FRAUD ALERT! Have you received a check in the mail from someone you don't know personally? Before you deposit or cash that check, click here for more information about check fraud at FakeChecks.org: Home

BUDGETING & CREDIT: A financial budget worksheet is available here in excel format.

BUDGETING & CREDIT: Building Your Credit  

Remember, if you have a problematic credit history, building credit can take some time. Here are some steps to help you build your credit.

Get a copy of your credit report and review it for errors. Take action to address any errors you find.

Apply for a small loan at the bank, thrift, or credit union where you have checking and savings accounts.

Apply for credit with a local store, such as a department store. They typically have a lower credit limit and a higher annual percentage rate (APR), but are generally more willing to lend you money. There is usually no fee for department store cards.

Make a large down payment on a purchase and negotiate credit payments for the balance. If you do not have a credit history but have a large down payment, there is less risk you will not make the payments. For example, if you are buying a used car for $5,000 and have enough cash, you might consider making a down payment of $1,000-$3,000. Although the loan will be very small, it can prove you make your payments on time.

You might ask a friend or relative with an established credit history to be a cosigner for you. A cosigner promises to repay the loan if you don’t. The lender should report the payment information for both you and the cosigner to the credit reporting agencies.

Pay your bills on time. This will help establish a good credit history, so you can get credit in the future.

You might ask the lender to review your history of making rent and utility payments to demonstrate your ability to pay.  

BUDGETING & CREDIT: Savings Tips  

1. Consider your needs vs. your wants. Think about items you purchase on a regular basis. These add up. Where can you save?

Do you eat out at restaurants a lot?

Can you cut back on daily expenses, such as coffee, candy, soda, or cigarettes?

Do you have services you do not really need, such as cable television or a cell phone? 

2. Set up a direct deposit and an automatic transfer to your savings account.

When you get paid, put a portion in savings through direct deposit or automatic transfer.

If you have a checking account, you can sign up to have money moved into your savings account every month. What you don’t see, you don’t miss!

U. S. Savings Bonds can be purchased through payroll deduction.  

3. Pay your bills on time. This saves the added expense of:

Late fees

Extra finance charges

Disconnection fees for phone, electricity, or other services

Fees to reestablish connection if your service is disconnected

The cost of eviction

Repossession

Bill collectors  

4. If you use check-cashing stores regularly, you might be paying $3 - $5 for each check you cash. This can easily add up to several hundred dollars in fees every year. Consider opening a checking account at a bank or credit union.  

5. If you get a raise or bonus from your employer, save that extra money.  

6. If you have paid off a loan, keep making the monthly payments to yourself. You can save or invest the money for your future goals.  

7. If you receive cash as a gift, save at least part of it.  

8. Avoid debt that does not help build long-term financial security. For example, avoid borrowing money for things that do not provide financial benefits or that do not last as long as the loan. Examples include: a vacation, clothing, and dinners out in restaurants. Examples of debt that helps build long-term financial security include:

Paying for a college education (for you or your child)

Buying or remodeling a house

Buying a car to get to work  

9. Save your change at the end of the day. Take that change and deposit it into the bank (every week or month).  

10. When you get a tax refund, save as much of it as possible.  

11. If your work offers a retirement plan, such as 401(k) or 403(b) plan that deducts money from your paycheck, join it! Most employers will match up to $. 50 on each dollar you contribute. The matched amount is free money!  

12. If you decide to make investments, do your homework. Know what you are investing in. Get professional advice if you need it. You should have enough money in savings to pay for 2-6 months of expenses in case of emergency. Make sure you have an emergency savings account before considering investing in non deposit products.  

13. If you own stocks, reinvest the dividends to purchase more stocks. Some companies offer an easy way to do this called a Dividend Reinvestment Program (DRIP). This process increases your investment faster, similar to compounding.  

14. If you are interested in learning about investing, you might want to consider an investment club. The National Association of Investment Clubs (NAIC) is the corporation that supports this investment style. Investment clubs are groups of people who work together to understand the process and value of investing even small amounts of money (as little as $5-$10).  

From the FDIC’s Money Smart curriculum. For more information on Money Smart, visit www.fdic.gov.