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20 Mini Money Hacks To Save You A Lot

20 Mini Money Hacks To Save You A Lot

If you’re like most people, you’d be happy to have more money, either to pay off debt, invest, or spend on items and experiences you love. I’m not a penny pincher but I do like easy, practical tips to save money and increase my net worth. Here are some money hacks to save you a lot and help you slowly achieve your financial dreams.

1. Hide your money…from yourself.

Begin delegating a portion of your paycheck, even if it’s a very small amount, toward savings. Have this amount automatically transferred from your paycheck to an account you can’t conveniently access, so the money never enters your checking account and you are less likely to spend it. Tricking yourself into thinking you have less per paycheck to spend will help you save.

2. Forget about late fees.

Automate your bills whenever possible. This will help you avoid those dreaded late fees.

3. Tell your raise where to go.

When you get an increase in pay at your job, automatically have that extra amount per pay period go into savings. You won’t miss it if you never see it in your checking account in the first place.

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4. Learn the language of money.

401K? Roth IRA? ROI? Cash flow? Net worth? If you want to understand savings, learn the language of money. Having an understanding of basic financial terms will help increase your sense…and cents.

5. Save for an emergency fund.

Plan for the unexpected. Year after year, there will be unplanned events that cost money, ranging from urgent home repairs to unforeseen medical expenses. Having money set aside can help greatly when those surprises occur.

6. Build multiple streams of income.

Gradually building multiple streams of income will give you access to more money to save.

7. Track your spending.

Record every dollar you spend for one month. Analyze your findings and determine if you can cut back some unnecessary spending in order to boost your savings.

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8. Have an accountability partner.

Find a friend on a similar mission to save money, and hold each other accountable. Having someone to encourage you along the way can make a big difference in attaining your savings goals.

9. Forget about the Joneses.

Quit comparing yourself to others. First of all, you don’t know other people’s financial situations; just because your coworker bought a new vehicle doesn’t necessarily mean he had the money to buy it. Secondly, trying to uphold an image of wealth may cause you to spend way more than you should, and therefore actually decrease your long-term savings. Focus on yourself and your situation, and try to do better than you did last year.

10. Don’t buy what you can’t afford.

Just because a store is offering an item for “% money down for 3 years” doesn’t mean you should buy it. And spending money on items for sale is still spending money.

11. Use cash when shopping.

Although some people use credit cards, diligently pay off the balance each month, and rack up airline miles, many of us are not as disciplined. For many of us, carrying cash when shopping is a smarter choice. It’s harder to part with cash; seeing money physically leave your hands is more difficult than swiping a card. Research shows people spend more when they buy using credit cards.

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12. Be mindful of the company you keep.

Jim Rohn, a businessman, is quoted as saying, “You are the average of the 5 people you spend the most time with.” Do you feel pressured by your friends to spend recklessly? If your goal is truly to save money, hang out with like-minded people.

13. Ask questions.

You thought an item was on sale, but it didn’t ring up on clearance in the checkout aisle? Ask. Can’t remember the balance you need to keep in your checking account to receive free checks? Ask. Not sure you understand your retirement plan at work? Ask. Many people are scared to ask financial questions, but taking an active interest in your finances is essential for you to take control of your money.

14. Embrace second-hand items.

If an item isn’t going to make you money, it might be worth purchasing it second-hand. If you’re crafty, many items can be refurbished for minimal cost. And embracing hand-me-downs for kids’ clothing can save you thousands of dollars.

15. Study yourself.

Do you overspend when you shop online? Book extravagant vacations when stressed? Are you a sucker for a latte every morning? It’s impossible to change your habits if you don’t know what they are. Studying your habits and what triggers you to spend money in the first place is a fundamental step to saving money.

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16. Take advantage of the retirement match at work.

If your employer offers free money, take it. All of it.

17. Befriend your tax accountant.

Tax accountants are a great source of information for saving money. Be sure you understand the tax benefits that accompany charitable donations and running a home-based business, if you have one.

18. Cut transportation costs.

Transportation is one of the biggest monthly costs for many people. Riding bike or walking to work, if you live close enough, can save you a lot of money plus helps the environment. If you drive your car to work, commuting with a friend can significantly decrease your costs, and make the ride more enjoyable.

