Many people think that bad credit holds them back from getting a job, obtaining low-rate loans and achieving a financial fit life. But the truth is that there is no sense in putting all the blames on your bad credit score. It is time to realize that it is not the credit score per se that bars you from achieving what you want in life, but your day-to-day decisions.
Here are some tips in eliminating the things that block you from making a progress in increasing your credit score and improving your finances:
Evaluate your spending habits
How you spend money is as important as how much you really have. Think about your income and the expenses that you have been making in the past 12 months. Are those expenses aligned with your goals? Are they equal or at least lower than your income? Your spending habits must be aligned with the results we want to achieve.
Let’s say, you are making $5000 a month and you make $2000 for repayments. That leaves you with $3000 to spend freely. If you are planning to increase your income, ask yourself if you are setting aside a certain amount of money to do that. Otherwise, you are simply making a plan but not doing anything to reach your goal.
Self-examination helps you think about your choices and the opportunities that could help you realize your goals and overcome bad credit. When your decisions are aligned to your goals, there is a better chance for you to get the results you wanted than simply waiting for your circumstances to get better before you take action.
Identify your financial goals
It is difficult to work on an unclear goal. Make up on your mind on what you really want to achieve. If the short-term goal is to increase the profits of your business, make sure to align all your management decisions into boosting your business revenues even if you need short term loans for business. Let’s say, you want to double your sales at the end of the month; don’t spend your loan proceeds on things which have no relation into boosting your profit margins. You can set aside other unrelated actions, and focus more on sales-related tactics such as improving product quality, increasing marketing efforts and improving customer service.
Know what you want to achieve is equally important as knowing what to do. By achieving clarity of purpose, you will minimize actions that could possibly stifle your progress. So, if you want to invest money on a particular endeavor, invest time in clarifying your goals. It will guide you not only in contemplating the results you wish to realize, but in implementing related strategies that could guarantee good results.
Eliminate expensive habits
Here are sneaky habits that are eating up your money:
- Financial statements
Keeping track of your bills and receipts are a lot easier these days because most companies are going paperless. But, the obvious downside is that is also easier to overlook. So, it will be wise to check your financial statements regularly. Doing so, can help you check if there are recurring charges or incorrect entries that are sucking up your budget and damaging your credit score so that you can dispute them with your credit provider. If you are no longer using certain services, you can drop them altogether.
- Wasting food
If you don’t have a weekly menu plan, it is difficult not to waste food. Unless of course, if you are feeding a bunch of teenagers inside the house, who love leftovers and anything inside the fridge. But, if you’re cooking for yourself or for two persons, make sure that you plan ahead of time. It will help you to stick to your menu’s ingredients every time you shop. It will keep you from overstocking canned goods and grocery items that you won’t consume anytime soon.
- Stress shopping
How many times did you buy an item simply because you are stressed or you feel down? When we go to the mall to “feel better”, we may end up buying things which we don’t really need. It is similar to doing your grocery when you are really hungry. You may buy food items, like junk foods simply because you want to eat. So, next time that you want to relieve stress, go to places where you don’t have to do some stress shopping, like a park, your favorite gym or anywhere peaceful so you can relax.
- Other expenses
If you are spending a lot of money on gym membership or an expensive hobby, maybe it is time to look for a cheaper alternative. Buying used sports gears or simply renting those items are way cheaper than actually buying brand new gears. There are also cheaper gyms that offer good services similar to what luxury gyms offer. If you can save money and enjoy the same quality of services, why not opt for the option that allows you to save more money in return?
Multiple factors contribute to falling into debt and straying from having a financially fit life. However, being mindful of all these factors will change your life for the better.
Editorial Note: Opinions expressed here are the author’s alone, the author being www.australianlendingcentre.com.au, and are not those of Credit Fix Solutions, any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.