-Pull your credit report and review your FICO (Fair Isaac Corporation) scores. Oh it is brothers out there that are terrified to view their credit reports. Get over your fear and begin to take control. Love it or hate it, your FICO score is how you are judged as risks to banks when you seek out a loan. The closer your score is to 800 the better. Review your report for mistakes and work with the 3 credit bureaus to get them corrected if needed.
-What are your expenses? Believe it or not, a lot of us don’t know. Take the time to write out ALL your debts and expenses; sometimes seeing is believing. Also review your bank statements and track what you are spending your money on. The little things can and do add up. Figure out your debt to income ratio. How much money are you spending versus how much money you are bringing in per month?
–Pay Yourself First. Always, always pay yourself first before anyone else or any monthly bill. Many financial gurus suggest paying yourself 10% of your monthly income. If you think this may be difficult for you, you may want to set up a savings account with direct deposit so the money is taken directly out of your check so you wont have a chance to initially get your hands on it.
-Do you need to downsize your life? Cable services, extra cell phone charges, eating out, going to the movies, going to clubs, lounges, buying drinks? Do you really need all of those cable channels or better yet…cable at all? Can you pack a lunch instead of eating out everyday? Can you visit friends and chill at their house versus spending money to go out? Figure out ways to pinch pennies where ever possible and this can help you save to pay towards other bills and debts.
-Only spend money on necessities. Do you really need anymore new cloths or shoes? Just because there is a sale at Perry Ellis or Macy’s doesn’t mean you need to buy anything. NEWS FLASH…there will always be sales. You are not missing out on anything. If you are one of those people who cant go into a mall or shopping center with out buying something…stay away from them so as to not be tempted. Necessities are the essential things that are needed for you to survive…rent, mortgage, water, toiletries, etc.
-Get a support group. For real! Try to hang with and communicate with folk who either have been where you are or who maybe also trying to better themselves financially. Believe me it sucks hanging around a group of guys who may negatively influence you and knock you off track. Communicate with people who will support you with your financial goals and who can offer you tips on how to get out of debt.
-Credit Cards and Student Loan Debt is evil incarnate. Paying off your credit cards is very important. Some suggest having no more than 2-3 cards at one time. Never only make the minimum payments because it will take years to pay them off. It is good to pay the card off with smallest balance first before tackling the larger balanced cards. This will also help with boosting your confidence that you are accomplishing your short term goal. And believe it or not if you are trying to improve your FICO score, maintaining a balance of 30% of the credit card limit will help. If you can, never defer you student loan payments. When you do this you cause the interest to increase which causes your balance to increase which in turn means it will take longer to pay off your debt. I F#@KING HATE MY STUDENT LOAN….sorry for the outburst.
I didn’t want to use this post as a soap box to speak about the importance of economic power; that post may come in the future. I wanted it to be more about you getting your financial house in order first. I hope these nuggets of information help you get going in the right direction to getting out of debt. They have worked for me! I learned through the information of others and from those who steered me in the right direction to obtain beneficial additional information (like the below links). Again, I am not telling you not to have fun and enjoy your life but maybe having to much fun, not being informed and poor planning may have lead to you getting yourself in financial trouble in the first place…just a thought.
Readers if you have any additional tips that may be helpful for us, please feel free to leave comments below.
http://www.suzeorman.com/
Clark Howard – Consumer Advisor
http://www.clarkhoward.com/
Black Enterprise Magazine
http://www.blackenterprise.com/
Black Enterprise Magazine also put together 10 Wealth for Life Principles.
http://www.blackenterprise.com/2010/08/20/black-enterprise-wealth-for-life-principles/
To get a Free Credit Report
https://www.annualcreditreport.com/cra/index.jsp
There is a fee for getting a credit and FICO score report combined. You can order them at…
Experian http://www.experian.com/
EquiFaxwww.equifax.com
TransUnion http://www.transunion.com/
Thanks for Reading
-Octavius
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OckyDub
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This is not true for every black person by far….but true for a lot of us:
We can work on closing the gap of wealth if that is where we focus our attention. We concentrate heavily on being “rich” and we don’t realize that having wealth is far better than being rich any day. We’d rather spend our money on fads than investing in things that actually gain value over time. I know a black couple from my hometown who hit the lottery and won 6.9mil AFTER it was taxed. In about 10 years, they were broke. They didn’t invest properly, didn’t pay off their home, and leased ALL of their cars except the Toyota Camry they started out with…..and it was all they had when everything was said and done.
We have to wake up!
I do not believe in credit. I am a serial saver. Save and invest your own shit. I dont believe in owing someone and someone telling when its good and bad to owe what and to whom. Not for me. Good luck for everyone else.
Thank you for this.
Honestly, my mother as spoken to me about some of the advice you’ve given here, but I haven’t utilized it as well as I should have.
I’m legitimately going to focus on putting these into practice. I’m at a better paying occupation than my previous jobs, but it’s still not enough. It’s like what Tee said about the couple that won the millions in the lottery. If you don’t know how to handle the money then you won’t know how to keep it.
I need to stabilize my financial situation and have healthier habits with my finances so that they won’t get in the way of me living a more financially successful life and accomplishing more things that I want to achieve.