People often underestimate the importance of having a good credit score and report. In this article, I am going to walk you through how credit can affect your money management now and in the future.
Here are 5 reasons why a good credit score is important:
1. REDUCED INTEREST RATES ON BORROWED MONEY
Over time, you can save money by having lower interest rates on credit cards and loans, thanks to good credit.
2. GREATER CHANCES OF LOAN AND CREDIT CARD APPROVAL
If your credit score is high, you have a greater chance of getting approved for loans and credit cards from lenders and credit card companies.
3. BETTER LOAN TERMS
Having good credit can result in better loan terms, such as higher borrowing limits, in addition to lower interest rates.
4. LOW OR NO SECURITY DEPOSIT REQUIREMENTS
Having good credit can result in better loan terms, such as higher borrowing limits, in addition to lower interest rates.
5. EMPLOYMENT OPPORTUNITIES
When hiring new employees, especially for jobs requiring financial responsibility, some employers run credit checks.
Building and Maintaining a High Credit Score
Here are some ways to maintain and build on your credit score to keep it healthy and high:
1. PAY YOUR BILLS ON TIME
Your credit score can suffer greatly from late payments. Make sure that all of your bills—including credit card and utility bills—are paid on time.
2. MAINTAIN LOW CREDIT CARD BALANCES
Using a significant portion of your credit limit, or high credit utilisation, can have a bad effect on your credit score.
3. BUILD A LONG CREDIT HISTORY
Your credit score is influenced by the length of your credit history.
4. KEEP THE NUMBER OF NEW CREDIT INQUIRIES TO A MINIMUM
If you make too many hard inquiries quickly, your score may suffer.
Understanding Your Credit Report
It’s important that you understand your report and what it contains. You can do free annual checks by many of the online credit reporting agencies, like; Equifax and Experian, to name just two. Order your report and take a look at how yours stacks up. Your credit report will include your credit history; including account details, payment history, credit inquiries, and public records like bankruptcies.
Make sure to regularly check your credit report for errors, including false payment statuses, accounts that are not yours, and inaccurate personal information.
Impact of Credit on Loan Eligibility and Interest Rates
Credit scores are used by lenders to evaluate risk. A higher score translates into lower risk, which makes you a more desirable borrower.
Your interest rate is determined, in large part, by your credit score. Better scores usually result in cheaper rates, which means you will pay less money back over the course of the loan.
Certain insurance providers base their auto and home insurance rates on credit scores.
Conclusion
Having good credit provides many financial opportunities. Understanding and managing your credit puts you in a better position to pursue favourable financial opportunities.
Regularly monitoring your credit report and score, developing responsible credit habits, and understanding how your financial behaviour affects your credit can result in significant savings and opportunities throughout your life.
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For those in their mid-30s to 50s, frugal living doesn’t mean cutting back on life’s pleasures. It is about finding the luxury in simplicity and making wise decisions that improve your life without breaking the bank. Let us look at how to live both luxuriously and frugally.
1. REDEFINING LUXURY
Luxury is often associated with high-end brands and lavish spending. However, true luxury is defined by high-quality experiences and moments. It is about appreciating what you have and seeing value in simplicity.
2. TRAVEL SMART
Travel does not have to involve expensive hotels and first-class flights. Consider low-cost options such as off-season travel, home exchanges, or staycations. Plan and book ahead of time to get the best deals and experience luxury for a fraction of the price.
3. GOURMET COOKING AT HOME
Dining at high-end restaurants is enjoyable, but recreating those experiences at home can be equally rewarding. Invest in new cooking skills, experiment with different recipes, and enjoy gourmet meals in the comfort of your own home.
4. SMART SHOPPING
Take a mindful approach to shopping. Put quality ahead of quantity. It’s better to have a few well-made items than a closet full of things you hardly use. Look for sales, discount outlets, and thrift stores to get high-quality items at lower prices.
5. DIY HOME DECOR
You can create a luxurious home environment without spending a lot of money on decorations. DIY projects, upcycling, and a little creativity can help you transform your space elegantly and affordably.
