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HOW YOU CAN OPTIMIZE YOUR CREDIT SCORE AND BETTER UNDERSTAND YOUR SPENDING AND SAVING BEHAVIORS

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HOW YOU CAN OPTIMIZE YOUR CREDIT SCORE AND BETTER UNDERSTAND YOUR SPENDING AND SAVING BEHAVIORS

Syble Solomon Head Shot-VA-

Financial Behaviorist Syble Solomon joined me on “Turn the Page” to discuss how her Money Habitudes card game, which has been used by hundreds of thousands of people globally, helps people to have their “best ever” conversations about money. These types of dialogues can support couples in staying together, the wealthy in improving their quality of life (affluence does not imply well-being!), and those who are financially challenged to thrive.

Listen to our episode for insights that will guide you in better understanding your spending and saving behaviors.
Lee Gimpel-head shot-VA
“Credit” is a topic that goes hand-in-hand with your habits and attitudes about money. Subsequent to our show, Syble and her colleague, Lee Gimpel, with whom she created The Good Credit Game, provided information that will assist you in optimizing your credit score. Given the variability in how credit works in different parts of the world, the suggestions they shared are best applied in the U.S. Here’s what they said:

WHY CREDIT IS IMPORTANT TO YOU
Your credit score is derived from the contents of your credit report at the time that the data is requested. Different companies produce both general scores, and ones that are specific to particular industries and different types of credit requests. Your score answers the question, “How much does the financial system trust you?” It determines the likelihood you’ll be approved for credit or a loan, and the rates you’ll receive.

Your credit background is increasingly used beyond traditional places like getting a mortgage or car loan. It may figure into whether someone will rent to you, or if you qualify for a job, especially those that require security clearances. Lower credit scores can mean higher car insurance rates. Statistically, people with lower scores make more insurance claims.

START BUILDING GOOD CREDIT NOW.
It takes time to build good credit. If you plan on buying a house in five years, start improving your credit today – not right before buying that home. The difference between great credit and OK credit could mean that you get a loan that’s hundreds of dollars cheaper per month, which will save you thousands of dollars over the course of that loan.

HOW TO OPTIMIZE YOUR CREDIT SCORE
The most important factor in your credit score is whether you pay your bills on time and as agreed.  This payment history accounts for 35% of your credit score.

Don’t max out your credit. Your credit score tends to suffer if you use a lot of your available credit at once, even if you pay your balance in full each month. A typical rule of thumb is to use a maximum of 30% of your limit. So if your card has a $10,000 limit, try to stay under $3000 in any given month. Increasing the credit limit on your account might improve your score in the longer term, if it enables you to use a smaller percentage of your credit limit.

Paying off your credit bill balance in full every month saves you a lot of money, while paying just the minimum will cost you a lot! Closing all old credit cards can lower your score. You can lose history and the lower overall credit limit can also hurt your score.

If you can’t pay your bill, contact the credit card company to work out a solution. Don’t ignore the bills. There will be late fees, and the balance will keep growing as interest will be charged on the new balance each month. This can lower your credit score, especially if outstanding balances go to collections agencies.

When you request your credit report, it is a “soft” inquiry and doesn’t lower your credit score. “Hard” inquiries are associated with financial commitments such as getting a loan or applying for a mortgage, credit card or line of credit. They can lower your credit score.

As long as you can make timely payments on what you owe, use credit! A minimal or nonexistent track record of paying back debt might lower your credit score and cause vendors to charge you higher interest rates. Since research shows that past behavior is indicative of future behavior, lenders want to see how you’ve handled similar situations.

FIX ERRORS ON YOUR CREDIT REPORT.
Credit reports often contain mistakes that can lower your credit score and/or reveal fraudulent activity. Errors like a misspelled name or incorrect address may cause someone else’s information to impact your scores. There are lots of fake “free” services out there, so ensure that you’re utilizing credible sources. Check your report from each of the three main credit bureaus annually. It’s free at: http://www.annualcreditreport.com.

HAVE CONVERSATIONS ABOUT MONEY.
Reading Syble’s “10 Tips to Talk About Money with Your Honey article, and using her Money Habitudes cards or on-line tool can help you to better understand your “money personality.” If you’d like to educate adults and young adults about credit reports, scores, and credit cards – in a fun and hands-on way – include the The Good Credit Game in your discussions.

Listen to my conversation with Syble to learn more!

Don’t Ignore Employee Turnover: It’s Costly

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Business
Don’t Ignore Employee Turnover: It’s Costly

employee turnover

Turnover is costly – just how costly? Research shows the cost of replacing a professional or managerial employee runs 1.5 to 3.0 times the annual salary. It can cost up to five times based on the intellectual capital – what a key person knows – when he or she walks out the door.

For example, to replace a $70,000 sales person with a large customer base can cost you $250,000. A $150,000 technical manager can ultimately cost $450,000 to replace. That’s no small pocket change. Therefore, in any business situation—growth, downturn, merger, or even stability—it makes business sense to retain your talent.

