Credit Building Hacks for the New Year

Credit Building Hacks For the New Year - Chic and Domestic
Credit Building Hacks For the New Year – Chic and Domestic

*This post contains referral links. I may be compensated for your clicks!*

My self lender account has been nothing short of a success for my credit. I was able to talk about just how helpful it was for my credit in my How To Build and Boost Your Credit post from my Purchasing Your Family Home series. With so many people gearing up to face their finances head on in the New Year, I’m getting more and more questions about not only savings and budgeting, but also ways to increase credit scores.

I don’t always get to talk about the importance of good credit and your credit scores, but because I’ve been blogging through our family home buying process the topic has actually come up a lot. I know that so many of my lovely subscribers (Are you one? Because you should beee!) are interested in purchasing their own family home in the future, so why not talk about it!?

Check out my post “7 Steps to Purchase Your Family Home” here!

So, a few things for the people who don’t know …

Self Lender is an online credit building CD account. It helps with boosting your credit score by reporting on time payments (as long as your payments are ON TIME) but the best part about it is how it holds your monthly payments for savings and distributes it back to you at the end! You essentially get a credit boost for an installment loan, but you’re really just paying yourself monthly, and tucking away your own money for savings. That’s a WIN.

You also don’t get a ding on your credit report for an inquiry, and it starts reporting almost immediately. I personally saw a credit increase of 50 points within the first 30 days of reporting, and 5 or 10 point raises after that. They have a few “loan” options depending on how much you can afford to save every month, and how quickly you plan to reach your savings goal. One is for as little as $25 a month.

A few more things to be aware of …

Now, because self lender reports as a (hopefully positive) installment loan on your credit report, if you are planning to make a big purchase sometime soon, like a house or a car, this “loan” will be viewed as a positive revolving debt on your credit report. No problem though, I would just recommend doing this and completing the CD before running your credit for your big purchase. You do have the option to pay in full at any time and close out your self lender account.

Overall, I can’t recommend self lender enough! I’ve been working really hard on my credit over the last year or so and seeing that big jump that simply trying out self lender has given me was well worth it. I chose to do the $25 option this time, but I actually plan to open another Self Lender CD with a larger monthly payment once this one is completed. You can honestly never have enough savings, and any boost on my credit report is a winner for me.

If Self Lender sounds like something that you’d be interested in trying in the New Year, check out my referral code and receive $10 towards your personal savings here!

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How to Create a Household Budget

Creating a budget that works for you, Where to start, and What it takes to make it last.

With the start of a new month, it feels like the perfect time for a fresh start with everything. It’s like a breath of fresh air. A clean slate. Maybe last month your finances weren’t quite where you wanted or needed them to be. That’s fine, no problem. That just means it’s time to create a household budget that you can stick to.

Most people think budgets suck! “Eww, what’s a budget?” “Budget? HA. We’re too rich for a budget.” WRONG. No matter how much money you have coming in, if you can’t account for every dollar you’re spending, you probably either aren’t spending it wisely, or you my friend are more than likely spending money that you don’t really have. Instead of viewing budgeting as a negative thing, view it as more as a critical tool to help you reach your financial goals.

Your finances are extremely important, but budgeting can, and more than likely will be a trial and error experience. What works for you may not work for someone else. Everyone’s pennies are different, and everyone’s expenses vary. The only things that will be the same for everyone is that everyone will have expenses. Unless of course, you’re just living off of the land, creating your own textiles, sewing your own clothes, and walking or riding a bike wherever you need to travel. And, everyone will need some sort of income to pay those expenses.
Now is the perfect time, now more than ever, to find what works for you and really start to concur your finances.

What a Budget Does

Budgets give you the tools you need to plan for how you will be spending over a period of time (usually month to month), how you can or will be saving over a period of time, and it can also be used to keep track of your spending patterns so you can start to see exactly where your money goes.

Where to Start

For most people, finances are scary, but it’s vital to keep your financial house in order. At some point, you need to think of your family finances like a business. You need to be detailed, accurate, and as thorough as possible. If you have your last 2 or 3 months of income statements, bank statements, or copies of your bills, start there. Gather this information to review so you can get a better idea of your average income, and expense numbers.

1. Record your average monthly income
Record the average monthly take home pay for your household. This is where being detailed and thorough comes in handy. If you have your last few paystubs or bank statements, this should help to give you an average number of what you’re bringing home per week, biweekly, or monthly. Use this to determine what your total monthly income number is, because this is what you’ll be using for your budgeting since you’re recording expenses on a monthly basis.