19. Involve your whole family.

Talk to your spouse and children about your financial goals. Kids can help search for best prices on upcoming purchases. Also, you can encourage each other to cut costs around the house by developing eco-friendly habits including turning off lights when leaving a room. Involving your family members empowers them and they will likely want to help save, especially if they know a reward is coming for them.

20. Reward yourself.

As you reach savings milestones, reward yourself. For example, after you have a $1,000 emergency fund saved, treat your family to a special weekend. Kids’ college saved for? Celebrate with a family vacation. You feel you’ve stashed enough for retirement? Delight in that once-in-a-lifetime experience you’ve been longing to take part in. Diligently saving money can be tough, and it’s important to relax a little and treat yourself for excellent progress.

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Dr. Kerry Petsinger

Entrepreneur, Mindset & Performance Coach, & Doctor of Physical Therapy

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Last Updated on March 3, 2021

Top 6 Hacks on How To Build Credit Fast

Top 6 Hacks on How To Build Credit Fast

When done right, credit can open doors and provide a lifestyle that you never imagined possible. Anything from flying around the world in first-class and staying at 5-star hotels entirely for free to starting and scaling businesses. It’s also an area where it can be easy to make mistakes and hard to recover from without the right information. In this article, I will break down how you can build credit fast so you can open doors in your life!

When you start to think about improving your credit score, you have to answer three important questions first:

  1. What are you trying to achieve by having good credit?
  2. What really is your credit score?
  3. How is your credit score calculated?

What Are Your Credit Goals?

Having a high credit score is great, but ultimately, your credit score is a tool in your personal finance arsenal that you can use to open doors. The first question you should ask yourself is “what will a higher credit score do for me?”

I work with many clients directly at Freedom Travel Systems to help them fully leverage the power of their credit so they can enjoy free luxury travel and start or grow their business. For my clients and many others, here are a few common goals many credit-savvy individuals have:

  • Free Travel – getting access to travel rewards cards so you can get tons of free travel and even get first-class flights, hotel suites, and luxury amenities all for free
  • Start/Grow a Business – getting access to business credit so you can start and grow a business with 0% or low-interest financing that does not impact your personal credit
  • More Approvals – getting approved for credit cards, auto loans, or mortgages so you improve your lifestyle or build your personal wealth
  • Better Rates – getting better interest rates on any loans you get will save you tens or hundreds of thousands of dollars over your lifetime

What Is Your Credit Score?

Your credit score is simply a 3-digit number that tells potential lenders how reliable of a borrower you are. Keep in mind that lenders, such as banks and credit issuers, stay in business by lending. Their goal is to find the people that have the highest probability of paying them back and they assess this primarily through your credit score.

What’s important to know is that there are two major scoring models used to create your scores. These scores are your FICO Score and your Vantage Score. More than 90% of lenders rely on your FICO score, so when you are checking your score, you want to make sure you see the actual score that the lenders use. And no, checking your own score does not hurt your credit!

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Then enters the 3 main credit bureaus, which are essentially agencies that collect credit information on you. These are Experian, Equifax, and TransUnion. These bureaus then apply a scoring model to the information they have on you and voila, you now have a credit score! Bureaus sometimes have different information on your report, which is why you will see 3 different scores.

How Is Your Credit Score Calculated?

Next, you need to understand how the credit score is calculated. This will provide a high-level overview, but there is more detail to each of these factors alone.

There are 5 main factors in the calculation of your credit score:[1]

  1. Payment History (35%) – This refers to the amount and percentage of on-time payments you have.
  2. Utilization (30%) – This is how much revolving credit you use as a percentage of the total revolving credit issued to you. Note that installment loans like auto-loans or mortgages do not count towards this while credit cards do.
  3. Age of Credit (15%) – This refers to how long your credit history is, primarily your “average age.”
  4. Credit Mix (10%) – This is how many different types of credit you have. For example, there are credit cards, student loans, auto loans, mortgages, personal loans, and lines of credit.
  5. New Credit (10%) – This primarily refers to how many inquiries you have for new credit.

Top 6 Hacks on How to Build Credit Fast

Now that you’ve learned more about your credit score, here are the top 6 tips on how to build credit fast.

1. Don’t Close Your Cards

Many of us are taught that getting a new credit card is bad and having too many will hurt your score. In fact, the opposite is true. You want to have many positive accounts reporting to your credit report. Logically, this makes sense because having more accounts with more on-time payments shows that you are a more reliable borrower. You just don’t want to open too many accounts too quickly since that can hurt your “new credit” factor.

