Author: Stephen Huck

Your credit score is incredibly important when it comes to your finances. It is vital to know what affects your credit and to what extent. Once you understand what is adversely affecting your score, you can formulate a plan to eliminate the culprit of the lower score. These issues could involve late payments or defaults on loans, numerous hard inquiries about your credit score, or mistakes that should not be on your credit report. Once you know what is affecting your score negatively, planning to reverse and avoid these issues is relatively simple.

We have all seen commercials emphasizing the need to check our credit scores. Individuals who are on top of their scores have confidence and can improve their buying power and stay on track for financial freedom. Those who have let their score go unchecked may have problems lying beneath the surface that, if not attended to, can cause financial hardship.

These dramatic representations of good credit vs. bad credit are a reality. You may not find yourself in those ridiculous situations depicted in the ads, but you can find yourself unable to buy a home or a car. Even worse, you can make those purchases but with unbelievably high interest rates. Despite ads and would-be creditors stressing the importance of good credit, most people don’t give it any serious thought.

In this article, we are going to discuss three factors that hurt your credit score so that you can watch out for these financial behaviors and start improving your score.

1. Making late payments/No payments

Making late payments on your credit cards, loans, or any credit reporting accounts makes up 35% of credit scores. The simple solution is to make your payments on time, every time. One or two late payments add up quickly. You don’t want to see your credit score drop drastically because you can’t make payments on time.

Making no payments will have collections knocking at your door. This is the worst-case scenario for your credit score. Avoid this disaster by making sure you are aware of the monthly payments you owe.  

2. Maxing out your credit cards

Idealistically, you should be using no more than 20-30% of your available credit. Keeping your credit cards maxed out at all times looks terrible to lenders and ultimately drops your credit score. Emergencies happen, and that’s why we have credit cards, but in case of emergency, make sure you make those payments on time and pay more than the minimum payment. That way, you won’t get stuck in debt or only pay the interest.

3. Applying for multiple credit cards over a short length of time

When a lender sees that you have opened up several new credit cards, this sends up a red flag. It’s pretty simple; creditors assume the more credit cards you’ve opened up, the more you’ll be buying things on credit. To them, this possibility means that you may not have the finances to pay them back. This is most important when applying for mortgages.

Places to Check Your Credit Score

Free and fee-required websites that do credit checks are out there. The top two we recommend are FICO and Credit Karma. Both of these websites offer a surplus of information when it comes to your personal credit. You will find everything you need to know about your credit score. You will also find a lot of information about how to improve your credit and refinancing options. Once you’ve taken the leap to check your credit score on one of these trusted sites, take some time to familiarize yourself with the website and all they offer.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Remember how hard entering the real world is as an adult? Actively teaching your kids skills you wish someone had shown you will make life a little easier from the start. One of the most essential skills to teach is how to spend money and, more importantly, how to save it.

So This is Growing Up!

The transition from kid to adult hits you like a ton of bricks. Everyone can remember when they left the nest. Trying to shuffle through the information our parents taught us through the years. Then, we try to put the advice to use. We can also remember all the times we tried something new and wondered why had no one taught about this in school?  Talking to your kids about life and money matters now will help prepare them for the future. They might roll their eyes, but they won’t forget these lessons. Always lead by example. Remember, your kids will watch your behavior and are sure to mimic it. Explain to your kids the decisions you are making and practice good spending habits when possible, and when not possible, remind them to do as you say, not as you do.

Find a Penny Pick it Up

The information you pass on to your children will be invaluable to them. You don’t have to sit them down and lecture, but when the opportunity presents itself, recognize it so you can give them advice or explain what you do. For example, when you go to the bank, this is an excellent opportunity to explain savings and checking accounts. Explain the difference to them, even allow them to set up an account of their own. This is an easy and fun way to show your kids where they can keep their money. This also opens up the opportunity to explain interest and the benefits of different banking styles, such as big banks vs. credit unions.

Another great opportunity to talk to your kids is when they reach the age, they can get a part-time job, encourage your kids to work when they have the time. They will have the rest of their lives to work. Use the opportunity for them to take small expenses off your hands, like luxuries, going to the movies, or buying a new pair of headphones. Two weeks after they start working, they will have a paycheck; that checking account is useful now! Take time to show them the different fields on a check stub, hours, wage, total income, and taxes. This will help them to see that you don’t get every penny you earn in your pocket.

