A good Credit Score can save you money on your next major purchase…

A good credit score can save you money. A credit report is a broad view of an individual’s credit history. Gives information on whether an individual pays bills on time, the type of credit owned, length of accounts, amount of credit used and if new sources of credit are being sought.

Three national credit bureaus maintain credit reports: Experian, Transunion and Equifax.

Good credit = more money in your pocket

Factors that affect Credit score

1.   Payment history (35%): Ability to pay bills on time; affects credit the most.

2.   Credit Usage (30%): Amount owed. Keeping credit utilization under 30% is strongly recommended for best credit building. (For example if $10,000 total, then keep credit use under $3000).

• Credit Utilization: Utilization of available credit on revolving accounts.

•  Amount Owed on Installment Loans such as auto loans and Mortgage with set loan term and set amount of payment

3.   Age of credit (15%): Also known as length of history; Length of time your revolving accounts have been open and length of installment accounts. It is an average of ALL accounts

4.   Type of credit (10%): Credit mix. The different types of credit accounts.

5.   Credit Inquiries (10%): Authorization to look up credit. Multiple inquiries negatively affect the credit score. Grouping inquiries within the same month will help to minimize effect on credit score.

Before you develop a plan to fix your credit score, you need to know what is on it.

Check your credit report to know what is on it. Annual Credit Report is a federally approved site that offers a free annual comprehensive credit report. Check your credit report at least annually to stay on top of its content.

Your net worth

An important step in developing your financial plan is knowing your net worth. Your net worth is a combination of what you own (your assets) and what you owe (your liabilities).Your net worth helps you know where you are, so you can decide where you want to go. It helps you understand your current financial situation and gives you a starting point for measuring your progress towards your financial goals.

When we started our financial journey, our net worth was at a negative. That helped us determine what our starting point was, and we were able to set our financial goals based on the life we wanted to create for our family.

To calculate your net worth

1. Add up all your assets (what you own). These include:

• Money in your retirement, investment and bank accounts

• Bonds

• Stocks

• personal items/jewelries

• Market value of home

• Your cars

• Cash value on any insurance property

2.Add up all your debts also known as liabilities: These include :

• Credit card debts

• Mortgages

• Student loans

• Car loans

3.Subtract liabilities (debts) from the assets

To improve your net worth

• Get on a budget and stick to it

• Develop a financial plan

• Earn more

• Save more, spend less

• Get out of debt

Start by calculating your net worth and then work on developing a plan to improve it.

Immigrants and Financial Freedom

Immigrants have such a great work ethic. Working hard and always showing up. We come early, stay late, work from home and take on extra projects. We miss out on kids activities to catch up on work requirements. We go above and beyond what is required even when we get passed on repeatedly for a promotion. Our financial needs pressure us to accept being continuously overworked even when undervalued and underpaid.

Our parents expect us to be the smartest, earning more degrees and titles. So we have been conditioned to work hard and accumulate accolades. A study found that more than 40% of African immigrants had 4 or more years of college and they were more educated than native-born Americans.

The unfortunate thing about the title and fancy degree is, in the US they are accompanied by student loans and a lifestyle that society expects us to uphold. Maintaining that lifestyle sinks us further into debt. 

At the time most immigrants get to the US, they are racing against a financial clock. In order to meet up, they need to double up on building wealth. Something that unfortunately happens much later than it should; further delaying the chances of living the life they truly desire.
According to the Survey of Income and Program Participation, the overall median wealth of U.S.-born couples is 2.5 times the median wealth of foreign-born couples. The gap is even bigger for migrant singles compared to U.S.-born singles, who hold three times more median wealth. 

Armed with a dream, and a plan to work hard, most of us jump from the plane right into whatever job is readily available. We do not spend the time to figure out a plan for the money we will make or how we intend to make it work for us. We just want to work. Besides, the needs of the family back in our countries of origin do not give us enough time to set your financial goals. There are mouths waiting to be fed, and debts to be paid.

To prevent feeling financially trapped , we need to empower ourselves. 

Financial education is very important.

