The Budgetnista Tiffany Aliche Reveals How Her Credit Score Went From 547 To 800+
As women in and out of the workforce, we have made tremendous strides. We've conquered everything from becoming our bosses to leadership roles where we've learned how to manage our own teams and work within the parameters of a company's budget. Yet, there's one thing that we have quite mastered yet--managing our own money.
That's right, we live in a time where we spend way more than we make--pushing aside bills and other necessities for that limited edition designer bag, or swiping our credit card every chance that we get, thus putting ourselves in more debt and sitting on a pathetic credit score that will do more harm than we can imagine.
Learning financial literacy is very important, and practicing good financial behavior can help you live the type of life you desire. Yet women of color and millennials typically overlook their dwindling bank accounts and do not educate themselves. It is only when we experience a financial hardship that we take a closer look at our finances and try to make improvements. Sometimes when this happens, we have dug ourselves in a low ditch, and while it is not impossible to get out of it, it is definitely harder.
I recently sat down with Tiffany Aliche, who is a financial guru and well-known as The Budgetnista to discuss how she went from having a 547 credit score to a score over 800 (she also saved $40,000 when she was only making $39,000 a year!), and her tips on saving, budgeting, and on building wealth:
You Can Easily Lose 40 Credit Score Points In Just One Week
At the age of 23, I had a credit score of over 800, which is an A+. A few years later, the recession hit. I lost my job, and I couldn't afford the mortgage or pay my bills. Since I wasn't paying my bills, my credit score dropped. People don't understand that your credit score is like your GPA for how you deal with money. When you don't pay your bills, your GPA drops. My credit score quickly dropped from 800 to 547 which is like a D-.
One thing that people don't realize is that 35% of your credit score is your payment history - so in other words it is contingent upon if you pay what you are supposed to pay. To rebuild my credit score, I worked hard to pay off credit cards in full at one time. When you do, it makes your credit score jump like Jordan. If you just pay the minimum amount on your bills, your credit score will do a slow climb. But if you want to make your credit score jump like Jordan, pay off a small amount of your credit card each month. I don't know why, but credit card companies care less about the amount you pay, and more about your habit in paying.
So if you pay off something in full, they are wowed. It doesn't matter if you have $8 on the card, if you pay it in full, it will make a difference. So when I figured this out, I put Netflix on one of my credit cards that didn't have a balance, and I paid it in full every month. Netflix would charge my card $8 bucks, and then I would pay them $8 bucks each month and I would see my score go up. So then I decided to do two cards like that. I had Netflix on one, and my gym membership for $20 bucks on the other. So every month, I was paying off 2 cards in full. And within a year and a half, I went from 547 to 750, which is a solid B/B+.
You Can Inherit Good Credit From Other People
To build good credit, you can be an authorized user on someone's card that has great credit. Basically what that means is that they can add you on their card as an authorized user, and you can inherit their good behavior because whenever they pay their bill, it will reflect positively on you. The primary credit card holder doesn't have to actually give you the card either - although as an authorized user you could get one.
Even if the primary credit card holder decides to stop paying their bill, it won't mess up your credit as an authorized user. That's the beauty in it - you only inherit the good credit, not the bad.
You Can Get A Secured Card When You're Young To Build Credit
When you are young, it is unlikely that you will be able to get a regular credit card because you probably will have no credit history. No credit history in the credit world is just like having bad credit or being considered a bad driver because you have no driving history. You haven't proven yourself.
To start building up your good reputation, go to your bank and ask if you can apply for secured card. A secured card is like a credit card with training wheels. The way it works, you give a bank anywhere from $300-$600 and they place it in a savings account for you. Then they give you a credit card that has that amount on it as your credit limit - so basically you are borrowing from yourself. So if you don't pay your credit card, it will take away the money that you have in your savings account. If you treat this card right, and you pay your bills when you should, they will take the secured card away and make it a regular credit card.
You Should Have At Least 3 Bank Accounts For Your Money
I recommend having at least three accounts - one just for your bills, another for spending, and then the third for savings. The account for spending should be attached to your debit card, and then the account for your bills and the account for your savings should not be attached to your debit card.
If you have the direct deposit option through your job, have your money automatically transferred to each account. Your employer may not tell you, but you can have more than one account connected with direct deposit.
Having An Online Bank Is A Must
I recommend having an online bank for your savings account because it makes your money inconvenient, and inconvenient money gets saved because it is not easily accessible. If you want to rate an online bank, go to magnifymoney.com and you can check out reviews and information on the bank.
I always tell people to have a regular bank for ease of use, an online bank for savings, and then a credit union. Credit unions are great because they will give you the best interest rates. Most credit unions are nonprofit, which means the interest that they ask you to pay is just to keep their lights on so the interest rates are lower than other banks.
