4 Steps To Building Financial equity - Part 1
4 Steps To Building Financial equity - part 1
My goal with this 2 part blog post is to help you take control of your finances, make smart decisions, and stay committed to your long-term financial goals.
Step 1: Start Saving Early
The earlier you start saving, the more time your money has to grow. Even small contributions over time can make a significant difference.
The earliest time you can start saving is Now.
1 Corinthians 16 v 2 says "On the first day of every week each one of you is to put something aside, in proportion to his prosperity, and save it so that no collections [will need to] be made when I come."
Here are three reasons why you need to start saving NOW.
1.Starting early gives you more time to save and achieve those long- term or big goals.
2.Saving early can provide you with a sense of financial security. Knowing that you have savings set aside can reduce stress and anxiety.
3.Starting early helps you develop good financial habits. It encourages you to live within your means and avoid debt. It also helps you plan for the future.
Step 2: Build A Strong Credit Score.
A good credit score can help you access credit at lower interest rates, which can help you save money over time.
Here are 5 tips to improve your credit score :
Check your credit report: The first step to improving your credit score is to check your credit report. You can get a free copy of your credit report from any of the three credit reference agencies in the UK (Experian, Equifax, and TransUnion). It is important to review your report for any errors or inaccuracies and dispute them if necessary.
Pay your bills on time: If you get a bill addressed to you... please don't ignore it. Late payments can harm your credit score, so it’s important to pay your bills on time. Set up direct debits or standing orders to ensure you never miss a payment.
Reduce your credit utilisation: Your credit utilisation ratio is the amount of credit you’re using compared to your total credit limit. High credit utilization can negatively impact your credit score. Aim to keep your credit utilisation below 30% of your available credit. So for example, if you have a £10000 credit limit, keep your balance below £3000 (30%).
Don’t apply for too much credit: Multiple credit applications in a short period can harm your credit score. Only apply for credit when you need it and space out your applications.
Register to vote: A few years ago, after I moved home I noticed my score dropped and I couldn’t figure out why until I received a letter in the post about the electoral roll. Being on the electoral roll can boost your credit score as it confirms your address and makes it easier for lenders to verify your identity.
Improving your credit score takes time and effort, but by following these tips, you can gradually increase your score and open up more financial opportunities in the future.