Ughhh….are we done with this yet? As much as I love saving money; this is probably the most boring segment I have taken on. Well, I started this, so I must finish. I certainly can’t let things go unfinished, that would drive my OCD crazy!
OK, we have $1000.00 in an emergency savings account, and at least three months’ worth of savings in another savings account. All of our unsecured loans are paid off and most of our credit cards are paid off. Our pantries are bursting with food and staples; we are ready for the zombie apocalypse!
Well, maybe we feel good about where we are financially anyway. Except for the 98 Ford Escort we have been driving since forever and the tranny or something is gonna blow at any time now. Remember when I kept talking about saving a credit card to build your credit score? Well, here we are, finally.
The credit card we have been saving is a nice tool to get that magical credit score up where we need it to be so we can get those low interest rates we have always dreamed about and have some negotiating power. Are you ready?
The key is to keep that card balance at 18 to 20% during the billing cycle. So, if it is a $1000.00 limit card, keep it at a $200.00 balance. To do this, use it for small purchases like gas or maybe a nice dinner out. Credit trackers use a 30 day cycle; so you want to carry a 20% balance during that cycle, and then pay the balance. Then do it again and again for about 6 months and watch your credit score grow. At this point you want to be on a plan with a credit score watcher, like score sense. There are so many score tracking companies out there and everyone gets a free score update once a year, but a monthly program helps you monitor what is going on. Make sure there are no mistakes or false reports on your credit summary. And when you see your score climbing, it gives you that warm fuzzy feeling inside, like you are accomplishing something. And be sure it is a plan where you can see all three scores. Transunion, Equifax and Experian.
Once you get your score where you want it, this gives you negotiating power to get those low interest rates on car loans or even qualify for that mortgage you have been struggling for.
Now we are living like the Jones ‘A nice car we can afford and the home we have always dreamed of that is within our means. Savings for a rainy day and food to feed the neighborhood for the zombie apocalypse. Ahhhh…..
Remember to keep making payments on time and hopefully with the savings security net, we won’t get caught in a financial bind.
Please share and comment. I would love some feedback.