A new year is upon us, and everyone is making their resolutions. While most people are focusing on their health or career goals, you can be taking the steps necessary to become financially successful in 2018. Here are some tips on how to get and stay on the financial track to success in the new year.
Budgeting is Key
Perhaps a very basic step, budgeting will be the key to your financial success. Whether you are already sticking to a budget, or have never made one before, take this new year as a time to evaluate your finances. If you already budget, go over every item line and make sure everything lines up with your current lifestyle. If you are new to budgeting, take this time to hash out every category and detail of your finances so you will be ready to tackle 2018. Evaluating your financial situation at the beginning of each year through your budget is a great way to become financially sound.
Get Out of Debt
We’ve talked about debt before, but any financially stable person will have control over their debt. This usually means that they don’t have any debt, or that they have an active plan in place to eliminate all of their debt. There are several methods to actively paying off debt such as the Snowball Method and the Avalanche Method. Pick one and get to work! If you don’t have any debt, you are already one step ahead!
Contribute More to Your Retirement
Look toward the future by making it a goal to contribute a little more to your retirement accounts this year. Even if it is only a small amount more than last year, it will still benefit you by getting you to your goal amount faster. Any extra you can contribute will set you up for financial success in the new year because you have a plan for the future.
Forget Past Mistakes
Making mistakes is just part of human nature. You, like everyone else in the world, have probably made some not-so-smart decisions with money in the past. While it is easy to get down on yourself for these mistakes–especially if you are suffering from some of the consequences–it’s important to keep them in the past. You can’t change what has already happened, but you can change your life going forward. If you want to be financially successful this year, then take the steps necessary to get there. Don’t worry about what you have or have not done in the past, just get out there and make your future bright! Take into account these simple baby steps toward getting right financially, and start moving in the right direction. If you make a conscious effort to improve your finances by doing something small toward that goal everyday, you will be on the right financial track in no time.
Whenever you hear people talk about credit, you often hear about credit scores. We all know that this is a ranking system of your credit history that helps you when you try to buy or lease certain items, but what exactly does it entail? Here are four things you should know about your credit score.
The 5 Factors
Everyone’s credit score is based on five different factors. Changing anything in any one of these categories can result in your credit score going lower or higher. You generally want a credit score of at least a 700 to be in the “good” category. Here are the five factors that affect your score:
- Payment history – Do you pay your bills on time? If so, there is a good chance you have a decent credit score.
- Amount of debt – Having a large debt to credit ratio can make your score lower.
- Length of credit history – The longer you’ve had credit, especially good credit, the better for your score.
- Types of credit – Your credit score can be affected by the type of credit lines you have open as well as the type of debt you have incurred.
- Your history of credit searches – Unfortunately, if too many lenders do a search for your credit score or history, it can negatively affect your score.
Reports vs. Scores
There is a difference between your credit report and your credit score. Your credit report includes how often you apply for credit, your debt collection accounts, all the details of your credit accounts, and possibly some public records. Your credit score is calculated using the information on your credit report.
Checking Won’t Hurt
You can check your own credit score without any penalty on your overall score. It’s only when lenders check your credit as you apply for a loan or a credit card that your score can be affected. Just don’t have too many lenders check too often, and you should be ok.
Negative is Only Temporary
If you have a factor that has negatively impacted your credit score, there is good news! It will eventually age off. Some things, like bankruptcy, can take many years to age off. However, it depends on what kind of negative factor you have. Just know that if you keep a clean record after, you can improve your credit score over time.
So you see, there are many different details about your credit score that are never really talked about. It’s good for you to stay informed on your credit score and the factors that go into keeping it healthy.
It’s time to go shopping for holiday gifts! You may be thinking this is a great time to rack up some great rewards on your credit cards, and it can be–if you use them safely. Many times during the hustle and bustle of the season we forget to really practice using our credit cards safely, and we set ourselves up for some sticky situations. Here are a few reminders about how to handle credit cards this time of year.
Online Shopping Hazards
These days some people opt to shop solely online, especially for Christmas gifts. If you don’t like big crowded stores, or you don’t have time to spend going all over town to buy gifts, online shopping can be great! Just make sure you are shopping on a website that you know and trust when you are making purchases. If the web address has “https” at the beginning, you know it is a verified and secured site that can be trusted. If it doesn’t have an “s” on the end, you probably shouldn’t purchase from them.
If entering your credit card information online makes you a little antsy, a safer (and easier) way to purchase on the internet would be to use a third party like PayPal. When you use a trusted third party, you don’t have to enter your card information on every site you purchase from, and you have some protection if something were to go wrong with your transaction.
If you do enter your card information on the store’s site, don’t choose to store it there for your next purchase. It may be tempting, especially if you shop there often, but if that site gets hacked, your credit card information goes along with it–which opens you up to identity theft.
