Fashion Contrast

Frugal living is the absolute key to financial happiness. This is probably something which the majority of people know, and what the minority who perhaps tend to the target audience of this post “need to know”.

Credit is perhaps one of the hardest forms of financial lending to actually hold onto. I remember when I was younger in a sense dreaming of the day I earned ‘mega bucks’ and paid for everything on my platinum credit card, saved huge amounts of money into my high interest paying savings account and generally lived the high life. Oh, and I could afford the biggest first time buyer mortgage going.

Life is just not like that.

When you actually have credit its amazing how quickly you either pick up the latest cards or loans, or even in my case are ‘sold’ them. Its horrible to think that people simple do make money out of your financial misery. Sad, but coincidentally true.

Some Great advice came up on a frugal living site that I frequent on how to repair bad credit ratings etc. Its fairly useful.

Maybe you missed a few payments at a stressful time in your life, or ran up high credit card balances during your freshman year of college without realizing you had no way to pay. Or, bills for emergency medical treatment weren’t covered by insurance and went to collections. We all make mistakes, and I’m sure you are already paying the price for being less than careful with your credit. Take heart, friends. The problem is more common than you may realize, and you can get back on track. Here’s how:

1. Stop using credit cards! This is an important first step. If you’re still using credit cards for purchases that are not emergencies without paying your bill in full each month, you need to suck it up and put away the plastic. Now.
2. Make sure your accounts are up-to-date. All of them. Even if you can just pay the minimum. If you can’t even make the minimum payment, try step three.
3. Get on a payment plan. Contact your creditors to arrange for payment. Most will work with you to help you bring your account current by either accepting reduced minimum payments for a while, reducing interest and fees, or a combination of both.
4. Review your credit report for errors. It happens surprisingly often. Keep an eye out for accounts that aren’t yours, especially if you have a common name. Sometimes information gets inadvertently attached to the wrong person. Alert the credit agency immediately, especially if you suspect fraud. You have enough to worry about!
5. Start establishing an on-time payment history. If you still have a credit card, make sure you pay on time every month. If you don’t have one, get one if you can. Set up one recurring charge like your cell phone bill, and pay it in full every single month. This advice may seem to contradict step one, but in order to repair your credit, you need to establish a history of paying on time and in full. So, stop using your credit cards recreationally, and start using them responsibly.
6. Give it time. Repairing your credit isn’t going to happen overnight. Even once you bring your accounts up-to-date and start making a trail of on-time payments, it can still take several years for your previous delinquencies, collections or defaults to clear off your credit report.

Buyer beware! There are organizations of questionable repute claiming the ability to wipe clean your past credit mistakes. No one can instantly fix your credit. With these organizations you’ll probably encounter big fees and little results. Instead, if you need help, contact a reputable, nonprofit credit counseling agency. Fees are low or nonexistent, and the services they offer, like helping you negotiate payments, can make a world of difference.

When you are in the privileged position to be able to save some of your monthly pay cheque, you must be doing something fairly right.

Most days I wonder what my life would be like if it was made slightly more secure by the introduction of actually saving money each month, for either a rainy day or for a first time buyer mortgage or even a new guitar amp.

As perhaps return readers might understand – saving money is simply not as easy as just deciding to put X amount aside each month. There needs to be an element of financial security in place to allow a ‘saver’ to save money and not put themselves into a position that is not clever.

Apparently a massive mistake savers make is ‘neglecting their savings accounts’ as Banks are meant to inform you when your interest rate is going to be cut, but like all warnings they seem to not get through. Even when this information is passed through is rare that savers actually act on it.

Neglecting your hard earned savings is perhaps one the worst mistakes you can make, plenty has changed in the savings market over the last few years and this trend continues to do so every year or even every few months. This in effect means that old ‘safe’ accounts are probably likely to be paying fairly rubbish interest rates now despite the understanding given from the banks that your interest rate will remain good.

“Best Buy” savings accounts generally do not spend very long at the top of the tables longer than the interest rate in minutes. For example purposes only here are the best buy savings accounts in January 2009

As you can quite obviously see that if you keep your money in one of these accounts and simply do not switch and save in another account you are bound to lose money.

In the best interests of oneself, its worth “shopping around” for the best deal, be aggressive, remember: its your money.