Whether you’re just beginning the process to repair your credit or you're a few months in, this post is for you. As you move along the journey of credit repair, you may be wondering, “Will I be able to maintain my good financial standing once I repair my credit?” The answer is yes. As long as you employ the right tactics, you will be able to maintain a positive financial standing well into the future.
During the credit repair process, be honest with yourself about your weaknesses and commit to strengthening them. What brought you to the realization that you should take control of your financial habits? Is it that you started hiding receipts or shopping bags from your spouse? Or that you were eating out while having a full stocked fridge at home? Once you can identify your personal finance Achilles’ heel, you’ll be able to take the steps necessary to be aware of it and stay on track in the future.
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First and foremost, hopefully you have a budget in place. If you don't, it is essential to have one in order to be financially stable. Chances are, if you were in need of credit repair, there was something faulty in your budget set up. It is not crucial that you evaluate and rewrite your budget in order to stay on track for your financial goals.
One of the key areas to look at is your miscellaneous expenses category. This would for those expenses that come up unexpectedly (i.e. that birthday gift you forgot about or that dentist bill you replaced that is due). All too often what ends up happening is you wind up dipping into the money for unrelated things. That cute bathing suit you found on Amazon Prime or those cute sandals that were on sale. Avoid using this category as a shopping fund. If you find you have money left over, you may want to lower the amount you have allotted to this category. You can then put that extra money towards your debt or emergency fund.
You may not have the means to save a lot of money right now, but putting aside a small amount each paycheck will not only add up over time but also give you a boost of confidence. As you see your debt go down and your emergency fund growing, your hopes for a positive financial future will seem bright.
One of the best ways to get you saving more is to automate it. Pretty much every bank has an option to automatically remove money and transfer it to another account. If the money is not there, you can't use it. Pay yourself first. You will thank yourself for it.
With our society moving more and more away from using cash, using a credit card or debit card has become the new way. The downfall is that it makes spending money that much more easy to do. According to a study done by Northwestern Mutual, the average household carrying $38,000 in debt and climbing (not including their mortgage) this is definitely something to take notice of.
In order to stay on track after you repair your credit, you really need to stick to an all cash diet. This should be done for the first 3 to 6 months. An easy way to help with this is to use the envelope budgeting system for spending. This will help as you will have physical control of the money leaving your hands which will lead to a feeling of having complete control of your budget and spending. In order to make sure you don't reach for that card, keep them out of your wallet altogether. Now, for payments like your mortgage or car payment, those are exceptions.
Is there anyone in your circle that is a personal finance guru? If so, perhaps you can get that person to be a mentor or someone that can simply help you get back on track. Perhaps you have a skill that would benefit them in some way. By having someone who can be a role model, you will have someone to keep you accountable.
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Boundaries with money really comes down to having to say "no". No to that new toy your son wants and no to those cute heels you saw online. If it is not in the budget, you just can't do it. It is not easy to do, but if you are committed to keeping financially fit, it is essential.
Repairing your credit can take a long time, and you need to be ready for the long journey. Remind yourself that the best things in life take time. Keep your eyes on the big picture and the end goal of financial freedom and control. Put up reminders everywhere that "you've got this" Put post it notes in the bathroom, in your car, office..whatver spots you frequent. Having these reminders front and center will keep you motivated and patience will grow from it.
If you are looking to repair your credit or you have already been through the process, you want to keep your credit in good standing moving forward. The first step is to find the right credit repair company for you. Once you have that taken care of, the above tips will help you be well on your way to feeling confident, capable and in control of your financial future. You never know, before long, your friends and family members will be coming to you for financial advice!