Categories
Budgeting & Saving

How to Fix Bad Credit?

Wondering how to fix my credit myself? Or how to fix bad credit? There's no doubt that living in the modern world requires credit. Yes, you can live without a credit card and survive on cash or cashback debit cards.

I know because I did it for over two years as I paid off credit card debt. But what I really wanted to do was improve my credit score immediately.

However, when you are ready to buy a house, you'll need to get your credit straightened out. In this post I'll discuss getting a credit repair service as well as what steps you need to take if you decide you want to fix your credit score yourself. You might even be able to fix your credit in just 6 months.

These steps are so easy. Perfect guide for do it yourself credit repair.

Related articles from our approved partners:

How Can I Fix Bad Credit Myself? - 6 MonthCredit Repair Guide

First, watch this video from my friend Dominique over at Your Finances Simplified. He's going to tell you exactly how to fix your credit.

Watched the video? Good.
Feeling overwhelmed at the next steps?
Yep. I understand.
Let's take this step by step.

Take a deep breath. People think that having bad credit is the worse thing that can happen. But just calm down. You are taking the first steps which puts you on the right track.

Remember, it's just money.

No one is going to die. Take control and get back in the driver's seat!

Fix 1: Check Bad Credit

The first thing you'll need is your creditor information. Get the most recent credit card statements, loan balances, and installment loan reports along with addresses and phone numbers. I recommend printing everything old-school style. It's going to come in handy later.

Fix 2: Get a Free Credit Report

Then, take a second to get your free credit report from AnnualCreditReport.com. Each year you are able to pull your credit report for free from the three providers Experian, Equifax, and Transunion.

Optional: Get Your Free Credit Score

You can check an approximation of your credit score for free at Credit Sesame one of our approved partners, but if you are trying to fix your credit, you probably already know your credit score looks a little like this....

bad credit personified

But that's ok. We're going to put you on the good foot.

Fix 3: Review your credit report for errors (highlight each error).

You're getting ready to take charge and stop being a victim. Most people don't even realize what they could get removed from their credit just because of errors.

What should you look for?

Wait a minute. So, you're telling me you didn't watch the video above?

Scroll back up for me right quick and you'll find out exactly what you should look for.

Or keep reading...

Dispute incorrect names, addresses, SSN, and date of birth via the certified mail.

You will need supporting documentation and letters. You will have to write a dispute letter and include the specifics of the inaccuracies. You want to dispute inaccurate, erroneous, outdated, misleading, and unverifiable information in your credit reports.

Tired of being harassed by your creditors? Maybe you'd prefer that someone else handle all of this for you?

In that case, you might was to work with a credit repair company to improve your credit.


Are you ready to...

  • Remove bankruptcies to rebuild credit?
  • Permanently delete foreclosures and repossessions?
  • Erase debts that were in collection?
  • Completely get credit cards under control?
  • Get approved for loans?
  • Get the best financing on cars and homes?

In that case, check out our partner Lexington Law for more details on how they can help you clean up your credit report.

Finally, fixing your credit permanently also means creating good habits and getting out of debt.

How getting out of debt is like the MTV show, I Used to Be Fat.

I used to watch this TV show on MTV called I Used to Be Fat. The show documents young adults, usually high school seniors and high school graduates who want to lose weight before they start college. Each episode features a different teen. I absolutely LOVE this show. I like seeing the determination and perseverance of these kids, they are really focused on their goals. Most of them thought about quitting along the way but each one makes it to the end and they usually reach their goal.

I was thinking the other day about how the TV show is very similar to a battle with debt. When you're in debt, it can feel like you're carrying around a second person, experiencing frugal fatigue, or that you have a spare tire of bills around your waist. I know because I'm working on getting out of debt myself. I realized that there are 3 major points we can learn from the MTV show I Used to Be Fat when trying to take control of our debt.
debt

Improve Your Credit Step 1 - Give Yourself a Deadline

Before the teens even begin a weight loss program, their coach/personal trainer gives them a large tear off number calendar to place on their wall. It has the total number of days until their program completion date, and every day they rip off the next number.

It is a good idea, when you are paying off debt, to set a deadline for your debt-free date, like 6 months. Setting a deadline is a way of making your goal specific. Every time you look at that calendar or see that date it will push your brain consciously and subconsciously to make it to your ultimate goal, to reduce spending and get out of debt.

