How To Build Credit History And Why It’s Important

I remember a story from when I was kid about a great aunt of mine.  She and my late uncle had paid cash for everything in their lives.  When they needed a new car, they wrote a check for the full amount.  When it was time for a house, it was paid for.  This was very responsible, but there came a time when my aunt wanted to build credit and she couldn’t.  She was over 70 years old at the time and had no credit history!  Yikes.  Ever since then, I have understood that it’s important to build credit.  So how do you build credit history?  And why?  Here are a few simple answers.

The Importance of Credit

There are a few good reasons to make sure you have a credit history.

  1. Future Need.  My aunt had no real need for credit.  I’m not even sure what the circumstances where that led her to find out she had no credit history.  In truth, she probably didn’t need it.  But, you never know when you might.  It’s good to have a credit history for the times you might need one.  Even if you don’t foresee such circumstances, they very well could be out there.  So, be prepared.
  2. Opportunity.  At the time that this happened with my aunt, rewards cards really weren’t a thing. But now they are.  Nowadays having credit history might set you up for opportunities to save money.  Having these opportunities available is key for you never know when they’ll pop up.
  3. Owning Your History.  Identify theft is a huge thing nowadays.  What if my aunt had her credit stolen?  Without a credit history, she might never have known!  Take control of your own credit history and then it’s yours to build and track.

How To Build Credit History

Building credit history doesn’t have to be complicated.  It can be done in a few easy steps.

  1. Open a credit card.  This is pretty basic.  Open a card in your name.
  2. Set a small credit limit.  When you are starting off, make sure to get a small limit.  If you haven’t used credit cards before, don’t get overwhelmed.
  3. Use the card occasionally.  Having a card will start credit history, but using the card is even more important. That’s where you’ll start getting judged on how well you use your available credit.
  4. Pay immediately.  Use the card in place of cash.  Don’t make extra purchases with your card.  Instead, just make purchases you would have anyways.  All you need to change is how you pay for your purchase.  When you choose this method, pay the card immediately.  Using the card and paying it off will quickly build you to a great score.
  5. Track your credit.  Once you start building credit history, you’ll be able to track your credit.  Use one of the free annual checks.  Make sure that you are seeing only what you expect to see.

In the end, a solid credit history can only come after you take that first step toward building it.  A small step or two can go a long way toward building lifelong stability.

Readers, how did you start building credit?  What was your reason at the time to get started?  Any other tips?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Five Star Books I Read In 2017

I love to read.  I track my books read on Goodreads.  My goal is to read 52 books per year.  So far, for the last two years, I’ve exceeded this goal.  One thing I love about Goodreads is that I can track the books I read.  I can also track how I rated them.  This is great because I can look back at books I loved.  I can track authors that I’ve enjoyed reading and find their latest books.  Here are my five star books from last year.  These were the best of the best from my perspective.

Revelation – Carter Wilson

This was one of the first books I read on my Kindle during vacation, and I loved it.  Wilson is not a well known author.  The book only has 255 ratings on Goodreads.  Still, it’s a great book if you love dark reads.  A man wakes up trapped in a room with a typewriter, and instructions to write a story.  He knows his kidnapper, but he has to figure out how to write what the kidnapper is looking for.  It bounces back between the kidnapping and the prior couple of years.  It’s a very creepy and disturbing read but very intense and well written.

Setting Free The Kites – Alex George

This book was set in the 1970’s and tells the tale of two teenage boys who become friends among shared tragedy.  You really feel like you get to know both of them, and the events and experiences that bond them together are written so that you feel you’re really there.  Being able to visualize myself watching the story is a sign of a well written book.  I couldn’t stop reading this book once I started.  I think it only took me a couple of days.

A Thousand Acres – Jane Smiley

I had written a previous review on The Last Hundred Years trilogy.  While the final book in that series disappointed, I loved the first two.  This is one of her older books, that got her on the map, and I loved it.  It’s again set in the Iowa cornfields, but from the perspective of three sisters who are turned against each other when their father reveals his intention to his 1,000 acre farm to them.  It isn’t a peaceful transition by any means, and it’s fascinating to watch things unfold.  Smiley has a way of making you root both for and against characters at the same time.  I love this and loved reading this book.

