Negotiate Salary With Confidence
The most sensitive topic of the job interview process is how to negotiate salary. What if they aren’t expecting to pay as much as I want or need? What if they are looking for someone to work 50 hours per week on a 40 hour salary? These questions must be answered before you start, otherwise you may be in for a rude awakening. Work out salary requirements during the final interview prior to the offer. If you have a salary expectation, you must make them aware of it before they extend an offer.
Know Your Worth
Research salaries and know your worth before you even apply for the job. When you are interviewing for a job, you are selling yourself. Just like you research the value of your car before you sell or trade it in, you need to know exactly what the job should pay given the job description. If the company is offering less than the industry median salary, there may be any number of reasons. In my experience, it usually means the company is experiencing cash flow problems, so I would look elsewhere before accepting a job with a lower-than-average salary. But if you are willing to work for less, request additional vacation time or incentive pay.
As a contractor, all earnings are incentive pay. But when you’re working a salary job, you are paid the same amount regardless of how fast or efficient you work. There may be performance metrics related to your job that you must meet, otherwise you work 40 hours a week and collect a paycheck. As an employee, it is important to negotiate incentive pay, such as an annual bonus. Make sure the requirements for any incentive are clearly described and reviewed periodically throughout the year. There should be no reason you are denied any incentive if you follow the guidelines.
If you have vacation requirements, let them know that too. I always recommend asking for at least 4 weeks of paid vacation , matching 401k contributions, full health benefits, and at least the industry median salary. If you have the experience and education to back up your request, the company should have no problem providing it. Any company that seeks to pay you less than the industry average without providing additional benefits is no place you should be working.
A note on health benefits: Health benefits vary widely in pricing, and families are often left paying thousands of dollars a year. If you have a family, get to know the company’s benefits package before you negotiate salary requirements. If the offerings are not sufficient for your family’s needs, consider looking for a job elsewhere.
You Are ‘At-Will’
Having a job means you are working for someone else, plain and simple. While it makes for a consistent paycheck and helps pay the bills regularly, you are likely in an ‘at-will’ environment which means you can be terminated for any reason, without notice and without cause. This alone should be cause enough for you to review other job opportunities annually, even if you absolutely love your job. If the company isn’t providing you generous retirement contributions, more than 4 weeks of vacation time, and regular raises, you’re not getting what you deserve. You job search goals should always include more vacation time, greater salary and at minimum, match your 401k contributions.
Sealing the Deal
Now that you know what you’re worth, including time off and retirement contributions, it’s time to negotiate salary. This is where you lay it all out on the table. Confidently state your salary range and use the benefits as your negotiating chips. Start with a salary range that’s average to 20% over the industry average, so you can gauge their interest. They may not offer retirement contribution, so you may receive 10% over average instead. When you can agree on a total package, have the offer drawn up in writing, and give yourself an evening to review it. I recommend sending the accept letter before 10 the following morning.
A Final Note: Helping Your Career
People say you shouldn’t jump around. They say you should work at the same place for a few years before you move on, and when you do, leave gracefully. This is all great advice for people working in the 1950s, but today that just isn’t the case. The best way to help your career is to work with people that are better than you. That part is never guaranteed, but you can seek out teams that excel, and people that exude knowledge. It’s like playing tennis – you always want a partner better than you to improve your game. If the people you work with are weak, chances are you’re going to pick up the slack. Don’t do everyone else’s job and get paid for only your own, get out there and find a job where you are either well compensated for your additional efforts or given hiring/firing decisions so that any incompetence will be your own fault.
Buying a New or Used Car
A new or used car is one of the largest purchases a person makes in their lifetime. A new car can cost upwards of $20,000, and luxury cars are double that. They come with shiny new paint, a bumper-to-bumper warranty, and a smell that can’t be replenished with a jar. But those luxuries aren’t reserved for new cars anymore. Many used and certified vehicles are so close to new that you would be hard-pressed to tell the difference. Consider buying a pre-owned car if it meets your requirements.
Used vs. Certified
A used car comes with its own set of concerns: did the previous owner take care of the car? Was it abused. Did they have kids, pets, or use it as an Uber vehicle? These are tough questions to answer today, because the industry doesn’t regulate that deeply. The only way to know whether the used car you’re looking at is a quality vehicle is by inspecting it yourself. Always ask the salesperson to have the car lifted so you can inspect underneath. Look in the glovebox for trash or other debris that should suggest it wasn’t clean. Look under the driver and passenger seats for dirt that couldn’t be vacuumed. Check out the trunk for damage to the pillars or floor. If you see damage or dirt in any of these areas, it probably wasn’t your grandmother’s errand car.