2. Create a list of household expenses
Now that you have a clear idea of what money you have coming in, create a list of household expenses. Everything that you can think of. Don’t just include household bills, (mortgage payment, car payments, auto insurance, groceries, utilities, entertainment) and then forget to include expenses like your actual household items. Cleaning supplies, sponges, rags; if you change them out monthly, toilet paper, paper towels, all of these things are also considered household expenses, because these are things that you will inevitably need in your home every month.

3. Categorize your list of household expenses
Separate your expenses into two categories: fixed and variable. Your fixed expenses will be the things that stay relatively constant each month. Things that are usually a requirement to your everyday living like, rent or mortgage, car payment, cable/ internet, credit card payments if you have them. You won’t really find these expenses sporadically changing.
Variable expenses are your expenses that may change from month to month. Items like gas, groceries, entertainment, and even your grooming (hair, nails, haircuts) budget. These expenses may or may not be essential to your everyday living, but these are normally the things that are easiest to make changes when in need of cutting back.

4. Total your monthly income and expenses
After totaling both your income and expenses, you should have an end result that shows more income than expenses. This means that you’re bringing in an adequate amount of income to cover your monthly expenses. Pat yourself on the back, that’s great! This means that you can start using your excess money to use for a designated savings of your choice, and or extra splurges and entertainment. If your results show that your expenses are higher than your income, no worries. This just means that you’ll have to do some adjusting to your budget and expenses.

5. Make adjustments to your budget
If you have accurately listed all of your expenses, the end goal should be having your income and expenses either be equal, or have an increase in your income amount. If you happen to have increase in your expense number, you should look at your list of variable expenses first to either decrease costs, or cut them all together. You currently can’t afford it. Since these expenses are typically non-essential, it should be easy to find ways to bring you closer to your income number, whether that be decreasing your grocery budget, finding a cheaper hairstylist, or decreasing how often you’re getting your nails done. Another great thing to look out for when decreasing expenses would be things gym memberships and subscription services.

6. Review your budget (Trial and Error)
Now that you’ve created your budget, here is when the trial and error comes in. It’s important to go back and review your budget, weekly to make sure that you’re staying on track with expenses and saving, but you should also look over your budget again after your first official month using it. Sit down and compare what you planned for expenses, versus what you actually spent. This will help to show you where you did well, and where you might need to make improvements. If there is a large difference between what you expected and the reality, then you might need to increase your budgeted expenses accordingly. If there is a slight difference, that’s still okay. Trial and error. Just work harder throughout the next month to stay within budget. Soon you’ll be budgeting and spending like a pro!

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Saving Money and Headache This Christmas Season

It’s the most wonderful time of the year, but also the most stressful! That’s right, I’m obviously talking about Christmas. Yes, I very well do know what month it is, but it’s never too early to start planning ahead. In fact, I like to get my act together 2 to 3 months in advance. Hence, the reason for this post. Christmas talk always comes early in my house, and for good reason. I’ve always been a huge plan in advance type of girl, and now being a parent has taken that into overdrive. My littles are still young, so I luckily don’t have the headache of hunting for Christmas list “must haves” that happen to land on every child’s wish list that year, but we all know just how busy the holiday season can get in general. I hate fighting other people, especially other parents for a parking space, aisle space, the last items on the shelves; it gets ridiculous! If I can save myself a little bit of headache, and a little bit (or a lot) of money, then of course I’ll jump at the chance to do that. So, here is my list of things that I’ve tried, and things that help me mentally and financially get ready for the holiday chaos.

• Saving VS Borrowing
Let’s start here by saying that you should NOT go broke for Christmas. Don’t let the season of giving overwhelm you, and have you giving too much of what you don’t have. Christmas should be saved and planned for, ensuring that you have a designated budget just for enjoying your holiday season. Start early, set your savings goal, and try your best to stick to it!

• Make a list of who you’re buying for
I’m big on giving, especially when I’m in the holiday spirit. It’s important that you know in advance who you plan to buy for this year. Maybe in your home you only buy for close family (Spouse, Children) or maybe you also do extended family (Spouse, Children, Parents, Nieces and Nephews) Maybe you also go so far as to join in on secret Santa at the office, and other Christmas gift exchanges, and all of this needs to be planned for. KNOW who you’re purchasing for this year to help you plan accordingly.

