Unfortunately, we don’t always learn about how to handle money, let alone how to be financially successful, when we are young. But, the truth is, there are some basic things that need to be understood before we actually have to deal with our own finances. In other words, we shouldn’t be adults and hear about mortgages, financing, interest, and balancing a checking account for the first time. Being at a loss about money jeopardizes our financial futures and makes living securely much more challenging. As such, here are a few financial success tips that every woman needs to know.
Always Know Your Credit Score
Your credit score is a figure that credit agencies use to determine how trustworthy you are, as far as your money and accounts. Effectively, it rates your creditworthiness, which lets creditors know if they should lend you money or not. A high credit score shows you have a good financial history that isn’t littered with missed payments and too much debt.
This score, which is monitored by three agencies (Experian, Equifax, and Transunion) matters because it determines your ability to get loans for important items like a home, car, or education. Even cell phone companies run credit checks to be sure you can actually afford their contracts.
If your score is low to mid-range, you will ultimately pay higher interest to obtain these items if at all. I highly recommend that you monitor your credit score regularly with a site like CreditKarma. They also offer tips for raising your score and cleaning up mistakes on your report.
Clear Debt as Soon as Possible
Even though most of us use debt to some extent, it can be cleared and kept to a minimum. Understand that not all debt is bad and does not necessarily hurt your future. In fact, owning a home, a car, and other assets can help build your credit.
That said, there are some types of credit that can pull down your score and keep you from moving up financially. If you look at some of the DTSS U.S. reviews, you’ll see that there are plenty of organizations to help you make a plan to clear your debt. It’s best to tackle these debts as soon as you can, especially if you plan to buy a home or need money for other ventures.
This lesson should be learned as people will do everything to avoid debt. While this can be good, it means you avoid taking advantage of good debt. For example, you don’t go to college because you don’t want to have a student loan and end up in debt. But, this is actually so beneficial in the long run as you’ll be more qualified to get better-paid jobs! Don’t assume that all debt is bad, and don’t assume that you can’t get out of it.
Don’t Keep All Your Money in a Checking Account
A checking account (transaction account) is the most common type of bank account. It lets you deposit money and make withdrawals as you please. This is the type of account most of us use to pay for our monthly expenses like rent, food, clothing, etc. It’s also where a lot of women keep all of their money.
Don’t do this! Keep only the money you need to live in your checking account, but put the rest in a savings account or learn how to invest it. Why? Checking accounts leave your money easily accessible, making it vulnerable to impulsive purchases. Additionally, they give you nothing back in interest, whereas a savings account does. By letting money sit in a checking account, you lose out on any financial growth potential.