Four Steps to Turn Around Employee Turnover

1. Calculate the True Costs
This includes the direct administration cost of recruitment (ads, background checks, assessments, paperwork plus the manager’s and HR’s time for interviewing, training, orientation) PLUS the indirect costs of performance differential (lost productivity, impact on customers, disruption to the team, lower morale and the lost ‘institutional wisdom’).

2. Study the Demographics
Lowering turnover requires probing into the details. For example:
• Who is leaving (high performers or low performers, older versus younger people, recent hires or people with long tenure)?
• What job categories or departments are experiencing the most turnover (production, systems analysts, sales, nursing staff)?
• When are they leaving (after two weeks, six months, five years, or ten years)?
• Where are they going (your competitor, another industry, back to school, out of town?)

3. Focus Your Attention
Not all turnover is equal. Simply looking at a turnover rate of 17% per annum does not tell the complete story. The loss of a top engineer with ten years of experience, strong customer contacts, and good relationships with suppliers is obviously more troubling than losing a filing clerk you hired a month ago. The cost of turnover is highest for jobs that have strategic, bottom line impact.

4. Identify the Real Causes
Start by identifying why people are staying and what you are doing that creates that desire to remain. Then find out what troubles people and would lessen their commitment to your organization.
Focus groups and employee surveys are effective ways to obtain real time employee feedback; to identify the ‘push’ and ‘pull’ drivers of employee engagement and to develop realistic solutions.

An Example:
In one company, a detailed analysis revealed that 30% of its IT and 40% of its MBA new hires were leaving in less than 36 months. It then estimated both the direct and indirect costs for these segments. And it came out to a whopping $1.5 million dollars.

Focus groups were conducted with current and departed IT / MBA employees. Compensation and benefits were not the key turnover drivers, but rather, the day-to-day work was not challenging. These young ‘bucks’ were bored and fearful of losing their edge. In addition, supervisors lacked basic management skills and were unable to state clearly performance expectations or provide meaningful feedback. Only then could solutions be developed to deal with the real causes of employee dissatisfaction.

Smart Moves Tip:
Employee turnover is an extraordinarily complex issue. There is no one magic bullet. What I have consistently found is: That it’s NOT the money. When someone leaves for ‘better opportunities’, what has happened is that certain dissatisfactions – like the ones above – caused the person to put out feelers or to become curious about recruiter calls or to start surfing the job boards. Be proactive here are ways to keep your star performers.

Marciabanner

Marcia Zidle:
The Business Edge with Marcia Zidle, your Smart Moves Coach, delivers practical advice to help business leaders take the growing pains out of growth. Are you facing overwhelming demands on your time? Are costly mistakes eating into your profits? Are you facing increased expectations from customers and clients and the need to strike a better balance in your life? Now’s the time to stop spending your energy managing problems and start doing your real work: growing your business to the next level and beyond. Learn to create a growth agenda to get your business on the right track and keep it there. Rev up your growth engine with exceptional talent. Develop the right kind of leadership to move it forward fast. Start by tuning in to The Business Edge, airing live every Wednesday at 11 AM Pacific Time.

Money in Our Lives By Ann Hutchins

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Money in Our Lives By Ann Hutchins

i-love-life[1]

I’ve only been co-hosting on the radio for a month, “Money In Your Life” on VoiceAmerica radio at 7 am PT Fridays, but after every show, I want to know who listened and what you thought.  When I started I thought what a great way to have a conversation that’s tough for people to have.  And we hope that’s true.  And what IS the conversation???    Money is on our minds every day: having it, getting it, saving it, spending it and sometimes it’s used in oragami ornaments.

And yet TALKING about money is, as most people tell me, is harder than talking about, say, sex.  Why is that? Is it because we’re just supposed to KNOW what to do with it – how to earn it, how to spend it, how to make it last all of our lives?  I have a hunch (which of course I’ll share), but I’d love to hear from you.

Here’s my hunch, we don’t talk about it because there’s a lot of people out there telling us that they can’t believe what we’re doing with our money, and if we’d only do THIS, we’d be set for life – and so we say to ourselves  “Everyone else got the memo on how to deal with money – and I didn’t.  So I’m not going to look stupid by asking.”

And then we get busy, things come up and time goes by and – well, you know the story.

But here’s the thing: we HAVE to talk about money and pay attention and ask questions – because we are being asked to make MORE decisions – with less REAL information.

So come back – and let’s talk about money in your life.

Ann Hutchins is a consultant and coach focused on increasing the strategic effectiveness and financial intelligence of clients. Using the skills developed in a 20+ year career as security analyst, portfolio manager, and chief investment officer in the investment industry, combined with coaching skills developed as an independent consultant and certified coach, she collaborates with her clients to ignite awareness and access understanding of what drives financial choices. This type of coaching engagement leads her clients to increased confidence in making their personal financial choices rooted in their personal financial style, and to develop new skills that allow them to access available resources that support them in their financial choices for the future.

 “Money In Your Life” on VoiceAmerica radio at 7 am PT Fridays: http://www.voiceamerica.com/show/2235/money-in-your-life

annhutchins

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