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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Between the rise of the creator economy and the gig economy, the window of opportunity to leverage your creativity for long-term gain has never been more potent.
For the last four years, I’ve worked as a full-time freelance writer and content creator. A year into this journey, I knew that if I wanted to create a sense of structure around my life outside of a traditional 9-5, I would have to create it.
To my surprise, that came in the form of social media.
Now, you might be wondering how someone might be able to juggle their work in a creatively-dominant career like writing while still having the mental capacity to produce ideas for their own personal brand, and well, that answer didn’t come easily.
In 2021, I hit a wall with writing and content creation.
With the stress and uncertainty that came as a result of the pandemic, to being burned out from having to live off my creativity, I reached a breaking point. For me, writing was always a space to explore my thoughts, process heavy topics, and express concepts that only words could bring reason to. However, when I didn’t have the brainpower to write or create content, I knew it was time to set parameters around my hobby of content creation and my passion for storytelling.
In this case, the biggest challenge was finding the balance between the two by releasing the guilt and shame of taking a break from both in order to reconnect with them.
Through years of trial and error, the fog finally cleared, and I was able to hit my stride in 2023. From garnering over 10K followers on TikTok, building an Instagram community around lifestyle and creative encouragement, along with my wellness collective, Black Girl Playground, and writing for xoNecole as a lifestyle contributor, the creative juices have been flowing steadily.
And it all happened by creating a strategy that allowed space for planning, resting, and creating. Today, I’ll be sharing my top tips to help you find your balance between your side hustle and passions.
On staying inspired and motivated when working on various content creation and freelancing projects:
Early this year, I came to the bright conclusion that I needed to shorten the gap between ideation and execution — and it completely changed how I create.
Oftentimes, when we have an idea come to us, we let it sit for too long, and then before we know it, we’ve either lost the enthusiasm to put it into action, or someone else grabs it. If you want to stay in a flow of creativity, whether side projects or full-time work, it’s important to not get slowed down by self-doubt, procrastination, or perfectionism.
Give yourself permission to act on your ideas as they come to you. Even if they’re a little muddy or not “perfect,” you can always fine-tune them later.
@yagirlaley shrinking the gap between [ideation] + [execution] 🧠💡#fyp #creativeadvice
On the importance of choosing a niche:
If there’s one thing that has helped me balance my work as a writer and content creator, it’s putting each in its own niche (or category). By definition, a niche is a specialized segment of the market or a specific area of expertise.
When you are creating in the same niche that you’re also making a living in, that’s an easy way to get your wires crossed. And at times, this could lead to feeling as if you don’t have any ideas for yourself because you’ve given them to the other area you're juggling.
When balancing two, you want to have enough fresh ideas to give to your personal projects and your full-time work to avoid any overlap. This ensures that your personal creative vision isn’t compromised when working on client projects while still having some for yourself.
On the strategies that have helped to maintain a consistent workflow in both areas:
I can’t stress enough how important it is to create a workflow and structure for yourself as a freelancer — this applies to those with a 9-5 in the day and a 5-9 at night, too.
As someone who admittedly has ADHD tendencies, object permanence can sometimes create a block in time and project management. That’s why I encourage creatives and professionals to create systems that allow you to see the work that’s ahead of you.
Personally, I can’t live without having multiple calendars going at once. My Google calendar keeps track of interviews for articles and events, while my physical calendar helps me keep track of important dates. I also work out of an Excel sheet where I can log in ongoing stories and track their status from drafting to submission. I’ve also heard great things about the Notion app for planning and tracking.
When it comes to creating content, spending time doing bulk content days has been an asset to my creative workflow. When I complete the videos, I save them to my drafts and upload them as needed.
Credit: Amberita
Courtesy of the writer
On the best advice for someone who is considering pursuing both content creation and freelancing simultaneously:
Don’t be ashamed of taking a break and resting — because both are essential to the life of a creative. Last month, I returned to Instagram after taking 6 months off from posting. During that time, I worked on growing my TikTok page, using the platform to practice vulnerability and allowing myself to put the fun back into creating content. Without the time, I can’t say I’d be able to approach Instagram with the same ease and playfulness; but thanks to that time away, it was possible.
Resting, letting our minds wander, or simply doing nothing are all just as productive as creating. No one can produce at all times, we have to allow ourselves the space for new concepts and ideas to flow to us. In addition to that, when we take breaks from social media, it allows us to stop the wheel of comparison and consume more than we create. So if you feel like you’re in a creative rut with all you want to balance, it may be time to take a step back, unapologetically.
Your creativity will thank you for it.
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Featured image by Sir Taylor