Certified vehicles are a much better bet, but they are used cars just the same. You’ll have to inspect the cars with the same vigor as you did a regular used car, but at least you’ll have piece of mind knowing the drivetrain will be warrantied for some time to come. All used vehicles should come with a safety inspection from a mechanic, but certified vehicles are required to provide one. Always request a CarFax report as well. You never know what kind of damage is lurking behind a repainted panel or under the trunk carpeting.
New Warranty vs. Extended Warranty
New vehicle warranties are great – they’re generally bumper-to-bumper and cover problems without a deductible. The only problem is new vehicles cost 20% more than their identical used counterparts. So buying a brand new car with 15 miles costs 20% more than a used one with 1500 miles. It would seem like everyone should buy a used vehicle with 1500 miles, but there definitely is not enough supply to provide that. But as I’ve stated in previous articles, buying certified pre-owned is always the best bet, which usually come with a balance of the new car warranty on top of an extended warranty. You can always buy an extended warranty on a new car and most used cars, but is it worth it? The answer is in which vehicle you purchased and how much you plan to drive it. I recommend eyeing the consumer reports new or used car lists, which will show you the amount of repairs each model/make required. If you’re buying a car because you like the way it looks, but it gets a poor rating in consumer reports, buy the extended warranty. You won’t be sorry.
What Could Go Wrong?
The worst thing you could have happen is your new or used car breaks down while you’re still making payments. If you’re making $200/month payments on a car that doesn’t run, it puts you in a very difficult situation. Always carry a warranty as long as you are making payments. You never want to be caught in a situation where you’re unable to fix the car and make the payments at the same time.
Job Interview Prep
Prepping for an interview is more important than landing the job itself. If you are not prepared, you are not going to land the job. Start by researching the company you are visiting and try to find out some things about the people who work there. Linked-In is a great place to find out who works where in the company, and what kind of backgrounds they have. This will lead you in the direction of their questioning, as well as help you strike up conversation. Don’t go overboard on details – no one wants to hire a stalker.
Know Your Material
If you’re interviewing for a business-level position, know that position very well. Make sure you have extensive knowledge on the material, competition, and challenges facing that industry. When you know your stuff, hiring managers eagerly give you an offer. Be on your game during the job interview and impress your hiring manager.
Dress for the job
It used to be common to see interviewees arriving in a freshly pressed suit and a nice tie. Sure, it would be nice if we lived in the 1920s when it comes to dress code, but we don’t. Dressing for the job shows you understand what the position is like and also presents a more accurate version of yourself. Wear the power suit if you’re going for a high-level consulting job, because you’ll likely wear that suit out on the job. Otherwise, dress business casual if you anticipate the office dresses that way. If you’re going for a development position and everyone is required to wear a suit, it’s probably not the environment you are eager to join.
Body Language & Confidence
Body language is very important during a job interview. Try to avoid bouncing or otherwise displaying nervous energy. Confidence plays a key role in body language. By properly prepping for your interview, you can arrive with confidence that you know the material and have plenty to talk about. When you’re seated with an interviewer, try to present a relaxed but focused disposition.
One of the most controversial topics in finance today is student loans. The ease of getting them, their limitations in bankruptcy, and the stress they cause families is beyond reason. I know people who graduated with 4 years degrees that have over $100k in student debt. These equate to $1000/month payments for 20 years. It’s hard to believe that a young college graduate would be saddled with $1000/month payments until they’re in their 40s. This is just unacceptable, but who is to blame?
Parents, blame the parents – when you’re 18, you probably know a thing or two about money. You know how much it costs to fuel a car, how much it costs to buy a movie ticket and how much a paycheck usually is at that age. What you don’t know is how valuable $100k is to you at that age. It’s critical that parents educate their children on the difficulty of paying off loans that size. It’s also important that parents understand the value of local colleges, community colleges and commuting to school.
Cost of Living on a Loan
The worst part about student loans is they aren’t entirely for tuition. You can take student loans out to cover the cost of living, apartment rent, utilities, books and more. All of these expenses have zero return-on-investment for the student, and saddle them with those costs far into adulthood. Add interest on top of the borrowed money and you’re paying 2x the rent back over the course of the loan.
