You probably don’t know this about me, but I’m extremely stingy with praise.

Unless you achieve a truly remarkable feat, in my opinion, you’re unimpressive and thus, unworthy of the energy required to exalt your meager accomplishments.

After congratulating a fellow gym member on his 6-year long physical transformation, we engaged in some light chitchat.

I learned how he lost 90 pounds and metamorphosed from an overweight, 50-something year old, abnormally sweaty mouth breather to a ripped beast. (I don’t exactly know the guy’s age. I can never tell with black men. Suffice it to say, he’s up there.)

Here’s his secret:

Eat a ton of fruits and vegetables, eliminate processed carbohydrates from your diet, and exercise two hours a day, seven days a week.

Whoa.

But still, this man accomplished what many have refused to even attempt.

There are tons of excuses to frolic in mediocrity. A particularly idiotic one is, “It’s too late. I’m old. Whaaah.”

“By the time I clean up my credit history, I’ll be 40-years old.”

“By the time I obtain my bachelors degree, I’ll be 50-years old.”

“By the time I reach my goal weight, I’ll be 60-years old.”

So, uh, if you don’t do these things time stands still?

Of course not!

The Lord willing, ten years from now I’m gonna be 41-years old. And you . . . you’re gonna be whatever age you are now PLUS ten.

If you gave up on a dream because you erroneously reasoned you’re too old, stop that foolish thinking right now, and start taking the necessary steps to move closer to your goal.

A year from now you will wish you had started today. – Karen Lamb

When I left DC for a month-long stay in Jacksonville, FL, I expected southern food prices to be comparable to those of a third world country. They’re not.

As it turns out, the financial pains of food inflation are experienced across the United States.

We all gotta eat. And most of us don’t want to dedicate three hours a day to coupon clipping.

Try these easy tactics to cut your grocery bill.

1. Skip prepared artificially flavored drinks.

What happened to beverages made from powdered drink mix, water, and sugar?

Country Time Lemonade?

Kool-Aid?

Gatorade?

Tang? Let’s hear it for Tang. If it’s good enough for astronauts, it’s good enough for yo’ dumb ass.

Go heavy on the water, light on the sugar, and you’ll stave off insolvency and adult-onset diabetes in one fell swoop.

2. Stop juicing.

There’s another word for all that pulp excreted from your juicer. It’s called food.

Pulp has loads of fiber, so if you hanker something sweet and liquidy, consider smoothies instead.

Grab bananas, strawberries, blue berries, and other freezer friendly fruit when they’re on sale.

Bonus: Never waste a banana again. Peel, cut, and freeze bananas to toss in smoothies.

3. Eat less.

Take the Portion Distortion quiz to find out how much American portion sizes have increased over the past few decades.

Save that extra slice of pizza for another meal.

With every additional bite after you’re satiated, your discomfort increases—all the way to the point that you’re just a stuffed, mouth breathing blob too miserable to focus or fall asleep.

4. Accept defeat.

Laboring in a hot kitchen for two hours is unimpressive. Especially when your efforts produce something that—if we’re honest—tastes marginally better than a $2 menu item from a late night Wendy’s drive-thru.

You can prepare delicious home cooked, no-fuss meals. French’s Chili-O makes the best chili seasoning mix. And McCormick’s sells a variety of delicious pasta, beef, seafood, and poultry seasonings.

5. Clean out your refrigerator weekly.

Groceries, unlike the plastic bag you brought them home in, don’t have a half-life of 55 kabillion years.

The additional space allows you to easily find food before it goes bad and helps you avoid buying items you already own.

6. Eat Ramen.

Kids these days aren’t too bright.

Recently, my 5-year old nephew snubbed my generous gift of one U.S. minted nickel. Yes he did.

Another five cents and he could’ve bought a pack of flash fried noodles.

Chuck the sodium laden seasoning pack. Instead, experiment with different sauces, broths, spices, veggies, and meats.

My favorite, albeit merely semi-frugal, ramen recipe includes bacon, Alfredo sauce, Parmesan cheese, black pepper, and red pepper.

