Tips on how to save money, improve your credit score, get out of credit card debt for Financial Wellness Month
CHICAGO (WLS) — January is Financial Wellness Month, and our I-Team has found how you can save, invest and battle high interest rates, with help from City of Chicago Treasurer Melissa Conyears-Ervin.
Chatham resident Diamond Montgomery recently paid off credit card debt and improved her credit score after the Treasurer’s Office connected her to a financial advisor.
“We started off by going through, obviously, my credit report, we talked about the importance of credit, how to rebuild your credit,” she said.
The first strategy Conyears-Ervin shared for financial wellness is splitting up your direct deposit.
“I believe in putting your money in different accounts, especially a savings account that is not convenient to you, because I believe that if you don’t see it, you can’t spend it,” she said.
As such, the second savings account should not have an ATM card attached to it.
Secondly, in addition to cash savings look for ways to invest. You should max out your 401K if you have one, even though the market was volatile last year.
“It’s always a good time to increase your 401 k’s are for long term investments,” Conyeraas-Ervin said.
Third, monitor your credit card debt and beware of higher interest rates. New offers on credit cards are an average APR of around 22%, and existing credit cards interest rates are now more than 19%.
You can also sometimes lower your credit card interest just by calling and negotiating, and pay your balances off every month to avoid interest.
“Improving your credit score is extremely important,” if you want to lower your interest rate, Conyears-Ervin said. “That’s the quickest and easiest way to make certain that you have the best interest rate possible”
You can improve your credit score by paying off balances every month.
“The lower that we can bring down those credit card balances really do affect our credit score. That can, in turn, affect the interest rates that are provided to us when we’re purchasing a home or purchasing a vehicle,” the treasurer advised.
Montgomery said her credit score has gone up over 100 points, and she will soon apply for a home loan.
If you’re looking for free help to manage your finances, you can get all the information at chicagocitytreasurer.com.
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