• Create a budget
One of the most crucial parts of not overspending with anything, is creating an allocated budget for everything. Once you decide who you plan to purchase gifts for, it’s time to start thinking about just how much you want to spend on gifts. It’s better to do this before getting everyone’s Christmas wish list, because it will be based on what you want to spend, and not what you feel like you have to spend. Plan for what you can afford, and not for what you desire. On average, your largest purchases go to your close family, but if you normally partake in giving outside of close family, you should also plan a budget for those gifts as well.

Once you’ve found a magic number to reach for your larger purchases, save towards reaching those goals first. Save weekly, or biweekly (Whatever fits you personally) and remember to be consistent. When you’ve taken care of saving for the priority of your budget, you should then start putting aside money for your extra gifts (teacher gifts for your kids, classroom goodies) or gift exchanges, and it also gives you a cushion if you do decide to splurge on something special for someone. At least you’ll know you aren’t cutting into your budget from some of your other household finances. As time goes on, and you’re weeks closer to really getting in the Christmas spirit (obviously not in the month of September) once you start getting a better view of what all you’ll be wrapping up, you should start planning what you’ll be spending on bows, wrapping paper, gift wrapping services, or gift bags because this too is an expense that should be budgeted for.

• Purge your old belongings
This can be done however far in advance you’d prefer, but when you’re getting into the mode of giving new, why not purge the old first. This can be useful to do for many reasons. I like to do it to actually make room for new things to come into our home, to possibly find things to sell for some extra money, and to also be able to give to those in need. Out with the old, and in with the new! Throw away any old and broken toys or damaged clothes, and donate any toys or clothing in decent condition. It is fun to get and give shiny new things for Christmas, but it’s important to remember that it’s not all of what Christmas is about. Spread some holiday cheer and give to someone in need.

• Buy gift cards
Buying small gift cards (But GOOD gift cards) is also a good way to save yourself some headache when it comes to saving and giving. I’ve found it to be a cool way to “save” a portion (a small portion) of my Christmas budget, because I’m a lot less likely to dip into my gift card savings. When it’s finally time to start shopping, you can use your gift cards that you purchased to places like Target, Walmart, or any of your local department stores to either purchase actual gifts and wrapping paper, or to give the gift cards as a gifts themselves. Just make sure to keep track of their totals by either buying gift card holders to write on, or adding your gift cards to envelopes and labeling them for better organization.

• Utilize Rebates and Online Membership Offers
My faaavorite way to save money and make money to use for Christmas shopping, is utilizing rebate apps and online membership offers. Ebates is great for saving money on your online purchases, and we all know that online shopping can possible be more convenient than in store shopping during the holiday season. I also use Shopkicks for an easy way to basically get free money towards store gift cards. It saves me a ton throughout the year, but right about now I like to save up my points for larger gift cards. How it works is, you basically receive “kicks” for simply walking into the store, or making purchases that you would be making anyway. If you’re interested in trying it out, you can also use my code (MALL659750) to earn yourself 250 easy kicks to get started! For my wrapping paper and stocking stuffer gifts, I normally use my accumulated savings catcher money. If you’re a Walmart shopper and you haven’t gotten hip to savings catcher, you’re completely missing out. Just shop how you normally would, and remember to scan your receipt when you’re done. If another local store has lower prices on any of the items you’ve purchased, you receive the difference to your savings catcher app, and redeem your money through Walmart pay, or a Bluebird card (My personal preference)

• Don’t fall for black Friday and Cyber Monday “Deals”
Black Friday is great, BUT, not every deal will be a deal on black Friday. It’s important to be strategic with your purchasing, and really track the average pricing of the items you plan to buy. Just because it has a red tag, doesn’t mean it’s really a red tag deal. I’ve seen people feel like they have to splurge and spend all of their money on that particular day, and in reality they only save about $10.

• Utilize free shipping
Last but certainly not least, when you plan to do online shopping, it’s beneficial to make larger purchases to qualify for free shipping. Also, if you aren’t already an Amazon Prime member, holiday time is the BEST time to invest in a membership. Sometimes it’s also possible to receive discounts on prime memberships that are worth looking into.

Saving Money and Headache This Christmas Season - Chic and Domestic
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Envelope Budgeting. How To Use An Envelope Rotation Budget On A Single Or Lower Income.