6. INVESTING IN EXPERIENCES
Instead of material possessions, invest in experiences that create lasting memories. Concerts, art classes, local festivals, and outdoor adventures often offer more fulfillment than material goods.
7. SELF-CARE ON A BUDGET
Luxury is more than just material possessions; it is also about self-care. Instead of paying for expensive spa treatments, create your own at-home spa experience. Practice yoga, meditation, or have a relaxing bath – affordable yet luxurious ways to care for yourself.
8. SIMPLIFY YOUR LIFE
Remove clutter and simplify your living space. This not only makes your home more comfortable and manageable, but it also allows you to focus on what is truly important.
9. GROW YOUR GREEN THUMB
Gardening can be a relaxing and rewarding way to experience luxury. Plant your own herbs, vegetables, or beautiful flowers. This not only improves the ambience of your home, but it can also provide you with fresh organic produce.
10. EMBRACE COMMUNITY RESOURCES
Take advantage of community resources such as libraries, parks, and free local events. These can provide free entertainment, education, and the opportunity to connect with others.
Frugal living means appreciating and enjoying life’s simple pleasures. It’s a mindset that values experiences and quality over price tags, leading to a more sustainable, fulfilling lifestyle. Take this approach to uncovering the hidden luxuries in everyday life.
Learning about money can give you the power to make smart financial decisions and reduce money-related stress over time. That’s where the LEARNING HUB helps you gain more financial knowledge, while providing you with the support and help you need.
Investing in your child’s future is often a top priority for parents in their 35s to 50s. While the traditional piggy bank is an excellent way to teach children to save, there are more substantial ways to ensure their financial security and educational future.
1. START WITH A PLAN
Begin by outlining your goals for your child’s future. Is it a college fund, seed money for a business venture, or financial support for a creative pursuit? Having clear goals aids in selecting the best investment strategy.
2. EDUCATION SAVINGS ACCOUNT
Consider opening an education savings account; there are many options depending on where you live. These accounts, which are specifically designed for educational expenses, frequently offer tax advantages.
3. DIVERSIFY WITH MUTUAL FUNDS
Mutual funds can be a great way for parents to diversify their portfolio without having to pick individual stocks. They allow you to invest small amounts on a regular basis.
4. BONDS: A SAFER BET
Government and municipal bonds can be safer investment options. They can be a good choice if you prefer a low-risk path to grow your child’s future fund.
5. TEACH FINANCIAL LITERACY
Involving your children in age-appropriate financial discussions is invaluable. Teach them about money management, saving, and investing. This education is just as important as the financial investment you are making in their future.
6. CONSIDER REAL ESTATE INVESTMENTS
Real estate investing can provide long-term returns for those who are financially capable. This could be through purchasing a rental property or investing in a real estate investment trust. Ensure that you first seek financial advice if you are not experienced in property investing.
7. THE POWER OF A TRUST FUND
Setting up a trust fund for your child can provide financial security and is particularly useful for larger estates or specific family circumstances. It can also assist with tax planning. Seek financial and tax advice before setting up any trust to ensure it is suitable for your financial circumstances.
8. LIFE INSURANCE AS A FINANCIAL TOOL
A life insurance policy can be used to secure your child’s financial future in addition to providing protection. Some policies accumulate cash value over time, which can be used to fund your child’s education.
9. REGULAR REVIEWS AND ADJUSTMENTS
As with any investment, it is critical to review and adjust your strategies on a regular basis. This ensures that your investments are in sync with changing market conditions and educational costs.
10. INSTILLING THE VALUE OF MONEY
Encourage your child to save for the future, whether through part-time work or saving gifts. This instills a sense of responsibility and an appreciation for money.
Investing in your child’s future requires more than just financial commitment; it’s about making informed decisions, taking a diversified approach, and instilling in them the value of financial responsibility. It’s a journey that goes well beyond the piggy bank, setting the stage for a brighter, more secure future for your children.
