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Alison Griffiths Posts

How to build your credit while you are in college

Most people work really hard to get into a good college, so with that in mind it’s important to remember that you’ve got to work just as hard on your finances if you want to achieve financial freedom. The best way you can do that is building a credit score, with a credit card. But don’t fret! It’s nowhere near as hard or scary as you might think. Each of us, including your parents, has a credit history, some a lot worse than others. To avoid getting yourself a bad history, take a few minutes now to read what will help and hinder your score.

Credit Cards Aren’t For Everything
The first mistake most college students make when they get their brand new card is throwing a party and charging all the supplies to the card. I don’t even need to tell you how much of a bad idea that is. Just because you have a shiny piece of plastic that lets you spend a ridiculous amount of cash, you don’t actually have, doesn’t mean you should. Ever. Never. Ever. One can never improve their credit line by doing this. You want to save the card for regular purchases, like when you shop for food at a grocery store. Use it then. Read more here.

Don’t Impulse Add
Say you get to the checkout at the grocery store and lay your eyes on a nice chocolate bar and can of soda. Ask yourself, “Would I have bought this before I had a never ending supply of money?” When your answer is no, make that decision to not buy the items. Teaching yourself this impulse control, with regular purchases, while in college can be hugely advantageous to not being insanely in debt and thus having a bad credit score by the time you’ve reached your mid thirties.

Use Money You Have
Most banks allow you to open up “online savings” accounts. Open one. After you’ve made a purchase on your card, transfer that amount to this online savings account. This way when it comes time to pay the bill, you have money you already reserved just sitting there waiting to pay the bill. Paying your bill in full helps your score, while paying just the minimum does not.

Don’t Use Funds You Haven’t Got
I can’t stress this step enough. Put money aside to pay off the bill. Do it. Remember we’re trying to build your credit score so banks are happy to loan you money, for a house, a car, a business, etc. If you make the mistake of thinking this month you’ll just make the minimum payment and “pay the rest” next month, you’ll quickly fall into a bottomless pit you can’t climb out of. Not paying your bill off each month makes a problem for the tomorrow you. Take charge and control of the today you and make the responsible decision.

The Real World
As most college students get some assistance from their parents, from making car repayments to buying appliances, try and take charge of these things yourself. As silly as it may sound, if you’re paying off a car loan under your parents’ name, or they are happy to keep helping with college bills and living expenses, ask them to transfer the money to you instead. Tell them you want to establish a good credit history early on and become responsible by making the payments under your name. Banks love people with long histories of making consistent, on-time payments. So lots of little bills or bits and pieces here and there will see your score rise quickly.

Tip: Get a balance transfer card



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Money Management for Canadians

When it comes to money I’ve found there are two kinds of people, those who are good at spending it and those who have self control. Unfortunately for my other half, I fall into the good at spending it category. While at the start of our relationship she grew to love me for being so generous with my money, as our relationship has grown, well all my frivolous spending on life’s more enjoyable luxuries has become an issue, putting unwanted tension between us.

One day we were talking about what we both wanted from our future together and I realized I had to change my spending ways. Not just for her to have everything she desired from life, but for me to achieve my dreams too.  Even if those dreams of ours were just so we could afford to send our kids to a good school, a good college and they wouldn’t resent me for missing out on a good childhood. I knew this big life change wasn’t going to happen overnight, especially not with the current lingering debt I’d amassed over the years. Time to do some serious reading on money and debt had arrived at my doorstep.

After a few weeks of reading how others had helped their own financial situations, I came across a helpful story by a woman who said she’d completely changed her life, for the better. Her story initially struck me as it had many similarities to my own life escapades, from frivolous spending to a mountain of debt. As I read more, she shared photos of her life and her finances, it was hard not to feel bad for her at first. I continued to read on and just a bit further down she shared a really moving photo. In the photo she was in tears and holding a hand written list.

She told us how her cat, Milly, had been hit by a car and broken his little hind legs. The driver didn’t stop and just sped off. This brave woman went on to say that because her life was in such a bad shape, she just didn’t have enough money to let the vet operate on 8 year old Milly. She had to make the heartbreaking decision to do what was right for him, in relation to all the pain and suffering he was enduring, she put him out of his misery.

I’m not going to lie, reading that story, looking at that photo, I got all teared up. It made me so sad to think someone like me, didn’t even have the finances to save their best friend. As sad as it was, I kept reading. This powerful woman stated she was using going to use the death of Milly as a chance to change her life, so Milly didn’t just die for nothing. She showed us what she’d written on her list from the photo. The list title ‘Personal Goals:’ On the very top of the list she’d written:

  1. Managing your money and staying out of debt so you can afford medical bills. Read more @ Life on credit

This empowering story moved me so much I simply had to share it with my other half. Letting her see I was so emotional, so moved by this tragic but life changing story, proved to her that I not only genuinely cared about our financial future together, but I wanted to change, to do something about my bad spending habits. So we put into place a plan and stuck to it. Every time I felt like making a purchase I would say to myself, “What would Milly think?” I was amazed at how well just this one simple technique worked.

A few weeks passed and she could see I was serious, so she booked us a debt consolidation appointment. She was so grateful that I was really making the effort to take our relationship to the next level, she even co-signed the debt consolidation papers with me! Telling me that just because I spent all my money on her, didn’t mean the debt was all mine to face alone. I love this woman.

Now a few months later, all my finances are on the mend and we have a joint a savings account we can see growing. I whole heartedly recommend, to anyone walking in my shoes that wants to truly change, please, for your own future, use debt consolidation as a way to reduce and eliminate your debt. You’ll notice your quality of life improves dramatically once your finances are taken care of. And don’t forget any time you want to make a purchase, ask yourself, “What would Milly think?”

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