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A few years ago, I grew sick of paying the minimum on my student loan balance each month and living basically paycheck to paycheck because I only had a debit card to my name. I finally decided that, for the New Year, my goal was to get more fiscally responsible.
I wasn’t in dire straits, but I also didn’t know very much about money. I did know, however, that you’re more likely to accomplish your goals if they’re measurable. If one of your resolutions for 2019 is to repair or rebuild your credit score, you don’t have to go it alone! CreditRepair.com, which works with customers across the financial spectrum, can personalize a game plan for you based on your unique situation.
I made a list of five finance-related things I wanted to tackle, and then one by one started working my way down the list. It helped me reach my main goals, which were increasing my savings and credit score by the time the year was finished.
1. Tackle My Student Loans
First, I got out all the documentation related to my student loans and put everything into a spreadsheet. I wasn’t great at mental math, but I knew my way around Excel. By entering in the four loans I had and their accompanying interest rates, with a little formula magic, I was able to create a spreadsheet that told me how much to pay toward each loan every month in order to minimize the amount of interest I’d pay and the amount of time it’d take me to pay off each of them. Having those concrete numbers in front of me was motivating in a way that writing a check for the minimum each month had never been. I felt informed and in control, and I used this win to build momentum toward my next goal.
2. Learn About Credit Scores and How To Improve Mine
Other than take out student loans, I had done nothing about building my credit, so that was the second thing I had to tackle. I spent some time reading about credit, what can positively and negatively influence it, and how to build a better credit score — especially when you don’t make a ton of money or are just starting out in your career. There were days that I felt kind of overwhelmed about the amount of information out there. Sometimes I’d set myself a timer for 15 minutes and then call it quits, but slowly, I began to understand what a good credit score looked like, what my credit score was, and the things I could do to improve it.
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3. Apply for a Credit Card
At this point in my life, I had never had a credit card to my name. To be honest, I was kind of scared of them. I’d heard horror stories of people getting into tens of thousands of dollars of consumer debt and being blindsided by exorbitant interest rates. So, instead of learning about how to be a responsible credit card user, I just buried my head in the sand. I had a debit card that was tied to my bank account, but this just meant that I was essentially living paycheck to paycheck, doing mental math every time I made a transaction, and constantly in fear of overdrawing my account.
I’d heard about rewards credit cards and people getting miles or points for purchases, but I wasn’t sure if I qualified for a card like that, and I didn’t know which one was the best for me. I asked a few friends what they had, read reviews online, and ended up getting a very basic credit card through my bank that was designed for people without much credit. By putting everyday purchases on the card and then paying it off in full every month, I was able to build my credit responsibly. I also made it a point to ask for a line of credit increase every 9-12 months, which increased my buying power and thus my credit score. I also did a lot of research and reading on how to build good credit.
4. Organize and Automate Savings and Payments
Did you know that, if a monthly payment’s due date is annoying or inconvenient for you, you can sometimes just call the company and ask to change your recurring due date? Some billing cycles are set in stone, but some you can consolidate or streamline with a simple request. I was getting paid once a month on the last working day of the month, which meant that I had to budget all month long for bills due on random days. This was a level of organization I was not prepared for, and I found myself accidentally missing payments by a day or two and being stuck with late fees more than I care to remember.
I started by automating every payment I could, from my electric bill to my emergency savings withdrawal. Then, I talked to a few companies and asked to have my payment date moved to the first of the month, when I was flush with cash. This included my landlord, my new credit card company, and my Internet provider. By getting all these bills out the door at the beginning of the month, I had a much better idea of how much was still in my bank account after everything was paid. It also meant that I increased my savings because I was regularly automatically withdrawing money for that account with each paycheck instead of waiting until the end of the month to see what, if anything, was left.
5. Learn More About My Retirement Plan
My employer automatically opted everyone into a standard plan, but beyond that, I knew nothing about my retirement account. I had heard vague talk that we “had a good match,” but I had no idea what that meant. However, buoyed by my previous successes, I decided to make an appointment with a representative from the company to learn the answers to all my retirement-account questions.
It was, to put it bluntly, a disaster. The man I met with was old enough to be my grandfather, he didn’t listen to me, and he was condescending and rude. He actually said something along the lines of, “When you quit your job to be a stay-at-home mom, you want to make sure you have a little money saved up.” At the time I was 25 years old, single, and pretty convinced I didn’t actually want kids. I left the meeting with angry tears streaming down my face. But after fuming for a few weeks, I decided that I wasn’t going to let one person derail my goals. I contacted the company again, explained the situation, and met with a different representative — who was much more helpful, patiently answered all my questions, and helped me get on track to build my retirement savings.
It took almost the whole year for me to tackle this list, but by the time I was done, I had increased my savings, my finances were much more organized, and I was on track to build a better credit score through some simple and easy-to-follow steps.
What do you do to keep your finances on track? Does anyone else love a good checklist as much as I do?
A grant writer by day and personal finance fanatic by night, Marisa is an avid traveler who lives in Pittsburgh, PA. When she’s not reading or writing for work or play, she enjoys running, thrifting, and searching for the most authentic Mexican food in the city.
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