Getting out of debt and building wealth allows us to choose the life we want. We get to plan our life and take the time to choose the career we have always wanted. 

How many of us immigrants would rather have a different career ? 

🗣Being debt-free offers us that freedom. 

If you learn to manage what you have, God will pour more into your life. Don't try to pull everyone with you through the little glimpse of a hopeful future coming through the crack of the window. Build yourself up financially, so you can support the rest of your family by opening the door for all to go through.

Financial independence gives you freedom

Setting Your Financial Goals

Money management is mostly linked to your behavior and less of what you know.The things, people or experiences that we value affect the way we manage our money. 

Our values are shaped by our upbringing, religious beliefs , culture, family, friends, and community.Our values and belief system guide our financial choices.

Our financial plan cannot be based on emotions and value alone. This is the reason why it is important to write down your financial goals and develop a concise plan for managing our money. 

To win with money, you need to set goals, commit to your plan and be consistent.

1. Find your WHY: We were motivated by our mistakes, failures, setbacks and experiences to want a stable home for our kids. One that will not be indirectly controlled by those that we ‘work’ for. In the midst of our struggles and financial reset, we found our reason WHY. Ask yourself, what is my reason why? What kind of life do I want for myself and my family? Where do I see myself in the next 1, 3, 5, 10 , 20 years? 

2.Write down your goals and review them often. Our goals are attached to the end of our monthly budget sheet. When we do our budget, we are reminded WHY we need to stick with the program. It is very easy to loose focus in our fast paced environment. Develop a system that works for you. Maybe a post it on your mirror, or Alexa telling you each day when you wake up what you are striving what. Whatever you do, make sure that you maintain consistency.

3.Your goals should be SMART

Specific: What do I want to achieve? Be as detailed as possible. What challenges do you anticipate? When we set a goal of paying off part of Jay’s student loan of $73,000 in a year, we knew that we were going to face challenges.Some of which were not having to shop, not taking vacations, cutting back on family time and others. Acknowledging those challenges and knowing why we were giving up these things made it tolerable.

Measurable: How are you going to measure it? If your goal is too large, break it down into smaller pieces. Looking at $73,000 in a year is overwhelming. But when we broke it down to monthly goals, we knew we had to focus on raising $6,000 in a month. Focusing on the smaller monthly goals, eventually led to us accomplishing the bigger goal.

Actionable: What are you going to do (actions or steps to be taken)to achieve your goal? Is it cutting back on eating out, meal planning etc.

In the case of Jay’s student loan, some of the steps we committed to were working overtime to increase income, not eating out, meal planning, downsizing our home, budgeting, and cutting out cable. 

Realistic: Is my goal something I can achieve or am I setting myself up for failure? 

In setting our goal of paying off $73,000 in a year, we wanted to set a goal that was attainable and was also going to challenge us. Some months when we felt like we could not meet our goal, we were forced to make drastic changes. Some of which included Jay working 27 days straight in a month or the kids not having Christmas presents. This is where your reason WHY is going to keep you motivated. 

Time Bound: When do I expect to achieve my goal? This helps solidifies your plan. We wrote our deadline down to the hour of the day and minute that we wanted the student loan gone.

In planning  your financial future leave nothing to chance.When you know what and why, it would be time to put the plan in motion. Maybe you are interested in resetting your financial life like we did, or you want to move your finances to the next level. Whatever the case,we recommend you create your SMART goals.

We are giving you the template we used to develop our goals. It worked for us and helped us develop a plan to pay our debt. It is yours FREE.

Creating an Emergency Fund

An emergency fund gives your peace of mind and protects your finances during a financial crisis. It serves as a cushion between you and all the unexpected events that life will throw at you.It prevents you from worrying when you experience a decrease in income, or have no income. Most of all, it makes sure your financial plan stays intact.

Money Used for things that are Urgent and Unexpected

When we were told our emergency fund was insurance preventing us from getting back into debt, we did not fully understood the concept. It was just a matter of time before the message became crystal clear. A few months after we moved into our home, AC unit needed fixing, the roof developed a leak and one of the our cars needed repairs. All of that ended up costing us about $6000.