Beartown – Fredrik Backman

This is a book about a hockey team.  This is a book about the players and coaches of the hockey team.  Also, this is a book about the town where the team plays.  Honestly, this book is about so many things but it’s just wonderfully written.  Characters are unfolded in layers.  You start hearing the story of any character, and you form a first impression.  As the stories are told throughout the book, your perspective will shift slightly.  Then it will change again and again.  This effect happens with a whole bunch of characters, and it’s done almost flawlessly.  This was probably my favorite book that I read all year.

Image courtesy of morguefile via beanworks

Little Fires Everywhere – Celeste Ng

As you can tell, I love books about characters, and this is a book that fits the bill perfectly.  It touches on a family and the dynamics that build and break bonds.  Understanding of how parents become who they are and how it impacts who their children become are major themes.  This isn’t a book full of twists and turns.  You see much of what’s coming.  But, how everybody gets there and the stories that go into that are what make this book great.

A Man Called Ove – Fredrik Backman

Since Beartown was such a great book, I wanted to read another Backman book.  And, it did not disappoint at all.  This is a book that is about an old man who hates the world.  Or does he?  As the book unfolds, he gets ripped out of his routine.  He isn’t happy about this and isn’t afraid to let everyone around him know about it.  Even so, it happens anyways, and his acceptance of change is the story here.  You want to pull your hair out as you read about Ove.  At the same time, you nod along as he describes some of his many frustrations.  This book has a lot of laugh out loud moments, many involving a character simply known as ‘the cat’.

That’s it.  Those are the books that stood out in 2017.  I’ll definitely be checking out more from these authors, both older books and future releases.

Readers, what books did you read that stuck with you recently?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

8 Simple Ways To Be Happier

Are you in a rut?  Feeling blue?  It might not just be the time of year.  You might have just hit a low spot.  If you’re there, that’s OK.  But, how do you get out of that and find your happy spot?  It might not take a big change.  Here are a few simple ideas to be happier.

Make Time For Yourself

The demands of life can take away all of your free time.  Family, work, the house, even planning vacations can all drain you.  One thing all happy people do is make sure that they have time for themselves.  This could mean time to exercise.  Or read. Maybe it’s just time to unwind. Either way, it’s important.

Connect With Loved Ones

Your family and friends know you best. They’ve been there with you during happy and sad times.  Make sure that you have loved ones in your life.  I sometimes find that social media makes it so we have access to a huge number of people, yet we often lose connections from the ones that matter most.  Find your anchor person (or people).  It’s important.

Learn Something New

Sometimes being bored can lead to unhappiness.  If you have nothing new to look forward to, the days become dreary.  You can snap out of this by learning something new.  Take a class.  Watch a podcast.  Read a book.  No matter what your idea is, a new challenge can help spark you toward happier feelings.

Do Things You Like To Do

If you have a favorite hobby or pastime that you just don’t have time for, find it again.  I can’t tell you the number of people that say “I used to love…”  My question to those people is simple: Why?  Why did you stop doing something that you love?

Get Rid Of Things You Don’t Like To Do

If you have things in your life that bring you down, try to get them out.  Now, this doesn’t mean to run out and quit your job tomorrow.  Nothing that drastic to start off.  But, think of little things, like a TV show.  How many of you watch a TV show that you once loved but is now a chore to watch? If you have that, it’s time to tune out.  That will free up some time for things that can bring you joy.

Automate Tedious Chores

Are you still writing a check to the gas company?  Why? Chances are you can pay that bill online.  If it’s not the gas company or a check, chances are there’s something you can automate.  Free up time and you have more opportunities.  Finding something to automate can help change your routine, and that alone is worth something.

Stop Being Around Unhappy People

If you have people in your life that bring you down, stop being around them.  Or if you have no choice (e.g. co-workers), then minimize their impact.  At work, this can be as simple as listening to music which reduces how much you hear from them.  Either way, reducing your circle of unhappy people will only serve to help you.  People that are positive will help you be more positive.