Improve Your Credit Step 2 - Check in Regularly with a Coach

Every week, the kids had a weigh in. Their personal trainer was making sure that they were on track with how much weight they were supposed to be losing at each stage in the process. Sometimes they were attempting to lose one pound a day! I never thought that was possible or healthy, but most of the teens actually accomplished it under the supervision of their coach.

If you really want to prioritize your goal of becoming debt free then you really have to give yourself check points. You can enlist the help of a friend or even a debt counselor to help you along the way. Having a good support system can make all the difference.

Improve Your Credit Step 3 - Get Rid of Old Habits and Create New Ones

When one of the teens was at a restaurant with her friends, she ordered a lean meal instead of the greasy french fries that her friends had. The personal trainer also taught her how to cook healthier meals so that she would be able to maintain her new lifestyle change.

Becoming debt-free is not a one-time goal. It has to be a lifestyle change. When I decided to start getting out of debt, I had to first evaluate why I was in debt in the first place. I had to eliminate my habit of impulse spending and replace that habit with a good habit. Now I impulse buy stocks and my portfolio loves it! It's not easy to change a habit that took years to cultivate, but with a good support system, it is entirely possible.

Are you ready to make a change?

Some of you may be thinking, I’m still young, so why should I care about my credit score? Lots of people have debt and less than stellar credit, but they’re still enjoying a cushy lifestyle. As long as I’m able to buy the things that I want, why should I be concerned? The answer is simple. Life is easier when you have good credit.

Take a look at it this way. Landlords, employers, and lenders need to determine whether they can trust you, and they look at your credit score as an indicator of your financial reputation. You may not think credit affects you greatly, but it does. When you ruin your financial reputation (a.k.a. credit score), it will take you a long time to restore it.

Poor credit affects your ability to rent, buy a car, get a home loan, and even open up accounts. Creditors don’t want to work with people with bad credit because the risk of not getting paid is very high. How can they trust that you will pay them back if you haven’t even paid others? If you’ve already tarnished your credit, here are some tips to help you fix your credit score and reestablish your life.

Improve Your Credit Step 4 - Make Your Payments on Time

This may sound trivial, but we all know that money can be tight, and skipping payments on one bill can help pay for other expenses. But, timely payments are the biggest factor affecting your credit score. Keep a budget, and make sure you have sufficient funds to make your credit card and loan payments on time.

Improve Your Credit Step 5 - Consider Getting a Secured Credit Card

Obviously, it will be very hard to get a regular credit card if you have bad credit. If you don’t qualify for a credit card, you can get a secured card instead. This is when the bank gives you a credit line equal to the deposit you make. If used wisely, a secured card can help nurse your poor credit to better health.

Improve Your Credit Step 4 - Add an Installment Loan

You can improve your score quickly if you show that you can be responsible for both major kinds of credit: revolving (credit cards) and installment (mortgages, auto, student loans, etc.). If you don’t have an installment loan and feel you are ready to handle one, consider adding a small personal loan. Stay away from expensive finance companies and “teaser” deals, and use a company that reports the loan to all three credit bureaus.

Improve Your Credit Step 5 - Avoid the Minimum Payment Trap

Credit cards come with high interest rates. We all know how our $2,000 computer ended up costing $8,168 because we only made the minimum payments at 20% on our credit card. Ouch, that hurts! Keep constant payments on your credit card (and don’t run them up again) and your balances will drop.

Improve Your Credit Step 6 - Use Your Credit Cards Lightly and Check Your Limits

Even if you pay your bills on time and in full each month, having big balances can hurt your score. Try to limit charges to 30% or less of your card’s limit. Lenders typically like to see a big gap between how much you’re charging and your available credit limit.

Improve Your Credit Step 7 - Keep Old Credit Cards

Don’t close out old credit cards. The longer your credit history, the better. Leave the accounts open but once you pay them off, stop using them. Closed accounts tend to bring down your score.

Improve Your Credit Step 8 - Suspend Credit Inquiries

The more credit inquiries you have, the more your credit score drops. Fix your credit and wait a while before allowing your credit to be pulled again.

Improve Your Credit Step 9 - Get a Goodwill Adjustment

If you have been responsible about paying your credit cards on time, the lender may agree to erase a late payment from your credit history. For more troubled accounts, communicate with your lender about possible options to erase previous delinquencies. If the lender agrees, it will improve your overall record.