Ask About Your 401K Day One Of The Job
On your first day at work, before you get into the swing of things, ask about 401K matching. Better yet, ask about this during the interview and see if the company offers it. For your retirement, many companies will match up to a certain percentage of your income that you deduct from your paycheck for retirement. So if you put 3% of our paycheck down for retirement, your company may match it. With some companies they tell you that you have to wait to be vested (usually 30 days or more) to reap this benefit, but you may can start it early if you ask.
In College, Stay Away From Private Loans Because They Are The Devil
If you get a private loan and miss one payment, you immediately fall into default. Default is on the same level as foreclosure or bankruptcy and we all know bankruptcy is like having a big, black F on your credit report. If you fall into default, it will prevent you from getting a car, an apartment - you name it. Also with a private loan, you will likely have to have a co-signer, so if you miss a payment and fall into default then your cosigner is also affected.
If you get a federal loan, you have to miss nine payments to get you to the default stage. One other thing about federal versus private loans is if you fall into a financial hardship, the federal loans will help you out and will be more understanding. But with a private loan, somebody could die and the money would still be due - they would just reach out to the consigner for the money.
You Can Get Paid To Shop
When you are in school, began saving early and get in the UPromise program. It is free to use! What I love most about it is that you can go online and sign up and then your register all of your debit and credit cards, and every time you use your registered debit or credit card at a partner store you will get cash back for your student loans. With UPromise, if you don't use it for your student loans, you can ask them to just cut you a check.
Also, whether or not you are in school, sign up for Ebates. Whenever you want to buy something online, type the store name in Ebates (it could be Target, Groupon, or whatever), and then Ebates will take you to their site and will record how much you buy and give you cash back.
Learn How To Live Off Less Than You Make
After you graduate from college, live a simple life. That can be getting a roommate or getting a used car, just learn how to live simply. If you don't, you will be forced to work a job you probably hate just to make enough money to afford your lifestyle.
Now that you know some of the secrets on budgeting, saving, and building wealth, implement these steps today and hold yourself accountable. An easy way to learn more financial tips and hold yourself accountable is through Tiffany's Live Richer Challenge and through her book The One Week Budget. In her book, she teaches us how to make responsible, financial decisions, while living a life that we desire. The Live Richer Challenge is a FREE, online financial challenge that can help you achieve your financial goals in just 22 days.
Tiffany created this program last year, and her goal was to have 10,000 women signed up and to help them master their money effectively and efficiently. In the end 20,000 people signed up and collectively all of the women saved 4 million dollars and were able to pay off over half a million dollars of debt together.
Women of color make up 70% of buying decisions, so it is time to change our mindset and change our financial situations. Let's start today and build a culture of wealth!
Related Post: 4 Lessons I Learned After Climbing Out Of $35,000 Debt While Making $12 An Hour
- I Paid Off $40K of Debt in 18 Months - xoNecole: Women's Interest, Love, Wellness, Beauty ›
- Ways To Rebuild Credit Score: 7 Strategies - xoNecole: Women's Interest, Love, Wellness, Beauty ›
- How to Fix Your Credit - xoNecole: Women's Interest, Love, Wellness, Beauty ›
- How To Buy A House With Bad Credit - xoNecole: Women's Interest, Love, Wellness, Beauty ›
Brittani Hunter is a proud PVAMU alumni and the founder of The Mogul Millennial, a business and career platform for Black Millennials. Meet Brittani on Twitter and on the Gram at @BrittaniLHunter and @mogulmillennial.
ItGirl 100 Honors Black Women Who Create Culture & Put On For Their Cities
As they say, create the change you want to see in this world, besties. That’s why xoNecole linked up with Hyundai for the inaugural ItGirl 100 List, a celebration of 100 Genzennial women who aren’t afraid to pull up their own seats to the table. Across regions and industries, these women embody the essence of discovering self-value through purpose, honey! They're fierce, they’re ultra-creative, and we know they make their cities proud.
VIEW THE FULL ITGIRL 100 LIST HERE.
Don’t forget to also check out the ItGirl Directory, featuring 50 Black-woman-owned marketing and branding agencies, photographers and videographers, publicists, and more.
THE ITGIRL MEMO
I. An ItGirl puts on for her city and masters her self-worth through purpose.
II. An ItGirl celebrates all the things that make her unique.
III. An ItGirl empowers others to become the best versions of themselves.
IV. An ItGirl leads by example, inspiring others through her actions and integrity.
V. An ItGirl paves the way for authenticity and diversity in all aspects of life.
VI. An ItGirl uses the power of her voice to advocate for positive change in the world.
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Less & Less Of Us Have Close Friends These Days. Why Is That?