Count Your Blessings

Everybody has blessings in their life.  Look around and offer thanks.  This doesn’t even have to be a religious thing.  It can just be a moment to appreciate a nice sunrise or a child’s laughter.  Finding the good in the world around us is very worthwhile.  It’s also very easy to skip over, so make it a point not to.

Those are just a few ideas that I’ve had.  These aren’t life changing, but they can help change your perspective.  Sometimes a big change isn’t what we need to find more happiness.  The little things, as they say, do count.

Readers, what are some of your simple ideas to be happy?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.

Why It’s OK To Get A Tax Refund

Don’t get a tax refund.  That’s one of the first things most personal finance bloggers will tell you.  It’s giving the government an interest free loan.  That’s what they will say to justify the reasoning.  Keep the money yourself.  That’s the advice you’ll get.  Earn the interest on your own money.  That’s the benefit you’ll be told justifies it.

I’m here to tell you that you don’t need to worry about it.  If you get a refund, even a large one, it’s no big deal.  It really isn’t much of a problem at all.

The Justification For No Refund

Avoiding a tax refund was one of the first big tenets of personal finance I heard when I started reading money blogs.  That was over ten years ago.  I listed above the reasons, but it basically boils down to the idea that you shouldn’t give the government an interest free loan.  It’s money that you paid all year that you get back, right?  So, you should earn interest on it.  Interest is more money.  More money is great for personal finance. It all makes perfect sense.

It’s Stale Advice

Back in the day ten years ago, I was 100% for this.  However now, I really don’t think it’s that important.  Why?  Two

image from Morguefile courtesy of clarita

words: Interest rates.

Ten years ago, banks were flying high and paying out big interest on savings accounts.  Getting a yield of 5-6% was not uncommon.  Things like CDs and such could get you 7% or more.

That was pretty big money.

Now, interest rates are pretty low.  The biggest savings rate I earn is 1.75%, and that’s up big from a few years ago.  It was 1%.

Say you get a $3,000 refund.  Your interest, back in the heydey, could have been as high as $210.  Now, with 1.75%, you’d get $52.50.  *I know that it wouldn’t come to these exactly, but for simplicity purposes, I’m going with these.

When Something May Not Be Better Than Nothing

One thing I still hear is that, even with low rates, it’s still free money.  After all, while $52.50 isn’t as much as the $210 you could have earned, it’s still $52.50.  You should grab it, right?

My answer: Sure, but….what about temptation?

See, when you get extra money in your check, it’s easy to say that you won’t spend it.  But, what if you do?  In my example above, it would only take $52.50 of spending through the entire year before you come out behind.

Think about that.  $1 per week and you’d be behind.  One night out with dinner and drinks.  You get the point.

You Can’t Spend What You Don’t See

Getting $52.50 is certainly nothing to sneeze at.  But, if you take away the temptation to spend that throughout the year, most people won’t.  If you don’t see it, you’ll be less inclined to spend it.

Is taking away $52.50 a small price to pay to end up with a guaranteed $3,000?  I think that for many, it might be.

It’s All Discipline

Many will read this and be aghast.  They’ll say that of course they could save that money every week.  They’ll point out that any money left on the table is foolish.  They’re right.

But the fact is, those people are in the minority when it comes to saving.  Many people may not be disciplined enough to end up with that full $3,052.50 at the end of the year.

See, I’d rather a whole bunch of people end up with $3,000 than end up with $2,500 because they spent $10 per week throughout the year.  For many, that’s worth it.

Know Yourself And Trust Your Gut

If you end up getting a hefty tax refund, don’t beat yourself up.  If anything, understand that it’s still your money.  Interest alone won’t make you rich, so don’t sweat the lost opportunity.

If you think you can make the change, then do so. Keep the money.  Enjoy the interest.

But if you decide it’s not worth it, don’t sweat it.  If you think you might get tempted to spend a little bit, then let the government have their loan.  Take your refund next year and enjoy it.  I promise it’s not that big of a deal.

Readers, what do you think about getting a tax refund?  Am I violating the personal finance code of ethics, or do you see my point?

Copyright 2017 Original content authorized only to appear on Money Beagle. Please subscribe via RSS, follow me on Twitter, Facebook, or receive e-mail updates. Thank you for reading.