Start local, then go big – the best way to finance a college education is to start local at the community college. Most tuition rates at community colleges are under $2000/semester, and some are far less than that. But that means you can get the first 2 years of college for under $10,000. That’s a remarkable bargain compared to going away to school, which will run at minimum $20,000/year. You’re saving 75% or more by staying local. Of course, that does not include the cost of a car and commuting expenses, but even if you add those, you’re looking at saving at least 50% and you have a car.
We all wish we were smart enough, talented enough or lucky enough to get free money for college. But free money isn’t just for those people. Actually, there is scholarship money available to almost every college student, you just need to apply for it. Do you research ahead of time, and make sure you apply for all the possible scholarships available. Sometimes, a college will offer a year of tuition or a steep discount. Make sure you count all the expenses before you make a decision. Even free tuition at a school 1000 miles away will cost $10k in living expenses annually. Don’t saddle yourself with unnecessary debt just because a college is giving away tuition.
What Is Too Much Debt?
This is an interesting question, because in my opinion, any debt is too much debt. If you plan carefully, you should be able to get through college with no debt. This would require that you work during your college years, and use that money for tuition, books and other expenses. It helps to have additional funding from parents, grandparents or other family and friends to keep costs low, but if you can avoid loans, by all means do so. If not, try to limit your loans to federal student loans. Sure, you cannot get out of paying them for almost any reason, but they’re usually the lowest rates, and they are the most flexible in terms of paying back. If you do limit your loans to federal only, you’ll be looking at about $125-150/month for every $10,000 you borrow, which is a more manageable figure.
There are many debt traps with long-lasting effects, some that could take years to recover. Here are a few often overlooked debt traps that you should always avoid:
Paying off credit cards is a topic widely covered on the Internet, as well as thousands of self-help books, online courses, credit repair and debt counseling services. Everyone has advice on how to pay off credit cards, and they all start with the same concept – pay off higher rate cards first, then lower cards. However, the issue is not the order in which they should be paid, but the reason they were overused. Before you come up with a plan to pay down your debt, look introspectively into why you got into debt, and how you’ll avoid debt in the future. I’ve seen many people celebrate going debt-free only to find themselves in just as much debt or more 5 years later. It’s often because life events and unexpected expenses took over.
While payday loans can be a lifesaver for some families, they come with some of the highest rates. You could end up paying 20% or more per month on the loan, which will add up very fast.
A brand new shiny black convertible sounds like a car we’d all love to have. That convertible you want might cost $40,000, and even if you put down 20%, you’ll be looking at a $600/month car payment. If you decide to sell or trade it in just a few years, it won’t be worth $20,000, so be careful spending big money on cars. Quality transportation can be found for $10-12k, and brand new quality cars can be bought for under $20,000. Until you can pay cash for that $40,000 convertible, buy a lower priced car and save $300/month on car payments.
The advice my grandparents gave my father was to buy the most house you could afford, because it will be easier to pay it off over time. While that may have been true in the 1970s, today’s housing market is not consistent enough to use as a long-term investment. For example, if you make $60,000 and your affordability is $250,000, don’t spend it all. Buy a home that’s 70-80% of your affordability, about $200k, so that you can afford all that life has to throw your way. The extra $250/month you’ll save will go a long way. If you don’t need it, you can save the extra $3000/year.
Student loans is a topic that cannot be covered in a single paragraph, but the most important rule is: never take out student loans to cover living expenses. You will end up spending twice as much over the loan for things like rent and food, of which have no return on investment. These costs can be avoided by attending schools within commutable range for at least the first two years. As long as you finish your degree at a university, the first couple of years aren’t nearly as important.
Of all the debt traps, this is the worst of them all. Grandma co-signs her grandson’s new car loan and he only makes the first couple of payments. Mom and dad bail out a newly divorced parent with an apartment they cannot afford. These situations arise out of love and empathy but end in fear and frustration. Debt collectors are as friendly as a lion and have heard every story you could imagine. Never, ever co-sign a loan. As long as you live by that rule, you’ll never have to deal with the frustration.
Debt habits are easy to form, and the bad debt habits are hardest to break. Once you get used to spending money in places where you shouldn’t, you can easily overlook the money you’d save on a monthly basis. Keep yourself focused on the long-term and try to avoid or restrain some of these common debt habits:
When signing up for a new checking or savings account, always ask for the no-fee option. If there are minimum balance requirements, look elsewhere. Most banks have account options that are fee-free as long as you don’t overdraft or use foreign banks. The strategy is to not have a lot of extra money sitting in checking and savings accounts. While it’s great to have liquid cash, it does very little for your long-term financial stability and you’re more likely to spend it when it’s not making you money. Keep enough money in a checking/savings combo to cover overdrafts, but no more than a few months living expenses.
