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WHY WORRY ABOUT MY CREDIT SCORE?

A Snapshot of Your MoneyWhy Worry About My Credit Score?

Why should anyone worry about a credit score? I know many people who think that worrying about raising a credit score is so “Old School.” Many people think if they have a cell phone, pay their rent and lease a car, they must have “good” credit, but there is much more to this story!
Almost 49% of people polled don’t realize that a credit score measures credit risk. Do you know how a score affects your life? Do you know how to read a credit report? Why worry about my credit score? One reason: It is your responsibility to manage your credit, understand your credit score and know what’s being documented by businesses and institutions.

Your credit score is unique, much like your fingerprint. It identifies your risk & financial health and follows you everywhere. In fact, your credit score can fluctuate daily without you doing anything. Creditors report their data about you at different times during the month and depending on the data added to your report; your score will go up or down.  It is not an exact science, and each credit company has its own scoring models that can differ from each one. So you could have a different score on Experian, Transunion, and Equifax. You can check your credit score here: https://www.creditkarma.com/

Thus, it is critical to worry about your credit score and check the pulse of your credit situation every six months or at least annually. You need to have good credit to function in the world. Contrary to many “quick-fixes” you may read about, the best way of increasing your credit score is good payment behavior over time and a healthy mix of credit types.

Here are a few things that your credit score determines:
•    What kind of insurance rates you can receive
•    If you can qualify for a home mortgage and at what rate
•    Whether or not particular companies will hire you
•    If you are eligible for an auto loan and at what rate
•    What credit cards you can qualify for and if you will receive special rates or travel perks

Makes sense to schedule a summer check-up of your credit health today! Why worry about your credit score? It could save you tens of thousand of dollars when purchasing a home and getting the best credit cards with the most generous benefits!

Stay green, my friends!

~Bob

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DASHING Through DECEMBER

3x3 Dashing to DecKeep it real!

You survived Black Friday and Cyber Monday and now you have the rest of your Christmas shopping to do. Amid holiday parties, family gatherings and business obligations, it’s time for many of you to begin annual holiday shopping, too!

The National Retail Federation’s latest survey finds that holiday shoppers plan to spend an average of $463 on family members, up from $458 last year and the highest in survey history. Average spending per person is expected to reach $805, with more than half of shoppers planning to splurge on non-gift items for themselves. And if you use credit cards, be prepared to go over budget by 25%.

Many people get emotional about selecting gifts for family members and loved ones. The desire to get the very best present is often in direct conflict with the reality of keeping your budget on target. Going overboard for Christmas and beginning 2016 in debt is not your best course of action.

Here at The Money Nerve, we believe that positive and intentional choices allow you to be deliberate about your spending during the holidays and beyond. Take a moment and examine some of the holiday emotions that may pop up out unexpectedly!  Are you trying to “buy” love or attention? Is there family competition regarding who bought or received the “best” gift? Do you feel the need to purchase a gift for every person you know?

Stop. Think about your long-term goals for your life and how you want to recognize or honor the special people in your life. Be thoughtful. Attaching a personal, heartfelt message with a small present can be the greatest gift of all. Spread holiday cheer on a personal level. This is a season based on love and sharing. – Reconnect with the people who are most important to you.

Enjoy the holiday, the shopping and the people! See if these five tips help you navigate the holidays and make it easier on your wallet:

1. Benjamin Franklin said it best, “The early bird gets the worm.” So begin saving for next year’s holidays in January. Set aside $25-$75 per month. Use cash whenever possible.

2. Set your budget. If you traditionally tip a babysitter, a dog walker or special people who provide personal services at the end of the year, be sure to add that to your budget.

3. Make a gift list. List the amount you want to spend on family and friends and stick to it. If you bought gifts early, pull them out to wrap. I have friends who forgot they purchased gifts early, put the gifts in a safe place, and then found the items after the holiday season.

4. Find deals. Read those Sunday ads and use apps like RedLaser to price match items. You want to be sure you get the best price on your purchases.

5. It’s not the size of the gift, it is the thought behind it. You can give small “stocking stuffers” to colleagues: $5 Starbucks cards, a mini-bottle of Champagne, homebaked cookies, or a chance to win the lottery with a $2 Scratch off card. There are many small and fun ways to show people you care!

Merry Christmas, Happy Holidays, Happy Hanukkah and more!

Bob

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Focus on Your Future

the money nerve

Have you ever heard Aesop’s fable about the grasshopper and the ant?

The grasshopper loved hopping about and singing during the warm summer. One day he saw an ant working hard to move an ear of corn and cried out, “Why in the world are you collecting food on this bright and beautiful day? Stay and play with me!” The ant shook his head and said, “I am saving this for the cold winter, and you should do the same.” The grasshopper laughed and went off to play but perished during cold weather. The moral of the story: It is best to prepare for the days of necessity.

The story seems harsh, and many people wish for a fairy tale ending where others solve all of our financial dreams (i.e., winning the lottery, getting an inheritance, marrying a rich spouse). In 1934, Disney created the delightful film short “The Grasshopper and the Ants” where the Ant Queen and her colony felt pity for the grasshopper and took him in during the winter. Have you ever seen the video? Check it out below.

Sometimes a project or goal seems so far away that it is easy to procrastinate. There is so much time left and we get bogged down in our busy-ness, that daily decisions feel more urgent and important than long-term investments in life.

Reality check: It’s your life; it’s your money! How are your plans for retirement going? Do you have savings for a rainy day? Life happens – when you least expect it.

Saving and spending are part of living a life of abundance. Let’s change the words being used from short-term desires like “I need those shoes” to some long-term goals such as, “I am making better choices with my money, to maintain my lifestyle when I get older.” As you discover the best balance between living for today like the grasshopper and stashing some wealth like the ant, you will come to realize that both are investments in yourself.

Ignoring regular maintenance on your car because you don’t want to spend the money can result in major car expenses down the line. In the same way, poor spending or saving habits may also result in a later retirement and fewer choices down the road. What should you do?

Here are three easy ways to get started:
1. Take the quarterly plan you created last week and imagine retirement is a “big purchase” like a house.
2. Determine the price of this long-term goal (the amount of money needed) with this calculator.
3. Tweak your quarterly plan (budget) to begin investing toward your targeted “quality of life” in your later years. You will be glad you decided to invest in yourself!