For any of the above strategies, I would encourage you to seek out professional advice first to ensure it aligns with your values, goals, and financial position.
Remember, it starts with you. Learning about money can give you the power to make smart financial decisions and reduce money-related stress over time. That’s where the LEARNING HUB helps you gain more financial knowledge, while providing you with the support and help you need.
Let’s talk about how your thoughts, views and what you possibly heard when growing up is seeing you still miserable and poor!
Your attitude combined with who taught you about money – has shaped the way you live today whether you are experiencing financial stress or have money behind you and living a stress-free life.
I want you to answer this question?
Who was your role model, who did you learn your money management skills from while growing up?
Did your parents or grandparents ever talk to you about money?
Having conversations around the dinner table while growing up about money is equally as important as the “Birds n Bees” talk that most of us are given at a certain age – if you know what I mean.
They say talking about money is taboo but I disagree. If you don’t start talking about money how are you ever going to learn about managing it more effectively?
Whether you grew up talking about how to save and use money wisely or not has shaped your perception today on how you live your life and what kind of a lifestyle you have created for yourself.
You will either have money in the bank or spend every dollar you earn.
You see 80% of us are managing our money out of sheer habit with no real understanding why and this has adverse effects down the track if you haven’t got a grasp on how to work it well. As it can either make or break the quality of our life in years to come.
I was having this very conversation with my Mum a while back and she was commenting that money was never talked about. There was never the education around this subject like she said is starting to happen today.
“Mum went on to say that it’s not until you retire that you start to feel the pressure or relief of how you worked your money. She stressed that saving is not a thing for today’s generation and she wished they knew the real power of this as she said it’s going to make a huge difference to the quality of someone’s life at the end of their working life”.
We are sadly creatures of habit. We do the same things over and over again often expecting to get different results but of course, we’re going to get the same results if we don’t change our thinking or our habits.
If you have decided you want a better life, then you have to look at what your belief is around money.
What did you hear growing up about money?
I’m guessing a few of these saying probably popped up and has created in some part a belief system to which you manage your money today.
Money doesn’t grow on trees.
It takes money to make money.
Some people, without a doubt, have more dollars than sense
He who has the gold makes the rules
A good name is better than riches.
Health is better than wealth.
Money is the root of all evil
You can’t take it with you when you die – now that’s spoken like a true spender lol! and the last common saying you may have heard is …AND
Money isn’t everything
Another contributing factor to what you may have heard about money is through sources like:
TV and regular news bulletins – which the media is great at giving you the grim view about financial markets and money today. They thrive off the negative stories.
How many times do you hear positive news stories about everyday people making it big (yes we hear about the lotto win stories) but over time we know that if those winning the lotto haven’t got a handle on how to manage money then in a few short years they will be back to where they started before winning.
Another popular source for hearing about money is when catching up with friends, especially from those friends that consider themselves a wiz at investing.
Offering you their 2 cents worth of knowledge on how they made a fair bit of money on xyz stock or a particular investment, but never how much they lost during the process. I challenge you to ask them how much they have lost up to that point!
There are so many areas to hear and learn about financial education.
A word of caution though to check where you’re getting your information from to see if it’s from a reliable source.
AND always trust your gut instinct because if it looks too good to be true then it probably is.
The subconscious is such a powerful thing that what you think about all day long is what you attract and this applies especially to your lack or abundant thinking about money.
When we keep saying to ourself ….oh we have no money… we’re poor…. we’re never going to get ahead then that’s what you’re going to keep getting.
But when you say to yourself, ok I’ve got this I’m going to keep putting money away and not touch it. I’m going to use cash for a while to curb my spending. I’m going to get there and we’re going to be debt free in no time then you will.
Keeping a positive mindset is one thing but actually doing the thing that’s going to free you up financially is another and both go hand in hand.
So what could you do today to change the way you think about money?
Motivational sayings are especially good when you feel a negative or disbelieving thought come up.
Having a massive belief in yourself that you’re going to make it is another way to change things.
Watch how things start to improve when you combine a positive mindset with activity and action.
