Tag: life goals

Uncategorized

6 Ways to Take Control of Your Credit

loansbyjoanna

Screen Shot 2018-10-10 at 2.11.06 PM

I know that it can sometimes feel like you have the worst credit out of everyone in your circle. In truth, most people don’t have great credit. In fact, the average score is just 675, which is slightly lower than what most financial experts consider a good score. With student loans still haunting you and collection agencies blowing up your phone, t’s easy to feel like you’re neck in debt and drowning fast. Don’t worry! I’m here to help! Here are 5 great ways to start managing your credit score.

#1 – Learn What Your Credit Score Actually Is

Of course you want to get this credit score taken care of yesterday. However, before we can begin working on your score, you need to know how much debt you’re in exactly and who you owe. It’s important that you also check to see if your debts have been sent to collections or if you have any late payments on your credit report. Request a copy of your report so that you can see exactly where you stand. You can get a free report from each bureau every year from AnnualCreditReport.com.

Then, there are a variety of ways to get both your credit score and your FICO score. You can use free tools like Credit Karma (but sometimes credit card companies might offer a free score as well). After you review your report and score, be sure to follow this guide to disputing errors on your credit report as sometimes errors can account for a low credit scores.

#2 – Beware of identity theft

Once identity thieves have your personal information, they can drain your bank account, run up charges on your credit cards, open new utility accounts, or get medical treatment on your health insurance. In extreme cases, they can file a tax refund in your name and get your refund, or even give your name to the police during an arrest.

The more your credit improves, the more susceptible you are to identity theft, so always be on the lookout. Check your report periodically to make sure that there aren’t any unauthorized accounts in your name. If there is something you don’t recognize or anything strange you notice, contact a reporting agency and have them look at it right away.

#3 – Take Care of that Debt

We all know that high-interest debt can be taxing on both our wallets and our stress level. However, did you know that it can also hurt your credit score? The longer you carry that debt, the more your “utilization ratio” increases which also lowers your credit score.

Sometimes that light at the end of the tunnel is quite dark, but there are several ways to address your debt. Consolidation is one option. Balance transfers is another. However, although both may work for some, the best course of action is one that addresses the debt and gives you a concrete plan to manage your finances more effectively. Look for a Debt Management Program. Do your research and find one that works best for you. As you pay under this program with a concrete plan of action, your credit score can recover at a steady pace.

#4 – Pay Off Anything Keeping You in the Red

Want to pay off your debt fast? The best way to do so is by reworking your budget, trimming unnecessary expenses and boosting your income to free up more cash to put toward what you owe. If you’re paying off debt on your own, without any professional service, then there are two primary ways to get rid of your debt: The first way is to pay off your smallest debts first—which will allow you to eliminate some of that debt quickly and get rid of the stress and anxiety of knowing what to pay first. The second is to pay off your cards and loans with the highest interest rate first—this will save you a significant amount of money long-term, and is most efficient.

#5 – Know That You CAN Request a Higher Credit Limit

This may seem counterproductive, but sometimes a higher credit limit can lower the utilization ratio we talked about before (assuming you won’t be using more credit once you have a higher limit). If you ask to have a higher line of credit, you have to be self-disciplined and avoid using it. This strategy, if used carefully, can help you meet your credit goals and may actually be one of the fastest ways to get the score you want. If you have a higher credit limit and pay your balances down or in full, it can even be more beneficial. Of course, this is up to you, but it’s definitely worth considering.

#6 – Seriously, Stop Stressing!

Having bad credit isn’t the end of the world, and isn’t the end-all be-all to your future and how close you’re able to come to your goals. Millions of Americans are either in considerable debt and/or hold low credit scores, and many of them have been able to pull themselves out of their rut. You can successfully manage your score in no time if you plan correctly, pay down your debt, check for errors, avoid identity theft, and improve your utilization. And remember, I’m always here to help!

Uncategorized

Prepare for your First Home Loan (Mentally, Spiritually, and Emotionally)

loansbyjoanna

There’s no disputing that a home will be one of the biggest and most important purchases of your life. It’s an exhilarating, taxing, wonderful event. However, armed with the knowledge you need to begin the home loan process, it can be a satisfying experience.