You will have crisis in your life that will require money. Money in your emergency fund will come in handy for those unexpected but urgent needs.

How much do you need in your Emergency fund?

 
The amount of money you save in your emergency fund depends on your family situation. It is recommended that you save at least 6 months of living expenses .

Some of the things to consider prior to deciding how much you save in you emergency fund include:

• Job security

• Marital Status

• Health of income earners

• Number of income generators

• Family obligations

How to build an emergency fund

1- Create a budget: This will enable you to know what your living expenses are, and help you set a baseline of your spending. 

2-Start and be committed. Irrespective of the amount, save on a regular basis. Be consistent.

3-Automate your savings

4-Get out of debt and increase your income: Consider decreasing your spending, canceling subscriptions you are not using, selling things your don’t need or getting a second job.

Sign up for the free BFR 14-day saving challenge and start building your emergency fund today.

10 ways to protect your financial well-being during a crisis

1. Make a budget and cut back spending to focus on essentials like food, utilities, transportation, and lodging.

2. Contact credit card companies and lenders to ask about payment options to avoid late penalties, interest charges, and damages to your credit.

3. Freeze debt repayment if you are hard on cash.

4. Reinvest in yourself. Focus on building your skills or broadening your knowledge

5. Utilize your support system and take care of your mental health.

6. Need help? Contact community organizations like food banks and faith-based organizations, for assistance to help cover daily essentials.

7. Create or update your emergency plan an review with those in your household.

8. Watch out for scams. Protect your financial information.

9. Avoid large purchases and make a plan for AFTER the financial emergency .

10. Review and safeguard important documents such as insurances, living wills and durable powers of attorney.

How to stop spending: 8 ways to save money

It is very tempting to spend when you are trying to work on your financial goals. With the advent of online shopping, all it takes is a click of the mouse or a swipe of a finger and your purchase is on the way. Many shopping sites are making it very easy to save your credit card information and are using adverts to make their products harder to resist.

The good news is, there are things you can do to remove the temptation and stay focused on your goal.

1. Make a budget before the month ends and before you receive your income and make sure you stick to it.

2. Cancel subscriptions you are not using. The cable that you barely watch, or the gym you have been planning to go to are all recurring expenses that steal your income.

3. Unsubscribe from newsletters and emails.Those deals that are delivered in your email are a trigger for you to spend. So why not remove the trigger. If you do not know there is a deal, you will not go looking to buy. A good app to use to unsubscribe is unroll.me app

4. Use coupons, discount codes and cash back apps to shop. Make sure you are shopping for things that are on your budget. Honey will give you coupons and compare other sites for cheaper prices for your purchases. Another site, Rakuten gives you cash back on purchases you make.

5. Use cash. When you use cash, you feel the weight of your spending. Remove your credit and debit card information that is saved online. When you have to input that information every time, it gives you a few extra seconds to rethink your decision.

6. Use a shopping list when you go out grocery shopping

7. Negotiate your bills with service providers.Most service providers have loyalty programs for longterm customers or discount programs to keep customers. So before you commit to your next billing cycle, make sure you are asking for a deal. What is the worse that can happen?

8. Plan meals. Planning meals helps you with your grocery shopping and also reduces impulsive shopping. The random trips to the fast food restaurants because you cannot figure out what to cook is $30 extra dollars you have saved. Plus, you can get the family involved and make it a fun, family bonding activity.

Be Financially Prepared: COVID-19

The Coronavirus is here, and has been declared a Pandemic. While we wash our hands and follow the recommendations advised by the CDC, we also want to stay financially prepared.
In the mist of an illness, the last thing you want to be doing is worrying about money, your loved ones or trying to find your important documents like your insurance cards .

While you take measures to prevent getting the virus, or read up on the signs or symptoms of the coronavirus, take some time to plan. The plan will serve as a road map for what actions you and your family will take if you or anyone gets sick.

• Make a plan and review with your family members 

• Gather important financial , personal, and medical information and keep in a safe place. 

