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To prevent identity theft, it is important to shred
all documents that contain ANY personal
information. Destroy unsolicited credit
applications and never give out your
personal information over the phone
or through email. It is also important
to regularly check your credit report
and FICO score in order to determine
if accounts have been opened in
your name. If you find that this has
occurred, you will need to report such
activities to the authorities immediately.
4
Strategies of minimizing debt
Debt is an amount of money that you owe to a person, bank, or company. Debt is a way
of life for almost every adult. Having a small amount of debt is important so that you can
establish a credit score. Unfortunately, if you are not disciplined and do not stick to your
budget, it is easy to let your debt get out of control. The smartest way to control your
debt, is by not overextending yourself in the first place. Reevaluate your priorities and
truly assess your
wants
versus your
needs
. Needs include debts that you must pay to live.
They include items like:
Rent
Utilities
Transportation
Food
Insurance
Loan payments
You can get creative to reduce the impact of your needs on your monthly budget.
Choose a roommate to share rent and utility expenses. Having a car requires gasoline,
maintenance, and insurance. Consider selling your car, taking public transportation, and
using the proceeds to pay down your debt. Consider carpooling to cut your fuel costs in
half.
Food costs are a necessary expense that you can control. As the old saying goes, some
people have “a champagne taste on a beer budget.” Why pay more for name brands
groceries, when store brands can save you up to 60%? Instead of eating out, pack a
lunch. You can also sign up to receive free coupons through email. Small changes in
your eating habits can help you save big.
Reducing the interest rate on loans you already have is another strategy that can put
some money back in your pocket. Call your credit card companies and ask for a
reduction. If you have made timely payments, you will have leverage to get your rates
reduced. You can be your biggest advocate by speaking up for yourself. You will never
know until you ask!
Se
Sec
tion 8 – Responsible Borrowing and Budgeting
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