Save money and refinance.

5 Ways to Cut Your Monthly Expenses

Save money and refinance.
Little changes make a difference!

Ever notice how your monthly expenses always seem to equal whatever salary you’re making, even after you get raises? The phenomenon is called “lifestyle creep” and it can keep you from reaching all kinds of financial goals, from paying down debt, to saving for retirement. One way to get lifestyle creep under control is to have any future raises you get direct deposited into savings – like a 401(k) account through your employer, or an Individual Retirement Account (IRA). But here are five things you can do right now to cut your monthly expenses.

  1. Make a Budget
    The first step toward cutting expenses is to make a budget, so you know exactly where your money is going. Start with major categories, like rent or mortgage, utilities, transportation, meals, clothing, and entertainment. Then break it down even further to ferret out items that are ripe for reducing. Many people, for example, are surprised to learn just how much they pay for pricey lattes and snacks from restaurants and vendors that would cost a fraction of that amount if they were made at home or purchased at a grocery store.
  2. Lower Your Mortgage Payment
    The biggest monthly expense for many people is their home mortgage. If you haven’t examined that loan since you bought your home years ago, it’s quite possible that you could save a lot of money – both now and over the life the loan – if you refinance at a lower interest rate. To know whether refinancing makes sense, you’ll need to add what you’ll spend on closing costs into the calculation of your new monthly payment.
  3. Get an Insurance Checkup
    If you have a car, you absolutely must have car insurance. But it pays to shop around periodically to make sure you’re getting the best deal. If you have a decent emergency fund on hand in case of an accident, one way to lower your premiums is to increase your deductible. Also be sure to examine your policy for “extras” you may not need. For example, you could be paying for roadside assistance both through your insurance policy and through AAA.
  4. Examine Your Auto-Payments
    Putting your regular bills on auto-payment can be a really smart way to protect your credit rating by ensuring you’re never late with a payment. However, if auto-pay causes you to keep paying for items or services you don’t really need or use, it’s no bargain. A few common culprits include unused gym memberships, subscriptions to magazines that aren’t read, and cable or satellite TV plans that include loads of premium channels that are rarely watched.
  5. Cut the Cord
    If you’ve already ditched your land line, good for you! If not, doing so is one of the quickest and most pain-free ways to trim your expenses. Most all of us have our cell phones with us all the time anyway, and if you really like the feel of a traditional phone in your hand, a VOIP (Voice Over Internet Protocol) plan that provides phone service over the Internet is a lot cheaper than traditional land line service.

Credit Report

6 Confusing Things About Your Credit Report

If you’re not used to reading them, credit reports can make about as much sense as a restaurant menu printed in a foreign language. At least in a restaurant, you can point to what someone else is having. But if you don’t know how to read your credit file, you could make mistakes that could lead to your financial life being harder than it needs to be.

Here are some common misinterpretations people make about their credit reports and how to avoid them.

  1. They have too many student loans listed for me
    When student loans are listed on credit reports, they are often broken up into individual loans for each semester you took out a loan. Of course, you still want to make sure all the loans are yours, but don’t be surprised if you see a lot of loans listed under the same provider.
  2. I must be a victim of ID theft because someone else’s name is on my report
    When companies like Equifax, Experian and TransUnion compile your information, they look to gather up all financial information that is being reported for you. In doing so, they may accidentally confuse you with someone with a similar name or other bit of identifying information. This can result in that person’s name, address, date of birth, Social Security number, etc. being mistakenly listed on your credit report. You can always have this kind of information removed from your credit report by disputing the information at the website of the bureau that is listing the information. You can access the website for the individual bureaus listed above by simply adding “.com” onto the name of the credit reporting agency.
  3. I paid that collection account, it shouldn’t be on my report anymore
    Collection agencies aren’t required to remove a collections account from your credit reports once you have paid it. All they are required to do is list that the account has been satisfied. Negative accounts like these stay on your credit report for seven years from when the account first went delinquent with the original creditor, whether they are paid or not.
  4. My credit score is missing
    The credit reports we are all entitled to by federal law – available at www.annualcreditreport.com or by calling 877.322.8228 – do not come with a credit score. There is currently no law that automatically provides everyone with a free score. FICO is the company that provides the score most commonly used by lenders. You can purchase a score from them at www.myfico.com.
  5. My date of birth and address are part of lending decisions
    When you access your credit reports, you will see that some of your personal information is listed in addition to your financial data. For example, the report may list where you live, when you were born, and who you have worked for recently, among other things. You needn’t be worried that this is being used against you when a potential lender is looking at your reports, though. It is illegal for a lender to use age or address when making lending decisions and these pieces of information are not calculated into your FICO credit score.
  6. All these inquiries count against my score
    When someone other than you looks at your credit report, it results in what is called an “inquiry” being put on your credit report. If you’ve ever looked at credit reports, you may know that there can be a whole lot of them listed at any one time. Keep in mind that the only inquiries that are ever factored into your credit score are ones that happened in the past year (even though they stay on your credit report for 2 years) and the ones that were for the purpose of you applying for credit or financing some other type of financial contract. The other types of inquiries are not counted against you.

Establish good credit

5 Ways to Establish Credit

Establish good credit
Establish good credit today!

When it comes to getting a credit card, qualifying is actually one of the easiest parts of the process. Establishing a positive credit record, however, requires dedication and patience.

Whether you are new to credit or are trying to “clean up” past mistakes to reestablish a favorable record, you may encounter a frustrating paradox: you must have and use credit to create a credit history, yet many financial institutions are reluctant to extend credit to someone without an established record. But don’t despair – there are several good remedies for both situations.

A Secured Card
An excellent start is a secured credit card. You are granted a credit line based on a percentage of a cash deposit you make to your financial institution. Because deposits are usually low, so too will be your credit limit. Application and annual fees for secured cards are often higher then those associated with unsecured credit cards.

The Retailer’s Card
Consider a local retailer’s credit card. Their criteria is often less rigorous than larger credit issuers. Be sure they subscribe to the major credit reporting agencies though – if not, you won’t be establishing a credit history.

A Co-Signer
Another option is having someone with a positive credit record co-sign an account for you. This requires a great deal of trust on the part of the co-signer – if you fail to pay, he or she is responsible. You could end up jeopardizing a relationship as well as a credit record.

Review Your Credit Report
Finally, if you have damaged credit, you might need to rectify the past as you’re building your future. Paying old debts and correcting errors on your credit report as soon as possible might be the way to go.

Pay off Your Debts
Once you have a credit line, establish a good history by using it responsibly. Keep balances low, always pay on time, don’t pursue unnecessary credit, and stick with a few good credit instruments of various types.