5 Easy Ways to Save for the Holidays in Just A Few Weeks

Facts are facts. When it comes to holiday planning, lists are long and time is short. If you’re one of those mythical people who has already finished your Christmas shopping, this article may not pertain to you. But you can still share it with the normal people in your life…that’s right you prepared people are the weird ones. Now, if you’re part of the 53% of people who wait until the last minute to tackle your holiday shopping, you’ll want to keep reading.

Ever Ascending Holiday Spending

Every year, Americans spend more on winter holidays than any other occasion in the calendar year. Staying in line with this upward trend, shoppers are expected to spend more during the 2018 holiday season than ever before. According to the National Retail Federation: “Consumers say they will spend an average $1,007.24 during the holiday season this year, up 4.1 percent from the $967.13 last year.” And that figure doesn’t even include travel expenses!

Regardless of whether your seasonal spending will top the national average or you skate by just under the line, we want to help you save money. While there may not be enough time to implement a long-term plan, here are five practical tips to help you stretch your holiday dollars a little further this year:

  • Know your limits. Set your limits. At this point in the game, time is of the essence—and so is your money. Rather than trying to overwhelm people with the quantity of your gifts, focus on the quality. It’s always better to give someone one gift they’ll love than to flood them with a variety of forgettable trinkets. Save your time (and hopefully your cash) with more meaningful gifts.
  • Go with gift cards. Don’t stress an opinionated recipient. Let them do the heavy lifting, you just give them the gift of shopping guidance. Plus, nothing says “treat yourself” like a gift card. Why not get creative and make those very same gift cards work for you? Many retailers offer gift cards at a discount during the holidays. If a store is selling gift cards at a 10% discount, buy a $100 gift card for $90 and use it to pay for your gift purchases. Hidden savings will help you through.
  • Abandon your cart. If you’re planning to do your Christmas shopping online this year, slowing down can save you money. Instead of finding the item you want, adding it to your shopping cart, and checking out immediately, try a new approach. The first two steps are the same. But then, instead of completing the purchase, leave the item in your cart and exit the site. When something sits in your cart for an extended period of time, many online retailers will send you a reminder email offering a discount if you’ll come back and complete the transaction.
  • The search for savings is on. Thanks to the Internet, you no longer have to cross your fingers and wonder if the store you’re shopping from will offer a coupon or promo code. Websites like Retailmenot, Groupon, and Ebates do the work for you. If you’re a frequent Amazon shopper, the Honey app will automatically search the web for coupons or promotions on the items you’ve added to your cart. The holiday season is the perfect time to let modern technology work for you!
  • Patience pays. Failing to plan ahead is rarely a good strategy. But in the case of holiday travels, it just might work in your favor. If you’re hitting the road for Christmas vacation, websites like HotelTonight and  LastMinuteTravel have created their entire business around helping travelers like you score last-minute deals on hotel rooms. Don’t just book the first available hotel room you see in the search results. Shop around. Outstanding savings are out there — you just have to find them.

While the tips we’ve offered can help you get through this holiday season with your spirit intact, there’s an even better way to prepare for next year.  At Scient, our Holiday Savings Club makes it simple to set aside a little money each month. Start a new tradition of stress-free shopping. Contact us today to learn more about our Holiday Club!

5 Steps to Set Yourself Up for Cyber Monday Success

Everyone knows about Black Friday. With its midnight madness and jaw-dropping promotions, Black Friday became a can’t-miss event! For decades, it was the day for shoppers to find the best deals of the Christmas shopping season. But then, just as it’s done with virtually everything else in our lives, the Internet changed the face of holiday shopping.

Cyber Monday: The Origin Story
While Black Friday has long been considered the official start of the Christmas shopping season, retailers began to notice a curious trend in the early 2000s. On the Monday following Black Friday, there seemed to be a spike in online purchases—mainly between the hours of 8am-5pm. While it seemed odd at first, the trend was relatively simple to figure out.

