Let’s be honest, establishing good credit is probably the last thing on anyone’s mind, especially for consumers who are just reaching college age or are even still in high school. But what many younger consumers don’t understand is building and establishing a solid credit history matters more than ever in today’s world.
Credit is central to reaching important financial milestones, such as buying a home or car. Credit has a large impact on the rates consumers pay as well. It is also important when renting an apartment or setting up utility bills. Don’t fall victim to paying those hefty deposits because you have no established credit. SPOILER ALERT: It is not fun.
Many employers even use credit scores when deciding whether to hire job candidates. In a study done by CareerBuilder and reported by CNBC, 72 percent of employees conduct background checks, with 29 percent also checking credit reports.
So when is the best time to start building credit?
I am so glad you asked.
A U.S. News article recommends that people start building credit at age 18. A person can’t legally contract for debt prior to the age of 18. Unfortunately, a lot of students and young adults do not realize the impact this three-digit number will have on their entire financial lives; I know I didn’t when I was 18. Starting to build credit at 18 is also beneficial simply because 15 percent of FICO credit score reports depend on the length of credit history. Lenders and employers want to see a history of managing credit responsibly.
The CARD Act of 2009 made it more difficult for consumers younger than 21 years old to get a credit card in their name. An applicant younger than 21 years of age has to show proof that he or she has the financial means to handle their debt or get a parent (or spouse) to co-sign before becoming eligible to be a card-holder.
In the states of Alabama and Nebraska the age of majority is 19. In Mississippi and Puerto Rico the age of majority is 21. Having higher ages of majority makes it even more difficult for those who are trying to take the steps to start building credit early.
No one is perfect and mistakes happen. By starting to build credit early, consumers have a chance to make up for mistakes made, while learning how to be financially responsible.
So where do you start? How do you build credit?
You’re not alone in wondering where the path to a good credit score begins.
A survey done in November of 2018 on credit cards found that more than 40% of college-age consumers said their parents or teachers never educated them on how credit scores are calculated or how to use a credit card responsibly. before getting one.
If you are eager to start building credit and shaping your financial future, start with a checking account. Checking accounts don’t directly impact your credit score making it a good way to start creating sound financial habits. A good credit score is a byproduct of good financial habits. This also helps you avoid costly mistakes that could damage your credit.
While a credit card is an obvious way to start building credit, it is important to start small. Learn financial lessons with amounts that are manageable for your budget. The key to building a good credit profile is actually quite simple: don’t take on more debt than you can support, pay your debt on time, keep unsecured balances low and continually pay them off.
At ēCO Credit Union the age required for opening a credit account is 19 due to the Alabama Age of Majority. The FORWARD>>> account is available for those that are interested in establishing sound financial habits and are between the ages of 19 and 29.
The FORWARD>>> Credit Card offers the following:
Want someone to come talk to your class or community group about responsibly establishing credit?
Contact the ēCO Credit Union Foundation at firstname.lastname@example.org.
Loans and Credit Cards are subject to credit approval. ēCO is federally insured by the NCUA and an Equal Housing Opportunity Lender. APR- Annual Percentage Rate
Only 327 days until Christmas! Wait, didn’t we just take down the tree and pack up all the decorations? We sure did, which means it’s already time to start saving for the 2019 Holiday season!
No, we are not crazy. Okay…maybe a little. But it is never too soon to start saving for Christmas, and with ēCO Credit Union’s Christmas Club Account, you can do just that.
Whether you decide to deposit a little at a time or a large sum, you will be ready to start making a list and checking it twice. By the time the holidays roll around,(because let’s be honest, it may be February, but December will be here before we know it) you will be ready to start shopping.
It may sound too good to be true, but it’s pretty simple to come out of the holidays without that awful buyer’s remorse and maybe a little extra change in your pocket.
How do Christmas Club Accounts work you ask?
It is pretty simple; ēCO’s Christmas Club Account is an interesting bearing savings account offered to members looking to save for a particular purpose.
