Core Bank and the Independent Community Bankers of America® (ICBA) are offering tips to help customers plan for their financial future by establishing and maintaining good credit habits for January’s Financial Wellness Month.
The term finance usually equates to money, however, finance encompasses not just money, but also the creation and management of money and investments. This means it deals with how you earn money, and also how you spend that money. Financial wellness has to do with your relationship with money and how secure it is regardless of the variables that could affect your future.
“Building strong credit is a key component of achieving long-term financial independence, and it all starts with smart money management,” said Brandon Meacham, VP-Credit Analysis Manager at Core Bank. “At Core Bank, our community bankers are here to guide you in creating a tailored budget that aligns with your financial aspirations—whether short- or long-term—helping you sidestep potential financial pitfalls and position yourself for sustained success.”
The following tips will help to build and sustain good credit:
- Open a checking account and keep track of your balance to help establish a credit history.
- Use debit and credit cards for convenience and safety, but don’t overspend or miss payments, which can negatively affect your credit score.
- Develop a mix of credit (such as a revolving credit line and an installment loan) to demonstrate your proficiency managing several types of credit.
- Show stability in the three to six months before a major purchase. Avoid opening or closing accounts or moving large amounts of money around.
- Build an emergency fund equal to at least six months of living expenses to help absorb unexpected expenses and avoid penalties and fees for missed or delinquent payments.
- Alter your credit focus as you approach different life stages. While Gen Z might be saving for a down payment, Gen Xers or baby boomers may be paying down debt or planning for retirement, respectively.
- Monitor your credit to correct any errors and detect potential signs of identity theft. Order your credit report annually from annualcreditreport.com.
“Establishing smart spending and saving habits early is critical to making the most of your financial resources and overcoming temporary setbacks,” said ICBA President and CEO Rebeca Romero Rainey. “Your local community banker is a valuable resource, offering expert guidance as you work toward important financial milestones and prepare for the future.”
Financial Wellness Month is observed throughout January and was created to remind us to pay closer attention to our financial wellbeing. It comes right after the hustle, bustle, and spending that comes with the holiday season, to help us slow down and prepare our finances for the new year and our lives as a whole.