This is also a great opportunity to explain the importance of saving. Make sure you give them some advice on saving, help them find a goal to save for, and get them started saving towards it. This part-time income can also be a great way to introduce tax preparation. Whether they can file for themselves or you can still claim them on your taxes, they can take part in the tax filing process. Show your kids where they can go to do their taxes, explain they have to do it every year, and the consequences of not doing it. Monkey see, monkey do

While talking to your kids about money is important, most of their habits are going to be formed from watching you. It’s a fact that when you have kids, you are always being watched. Your kids will notice when you make thrifty decisions, like when you drive a block out of your way to fill your gas tank to save ten cents per gallon. Or when you buy treats at the grocery store if they are on sale. They will also notice if you justify large shopping sprees with “the price we pay for beauty” or if you always go out to eat over making food at home. Practicing restraint is good for your wallet, and you are also teaching your kids a valuable lesson. Don’t be afraid to point out when you know your spending habits are excessive, but you can afford it because of your budget and save your money to splurge a little; every purchase can be a learning experience for your kids.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Budgeting and finances are the most unpopular topics of discussion. Unless you are trained in the art of financing, this concept can seem complicated. It doesn’t have to be that way. Anyone who has a smartphone has access to hundreds of free or paid budget apps. These can be helpful and easy to understand. We recommend following these steps before downloading one of those handy apps. This way, you have all your information in front of you, making it easier and more efficient to walk through the requirements of these apps. We recommend using a spreadsheet program or another similar system to record everything.

1. List everything you owe

Most Americans owe lenders in some form or another. Make a list of all of your debt:

• Who do you owe?
• How often do you make payments? (generally monthly)
• What is your minimum monthly payment? (If you pay more than the min-write that.)

If you want to go the extra mile, include what your interest rate is on each of these loans. It’s important to stay aware of these as they may fluctuate. Also, this is important to know if you are considering refinancing.

• • When are they due?

Student loan → $X/Month → % Interest →  due XX/01/20XX Car payment → $X/Month → % Interest → due XX/01/20XX *This does not reflect the total amount due, just your monthly payment* If you only can make the minimum payments, for now, that’s o.k. We’ll revisit this list later.

2. List your monthly expenses

Everyone has monthly subscriptions, expenses, and/or ‘dues.’ Write them down by name, what the monthly payment is, and the day they are due. Rent → $X/Month →  due XX/01/20XX Utilities → $X/Month →  due XX/01/20XX Subscriptions (such as streaming or news subscriptions) → $X/Month →  due XX/01/20XX Gym Membership → $X/Month →  due XX/01/20XX

3. Add your monthly debt & expenses

Add these two numbers together- place it at the top. This is the chunk of change you will be expecting to pay every month.

4. List your monthly income

Write what your monthly income is. If it fluctuates, look at the past six months, add them together, and divide by 6. This is your mean income. This goes to the top of your list.

5. Categorize your spending

This is probably the most time-consuming but undoubtedly, the most important step. Take a look at the last 3-6 months of your spending habits. Jot them down into categories and what their totals are. Example:

• Gas → $X → July/20XX
• Groceries (food items only if you can) → $X → July/20XX
• Going out to eat → $X → July/20XX
• Shopping → $X → July/20XX
• Beauty products/vanity* → $X → July/20XX

*If you find you are spending a lot each month on certain products, like beauty products in the example, make it a category.  This can go towards any particular hobby or interest you spend money on. The more you can categorize, the more you will be able to analyze your spending habits.

6. Face the facts

At this point, you are either patting yourself on the back or sobbing. Hopefully, you didn’t have to pick your jaw up off the floor. Either way, you have officially graduated from Millennial Budgeting 101! Now, put all that extra cash in a savings account! If you’re still struggling to comprehend your ridiculous spending habits, it’s time to reevaluate. Do you need Hulu, Netflix, HBO, and Cable TV? Get rid of what you don’t need. And stop buying what you can’t afford.

7. Make your budget

Now that you have the numbers in front of you and you’ve gotten rid of the things you don’t need, it’s time to set budgets. Remember, the goal is to save money every month. Every category needs to have a cap, and you need to stick to that cap.

