Category: Debt

Credit, Debt, Parachute Services

Building Credit for a Brighter Financial Future

Building Credit for a Brighter Financial Future

Building good credit is a process that takes time as well as consistent and responsible financial habits. Here are some key strategies to help you establish a strong credit history:

1. Get a Credit Card:

  • Secured Credit Card: This is a great option for those with no or a limited credit history. You’ll need to deposit a security amount, which acts as your credit limit. Responsible use can help you build credit over time. You can consult https://www.nerdwallet.com/best/credit-cards/secured?msockid=27ec8dd2cb9164941d859e36ca39659e for options.
  • Unsecured Credit Card: Once you’ve established a good credit history, you may qualify for an unsecured credit card, which doesn’t require a security deposit.

2. Make Timely Payments:

  • Payment History Matters: Paying your bills on time is the most crucial factor in building credit as it accounts for 35% of your credit score. Late payments can significantly damage your credit score, so be sure to be on time!
  • Set Reminders: Use digital tools or calendar reminders to stay on top of due dates.

3. Keep a Low Credit Utilization Ratio:

  • Credit Utilization: This is the amount of credit you use compared to your total available credit limit.
  • Aim for 30% or Less: Ideally, you should keep your credit utilization below 30%. This means if your credit limit is $1,000, you should aim to use only $300 or less at any given time.

4. Limit New Credit Applications:

  • Hard Inquiries: Each time you apply for credit, a hard inquiry is made on your credit report, which can temporarily lower your score.
  • Apply Strategically: Only apply for credit when you truly need it. Try not to have more than 2-3 hard inquiries per year, if that.

5. Monitor Your Credit Report:

  • Free Reports: You can get a free credit report from https://www.annualcreditreport.com/index.action representing each of the three major credit bureaus (Experian, Equifax, and TransUnion) weekly for free.   
  • Check for Errors: Review your report for any inaccuracies and dispute them if necessary.

Additional Tips:

  • Pay More Than the Minimum: Paying more than the minimum payment can help reduce your balance faster and save on interest charges.
  • Consider a Credit Builder Loan: These loans can help you build credit by reporting your on-time payments to credit bureaus. Consult banks and credit unions to see if they offer this. 
  • Be Patient: Building good credit takes time. Don’t get discouraged if you don’t see results immediately. It can take several months to see the impact. 

By following these tips and practicing responsible financial habits, you can establish a strong credit history that will benefit you for years to come.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Budget, Credit, Debt, Parachute Services

Living a Financially Peaceful Life

Creating and living a financially peaceful life is a journey, not a destination, and it’s very personal. It’s about aligning your financial habits and mindset with your values and goals so that money supports your well-being rather than causing stress. Here are steps to find this peace:

Deepen Your Understanding and Acceptance:

  • Revisit Your Money Story: Take some time to reflect on how your upbringing and past experiences have shaped your current beliefs and behaviors around money. Understanding the roots of your financial habits can help you approach them with more compassion and less judgment.
  • Practice Self-Compassion: Be kind to yourself regarding past financial mistakes. Everyone makes them. Focus on learning and moving forward rather than dwelling on regret.
  • Define “Enough”: In our consumer-driven society, it’s easy to fall into the trap of always wanting more. Take time to define what “enough” means for you. What level of financial security and lifestyle allows you to feel content, fulfilled and help you sleep at night?

Solidify Your Financial Foundation:

  • Craft a Conscious Spending Plan (Budget): Move beyond simply tracking expenses to creating a plan that reflects your priorities. Allocate your money intentionally towards your values and goals. Consider using different budgeting methods (e.g., 50/30/20 rule, zero-based budgeting) to find what makes sense to you.
  • Build a Robust Emergency Fund: Aim for 3-6 months’ worth of essential living expenses in an easily accessible, liquid account. Knowing you have this safety net can significantly reduce financial anxiety.
  • Prioritize Debt Reduction: Develop a clear strategy to tackle any outstanding debt. Whether it’s the snowball (start with small debts) or avalanche (highest interest rates) method, consistency is key. Celebrate milestones along the way to stay motivated.
  • Automate Savings and Investments: Set up automatic transfers to your savings and investment accounts on payday. This “pay yourself first” approach ensures consistent progress towards your future goals without requiring constant conscious effort.
  • Protect Your Assets: Ensure you have adequate insurance coverage (health, home/renters, auto, life if applicable) to safeguard yourself and your assets from unexpected events that could derail your financial peace.

