Shopping with a Strategy Gives you the Advantage
Who doesn’t want to get the most for their money? When you score a deal, you feel good about the money you’ve saved. That’s because shopping isn’t just something you have to do, it can be something you enjoy, too. Smart shopping habits can help you save money while getting the things you need and want. Reckless shopping, however, can lead to debt you just don’t need. Too much debt can strain your finances and may adversely impact your credit score.
Making smarter shopping decisions doesn’t have to be difficult. A few simple steps can help you manage your money and take control of your credit.
Step 1: Build a budget.
In 2014, 61% of Americans admitted they don’t have a budget and don’t keep close track of their spending, according to the 2014 Consumer Financial Literacy Survey. Yet a budget can help you control spending, save more and feel more secure about your monthly finances. Getting started is easy. For one month, track every penny you spend – on everything from a cup of coffee at the gas station to your rent or mortgage payment. Then plug that information and your total monthly income into a budget worksheet. The National Endowment for Financial Education offers interactive budget worksheets on its website to help you refine your spending and saving goals and strategies. Having a budget allows you to manage regular expenses and even plan for some “mad money” to spend however you like during the month.
Step 2: Pay yourself first.
Your personal budget should include money you pay to yourself in the form of savings. Ideally, everyone should have an emergency fund and retirement savings. If you have kids, you may also be saving for college. Setting aside just $10 can add up over the course of your working life. Financial experts say you should treat your savings like any other bill you must pay every month. The difference is, instead of the money going elsewhere, paying your own savings accounts keeps the money in your pocket and allows it to grow.
Step 3: Control your debt and watch your credit.
More than a third of American adults carry credit card debt from month to month, according to the Financial Literacy Survey. For more than 35 million people, that amount tops $2,500 each month. Avoiding too much debt requires you to use credit wisely.
Review your credit report regularly; it’s the best snapshot available for understanding your credit status. Plan ahead for big purchases – such as a car, home or major appliance – and use online calculators to help you understand the potential credit impact of making these purchases with credit. Pay off credit card balances right away and avoid using credit for everyday purchases like food or things that don’t provide a long-term return, such as a vacation.
Fortunately, you can find plenty of online resources to help you learn about credit and how your spending can affect it.
This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from ConsumerInfo.com, Inc., an Experian company. © 2014 ConsumerInfo.com, Inc. All rights reserved.
