mailbox to mail.
Don’t bring your mail to work to be mailed. Many companies have the mail sitting on the counter for anyone to take. Again, take it to an actual postal mailbox to mail.
Don’t leave you incoming mail in the mail box all day for others to be able to grab. Talk to your Post Office about what you can do (locked mailbox, slot in your door etc). Maybe have your mail sent to a P O Box.
Look at your mail promptly. Did you get a declined credit offer when you haven’t applied for credit? It could be a sign that someone may be attempting to open a credit card in your name.

There are many ways to steal someone’s identity, don’t make it easy on them.

To purchase a copy of either of my books Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day or 111 Ways To Save

#JillRussoFoster #30WaysToSave

Financial Literacy Month – Tip #13

Monitor Your Accounts

Here’s the tip from July 28-Credit month:

Something that I personally do weekly is to monitor my accounts. I go online (from my home computer) and check my accounts, both bank and credit cards. I actually look at the individual transactions to see what is posted. Is there anything that I don’t recognize? Get in the habit of this and check even if you haven’t used the account. You never know who has.

To purchase a copy of either of my books Thrive In Five: Take Charge of Your Finances in 5 Minutes a Day or 111 Ways To Save

#JillRussoFoster #30WaysToSave