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Freaked Out About Finances? You’re Not Alone

0 Comments 03 September 2009


freak out Freaked Out About Finances? Youre Not Alone

You know that feeling, where your heart starts beating faster, you feel like you can’t breathe, and you just want to avoid the reality? I’m not talking about an anxiety attack, but about getting freaked out when checking up on your finances. You are definitely not alone, even if I’m the only other one with you.

Ever since I can remember, I’ve been very independently minded, even from childhood. I even held a job of some sort since the age of 10, cooked, cleaned, looked after others… but I was never fully financially independent.

With the opening of my first bank account, I had a nice sum of money… which, of course, went quickly. Why? Because I didn’t know anything about budgeting or money management. I wasn’t taught at home how important it is to check your statements and watch your spending, and with the rise of the feminist movement, the decline of home economics courses occurred before I even started school. Shortly after receiving some money put aside for me by a wealthy family member, I was at negative 100 dollars in my bank account. I got that covered, but from then on always had a fear that my balance would be too low and I just didn’t want to confront it.

So, for the first few years of my adulthood, I would never check my balance. I always just assumed I either had enough money, or didn’t, and somehow thought I could budget properly this way. I never took out a credit card, due to the lack of any credit at all. But, at the age of 23, I finally decided to take control of things… and it’s felt good, albeit occasionally nerve-wracking, ever since.

Credit Reports and Score

It is very important to keep an eye on your credit report. United States law requires that each credit bureau must provide you with a free copy of your credit report each year. The only government-approved website to obtain these statements is AnnualCreditReport.com.

Why does my credit score matter?

Your credit score and history determines your ability to be approved for a new credit card, a loan, and is even used to decide if you are trust-worthy enough to rent an apartment or home. Whether or not you are worthy of many of the basic conveniences of American life is based upon your financial history. It will show if you’ve paid your bills on time, how much you are currently in debt, and if other financial institutions have determined you to be credit-worthy.

There are three main credit bureaus that report your credit score:

  • Equifax
  • Experian
  • Transunion

The majority of Americans have a credit score between 650 and 799. The highest possible credit score is 990, while the median is 723 (according to FICO). An okay credit score is 700, 800 is good, and a score below 650 makes it hard to be approved for almost anything.

Something to keep for your notes is that each time you apply for a credit card, your score is dropped a few points. So it is very important to check up on your score prior to applying for one. While there are many credit reporting services online, it is best, if you’re going to get one in addition to your free credit report, to contact your bank for their recommendation.

Saving Money

When money’s tight, the last thing that’s considered is actually saving any of it for the long term. While that may be the case, it is unbelievably important to start saving at an early age. Expenses, minus college loans, are relatively lower before one starts a family, buys a house, and incurs more regular responsibilities.

College students and young people in general need to begin putting money aside … and not touching it. The first step is to set goals for your savings plan. Determine what it is you’re saving money for, then figure out a time line for accomplishing your goals. To learn more, check out Goal Setting for Saving Money.

While finances may be scary, don’t leave it up to only your accountant (or your husband) to keep track of them. Check your bank account balance regularly, pay off all of your bills on time before buying anything new, and sit down to make out a budget plan. A great online resource that can handle all of this is Mint.com, or you can just do it the traditional way and keep books of record. You can save yourself from debt, and get a healthy credit score in no time.

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