Not-So-Common Cents

Growing up is tough. You’re expected to get a job or go to school right away. It’s become the societal norm to instantly move out of your parents’ house… and then maybe buy a car. Or get a couple of credit cards. Don’t get me wrong – credit is important. But it can make you or break you. Here are a few (unfortunately) not-so-common sense tips to follow:

• When signing up for a credit card, READ THE FINE PRINT. And then read it again. Done? Read it once more. Look for the words “introductory rate” and find out what the NON-introductory rate is. If you see the words “variable rate,” determine what that means to YOU.
• Financing a car? Your interest is more important that you think. Find out what is normal based on your credit score. If you can, ask (nicely) if mom or dad will cosign for you. Lastly, don’t be afraid to walk out if you think you’re being ripped off.
• Getting out on your own is nice. No curfew, independence. But you know what’s NOT nice? Rent, utilities, a mortgage. If no one is kicking you out, take it slow. Save up while you’ve got the time. Don’t rush out of mom and dad’s to move in with your BFF, because guess what else? Friends don’t (usually) make good roommates.
• I’ve got two words for you: AUTOMATIC PAYMENTS. Missed and late payments hurt you a lot more than you might think. The best thing you can do is setup automatic payments so that you don’t find out you’re behind on payments from a bill collector.
• If you find yourself in a hole, think wisely about your next move. While it might seem ideal to get a cash advance or payday loan, or even close out all of your credit cards, these types of things can reflect poorly on your credit.
• Debt to income ratio. Learn it, live it. Just because you’re approved for a $1,000 credit card doesn’t mean you should use it all. If you’re constantly maxed out, it can negatively affect your credit score.
• Wants vs. Needs. Learn the difference! Starbucks is a want, groceries are a need. New flip flops are a want, new work shoes are a need. A new car is a want, mortgage is a need.
• Save first. Spend later. One of the most important things about budgeting is to spend less than you make. If you make saving your first priority, you can’t spend more than your actual paycheck.

Be smart. If you aren’t sure about a loan or credit card, don’t sign! Do your research, ask around. No one will judge you for wanting to make the right decision.

This blog was written by FTWCCU Marketing/Digital Commerce Assistant, Sammie Arriola.