As more and more companies shifted their business practices online during the Dot-Com Boom, employees needed Internet access. And even though participating in e-commerce may have violated more than a few corporate Internet usage policies, employees faced the irresistible convenience of shopping online. After the trend continued for several years, the term “Cyber Monday” was coined in 2005, and the online version of Black Friday became a holiday fixture.

5 Tips for Making the Most of Cyber Monday
In 2017, online consumers spent more than $6.5 billion on Cyber Monday, which was a 16.8% jump from the year before. As mobile technology continues to improve and make digital transactions easier, it’s safe to assume Cyber Monday’s popularity (and profitability) will only increase. That means whether you’re shopping from home, your smartphone, or your workplace (don’t worry, we won’t tell), there will be millions of other virtual shoppers searching for holiday bargains along with you. Luckily, you still have time to prepare your digital shopping strategy.

To make your Cyber Monday shopping experience as smooth and rewarding as possible, be sure to follow these practical tips:

  • Bookmark your favorite websites. This step is the digital equivalent to planning out your Black Friday shopping route. But thanks to mobile phones and streamlined web browsers, you can mark your favorite e-tailers with just the tap of a screen or the click of a button. A little quick-and-easy planning can save you time—and money!
  • Stay tuned to social media. As stores and companies look for creative ways to connect with potential customers, many are offering special deals and promo codes via social media. So before Cyber Monday rolls around, make sure you’re following your top stores on Twitter, Facebook, and Instagram.
  • Sign up for newsletters. While newsletters aren’t traditionally a great way to get up-to-the-minute sale details, online specialty stores occasionally offer special discounts to customers who join their mailing list. Receiving the occasional newsletter email is a small price to pay for saving big on items you love.
  • Set a spending budget. We know, we know. This tip can apply to just about any shopping experience. But since making online purchases doesn’t involve manual payments for physical items, it feels effortless—and that can be expensive. So, before you load up that digital shopping cart, know how much you’re willing to pay at checkout.
  • Keep an eye on your cards and accounts. Cyber Monday draws millions of customers. This is good news for retailers—but it can also provide a virtual playground for scammers and cybercriminals. Since regular monitoring is one of the best defenses against financial fraud and identity theft, don’t forget to check your banking and credit card statements for unauthorized activity.

Whether you do your holiday shopping on Cyber Monday, Black Friday, or random days throughout the year, a Holiday Club Account with us gives you a smart way to pay for your purchases. When you open one of these specialized accounts, you can set aside money all year long, earn interest on your savings, and gain access to your funds just in time for the winter holiday season. Ask us for more information today!

Holiday Shopping Hacks: Your Black Friday Survival Guide

Judging from the massive marketing blitz and predictable purchasing frenzy, one could make the argument that Black Friday is a holiday all its own. But despite the fact that we all have that one friend who feels like it’s perfectly acceptable to listen to Christmas music as soon as Halloween is over (it’s not ok—but that’s another post for a different blog), the day after Thanksgiving is traditionally considered to be the official start of the Christmas season.
Black Friday by the Numbers
With this yearly retail extravaganza just around the corner, you might be asking yourself, “What will an estimated 174 million Americans do on Black Friday this year?” Before you start googling, we’ll save you the research. They’ll spend the day—the entire weekend, actually—shopping. Wait. You knew that already? Fair enough. Did you know that the average Black Friday shopper is expected to spend more than $500? Even though we’re dealing in estimates and averages, that adds up to a lot of people and purchasing!
As online and mobile sales increase, the traditional Black Friday crowds may thin out a little—but not much. Even though 2017 saw a 4% drop in the number of in-store shoppers compared to the previous year, there were still more than 102 million people that joined the retail masses. So, with millions of people frantically scouring stores for the best deals of the season and even more hunting for deals on their smartphones, a little strategy may help you keep the holiday shopping season merry and bright!
7 Tips for Having the Best Black Friday Ever!
While there are probably as many shopping hacks as there are shoppers, we’ve narrowed the suggestions down for you. Here are 7 ideas to help you survive Black Friday with your sanity and your budget intact:

  1. Create a shopping strategy. Since most major retailers advertise their Black Friday specials ahead of time, it’s easy to plan ahead by scanning sales flyers and online promotions. Knowing exactly what you’re looking for will save hours of wandering and wondering.
  2. Get in and get out. Most of the time, it pays to shop slowly and carefully—but not on Black Friday! If you’re going to score the best values at multiple stores, you need to grab the items you want, check out, and head to the next store. The midnight madness is no time for browsing.
  3. Maximize your mobile experience. If you’re planning to take advantage of mobile deals or online specials, you can save time and frustration by downloading all the necessary apps in advance.
  4. Prepare your profiles. How many times have you found a deal online, placed the item in your cart, and then had to waste time setting up a customer profile before checking out? Don’t miss out on limited-time-only deals. Create your profile on websites before it’s time to shop.
  5. Look for the lock. Before you enter your personal details and credit card information on a website, make sure the web address starts with “https” and there’s a closed padlock icon next to address. These details indicate the site is secure. If the address starts with “http” or the padlock is open, see if you can find a deal somewhere else.
  6. Team up for double the fun. Finding amazing bargains is fun—but isn’t it better when you have someone to share in the excitement? If you’re going to engage in shopping shenanigans at 2:00 AM, you might as well do it with your favorite shopping buddy!
  7. Shop early. Shop often. It would be logical to think that Black Friday is limited to—well, Friday. But in an attempt to boost sales, stores like Amazon and Best Buy are running early sales. And with the rising popularity of Cyber Monday, you may be able to find money-saving specials all weekend long!

Hopefully, these ideas will help you save some money this winter holiday season and have a little more fun in the process. When the new year rolls around, it will be a great time to start planning ahead for Black Friday 2019. To avoid any last-minute budget crunches, come talk to us about setting up a Holiday Club account. Setting aside money throughout the year is a great way to avoid financial stress and focus on the festivities!

Three Simple Suggestions for a Budget-Friendly Halloween

Think back to when you were a kid. What was your favorite thing about Halloween? Was it the costumes? The candy? The spooky decorations around your neighborhood? All the above? Now, think about your little ones. Which Halloween traditions excite them most? There’s a pretty good chance they love the same things you did.

That timeless trio of candy, decorations, and costumes account for more than 80% of Halloween spending. How much do people actually spend on Halloween? According to a National Retail Foundation survey, Americans spent an estimated $9.1 billion in 2017, and the number is expected to top $9 billion again in 2018.

From shopping for the newest costume to overspending on premium candy for trick-or-treaters, it’s easy to get caught up in the fright-filled fun and spend more than you intended. So, how do you give your little ones a Halloween filled with fantastic childhood memories without blowing up your budget in the process? We’ve got a few ideas.

Three Tips for Saving Money This Halloween

By following these tips, you can save money on candy, decorations, and costumes and help your kids enjoy a Halloween that’s a little less trick and a lot more treat:

 

Candy

Based on the survey mentioned above, a whopping 95% of Americans plan to buy candy this Halloween. If you’re looking for easy ways to save, steer clear of the brand name selections and buy in bulk. If you’re trying to be that house, the one all the kids talk about because you’re the ones that give out the “good stuff,” be sure to scan local sales and be patient. Stores will often discount candy on Halloween morning. A little last-minute shopping can give you the chance to get more for your money.

 

Decorations

Hosting a Halloween party for your friends? Instead of rushing out to a specialty store and buying elaborate displays and mass-produced trinkets, add a personal touch by letting your kids design decorations of their own. You may not win any neighborhood decorating contests, but your children will love showing off their handiwork to all their guests! Need some suggestions to get your family’s creative juices flowing? The home decorating experts at HGTV can help you scare up a great idea!

