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There are many different times in life when reviewing your finances is a good idea. You might be moving out of your parents’ house after graduating from high school, you could have just graduated from college with a load of debt, or you may even simply be trying to reset your monetary situation after an unexpected big expense.

Regardless of the specific situation, if you do some research into personal finances, you’ll likely find that everyone talks about the same basic things—like budgets, income and expenses, and rainy-day funds. These are all important fundamentals, but they’re often not enough.

If you want to set yourself up for real, long-term change, it’s essential to dig a little bit deeper than that. Here are a few more unique factors to consider as you set up your finances.

1. Learn About Credit

Everyone is aware that a good credit score is important and that a bad credit score can be detrimental, but often, individual knowledge stops there—even though it shouldn’t. It’s important to develop a deeper understanding of how credit works.

For instance, it’s critical to know what specific activities can hurt your credit score, such as:
  • Missing payments.
  • Applying for credit repeatedly in a short window of time.
  • Maintaining a high credit utilization ratio (i.e. using too much of your available credit.)
  • Defaulting on loans (think things like bankruptcy and foreclosures.)
Even once you’ve built good credit, you must understand what you can use it for. For instance, having a good credit score can give you:
  • Access to lower interest rates and smaller security deposits.
  • A better chance of getting hired.
  • Greater leverage in negotiations.
  • Higher chances to be approved for a personal loan — and for a larger amount.
  • A better shot at getting a mortgage.
  • The ability to refinance an existing loan to get a better rate.
Understanding the nuances, powers, and abilities of good credit — not to mention how to avoid bad credit — is a critical factor in sustained financial success.

2. Respect Debt

If you want to have healthy finances, you absolutely must respect the power of debt. This doesn’t mean you have to avoid debt at all costs. On the contrary, a personal loan can be an ideal way to take care of temporary financial instability — when done correctly.

However, every time you consider taking out a loan for a car, a house, school, or any other major expense, it’s crucial that you deeply respect the power that a lump of borrowed money wields over your life. From interest payments to lowering your credit score, having large amounts of debt can hamstring your ability to function.

With that said part of your personal finance journey should be developing an understanding and respect for borrowed money. When asking for a loan:

Always consider how you’ll pay it back.

Calculate how much you’ll pay in interest and ensure it’s worth it.

Look for ways to consolidate existing debt in order to avoid things like higher interest rates and missed payments.

If you can properly manage debt, it can go a long way in keeping your finances in tip-top shape.

3. Develop a Growth Mindset Toward Money

If you want to manage money well, you must maintain a growth mindset toward your finances. In other words, you must strive to maintain the attitude that even when you’re handling your finances well, you can still do better and get smarter.

A positive, continuous learning attitude toward money is a cornerstone to long-term personal monetary success. It doesn’t just affect all of your financial behaviors, it literally has the power to impact nearly every aspect of your life. 

For instance, when you’re at the supermarket, a growth mindset can help you balance the need for healthy food with the ability to stick to a grocery budget. A growth mindset can also help you research the financial implications — like the cost of living — that come with relocating for a job. Heck, a growth mindset can even be instrumental in helping you make small-yet-significant changes when you’re going through any kind of financial hardship.

Whatever your age, demographic, location, beliefs, habits, or lifestyle, having a growth mindset towards your money can help you stay on top of your financial situation at all times
Getting Serious with Money

It doesn’t matter if you’re a free spender or a penny pincher, a financial whizz kid or someone who hates everything with a dollar sign attached to it — getting serious about your finances is an essential part of surviving and thriving throughout life.

That’s why you must push past the budgeting basics. Strive to develop a healthy appreciation for things like credit and debt. Develop that growth mindset that is always looking for the best way to handle your finances. If you can hone your financial acumen in these ways, you can rest assured that your personal finances will be able to weather any storm, no matter what life may throw your way.