Many advisors will inform you of what documents you’ll need to prepare. There are countless articles and workshops about collecting your checks, paystubs, W2s, and receipts, and they aren’t incorrect, however I’d like to offer you a few conceptual, and maybe uncommon, steps that you’ll need to shop for a home, apply for a mortgage, and close with the confidence that you got your money’s worth.

1. KNOW YOURSELF Screen Shot 2018-09-12 at 1.55.26 PM

First time home buying is about knowing yourself, what your life goals are, your priorities, and knowing how to use your income, assets and/or credit in a way that works for you.

I don’t say this lightly, but for some, getting a home might not be the best thing to do right now. I’m not trying to discourage you, but not everyone is at a place in their life to be able to afford a home. Let me explain.

I have a friend (I’ll call him Joe) who grew up in a household where his single father lived life paycheck to paycheck, and not necessarily because he had to, but because his father had been taught by his mother who happened to take life as it came, without thinking too hard about saving.

Consequently, as great a woman as Joe’s grandmother was, Joe has never been able to spend money smartly. In fact, every month he spends more money than he has.

Now, for Joe, he’ll need to first practice paying off small purchases now, until he is able to work his way up to affording to owe on a home loan. Otherwise, he may find himself biting off more than he can chew.

Before applying for a loan it’s important to know yourself, know what type of spender you are, what type of payment plan would work for lifestyle, and if it’s a good plan for your life right now.

2. FIND WAYS TO SIMPLIFY Screen Shot 2018-09-12 at 1.49.26 PM

We’re marketed to everyday. Everywhere we go, there are people telling us what our life should be or what life that we should have. As soon we turn on our TVs and our devices, we receive messages: If you buy this, you’re going to have that life. Go here or buy this and it’ll be worth your while, your taste buds will dance, your kids will be happy, you will be popular, admired and attractive!

I like to tell people to consider living a minimal lifestyle. Minimalism can be a tool in helping you find simplicity and subsequently, freedom. Most people hear that M word and immediately think they’ll have to downsize their possessions. In reality, minimalism is about making all of your decisions more consciously and deliberately.

We want to be able to spend more time with our kids, family or friends. We want to spend our time in a more balanced way. For instance, we all know that we should be exercising. In January, we all go out and buy these gym memberships. This is good news for fitness and nutrition companies, they capitalize on this want for a better life.

I’m not saying not to buy that gym membership. I’m not saying to empty out your home and get rid of that beautiful collection of books. In fact, if you’re happy and it doesn’t cause stress, then continue to do that thing.

If any aspects of your life IS causing you stress (not the good stress where you’re learning and growing, but the type where you’re not sleeping at night because you feel like you didn’t make the right decision) cut it out of your life.

I’ve been working on this aggressively, because I’m a collector, shopper and all around early adopter of anything electronic! And I can tell you, when you simplify your life because you want to align your life to support your values, that’s when happiness occurs. When minimalism is coming from a place of fear, and you’re throwing things out because you think some type of Zen will magically occur if you empty out your house, it won’t work.

3. REEVALUATE Screen Shot 2018-09-12 at 1.52.08 PM

To start simplifying your life, you need to reevaluate what your life is. The first thing you have to do is stop and consider what your grand, massive, colossal life-goal is. This is the thing that keeps you going—maybe it’s to become the CEO of an international clothing design company, or to have a non-profit historical museum. Perhaps it’s just to have a happy, stress-free, intentional life. Now ask yourself what is standing between you and your goal.

I like tell folks to identify their pain points. Maybe you have a hour-and-a-half commute to work every day. People can spend 1000 a month or more on transportation because of extra costs, they need need a better car, gas millage, maintenance, they need to house the car, parking, etc. When really, maybe they should live closer to work.

I understand, sometimes you look at your life, you want your kids to be in a certain school district, you want to be close to your parents, you like a certain coffee shop. Ask yourself if the lifestyle you’re maintaining is worth anything you’re giving up, including your financial freedom.

It’s important to be authentic. When you’re trying to be inauthentic, trying to impress others, not being honest with yourself about whether you can afford all the credit cards that you have, or whatever the case may be, it’s very hard to take a step back and evaluate your day-to-day choices and not judge yourself. You can start this new life anytime!

I am going to tell you now that you will need to collect your important papers, your paystubs, and documents, documents, documents, but really, the first step is to realize how you want to live, what lifestyle you want, what works for your lifestyle right now, and what works for your eventual goal.