America Saves Blog
Tips, advice, and the latest news from the savings world.
Credit scores affect everything from the interest rates you pay when you borrow money to whether you can rent an apartment or get a job. Obviously then, it is important to know how credit scores work and how high-interest debt can affect your credit score. However, a recent survey by Consumer Federation of America and VantageScore Solutions found that most Americans do not know what a strong score is and do not understand the financial cost of a poor score.
Credit Score Basics
Your credit score is a number lenders use to help them decide how likely it is that they will be repaid on time if they give you a loan or a credit card. This credit score is built on your credit history. The score is based on several factors, including your total debt, the types of accounts you have, the number of late payments you have made, and the age of your accounts.
Having a lower credit score means you will end up paying higher interest rates on all your consumer and mortgage loans. For example, on a $20,000, 60-month auto loan, you can pay up to $5,000 more in interest with a bad score than a good one. A low credit score can also make it harder to rent an apartment, get utility services, and even get a job.
A lot of energy-saving tips annoy me. When I hear that CFL's save $35 over the life of the bulb it doesn't make me want to do a dance. They say that a CFL bulb lasts 10 years, so we are only talking about $3.50 per year! Whoop-de-do-da. Not exactly something that makes me run out and stock up on expensive light bulbs. But there certainly are things you can do to make a significant impact on your electric bill.
The following saver story comes from the American Saver Summer 2011 edition:
In 2004, Tonya Shelton was facing financial ruin. Barely making more than minimum wage and having lost her home to an unexpected family crisis, Shelton and her family were forced to live in a rundown hotel. Their future seemed bleak. However, armed with a burning desire to make life better for her family, help from Purdue Extension’s Making Your Money Work financial literacy program, the assistance of a Iocal America Saves campaign Indy Saves, and a savings plan, she began her journey to becoming a good steward over the money she did have.
With the help of Indy Saves, Shelton set a goal – to save $10 a week towards an emergency fund. It was money she felt she did not have at the time, but Indy Saves and Making Your Money Work helped her to commit to a budget in order to start saving. She sealed the deal by enrolling in a direct deposit program. “Having a savings account helped me to understand the value of having a banking relationship,” said Shelton.
I often hear that the hardest part about saving is getting started. That’s why we are going to post ways to Kick Start Your Savings each week on the America Saves Blog. Anyone can take action and start to save today.
The following resources will help you take positive steps towards saving more now:
Inspiration from the Experts
9 ways to save on back to school – From MSN Money
- Take inventory
- Get the school's list
- Go through the ads
- Check prices online
- Buy in bulk and bundles
- Take advantage of tax holidays
- Look off the beaten path
- Make the kids work for extras
- Shop throughout the year
Got Debt? It’s Time for a Reality Check – From AARP.org
- Challenge yourself to start paying off your bills now and work towards being debt-free.
It can be hard to put aside money for savings. But there is an easy way to save money without ever missing it. Make your savings automatic. You can start small and save $20 a week or month or you can try and save more.
How to save automatically
- Many employers allow you to divide your paycheck into different accounts. Take advantage by putting part of your pay into a savings account.
- If you get paid in cash, take a small amount to the bank to deposit into a savings account. Many banks make this easy by allowing you to deposit cash directly at an ATM. Tip: do this the day you get paid. That way you will be less tempted to spend the money.