Improve Your Credit Step 10 - Check Your Credit Report for Errors

You can check your credit report without negative scoring (once per year, for free) with the three credit bureaus at AnnualCreditReport.com. Make sure to look for any mistakes that could be hurting your score. If you see something wrong, make the effort to have it corrected.

Improve Your Credit Step 11 - Seek Professional Help

If you are overwhelmed with debt and don’t feel you can handle the problem on your own, consider working with a professional debt relief agent. They can help you explore your options and give you guidance on this post

It’s very easy to ruin your credit, but it takes time to build it back up. No matter how bad your credit is, you can take steps to make it better.

Sometimes we mishandle our budget, and we spend more than we should. (You know that you shouldn’t have bought that expensive flat screen TV). And, sometimes we end up in tough financial situations because of things beyond our control. Whether you have experienced job loss, illness, or another type of financial disruption, it’s important to know that you can turn things around.

It may not be easy, but step by step, you will be able to fix your financial situation. Just don’t delay facing the issue. The longer you wait, the harder it is for you to recover.

Categories
Budgeting & Saving

Combined Finances: To Merge, or Not to Merge?

This post was created in partnership with Credit Sesame.

Whether you have married, moved in with a partner, or are considering the next step in a relationship, one common question couples ask themselves is whether to open up a joint bank account.

A joint account is beneficial if you wish to share expenses like the monthly bills, but a large percentage of couples choose not to go that route. Many couples also find that keeping a separate account along with a joint account helps them keep finances straight. Before taking the plunge on a joint account, consider the good, the bad, and how to make the final decision.

Joint account overview

A joint bank account is a financial account that gives two or more people access to the same funds. These partners can make deposits, withdraw funds, and write checks. Examples of common joint bank account owners are married couples, partners living together and housemates that share bills.

The good

Joint accounts offer several advantages:

Long-term saving is easier. If you and your partner have a long-term purchase in your sights, a joint account is a great way to save for it. You can both deposit funds, and you can both see progress.

Budgeting is simpler. When all of your payments come from account, it’s easier to track money that you spend. Two incomes might also make overdrafts less likely to occur.

Spending patterns are clear. Each person with access to the account can see where the money goes. Some people like the accountability a joint account provides. Knowing that their partner can see the transactions makes them less likely to make unnecessary purchases.

More comfort in finances. If one person prefers not to take the financial reins, the other can lead.

The savvier person can teach. Even though the person with more financial comfort is leading, a joint account can be an ongoing learning opportunity for the partner who is less hands-on with money. Learning and growing together allows a deeper connection in the relationship.

The bad

Opening a bank account with a partner carries some disadvantages, too:

Vulnerabilities are inherent. A joint account allows an irresponsible person to cause credit and financial damage for his or her partner.

Transparency may breed conflict. One partner may become critical of the spending patterns of the other.

Privacy is limited. Your partner knows all of the purchases you make and vice-versa.

Financial management may fall to one partner. The partner holding the reins may resent that the other person doesn’t manage the account. Even the simplest of accounts require review and balancing.

Miscommunications can occur. Overdrawing the account due to miscommunication is possible. On a joint account, each partner must know how much money is in the account and what expenses the money is headed for.

The demise of the relationship can lead to financial confusion. If the relationship ends, there might be issues dividing the funds, or one person may deplete the funds without the other’s permission.

Financial entanglement can lead to financial liability. If one partner has a large debt - a tax lien or child support arrears, for example – the funds may be at risk for seizure.

Learn more: Tax Best Practices for 2016

How to decide

You and your partner must consider all of the advantages and disadvantages and come to an agreement on whether or not it is the best decision for your situation. You have options

You can open a joint account that for day-to-day expenses and keep your own separate savings accounts. This could help you avoid conflict.

A joint savings account is an ideal option if you and your partner want to save for a large purchase together like a vehicle or home. With your own individual separate checking accounts, you can still pay the routine expenses at whatever ratio you’ve agreed upon.

You can skip the joint accounts all together and only share expenses. This is for couples or partners who prefer total financial independence. Each person maintains total control over his or her money.

Your final option is keeping all of your finances divided. You and your partner can take turns paying bills and buying dinner. Having separate accounts doesn’t mean you have to keep all assets separate, but you could do that as well.

Before deciding to merge finances, complete transparency is key. Share your credit history, debt picture and financial goals with one another. You can start the conversation with a free credit report from Credit Sesame and analyze them together.

This goes without saying, but before you open a joint account, be sure you absolutely trust your partner.

