Managing Money & Credit

Financial success revolves around managing your money well. You must have a good plan and stick to it.

Do you wonder where your money went every month? Are you having a hard time building your savings? If you answered yes to either of these questions, it's time to make a change if you want to be financially successful. Follow these money management tips:

Create a Budget & Savings Plan

If you haven't made a budget or been tracking your spending, we promise you'll be amazed at the amount of money you can "find" (and keep) each month by creating a budget and spending plan, and sticking to it.

Determine Your Income

For many of us, that's our one-and-only paycheck, but if you have a second job, are paid hourly, or you're self-employed, take a moment to determine realistically how much you're bringing in each month. Consider your best and worst months. You should also factor alimony or other sources of income.

Set a Budget

Creating a budget and following it are no easy tasks. Depending on where you are on your path to financial success, you will have different priorities in your budget. However, one principal will always remain: don't spend more than you make. It's the golden rule that should never be broken, else you will find yourself in a financial hardship. With that in mind, tackle your budget with the following priorities:

1. 1) Create an emergency fund of at least $1,000. Work toward building it to 3-6 months of essential living expenses.
   
2. 2) Prioritize payoff on high-interest-rate debt with extra payments or a debt consolidation loan.
   
3. 3) Create a savings plan for future goals such as buying a house, retirement or education.
4. 4) Account for all your fixed-expenses.
5. 5) Set spending limits for all your non-fixed expenses.
   

Monitor Your Cash Flow

Track every purchase to see how well your lifestyle fits your budget. Make sure you account for all of your income with an equal amount of spending and saving. You'll probably be surprised at how much you are accustomed to spending on what seem like "the little things". Change your behaviors to fit your budget, or adjust your budget to suit your lifestyle — just remember to keep your priorities in line.

Improve Your Credit

Before your Credit Union can extend you any credit, it first has to assess your credit history. We have to know what debts you’ve assumed in the past and whether you’ve handled them responsibly. If your credit report is less than ideal, you may be stuck with a higher interest rate, lower loan amount or just no loan at all.

It's a good idea to review your credit report regularly — you can get a free copy of your credit report annually or anytime you are denied credit. Check to make sure incorrect information isn't bringing your score down, or that accounts haven't been opened in your name fraudulently. Learn more about protecting your identity.

If you find that your credit score is preventing you from getting the loan you need or the rate you want, follow these tips to help improve it:

• Make your payments on time — a few weeks early if you can.
• Make more than the minimum payment amount.
• Reduce your debt to income ratio — pay off high-rate debt to may more of your income available for the payments on the new loan you want.
• If your score is low because a lack of any credit, open a credit card and demonstrate that you can use it responsibly by paying it off in full each month.

It can take six to 12 months or more to significantly improve your credit score. Once you are consistently demonstrating financial responsibility, your score will reflect that. Will a higher credit score, you will be rewarded with the best loan rates, allowing you to keep more of your money for yourself.

Make Wise Banking & Financial Decisions

A penny saved is a penny earned, as the old saying goes. Make sure you're not throwing money down the drain with your day-to-day finances. Fees and interest charges can add up to a lot of dough over the years. Choose your financial institution wisely. We are not-for-profit. That means better rates and fewer or lower fees than banks and other for-profit institutions.

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