Glinda Bridgforth is a best-selling author and financial expert. She recently conducted a seminar sponsored by Toyota Financial Services where she gave financial fuel tips, quick tips about managing money and reducing debt. I picked some key tips to share with you and include my own tidbits for each.
Tip 1: Don’t take payroll advances from the bank. Some banks allow their customers who have direct deposit to take an advance on the money that will be deposited. For example, if you have a direct deposit amount of $1,500 that will be deposited in your account and you take an advance of $500, the bank will charge a fee in addition to reclaiming the original advance amount of $500. The fees can be an interest rate of nearly 120%. That’s quite a steep price and one to avoid.
Tip 2: Ask these questions. When financing a car, ask yourself these questions first.
1. What is the value of my current vehicle for resale or trade-in? You can find this value on sites such as Kelly Blue Book and Edmunds.
2. What terms and size do I need?
3. What is my credit score and how will it affect my financing rate?
4. What is a simple interest loan? This means the interest compounds daily and starts compounding immediately.
Tip 3: Know what you owe. Get a handle on the debt that you have. One of the first steps to eliminating debt is to create a list of all the money you owe and to whom. Prioritize the list by the size and interest rate of each debt. Pay off the debt with the smallest amount first. This is important to keep your momentum and motivation high. A template to create a snapshot of your debt is available in the Grow Your Savings Templates and Kit.
Tip 4: Get your house in order. Tracking your spending and saving is crucial to building wealth. There are templates to track these in the Grow Your Savings Templates and Kit. Bridgeforth advises to strive to divide your income and spend it in the following way: debt 10%, tithe 10%, savings 10%, housing 35%, food and clothing 20%, and transportation 15%. I prefer dividing the income between needs (50%), wants (30%) and savings (20%) then I state what expenses go in each category. For example, food and housing would go under needs. This method of dividing your income allows you to account for all your unique expenses. This method is explained in our free eBook: Tell me HOW not just what received when you sign-up to the mailing list.
Tip 5: Save something. I agree wholeheartedly with this tip. Start saving some money right away. The important thing is to start, not solely how much you will be able to save. Bridgforth advises, you can save your spare change in a bottle at the end of the day and then take it into the bank. You can also setup an automatic transfer so that you never forget to save. As you learn to cut costs and stick to a budget you will be able to increase the amount that you save.
Tip 6: Boost your credit score. 90% of top lenders use your FICO score to assess whether they will lend you money. Therefore you want to increase or maintain a good credit score. Bridgforth gave these tips to boost your credit score:
1. Stop creating debt by using credit cards
2. Fix errors on your credit report
3. Pay your bills on time
4. Lower your interest rates
A money management system, saving money and reducing debt are key to achieving financial freedom. Leave a comment and let me know your thoughts.
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