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Go from bad credit to good credit without beating yourself up
Can there be any joy in monitoring your finances? Your bank balance is disappointing more often than not. Trimming expenses doesn’t bring any joy. Reminders of irresponsibility can be a gut punch.
Still, a different mindset can help you make the changes to put you on the path to good credit.
Begin by forgiving yourself for financial mistakes
The shame and blame we heap upon ourselves for not being where we want to be financially can make our situations worse. It leads us to avoid confronting credit spending, recurring debits from bank accounts, balances on personal loans or car loans, and important conversations with family members.
Shame springs from an idea that the individual has departed from social norms. Start dismissing your shame when you understand that one in three others you’ll meet today also have credit under 601. That’s right—one-third of Americans today have bad credit.
The individual experiencing bad credit has lots of company. And is this all their fault? With aggressive companies relentlessly bombarding us with messages that we deserve their products and that we must keep up with our peers, it’s no wonder we overextend ourselves.
If you can grab your financial issues “by the horns” so to speak, you have made the first
step on the path to success. Some psychologists tell us that, “a willingness to endure discomfort and capitalize on challenge is a trademark among successful, fulfilled individuals.” While it will require a little effort, put a budget in place, inform those who may impact it, stick to it. You’ll quickly find positive feelings about yourself and your financial situation multiplying. As Benjamin Franklin told the framers of our constitution, “Once begun, half done.” Those quill pens got to writing, despite their enormous task.
Gamify Your Savings
Rather than tracking every $3 coffee, focus more on a positive indicator: your savings level. As that rises, set a reward after reaching certain amounts. The reward could be you get to buy a new piece of clothing or 10 shares of SnapChat stock. Set these levels up ahead of time and stick to these commitments. These rewards can offset the sense of loss from avoiding day-to-day overspending.
Take the pressure off when you avoid social media
First and foremost, understand that social media is simply carefully selected snippets of your friends’ and family members lives. What they choose to share is designed to elicit envy. Those of us here at First Financial are constantly surprised at friends’ life-is-so-great posts and how these compare to what we know are their real struggles.
What’s more, when you focus on others, you remove your attention from your own issues. If you have bad credit, all your attention needs paid to your spending and savings plans.
Let the social world turn without you when you use a religious tradition, mindfulness, meditation or good old smart reading to understand how pointless it is to compare yourself to friends, relatives.
Deepen Your Relationships when You Lay It All Out for Loved Ones
Serious conversations with loved ones can be intimidating, particularly when they’re about money. Strategize how to take the sting out of belt-tightening before you tackle it with those you love. In other words, have alternate plans to take the place of lavish habits so that your new financial regimen doesn’t translate as 100 percent loss.
First, explain how it’s important now to join forces for common goals and how these efforts will unite you. Emphasize that working together for financial fitness by cooking meals together, going to resale and thrift shops and competing for better money saving strategies will get you talking and sharing more. Also, make sure you include your family members’ long- and short-term goals in your planning. Study after study reveals that children and spouses prefer experiences and time spent together over material goods anyway. Shared experiences just connect us better and for longer than shared material consumption. Use that research if you have to!
Your new financial fitness system may benefit from gratitude journals. Everyone should jot down at least one thing they’re grateful for every day. Sharing is optional, but when these grateful moments that include others are shared, it strengthens bonds. These journals, particularly effective when an individual is feeling particularly short-changed, have proven to increase happiness significantly.
Experian recently reported that loans in the non prime, subprime and deep subprime risk tiers accounted for more than 25 percent of all new auto loans during the second quarter of 2012. They also announced that loans to customers with bad credit was up 14 percent during the second quarter on a year-over-year comparison.
Melinda Zabritski, director of automotive credit for Experian Automotive said that although there was increase in subprime loans, there is still a strong sense of managing risk. The amount of lending can provide a customer a car with bad credit, allowing manufacturers and dealers to sell more cars.
Car financing throughout 2012 have led customers to Toyota and Ford dealers, and each is claiming that one of their models is the best selling car this year.
Ford has sold 489,616 units of the Focus while Toyota has sold 462,817 units of the Corolla. The automaker argues that its Corolla body style is seen in different names and the sales of these units are not included in Corolla sales numbers. The race is too close to call as of now.
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