And no, I don’t fool around with homemade Alfredo sauce or that ridiculously priced shaved Parmesan cheese.

7. Stop wasting food.

According to Dana Gunders of the National Resources Defense Council, “40 percent of food in the United States today goes uneaten.”

Learn how to properly store food. Transfer your restaurant leftovers from the Styrofoam carry out box to a glass or plastic food container with a lid.

Not only will your takeout last longer, but it won’t absorb the flavors of other foods in the fridge.

8. Learn how to cook a few meals well.

Often your first swipe at a dish is a fantastic, inedible failure. Think you’re the only one? Just ask the average Pinterest user.

9. Take a chance in the kitchen. As a novice cook, I’d follow recipes to the letter. If the recipe called for fresh parsley, I ignored the dried parsley sitting in my cupboard and used fresh parsley.

After discovering modifications could improve a dish, I took on more risks. The next time you’re short a few ingredients, either find a substitute or consider eliminating them altogether.

10. Read user comments before attempting online recipes.

I’m amazed at how many people shell out 4 and 5 star ratings for recipes they’ve modified beyond recognition. Commenters often disclose whether a recipe is too salty, too bland, too spicy, too greasy, or any other small factor that might yield a meal unfit for consumption.

11. Ignore food “expiration” dates.

“I dunno. Smell it.” That’s my canned response to questions involving whether my food has spoiled. It’s quite possible, probable even, that you’ll contract a nasty foodborne illness if you follow my lead . . . so don’t.

But don’t accept your supermarket’s word as gospel.

Many foods are perfectly safe to eat after the “sell by,” “best by,” “use buy,” or any other date posted on the packaging by manufacturers. Do your research.

12. Drink tap water.

I don’t care if you can buy forty-eight 16.9-ounce bottles of water for $3.99.

Grab a BPA-free water bottle and refill it for eternity (or until you leave it at the gym).

13. Load up on inexpensive foods. 

I could list them all here, but why redo what’s already been done? Check out 25 Cheap Foods that are Good for You!

Also, plan your meals around seasonal produce as prices tend to be cheaper. Refer to Epicurious’ Seasonal Ingredient Map.

Of course you can increase your savings significantly by spending a few hours rifling through your local grocers’ weekly ads and snipping coupons from the Sunday’s paper, but if you’re uninterested in such tasks simply take the knowledge from this blog post with you the next time you hit the supermarket.

How do you cut your grocery bill without coupons?

Image credit: Why I Don’t Cook at Home from The Oatmeal

I’ll happily invest financial resources in income boosting education. However, I’m reluctant to fork over cash for high-priced courses. After all, with any investment, you stand a chance to lose money.

According to The College Board, public four-year college tuition costs for in-state students spiked 4.8% between the 2011-2012 and 2012-2013 school year. Attendees of private, nonprofit four-year universities saw their tuition and fees rise 4.2% for the same period.

Although I largely agree with John Rohn’s statement, “Formal education will make you a living; self-education will make you a fortune,” I appreciate diverse forms of education: online, offline, video, audio, written, informal, and yes, formal.

So what’s a knowledge hungry miser to do if the price of post-secondary education continues to trounce inflation?

Well, there is a solution. It’s not perfect, but it is free.

Massive Open Online Courses (MOOCs)

Not sure if you fully digested that acronym, but a massive amount of people, i.e., ANYONE, can enroll in these open, online courses.

Use the MOOC experience to feed your natural curiosity or learn a new skill that’ll help you excel in your career. Students can enjoy instructor led education provided by Duke, Princeton, Stanford, and other renowned universities—for free.

Find MOOCs at . . .

1. Coursera
2. Khan Academy
3. EdX
4. Udacity
5. Canvas Network

In some instances, students who successfully complete a MOOC receive a certificate, statement of accomplishment, or other formal acknowledgement for their efforts.

But don’t expect universities to treat you the same as their traditional students. You can’t expect to skirt a lengthy admissions process, dodge steep tuition costs, AND pick up college credits. Can you?

I’m looking at enrolling in A Beginner’s Guide to Irrationality for fun and Fundamentals of Personal Financial Planning for my professional development through Coursera.com. See anything you find interesting?