German philosopher Friedrich Nietzsche once said, “It is not a lack of love, but a lack of friendship that makes unhappy marriages.” At close to two decades of working with married couples, I agree with this man 1000 percent. It’s actually the main motivation for why I once penned, “Are You Sure You're Actually FRIENDS With Your Spouse?” because, the reality is, if you’re not friends with the person who you vowed to share every aspect of your life with, for the rest of your life, it’s going to be very difficult (if not damn near impossible) to honor that level of commitment. Without question, I will now and forever die on the hill that if you like your partner, you can make it through the not-so-in-love-right-now moments. Vice versa? Eh…not so much.
A basis for why I feel this way? Another quote immediately comes to mind. Famed author Jane Austen once wrote: “There is nothing I would not do for those who are really my friends. I have no notion of loving people by halves, it is not my nature.” You know, back when I also wrote “10 Things You Should Absolutely Expect From Your Friendships” for the platform, I shared that some of the traits of a friend — a real friend — include loyalty, honesty and compassion. And if you can’t say that your spouse is this way (as they say the same thing about you), chile…what is y’all doin’ over there?
So, why am I talking about marriage when this article is supposed to be about friendship? It’s because, something that life has taught me, kinda sorta the hard way, is we should vet potential friends — especially close friends — almost like we would a spouse.
And if you keep reading, I think you’ll get why I framed the intro in the way that I did.
Why Friendships Are Still Hella Essential
GiphyOkay, so before I get into why it seems that people have fewer friends than they ever had before, let me just say that, even as an ambivert who enjoys my own company and has absolutely no problem with being alone a good amount of the time, every personality type needs friends. That’s not just my opinion;science makes it a fact. Not only do studies support thathealthy friendships help us to feel more satisfied with our lives, but they can also reduce our chances of experiencing depression, stress, and anxiety and they increase longevity overall.
This is why — without going too deep because it’s kind of another topic for another time — it’s important to not allow past hurts and disappointments from former friends (or folks you thought were your friends) to cause you to build up walls as you declare that you don’t need anyone. When you do that, all you’re really doing is working against your own health and well-being. The saying that “no man (or woman) is an island”? It is absolutely true.
That said, even if it’s just a couple of people, make sure that you’ve got individuals in your life who you can call a friend and, in turn, they can say the very same thing about you, okay?
Are All of Those People Your Actual Friends? Or Do You Just Happen to Know a Lot of Folks?
GiphyAight but what if you happen to be someone who swings on the other side of few? Meaning, if someone were to ask you how many friends you had, you’d quickly declare that you’ve got too many to count. Listen, not to patronize or anything yet, but whenever I hear folks (especially if they are over 35) say something along those lines, it takes me back to high school — a time when so many of us thought that so long as we knew a ton of folks and/or we were popular, clearly, we had many friends.
Wisdom and pure ole’ dealing with humans on a consistent basis will teach you that an article that I wrote a few years back for the platform has a title that is spot-on: “According To Experts, We Only Have A Few Friends — Here's Why.” According to it, the average American (based on a survey that was conducted) has somewhere around 16 friends. Oh, but wait. Last fall, I wrote another article for the platform entitled, “What's The 'Five Friendship Theory' All About?” According to it, if you’re someone who takes the word “friend” and the responsibility that comes along with it very seriously and quite literally, as an adult, you can probably only maintain about five close friendships.
Why? Well, that brings in another article that I once wrote: “Life Taught Me That True Friendships Are 'Inconvenient.'” Chile, I don’t know about y’all but my friends know that if I call you that, you can call me in the middle of the night, and you can have money towards your rent (I’m not your mama but we all have hard times sometimes) and I’m gonna have your back in a way where you’ll wonder where you stop and I start — and no, I don’t have a lot of bandwidth for a ton of those people.
Okay, but what if you’re someone who is like, “I know that I have more than 16 and definitely more than five friends, no question”? The next thing that I would encourage you to explore is a theory by Aristotle (check out “According To Aristotle, We Need ‘Utility’, ‘Pleasure’ & ‘Good’ Friends”). Without even realizing it, many of us have people who we use the word “friend” for when…it’s kind of like how social media apps say “friend”: we’re familiar with one another and enjoy some of the same things, we might even have some of the same goals; at the same time, though, we’re not “all-encompassing friends.” We just get along really well at work (utility friends) or like to go to brunch at the same spots sometimes (pleasure friends).
Taking all of this into account, are you sure that you have a ton of actual friends? Or do you just happen to know a lot of people and you use that word for the lack of having another?
And that brings me to my next point.