 

Costumes

When it comes to finding great deals on Halloween costumes for your children, thrift stores are your friend. If you shop early enough, many second-hand stores will have a selection of costumes that were only worn once or twice before the previous owners outgrew them. If you’re getting down to crunch time and you don’t have your kiddo’s costume figured out, Pinterest is a great place to find creative DIY ideas. And if your costume design project doesn’t turn out as perfectly as you hoped, don’t worry—nobody will notice because trick-or-treating happens in the dark!

Now, before you get carried away with crazy ideas about how to spend all the money you saved this Halloween, remember, Halloween savings can help ease the financial stress of Christmas shopping. That’s right, Christmas shopping. Once Halloween is over, there are only 54 shopping days until Christmas. Now, THAT is scary!

9 Things to Remember When Using Your First Credit Card

Getting your first credit card is a significant financial milestone. After sorting through an endless array of program options and promotional offers, you made your choice, filled out the application, and saw those two magic words: You’re approved!

After the initial excitement wears off, it’s important to remember that just like your first car, your first credit card comes with a lot of responsibility. While it may be tempting to grab some friends to take the new plastic for a test drive, it’s a good time to exercise a little restraint. The financial decisions you make now will have long-term effects. Like a misspelled tattoo, it only takes a momentary lapse in judgment to make a mistake that will follow you for years to come.

So, before you start exercising your newfound financial freedom, here are a few tips to make sure your first credit card experience is positive:

  1. Pay attention to the fine print.
    Even if you don’t need readers, you may want to have some handy. Companies like to sneak stuff in the small print. Introductory interest rates can be attractive, but once those offers expire, you could be left paying higher interest on your purchases.

  2. Don’t be a card counter.
    If you have multiple cards, it can be tempting to spend more than you intended. Also, it makes your wallet fat which makes for uneven seating and back problems down the line. Simplify your life, stick to a single card, and keep the credit limit sensible.

  3. Consistency Pays Off.
    This simple step will help you avoid additional interest charges, and it’s an effective way to build an excellent credit rating.

  4. Always pay your bill on time.
    Late payment charges are usually more expensive than your minimum payment, which can make it hard to keep up with your bill. If you’re worried that you’ll forget the due date, most cards offer an automatic payment option. Use it.

  5. It’s your budget, don’t fudge it.
    Try to think of your credit card as for emergencies only. Do your best to continue using your checking account or cash to cover everyday expenses. Your credit card is like that friend you call when you need help moving or a ride to the airport. There when you need it, but not to be overused.

  6. Steer clear of cash advances.
    These advances usually charge a higher interest rate than regular credit card purchases. 
    The convenience isn’t worth the cost.

  7. Keep your monthly credit card payments less than 20% of your income.
    Once your bill exceeds that amount, it becomes exponentially more difficult to stick to a sensible, reasonable budget.

  8. Review your credit card statements each month. In addition to being a smart way to track your spending, regular monitoring is the most effective way to combat credit card fraud and identity theft.

  9. Be honest with yourself.
    If you find that your spending gets out of hand, there’s no shame in putting your credit card away (or getting rid of it all together) until you correct your bad financial habits.  

Credit cards can be useful tools for emergencies, and when used properly, they can help you maintain a strong credit rating. But with so many card options available today, it is essential to choose the one that’s right for you. If you haven’t secured your first card yet and are wondering where to find a trustworthy offer, Scient Federal Credit Union offers carefully selected credit card programs. That’s a great place to start.

Fact vs. Fiction: What Really Impacts Your Credit Score?

When it comes to credit scores, it can seem like everyone’s an expert. Ask a random group of people what factors affect your score the most, and you’ll likely get a different response from each person. And the most frustrating part is they’ll probably all be right—and wrong.

Credit scores are calculated based on a variety of factors, so they tend to feel like a secret code. Fortunately, this code is easy to crack. All you have to do is separate fact from fiction. Once you understand the specifics of how your score is determined, it will be easier to sort through all the misinformation.