• Income = X
• Expenses = X
• Spending
  • Gas = X
  • Groceries = X
  • Going out to eat = X
  • Shopping = X

* Remember this is ALL you’re allowed to spend each month.*

Now you have your basic budget formula (Income/month – Expenses/month – Spending/month = Savings/month)

8. Manage your budget

This is where you get to explore the different apps and stay on top of your finances. You can also use spreadsheet programs and save them to a cloud to use on the go. The importance is to watch your spending and, at the end of the month, look at the numbers. Another suggestion is to save your receipts throughout the day and enter those numbers in the evening or the next day. Look for budgeting apps or other technology-based tools that work for you to help manage your budget. Remember, the goal is to save money at the end of each month. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Issues concerning money are one of the leading causes of divorce. Prevent the strain that comes from financial instability by taking control of your budget as a couple. Work together to fight the battle against money instead of fighting each other.

Hey, Money, We Need to Talk

Dealing with money issues cannot be avoided. Money (and gravitational pull) makes the world go round and is also the cause of a lot of stress: where to get money, how to spend it, and, dear God, how to save it. These issues are inevitable, but why let them create arguments in your marriage? You are already fighting one battle; don’t let it turn you against your strongest ally. The earlier you confront the issue of money and how to handle it as a team, the sooner you can defeat one of the main distressing issues in marriages. Financial problems put undue strain on marriages, and it needs to stop. You may not see eye to eye about spending, but you still need to work together to create a joint budget for the income in your home and be transparent about your spending. This will allow you to avoid issues about money and resolve the problems that have already occurred. Always remember what you work so hard to preserve. Why throw away such a precious bond that has created so much beauty in your life? 

Couples that Budget Together Stays Together

Making a budget as a couple is a great tool you can use to stop the frustration of wondering where all the money goes at the end of the month. It will also help you to work together to reach the financial goals that you have been trying to achieve on your own.

Getting started, you need to sit down and review your current financial situation in depth. Start with collecting your income, combine your pay stubs from last month, and write down all their totals. If your income is consistent, it will be easier to budget, but don’t worry; you can also budget for fluctuations in your income. Then, look at your spending. Collect all your bills. You can start with communal bills like rent, but make sure you also collect all the personal finances like your golf club membership or subscription to home magazines. The next area you will have to account for is spending. Estimate or pull up last month’s credit card statement to look at about how much you spend on food and gas or personal shopping. Lastly, you must discuss savings, how much you have, how much you put away each month, and what you are saving towards or where you invest it.

When you make a personal budget, you will compare the income to the expenses and adjust until your income exceeds the expenses. As a couple, you will have to decide what to keep and abandon to reach financial goals. You will know where all your money is going and will have already accounted for personal spending too. Now, there will be no surprises at the end of each month. You can rest assured knowing that all your essential bills are accounted for and know how much extra you must spend on yourself. Having a budget will avoid a scenario where resentment about spending your money is obsolete because you have merged your total household income and know that your money can cover all your necessary expenses.

Honesty’s the Best Budget (and Marriage) Policy

Creating a budget is a great tool and will help to prevent resentments over money in your relationship. But to do it right, you must be honest about your spending and financial situation. Studies show that about 30 percent of people are dishonest about their finances and estimate that about 50% of divorces are related to financial issues. Full disclosure is critical in your marriage budget endeavors to avoid becoming the latter statistic. Full disclosure means you break down the debt, bills, and spending. No secret student loans lingering or splurging on expensive “mental health excursions” at the spa without accounting for it. This is not to say you can’t indulge, but you need to be upfront about the extent of your financial obligations. Budget preemptively for personal expenses and be ready to give up what is unnecessary for the financial stability of your household.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

A General Ledger (GL) contains every financial transaction recorded during any accounting period (or cycle). Nowadays, businesses record their account data electronically on software such as QuickBooks. But, before records were stored electronically, businesses hand-wrote all their transactions in “books” for each account. All these books combined were called General Ledger (GL). General Ledgers use the double-entry system of accounting. This means that every transaction will be recorded on two different accounts. After a General Ledger is complete, it is used to create financial statements.

Today’s Technology

Fortunately, accounting-based software exists today. This means that business owners, accountants, or bookkeepers can spend less time manually inputting financial transactions, spend more time growing their business, and analyze that data to make critical financial decisions. Many affordable accounting software options are on the market today, such as QuickBooks. We recommend taking the time to research the features offered throughout the software that best fits your company’s needs. There is no need to buy the costliest software with a multitude of features that do not apply to your company. Lastly, we recommend having an accountant familiar with that software set it up for you. Improper setup can cause hours of pressing the ‘delete’ button.

