Money Management Is the Key to Financial Independence

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It is the world of high flying individuals. The youth, for sure, is career-oriented and fiercely independent. But the freedom comes at a cost. Expenses might pile up and if you are one of those individuals who hate dependency of any sort and you might end up losing your much-valued freedom. However, there is good news! There are a few easy steps that you need to keep in mind to achieve financial independence, followed by the hardest part, holding it.

Money management is the key to success for you; financial freedom starts from you and the steps you take. You might just be starting or are looking for better ways for taking the mystery out of money management. Do not get overwhelmed and read on.

Controlling your credit

Well, this goes without saying. You have to get full control over your credit. It includes keeping tabs on income, purchases, debts, and credits. Your credit score is a valuable asset, and all you need to do is have time, patience and an eye for the details. Remember a good credit score is 670 and above. Finding out the exact amount that you owe and getting current on the overdue bills are some habits that you should cultivate. Procrastination is the enemy. It is the only way to stop the obsession with money woes. By continuing to pay on time, you will be improving your credit score. Taking stock of the credit accounts is important as well. The general rule of thumb for a credit account is not going overboard. No more than 30% of the available credit should be used.

Automatic payments

Life is hectic. And automatic payments will save a lot of headaches for you. Generally, the credit companies allow for this feature. You have the option of fixing a due date and schedule automatic payments on a monthly basis. If you owe a credit company, you can contact them directly and work with the professionals and advisors. Ensure proper communication and hundreds and thousands off the net owed amount can be saved. You should also steer clear of charge-offs when a credit company comes calling. Signing a document of agreement or accepting the terms on something you don’t understand is a strict no. Cut those extra costs and enroll for automatic payment options with your credit company and the bank.

Payment strategies

You have to schedule your payments according to a carefully thought out plan. You should work from the smallest to the largest debt. By paying off the debts for the smaller credit accounts, you will get things done quicker. Paying more than once a month and using “fast cash”; a gift amount or a bonus to pay off debts is the intelligent thing to do. You should also make it a point to pay off the highest interest rate debts first. They will draw more as time wears on. Paying strategically is the way to go.

Listing the credit accounts

The key concept for money management is working on the payments. Listing the accounts earmarked for “due balance” is a good option. Credit accounts are usually of a variety of sorts. Include automobile or student loans, home loans, credit cards or credit from any other line of sources; the due dates noted and the minimum payable amount set aside. Setting up a reminder on your smart device is the way to go. It’s easy to get caught up in the act of earning money and spending the life fuel on the betterment of career opportunities. But a timely reminder and the necessary steps should prove a good friend in the long run.

Credit report

You can and should invest in getting your free credit report. Many reputable organizations offer the option of calculating your credit report and mailing it to your doorstep. These credit report organizations including Experian, TransUnion, and Equifax are reputable. It’s always the better to get the report verified by seeking a second opinion. Understanding the credit report is also important, and a bit of research goes a long way. A credit report typically contains; your personal information, accounts that are currently open, credit inquiry amounting to the previous and current year and public records. Contrary to the credit score, the credit report can’t be improved upon, but you need to make sure of any existing errors and notify the credit provider directly.

FICO score

Whether you get a loan or insurance of your property, the availability is dependent on the FICO score. Thus, your FICO score is highly important. Potential employers might even ask you for the proof of your FICO score. The score essentially determines your responsibility levels when it comes to buying and selling and credit management. It’s a marker for your value as an asset to your employer or credit provider. The FICO score is calculated by a combination which includes 35% payment history, 30% of the net amount owed, 15% of the length of your credit history, 10% of new credit and 10% for the type of credit owed. A good FICO score for companies is a range of 260-300.

Everyone is fighting their own battle when it comes to money management. But it’s never too late to start. Start today!