Cultivate a Peaceful Financial Mindset:

  • Practice Gratitude for What You Have: Regularly acknowledge and appreciate the financial resources you currently possess. We can always be grateful for something.   
  • Embrace Mindful Consumption: Before making a purchase, pause and ask yourself: “Do I truly need this? Will it genuinely add value to my life? Am I buying this for emotional reasons?”
  • Detach Your Emotions from Market Fluctuations: If you’re investing, understand that market ups and downs are normal. Avoid making impulsive decisions based on short-term market noise. Focus on your long-term investment strategy especially if years away from retirement.
  • Limit Exposure to Financial “Noise”: Be mindful of how much financial news and social media you consume. Constant exposure to others’ seemingly “perfect” financial lives or fear-mongering headlines can increase anxiety.
  • Focus on Progress, Not Perfection: There will be months where you overspend or face unexpected expenses. Don’t let these setbacks derail your overall progress. Learn from them and adjust your plan as needed.
  • Practice Generosity: Giving to others can foster a sense of connection and purpose, which can contribute to overall well-being and a more peaceful relationship with money.

Nurture Your Financial Well-being:

  • Regularly Review and Adjust Your Plan: Your financial goals and circumstances will likely change over time. Schedule regular check-ins (e.g., monthly, quarterly, annually) to review your progress and make necessary adjustments to your spending plan and goals.
  • Seek Knowledge and Education: Continuously learn about personal finance. The more you understand, the more confident and in control you’ll feel. There are ample free resources. 
  • Communicate Openly About Money: If you share finances with a partner or family, have open and honest conversations about your goals, values, and concerns. This fosters trust and collaboration.
  • Know When to Seek Professional Help: Don’t hesitate to consult a fee-only financial advisor, therapist or counselor (e.g., Parachute) if you’re struggling with financial stress, anxiety, or making sound financial decisions.

Creating a financially peaceful life is a process that involves practical steps and a shift in mindset. By focusing on clarity, control, and aligning your finances with your values, you can move towards a future where money supports your overall well-being.

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Credit, Debt, Parachute Services

FREE July 29th Virtual Workshop- “How Credit Card Interest Works: The Cost of Convenience”

How Credit Card Interest Works: The Cost of Convenience

Learn the ins and outs of credit card interest to avoid high interest charges and debt balances. We will provide a simple summary of how interest works and how you can avoid the credit card “debt treadmill.”

Register at: https://www.bit.ly/parachute-card

Spread the word! Share this with your employees, friends, family, clients – anyone who could benefit from these valuable tips.

See you there!

P.S. Don’t miss out on this FREE opportunity to take charge of your finances.

All workshop attendees will be entered to win a free Parachute appointment!

If you’re dealing with high interest debt payments, see what you can save with Parachute’s Debt Management Plan by clicking Get Started Here:

GET STARTED HERE

Budget, Debt

Unlock Summer Fun Without Emptying Your Wallet

Summer can be a time for fun, relaxation, and making memories. However, it can also be an expensive time of year with vacations, activities, and increased utility bills. By being mindful of your spending and implementing some smart strategies, you can enjoy all that summer has to offer without draining your bank account.

Budgeting and Planning

  • Create a Summer Budget: Before summer begins, take a good look at your finances and determine how much you can realistically allocate for summer-related expenses. Factor in any vacations, day trips, entertainment, potential higher utility costs, and any summer camps or activities for children. Just a little bit of planning can go a long way!  
  • Track Your Spending: Once you have a budget, keep track of where your money is going. This will help you identify areas where you might be overspending and allow you to make any adjustments as needed. You can use budgeting apps, spreadsheets, or even a simple notebook.
  • Plan Affordable Getaways: Summer vacations are a highlight of the year for many, but they don’t have to be extravagant. Consider budget-friendly destinations, explore staycation options in your local area, or travel during off-peak times to save on flights and accommodations. Look for deals on hotels and activities well in advance.
  • Take Advantage of Free Activities: Many communities offer free events during the summer, such as outdoor concerts, movie nights in the park, and festivals. Check your local listings for free entertainment options. Parks and recreation centers often have low-cost or free programs and activities.  
  • Pack Lunches and Snacks: When heading out for day trips or activities, pack your own food and drinks instead of buying them along the way. This can save a significant amount of money, especially for families.