 

About Credit Sesame

It’s our mission to be the credit and loan expert and advisor—finding the best way for you to manage your credit and loans to save money and build wealth. Get your credit score, and more from Credit Sesame.

Originally posted 2016-04-13 10:00:49.

Categories
Budgeting & Saving

How Filing Taxes On Your Own Can Make You Smarter

This partner post is part of the TaxAct #DIYtaxes blog tour which empowers you to take ownership of your finances by doing your own taxes. TaxAct provides the tools and guidance to help you confidently file your taxes easy and fast. Do your own taxes today at TaxAct.com. You got this. 

 

Do you do your own taxes? If not, maybe you should start. Filing taxes on your own can make you smarter. You’ll learn new skills and gain a better understanding about your personal financial situation than you ever thought possible. Trust me! I’ve definitely learned a lot about both tax rules and regulations, as well as my own money management style by doing my own taxes in the past.

When I first started doing my taxes, I was using the easy phone system. Because I was eligible for the 1040-EZ filing, all I had to do was call, report my income, confirm, and my refund was in the mail shortly after. As technology improved, I continued to file the 1040-EZ but I started to do so online. Then, I started a business and my taxes got a little more complicated. But I simply used an online filing service that walked me through the questions that I needed to make filing easy. And I learned a lot about credits, deductions, and where to go on IRS.gov to get more information.

Here are some ways that filing your own taxes can make you smarter.

Filing taxes on your own allows you to...

1) Learn About Tax Filing Deductions

As mentioned, one of the benefits of doing your own taxes is learning more about tax rules, regulations, and best of all, deductions. When you walk through doing your own taxes, you may find places to save money that you have never used before. This is especially true if you use a tax software that takes you through several question and answer prompts about events that may have taken place in the last tax year. Once you learn about these deductions and savings tools, you’ll be able to use them for years to come, as long as the tax code doesn’t change in the meantime.

2) Become Aware of Income and Expenses

It’s easy to get caught up on how much money you are bringing home every two weeks when you get paid and forget about the bigger picture of how much you are really earning each year in terms of both salary before taxes and other withholdings for retirement, health insurance, etc. But when you complete your own tax return, you’ll get a chance to see what your earnings and expenses really are.

3) Complete a Financial Check-Up

Again, doing your own taxes means you have to gather up all of your documents for the year, including earnings statements, expenses, etc. It’s also a good time to review the other aspects of your personal finances, like your debt obligations, investment accounts, insurance, and more. While you have all of that out and in front of you anyway, it’s a good idea to also give your budget a once-over to make sure you are saving as much money as you can. You may find that you can put more money toward your savings goals, or that you could lower some of your monthly bills with a little negotiation or leg work.

4) Make Last Minute Adjustments

By doing my own taxes, I’ve also been able to make some last minute adjustments to help my overall financial picture. As an example, you have until April 15th to make retirement contributions for the prior calendar year, which may help you cut down on the amount of income tax you owe to the government. Doing your own taxes means you have the ability to look at your tax status and decide if adding more money to your retirement savings is a good idea to help lower your taxable income.

5) Review and Adjust Withholdings

When you get ready to sign the bottom line, don’t think you are finished just yet. Once you’ve determine how much you owe to the IRS, or how much of a refund you’ll be getting back, you should take the time to adjust your withholding rate too. Although getting a large tax refund may seem like a good idea, it’s actually better to receive more money on every paycheck throughout the year instead. If you consistently receive a large tax refund, it may be time to lower you withholdings so you can receive more of your money throughout the year instead of getting a lump sum during tax time.

Likewise, if you ended up owing a lot of money into the IRS you can adjust your withholdings the other direction to have more withheld from your paychecks to get your estimate as close to $0 as possible for the new year.

Doing your own taxes doesn’t have to be daunting. In fact, it’s easier than ever thanks to many online tax programs that allow you answer simple questions and quickly fill out a few fill-in-the-blank forms. Plus doing your own taxes is a great way to learn new skills and be aware of your own personal financial situation.

Are you doing your own taxes?

 

Beating the tax deadline doesn’t have to be stressful. With TaxAct, everything you need to confidently prepare and e-file your taxes is right at your fingertips. You got this. File your simple federal and state return FREE today with TaxAct. 

Originally posted 2016-04-07 06:00:01.