Instead of closing a card, what you should do is simply keep the card open and put a small subscription service on it monthly. Why? Because each time you have an on-time payment, it helps build your payment history, the largest factor of credit.

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If you close a card, you are missing on potential on-time payments, age of credit, credit mix, and also lowering the total credit lent to you so your utilization percentage may go up. If you have an annual fee on a card you don’t like, see if there is a “no-fee” version of the card and downgrade it to that card rather than close it.

2. Use Autopay to Never Miss a Payment

This one is easy to do and easy not to do. Go into your credit card account and set up auto-pay. You can choose to either pay the full amount, the statement balance, or the minimum payment. Personally, I like to set up autopay to pay the minimum payment so that I never get a late payment. Then, I go in and manually pay the statement balance each month by the payment due date.

This helps me personally see my spending and have a manual review of my charges while ensuring, not have to pay interest, and still get the benefit of making sure that I never miss a payment if something goes wrong. Think about it, if you were to have a medical or family emergency, the last thing you want to experience on the back end of that is a late payment and a drop in your credit score. So, set up autopay.

A pro tip is to update your payment due dates across all bills and accounts to be the same so that you can “time batch” the process and have one time a month where you sit down and handle your payments. You can do this by simply contacting the credit card company or doing it online.

3. Get a Credit Limit Increase to Lower Your Utilization

One of the factors that get most people into trouble is using too much of their allotted total credit. Their utilization, which is the percentage of revolving credit they use, goes up, and their score tanks. You should aim for less than 30%, and in an ideal world, less than 10%.

To help drive this down, call your credit issuer and ask for a credit limit increase. This will help increase the total amount of credit extended to you and drop your utilization. Oftentimes, they will only give it to you when your utilization is fairly decent (less than 50%), so work to pay it down as best as possible before doing this. You should ask if the credit limit increase will give you an inquiry as some banks do a hard inquiry while some do not. If they do a hard inquiry, it is often better to just get a new card altogether or pass.

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4. Add Authorized Users to Increase Your Age, Add History, and Decrease Utilization

This is one of the best hacks out there as it helps with the 3 biggest factors of improving your credit: payment history, utilization, and age. This concept is also called “credit piggybacking” where someone with great credit history on a card adds an authorized user (AU) to the card. When the AU gets added, the credit history and information from that card are added to the AU’s report!

This is extremely helpful for people with young credit because it can drastically increase your age of accounts. It can also help many people with limited payment history or high utilization.

Please be aware that anything good or bad on that account you are added to will show up on your report. So, you want to avoid any cards with negative marks or high utilization. That being said, it is a one-way street, so nothing that you do with your credit can impact the primary account holder.

This is so valuable that there are companies that sell AU accounts. I always suggest starting with your family and/or personal network first as there are likely people in your network that can help!

5. Space Out Your Application Strategy

New credit is the smallest factor of credit, but it still matters! If you are looking to build up your credit, you should space out your applications. If you apply for too much credit in a short period, it looks very needy in the eyes of the lenders. For this reason, it is safest to apply for cards slowly over time unless you have really studied more in-depth how this works. A good rule of thumb is once every few months.

If you are in the credit game for the hopes of getting tons of credit card points for free travel, which is what I personally take full advantage of, you will want to familiarize yourself with the different bank rules and card promotions to put together the right application strategy. Applying blindly will waste inquiries and leave tons of benefits on the table!

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6. Review Your Report for Negatives

If you have any negative or “derogatory” marks on your credit report, this will hurt you drastically. They do impact you less as they age, however, you should review your credit report to ensure that everything on your report is 100% accurate and actually yours. Wrong information ends up on credit reports all the time and you will want to take personal responsibility for making sure it is accurate.

The “burden of proof” is on the credit bureau to confirm that any information on your report is in fact accurate. If you find inaccuracies, you can dispute that with them, or you could consider getting a credible credit repair company to help you.

Final Thoughts

There you have it, the top 6 tips on how to build credit fast so you can get closer to reaching your goals. Now that you’ve learned more about how credit score works and how you can improve yours, you’ll hopefully be able to make better financial decisions and achieve your financial goals quicker.

More Tips on How to Build Credit Fast

Featured photo credit: CardMapr via unsplash.com

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