Three major credit bureaus — Experian, Equifax, and TransUnion — regularly collect information about your payment history, while your credit report contains additional details regarding your payment history, credit utilization ratio and any open and closed credit accounts.
The information in your credit report is used to calculate a three-digit credit score, which lenders then utilize to evaluate a borrower’s likelihood of defaulting on a loan.
By having a higher score, you’ll typically qualify for loans or credit products with lower interest rates and more favorable terms.
No matter how enthusiastic our New Year’s resolutions may have been to save more, spend less and/or take total ownership of our finances in 2021, they might now be losing their luster. The days since we made those ambitious resolutions are quickly passing and the shine is wearing off. Can’t we just cut ourselves some slack and do what makes us feel good and safe in the immediate sense, even if that means forsaking our lofty financial goals?
Try, if you can muster the energy, to return to that place of desire for a better financial life. If you feel that you’ve already blown it by, say, spending beyond your weekly budget or skipping a credit card payment, remember that a mistake doesn’t mean you can’t try again and have success.
“Many people simply track their finances automatically with an app – which is a great start, but what these apps don’t account for is when you stray or get off-target with your financial goal, which happens a lot,” says Amanda L. Grossman, a certified financial education instructor and personal finance blogger at FrugalConfessions.com. “What you want to do is to start calculating and then tracking the gap between where you are, and where you should be, according to your financial plan or goal.”
What this means, Grossman explained, is “charting where you should be each week or month (or even daily) to achieve your financial goal, and then also charting (in a different color) where you actually are. The space between the two lines will be your ‘gap’, which can either mean you’re behind, or ahead, or ‘the curve’. The curve being the numbers you need to be hitting to hit your overall financial goal target.”
2. Examine 2020’s Spending Habits and Plan for 2021
“The pandemic helped consumers reevaluate spending in terms of what they needed, versus what they wanted,” says Angela Holliday, president of Frost Brokerage Services, Inc. and Frost Investment Services, LLC. “With this in mind, take a look at how you managed to cut costs in 2020 and apply that where you can in 2021. Then, use the extra cash to pay off your debt. This will help you continue good habits so you can prosper in the new year.”
“Warren Buffett is quoted as saying, ‘If you want to make saving a priority, take a look at how you budget. Do not save what is left after spending; instead, spend what is left after saving,’” says Dr. Robert R. Johnson, professor of finance, Heider College of Business, Creighton University. “If one truly wants to make savings a priority, it cannot be a residual — what is left over. It should be a line item on your budget. You don’t successfully build wealth by simply taking what you have left after all your expenses. We accomplish what we prioritize. Prioritize savings and invest those savings.”
“Writing down ‘I will save more’ isn’t tangible, and quite frankly, comes off more like a lofty wish than an actionable goal,” says Nishank Khanna, CFO of Clarify Capital. “Your goals should be specific. If you really want to save more, come up with a number and write that down. Whatever you write should be concrete and measurable. When you’re able to quantify your objectives, you’ll find it much easier to track progress and work towards goal achievement.”
Additionally, if you are able to write down your financial goals with a pen and paper (as opposed to using a phone or computer), you should do so. Research has shown that the manual act of writing can enforce our memory, potentially helping us more easily recall our goals later.
Once your goals are written down, set dates in your planner, revisit them regularly and check your progress. “Then remember those accountability dates by setting reminders on your phone and sending emails/texts to your future self,” says Shaun Morgan, personal finance blogger at Simply Know Money. Morgan also recommends printing out your goals and placing them in areas where you might stumble upon them without meaning to.
5. Get a Separate (Online) Savings Account for Emergency Funds
“To help [prevent] overspending, I generally recommend having separate savings account beyond the primary checking and savings account at your primary bank,” said Todd Bryant, founding partner and financial planner at Signature Wealth Advisors, LLC. “Although rates dropped significantly on savings in 2020, take a look at an online high-yield savings account for this secondary account. Use this not to replace your primary checking/savings, but to supplement them as a place to keep your rainy day/emergency fund. By having it at a separate institution, it tricks your brain into thinking it’s harder to access that money.” In separating your accounts, you might not as freely transfer money in and out like you would between accounts at the same bank. “Plus, the online high-yield banks generally will pay much higher interest rates than the traditional brick & mortar,” Bryant says.