I hate to admit this, but I watched every episode of Love & Hip Hop Atlanta. Yup, every single one. It’s my guilty pleasure, my mental break from the hectic, pressure-filled real world, a place where I can… Man, you get the point. It’s crappy TV, but I enjoy it. Fine, I said it.

Before we begin, please check out my main blog and new real estate blog. ‘Preciate it

Upon watching reruns of the show to catch something I missed while watching it during the time it aired, I noticed something, Love & Hip Hop: Atlanta is a treasure chest of financial wisdom. Who would have thought?

Love & Hip Hop Atlanta secretly provides financial nuggets that everyone should abide by. Who said reality TV wasn’t beneficial?

Below you will find the 3 financial lessons I learned from watching Love & Hip Hop Atlanta.

Stevie J

Stevie J was the obvious star of the show (sorry Scrappy). I think Stevie J is a man who was dealt a bad hand and is simply misunderstood (straight face). You have to feel sorry for this guy. He’s surrounded by women who do nothing but take advantage of him. Poor Stevie.

However, despite being a womanizer and victim at the same darn time (is that possible?), he taught me something about investing. See, Stevie isn’t as selfish as everyone makes him out to be. Stevie J taught me about diversification. Not only did Stevie have Mimi (his main chick), he had Joseline (his side chick), and probably countless other women who didn’t make the show (his supporting cast).

How does this translate into financial advice? Well, I know you heard of the saying “Don’t keep all your eggs in one basket.” What Stevie was subconsciously telling the audience was that you should make sure your portfolio is diversified. He was telling us, through his love trio, that proper asset allocation is a must in your portfolio to reduce risk and maximize gains.

Wow! That Stevie J is a great guy! Thanks “Steebie!”

“Get this bread.”

Karlie Redd

Karlie Redd’s story on Love & Hip Hop Atlanta was a strange one. She started off being a gossiper and morphed into the starving artist role, willing to do anything and anyone for her shot at music success. One thing you can’t deny, Karlie is an attractive woman. However, she was ridiculed often during the show as being old or, at least, too old to try to get into the music scene.

Side Note: Why does it seem like hip-hop and R&B artists have this thing against age? Is there a such thing as being too old for a music genre?

With that said, that brings me to the 2nd financial jewel bestowed upon me by watching “Love & Hip Hop: Atlanta.”

When investing make sure you know your time horizon and make sure it’s not too short. We all know those people who are 50 years old and still haven’t started to save for retirement. The rumor mill says that Karlie is 46, and there’s nothing wrong with her being 46. She looks amazing, but by some invisible music standard, she might be a wee bit too old for the new R&B/POP scene these days.

Invest early and often! The earlier in your life you start investing, the greater chance you have of reaching those investment goals.

Mimi

Mimi, aka one part of the Big 3, aka willing participant in Stevie J’s nonsense, taught me the 3rd and final lesson that I gleaned from watching Love & Hip Hop Atlanta. What confused me about Mimi was how she was always angry at what Stevie was doing, but never did anything to cure her anger.

Answer this question for me.

Would you stay with a guy who got another woman pregnant, and then admitted to getting another woman pregnant when you confronted him about it?

Would you stay with a guy who carried around the pregnancy test and then requested that you and the other woman attend therapy together to come to some common ground? Huh?

If you’re confused as to why Mimi decided to stay with Stevie after all that, then you understand why I think she was a willing participant.

That brings me to my point. Don’t let emotions guide your investment decisions. The only reason Mimi would stay with Stevie after all the wrong he did was nothing other than emotions.

Emotions also happen to be the #1 destroyers of investment returns. In the stock market you have to realize that stock market returns may deviate wildly over a short time frame. Focus on the big picture (your goals) when investing and don’t let fear and greed overtake you and your decision making.

In the End…

I’m not saying that you should now go out and start watching crappy reality TV, but if you do happen to watch them, just so you’re not losing brain cells watching garbage, try to dissect the show and find some financial nuggets. This will require a bit of thinking, which replaces the brain cells you’re losing by watching such crap.

