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By J.Swindell

How to manage money and improve your credit score

Managing personal finances isn't hard but it can take time, especially if one's in debt. Forgetting or missing payments happens but is dangerous when repeated. Anyone can get an understanding of their money when they separate necessities from luxuries.

Setting goals
Whether the goal is an expensive car or cash to send your child to college, it helps to know your financial standing. Once a money strategy is in place, you can see how realistic your goals are. This gives a clear view of what can be changed or eliminated altogether.

Starting with the basics
Find out what's in all bank accounts. Monthly deductions, like a gym membership, should be noted on the day scheduled for remittance. Then do a monthly expenses report on a blank sheet of paper. List the approximate cost for food, utilities, transportation and housing.

Add in expenses that apply to each family member, like school tuition. Total everything and round up to the nearest hundred dollars. Then deduct this figure from monthly net pay and use this to pay down outstanding balances, or place it in an interest-bearing account.

Cutting credit and saving for large purchases
Credit cards must be used with caution, because interest rates can make a difference in how long it takes to pay off the balance. Though some cards are easy to get, keep in mind there are a few where balances must be paid in full by the next statement, or come with fees greater than the average minimum payment.

The best way to manage credit is to pay down the largest balance first, followed by the card with the highest interest rate. Remember, those in good standing can negotiate a lower rate with the card company. Paying more than the minimum payment at due date will bring interest down.

Making small changes to save money
Minor changes, such as taking public transportation to work or school, eating at home more often, and using the library to borrow books and videos instead of buying, can save hundreds by the end of the month. If a person finds themselves drowning in checking account fees, arranging an automatic transfer from their savings account to cover checks is highly recommended. This costs less than non-sufficient funds (NSF) charges and reduces the likelihood of an account closing for excessive negative activity.

Getting outside help
There are many helpful applications and websites for the average consumer looking to manage money better. Budget sheets and other tools may be downloaded for free, and often these sites offer unbiased advice using terms that are easy to understand. Some of these applications allow users to earn interest or deduct savings automatically.

Going to a neutral source like a credit counselor may be more effective than going to a bank. Banks often cross-sell services like a credit card to help with debt or make large purchases. While there's nothing wrong with having a credit card, a person needs to be certain they can handle this type of financial responsibility.

People from all walks of life have turned around their finances for the better, but it does take discipline, initiative and thought. Sometimes people continue to practice these habits so they will always have a little extra in their wallet. Even if one doesn't have a large bank account, it feels good to know they have good fiscal health.

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