2020 was the year of the subscription service. Maybe 2021 can be the year that you take it down a notch; after all, these things add up and those free trials tend to be woefully short.
“Many people sign up for monthly subscription services, [and] once they’re signed up, they rarely go back to reassess,” says Steffa Mantilla, a certified financial education instructor and founder of the personal finance site, Money Tamer. “Make a list of all your subscriptions and critically assess whether you’re getting the full value out of them. Many people find that they have two or three services that offer the same type of service. By cutting even a few of these subscriptions, you’ll save hundreds of dollars every year.”
“In our country today we require more formal education to drive a vehicle than we do to manage money,” says Harry N. Stout, author of the FinancialVerse, personal finance books and content. “People are just not prepared to address the financial matters they face in life. Study after study shows that Americans lose over $1,000 annually by not properly understanding basic household finance issues — that’s about the monthly mortgage payment on a modest home or over two average car loan payments. There is payback in improving financial literacy.”
“Financial literacy is defined as being educated about money and finance, with a special focus on an individual’s personal finances,” Stout continues. “Being financially literate enables smarter money management decisions to be made that lead directly to a financially secure future, one that protects assets and loved ones. Categories that typically come into play with financial literacy are everyday financial issues like budgeting, spending, debt, taxes, retirement savings, college savings, mortgage management and tax and estate planning. If sufficient time is not spent learning about better managing money matters, individuals will not be able to reduce financial stress and anxiety. Knowledge is power.”
To continue where Stout left off, note that knowledge can also be free if you know where to look. Debt.com’s 12-month self-improvement email course #WeKnowDebt is free of charge. The course gives Americans “a comprehensive breakdown of basic personal finance topics [including] budgeting, savings, interest rates, taxes, and good credit – just to name a few,” said Howard Dvorkin, CPA and chairman of Debt.com. “The course also provides support through a Facebook group for those who sign-up and have questions along the way. Each email lesson in the #WeKnowDebt course is jargon-free and comes with a unique list of resources — along with a ‘Learn this’ and ‘Do this’ section. Anyone interested in making financial literacy a year-long goal can sign up for the free, #WeKnowDebt email course.”
“It’s one thing to have financial goals, but it’s another to have financial goals with no viable strategy in place to meet said goals or track implementation of employed strategies,” says Jasmine Young, founder and CEO of Southern Tax Preparation & Services. “A CPA can help you do both ─ but not if they only see you during tax time. CPAs perform relational work, meaning that if they have formed a relationship with you and you are checking in with them several times throughout the year, they are abreast of events that have happened throughout the year that can affect your finances and are better able to provide you with more guidance and advice as to how to reach the financial goals you set.”
Remember those super-specific goals we made you write down? Well, when you revisit them, be open to revising them. Try to pinpoint the “why” behind them. As we change, so do our wants ─ and sometimes even our needs.
“You might be going down a track for one thing but now you have completely different goals,” says Tolen Teigen, Chief Investment Officer of Financial Decisions. “Take a step back and think about what you want to accomplish. Many people have had a lot of major changes. Maybe now is the right time for a career change or moving out of state or elsewhere.”
“The goal isn’t perfection, it’s progress. Celebrate the little wins,” says Melbourne O’Banion, co-founder and CEO of Bestow. “When it comes to managing your money, don’t make perfection the enemy of progress. Checking important items off your to-do list is an incredibly valuable part of meeting your money goals, such as finally buying that life insurance policy you’ve been putting off, setting up auto deposits into an IRA or brokerage account or creating a will. Plus, that sense of accomplishment will motivate you to keep up the momentum and do more.”
How much do you know about the coins that are in your wallet? If you aren’t sure, it’s always a good (great) idea to go to that particular coins website and learn about the programs and projects they have going on.
Why? Many coins offer airdrops and other rewards that are only available through them.
The more you know about a crypto company the more you know about their involvement with the community, value, views and company culture.
Do your research and aways know what you are investing in.
There are coins being dropped daily. From meme coins, to spam, to well backed one’s. Therefore its best to do your due diligence and follow the cryptocurrency market.
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