While in college, I interned at a financial services company’s marketing department. My internship assignment was to create a presentation about the importance of financial wellbeing. This was back when wellness was just beginning to be commonplace. My research focused on financial education and how it can be used as a way to improve your health. The key takeaway is that financial stress is unimaginably harmful and can have a negative impact on our health, careers and relationships.
This realization ignited a passion within me to write about financial advice that can help people get control over their financial lives and well-being. As a result, I’ve picked up a lot of helpful money tips over the years, and I want to share them with you now.
1. Credit building before you need it
It can take many years to build a strong credit rating. This can have a huge impact on your life in many ways. A good credit rating can make it easier to obtain loans such as mortgages or auto loans. It also allows you to access lower interest rates, borrowing amounts and longer terms. Your credit score can impact how easy it will be to rent an apartment or qualify for utilities. Employers will also run a credit check on employees whose job involves managing money.
It’s important to start building credit as soon as you can. It may seem like if you don’t have a credit card or any debt you need to pay off that you can’t hurt your score by missing payments, but not taking out credit can stop you from building a credit score at all. To build credit, you need credit. It’s important to take out a mix of credit and use it responsibly so you can improve your score by showing you have a history of making on-time payments. It takes at least six months for credit scores to be established once you open a credit card account.
If you’re struggling to qualify for credit because you haven’t had a chance to build any (fun, right?A secured credit card is an option. A secured credit card allows you to deposit money on the card and then use it more like a bank debit card. You can’t spend more than that limit, but when you make on-time payments to that credit card, you will start to build your credit history. Double-check that your secured card issuer is reporting your payments directly to the three main credit bureaus Experian, TransUnion and Equifax.
2. It’s possible to use intuition to budget
I write a lot about creating budgets. There are many helpful budgeting methods that can be used for everyone. That being said, budgeting is a lot of work and that’s why so many people struggle to stick to a budget. It’s easy enough to sit down and figure out how much you can afford to spend each month on categories like living expenses, food, transportation, and entertainment. Problems arise when people have difficulty tracking their spending and being conscious of whether or not they’re sticking to their budget each monthly.
Over the years, I’ve found that learning how to budget intuitively is much more important. It is still important to create a budget that allows you to know how much you can comfortably spend, after you have paid your basic expenses like rent or car payments. Once you know how much you can afford to spend on things that go up and down (clothing, dining at restaurants, etc. ), you can start to make smarter spending decisions.You can then practice intuitive spending.
Do a gut check before you make a purchase. Chances are, you know whether or not it’s a good use of your remaining funds. If you aren’t sure if the purchase fits within your budget, hold off on making it until the end of the month once you see how much money you have left. This will allow you to get a better idea of the types of miscellaneous purchases that you can afford. If at that point you no longer want to make the purchase, you’ll also start to train yourself to avoid making unnecessary impulse or emotional purchases. Once you build those good spending habits, sticking to a budget will be easier and won’t require much active effort.
3. A great tool for wellness is to pay down your debt
Recalling wellness, paying off your debt is one the best tools you have. When we’re feeling stressed out, it’s very tempting to order takeout, book a spa day, or splurge on a fun treat. Did you know that debt can have a negative impact on your mental and physical health? Anyone who is trying to pay down debt well knows how stressful it can be. However, a University of Missouri 2021 study found that adult debt stress can lead to poor health. It can cause joint pain or stiffness and make it difficult to perform daily activities.
A 2017 AICPA study found that 31% of people worry about their debts in general, 18% worry at work about it, and 25% worry about it at night. This is a high-stress situation. When you’re tempted to blow off steam by spending money, consider making an extra debt payment instead. You can save money on interest by making extra payments. It will also make it easier to relax with less debt.
4. First, pay the principal
You should specify that you would like the extra payment to be applied to your principal balance, and not the interest, when making extra payments towards debt, such as student loans. If you don’t specify this, the lender will use your extra payment to pay off interest and you’ll make no to little extra progress on paying off your balance, which will then continue to accrue interest. Be sure that your extra payments are working for you, not your lender.
Source: The Every Girl
