Complex Financing

You probably understand that paying bills late or missing payments all together can result in a drop in your credit score.  There are many other situations which are not as widely known which can cause you to have a less than perfect credit score.  Here are a few situations you’ll want to avoid in order to keep your credit score as high as possible:

Doing Too Much Comparison Shopping

When you shop around to get the best interest rate on a  loan, you think you’re doing the best thing possible for your financial situation.  And if you manage to get a super-low interest rate, you are.  But in reality, shopping around for financing can result in having a number of inquiries to your credit report  (which is not to say I don’t advocate shopping around for things like auto insurance).  Each time you fill out a credit card application or visit a bank to apply for a loan – the lender will pull your credit score.  Inquiries to a credit report remain visible on your report for 24 months.  People with high numbers of inquiries are statistically a higher risk for credit than an individual with less inquiries.  The more inquiries on your credit report the lower your credit score.

Canceling Credit Cards

It goes against everything that seems to make sense in the financial world – but closing credit card accounts can actually result in a lower credit score.  When your credit score is calculated, the formula considers how much of your available credit you are actually using.  When you cancel or close a credit card you’re no longer using, you reduce the amount of your available credit which increases the amount of credit you’re using in relation to what you have available.

Keeping Credit Cards And Not Using Them

It seems that if you’re not supposed to go around canceling credit cards the only thing left to do is to leave unused credit cards open, right?  Eventually, after 7 years of no activity, an unused credit card will no longer appear on your credit report.  The problem with leaving inactive cards on your credit report and just allowing them to drop off the report after 7 years is you don’t want it to disappear after 7 years if you have a good payment history with the account!  The record of payments made on time is used when your credit score is calculated, and lenders also look at your history of making payments when determining your credit worthiness.  To keep a credit card active and on your credit report, simply use it for a small purchase once every few months.  Pay the balance off in full when the statement arrives and it will keep your account open and reporting on-time payments.

Saving money when you are behind the eight ball is probably one of the toughest things in the world to do. It’s kind of like reducing belly fat. It takes alot of hard work, self control and among other things time. Saving money and changing your spending habits isn’t something that is going to happen overnight. It’s a lifestyle changes that takes a commitment from you.

If you have made the decision to start saving money don’t expect to see results the next day. Choosing to incorporate some of the tips and ideas you read on this blog will help you save money. It just takes time. Next time you are out say no to buying something you don’t need, buy no name brands at the grocery store and put a blanket over you and turn the heat down. You will save but it’s a long road.

Whether you are frugal by nature or have adapted your lifestyle to deal with the changing economy, frugal living is certainly experiencing a boost in popularity.  Living a more frugal lifestyle can take a bit of getting used to, especially if you have never paid close attention to your spending in the past.  The key is understanding the difference between being frugal and being cheap.  When it comes to managing money, like everything else in life, moderation is key.  You must be able to find the balance to ensure you are not skimping on areas where you would have been better off spending a few more bucks.  The following scenarios show why sometimes it’s better to spend than save.

Safety

There simply is no price too high to ensure your personal safety and the safety of those you love.  Whenever you are faced with a decision to pay more to increase safety, those dollars are well worth the benefits.  Consider this when making decisions about child care, maintaining your home or car and buying adequate insurance.

Time

Some people take living a frugal lifestyle to the extreme.  Yes, there are benefits to cutting coupons and taking the time to shop for the best prices, however not if it consumes your day.  Few people have the luxury of plenty of excess time on their hands these days.  We live in a fast paced society where work, family and social obligations consumer every hour of the day, therefore your time is valuable.  It is important to balance the time you spend in being thrifty with the savings you actually receive.  You might find some efforts really aren’t worth the time.

Quality

Saving money by purchasing inferior quality products is often penny-wise and pound-foolish (to borrow a cliche).  If you have to buy a poorly made item three times over to get the same value of paying a bit more the first time, you probably aren’t seeing any real savings.  When you get into bigger ticket items like used cars or home renovations, being frugal can be downright expensive when you end up paying for repairs or other expenses that could have been avoided.  Some things are simply worth paying more for.

At the end of the day it is more important to know that you spent your money wisely than how much money you saved.  By paying close attention to where you can shave costs and lower expenses you can adopt a more frugal lifestyle without sacrificing quality.  Save where you can and spend where you should and you will likely be more successful in adjusting to a simpler way of life.

I was not aware of the seriousness of Compulsive Shopping/Spending Disorder (CSD) until I recently took a closer look at it. CSD is very similar to other addiction issues such as alcohol, smoking, drugs and sex. Although CSD is not specifically listed in the Diagnostic and Statistical Manual of Mental Disorders (DMS), it does seem to be a well-researched topic in the field of psychology. Often CSD is accompanied by other psychological disorders, commonly depression. A while ago we discussed findings that showed sad people spend more money, prolonged sadness and low self-esteem could potentially lead to CSD.

Symptoms of Compulsive Shopping/Spending

Compulsive Buying: You may just go shopping with the intention to purchase a specific item or a list of items, but you end up purchasing hundreds of dollars worth of things that you do not need.  Not being able control to your urges is a prominent sign of CSD.

Impaired Relationships: Money is often the leading cause of divorce, all the time you spend away from home to shop and create more and more debt will start putting tremendous pressure on your relationships.

Shopping Because Depressed: You find yourself shopping or spending money as a result of feeling angry, depressed, anxious, or lonely.

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It’s been a few years since I have had to go out and do a job search but that may change in the not so distant future. I have been doing a bit of reading on some tips to job searching and there seem to be a few recurring themes or tips out there.

1. Google  yourself and see if anything negative comes up. You can sure bet that most employers will be doing the same. If you have negative related material about you on the internet you might want to start looking into getting it removed. Posting dirty jokes on a chat board isn’t going to help your case.

2. Get a professional email address or use the one that came with your ISP. Chunky lover at aol dot com just isn’t going to sell anybody. It’s funny on the Simpsons but that’s a cartoon.

3. If you are interested in a certain field or profession find clubs or organizations related to those and join them or attend seminars and meetings. It

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