Saving on Everyday Expenses

  • Save on Cooling Costs: Warmer temperatures often lead to higher energy bills. Use strategies like closing curtains and blinds during the day to block sunlight, using fans to circulate air, and adjusting your thermostat a few degrees higher. Consider using smart thermostats to optimize energy usage. Regularly maintain your AC unit by cleaning or replacing filters. Try to run the AC in off hours (early in the morning or at night) to take advantage of cooler temps.  
  • Cook at Home More Often: Dining out can add up very quickly! Take advantage of seasonal produce and cook more meals at home. Plan your meals in advance and make a grocery list (and stick to it!) to avoid impulse purchases. Consider grilling outdoors to avoid heating up your house.  
  • Look for Sales and Discounts: Keep an eye out for summer sales events, such as holiday weekend discounts and back-to-school promotions, for potential savings on various items. Many museums and attractions offer discounts for local residents or through daily deal sites.  
  • Reduce Transportation Costs: When possible, walk, bike, or carpool instead of driving alone. This can save on gas and reduce wear and tear on your vehicle. Check if local public transportation offers summer passes or discounts.
  • Utilize Free Entertainment Resources: Take advantage of your local library for free books, movies, and even events. Explore free streaming services or borrow DVDs instead of going to the movie theater.  If you do go to the movies, go to the matinee whenever possible. Ask for student and senior discounts.

Smart Spending Habits

  • Differentiate Needs vs. Wants: Before making a purchase, especially on non-essential items, ask yourself if it’s a need or a want. Prioritize essential spending and be mindful of impulse buys. Then, direct any savings to summer fun. 
  • Use Cash Instead of Credit: For discretionary spending, consider using cash. This can help you stay within your budget and make you more aware of how much you’re actually spending.
  • Automate Savings: Set up automatic transfers from your checking account to your savings account at the beginning of each summer paycheck. Even small amounts can add up over time without you having to actively think about it.  
  • Review Subscriptions and Memberships: Take a look at your recurring subscriptions and memberships (e.g., streaming services, gym memberships) and cancel any that you don’t use regularly.  
  • Consider a Spending Cleanse: Before summer begins, try a “no-spend” week or weekend to reset your spending habits and identify areas where you can cut back.
  • Involve the Family:  Give small jobs to each member of the family for shared summer goals. Have the kids look for and save change, host lemonade stands, help neighbors with errands or lawn work for some extra spending money. 

By implementing these summer savings tips, you can enjoy the season’s activities and maintain a healthy financial outlook. Remember that even small changes in your spending habits can lead to significant savings over time!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan by clicking Get Started Here:

GET STARTED HERE

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.

Credit, Debt, Parachute Services

A Quick Guide to a Debt Free Life

Avoiding debt is a crucial step towards financial stability and peace of mind. Here are some practical strategies that you can begin to use right away.

Budgeting and Saving

  • Create a realistic budget: Track your income and expenses to identify areas where you can cut back.  
  • Build an emergency fund: Aim for 3-6 months’ worth of living expenses to cover unexpected costs. Emergency Fund Calculator: Calculate Your Safety Net (pnc.com)
  • Prioritize needs over wants: Differentiate between essential purchases and impulsive ones. Don’t confuse needs versus wants and don’t elevate wants to needs. 

Responsible Credit Card Use

  • Pay your balance in full each month: Avoid interest charges by clearing your balance completely.  
  • Limit credit card usage: Rely on cash or debit cards whenever possible.
  • Choose cards wisely: Look for cards with low interest rates and rewards that align with your spending habits. Read more at 10 Strategies to Avoid Getting into Debt | Central Bank

Smart Spending Habits

  • Cook at home: Eating out can be expensive; preparing meals at home saves money.  This is one of the top ways people report gaining traction with their savings.
  • Find free or low-cost entertainment: Explore your local parks, libraries, and community events.
  • Avoid impulse purchases: Take time to consider whether a purchase is necessary before buying. Wait at least 48 hours.  Read more at How to Identify and Eliminate Unnecessary Expenses (firstcomcu.org)

Long-Term Planning

  • Set financial goals: Define your short-term and long-term financial objectives. Think very specifically about what it is you truly want, when and how you can get there.  The more specific you are, the more likely you will succeed!  
  • Invest wisely: Consider retirement savings and other investment options.
  • Educate yourself: Continuously learn about personal finance and money management.

Additional Tips

  • Avoid payday loans and high-interest debt: These options can trap you in a cycle of debt. These are very short-term loans with very high interest rates.    
  • Negotiate bills: Contact service providers to discuss potential discounts or payment plans.
  • Seek professional help if needed: Credit counselors can provide guidance and support.  

Remember: Building a debt-free life takes time, consistency and discipline. Small steps can lead to significant results!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your situation? Check out our Financial Counseling Session https://parachutecreditcounseling.org/services/debt-management/#financial-counseling or call 716-712-2060

Budget, Debt, Parachute Services

Creative Ways To Easily Save

Saving money doesn’t have to be boring and routine! Here are some creative ways to easily boost your savings and get closer to those money goals!