Not sure how much you need to start saving? Remember earlier, when we said it feels like it was just yesterday when we packed up all the decorations? December wasn’t too far back. You should be able to find all of those receipts used for wrapping paper, decorations, food, entertainment, and let’s not forget—all of the gifts for your friends and loved ones. Use those receipts to total up how much you spent on Christmas. Once you have a total, divide it by ten to determine how much you’ll need to save each month to have enough by November—when funds are disbursed. To make it even easier to get started, ēCO offers Automatic Transfer and payroll deduction.
Start a Good Savings Habit
Christmas Club accounts earn dividends on the average daily balance when more than $100 is maintained in the account. Dividends are paid on a quarterly basis. If you want to check out the current rate—visit ēCO’s rates page HERE.
Isn’t the phrase “Money Saved is Money Earned?” Having a Christmas Club account can help you save for Christmas expenses, while also helping create a habit of saving. Although the balance may feel small, it is beneficial to help you build sound savings habits.
Christmas comes the same time every year, but somehow, it always seems to sneak up on us. Start your Christmas Club Account with ēCO today, and you’ll be ready to tackle all of your holiday expenses, while earning interest throughout the year.
I will be the first to admit that I am not a mindful spender. I like to attribute part of the problem to the dollar bins at Target. If you can go into target and walk past those dollar bins and not put a single item in your shopping cart, you have more self-control in your pinky finger than I could probably ever possess. GOOD. FOR. YOU.
They say the first step in getting help is admitting the problem right? Well here it goes…I know I have a problem mindlessly spending money. The majority of the time when I am mindlessly spending money I find it is on items I could most likely live without.
Amazon, I am talking to you.
Eating & Shopping. Those are the two activities I catch myself doing mindlessly when I am bored. Can anyone relate?
We are only 18 days into 2019. Of course, everyone has been declaring resolutions right and left, which will most likely be abandoned (if they haven't already) by the end of the month.
I mean let's be real, January is a really a trial month anyways.
I feel like the word "resolution" makes it harder to achieve whatever change or action you have decided to do. It is almost like there is a heavier responsibility and burden that comes with declaring a resolution.
Instead, I have created a goal (pretty much the same thing as a resolution, but in my head it sounds more attainable) for myself to become a more mindful and practical spender, both of my time and money (but mostly money).
After much soul searching and internet browsing I have found some helpful tips. And, believe it or not, a few of these I already do, #winning.
Think Before Spending
A few questions to run through before making that new top, cup of coffee, or random Amazon purchase.
I don’t know about you, but it is much easier for me to swipe my debit card than it is to hand over cash. I will hold on to cash until I absolutely have to spend it. Even more so, I hate breaking large bills. I do not know what it is, but it almost feels as if a piece of my heart breaks when I break large bills. Maybe it is the physical act of having to watch myself hand over the cash that makes it so hard to part with, whereas when I swipe my card I don’t actively see the money go unless I open up my mobile banking app. Not only is it beneficial to have cash handy in case of an emergency and you can’t access an ATM, it has definitely kept me from making some unnecessary purchases.
Have a friend or a family member hold you accountable. Whether it is for your shopping habits, working out, eating better, find an accountability partner. Let’s all be honest here, it is so much easier to point out the faults in others before we point them out in ourselves. Find someone who is able to not only point out your bad habits, but who also identifies and celebrates your successes with you.
Name-brand sometimes isn’t always the best brand. I am a firm believer that there are certain things to splurge on and get the name brand. But, there a lot more items that serve the exact same purpose as the name brand items and are cheaper. Look for sales, coupons, or specials on items. It is perfectly acceptable to be picky and shop around for the best deals. Don’t let anyone tell you otherwise. Check out bargain stores too. Some of those overpriced items tend to make their way to places like Bargain Hunt or Dirt Cheap where you can get them for a hefty discount. Trust me, I just bought two pairs of shoes for $5 each, originally costing $45 each. **cue happy dance
An Attitude of Gratitude
Gratitude goes a long way. The truth of the matter is, this day in age it is so incredibly easy to mindlessly spend our time and money. We have the world at our fingertips, but that is no excuse to not be grateful. I am guilty of filling the void of boredom with random online shopping sprees or getting completely sucked into a Netflix binge. When you catch yourself in the midst of those things, take some time go outside and get some fresh air. Better yet, go for a walk, a run, a hike, a bike ride; anything that gets you up and moving. Or…if you’re going to be on your phone send someone you love a text and let them know why you’re thankful they are in your life. I promise it will make their day and yours a little brighter.