Focus on the Facts

There are three primary credit reporting bureaus—Equifax, Experian, and Transunion, but the most trusted credit ratings come from the Fair Isaac Corporation (FICO). While some lenders and creditors look at a combination of scores from the various reports, the FICO score is widely considered the most reliable. According to FICO experts, your credit score is calculated based on five main categories:

  • Payment history (35%)
    Creditors want to be sure of two things: You pay your bills, and you pay them on time.
  • Amount owed (30%)
    To maintain an ideal credit score, aim to keep your overall debt under 30% of your total available credit.
  • Length of credit history (15%)
    Lenders want to see consistency in credit management. This category looks at how long you’ve had established accounts. The longer, the better.
  • Credit mix (10%)
    Credit scores factor in a wide range of accounts, from credit cards and retail accounts to mortgages and installment loans.
  • New credit (10%)
    Opening new credit accounts isn’t always a bad thing but applying for several all at once can have a negative impact on your score.

Six Common Credit Score Myths

  • Checking your credit hurts you. 
    When you apply for a new loan or credit card, the lender runs a credit inquiry. Too many of these inquiries in a short period can cause your score to dip. However, checking your own credit doesn’t damage your rating. In fact, many credit card companies allow account holders to view their FICO scores for free because regular monitoring is an effective way to spot fraudulent activity or identity theft.
  • Your income level matters. 
    While your income certainly influences your ability to pay your debts, it doesn’t factor into your score. Credit reports may list your current and former employers, but that information holds no bearing on your score.
  • Your education or occupation is important. 
    It doesn’t matter whether you went to an elite university, community college, or dropped out of high school. Your credit score measures your ability to manage debt, not your educational pedigree. Same goes for your job. Gainfully employed, under-employed, or unemployed, you can still build a good credit score.
  • Closing a credit card will help your score. 
    Even if you pay off a credit card, closing the account can hurt you more than it helps. If you’re worried that you might misuse the credit, destroy the card—but keep the account open. The available credit and length of credit history will reflect positively and help you in the long run.
  • Quick fixes can help bad credit.
    Yes, it is possible to improve your credit score—but you don’t have to pay someone else to do it for you. Because most credit repair relies on sensible, strategic steps applied over time, you can handle it on your own. Rather than paying a credit repair service, use the money you save to bring past due balances up to date or pay down your overall debt.
  • Avoiding all debt will help you keep a good credit score. 
    Your credit score is a metric that measures your ability to manage credit—not avoid it. If you don’t have any credit accounts, there’s nothing to measure. That being said, just because you qualify for credit doesn’t mean you have to max it out. You’ll help yourself more by using your credit strategically and paying off your balance each month.

While this list covers some of the most common credit score myths, there are countless others. By focusing on the facts and ignoring anything that doesn’t line up with them, you’ll find it easier to manage your credit with confidence.

Clear Up Your Tipping Confusion

Tipping. Conversation about the topic can spark lengthy debates with opinions ranging from staunch support to extreme opposition. Some consumers appreciate the opportunity to reward members of the service industry for a job well done. Others feel the practice places an unfair expectation on the patron, inflates the overall cost of goods or services, and leads to increased employee turnover.

Historically, the American tipping model allows wait staff at upscale restaurants to earn a comfortable living, but those working at small, low-end establishments often struggle to make a livable wage. The wide disparity in earning potential stems from a 1966 law that established a federal minimum wage for tipped employees. The current minimum wage for tipped employees? $2.13 an hour. If that figure sounds shocking, consider the fact that it hasn’t changed since 1991.

Should the federal minimum wage for tipped employees be raised? Perhaps. There are advocates on both sides of the issue. Are there alternate ways to create a more equitable earning system? Absolutely. But those are deep conversations for another post. For now, tipping is standard practice in restaurants across the country, but the service industry extends beyond the dining room walls. And while 15-20% seems to be the going rate for a restaurant tip, you may be wondering how much to tip in other areas.

