List Of The Best Financial Advice

Brian over at FinancialDominance.com has tagged me to participate in the My One Money Advice meme.

This meme was started by Pinoyo over at Moolanomy in an effort to help promote financial responsibility and awareness.

The Question: If you can give one advice, tip, or story related to money, what would you share?

Always Pay At Least The Minimum Due On Time
The one piece of advice that I would share would be to always make sure that you pay at least the minimum due on your debts and make the payment by the due date.

When I graduated college with a fair amount of debt, I always maintained a very good credit score because I never had a late or missed payment. While paying only the minimum is not the strategy to use if you are trying to get out of debt, it will go a long way towards preventing you from getting deeper in debt.

As soon as you start making late payments, you will be hit by additional fees and most likely will have your interest rates jacked up as well. To add insult to injury, your other credit cards may increase their rate as well once you have a late payment hit your credit report.

As I mentioned when I wrote about 5 steps to improve your credit score, lenders are more concerned with whether you are going to pay them on time than they are with how much more than the minimum you pay each month. From a lender’s perspective, they actually prefer that you pay the minimum as that will keep you in debt even longer.

Timely payements account for 35% of your FICO score so by following this one piece of advice you will be doing your best to maintain a quality credit score while you eliminate your debt. The real benefit here is that your high credit score will qualify you for more attractive balance transfer offers and lower rates with your existing credit cards.

Additional Tips
Others that have participated in this meme have included some outstanding tips. Here are a few of the tips and advice that have been shared:

I’d like to hear what tips or advice the following people would share: Mark at Financing Your Family, Jake at More Merchant and Eric at Money Dork.

Even if I haven’t tagged you to participate, feel free to join in the fun with your own tip. Let me know about your tip by linking to this page or leaving a comment and I will add it to the list.

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7 Responses

  1. Pinyo says:

    Thank you for participating. I think this is a good tip if you have problem paying the full amount which I personally advocate. Also, if all you can do is the minimum, I think it is appropriate to stop using your credit cards until your debts are paid off.

  2. Jake says:

    My 1 tip which is easy to remember but harder to follow is this:

    If you can’t pay cash, you don’t deserve it.

    This tip will really help you out by allowing you to save thousands in interest over your life.

  3. mnc says:

    @Pinyo – Absolutely. I fully advocate paying all balances in full each month and to stop using your cards when you are in debt.

    @Jake – Thanks for the tip, I’ll get it added to the post.

  4. Brian says:

    mnc: Thanks for answering the tag!

    Protecting your credit score is a great way to achieve an improved financial condition over your lifetime because of reduced interest (and other) costs.

    Great tip!

  5. My apologies and it is fixed now.

  6. Nick says:

    There are definitely some great tips there, put I don’t see “pay yourself first” on the list.

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