If the bank doesn’t give you checks, buy them elsewhere. There are many check printing companies that will give you a much better deal. But with today’s online banking features, there is little need to physically write checks anymore.
How often do you eat out per month? How much is your average bill? Going out every Friday night and spending $100 is a $400 monthly habit, and more than $5000/year. That’s just from one night out a week! It’s great to spend time with friends, but if your retirement account is not where you need it to be, these are some of the best places to cut back. Try a different restaurant, order the specials, or cut back on the number of drinks you order. There are many ways to cut down the costs of dining out without cutting back on fun.
I hear this term in my social circles far more than I should. There is no reason to make yourself house poor by overspending on your house and cars, or anything else for that matter. When buying a home, make sure you have enough money for a down payment, another 10% to cover moving and renovations, and at least 20% of your net income left over for anything that comes your way. If you spend all of your money buying your house, you’re going to have a hard time enjoying it with no furniture, old carpets, or other things you spend everyday wishing you could change. Don’t put yourself through that frustration just to have your name on a deed.
I can’t tell you the number of times I’ve impulsively purchased something and later realized that the pitch was the only reason I did. Sure, the pitch was great, but what was I doing watching that commercial or looking at that end-cap. It’s all about realizing that the end-caps and commercials have one purpose – to sell you whatever is on or in it. It looks like a good deal? Sure does, that’s the point. Stay above the influence and stick to a list while shopping. If you see something in a commercial you think you can’t live without, do some research on it. You might find that after 15 minutes of reading reviews, you didn’t really want it anyway.
Unfortunately, therapeutic shopping is a topic I’m also familiar with. I’ve lost people in my life that have made shopping a therapy rather than a purposeful destination. It takes courage to realized that you’re therapeutic shopping, and even more courage to put those feelings aside. As easy as it is to say it, it’s much harder to realize how much more that money will mean to you tomorrow, next week, or a year from now. Whatever it is you are buying, it is not important. Your feelings are important, so I encourage you to write those feelings down. Instead of shopping, visit a park and take a walk, or spend the money on a ticket to a museum. Seeing new things will help you process your feelings. If you continue to feel like you’re outside your comfort zone, reach out to family and friends for help. Never feel ashamed to talk about your feelings – you are just as important as everyone else on this earth.
One of my favorites as a kid, reward shopping can be both beneficial and challenging. My parents used to reward us with $25 for a report card showing a B average or better. This was used mostly for new video games, remote control cars, baseball cards, and other things that have little value today. The excitement of getting them at the time, however, is priceless. Giving children a reward for good grades is a great way to exercise reward shopping. Sometimes, you want to reward yourself, like when you’re promoted or get a raise. Don’t be afraid to splurge a little on yourself from time to time, it’s just as important as the rewards we got for good grades. It’s just that we get to choose the amount. Be responsible by capping your rewards and you’ll end up happier with your purchase in the long run.
Saving money on utilities is something we’d all like to do. It’s almost like money down the drain every month, well some of it. While the modern comforts are great, there’s no need to waste it. By following a few simple steps, you can cut your utility bills down and put that money in a better place. Here are a few suggestions on how to reduce electricity, water and gas bills:
Using Less Electricity
What if I told you the secret to using less electricity is not having so much stuff that you requires power? That’s part of the secret, the other part being you can create your own electricity using solar panels. There are many ways you can reduce your electrical usage, let’s explore a few ways:
- Solar power – you can add panels to your roof that will provide power to your home during the day, and whatever is left over can be fed back into the grid to reduce your electricity costs overnight. Many people end up with near zero bills or receiving money back.
- Unplug your devices – unplugging adapters, computers, TVs, appliances and other electronics is a great way to save on electricity. They all consume power when they’re not in use, and this is especially true when you’re away from the house for extended periods of time or on vacation. Unplug these items and save.
- Look for efficiency when buying – always check the energy star tag on your TV, appliance or other devices to see how much power they consume. If you’re buying an appliance that uses 2x the power of its competitors, look to find out why. An inefficient refrigerator can be more costly than just power, especially if it cannot keep food properly cold.
Using Less Water
It should seem obvious to us the ways that we can reduce water usage, but so many homes look past this and just leave their usage status quo. I’m always eyeing the rate usage on our utilities year-by-year, month-by-month, so I know when we’re using a lot of water, and when we’re not. We have a pool in our backyard, so we use more water during the summer trying to keep it topped off than we do at any other time. It takes hundreds of gallons during the summer. During the winter, dozes, so it’s far less usage. But how do we really reduce water usage?
