Taking Control
- smartgirllogic
- Apr 17, 2018
- 7 min read
As women, it is important that we are never in the dark about our finances. For so long, men have understood and handled money more than women. I am not saying women are not financially literate, but history shows that women usually take a back seat in the finances, but hold power in the commercial aspect of what is being bought for the home. That is why commercials for brands are targeted at women and investing, stocks, bonds and loans advertising is directed at men.
Thankfully, times are changing and women are seeing the importance of having control over their finances and creating wealth for themselves and their families. As a young woman, I am just now stepping into the financial game. I have taken over majority of my bills and am fully invested in the growth of my bank account. If you are like me, it is hard to know where to start, and the language used in financial documents often go right over my head and probably yours too. I am going to share 5 tips I have learned over the last year that are great ways to get a handle on your finances.
1. DO NOT OPEN UP MULTIPLE CREDIT CARDS
I know this sounds rudimentary, but a lot of people do not know how damaging it is to open up multiple credit cards. They think it will help short term but it only ends up hurting you in the long run and messing up your credit. Always think less is best and that credit cards are an emergency. Please note that a margarita, new shoes, bad hair day or a broken nail is not an emergency unless it is crucial to your self love regimen. Treating yourself every now and then is important, but do not make it a habit if you can not afford it. Also note, do not tell close family about your credit card limit. It is hard to say no to family and their financial crisis unfortunately is not always yours. If you can afford to help by all means do it, but do not give money to family that you can not afford to lose.
2. WHAT TO DO WITH A HIGH CREDIT CARD BALANCE & HIGH INTEREST
If you “accidentally” find your self in a situation where you have a high credit card bill and are one more night at the club away from your credit card limit there is hope. And if that is not bad enough and you are paying almost as much in interest as you are your monthly bill, there is also hope. The best thing you can do, is to stop throwing away those pre-approved credit cards that come in the mail. As the banks send out pre-approved credit cards collect all the ones that say 0% interest for the first few months and 0 transfer fees. These cards are very important. Most people under 30 do not know this, but when you close credit cards out completely to pay them off you hurt your credit. Even though you believe it is in your best interest to close them and pay them off, you are better off paying them down and leaving the accounts open.
Once you collect your 0% APR (Annual Percentage Rate) and 0 transfer fee cards, start reading what that bank has to offer and do your research. Does that bank have good customer service and good customer loyalty? Pick a bank that works for you and open that credit card. Now I know I said earlier do not have more than one credit card but just hear me out. Once you open your credit card with the new bank, they will approve you for your new credit limit. After about a week or two, they will allow you to do a “Balance Transfer.” This means you can transfer one credit card balance to another. This will help you because it allows you to pay off your credit card debt without paying interest for at least 6 months. Once your credit is transferred, then you can close the credit card with the previous bank. Even though 6 months is not a long time when you have 2 years worth of debt, it gives you a nice buffer to get the ball rolling without additional fees. I did this myself about 2 months ago and it has made a big difference, and once my 6 months is up I will decide if I can manage the interest payment or if it is time for another transfer.
3. SOME BILLS ARE INEVITABLE
Unfortunately, there are certain bills we cannot avoid. No matter how financially savvy someone is they still have bills. Life happens and you cannot account for the random situations that pop up you did not plan for. When these bills come, take a deep breath and access the damage. It is rare that companies, hospitals or debt collectors want their money all at once. When you find out you have bills that seem to be pilling up, do not go broke trying to pay people back. If all you have to give a month is $40, or $10 every time you get paid, set up monthly payments or make small payments monthly until the bill is low enough to pay in full or completely paid off. Also, do not be afraid to call and advocate for yourself. Be polite and honest, “I cannot afford to pay, is there anything you can do for me to help or lower the payments.” If they can help great! If not, you pay a little at a time. As long as you make some kind of payment you are usually safe. Please note, I am not saying don’t pay your car note or phone bill. I am just saying make arrangements for these things and if they get behind reach out and set up a plan.
4. MAKE LIST
It is hard to remember everything. Life can get tricky and things happen fast, you do not want to forget your financial obligations, but it just happens. Write down ALL your expenses. Sometimes you have to stare fear in the face and say I will win! No matter how depressing or over whelming it may be, making list has practical application and can be therapeutic. If you want to be extremely thorough you can write down the amount, company or name of bill, monthly amount you can pay, and date of completion. It takes some time and requires effort, but when you can check off and cross off completed bills it is an amazing feeling.
5. KNOW YOUR NUMBERS
There are certain numbers that are very important for financial success. Everyone knows it is important to know your Credit Score. Lets assume for a moment you have no idea what I am talking about. Well, your credit score from the dictionary of me is, “A set of numbers that influences your ability to get a loan and allows lenders to judge whether you are a risk to them based on your history.” But if for whatever reason you do not believe me, here is a more reliable source. According to Investopedia, “A credit score is a statistical number that evaluates a consumer’s creditworthiness and is based on credit history. Lenders use credit scores to evaluate the probability that an individual will repay his or her debts.” I can and will do an entire post about credit but for now thats what you should know if you know as little as I did about a year ago. Good credit makes life easier, but that is in itself, easier said than done. If you are not sure what your credit score is or do not know what is on your credit start at the beginning. Use whatever search engine you rely on most and go to ScoreSense. This website will allow you to check your credit score. You will have to sign up, but we know from Netflix, HBO and Amazon Prime that you sign up and cancel before your trial is up. Here is the good news, The Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies, Equifax, Experian, and TransUnion to provide you with a free copy of your credit report, at your request, once every 12 months (FTC).
Yay! Now you know your credit score. No matter how bad or how good your credit score is there are options for what to do next. Once you have your credit score and cancel your subscription, head over to AnnualCreditReport.com. Now before you panic this is way less stressful than finding out your credit score. You already know the number so lets figure out why. Go through all the prompts, and choose which website you want to use, Experian, Equifax or TansUnion. It allows you to use all three, but that is a waste and you should save those extra two credit reports for later. Be prepared before you start to answer some tough questions about your history. Make sure you answer honestly and to the best of your ability. They ask these questions to make sure you are who you say you are, and if they are not sure, you will have to do additional steps to receive your report. Once you get through the questions your credit report will be right there in less than 5 minutes. Take a deep breath, and take a look. Pay close attention to whatever says, “In Collection.” That means that you have not paid, and that is affecting your score. Write down the name and number provided of who you owe and give them a call in the morning. Have your story ready and be polite. Once you figure out what is going on and what you need to do to pay them back, ask politely is there a way to clear it from your credit. Most people are willing to help if you ask nicely. If for whatever reason they are not able to take it off, do not stress as long as you pay it will eventually go away. Nothing you see on that report is permanent. Just by looking, you are taking an important step in the right direction.
When I graduated college, I did not know what my life was going to be like. I did not think I would have to take on all my finances right away. I am stressed and I am struggling, but most importantly I am learning. Knowledge is power and the more I know the more weight is lifted off my shoulders. I hope these tips help you start your financial journey and help you take control.
– Just Jordan
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