My Personal Finance Blog

Not too long ago I read a story about the “Extreme Home Makeover” houses. It seems several of them fell into foreclosure over the years. It makes me wonder if bailouts – big government or the average person – are ever the right way to go.

It would be easy for me to start talking about the right way for the show to find people and the right way for the houses to be built. But I have to get my own house in order before I start judging other people and their home situations. It is that whole beam and speck issue for me.

When the economy tanked, many of my freelance writing jobs followed it down the drain. We began to do what most Americans do – live off credit. We have been down that road before and recognized the symptoms early enough to begin the process of pushing things back on track. Right now the finances are so tight that you can hear them squeaking! Something has to give if we are going to survive to 2011.

5 Steps for Getting the Finances in Order

1. Pay cash. The easiest way to force your family to stay out of debt is to buy with cash. That means that if you do not have the money then you do not make the purchase. It is always the first thing that we do if we feel things getting out of control.

2. Make the cut. This means that we temporarily turn off all those services that are not essential to living – cable, extra phone lines, and bug treatment for the house. As individual items they may not be worth much, but when you add them all up they can make a huge dent in the budget.

3. Start selling off those items that you do not need. The extra car can give you cash to survive a few months PLUS you can cut out that insurance for that car from your household budget.

4. Get creative. Plan out menus that take advantage of everything in your freezer and pantry. You may find that you can skip a few trips to the grocery. Also plan out all your errands so that you can cut back on the gas you use up.

5. Be honest – with yourself, with your spouse and, YES, with the kids. The family needs to face finances as a family and working together will make the experience easier to manage.

Times have been tough on many people because of the economy and because of the way society as a whole consumes. Getting finances in order in my own home is the best thing that I can do to help the economy. After that, I will put together my plan for “Extreme Home Makeovers.”

Credit repair begins with you. Many people have bad credit and they don’t even know about it or they think they have no way to repair it. Everyone has the right to see their credit reports and to repair their credit score.
I have listed the top 5 steps to credit repair and how to restore your credit today:

Top 5 Steps To Credit Repair

1.  Pay Your Bills On Time – This sounds like a no-brainer, but I can’t stress how important it is. One little 30-day late payment will set you back a year or more. Set up automatic payments with all your creditors. If you can’t make a payment, call your creditor and make something work so that they won’t report it to the credit bureaus. You would be surprised how many times this works.

2.  Dispute Negative Items – The main reason most people get denied loans is because of past negative items. A lot of the time these items aren’t even yours because of identity theft, reporting errors and other factors. The Fair Credit Reporting Act was implemented to allow consumers the right to dispute or verify any listing that is on their reports. 4 out of 5 credit reports contain errors, make sure yours is not one of them.

3.  Increase Debt to Limit Ratio – Two ways you can do this, keep your balances low and increase your limits. Always make sure your balances are below 35% if possible. Increasing your limits will help the ratio as long as you don’t increase your debt on those accounts too.

4.  Diversify Your Credit – This can difficult for some that can’t get a mortgage or car loan. Start with the basics, get a checking account with your bank with a line of credit. Get a credit card attached to your bank account. Then get a merchant store card. All these things will help your score by diversification A mortgage and car loan are the best ways to diversify, but take time to get up to.

5.  Contact Your Creditors – Creditors want their money too and they will negotiate to get it. Make sure you have talked to your creditors before paying off a bill. Use your leverage to negotiate the removal of the negative items upon final payment.

There are many factors that can contribute to low scores, but credit repair can help bring it back up again. I urge you to use these steps to repair your credit today and get your finances back on track.

In 2009, the leading credit repair service forced the credit bureaus to remove over 1 million negative items. See how 500,000 clients used these credit repair methods to get the credit score they deserved.