Planning For A Credit-Worthy Future.

Credit can be a fickle thing if when you don’t understand it many things can come about and bite you in the rear leaving you with a credit mess. The best way to avoid those messes or recover after coming out of a financial mess is to plan your financial future and set some boundaries for yourself for a better, more solid financial future.

Planning for your future can look like a lot of things and should involve many different aspects, like living within your means, things you want to accomplish financially, what you want out of your future credit, how you will build and maintain your credit, and how you will set guidelines for yourself to avoid making common credit and financial mistakes. This article with touch briefly on each one of these to offer you more insight into how to plan for a credit-worthy future.

Living Within Your Means

What does this mean exactly, well it means not spending more than what you make each month. This is one of the hardest and almost impossible things for American families to do, especially when your household expenses exceed your income. Ideally, you need to be able to pay all your bills on time each month and still be able to buy amenities like food and clothing, while sticking some in savings. To live within your means can be making choices between an upgraded cell phone plan and one that just covers what you mean. It can be the difference between eating out or learning to cook and staying in. There are lots of ways to shrink your monthly expenses to live more within your means.

What Do You Want to Accomplish Financially?

This can accompany living within your means, because if you are just distraught over the situation and want to have more luxuries in life, then you simply need to earn more money. You should look at the life you would like to live and then estimate what it would take months to make that life happen. You then would need to put together a plan to meet those needs before you start living that way. This could mean seeking out more training in your industry, asking for a raise, changing jobs, or taking a second job. The important thing is to always stay within your current means, even if you are looking for a way to increase your income. Until you are making that higher income, it is not available to you.

What Do You Want Out of Your Future Credit?

Most will answer with buying a house, buying a car, vacations, college for the kids, and retirement. These are all great and should be goals depending on your family and personal situation, but all these things and those like them require decent to good credit and some planning to obtain securely. Think about the types of things you want in these areas and speak with professionals in the industries to see what it would look like on paper. This will give you a realistic sense of what it takes to get your credit to the point of being able to afford and finance the things you want.

Build and Maintain Your Credit

To build and maintain your credit you need to stick with the guidelines surrounding the living within your means section and that means paying your bills completely on time every time. This is not always possible but should be strived toward and if not met should be made up as quickly as possible to get yourself back on track toward building and maintaining good credit.

Set Guidelines for Yourself

It’s important to set some spending rules and good habits for yourself. Don’t completely deprive yourself this will only lead to failure and can have catastrophic results for your finances and future. Instead, set some ground rules with occasional indulgences and stick money aside in savings for the big rewards. Smart money practices will always win out over excess in the long run.

Good credit is something that has to be worked at and maintained. While it is difficult to rebuild good credit after financial stumbles, good credit from the start can be maintained much easier. When you turn eighteen you will notice a barrage of credit card and other loan offers coming in the mail, calling you on the phone, and popping up in your email. While some may be tempting with high limits and promises of low-interest rates and payments, these can be the traps that walk you straight into a large amount of suffocating credit card debt in the future.

To navigate through these offers, you should open them all and read ALL the information carefully. It’s important to understand the information included with the offer. While they may be offering you 0% interest or some other enticing bit, the fine print will often reveal that the promotion is only for a short period of time or through certain restrictions. To help you decide which offers to pitch, which to keep and how to protect yourself from overwhelming numbers of offers, here are a few simple steps to follow.

1-Read the fine print

As mentioned above, the fine print will often reveal loopholes in the promotions, time restrictions on your initial agreement, and other nasty little things, like fees for a variety of things and other negative surprises that could jump out later down the line. If there is anything you are uncertain about or you find a company you are not familiar with, take the time to check them out with a site like ZapData or through the Better Business Bureau for complaints and in-depth information.

2-Consider the offers carefully to choose the right one for you

Before you fill out, call or send off the credit card applications, e best fitted to your needs. This doesn’t mean you should automatically pick the highest limit or lowest interest rate. As for interest rates, look for stability. If you are considering two different cards and companies and one offers 0% interest for the first three months, then the rate goes to 28%, is it really better than a card that offers 8% interest and never changes? You want consistency with no surprises. As for the limit, picking the highest limit can be tempting and you may end up maxing the card out and spending, just because it’s there. Instead, choose a card that offers a limit that can help you in an emergency but is not high enough to get you in trouble.

3-Opt-out of future offers

When you selected the card or cards you will apply for and use, it’s important to take the time to opt-out of future offers and future mailings. The more offers you get the more your credit is being checked and this is harmful to your credit score. You want to only allow the companies you ask to check your credit. There should be opt-out information on the application form itself, though it won’t be readily available, you will have to look for it a little. Some organizations and sites can help you opt out of the credit card offers without taking the time to contact each company separately. Check out or for more information and to sign up.

4-Set some rules

When you first get a credit card, it will seemingly burn a hole in your wallet. You will think about it all the time and you will feel as if you have been given free money, especially if you live on a budget or fixed income and don’t often have money for extras. Set some rules for yourself and follow some standard rules to avoid credit card debt. You should pay your balance every month and avoid paying the minimums. If you charge $1000 and only pay the minimums, at an average interest rate it would take you at least eight years to pay off the balance.

Credit cards can offer an emergency support system that you can fall back on in a time of financial hardship, but if not handled correctly can turn bad and land you in credit card debt that can be difficult to get out of.

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