• Continue to save money in your emergency fund . Keep a small amount of cash at home in a safe place 

• Discuss your Investment options with a certified financial advisor and ensure you are making an informed decision.

• Make sure you review your insurances and consider enrolling in life, health insurances and update your beneficiaries. 

Another useful tool to use to gather your documents is the Emergency Financial First Aid Kit.

𝗧𝗵𝗲 𝗘𝗺𝗲𝗿𝗴𝗲𝗻𝗰𝘆 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 First 𝗔𝗶𝗱 𝗞𝗶𝘁 (𝗘𝗙𝗙𝗔𝗞) keeps you prepared if a disaster strikes your community. The EFFAK contains the following four sections 

♦️Household Identification

♦️Financial and Legal Documentation

♦️Medical Information

♦️Household Contacts

Each section includes checklists and contact forms to help you collect and assemble your relevant documents and information

The form  is available for Free from the Federal Emergency Management Agency (FEMA) 

Download the form today and create your plan. So if you or a loved one gets sick, you do not have to worry about anything else but nursing them back to health.

Developing an attitude of gratitude

💕Today,  the smile on my 3 year old’s face as she babbles off her endless morning demands reminded me that we got to see another day. 

💕The caring nature and innocence of our 6 year old asking her sister to let ‘’Alexa” rest from playing all night , got me thinking that giving does not have be financial. Being there for another is giving of yourself. 

 💡Sometimes we get so focused on achieving our financial goals or fighting off our financial stressors that we forget to show appreciation. We lose sight of the blessings that surround us, the goals we have achieved and the drive and motivation that has been given to us.

It has been shown that developing an attitude of gratitude helps you achieve your goals sooner and helps improve your overall health. It is about the mindset.

How to cultivate an attitude of gratitude

1. 📝Make it a habit to write down each day the things you are thankful for that cannot be bought with money. Doing so consistently for 30 days will make it a habit. Better still, start a gratitude journal.

2. Talk about the people or things you are thankful for. Let the people you are grateful for know how you feel about them. You do not have to wait for a special occasion.
For example, at the end of the day , tell your spouse 3 things that you are most grateful to them for.

3. Do something for those you are grateful for. Simple things such as a thank you note, taking someone out to lunch, a phone call or a text message go a long way. Do not wait for the ‘other’ person to initiate contact. Be the sunshine in someone's life and let them know they were thought about.

4. Acknowledge your accomplishments no matter how small. You may not be where you intend to be, but you are taking action to get there. Be thankful for those small wins. They add up to the big win.

𝐖𝐡𝐚𝐭 𝐚𝐫𝐞 𝐲𝐨𝐮 𝐭𝐡𝐚𝐧𝐤𝐟𝐮𝐥 𝐟𝐨𝐫 𝐭𝐨𝐝𝐚𝐲?

What can you be thankful for?

529 Plan

𝐌𝐚𝐤𝐞 𝐠𝐫𝐚𝐝𝐮𝐚𝐭𝐢𝐨𝐧 𝐬𝐨𝐦𝐞𝐭𝐡𝐢𝐧𝐠 𝐭𝐨 𝐥𝐨𝐨𝐤 𝐟𝐨𝐫𝐰𝐚𝐫𝐝 𝐭𝐨! 

The 529 plan is an investment vehicle used to save for education and education- related expenses .

Benefits of the 529 plan

It is a tax -advantage account

Can be used for education related expenses for any age: elementary through college level and beyond 

It is transferable to other siblings and relatives( in case one decides to skip college) 

Owner controls the account not the beneficiary

Can be used for tuition and other education-related expenses such as housing 

Accounts owned by the parents have very little impact on financial aid so child may still qualify for financial aid 

Disadvantages

Limited investment options

Has associated early withdrawal fees

May have a short investment window if you start late

𝘔𝘢𝘬𝘦 𝘺𝘰𝘶𝘳 𝘣𝘦𝘯𝘦𝘧𝘪𝘤𝘪𝘢𝘳𝘺 𝘦𝘹𝘤𝘪𝘵𝘦𝘥 𝘵𝘰 𝘵𝘰 𝘨𝘰 𝘵𝘰 𝘴𝘤𝘩𝘰𝘰𝘭. 𝘉𝘳𝘦𝘢𝘬 𝘵𝘩𝘦 𝘣𝘰𝘯𝘥𝘴 𝘰𝘧 𝘴𝘵𝘶𝘥𝘦𝘯𝘵 𝘭𝘰𝘢𝘯𝘴!