Here are a few general rules, courtesy of DealNews, to help you tip with confidence:

Waiter/Waitress: 15-20% minimum
Tipping Tip: We’ve already covered this one, but here’s an additional reminder: if you use a coupon or discount promotion, be sure to tip on the original price—not the discounted total.

Food Delivery Driver: 10% (or $2 minimum)
Tipping Tip: If you live far away from the restaurant (20-30 minutes), consider adding a few dollars extra to help the driver cover the additional gas expense.

Hairstylist/Barber: 10-15% for standard service, 15-20% for exceptional service
Tipping Tip: It’s hard enough to find a hairstylist you like. When you finally do, tipping them well can not only show your appreciation but help establish a great relationship going forward.

Tattoo Artist: 10-20%
Tipping Tip: Like most purchases, this one can vary based on the size and detail of the tattoo you choose. As for the exact amount, if you’re pleased with the artist’s work and you have any thoughts of becoming a return customer, the goodwill you build with a solid tip is well worth it.

Bartender: $1 per drink or 15% of the bill
Tipping Tip: You can take a wait-and-see approach by tipping when you close out your tab, or you can increase your odds of getting good service by tipping ahead of time.

Car Wash Attendant: $2-3 for a basic wipe down, $5-10 for more extensive washes
Tipping Tip: If you’re going to spend money on a quality car wash, investing a few extra dollars in a tip will help you ensure your attendant pays attention to the little details that make your car shine like it should.

Uber/Lyft Driver: $2-3 for a standard trip, $5-6 for extended trips
Tipping Tip: Along with lowering their fares, most ridesharing apps have added a tip option. This should save you from navigating from the whole “So sorry…I don’t have any cash” conversation.

If you find yourself in a situation other than those listed above, and you’re unsure about the standard tipping rate, it’s usually safe to assume that 18% of your total bill is a quality tip. It may not qualify you as a high roller, but you certainly won’t have to deal with dirty looks on your way out.

Hey, parents—it’s back-to-school time again!

Doesn’t it seem like just yesterday that your kids were counting the days until summer vacation? Now, after a few weeks of unlimited quality time and togetherness, we have a countdown of our own, don’t we? Yep. We’re counting the days (and possibly the hours) until school starts again. The thought of our children being out of the house for six hours every day may feel like cause for celebration, but as the grown-ups, we’re expected to play it cool. We have to find something to temper our end-of-summer excitement. The looming prospect of back-to-school shopping might do the trick.

 

Ready. Set. Spend.

According to a recent consumer survey, back-to-school (B2S) spending is expected to reach $27.6 billion this year. As you would probably guess, the bulk of that money (more than 75%) will be spent on clothing and school supplies. In fact, 98% of respondents indicated they planned on purchasing these items. If you’ve ever braved the B2S shopping scene, you’re probably not shocked by those figures. What you may find surprising is the fact that planning ahead isn’t always the best way to save money.

Survey results show that shoppers who tried to beat the back-to-school rush wound up spending approximately $100 more per household (if you’re a chronic procrastinator, this informational tidbit is pure gold). This may explain why back-to-school shoppers will spend almost $18 billion between mid-July and mid-August. While last-minute sales and promotions certainly factor into the equation, the late-summer spending surge may be due to the nationwide popularity of tax free weekends.

Connecticut’s Sales Tax Holiday is coming up August 19-25! Certain back-to-school products will be exempt from taxes during this time. Be sure to click here to find a list of exempt and unexempt purchases and save smart. 

If you’re a back-to-school veteran or if your little ones are starting school for the first time, this time of year means looking for ways to save. While the total amount saved on taxes may not be large compared to the amount spent, if you’re going to buy the items on your child’s school supply list anyway, you might as well schedule your shopping and save some money.

 

Scient can help stretch those back-to-school dollars.

