financial well-being Archives - Page 2 of 5

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:

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:

Parachute Services, Student Loans

Federal Student Loan Collections Have Resumed – Act Now!

This is an important update regarding federal student loans. The pause on collections for defaulted federal student loans has ended.

What’s Happening Now:

Effective Monday, May 5, 2025, the U.S. Department of Education’s Office of Federal Student Aid (FSA) resumed collecting on defaulted federal student loans. This impacts over 5 million borrowers.

Treasury Offset Program: The government can now withhold federal payments, including tax refunds and Social Security benefits, if you have defaulted student loans.
Administrative Wage Garnishment: Later this summer, administrative wage garnishment will resume, allowing up to 15% of your disposable income to be withheld.

If You’re in Default – Act Immediately!

The FSA is urging all borrowers in default to take immediate action to avoid these involuntary collection measures. You should receive an email from FSA in the next two weeks with details on how to contact the Default Resolution Group. They can help you explore options like:

Setting up a monthly payment plan.
Enrolling in an income-driven repayment (IDR) plan.
Signing up for a loan rehabilitation program to get your loan back in good standing.

How Parachute Can Help (NY Residents):

For New York residents, Parachute offers free, confidential student loan counseling. Our counselors can help you understand your options, navigate the repayment process, and develop a plan to manage your student loan debt, especially if you’re in default. Contact us at (800) 926-9685 to schedule a session.

For those in other states, please visit StudentAid.gov for information on repayment options. You can also search for a local non-profit organization in your region that provides student loan counseling, such as those affiliated with the National Foundation for Credit Counseling (NFCC).

Taking proactive steps now can help you avoid serious financial consequences.

Budget, Parachute Services

FREE June 24 Virtual Workshop – “Have a Blast on a Budget: Summer Savings Hacks”

Have a Blast on a Budget: Summer Savings Hacks

NEW TIME!! Tuesday, June 24 from 6:00 p.m. – 6:30 p.m.

Don’t let rising temperatures lead to runaway spending! Discover smart ways to save on food, entertainment, and even your utility bills.

We’ll show you how to make small changes that add up to big savings. Unlock a summer that’s memorable and budget-friendly!

Spread the word! Share the attached flyer 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!

Parachute Services, Student Loans

Student Loan Delinquencies Surge, Threatening Credit Scores and Financial Stability

A new report from the Federal Reserve Bank of New York’s Center for Microeconomic Data reveals a sharp increase in student loan delinquencies, raising concerns about the financial health of millions of borrowers.

The report, which includes data updated through the first quarter of 2025, shows that after a five-year pause, student loan delinquency rates have returned to pre-pandemic levels. Nearly one in four borrowers (23.7%) with a payment due are now behind on their student loans. This surge is attributed to the expiration of pandemic-era protections that temporarily halted loan payments and reporting of delinquencies to credit bureaus.

The consequences of this rise in delinquencies are significant. The report highlights that borrowers who have become newly delinquent are experiencing substantial declines in their credit standing. Over 2.2 million borrowers saw their credit scores drop by more than 100 points, and over one million saw decreases of at least 150 points. This credit score damage will lead to:

Higher borrowing costs for future loans (auto, mortgage, etc.)
Difficulty obtaining new credit cards
Challenges securing housing and employment

The findings underscore the vulnerability of borrowers, particularly those over 40 and those with already subprime credit scores, who now face increased financial hardship due to these delinquencies.

“The resumption of federal student loan collections marks a significant and potentially destabilizing event for millions of borrowers who have already faced economic hardship. The end of this long-standing pause demands immediate attention and action from borrowers to understand their repayment options and avoid the severe consequences of default, including wage garnishment and the withholding of essential federal benefits,” says Noelle Carter, President & CEO of Parachute Credit Counseling.

For those facing student loan challenges, Parachute Credit Counseling offers free, confidential support. Our experienced counselors advocate for borrowers, helping them understand their options with the Default Resolution Group and assisting them in choosing the path that aligns with their best interests. For more information, borrowers can call 716-712-2060 or visit https://parachutecreditcounseling.org/.

Budget, Parachute Services

Join us for a FREE Parachute virtual Zoom workshop: Financial Fumbles: 10 Mistakes Sabotaging Your Savings

JOIN US! This workshop will review the top ways we often fumble with our savings. Learn the small behaviors (habits) that can add up to big returns and grow our savings in strong ways PLUS hear about current Bank-On efforts to make banking more accessible.

Financial Fumbles: 10 Mistakes Sabotaging Your Savings

NEW TIME!! Wednesday, May 14 from 5:30 p.m. – 6:00 p.m.

Register now! Spots are limited!

Register at: https://bit.ly/parachutefumbles

Spread the word! Please share 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!