Recently, I have had several opportunities to adopt a puppy. And while I am always eager to play with puppies, watch cute puppy videos and even see pictures of puppies, I was very hesitant when actually having to decide if I wanted to commit to becoming a dog mom.
Whether you are considering adopting a dog, cat, rabbit, guinea pig, hamster, or fish, caring for a pet is a life time commitment. While there are many benefits of adding a pet to the family, there are many things to consider when deciding to make the commitment.
Pets can be so exciting and frustrating all at the same time. And while an animal will provide joy and fulfillment, companionship, and even help boost your social life and health, they require a lot of time, and tangible items such as food, shelter, medical care, and other supplies.
According to the Bureau of Labor Statistics, “Americans spend a substantial amount of money on the care and feeding of their animals. In 2015, households spent an average of $528 on pets.” It is only practical to weigh out the monetary costs that accompany pet ownership, before making the leap into becoming a crazy pet parent.
When considering adding a fury, or maybe not so fury, family member, ultimately it is best to see if your budget will allow for you to give the animal the time, love, and home it deserves.
Here are a few things to include when budgeting for your new pet.
There are so many options for pet adoptions. There are shelters and rescues that have different animals available for adoption. Most of these pets are a little older and are up to date on their shots and medical care. Also, because we live in a world that revolves around social media, there are always people looking to find homes for puppies, or even rehome their pets for all types of circumstances. Depending on which situation you go with, in my experience, the adoption costs can vary and it is important to factor it in when budgeting. The benefit is it is a one-time cost, not a monthly expense.
Let’s not be naïve, puppies chew. EVERYTHING. Kittens claw and climb. Hamsters are escape artists and nocturnal. Before bringing your new friend home, you might want to make sure your home has been pet-proofed. Not only does this mean putting up anything you don’t want becoming an impromptu chew toy or scratching post, but also locking away hazardous chemicals that your pets may accidentally ingest. This may mean investing in containers that can be sealed to protect the animals.
Just like humans, our pets need food to be healthy and energetic. Go ahead and add pet food to your grocery shopping list as an added expense. If you have a cat or kitten you will need to budget for kitty litter. Hamsters need proper shavings in their habitats to keep them healthy as well.
Some pets are extremely low maintenance when it comes to supplies, and others are extremely high maintenance. Puppies especially. The early years are probably the hardest when training your new pup where they are allowed and not allowed if they are kept inside. Here are just a few supplies you would need to account for in your budget.
Every pet needs general health care in order to live a long, happy and healthy life style. Yearly vaccinations help with flea and parasite control. Depending on if you will breed your pet, there are also spaying and neutering costs. There are also the unforeseen veterinary emergencies that you will need to be prepared for as well.
Training isn’t essential to every pet but should also be factored in. Especially for dogs, there is obedience, protection, and potty training should you wish to inquire someone else’s help. Training can become pretty expensive depending on the extent of training you are wanting for your pet. There is also a free option of training your pet yourself. There are plenty of tips, tricks, blogs, and video tutorials readily available on the internet!
Owning a pet brings so much joy to a family. It helps foster a sense of responsibility for younger children; it reduces stress, provides companionship, and helps create lasting memories. Being financially responsible enough to budget out all of the costs associated with becoming a pet parent helps determine if you are emotionally ready for all the time animals need to thrive. Budgeting out pet costs help ensure that you are ready to provide a long, happy, healthy life for your new family members.
As for me, I have decided becoming a dog mom is exactly the journey I want to take for 2019!
The free budgeting tool provided by the ēCO Educational Center HERE helped me budget out the costs for whenever I do find the perfect pet for me. You should check it out too!