Categories
Budgeting & Saving

3 Simple Ways to Travel on a Budget

At some point in your life the travel bug hits you. For some people it happens earlier than for others. I remember always wanting to travel. So much so that my career ambition was to be a travel agent. After speaking with my guidance counselor, I learned that my career of choice was not as viable as I had hoped. So I decided to travel for fun instead. I traveled out of the country for the first time while attending college.

In college I signed up for a study abroad program. If you are still in college I highly recommend this way of travel as a first timer out of the country. It's an easy way to get acquainted with the whole process of leaving the country. Spending time outside of your natural habitat and in unfamiliar surroundings really helps you grow as a person. But travel can be expensive and as a college student or recent graduate, you have to watch every penny. So here are some tips to travel on a budget.

Plan Your Travel Budget

If you are a recent college graduate, then you may not have the money to blow on a five-star vacation to Dubai. But if travel is important to you then you should at the very least have a travel budget. I have a separate 'savings' account that is specifically for my spontaneous travel and each month I put aside 25 dollars. This process is as simple as setting an automatic transfer and at 25 dollars it doesn't affect my normal budget significantly. If there is not enough in my normal discretionary spending for a plane ticket, I can tap my travel savings account. I also try to deposit extra money in that account when I have it. This is savings in addition to my 401k and emergency account savings so I feel absolutely no guilt about emptying it every few months. I recently went to the Bahamas for my birthday and I emptied my travel account to enjoy a dolphin encounter. It was amazing! And I am already beginning to save for my next trip.

I want to make two important notes here. Nothing should trump your normal savings plan and you shouldn't 'dip' into normal savings for a trip. Secondly, it's OK to enjoy what you've worked so hard for! Just don't let it put you off track of your ultimate goal. But traveling doesn't have to be expensive and I'm going to tell you exactly how to budget for travel.

Search for Deals to Fit Your Travel Budget

While saving money for travel is beneficial, it’s important to stretch that travel dollar as far as it will go. Searching for deals on flights and hotels can help you save even more money. Try Kayak.com to find flight deals leaving from your city. You can also set an alert to track the flight prices as they fluctuate. I search for flights with Kayak and watch the confidence meter. It estimates whether the price of a flight will increase or drop over the next seven days. And snagging a good deal while it’s hot is a great method to stretch your travel dollar.

BONUS: Maximize Your Travel Budget

One of the best ways to travel on a regular basis is by using points or Miles that you earn with everyday purchases. For example, with the Discover it® Miles card, you can earn 1.5X Miles on every dollar spent. The card also allows you to fly any airline at any time. And you can also redeem your Miles for a variety of travel purchases including hotels or rental cars! As a new cardmember, Discover will automatically double all the Miles you’ve earned at the end of your first year on your Miles card. Now you can travel even more.

Traveling as a college student or recent college grad does not have to be expensive. If you take the time to search for travel deals and put money aside into a travel fund, you can travel more often this year. And by using a card like the Discover it Miles card, you can even maximize your travel budget.

This post was created in partnership with Discover.

Originally posted 2016-01-27 16:58:57.

Categories
Budgeting & Saving

How Can a College Student File Taxes?

If you’re a college student, you may not think a lot about taxes. After all, you may not earn a lot of money, or you may get work-study money and assume you don’t need to pay taxes. However, it’s important to be aware of the topic, even if you think they don’t yet apply to you.

Even if you’re in college, you may still have to pay taxes. While you can only answer these questions yourself, you may want to check with your parents and/or a tax professional as well for the best, most accurate advice.

Are You an Independent or Dependent Student?

In many cases, even if your parents have claimed you as a dependent on their taxes, and even if you’re a student, you may still have to file taxes. It depends on how much money you earned throughout the year.

If you were self-employed during the past year and made more than $400, you will have to file a federal tax return and pay self-employment tax. In addition, even if you received Federal Work-Study, you still are generally subject to federal and state income tax. However, unlike self-employment tax, your work-study income is exempt from FICA taxes, provided you’re enrolled full-time in school and work less than half-time.

No matter what income you receive throughout the year, you’ll want to make note of any earnings when you fill out your Free Application for Federal Student Aid (FAFSA). Your FAFSA helps determine how much aid you will receive in the upcoming year for school. You should always fill it out, even if you think you or your family make too much to qualify.

Do Students Qualify for Tax Benefits?

College students may qualify for some tax breaks, or benefits, as long as they’re attending an accredited university, college, vocational school, or adult education classes. There are two tax credits in particular students will want to be aware of, as they can help lessen your tax burden and help you pay off student loan debt while you’re still in school.

