In today's economy, so many people are worried about their credit score. They believe that their credit score is incredibly important. However, if you manage your finances properly, you may never need a credit score. I know this sounds crazy... but relying on a credit score to handle your finances means that you are living beyond your means.
Join the Revolution-Live Debt Free
Imagine if our nation had not overextended itself prior to the recession. What if companies minimized the amount of borrowing that they did? What if your family no longer carried $10,000 in credit card debt or more? What if we spent what we had and not a penny more?
It may sound unfavorable, but when normal means you are broke, why do you want to be normal? That is the question that Dave Ramsey asked many people. He encourages people to live debt free. The concept is not a new one. Even in biblical times during the 7th year all debts were forgiven.
If we look back in history to and learn from our past, let us look at the great civilizations of the past. The longest lasting empires and most advanced civilizations in our history did not allow the levels of debt that our society incurs everyday. Have we forgotten the successes of the past? Have we forgotten the wisdom?
Choose to Be Different
How you manage your debt is up to you. But, if you want to establish your credit why not start by only spending the money that you make. Here are a few tips to help you do that.
Step One-Spend Your Money on Paper Before You Spend It at the Store
I know that keeping a budget can be difficult. However, if every time you get paid, you keep a budget or log of how you're going to spend every penny, you will ensure that you do not spend more than you have. Basically, you sit down with your paycheck and a piece of paper. On each line you write what you owe and what you were planning on spending for certain categories. Then, you total up all of your spending and make sure that it equals how much is in your paycheck. If there is money left over, you need to add a category for where that money will go. A great category if you have extra is "savings".
Step Two-Check Your Budget Every Week
If you are anything like me, you can find time to watch your favorite TV show every week. But, you struggle to find time to check your financial situation every week. By setting a regular appointment to check your finances, you can make sure you are staying true to your budget. It does not have to be an involved balancing your checkbook process. You just need to make sure you are staying on budget. By doing this every week, you ensure that you never get too far off track.
Step Three-Create a Heaven-Only-Knows Category
Okay, we know that we can not be perfect at this system. If you were already perfect at this, you would not be reading this article. So, as a way to give you some flexibility, create a HOK category. The HOK category is your indiscriminate spending money. You can use this for what ever you want. And only Heaven will know what it was used for. Do not overspend. But, feel free to use your HOK money however you see fit.
By using these three steps you can be on the road to a well-established credit and a financially stable situation.
If you are looking for additional ways to manage your finances in a responsible way, read more of Jacob's articles by clicking on his Author link below.
A few others you may find of interest are Dave Ramsey, MotleyFool, and of course, one of my favorites, a book entitled: The Richest Man in Babylon.
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