Hmm, I wonder what I can learn from watching Here Comes Honey Boo Boo?

Leave a comment below with a TV show that you watch and a financial lesson you learned from watching the show.

Dominique Brown is a financial planner, landord, personal finance blogger and video blogger. He is the owner of YourFinancesSimplified.com where he talks about everything from being a new father to his worst financial mistakes. He is also the owner of InsiderRealEstateTips.com where he talks about real estate exclusively. The Huffington Post and H&R Block. You can find him either on Twitter, Facebook, YouTube or Instagram.

Photo credit: VH1.com

A couple of days ago, in How Lazy Bastards Make Money Without Lifting a Finger, we discussed the benefits of passive income.

Today we’ll dive into the nitty-gritty details on how to passively beef up your earnings.

Interest

Simply put, interest is the cost of cash. It’s money earned for money loaned.

Individuals, businesses, and governments pay rent for other people’s money.

Let’s say I lend you $1,000 at an annual rate of 8% on January 1st, 2013, with principal and interest due in one year. At year-end, assuming you don’t screw me, I’ll receive principal of $1,000 and interest of $80 for a total of $1,080.

Besides fork over $1,000 at the beginning of the year, I do nothing more than wait for the dough to roll in.

Nowadays, the interest paid on savings accounts, money market accounts, and certificates of deposit is so pitiful I won’t waste your time delving into the specifics of these vehicles. Just know you can buy them from mega banks, community banks, and credit unions.

Unfortunately, U.S. treasuries currently earn an interest rate that’s equally pitiful to the amounts paid by financial institutions.

For real money, use peer-to-peer lending sites such as LendingTree or Prosper.com to design a basket of personal loans.

There aren’t many opportunities to make legitimate, tax-free money these days.

Invest in municipal bond funds through a discount broker such as Charles Schwab or Scottrade. Municipal bonds are issued by state and local governmental agencies. Muni bond interest is spared from federal and often state income taxes.

Dividend Income

There are two main ways to make money from ownership in a company: capital gains and dividends.

We’ll discuss how capital gains work in a later section. For now, let’s focus on how dividends let you squirrel away cash while watching back-to-back Seinfeld reruns.

In a nutshell, dividends represent the portion of a company’s profits paid to its investors. Non-employee shareholders receive a chunk of corporate earnings, and the company’s employees do the hard work of . . . well . . . working.

Big Brother bestows a special, maximum tax rate of 15% on what the IRS refers to as qualified dividends. Compare that with a federal income tax rate of up to 35% on income earned from a day job. Crikey!

Dividend paying investments include, but are not limited to, the following:

• Individual stocks
• Stock mutual funds, index funds, and exchange traded funds
• Real Estate Investment Trusts (Generally, ordinary federal income tax rates of up to 35% apply to dividends paid by a REIT.)
• Privately owned corporations

You can purchase most of the investments listed above through brokerage firms as well as financial institutions like Vanguard, Fidelity, and T. Rowe Price.

But unless you got a lot of dough laying around, you’ll likely have a hard time buying into a privately owned company. UK residents can invest small dollar amounts in startups through Seedrs.

Although U.S. company’s such as KickStarter and Indiegogo provide a channel for the little guy to fund private (and potentially profitable) projects, rewards are limited to the non-monetary warm and fuzzies you get from altruism. Who gives a crap about that?

Rental Income

Many of us are familiar with residential or commercial real estate that you lease out in its entirety. You have to get creative if you want to avoid the perils of traditional landlording.

The good news is you don’t need extensive amounts of capital or credit to earn passive rental income.

Use your primary residence to generate extra cash:

• Get a roommate or host travelers - Airbnb, Roomorama
• Loan your garage or spare bedroom to a small business for inventory storage - Craigslist
• Park on the street and rent your carport to commuters or patrons of nearby establishments - ParkCirca, ParkatMyHouse

One enterprising D.C. homeowner converted the first floor of his townhouse into coworking space. For $400 per month, entrepreneurs lease a desk, chair, high speed internet, and the use of other amenities found in a standard office.