- Run sprinklers for less time – if you have a programmable sprinkler system, program it to run for 5 minutes rather than 10. Check your sprinkler nozzles for damage and make sure they’re aimed at foliage and not driveways and sidewalks.
- Take shorter showers – I know this may be the most difficult to actually accomplish, but showers are one of the biggest water hogs in your home. Try timing your shower to see if you’re going over 10 minutes. If you shower daily (which I recommend), even 2 minutes a day is over 1 hour of running water a month. That could equate to hundreds of gallons. Use your water and your time wisely.
- Don’t prewash your dishes – how many of us wash our dishes before we put them in the dishwasher? I remember a friend saying, ‘But I didn’t use soap,’ as if that were the reason they needed to be washed twice. You could easily have used soap as you scrubbed them and skipped the dishwasher altogether. If you’re using a dishwasher, let it do its job. If you hand wash your dishes, finish the job. It’s one of the few things we wash twice. But think about it this way – do you wash your hair and face before you get in the shower, and then wash it again?
Using Less Natural Gas
If you have natural gas in your home, you know how easy it is to run up the bill using the heating system or gas fireplace. Gas fireplaces look great and don’t create a mess, so it seems natural to want to run it all the time. This could add up to one costly gas bill. It’s a good idea to limit your gas fireplace usage to a couple of hours a day at most. Running it for 4+ hours a day will add up quickly and add quite a bit to your monthly utilities bill.
Measuring Electrical Use
If you don’t already have one, I recommend buying a device like the Kill-a-watt to measure current draw. Knowing how much electricity your devices use is the first step in know what to curtail. It’s easy to measure, and they aren’t expensive at all (~$20).
Measuring Water Use
Measuring water can be done with little effort, but it’s not as easy as using a Kill-a-watt. For example, measuring water use in the shower is as easy as timing how long it will take to fill a 2 gallon bucket. If it takes 1 minute to fill, your shower uses 2 gallons/minute. Your toilets will list how much water each flush uses. Your kitchen sink will have to be measured like your shower, but you can figure out exactly how much water is being used while your faucet runs, which will help remind you to shut it off after it’s been running alone for a few seconds.
As you can see, measuring your electrical and water use is an easy task, and will help you understand where your money is going on utilities. Be aware of how you’re using power and save the money that is otherwise wasted every month.
Bad days are inevitable. Some days are very bad, and depending on how you cope with those days, they could be the most financially devastating days of your life. I’ve seen so many people fall into a financial hole because of depression, substance abuse, and poor diet, among other causes. It’s heartbreaking to see your closest friends dealing with pain that you cannot fix. It’s tougher when the person who is dealing with it is you.
Admit your day was bad and move on – it may sound easier than it actually is, but admitting your day was terrible is a great start to moving on from it. You can dwell on how bad it was and look to therapeutic shopping as a remedy, but that will often end in buyers remorse, which is another depressive state. Look for outlets that allow you to process your frustration like reading, coloring or spending time outdoors.
Avoid shopping to lift spirits – therapeutic shopping can devastate even the biggest bank accounts. Once you’re sad and you find that shopping lifts your spirits, there isn’t a store big enough to satisfy your demand. When you’re feeling down, call a friend, visit a park, and do anything other than going to the store. The store doesn’t have what you’re looking for, I promise.
Keep a journal – one of the best ways to offset bad days is to review the good days you had in your journal. Every day is a new beginning, so you don’t have to dwell on whatever has you down today. Write in your journal at least a few times a week to keep it current and relevant.
Dive into a hobby – thinking about taking up painting? Or do you want to learn how to play the guitar? Both of these hobbies are a great way to challenge yourself without breaking the bank.
Volunteer – whether at the local animal shelter, a senior center, or to help the veterans, there are many ways you can volunteer your time. This is also a great way to meet like-minded people who care as much as you do. Websites like Volunteer Match are a great place to find volunteer opportunities in your area.
There are many ways to distract yourself from the pain of a bad day. Especially when there are a string of bad days line up together, it can get tough to focus on the big picture. Know that impulse shopping, drugs, alcohol, and junk food aren’t the answer. Focus on yourself in the dark times and you’ll come out stronger and happier in the long run.