Three facts about money I’m going to leave with you are:
Having good money habits takes enormous pressure and stress off you worrying about how you can afford to live day to day.
Having an awesome mindset can move you from poor money habits to good money habits, and
Lastly, anyone can change their belief around money if you decide to choose to, regardless of how you grew up and where you came from.
If you’re looking for more help and guidance in managing your money and getting your money back into great financial shape – then check out my ONLINE PROGRAMS that I’ve created to teach people this very thing – how to move them into awesome financial health.
Also available is my monthly coaching program that helps you to stay on track while you achieve your financial goals.
Look forward to seeing you in one of my programs.
Until next time…….here’s to your financial health, wealth & happiness.
Changing a money habit is NOT merely a matter of saying… yep, I’m not going to spend everything I earn this payday or I’m not going to overspend on my credit card this month from impulse buying.
Poor money habits I believe come from a deeper concern than just spending on meaningless stuff. Stuff that half of the time we don’t need or even use.
So where do these money habits come from?
Well before I answer this. I want to remind you what an actual habit is.
A habit is a behaviour that is learned when we regularly keep doing the same thing over and over again without even thinking.
Money habits are no different than the habit of brushing your teeth when you first get up in the morning or after breakfast. It’s a behaviour that becomes ingrained in how we treat and respect our money. One that we are fully aware of the consequences that follow if our habits are from poor money decisions.
Is there a cure for our poor money habits?
Yes, I believe there is. However, it takes time, discipline, awareness and mental strength in order for anyone to break this habit.
How long can it take to change a habit?
According to psychologists, while it may take approximately 21 days of conscious and consistent effort to create a new habit, it takes far longer to break an existing habit.
From personal experience in working with clients who want to change their poor money habits – it takes a lot longer.
You see there are deeper issues at play why some of us have poor money habits that can at times border on addiction. Just like any addiction, it’s more often than not about something that’s happened in the past.
A habit is not necessarily an addiction, though the two are strongly linked. A habit is any conscious behaviour you do on a routine basis.
Addiction is more about the behaviour to an excessive degree whereby someone feels unable to stop or control it.
Our self worth is often tied to our poor money habits. Our poor money habits can come from the messages we heard growing up and from the examples, we saw when we were younger.
Some of us spend when we feel low or unhappy to give us the kick “or high” we hope to make us feel good about ourselves. The hope that is supposed to fill the void we’re so looking to fill.
When in fact it’s much like the high you get from either an alcohol or drug addiction. Feels good at the time but hell when coming down from the high.
What’s the price of not changing our money habits?
There’s a high price to pay and that comes in the form of massive debt, poverty, unhappiness, envy & jealousy and often health issues.
So how do you move from poor money habits?
What are some of the ways to transform a poor money situation?
3 ways you can change a money habit is to:
1. First, acknowledge that you have a problem. A problem that you’re spending more than you earn, A problem that sees you with credit card debt, personal debt and other debt that you have no hope in paying off anytime soon. Being aware that you’re deep up to your elbows in debt and it’s time to get out, this is the first step.
2. Get help. Get the support you need to help you move forward. Having someone who understands and willing to help you means you’re not alone. It also gives you someone you can be accountable to. Someone who has a vested interest in seeing you succeed and live a better life without financial worry or stress.
3. And lastly, find your purpose – YOUR why. The reason you want a better life and one that doesn’t include massive debt or poor money habits. Set some goals. Write down how you want your life to be. What you want for your life and keep this at the forefront of your mind.
Writing down your dreams, goals and desires keeps you focussed and helps you work towards the bigger picture and what you want in life.
Breaking a habit takes a lot of willpower and motivation.
Ending the cycle of poor money habits is generally easier when it’s something you want to do rather than something others say you should do.
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The MONTHLY COACHING PROGRAM provides you with the support you require throughout your financial journey for a fraction of the price for $37 per month.
I’ve just opened up this program, as I’m getting a lot of questions asking if I have a monthly coaching program for a small cost.