When you consider the average household spends $510 on assorted clothing, supplies, and gadgets per child, one thing is sure: no matter when you shop, back-to-school season comes at a price. Fortunately, we offer products and services that can make those school-related expenses much easier to manage. From low-interest signature loans that help you cover this year’s supplies to specific savings accounts that can help you prepare for next year, the solutions available at Scient can make back-to-school shopping more affordable and less stressful.

At Scient, we want to help you make the most of this back-to-school season! Contact us today to find out how we can ease the financial stress of shopping and set you up for a successful school year.

Teach Your Kids to Make a Stand—a Lemonade Stand.

Long before Beyoncé transformed it into a cultural touchpoint, lemonade was the commodity of choice for childhood business ventures. Perhaps you had a lemonade stand of your own, or maybe you just knew someone who did. Either way, the memories of ice-cold refreshment probably ride on a warm wave of nostalgia. If your enterprise was especially successful, you might even hear a faint “cha-ching” as you reminisce.

Fast forward a decade or two, and now you find yourself juggling the demands of family, friends, and career. Thanks to the latest technology, it’s easy to let your kids spend their summer vacation drifting along on a digital stream of Snapchat streaks and Fortnite marathons. In these dog days of summer, you have a perfect opportunity to shake up your child’s summertime routine with a little old school entrepreneurship. It’s time to bring back the lemonade stand.

Let your kids in on the fun.

When you were young, running a lemonade stand didn’t feel like a job—it felt like freedom. So, don’t worry that encouraging your children to work will somehow rob them of their summertime fun. The venture can be fun, and the lessons they learn from operating a small business can last a lifetime. What lessons? Glad you asked!

Goal setting

Believe it or not, this one comes pretty naturally to kids. If you ask them what they want to do with the money they earn, they’ll probably have at least one goal already in mind. It may be a video game, a bike, or new clothes, but whatever it is, their motivation won’t be hard to find. When they finally save up enough to buy what they want, the sense of accomplishment will be something you can build on for the rest of their life.

Entrepreneurship

Operating a lemonade stand is an excellent way to help your children learn that it costs money to create something. After all, lemons and sugar aren’t free. Understanding economic concepts like cost of goods and profit margins will give your kids a valuable perspective with real-world applications. As they plan their drink prices, let them decide what to charge. Positive or negative, the lessons they learn from experience will help them with future planning.

Responsibility

Like many things in life, lemonade stands are super fun at the beginning! But after a few hours sitting in the sun or waiting out a thunderstorm, there’s a pretty good chance your little entrepreneur will want to close up shop. While it may be frustrating (for you and them), this scenario provides an excellent opportunity to teach them that you can’t just walk away when you get bored. And let’s be honest, we can all use this reminder from time to time, can’t we?

Creativity

Challenge your child to think about how to separate themselves from their competition. (Of course, this may be hypothetical competition since modern-day lemonade stands are few and far between.) Depending on their age, your little one may focus on colorful sign design at first. This focus is understandable, since making the sign is half the fun. But beyond that, feel free to offer creative suggestions. Could they provide a sugar-free alternative? Maybe offer an iced coffee alternative to appeal to more customers? How about spreading the word with a social media post? Should they accept payment through Venmo or PayPal? Like a child’s imagination, the options are limitless. So is the fun!

At this point, you may feel like opening up a lemonade stand whether your kids are interested or not! Channel that excitement and energy into helping them see the fun-filled potential of the idea, and don’t be afraid to get in there and help them when they need it. The time spent together will be even more valuable than the money earned and the lessons learned.

How to Start Building Credit Once You Turn 18

Good credit is crucial to unlocking many financial opportunities in life. When you have a great credit score, you will see lower interest rates on car loans, credit cards, and mortgages. Some employers and landlords even check credit reports before they make a job offer or approve a resident application.

Building good credit takes time, and adults as young as 18 should consider starting immediately so they have plenty of time to build up their credit score.

