Making Responsible Financial Decisions
It is important to take responsibility for your financial decisions. When you are signing up for any financial service or product, make sure to read the terms and conditions so you are aware of all fees associated with that service or product.
Make A Budget And Stick To It
One way to maintain a healthy financial situation is to create a personalised budget for yourself. To start, take all of your receipts, bill payment stubs and other expenditures and divide them into different categories, for example:
- Living Expenses (i.e. rent/mortgage, utilities bills, grocery expenses, car, etc.)
- Personal Expenses (i.e. gyms, credit card bills, etc.)
- Entertainment (i.e. dining out, concerts, etc.)
These might not be the right categories for you, but work with your expenses and find the breakdown that works best. Once you begin to see how much you spend in certain categories, you can figure out where you can start saving.
One of the best things you can do is stick with your budget to make sure you are living within your means.
Maintain Good Credit
Pay your bills on time; paying your bills late or defaulting on your credit balance is a major negative on your credit score and will result in a higher cost of credit.
Defaulting on credit agreements will stay on your credit file for six years.
If you have missed payments, get current and stay current; ask your creditor to report your obligations as current.
If you are having trouble paying your bills on time, request help from your creditors. Most legitimate companies will work with you if you have a well thought out request.
Keep your balances on revolving credit products low relative to the total credit line. Using a high percentage of the available credit will impact your credit score negatively.
If you have numerous unused but open credit cards, close several of them. Numerous outstanding credit cards impact your credit score negatively. However, don't close all of them. The presence and timely payment on a credit card can improve your credit score.
Use balance transfers to lower the cost of your credit, but be aware that simply moving your debt from one creditor to another does not help your credit score. Pay down bills in order to increase your wealth and improve your credit score.
Don't apply for numerous credit products in a short period of time. A large number of credit inquiries impacts your credit score negatively.
The average age of your credit accounts affects your credit score.
Practice Card Safety
Tips on keeping your credit card safe:
- Sign your card as soon as your receive it.
- Guard your PIN when using public Cash Machines, and don't leave your receipt behind at the Cash Machine.
- Never give your credit-card number over the telephone unless you initiated the call.
- Make certain you get your card back after you make a purchase.
- Keep a list of your credit cards, credit-card numbers and free phone numbers in case your card is stolen or lost. Make a copy of the back and front of the card and store in a safe place.
- Review your monthly statement to make certain all charges are your own, notify the card issuer of any errors or unauthorised charges.