Capital Gains

Capital gains, generally, occur upon the sell of an asset you acquired–whether for personal use or investment purposes–at an amount greater than the purchase price.

For example, let’s say you unload a couple of Jodeci CDs on Craigslist for $15. You picked them up for $5 at a record store’s liquidation sale a few weeks earlier. The resulting capital gain amounts to ten bucks.

The Internal Revenue Code classifies capital gains as either short-term or long-term. If you own an asset for more than a year before you sell it, the excess amount you receive over what you paid is your long-term capital gain. Own the asset for a year or less, and you have a short-term capital gain.

As you  might’ve guessed, the tax rates applied to short-term and long-term capital gains differ. Long-term gains receive a favorable federal income tax rate of up to 15%. Short-term gains are taxed at ordinary income rates, which, as stated previously, can climb up to 35%.

Personal property, real estate, or any asset listed under the Dividend Income section above can be sold for a capital gain.

WARNING:  These investments are NOT risk-free. The possibility exists that you’ll lose money.

Search yourself to determine if you can stomach the risk.

Additionally, the Internal Revenue Code is a complex, convoluted mess of loopholes, penalties, and special treatments so do your own research to determine how taxes impact your personal finances.

What happens if you quit your job?

It’s not a trick question.

If you skip work tomorrow, the day after that, and forever more, what’s the natural consequence of your decision?

You stop receiving a paycheck, right? That ain’t cool.

I get why companies refuse to pay ex-employees. But I’m sayin’ though, I don’t like it.

And that’s why I constantly scour the universe for strategies that move me closer to a monetary fortune so large that work becomes optional.

Here’s where passive income comes in. Unlike active (earned) income, which requires you to work in order to make money, passive (unearned) income pours in with little effort on your part.

You may sacrifice an ungodly amount of time and effort to rack up the money needed to acquire income generating assets. Beyond your initial cash outlay, however, you can relax while reaping the financial benefits of your investments.

As an added bonus, passive profits receive favorable tax treatment. Meaning, Uncle Sam puts his grubby mittens on smaller piles of your cash.

Consider this. Payroll taxes, e.g., Social Security and Medicare, historically, amount to 15.3% of an employee’s active income. You pay half, your employer pays half. The self-employed have the good pleasure of paying the entire 15.3%.

Passive income often enjoys reduced federal income tax rates AND bloodsucking payroll taxes don’t apply .

By now, you’re wondering, “How do I get in on some of that workless-money-making action?”

Patience, grasshopper. We’ll go over the specifics next time we meet, so stay tuned.

Click on the link to learn more about passive income streams.

Photo credit: Wikipedia

450 square feet.

That’s the current minimum apartment size in New York City. If Mayor Bloomberg has his way, micro-units with 275-300 square feet of living space will become the new normal. Even if you boast larger quarters, many people simply don’t have space for a treadmill, elliptical trainer, or wall of free weights in their home.

Try these 5 ideas and lack of space is no longer an excuse for skipping exercise.

The BOSU® Balance Trainer, an acronym for ‘both sides up”, provides the opportunity for strength, core and balance exercises in one small space. Do squats while standing on the squishy dome and work your core muscles as well as your quads. Turn the Bosu over so the dome is on the floor and do push-ups holding onto the edges of the platform for an extremely challenging exercise that works all your muscles. The Bosu takes up about 2’ of space so if you have room to sit on the floor, you have room to use the Bosu.

Free weights take up an entire wall at the gym and weigh hundreds of pounds, but you don’t need a large space or reinforced floor for weight training at home. Adjustable free weights that look like regular dumbbells but come with various plates allow you to add or subtract weight with the push of a button. PowerBlock and Bowflex are two companies that make adjustable dumbbells. Or save money by filling empty hard plastic detergent bottles or gallon orange juice jugs with water or sand and make your own free weights. One gallon of water weighs about 8.3 pounds, one gallon of sand weighs 22 pounds.

If adjustable dumbbells take up too much space, use resistance bands. Bands are color-coded according to the tension level, with black typically giving the most and green the least resistance. A package of three bands takes up less space than your Kindle, and can be used for a wide variety of strength exercises. Look for bands that attach to a doorknob to expand the range of possible exercises.