Another tip for the holiday season is to pick one credit card to use for holiday purchases, and leave the rest at home. Carrying one card is safer than having a wallet full of them. If your wallet or handbag gets snatched, you only have to worry about canceling one card instead of several. Carrying one card also ensures that you won’t be able to overspend and rack up lots of debt on several different cards. It also helps you track your holiday spending if you have every purchase in one location.
Caution: Store Cards
When you head to the check out at your favorite store, you will probably be asked to open a store card for an extra discount. Many times those discounts are significant, which makes the credit card offer very tempting. However, be very wary of the store credit cards as they can carry hefty interest rates if you don’t pay them off in full. This is one of those situations where if you can be responsible and pay it off completely every month, it may be worth the discount. However, if you have a balance left over for the next month, the interest charge alone practically cancels out the initial discount you got on your purchase.
Track, Track, Track
When using credit cards for lots of purchases over the holidays, it’s important to track everything you spend. Yes, you will get a statement later with details, but keep a record for yourself as well. If you have tracked every purchase, when you get the statement you can see if everything is correct or if there is a discrepancy. Also, keeping a record of your spending on your card will ensure you don’t go over your credit limit by telling you how much you have left on your card to spend. Finally, it’s just good practice to keep track of your spending, not just on holiday gifts, but every day. It’s very easy to rack up debt when you are just swiping a card. Keeping a log of your purchases will help you make sure you stay within your financial budget.
These are just a few reminders of ways to stay safe with credit card usage over the holidays. If you are smart with your card this season, you won’t be in a bind when the new year rolls around.
The holiday season is upon us! It’s time to trim the tree and shop for gifts. During all the hustle and bustle of this season, it’s important to keep a vigilant watch out for scams. Christmastime is the most notorious time of year for money scams, and if you are a victim of one, it can be potentially devastating.
Here are some “popular” scams that are going around this time of year:
Gift Card Scams
For some people, gift cards are the perfect Christmas gift. It’s quick, easy, and it lets the recipient buy whatever their heart desires. If buying a gift card is on your shopping list this year, it’s best to buy them directly from the store and get it from the cashier.
Online gift card discount and auction sites can be fraudulent. Either they take your money and you don’t receive the intended gift card, or you receive the intended gift card, but it was stolen or doesn’t have the amount of money on it that it should.
Likewise, buying gift cards from the huge kiosks in general grocery stores can be a gamble too. There is a scam where people take the codes off many of the cards so they can use them online. You then buy one of those cards and they are not usable because the codes have already been used. You are out money and have nothing to show for it. So, again, it’s best to get one from the actual store you want the recipient to purchase from, and get it from the cashier.
Twinned Wi-Fi Scam
We’ve talked before about the perils of public wi-fi and how you shouldn’t use it for paying bills or checking bank accounts. Now there is a new reason to be wary of your friendly coffee shop internet services–the Twinned Wi-Fi Scam. This is where a person can make a new wi-fi signal that looks exactly like the complimentary one at the location where you are. You click on that one, thinking it’s the right one, and now the hacker has all of your information on your computer. It’s a scary thought, but that’s why it is important to only use encrypted sites and never enter your credit cards, go online shopping, or check your bank accounts over public wi-fi.
Package Delivery Scam
Online shopping for Christmas gifts has become huge, mostly for its convenience of being brought directly to your doorstep. If you are a person who likes to shop online, beware of the Package Delivery Scam.
This scam will send you an email with a subject line that says something similar to, “USPS Failed Delivery Notification.” When you click to read it, it will tell you there has been a failed attempt to deliver your package or that your package was intercepted at some point. It then gives you a link to click to find out when you can expect your package. If you click this link, you will download a virus onto your computer that can gain access to all your private information. It’s scary because these emails don’t look sketchy–in fact, they look official. This scam isn’t just the USPS either, it has been seen with UPS and FedEx as well.
The best thing to do in this scenario is to think rationally through your online purchases. Are you even waiting on a package to be delivered? If so, did you get tracking notifications about your purchase? Go to the tracking website and see where the official tracking number has your package. If it doesn’t say anything is wrong, you can be assured the Failed Delivery Notification email was a scam. If you are unsure, you can always call USPS, UPS, or FedEx and ask about your package rather than taking the email at face value and clicking on the link. Just think it out and be aware that this scam is out there.
Now that you know some of the common holiday shopping scams out there, you can be more wary of where you do your business. It’s important to keep a watch out for scams all year long, but it seems the holidays really amp up people’s attempts to steal your money and information. Just be careful and use your head when shopping, and you should be able to avoid these scams this year.
Information on scams provided by mycreditunion.gov