There are many ways to earn cashback on purchases. One of the easiest ways is to use an online cashback website like Ebates or TopCashBack. Credit cards, store rewards programs, and rebates are another way. Regardless, cashback is something you’re entitled to on almost every online purchase so don’t let that money slip through the cracks.
Sign up for cashback before you make your purchase. Refer to the list of popular cashback websites below. It costs nothing to sign up with the cashback websites, and many of them have minimal payout thresholds so you can get your money quickly.
Plan your purchases ahead of time – most cashback websites offer greater cashback amounts during holidays and promotional periods. For example, the anniversary of the cashback website may trigger an offer for 2x cashback. If you’re planning on making a large purchase like a TV or refrigerator, wait until a major holiday to see if the cashback amount is greater.
Know your categories – many cashback sites limit cashback on specific categories, including gift cards, low-margin goods like laptops, and other items with minimal profit margins. Don’t get confused and make a large purchase only to find your category was excluded. If in doubt, email the cashback website and ask if the purchase will qualify.
Track Your Purchases
Track your purchases – make sure that after you’ve made your purchase, you receive the proper amount of cashback. Mistakes are uncommon, but they do happen. If your cashback amount does not equal the amount you calculated, write to the cashback website immediately. They are often able to remedy these issues right away. If you wait too long, it may be too late to do anything.
Popular Cashback Websites
Active Junky focuses on active lifestyles, so you’ll find stores like REI, Cabela’s, Backcountry, Nike and more. They offer many articles in categories like cycling, mountain biking, kayaking, camping and hiking. Also, check out their buyer guides for an in-depth look at active lifestyle products.
Ebates is one of the largest and most reliable cashback websites on the web. They have over 1,800 active stores and 10,000 coupons. On major holidays, Ebates typically offers double cashback or more at select stores, up to 40%.
Mr. Rebates is a classic cashback website featuring over 2,000 stores. Their simple interface makes shopping cashback easy. Mr. Rebates also offers coupons at many of their cashback stores.
TopCashBack is one of the newer cashback websites, now offering cashback at over 3,500 stores. They bill themselves as the USA’s most generous cashback site and even guarantee the highest cashback.
Don’t wait to sign up for one of these cashback websites. You miss an opportunity to save money every time you place an order online outside of a cashback website.
Using Credit Wisely
In my experience, I found most money making opportunities take capital to get rolling, so I’m always concerned with using credit wisely. It’s tough when you have an idea that you think will really work, but you’re facing an uphill climb. On the flip side, you may really want that new car or designer purse, and you aren’t worried about the cost today. You know you can pay it off later. Both of these scenarios lead to the same path: debt. I minimize this potentially toxic debt by following these guidelines:
Credit and Relationships
Credit cards can make or break any relationship. If your SO doesn’t have the same approach you do, you’ll find yourselves at a crossroads. It’s important that you have the credit card discussion early on in your relationship so you don’t end up fighting over it later on. As long as you’re on the same page, you should be able to keep credit card problems at bay.
Know Your Limits
Know your limits – not just your credit card limit, but your cash limit on a monthly or quarterly basis. Never spend more in one month than your cash flow over a quarterly period.
Credit in Moderation
Don’t have more than 4 credit cards – I’ve heard people say they have 10 credit cards and an 800 score. That’s great, but you’d probably have an 850 with fewer cards. All of that extendable credit actually makes you a risk. If your limits are high (e.g. more than 4x your quarterly cash flow, or more than your overall annual cash flow), request that the banks lower them to a more reasonable level. Try to keep your limits under your annual cash flow.
Avoid Store Cards
Don’t use store cards – ever! There is nothing to be gained from a store credit card other than a large credit limit that’s only useful in the store itself. It’s actually a detriment to your credit, so be careful when the salesperson tells you that price is only good if you use the store card. That’s usually a sign that their profit margins are too low to sustain business without pushing their card on you. Avoid the pressure and use one of your bank cards instead, or buy it elsewhere.
Join a Credit Union
Join a credit union – this is probably one of the best pieces of advice I got early on in my adulthood. I joined a credit union at 21 which helped me with my first car loan and subsequent loans since. Each loan was at least 1 point below the industry average. The only times I have not used the credit union is when the manufacturer’s bank offered a better rate, sometimes as low as 0%.
Say No to Cosigning Anything
Never cosign – I cannot stress this enough. The best way to indirectly ruin your credit is to lend it to someone else. No one cares about your credit score more than you do, so once you lend it out to others, expect it to drop. Even if they make every payment on time, you’re still looking at outstanding balances, and the risk of a lawsuit if payments are missed.