If you’re looking for cardio, strength, balance and flexibility in one piece of exercise equipment that also provides fun and entertainment, check out the Wii Fit Plus. Do yoga on Monday, play the ski slalom game on Tuesday to work on balance, run on Wednesday, show off your hula-hooping skills on Thursday and perfect your plank on Friday . All exercises are performed on a balance board that is about the size of a typical bathroom scale.

If you have a small living space and are short on cash:

Use your body weight for resistance in exercises such as push-ups, sit-ups, lunges, squats, and triceps dips using a chair.

Walk or even run up a flight of stairs. If going up is too difficult, start by walking down the stairs.

Practice balance exercises, Pilates or yoga positions.

Guest blogger Lynn Grieger is an ACSM certified personal trainer and contributor for Everyday Health and its calorie counter and fitness tools.

Earlier this year, the United States’ collective student loan bill topped $1 trillion.

Amazingly, only about 30% of those over the age of 25 hold a bachelor’s degree or higher. Even more startling, 40% of college freshman fail to finish a four-year degree in—wait for it—six years!

For the most part, I believe an educated populace provides great economic benefits to the nation.

However, the neck-breaking pace at which we’re racking up student loans concerns me.

Unlike many Americans, I don’t view a college degree as a magic bullet to success, particularly if you borrow money for higher education that doesn’t lead to a job that affords you the ability to repay your debt.

You see, student loans—federal AND private—are practically impossible to discharge in bankruptcy.

Dare to default on a student loan backed by the taxpayers and, without even hauling your broke butt into court, Uncle Sam can

• Seize your tax refund
• Garnish your wages,
• Siphon money out of your bank account,
• Usurp up to 15% of Social Security retirement and disability benefits
• Slap a lien on your property, or
• Engage in any other gestapo-like tactics to recoup borrowed funds.

Private lenders employ more civil measures to shake down deadbeats. But since bankruptcy laws make it difficult to shirk student loan obligations, at some point during your life, you’ll probably pony up the dough you owe.

Private student loans should wash away in bankruptcy as easily as credit card, auto, and personal loans.

Maybe then, banks would exercise more diligence before forking over tens (or hundreds) of thousands of dollars to youngsters who don’t know how to properly wash, dry, and fold a load of laundry, let alone evaluate their ability to repay a massive amount of debt.

Alas, whether public or private, the only way to shake student loan debt is by paying it.

So how tough is it to bankrupt student loans?

As the infographic below shows . . . real tough.

From: OnlineColleges.net

In 4 Hardcore Strategies to Torch Debt, Rack Up Cash, and Build Wealth Now, I kindly suggested you “stop buying shit” in order to achieve your financial goals.

I’ve returned to explain myself to those who wonder, “How does this broad think I’m supposed to survive without spending money?”

You see, there’s a science to kicking a shit buying habit.

First, know your shit.

Answer the following multiple choice question.

Shit is any purchase I . . .

(a) Don’t need and can’t afford
(b) Can afford and won’t use
(c) Need and already own
(d) All of the above

Hint: The answer is ‘All of the above.’

Before we continue, let’s make two assumptions: 1) You have the mental wherewithal to tell the difference between a need and a want, and 2) You know enough about your finances to identify what you can and cannot afford.

Now, we’re left to deal with the shit you unknowingly own.

Allow me to indulge you in a movie metaphor to explain my point.

“There is no spoon.”

Do you remember Neo’s exchange with that creepy, bald kid in The Matrix? 

Creepy Kid: Do not try and bend the spoon. That’s impossible. Instead, only try to realize the truth.

Neo: What truth?

Creepy Kid: There is no spoon.

You want the truth?

The truth is I don’t have a clue what greater meaning lies within that statement. But all this talk about spoons got me to thinking.

When I bought my very first batch of silverware, I didn’t buy forks, knives, and spoons. I bought a safe and durable means of transporting nourishment from my plate to my mouth.

The reason we scour the aisles of Target for a monetary fix to any tiny unmet need is we define our needs too narrowly.