As a student, you’ll want to check out the American Opportunity Credit and the Lifetime Learning Credit. While you can only apply for one credit per person (i.e. you and a sibling could qualify for each credit, but you yourself can’t claim both), these credits are very helpful toward reducing your tax burden.

If you’re a student currently paying off student loans, you can also qualify for the student loan interest deduction and the tuition and fees deduction. Here are additional tax credits which you may also qualify.

"Will I Pay Taxes on Scholarships or Grants?"

This will likely come as a relief to many of you: you do not have to pay taxes on scholarships and grants. Any scholarships you’ve received for merit, athletics, and more do not have to be included in your gross income on your tax return. This also includes fellowship grants, which many graduate students receive.

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Once you've determined if you need to pay taxes, and how much you need to pay (if anything), it's time to file your taxes. If you're a dependent, you can work with your parents and provide them any paperwork they need to complete their taxes. If you're filing on your own, you can always e-file, likely for free since you're a student and don't make much money. In all likelihood, you won't owe anything and you may even get a tax refund. That's why it's always important to file your taxes, even if you think you didn't make enough of an income. Never leave money behind!

The tax code can be very complicated, regardless of your status as a student. See our Ultimate Tax Guide for more assistance.

Originally posted 2016-01-06 10:00:18.

Categories
Budgeting & Saving

Last Day of the Year: How Much Do You Have Saved?

The end of the year is nearly here! If you're like 45% of Americans, you're probably starting to think of resolutions for 2016. If you're like me, you might be regretting some of the resolutions you set in 2015 and didn't keep (I'm looking at you, running goals!) You may have set budgeting, saving, health, family, or any number of goals for yourself in 2015, and maybe you're thinking of continuing a lot of those goals into 2016.
Since you're a Young Finances reader, you've probably been better than most at keeping at least a few of your money goals. We'd like to know, how much have you saved this year? What were your goals for saving and how did you do?
If you're interested in determining your saving rate, you can look at it a few ways. Here's how to determine how you did on saving this year:

The 50/20/30 Method

One way to evaluate how well you did on your saving goal this year is to see if your spending and saving followed the 50/20/30 method. LearnVest outlines examples of how this method works but here are the basics:
  • 50% of your take-home pay (after taxes) goes to fixed expenses like rent, utilities, food, and fuel. LearnVest lists student loans under "financial goals" and not fixed expenses but I would include student loans under your fixed expenses. Unless you make so little, or you're in school and can defer your loan payments, every lender considers your loans non-negotiable. You have to pay your student loans, unless you get a forbearance or deferment. If you don't, you'll go into default and damage your credit among other repercussions. Student loans also cannot be discharged in bankruptcy. Bottom line: they're a fixed expense!
  • 20% of your take-home pay is for savings and other financial goals. This is where you get to calculate some of the fun stuff! What were your 2015 saving goals? Take a look at your savings or investment accounts, and see if you put at least 20% toward saving of some form. If you were able to save or invest 20% of your take home pay, you're on the right track! No worries if you weren't, though. Any amount of saving puts you on the right track. For 2016, you can always find additional ways to hustle and thus be able to save more moolah.
  • 30% of your take-home pay is for flexible spending like shopping, entertainment, and hobbies. It's just fine if you spent less than 30% on hobbies or entertainment. Some people prefer to save their money for big ticket items, like travel, instead of spending money throughout the year. If you spent more than 30% of your take-home pay on flexible spending, though, you'll definitely want to go back and read more Young Finances articles.

Emergency Savings Evaluation

For some of us, especially those who've just graduated and maybe aren't making a huge salary, sometimes your saving goal is determined by your emergency savings. If you have emergency savings, you're doing really well!
Take a look at your emergency savings right now. See if you have enough saved to cover at least 3 months of expenses. For example, if your monthly fixed expenses come to $1,000, you should have $3,000 in your emergency savings. Even better is 6-9 months of emergency savings.
If you don't yet have enough saved to cover 3 months of expenses in case of a job loss, this should be your biggest priority in 2016. No matter what age you are, emergencies can happen at any time. It doesn't make sense to put money you don't have on a credit card with a high interest rate.
For 2016, let's make saving a priority! By evaluating your saving rate in 2015, you now know where you're doing well and where you can improve.
How much were you able to save this year, and how did you do it? If you'd like to see more articles on how to save, let us know!
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Originally posted 2015-12-30 10:00:20.