Preparing for a General Ledger

Before anything is posted in General Ledger, it is first recorded in journals, also known as the “Books of Original Entry.”  Nothing is posted in the GL before being recorded in its original journal. Every financial account has an assigned journal to it, and every time you record a transaction, it is called making a “journal entry.”  Generally speaking, this is where a bookkeeper comes in handy. Although this job may sound monotonous, it is imperative. Depending on the size of your company, you may have a team of bookkeepers inputting daily transactions or a sole bookkeeper.

Double Entry System of Accounting

Every time a transaction is recorded, it will be recorded twice in two separate accounts. It will be debited to one account and credited to another. Every account will have two columns: Credits to the left and debits to the right. Depending on the nature of the account, they will either increase or decrease. There are five types of main accounts: Assets, Liabilities, Income, Expenses, and Equity. Remember, for every transaction you record (whether that may be a sale or purchase), it’s going to be recorded in at least 2 of those main five accounts. For example, Say you own a convenience store and are out of beer. If you buy $1,000 worth of beer wholesale from the factory- your cash account will decrease by $1,000. This is shown by crediting the account on the right-hand side for that amount. Now, you have $1,000 worth of beer to sell, so your asset account will be debited on the left-hand side for that amount. Now, the books are balanced. If the books come out with a number other than 0 by the end of a cycle, an error was made during a journal entry.

Trial Balance

It’s the end of the accounting cycle, and you are ready to create your financial statements. More times than not, some errors were generated during journal entries. This is the purpose of a trial balance. The word “trial” is what it sounds like. It lists all the accounts with the balances next to them. This is where you can see if any mistakes were produced when debiting and crediting accounts using the Double Entry System of Accounting. Remember, the balance must be zero, or an error has been created. You are one step closer to producing exact financial statements by completing a trial balance. The larger your company grows, and depending on the nature of your sales (a house cleaning company vs. a supermarket), your accounts will differ. The house cleaning company, which offers a single service, will have a much less complicated GL compared to the chain supermarket with hundreds of vendors and employees. Be prepared for when your company grows! About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Cloud-based businesses are growing in popularity. I would know, as I am the founder and CEO of an industry-shattering cloud-based business. New developments in technology, such as the application of cloud storage and online tools, have transitioned small and large businesses into a more productive and efficient realm of doing business. Documentation of money flow and expenses is necessary for every company for both administrative and legal reasons. By transitioning to paperless accounting and online accounting software, documentation of money flow and business expenses can now be accomplished with enhanced security, organized cost and time efficiency, and effortless accessibility.

What do You Want to Spend Your Time and Money on as a Business Owner?

Say you’re a business owner focused on the success of your company. But you have all these bookkeeping responsibilities, trying to keep track of your accounts and business transactions. Accounting is necessary for the organization and the success of every company. With that comes a new set of expenses. Think about ink, paper, scanners, and mailing fees. Even more, think about employee salaries to cover the extra work. This is where transitioning online may come into play. Not only does this free up money by saving on overhead, but also time! You can do much more when you utilize the cloud for your business.  Moving online bypasses time spent on manually filling out paperwork, faxing, and mailing documents. And as companies grow larger, the amount of paperwork ultimately increases as transactions increase. This leaves more room for mistakes.

Looking at the Benefits of Cloud Document Management with an Online Accounting Department

• Efficiency – With online accounting software, such as Quickbooks, businesses will increase their efficiency. Accounting needs that regulate and analyze expenditure data are time-consuming and require focused attention. Transitioning to online accounting is user-friendly. Online accounting algorithms do most of the work for you and ultimately increase efficiency, allowing you to focus on other essential aspects of the business.
• Cutting costs – Thinking about going green? Is your company expanding, and you seem to be drowning in constant paperwork? By utilizing online accounting and cloud document management, you can focus your efforts on essential business issues while saving on accounting expenditures. Simple accounting software and online tools allow you to address these needs without excess expenditure on physical items such as thousands of sheets of paper, printers, and ink. Not only will you cut costs, but you’ll also be helping out the environment!
• Enhanced Security  – By storing information on a secure cloud database, online accounting departments increase overall business security. Financial information and transactions are not stored in file cabinets but are securely protected on private data networks. Gone are the days of paper shredders or the fear of misplaced paperwork with important monetary information.
  • https://www.completecontroller.com/security
• Virtual access – Don’t want to go into the office? On a business trip on another continent? You can access your data virtually with cloud documentation and online accounting departments. You don’t need to go into the office to file/fill out paperwork. Instead, stay in your comfy clothes- access/update/change your information from the comfort of your own home.

