🌸 Financial Spring Cleaning: Declutter Your Finances This Month!

Hey Wicked Club fam!

April is here, and it's not just any month – it's Financial Literacy Month! This is the perfect time to take a deep dive into your personal finances and get a clear picture of where you stand. The first step to financial well-being is simply being aware of your money, spending habits, and future goals and that’s exactly what we’re going to do in this issue.

🗒️ This week’s rundown:

• Topic of the week: Financial Spring Cleaning: Declutter Your Finances This Month!

• Credit Building for Immigrants and Students

• Reward Activation and Reminders

🌸 Financial Spring Cleaning: Declutter Your Finances This Month!

It's Financial Literacy Month! There's no better time than now to take a closer look at our personal finances and get a clear picture of where we stand. Raise your hand if money planning sometimes feels like a chore. Yeah, me too!

We all know that feeling – the frustration of mindless spending, or the guilt of not saving enough. But here's the good news: the biggest hurdle is simply facing your finances head-on. Some of these tips might already be familiar, but that's not the point. Consider this a reminder to get your finances in order. After reading, take the time to sit down and dive into your finances.

Step 1: Illuminating Your Finances:

Just like exploring a dark cave, you need a light to navigate your finances effectively. The first step is awareness: understanding your current financial situation. Here's how to shine a light:

• Track Your Spending: For the next month, track every single expense, no matter how small. Use a budgeting app, spreadsheet, or even a simple notebook. Seeing your spending habits visually can be a real eye-opener!

• Gather Your Documents: Collect your most recent bank statements, credit card statements, and any investment or loan statements. These documents will provide a snapshot of your income, expenses, and debts.

• Check Your Credit Cards: Take control of your credit cards! Gather them, create a master list, and review statements. Identify underused cards and consider downgrading or canceling them responsibly. Utilize cards strategically to maximize rewards.

• Check Your Credit Report: You can get a free credit report annually from each of the three major credit bureaus. Knowing your credit score and reviewing for inaccuracies is essential for financial health.

Step 2: Categorize Your Expenses:

Now that you have some spending data, categorize your expenses:

• Essentials: Rent/mortgage, utilities, groceries, transportation.

• Debt Payments: Minimum payments for credit cards, loans, etc.

• Discretionary Spending: Entertainment, dining out, subscriptions, etc.

Step 3: Analyze Your Spending Landscape:

With your expenses categorized, it's time to analyze:

• Are you spending more than you earn?

• Where can you cut back on discretionary spending?

• Are there any hidden fees or unnecessary subscriptions draining your finances?

Step 4: Debt Diagnosis:

Debt can be a burden, but understanding its impact is crucial. List all your debts, including:

• Total amount owed: How much do you owe on each credit card, loan, etc.?

• Interest rates: Higher interest rates mean you pay more for borrowing.

• Minimum payments: What is the minimum amount you must pay each month?

Check out our newsletter where we focused on how to get out of credit card debt here.

Step 5: Building Your Savings Arsenal:

Everyone needs a financial safety net. Evaluate your savings situation:

• Emergency Fund: Ideally, aim for 3-6 months of living expenses saved for unexpected costs.

• Retirement Savings: Are you contributing to a retirement plan? Start early, even if it's a small amount.

Step 6: Set Financial Goals:

Where do you want your money to take you? Do you dream of a vacation, debt relief, a down payment on a house, or a comfortable retirement? Setting clear financial goals will help you make informed decisions with your money.

Step 7: Financial Fitness Check-In:

By now, you have a clearer picture of your financial situation. This doesn't have to be overwhelming – it's the first step to making informed decisions!

Remember:

• Knowledge is power! The more you understand your finances, the better equipped you'll be to make sound financial decisions.

• Don't be afraid to ask for help. There are many resources available to guide you on your financial journey.

Feeling overwhelmed? Start small! Pick one or two areas to focus on this month, like tracking expenses or saving for an emergency fund. Small steps lead to big changes!

🌍 Building Credit for Immigrants and International Students in The US

Financial independence is key to a fulfilling life in the US, and building a strong credit score is crucial for unlocking financial opportunities. So here's a roadmap to navigate the US credit system for our immigrant and international student readers.

Understanding the Credit Landscape for Immigrants:

A study by the Consumer Financial Protection Bureau (CFPB) in 2018 found that immigrants in the US had an average credit score of 664, compared to 714 for native-born Americans. Immigrants who have been residing in the US for less than five years tend to have even lower average scores (around 624). This gap exists for a few reasons:

• Lack of US credit history: New arrivals may not have a credit footprint in the US, making it difficult to qualify for traditional credit products.

• Different credit systems: Credit scoring models in other countries may not translate to the US system.

Building Your Credit History:

Even though there might be an initial gap, you can absolutely build a strong credit score in the US! Here are some options to get started:

Options:

• Secured Credit Card: This requires a security deposit that becomes your credit limit. Use it responsibly and make on-time payments to build a positive credit history. Once established, you might qualify for an unsecured credit card with no deposit required.

• Become an Authorized User: Ask a friend or family member with good credit to add you as an authorized user on their established credit card.

• Explore Alternative Reporting Utilities: See if your landlord reports rent payments to credit bureaus.

Additional Tips:

• Make On-Time Payments: This is essential. Set up autopay or reminders to avoid late payments.

• Maintain Low Credit Utilization: Don't max out your credit card limits. Aim to keep your credit utilization ratio (amount owed divided by credit limit) below 30%.

• ITIN Number vs. Social Security Number: If you don't have a Social Security number yet, you can still build credit using an Individual Taxpayer Identification Number (ITIN).

• Beware of Predatory Lenders: Do your research and compare offers before accepting any credit product.

Resources:

• Many banks and credit unions offer special credit products designed for immigrants and international students.

• Non-profit organizations like the National Foundation for Credit Counseling (https://www.nffc.org/om-nffc-org/) provide free financial education and credit counseling.

• Look for resources and programs in your language specifically designed to help immigrants build credit.

Remember:

Building credit takes time and smart financial management. Despite the initial gap, you can overcome this obstacle. By following these steps, using credit responsibly, and seeking help from available resources, you'll be well on your way to achieving a strong credit score and financial success in the US!

🔔 Reward Activation and Reminders!

☕️ Earn Cash Back and Stars on Starbucks Purchases with Bank of America

Good news for coffee lovers and Bank of America customers! Link your eligible Bank of America debit or credit card to your Starbucks Rewards account and earn:

• 2% Cash Back on all qualifying in-app Starbucks purchases.

• 1 Bonus Star per $2 spent to redeem for free drinks and food.

Here's how to get started:

1. Visit BankAmeriDeals® to activate the offer.

2. Sign up for or sign in to your Starbucks Rewards account.

3. Save your eligible Bank of America card to your account.

💫 Reward Activation Reminders

We have entered quarter 2, and the rotating categories have changed! Remember to activate these rewards on your account to ensure you receive all the cashback!