Managing Finances and Credit with the Help of Wells Fargo

This post is brought to you by a compensated campaign in collaboration with Latina Bloggers Connect and Wells Fargo. All thoughts and content are my own. #WellsFargo #Sponsored

Growing up my parents always spoke to me about how important my credit is. When I was 14 years old my mom gave me my first credit card for “emergencies” only. I was just starting High School far from home and my parents wanted some reassurance. Little did I know that they were starting me on my financial journey. Growing up in a Latino household my parents always told me how important it is for us to educate ourselves. I love that Wells Fargo is helping the Latino community by providing financial resources. That includes providing customers with bilingual online tools, Spanish Text Banking, Spanish account statements, Spanish-language call centers, Spanish-speaking bankers in stores across the nation, and more.

As part of that commitment and in order to connect with the Hispanic community in a meaningful way, Wells Fargo recently collaborated with Telemundo for the “Conversemos de Tus Finanzas” campaign. The campaign is focused on empowering Hispanics to enhance their financial knowledge and help them to reach their financial goals. The campaign provides customized content, tools and resources around the important financial topics of money management and credit.

Credit Tips

Establishing and constructing your credit is important in reaching your financial goals.

Below are a few tips to establish, improve and maintain your credit:

• Check your credit report annually

Make sure your credit report contains current and accurate information. Errors could negatively impact your credit score and even be a sign of possible identity theft. Request a free copy of your credit report at least once a year from AnnualCreditReport.com or call toll-free 1-877-322-8228.

• Pay your bills on time

Your payment history is one of the biggest factors in your credit score – including things that may surprise you like on-time payment of your rent and cell phone bill. Using free online tools, often available through your financial institution’s online banking, can help you develop a budget and create an automatic bill payment schedule.

• Keep debt at no more than 35 percent of your gross monthly income

Lenders look at the amount of debt a consumer has compared to their monthly income when making credit decisions.

I think knowing how to handle your finances is important in curbing credit card debt. Just from my experience, creating a budget for all your monthly expenses helps you know what cash you have available to save, spend, or give to charity.

Money Management Tips

Money management is also very important when it comes to reaching your financial goals. Follow these tips so that managing your money is simple and effective:

• Prepare a budget
  • Understanding your income sources is one of the starting points towards creating a budget.
    • Your annual gross income represents your total income before any taxes or other deductions. “Take-home pay” represents your net income, specifically your income minus taxes, credits, and deductions.
  • Tracking your expenses will help you spend your money more wisely. If you take the process step-by-step, it can be surprisingly easy to find out how you’re spending your money. Here’s how:
    • Gather your financial statements.
    • Create a list of monthly expenses.
    • Examine your expenses.
      • Fixed expenses
      • Flexible expenses
      • Discretionary expenses
    • Saving for life’s special moments. Set your sights on specific goals to effectively target your savings strategy. Look for an online budgeting tool that helps you identify and track multiple goals at once.
    • Putting it all together in a budget. Create a budget in five easy steps.
      • Step 1: At its core, a budget is a worksheet with two columns: one for income and one for expenses.
      • Step 2: Track. For one month, keep a detailed log of all your spending habits.
      • Step 3: Analyze. At the end of the month, total your income and your expenses and then subtract your expenses from your income.
      • Step 4: React. After looking at all of your expenses, separate them into categories and set a budget for each.
      • Step 5: Review: Make a habit of reviewing your budget every month, particularly in the early stages.

When I began having my own family, I practiced the same examples I saw from my parents. Saving more than spending was what I was told to do so that credit cards wouldn’t become something I would rely on. There was a phase where I was using credit cards and spending more than I was able to pay monthly. When I saw how detrimental it could be to my credit score – I immediately began to change the way I spent my money. I removed all credit cards from my wallet and only used my debit card or cash for purchases. It was a simple motto: if I can’t buy it right now with cash, then I can’t buy it. It taught me to save more so I can purchase the items I want and not rely on credit to get instant gratification. It was a hard lesson to learn but it has helped my credit tremendously! Having and maintaining excellent credit is hard but I now have the tools I need to show my children how to succeed!