We are officially in the third quarter of 2022! So far, 2022 has seen an overall increase in household debt for Americans, with consumers indicating that almost 30% of their income goes toward paying off debt. Despite this, only 1/3 of Americans say that they maintain a household budget. When expenses are not accounted for in a healthy and realistic budget, it can cause you to fall into debt - which impacts your credit and financial health. That's why we want to focus on the importance of credit, spending, and budgeting on your overall financial well-being.

Here are a few quick budgeting tips...

1. Have A Budgeting Purpose: Why do you want to implement a budget? Is it primarily to pay off debt? To save money for a big trip/expense? To improve your credit score? Or maybe you just want to have your finances more organized? Make sure you have a clear vision, purpose, and goals for your budget when you start - this can help you stick to your budget and keep you focused.
   
   
2. Try Different Methods: There are so many methods and options for implementing your budget, if one is not working for you - simply try another! Maybe checking your bank balance at the end of every day is most effective for you, or maybe you prefer some help from a money-managing app. You can utilize an electronic (or hard-copy) spreadsheet to track expenses, or you can set up alerts or spending caps on your bank cards. Figure out which method keeps you on track most effectively and stick to it!
   
3. Be Kind to Yourself / Treat Yourself: If you have some room for a treat here and there - give yourself a (financial) break. It is important to allow yourself to enjoy your money, otherwise you will lose your motivation to keep going. And remember, if you make a mistake, don't beat yourself up. You will not be perfect at this right away! The important thing is to keep trying as best you can.

More Credit and Spending Basics

Here are some tips to help you keep your personal finances in order - pay special attention to these factors when you are anticipating an increase in spending and/or debt load (such as that tempting end-of-summer getaway):

1. Make (and KEEP) a Budget: As we discussed above, budgeting is key! You know how much money you have, and even with the BEST credit line offer, if you do not have the money now, you probably won't have it when the credit card bill is due either. So be smart - create a budget for how much you want to spend on a monthly or weekly basis. Make several lists, one for bills, one for food or travel, and other categories to stay organized.
   
   
2. Use Credit Offers Strategically: Whether you are applying for a new credit card or using one you already have, use the offers to your advantage. Look at rewards points or cashback offers that will benefit you the most based on your spending habits; and if there is a 0% interest offer for a certain amount of time, make sure you can pay the balance during that time frame to avoid interest build-up and carrying balances month-to month. Maybe look for balance transfer options with low interest rates for existing debts as well, to help save on interest your balances may be accruing.
   
   
3. Stay Below 30% Utilization: This one is more of a basic credit rule, but it is always important to keep in mind anytime you use your credit cards. Look at your credit card limit and try to keep your balance below 30% of that limit. This will keep your revolving debt low and will reflect positively on your credit report. For example, if you have a credit card with a $1,000 limit, make sure you keep your balance below $300 on that account. As a bonus, this will also help you enforce your budget and give you a definitive cut-off point!
   
   
4. Check Your Credit Score (and Your Credit Accounts) Often: It is important to keep an eye on all of your accounts regularly. There are multiple factors to consider here - you need to be staying on top of your balances, spending, and payments, but you also need to keep an eye out for fraudulent activity, which has been spiking since the onset of the pandemic. You should be checking your credit score and credit accounts at least once a month to look for any unusual activity AND to keep your budget organized. Being educated on your credit report and knowing what should (and shouldn't) be reflected there, is your BEST tool for maintaining financial health.
   
   
5. Pay Your Bills On Time: This is another basic credit rule, so don't forget it! On-time payments are one of the biggest factors that determine your credit score, and therefore determine how much credit you get approved for, if any at all. Paying bills on time is crucial to staying ahead of your debt, and can have a lasting impact on your overall financial health. Even if you break the four rules listed above, this one you must try your hardest not to break. A late payment can stay on your credit report for 7 years, and often can be the reason for getting denied an auto or home loan.

Spend carefully, and stay organized!

Want to Know How to Take Your Personal Credit to the Next Level?

We hope this information was useful to you, but if you want to take the next step in improving your credit score and your financial health, we have some additional resources for you....

If you would like a more in-depth guide to improving your credit, we have an amazing new e-book, "The DIY Credit Restoration Guide", including, "The Shocking Truth of What LexisNexis Has on YOU!" This is a great companion to our DIY Credit Program, or you can use it on your own to take your credit to the next level. VISIT OUR ONLINE STORE for more information.

Thinking About Starting A Business? Want to Know More About Business Credit?

We provide a comprehensive assessment and consultation to discuss your best path toward financial success for your business. Complete our Business Assessment today and get a jump start for your business! CLICK HERE to complete the assessment.

And we have a NEW E-Book to help guide you through the process of establishing business credit and obtaining funding for your business, "The Business Credit and Financing Guide" by HOPE BSG now available in our online store!

Whether you are a self-paced learner and want to take each step of the process at your own rate, or you just want to learn more about the world of business financing and how to take your business to the next level - this book is for you.

One more thing...

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