A while back, the metal disk that attaches to the magnetic strip of my medicine cabinet door became unglued. As a result, the door wouldn’t shut. So I duct taped the old metal disc back to the cabinet door.

Every couple of weeks, the tape would lose its stickiness and the medicine cabinet door would pop open, exposing my meds to glassy-eyed prescription drug abusers. I’d reattach the disc with a fresh strip of duct tape and carry on about my day. This ritual went on for months.

At one point, I considered springing for a tube of super glue or picking up a few strips of double-sided type. But that’d require me to spend money on some shit I wasn’t sure I needed. Then I remembered I had an unopened tube of epoxy hanging in a bag on my hallway closet door.

I smeared the adhesive all over the metal disk, slapped it on the cabinet door, let it dry for about four hours, and BAM!–it was good as new. And I didn’t have to spend an extra cent.

Take some time, pull out the knickknacks that are wedged in the cobwebbed crevices of your home. Get rid of the shit you don’t need, don’t want, can’t use, or won’t use. Then organize the rest in a logical fashion.

When you need it, you’ll know where to find it . . . in your home, not the halls of Target.

Image courtesy of photostock at FreeDigitalPhotos.net

Earlier this week, I tweeted the following:

Surprisingly, many of my Twitter friends chimed in to share their opinion on which is a smarter option: buying or leasing a car.

One Twitter follower asked me if I financed or paid cash for my vehicle. Completely unembarrassed by hypocrisy, I replied,

Clearly my position on borrowing money has shifted a bit. Two years ago, I would’ve ended my answer with “before I knew better.”

No buts.

No qualifying statements.

Y’all know me. Debt freedom is worth far more than a depreciating asset I can’t afford. Heck, I struggle with taking out a mortgage to buy a modest home.

But that’s just me.

If you insist on taking out a loan, for any reason, you’ll need excellent credit to secure the best interest rates.

I’d rather you cut yourself with the sterile edge of a sheet of paper than the rusty blade of a machete. So, I threw together a mini crash course on how to increase your credit score.

Obtain a copy of your Equifax, Experian, and TransUnion credit reports.

Although you can run a free credit check through AnnualCreditReport.com once a year for each major credit reporting agency, you won’t receive a score. With that said, the service won’t cost you a dime.

Inspect each credit report for incorrect information.

Is your student loan categorized as a revolving account? Is the real age of your home equity line of credit older than what’s shown on your credit report? Is a credit card limit higher than what’s recorded?

Do you see accounts that don’t belong to you? Late payments that were paid on time? Applications for credit you didn’t make?

My apologies for slapping you with a litany of questions, but this stuff matters.

Dispute inaccurate information with the applicable credit bureau and the knucklehead who provided it, immediately.

Decrease your credit utilization ratio below 10%

Simply put, your credit utilization ratio is how much credit you’re using compared to your total available credit.

There’s a rumor floating around that cancelling credit cards improves your credit score. Balderdash! It ain’t true!

Close a revolving line of credit and you risk harming your credit score in two ways:

1) You shorten the average age of your credit accounts.

2) You increase your credit utilization ratio.

Leave zero balance revolving accounts open, and pay down the outstanding amount on the others.

Many creditors report card balances as of the statement date. Meaning, even if you pay off your balance after the statement date and before the due date, your utilization ratio may seem unreasonably high.

So, submit your payment before the statement date. 

If you can’t pay your revolving accounts in full each month, then why are you going deeper into debt, huh?! Stop this foolishness now before you render yourself insolvent.

You could also request a credit limit increase on your existing accounts. Ask the representative at your credit issuer whether a “hard pull” or “hard inquiry” is required to get a higher limit.

Keep your credit shopping period short, say, 14 days or less.

For instance, many scoring models count applications for new credit within a small window as one hard inquiry. In case you’re wondering why this matters, creditors get a bit squeamish when your behavior suggests you desperately need a loan.

If you look like you’re a prudent consumer hunting for the best interest rate, the damage to your credit score is minimal.

What tricks have you used to quickly boost your credit score?