Disclaimer: Consult a Financial Advisor on whether to, and how to implement investment advisory services.

How to talk to your spouse about money

Talking to your spouse about money can be very challenging. This is in part because each spouse has a different relationship with money. The value they give to money, how they feel about money, the way they manage money, or their financial upbringing. 

Due to these differences, It is no surprise that talking to your spouse about money can awaken feelings of anxiety, fear, resentment, and distrust.

 These money talks even though stressful, are necessary for a healthy marriage.

 𝐓𝐡𝐞 𝐠𝐫𝐞𝐚𝐭 𝐧𝐞𝐰𝐬 𝐢𝐬....... Some things can be done to make these conversations less stressful.

In our quest to build a stronger, and more solid financial foundation for our marriage, we realized that 5 things are needed for a couple to talk about money without fighting. 

 1- Be open and honest with each other.  Avoid playing the blame game. It is hard for ANYONE to admit that they are wrong. 

“HERE ARE MY STRENGTHS, HERE ARE MY WEAKNESSES. SINCE WE ARE A TEAM, HOW CAN WE SUPPORT EACH OTHER?”

2- Be aware of your emotions, and keep them in check. Taking emotions out of these discussions is a hard task. So talk to your spouse about the feelings you have about your current financial situation and how your feel thinking about the future. Lead the conversation with love, and focus on creating a financial plan to tackle any money problems. 

3- Schedule financial discussions and make them fun (why not make it a date night too? ) Try not to talk to your spouse about money when you have had a long tiring day at work, or when emotions are running high. Give your partner an added reason to show up. Make room in your budget for fun activities to keep each other motivated to keep working toward your goals.

 4- Be consistent. Be intentional and make these discussions recurring events on your schedule. Block out specific dates in the month and set reminders. Those small consistent changes add up to the big wins.

 5- Both parties should be involved. No spouse should dominate the conversation. Be sure to seek each other’s opinions. Ask open-ended questions that allow your partner to contribute more than a “Yes/No” to the discussion. If you have a difficult time controlling the conversation, get a timer and take turns talking uninterrupted. 

Talking to your spouse about money keeps you accountable to each other. It also facilitates you reaching the financial goals your set for your marriage sooner. 

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4 Ways to Improve Your Credit Score

Your credit score is an important part of your financial plan.

Taking measures to improve your credit score without increasing your debt is important because a great credit score helps you build a solid financial foundation.
There a several ways to improve your credit score, but 3 factors play a huge impact on your credit score. They are :

Your payment history

This is your ability to pay your bills on time and also reflects any late payments you may have had. Of the 5 factors that are used to calculate your credit score, payment history has the greatest Impact on your credit score. To improve your payment history,

• Pay bills on time and in full

• Automate payments

Your Credit Utilization

This is the amount of available credit that you are using in your cards. The lower your credit utilization, the better your credit.
Your can improve your credit score by decreasing your credit utilization.
To do this, you should:

• Pay down debt or pay credit cards in full each month

• Increase total limit on credit cards.

The third factor that can help improve your credit score is:

The length is your credit history.

This is how long you have had your credit accounts. It can be challenging to make any alteration to the credit history as it is based on time. But some taking precautions to decrease the length of your credit history is helpful.

• Avoid opening new accounts

• Become an authorized user on someone’s credit card with great credit to lengthen your credit history.
  

Other things you can do to improve your credit score include;

• Get a secured credit card to establish credit history

• Use the Annual Credit Report check credit report for any errors and correct them immediately

• Avoid applying and opening new credit accounts frequently

• Keep credit age greater than 5 years

Experian also suggests using Experian boosts to improve your credit score.

