Tag: Financial Advise

Best Ways To Use A Credit Card Responsibly

credit card

Like money, credit cards are merely a tool that allows us to build a financially stable world around us. Most people tend to abuse their power and get into financial trouble. Use it wisely and the investment will be well worth it.

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Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Build Your Credit

The best way to use a credit card is to build credit with it. Don’t apply for a credit card to buy things; this will lead you to financial ruin.

By building your credit you show lenders you’re responsible enough to borrow money and pay it back. Paying your credit card on time will boost your credit score which will allow you to qualify for bigger financial goals such as financing a car or purchasing a house in the future. Your future self will thank you for building your credit score!

Keep Your Limit Below 30%

The last thing you want to do is max out your credit card. This will have a negative effect on your credit score, OUCH! High utilization presents a high risk of falling behind on payments to the lender. Minimize the amount used to keep your credit score afloat. Keep your limit at or below 30%. If your credit line is $1,000.00 use up to $300.00 of credit.

Avoid The Quicksand

The moment you act upon impulsive purchases is the moment you give up your financial freedom. These choices will unfortunately result in a cycle of poor spending habits and lead you towards a world most people are trying to escape. Avoid the impulsive purchases, the transaction can wait.

Be careful when lenders increase your credit line. They will first increase it when you’re doing a great job of paying on time. The second time they increase it is a strategy to trap you in the quicksand. Don’t fall for it! Only use the 30% of credit line on the increase if you’re able to pay for it. You do not want to fall behind or make payments on large purchases. You will end up pay the banks money out of pocket due to the interest.

Smart Transactions

Use your credit card for expenses such as fuel, small groceries, misc. purchases for your home (lightbulb, screws, cleaning products, etc.), and in some cases, for an emergency. What all these things have in common is that they’re fairly easy to pay back for. These are perfect small ticket items to help build your credit score.

Make On-Time Payments

Schedule automatic payments in order to avoid late fees. The responsible thing to do is pay your bill on time in order to keep building that momentum that will positively affect your credit score. Late payments never look good to a lender so prove yourself trustworthy and responsible!

Avoid The Interest

Avoid the interest rate by paying your bill in full. Once you start making minimum payments on a credit card your remaining balance will accrue in interest. Remember, a credit card is a tool so use it to your advantage, not for someone else’s.

If you used your credit card for an emergency and can’t pay it in full, close it in two to three large payments. One of the benefits of having a credit card is that if your personal savings have taken a hit, you’re not without temporary help. Be sure to close the credit card, work on your emergency fund, and continue to use it wisely so you won’t rely on it for another rainy day.

On Another Note

Transfer Debt To A 0% APR Card

If you have too much debt on a credit card consider transferring it over to a card with 0% APR in order to avoid the compound interest on it. This will allow you to catch up without any additional fees. Take advantage of not having the interest and reach your goal!

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How To Create an Emergency Fund and Why It’s Important

Emergency fund
Create Your Emergency Fund Today!

Creating an emergency fund isn’t difficult so learning how to start shouldn’t be either. Here are 4 amazing strategies and tips to building your nest egg for a rainy day.

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Welcome to Franknez.com – the blog where you can digest content on personal finance, side hustle ideas, entrepreneurship, and trending investing topics.

Lets get started!

When an emergency occurs, you’ll be ready

We can’t predict the future, but we can sure prepare ourselves for it when a rainy day disrupts our parade. Having an emergency fund allows us to have a peace of mind and also creates financial confidence. As Grant Cardone says, assume control of all situations; so prepare now so you’ll be ready later.

#1. Create an Emergency Fund Goal

When you don’t know where to begin, start by creating an emergency fund goal first. Everyone’s goal will vary due to income and the amount of debt carried. A good minimum would be $1,000 – $2,000. An ideal and longer term amount would be $10,000+.

Did you know that more than 50% of Americans can’t afford an emergency bill of $500? There is something seriously wrong with this.

DO NOT be part of this statistic, create your emergency fund goal right now. Literally right now. Just set it, and work towards manifesting it. YOU CAN DO IT.

Before you begin to build your hefty nest, make sure you’re debt free first. Contributions will be so much easier this way. If you’re not debt free, set the goal for your small emergency fund and work on eliminating debt before you start paying yourself first.

#2. Pay Yourself First

When payday comes, be sure to pay yourself first (SAVE). We often tend to splurge and sometimes put away what’s left. You know exactly what I’m talking about.

Paying yourself first is the complete opposite; spend after you’ve put money away towards savings. Check your calendar and see what must go towards your expenses. Deduct it from your earnings and focus on saving the portion that will help you reach your goal.

Find which week works best for you out of the month to save. Once your expenses have been taken care of, pay yourself first, and enjoy what’s left. If most of your income covers your expenses be sure to check out my post on the 7 easy ways millennials can start earning more money to see how you can earn extra income.

Now that you have your target, you understand how much you must put into savings every month to meet your emergency fund goal. Do what you have to do in order to make this happen.

Here are some quick ways you can earn extra cash:

  • Recycle
  • Deliver food
  • Offer ridesharing services
  • Teach online with Fiverr

Make sure any additional cash is directed towards your money goals.

#3. Don’t Let Your Savings Collect Dust

This is where you take the first steps towards allowing your money to work for you. Put it in a high interest savings account.

Keep about a quarter of your savings in your personal savings account as liquid asset (money you can take out immediately). The more you put into your high interest savings account, the quicker you will reach your emergency fund goal through the amazing work of compound interest.

Here are some banks that pay you interest:

What about the stock market?

Invest in the stock market if a). you have no debt and b). you’ve built your hefty emergency fund worth 3-6 months of living expense.

Read: How To Invest in The Stock Market (Step by Step)

#4. Be Consistent

In other words, discipline yourself to save for your emergency fund.

Saving money might seem like a sacrifice at first but by being consistent you’re now creating a great habit and financially stable life. Your future self will thank you.

Remember the importance of having an emergency fund. The benefits of being prepared include:

  • Having money in case of car issues
  • To cover emergency hospital bills
  • Security in case of a layoff
  • Financial peace for your family

The best way to carry out your mission on building your emergency fund is to put money away every month no matter how good or bad it was.

Develop this winner habit and you’ll be meeting your goals in no time.

Keep yourself motivated

If you find yourself losing motivation remember why you started in the first place. Nothing good ever comes easy.

Look for motivational and inspirational accounts on Twitter or Instagram. I personally post motivational content from time to time on IG.

Don’t stop at nothing.

Here are some life changing accommodations to help you save money

Save Money And Change Your Life
These Tips Require Discipline & Action | Start Saving For Your Future Today

1 – Don’t get into further debt. Wait on that awesome new car model that just came out. Perhaps work in your field a little longer before furthering your education. Remember, the more debt you have the harder it is to save.

2 – Start a side hustle. Use that additional income to add to your emergency fund and reach your target quicker. Don’t stop increasing your income.

3 – Live below your mean. This strategy will allow you to build your net worth so that you don’t live paycheck to paycheck.

Let me know in the comments below

Have you reached your emergency fund goal?

The readers would love to hear from you. Share your thoughts below.

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