Where to Start with Online Accounting

In order to determine the optimal scale of online accounting software, it is essential to conduct a comprehensive assessment of expenditures and allocation of resources.

• https://www.completecontroller.com/how-it-works 

Future Opportunities

Online accounting software will save your business money, putting focus and monetary value where it counts. Aside from security, efficiency, and virtual access, online accounting software can make future projections for your business. An online accounting department can provide insight into helpful business practices and future business ventures by analyzing losses and profits and tracking expenditure trends and values.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Everybody has to use credit, whether buying a car, buying or renting a home, or sometimes even applying for jobs. The fact is using credit is almost unavoidable. You will need a good credit score to have power as a borrower and lower interest rates.

You Get Credit for All Your Credit, Good or Bad

We have established that inevitably, you will have to borrow money for high-cost items you need in your life, but why spend more than you have to on a high-interest loan? The first thing a lender will look at is your credit score. Your credit score is determined by all data of your past credit reporting arrangements sent in by creditors, such as credit card companies or lenders. This score will ultimately decide the outcome of your loan. Let’s discuss what a good and bad credit score looks like and the importance of making good decisions with your credit. Then, we will examine what actions affect your score and how the data is collected. When we are finished, you will have a new appreciation for what your credit score can do to help you.

A Good Credit Score’s Value is in Your Interest

A good credit score will make or break a deal, but what is a good credit score? What is a bad one? To answer this, we have to look at your past credit behaviors from all the credit reporting agencies you have dealt with in the past. These behaviors, good or bad, are reported to credit bureaus, who then compile the information, assess it, and rank you on a scale from 330-830. A good credit score is somewhere above 700. A score on the higher end of the scale will show a lender you are reliable with money. Some actions that keep your score above 700 are:

• You are paying your credit card bill in full or on time. Late payments are the most common mistake people make. If you don’t have the money, don’t spend it!
• You are paying back all of your loans on time. The people who lend you money will also report nonpayment or late payment to the credit bureau. Be sure you can maintain these payments for the entire loan length before making the deal.
• You are paying your rent on time. If you rent your home, your landlord also has the right to report you to the credit bureau. If you don’t pay your rent or send it in late, you are subject to a drop in your credit any time you are on a lease.

Take Control of Your Credit

Your actions will cause your credit score to move on the scale. Paying close attention will help you to stay in control of it. Some activities affecting your credit score include paying your bills, rent, and loans on time. This represents the most common credit-affecting areas, but others exist, such as:

• You are opening many accounts in a short time.  When you apply for a credit card, you ask someone to inquire about your credit history. Unfortunately, credit queries affect about 10% of your credit score.
• You are closing many accounts in a short time, especially if the cards still have balance. This is a red flag to the credit bureau.  When you close tabs with a balance, you are showing them that you cannot afford to fulfill your agreement.
• They are defaulting on a loan.  Not being able to finish a loan contract is a big problem.  You should consider this before accepting a deal.
• Check your credit score often.  If you don’t know your credit score, many services can show you what it offers, and many are free! Know your score.  Knowledge is the power to stay debt-free and credit-positive. Check your score at least once a year.

A good credit score will be valuable to you throughout your adult life.  Use these tips and pay close attention to your credit behaviors. Every credit decision you make, whether good or bad, will follow you for years to come.  So, assess your choices thoughtfully to stay out of trouble!  Click here to see how you can begin building your credit today. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Young adults find out fast that they need credit to do anything in the adult world. Credit is easy to build once you know where to start. But no one gave a class on that in school, did they? Here is some advice to get you started.

It All Starts With a Piece of Plastic

We all grow up and envision what we expect our lives to be like. We imagine the perfect job, home, car. You may want to be an accountant with a three-bedroom home in California with a reliable vehicle. All before you turn thirty. Most of the time, you don’t have the money to accomplish these goals outright, even with a secure job. This is why you will need a good credit score that shows people you know how to spend your money so that they can trust you with some of theirs. You need good credit for everything, but you need a credit history. The best way to start is with a credit card! Get a secured credit card. You can go to any bank and apply. This card is more accessible because you will put some of your money down to get started. The money you put down will become your credit limit. All you have to do now is use it, pay for goods and services that you would use your debit card for, and stay under that deposit.

Plastic, Maybe, But Not a Toy!