I’ve noticed a lot of people trying to attempt a newer way of budgeting; Envelope Budgeting! It’s a great concept where you allocate money to certain bills and expenses, and you ONLY spend money that you have allocated to that particular bill or expense. I think this idea is great, it definitely works if you actually remember to plan for every expense. It was hard personally during my first attempt, because I would remember all of my bills, but forget expenses like buying toilet paper and paper towels, remembering a diapers expense for the kids, but not the wipes. It was much trial and error, but from my personal experience, YES it does work.

My biggest concern with envelope budgeting is that a lot of what makes it efficient is having the money to basically get a month ahead on your bills. If you’re new to this and I lost you just now, let me explain. If on average, you spend about $200 a month on groceries, there would be an allocated $200 in your “Grocery” envelope to spend, and you would spend nothing more than your $200. The $200 would obviously have to be in the envelope ready to go when the first of the month comes along, so I thought, “Well what if you don’t have that option?” In order to make the normal way of envelope budgeting work you have to find a way to stay 1 to 2 months ahead of expenses. So lately, I’ve been trying to use a new way to budget our household expenses, while also using envelopes to help you stay on budget. So far, it’s shown to be a great way to stop overspending, without needing to always be a month or two ahead. This is obviously from my personal experience, and I’m not expert, but maybe doing this could also work for you! All you need is a few envelopes, and a general idea of your average household income.

1. Estimate your average monthly income
If your monthly income fluctuates, just use what you think is average, and remember to aim on the lower end. This ensures that you aren’t falling short in the long run. It’s better to budget with less.

2. Make a list of your various household bills in no particular order
Off the top of your head, list your monthly household expenses and try not to leave anything out. This is something that could also be doing in Microsoft Excel if you’d prefer to keep things digital. Things like Mortgage, Water, Electric, Insurance, Phone, Groceries, are obviously hard to forget, but don’t forget to estimate Household Expenses (Toilet paper, Paper Towels, Cleaning Products) Personal Upkeep (Haircuts, Nails, and other Grooming), and last but not least, personal fun money, and family fun money!

3. Take the items on that list and relist them in order of priority
This is best done on another sheet of paper so it can be separated into columns. What bills take top priority? Think of the expenses you would pay and take care of before anything else. Things like your Mortgage, Electric, and Water might fall higher on your list. Personal Fun Money and your subscription to your favorite beauty box might fall somewhere lower on the list for example.

4. Rewrite the list in order of due date
In column 2, you should rewrite your expenses listed in order of when they’re due throughout the month.

5. List the due dates for your expenses
For the sake of organization, make sure you either add a column to list the actual due dates for your expenses, or add the due date to you list in column two. When you look back on your budget, it will make things so much easier to have the actual dates listed.

6. Add a column for bill pricing/budget
In column 4, list the prices or preferred budget for all of your household expenses. If it’s an expenses that possibly fluctuates, it’s best to budget high to ensure that you aren’t coming up short.

7. Find the total of all of your monthly expenses

Add up all of your monthly expenses to get your magic number. Now, this is where you can really take a look at your current household budget for a second. If the total of your monthly expenses is more than your monthly income listed, then you should either focus on lowering your monthly expenses (You can start from the expenses on the bottom of your priority column) or find ways to increase your household income.

8. Divide your expense costs
Divide the cost of each of your expenses by 2 (If paid biweekly) and 4 (If paid weekly) to get the total that should be placed in your envelopes with each pay day.

9. Add that total to your envelopes weekly or biweekly
Label your envelopes to match your household expenses. Adding to your labeled envelopes weekly or biweekly as if you’re paying ALL of your bills every payday, ensures that by the actual due date of that expense the money has already been put aside for payment.

10. Rotate if need be
Now, because you’re budgeting using your income as it comes in, there could always be room for a shorter paycheck, or maybe the due date of an expense comes before you’ve paid all 4 weeks in full. Assuming you’ve hit that target number of income to cover your monthly expenses, and assuming your monthly expenses were all within the numbers that you budgeted for, it should be no problem for you to rotate your weekly envelope payments to suit your needs for what is due.

IF you find this necessary, you should make note of this on the envelope that you withdrew money from. Using your list where your expenses are listed in order of their due date, you should choose to draw from expenses due later in the month, or early in the following month to ensure adequate time to replace it. This keeps things in line to make sure that you’re only using money for your bills, while also not overspending.

With everything, this method is trial and error. The longer you keep at it (I’ve been doing it for 2 months now) you can see what works for your household personally and adjust accordingly.

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