Experian Boost gives you credit for paying your utility bills on time; a factor that is not otherwise included in the calculation of your credit score.

Saving on car rental

When we travel, we make a budget of how much we want to spend on the trip. For unexpected needs that may arise, we try to fit them into our miscellaneous budget category or find ways to get them at a discounted rate. In this case, we realized we needed to rent a car for an extra day. We ended up renting a Dodge Challenger 2020 for $2.92/ day. That is a savings of $74.64.

First we checked online for discounts, next we verified if enrolling as new members at a rental agency will give us discounts, then we checked at our professional organizations for membership discounts, and lastly we compared these discounts to using the loyalty points we had been accruing for being active members of enterprise.
To get our cash rewards we reserved the car online via ebates now Rakuten. We proudly proceeded to check out our $2.92 rental using our enterprise loyalty points at the counter. Yessssssss !!!

Other things to do to save on rentals include:

1- Using an App like honey to quickly find online coupons for car rentals

2- Use rewards from rental loyalty programs like National , Enterprise or Hertz

3-Rent off the airport. Renting at the airport comes with extra fees to cover things like the running of the shuttle, and airport taxes. Renting away from the airport helps you avoid these extra costs.

4- Consider using your personal automobile insurance to cover your rental insurance. Also, most credit card offer rental insurance, so check with your insurance and credit card companies so your are not paying for insurance you already have.

How to stay on track with your financial goals

Our financial decisions are guided by the things that are important to us. The people in our life, the things we value, our financial goals, our environment, and the community we live in are some of those factors. As we struggled with getting our finances in order, we were faced with many challenges. Some of these being dealing with financial requests from family and close friends and the financial commitments from the community in which we lived.

Being able to balance our finances and maintain our relationships is a constant struggle. After a few arguments and some financial setbacks, we realized that we needed to find ways of striking that balance. First, we needed to remind ourselves of why we cared enough to find that place of harmony. That is where setting financial goals plays a huge part in your financial journey. They are a constant reminder of why you are making certain decisions and they help prioritize how your money is being spent.

When external influences like demands from family and friends, or the never-ending community engagements threaten to negatively affect your financial plan, those goals keep you focused.

Other ways to stay focused:

1.Set a monthly budget for giving

STAY ON TRACK

BUDGET

Creating a monthly budget is essential to maintaining your financial stability. Your budget tells your money where to go. Allocating a fixed amount each month for giving, tells you how much you have available to spend on loved ones, family or charity.
When you run out of your ‘giving’ fund, find other creative ways to give. 

2. Create healthy boundaries with your family and friends

Establishing healthy boundaries earlier on in your relationships makes setting limits and limitations a lot easier. Both parties are able to appreciate and respect boundaries that have always been in existence. Also, your expectations are more likely to be taken into consideration when making financial requests. Teach people how to treat you and they will respect your boundaries.

3.Consider other ways of being helpful

Find other ways to extend help besides monetary compensations. When a loved one reaches out to you and you have exceeded your monthly ‘giving’ budget (or they don’t fit into the criteria) you can always extend other ways in which you can help them. For example, offering to babysit or mow the lawn are things that can help a recipient save money. You can also lend emotional support or guidance, dig through your pantry and see what you have that you make use to make a basket for them. Visit with them, lend a listening ear or be supportive.

4.Do not base your relationships on money

Although the gifts and presents augment feelings of love, they cannot replace the affection, connection and sense of longing that we crave from a relationship. Being able to buy kids their favorite toys should not be a substitute for the empty seat at their game, neither should the expensive present replace the calls and regular visits to your loved one. Most often all we want is to feel loved, special and noticed . It is difficult to put a price tag on that. 

5.Learn to say “NO”

Most often, “NO” does not need to be followed by an explanation. An important part of  our financial reset was learning to prioritize our needs. Learning to say “No”, to yourself and others will allow you bring your dreams to life. We had to say No to our kids a lot of times during this journey. We still say No to each other because we understand we have goals to achieve. 

The quest for financial independence should not alienate you from your loved ones. Both can co-exist. Finding that balance can be challenging but it is possible. Find what works for YOU.