You need to start building your credit because you will use your credit score for the rest of your life. Landlords will check it, banks that lend you money will want to know it, and sometimes even your employers. Be careful with that little piece of plastic because it can hurt you as fast as it starts to help. You can ruin your credit, but all that can be avoided. Avoid spending more than you have, don’t apply for more credit cards, and always pay your bill on time. Your score will flourish; remember, all those dreams depend on it.

Never Use Your Credit Card for Things You Can’t Afford

It can be tempting to want to spend it like free money, but you have to pay it back at the end of the month. Try to use it for bills that you already pay every month and save the shopping spree for your savings. This way, you always know what to expect when you get your bill. It will be consistent and easy to keep track of.

Avoid applying for other credit cards, even if they save you 10% when you check out at a department store. It can negatively affect your credit score. This is not a time to be impulsive. Instead, try to get a card with good benefits and use the one. If you want to open another account to separate your finances, go ahead as long as you use both and pay them off on time.

No matter what you use your card for, how much you are spending, or where you got it, the most important thing to remember is to pay your bill on time. This is why you should finish what you can afford because, at the end of each month, you get a statement from someone expecting their money back. If you don’t pay them, you will tarnish the reputation you worked so hard to build.

What is My Credit Score?

Your credit score is between 300 and 830, which helps a lender decide whether to lend you money or sell/rent something, like a car or house. The higher your number, the better your score. A good score might be 730. This would show a lender that you pay your bills on time, would be a reliable person to lend money to, and would probably qualify you for a lower interest rate. A bad credit score might be in the 550 range. This would be a red flag to any lender; you probably don’t pay your bills on time, pay your credit cards off with other credit cards, and have outstanding balances. This would make someone hesitant to lend you the money you need because you have not paid back the borrowed money. If someone did lend you money, they would give you a high-interest rate, making what you are buying more expensive.

You can check your credit score online or using a free app. Check it regularly and get a summary of the activity that may be making it drop so you can adjust your spending behaviors. Get a secured credit card, pay your bills on time, and know your credit score, and you will be in a great position whenever you decide you want to make your next life decision.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

It’s great that you’re taking meaningful steps towards achieving financial stability! One of the most important things you can do to reach your financial goals is to prioritize saving in your budget. By doing so, you’ll build a safety net for unexpected expenses and create a cushion for your future financial security. Your dedication to this goal is commendable and will pay off in the long run. Keep up the great work!

Why You Need to Budget for Some Savings

When you’re making a budget, remember that life is full of surprises. Like Forrest Gump said, “Life is like a box of chocolates. You never know what you’re going to get.” Hopefully, you can presume what expenses you will have, and your budget will cover all those expenses. If so, that’s great! Remember, though, that life is unexpected, which means spending deviates a little from our plan. This is why we need to account for those deviations. It might not seem as important when you have an unexpected birthday dinner for a close friend, but what about when that deviation is significant? Let’s say your son comes home with a permission slip for a school trip, one week in El Salvador with his favorite teacher, and all his friends are going. You need to write a check for $600, and he can have a trip of a lifetime, or a pebble hits your windshield, and your insurance deductible is $500, now that $300 windshield comes out of your wallet. Good or bad, life happens, so we need to set up a savings account and budget for it every paycheck.

How I Save Because I Am No Fortune Teller

Some people try to put a specific dollar amount away every month. For some whose income varies, putting away a percentage of their income might be easier. Some people put away 20 percent, others put away 30 percent, whatever you can manage. Now, where to put your savings? If you don’t already have one, open a savings account. This is a good placeholder for your money. This way, you can separate it from the money that you have budgeted to spend. Your savings account is a good place to save for future goals and unexpected expenses, vacations, shopping sprees, putting a down payment on a home, or that windshield. Always keep some of your money in a savings account so that money is immediately available if you need it.

You can invest some of this money, start a retirement fund, or invest in the stock market. Find one that looks desirable to you and start saving for your future because getting old is a great example of life happening. Some retirement accounts to look into are an IRA, Roth IRA, or a pension through your company.

Put a little money into the stock market. This can be a fun way to invest your money. Pick something you trust, a company you use, and believe will keep flourishing and making money. You don’t have to put the whole 30% there, but take 30% of your savings and invest it. The best part about this is you can turn that money into more money. Who doesn’t like the sound of that? Watching the money you invest grow is super fun. If you are losing money, you can always move that money around and never lose more than you put in.

Savings in your budget are necessary because no one knows what the future may hold. If you are not already saving or you read this, and you might not be saving enough, sit down to do some money management, and next time you get a paycheck, put something away for the unexpected. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.