There’s A LOT of Space Between “Friend” and “Enemy”
GiphyIf you read a lot of my friendship content, something that you will notice me saying quite a bit is that there is quite a bit of space between friend and enemy. It needs to be mentioned, as often as possible, because there are some people who get offended if you don’t consider them to be a friend — and that is unfortunate. I say that because the conclusion shouldn’t automatically be that they are your enemy just because “friend” isn’t what immediately comes to your mind.
They can be an acquaintance. They can be “cool people.” There is someone in my life who, while we’re not friends in the traditional sense, we are each other’s confidant; years ago, we agreed that we would be the place to tell each other whatever and it would stay between us — that is the main purpose that we serve in each other’s lives. Some people, you may consider to be spiritual family in the sense that you care for them and have some deeply profound things in common and still, they are not exactly a friend (I mean, a lot of blood relatives aren’t “friends” with each other).
All I’m trying to say here is we’re all too old now to only put folks in two boxes when it comes to this particular relational dynamic: friend or enemy. So, take some time out to seriously reflect on what you consider the various people in your life to be. I can promise you from personal experience that the sooner you know and the clearer you are, the easier it will be on everybody — because needs and expectations will be clear to you (and them once you articulate them) too.
What Got Folks to Having Less Friends? The Pandemic Plays a Significant Part.
GiphySo finally on to what inspired this piece to begin with. A part of it was an article that was published last year by Big Think entitled, “Americans more than ever have no friends. Here are 5 steps to make more friends.” Another was something that The New Yorker published back in 2021; it’s entitled “What COVID did to friendship.” Y’all don’t have enough time and I don’t have enough space to get into the fact that, just because the media may be talking about it less, that doesn’t mean that we’re not still in a pandemic.
In fact,one article stated my thoughts on it quite well when it said, “The real question, then, is not whether COVID is still a pandemic, but how much COVID illness and death are we willing to accept?” SMDH. And one of the things that has come with experiencing COVID is an interesting type of PTSD: detachment. There are plenty of articles out here to support the fact that my saying that is not merely my opinion.
Even according to the American Psychological Association, loneliness damn near skyrocketed, especially during lockdown and, unfortunately, a lot of people have not recovered from it. That’s why it did not surprise me at all when I read that more than ever, many people do not consider anyone to be a best friend; fewer people are relying on friends for any type of real support, and there is a semi-steady decline in people having friends, especially quality friendships, overall.
In fact, as far as close friends go, currently, close to 50 percent of Americans say that they only have three or fewer, and a relevant contributor to that was what the pandemic revealed as far as people’s proactive participation in other individuals’ lives (I actually read that young women were the ones who lost touch with friends during the peak of the pandemic the most). I also thought it was interesting that some studies cite that 12 percent of Americans say that they don’t have any friends at all.
Is the pandemic the only cause? No. So are things like people working more hours and spending more time online than they probably should (which also increased due to the pandemic, though). To that, Teen Vogue once published, “Social Media Is Impacting IRL Friendships” and Healthline once published, “Social Media Is Killing Your Friendships.” Then we also have to factor in having families of our own which can also take up a lot of time, and that sometimes can cause us to forget to nurture our friendships; so, before you know it, they fade to black. Not due to a fallout or anything, just…life.
And all of this? Some people are saying that it has led to what is known as a “friendship recession.” A huge flag about that is there are reports that a drop in close friends can cultivate a type of loneliness that is just as health hazardous as smoking a whopping 15 cigarettes a day. Not good, y’all. Not. Good.
Quality over Quantity Is Key. Just Make Sure That You Have a Friend or Two.
GiphyOkay, so what is my overall point? That’s a fair question. Just like sometimes “life life-ing” can make us forget to tend to our friendships, if you don’t stumble across content like this, you might not even realize that you’re feeling mentally stressed, emotionally strained, or super isolated and it’s all because you need to prioritize your friendships — because your mind, body, and spirit need them. Again, science has proved it.
At the same time, if, like a client of mine, you find yourself getting a little bit paranoid because you have noticed that over the past several years, your close friend count has been far less than what it used to be, this article proves that you are absolutely not (pardon the pun) alone. Honestly, there’s nothing wrong with having a very small circle of friends because quality is gonna beat out quantity every time; you just need to assess when it happened and why so that you can be sure that you are choosing it to play out that way and it’s not due to some underlying cause that you hadn’t taken into consideration — until now.
An Italian priest by the name of Thomas Aquinas once said, “The happy man in this life needs friends.” Even if it’s just one or two people, please make sure that you have folks who aren’t just your friend but your very close friend. You need them. They need you.
Everyone else, figure out where they fall and nurture accordingly. Life is a lot. We all get by with the help of our friends. Real talk, y’all. Thank goodness for them.
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