The “No Spend” Challenge:

How it works: Choose a specific period (a weekend, a week, a month, or even longer) where you commit to not spending any money on non-essential items. This means you have to be very honest about what is a “need” versus a “want”. It also means no impulse buys, no dining out, and sticking to only necessary expenses like groceries and bills.  

Why it works: This challenge makes you more aware of your spending habits and helps you identify areas where you can cut back (i.e., where your budget leaks are). It can also be a fun way to test your creativity in finding free or low-cost alternatives for entertainment and activities.  

2. The “Spare Change” Jar:

How it works: Designate a jar or container specifically for spare change. Every time you receive change, whether from a purchase or as a gift, put it in the jar. You’ll be surprised at how quickly it adds up! It also encourages you to spend the cash you have on hand and not use a credit card or debit card where you may be spending more.

Why it works: This is a simple and effortless way to save money without making significant changes to your spending habits. It’s also a great way to use up loose change that often gets lost or forgotten.

3. The “Envelope System” for Budgeting:

How it works: Allocate a specific amount of cash for different spending categories (e.g., groceries, entertainment, dining out, etc.). Place the cash in separate envelopes labeled with each category. Once the money in an envelope is gone, you can’t spend any more in that category until the next month. This method has gained great popularity lately.

Why it works: This method helps you stick to your budget and avoid overspending in certain areas. It provides a tangible way to track your spending and encourages you to be more mindful of your money.  

4. The “Round-Up” Rule:

How it works: Whenever you make a purchase, round up the amount to the nearest dollar (or even higher) and transfer the difference to your savings account. For example, if you spend $23.50, round it up to $24 and transfer the extra $0.50 to savings, even if in the change jar. Remember to use cash whenever possible.  

Why it works: This is a painless way to save small amounts of money consistently. The rounded-up amounts may seem insignificant on their own, but they can add up to a substantial sum over time.

5. The “30-Day Rule” for Impulse Buys:

How it works: Whenever you’re tempted to make a non-essential purchase, wait 30 days before buying it. This gives you time to evaluate whether you truly need the item or if it was just an impulse.

Why it works: This rule helps you avoid buyer’s remorse and prevents you from wasting money on things you don’t really need. Often, after 30 days, you may realize you no longer want the item or find a more affordable alternative that helps you save additional money. 

6. The “No Spend Day” Challenge:

How it works: Choose one or more days each week where you commit to not spending any money at all. This includes avoiding all purchases, even small ones like coffee or snacks. This habit can result in powerful savings over time.

Why it works: This challenge encourages you to be more resourceful and find free or low-cost ways to entertain yourself and meet your needs. It can also help you break the habit of spending money out of boredom or habit.

7. The “Cashback Rewards” Strategy:

How it works: Take full advantage of cashback rewards programs offered by credit cards or shopping apps. These programs give you a percentage of your spending back as cash, which you can then deposit into your savings account but be sure not to overspend for the sake of rewards.  

Why it works: This is a way to earn money while you spend, making your purchases more rewarding. Over time, the cashback rewards can accumulate into a significant amount of savings.  

8.  Weekly $ Saving Challenge

How it works: Start by putting a dollar into your savings account in the first week.

Then, increase the amount to $2 in week two, $3 in week three, and so on. Over the       course of one year, you will have contributed a hefty amount toward savings. If you start this week, then your savings will total nearly $1,400 by this time next year.

Why it works: It starts you on a path of developing an ongoing savings habit with reasonable amounts of money and shows you what you can accomplish with consistency.

9.   The Penny Savings Challenge

How it works: Start by putting 1 penny away on day 1, 2 pennies on day 2 and so on so that you are adding another penny each day. Prepare to do this for 365 days consistently. Once you reach day 365, you will have $667.95!   

Why it works: This example shows you the power of even very small amounts of money saved over time and how money grows from small, manageable habits.

Remember, the key to successful saving is to find methods that work for you and that you can stick to in the long run. This can result in significant savings. Don’t be afraid to experiment with different strategies and adapt them to your specific needs and preferences for savings success!

Keep reading about additional, effective ways to boost your savings!  

15 Creative Ways To Save Money Without Making Significant Changes | Bankrate

40 Simple Ideas for How to Save Money Fast – Synchrony Bank

10 Creative Ways to Save Money | Space Coast Credit Union

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan

GET STARTED HERE

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching  or call 716-712-2060.