Here’s how to start building credit once you turn 18.

 

1. Understand the Basics of Credit

As you start to build credit, you should understand the basics of how it works.

Your credit report – maintained by credit bureaus Experian, TransUnion, and Equifax – contains data on your current and past debts, payment history, residential history, and more. This data is supplied by many of the lenders, creditors, and businesses with which you hold accounts.

The information contained in your credit report determines your credit score. Higher credit scores are more attractive to lenders and creditors. The factors that influence your score include:

  • Payment history
  • Average age of accounts
  • Credit utilization ratio
  • Account mix
  • New credit

As a new adult, some of these factors may not currently apply to you. However, they can all negatively or positively affect your score, depending on your behavior as a consumer. Educating yourself on credit now will help you avoid costly mistakes in the future.

 

2. Become an Authorized User

If you have a friend or family member who is willing to add you as an authorized user on their credit card, you can piggyback off their credit card activity to build your credit. Even if you don’t use the card, the account can still land on your credit report and boost your credit score.

This method poses some risks, both to the primary cardholder and the authorized user. If you or the primary cardholder rack up too much debt or miss payments, that activity could end up damaging the credit of both parties.

You should also verify that the credit card company reports card activity for authorized users. If they don’t, your credit won’t see any benefit.

 

3. Get a Starter Credit Card

Credit cards are one of the best tools around for building credit, but you may have trouble qualifying for one when you have no credit history. Luckily, there are a few credit card options for young people with little or no credit:

  • Secured Credit Cards: Secured credit cards require an upfront security deposit to open. Your deposit will typically equal your initial credit limit – for example, a $500 security deposit would get you a $500 credit limit. These cards are easier to qualify for, but you can use them to make purchases and build credit just like traditional credit cards.
  • Student Credit Cards: If you’re currently enrolled in school, you can apply for a student credit card. These cards typically have low credit limits, but they will help you build credit and they may even offer extra incentives for earning good grades.

 

4. Make Payments On Time

Making timely payments is the most important thing you can do to build credit, as payment history makes up 35% of your credit score. A positive payment history will help your credit score immensely.

This advice applies to credit cards, loans, utilities like cell phone services, and any other account that requires a monthly payment. No matter the account type, a late or missed payment that lands on your credit report can do significant damage to your credit score.

 

5. Maintain a Low Credit Card Balance

Your credit utilization ratio, or the amount of available credit you have tied up in debt, is another major contributor to your credit score. Most experts recommend keeping your credit card balances below 30% of the available credit limit.

Ideally, you should pay your balance off in full each month to avoid interest and keep your utilization low.

 

6. Get a Loan

Getting a loan just to build credit is generally not a good idea, as you shouldn’t take on debt only for the sake of your credit score. But if you have a valid reason, such as needing a car for college, a small loan in your name can help you build credit.

Just like credit cards, loans will only build credit if you pay them on time every month. And if you also have a credit card, getting a loan will help with the account mix factor of your credit score.

 

7. Monitor Your Credit Report and Credit Score

Now that you’re building credit, you should monitor your credit report and credit score. Monitoring your credit is one of the best ways to learn what will positively or negatively impact your scores. It will also help you catch inaccuracies or signs of identity theft sooner.

You can check your credit report for free annually with each major credit bureau. As you review your report, look for any negative or inaccurate information that could be screwing up your credit.

 

8. Keep it Simple… for Now.

The more credit cards and loans you open, the higher chances you have of falling into debt. When you’re just starting out, you should probably play it safe and manage one basic credit card and/or small loan until you get the hang of things. Trying to do manage too many debts at once could get you in over your head.

Over time, you can start to add other credit cards or loans to the mix, diversifying your credit profile and adding more opportunities to build credit. And because the age of your accounts affects your credit score, just keeping accounts open will help you build credit in the long run.

 


This article originally appeared on credit.com and was written by Leslie Tayne.

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