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If you have any concerns about your finances at all, sit back and listen to this 3-minute audio. After you do… read the rest of the post below.

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What did you think?
I remember speaking to Travis when he was considering filing bankruptcy; he was so stressed!
You probably know what I told him, but I’m going to say it again. I said, “Travis, you need to make a decision about your bankruptcy based on what is best for your family; however, don’t worry about your credit. Your credit is the easy thing to fix.”
Well, he took my advice, followed about ¾ of it…
Two years and two days later, he bought a home for 5% down, with an interest rate of 3.5%.
Think about that…
So many people worry about late payments, or a foreclosure, or a short sale… why?
If you know how to rebuild your credit, you don’t have to worry about past mistakes on your credit report.
The first step is simple: Sign up for my FREE webinar right here. Don’t delay. After all, if you attend the webinar right now, by summer or fall, your credit will be all taken care of!
If you want to change your life, click this link and sign up for this webinar right now.
Here’s to the best year of your life!
Px
P.S. Don’t put this off!  Click here to sign up for the FREE webinar.

If you want to know how to raise your credit score by paying off debt, you should know two things:

1. The lower your balance-to-limit ratio, the better your score.
2. You must keep credit cards active.

Let me start with your balance-to-limit ratio. Credit-scoring bureaus award higher scores to people who have credit card balances that are no more than 30 percent of their overall limit. If your limit is $10,000, for instance, your balance should never exceed $3,000.
One of my first strategies for helping a person build a 720 credit score is to lower each credit card balance to no more than 30 percent of the credit card’s limit.
That 30 percent target is the minimum you should aim for. If you can pay your credit cards entirely, great! Your score will be higher.
Important: Many people think that if they pay their credit card balances in full each month, they don’t have to worry about having a high balance the rest of the month. This is a common misconception.

From a credit-scoring perspective, bureaus look at your credit-card balances as a snap shot in time, which means that if you have a credit card with a $2,500 limit and a $2,000 balance on the day your credit report is pulled, your score will be lower… even if you just sent in a check for $2,000 that simply has not cleared the bank.
That is why in my Free Credit Score Webinar, I teach people to never charge more than 30 percent of their credit card balance. And the closer they can keep their balance to $0, the better!
This brings me to my second point.
You must keep your credit cards active. When I give my Free Credit Score Webinar,  I explain to people learning how to build credit that they must use their credit cards. Otherwise, the credit-scoring bureaus have no way of telling whether you are a responsible borrower.
Consider it like this: Let’s say you own an airplane. Owning an airplane isn’t enough to be granted a pilot’s license. You must first demonstrate your ability to take off and land, you must have hours of flight practice under your belt, and you must hold the proper certification.
Likewise, owning credit cards is not enough to demonstrate that you know how to use them. And because credit-scoring bureaus consider the most recent activity to be the most important, you must use them regularly.
So how do you keep a low balance on your credit cards while still keeping them active?
Simple. Let’s say you have four major credit cards that you want to pay off but keep active. (Ideally, you should have between three and five major revolving credit cards.) Here is a plan that shows you how to raise your credit score by paying off your debt.
1. Identify four bills that have a set monthly payment. For instance, your gym membership, magazine subscription dues, car insurance, and health insurance bills are probably the same amount each month.
2. For each of your four credit cards, schedule an auto pay of one of these bills.
3. Then, create an auto payment from your checking account to each credit card company. This auto payment should occur two days after your credit cards are charged for the bills. Let’s say, for instance, that you create auto payments for your Visa, MasterCard, American Express, and Discover cards to pay your gym membership, magazine dues, car insurance, and health insurance bills (respectively), on the 5^th of the month. You would then create another level of auto payments so that your checking account pays your credit card balances two days later.
This way, you will never pay interest, keep your credit cards active, and keep your credit cards paid off.
So what about other debt? Here’s a tip on how to build credit by getting small loans:
Let’s pretend you are going to buy some new furniture. Assume that you have enough money to buy the furniture outright; however, you would like to build your credit.
If the bank will report the loan as an “Installment Loan” to all three credit bureaus, it’s a great idea to finance part of the purchase. Then, pay the bills for three months before paying the remaining balance in full.
Let’s assume you finance $5,000 and pay 10 percent as an interest rate. Your monthly payments are $41.66, and you pay these for three months before paying the balance in full. During these three months, you pay only a little bit in interest, but you have a new item on your credit report that appears as “Paid in Full” and “In Good Standing.”
In summary, if you want to know how to raise your credit score by paying off debt, remember two things: keep your balance low and keep your debt active.

Philip X. Tirone is the creator of The Free Credit Score Webinar and the 14-Day Credit Challenge, both of which teach consumers how to raise your credit score and achieve a 720 credit score. You can visit his blog on how to raise your credit score at 720CreditScore.com

Why make it more complicated than it needs to be?
If your financial or credit situation is chaotic, you probably think turning over a new leaf will be too hard. But there are three easy ways you can improve your financial situation in 2013.
Tip #1: Write Your Goals Down!
What would you like to see change on your credit report within the next four to six months?
For instance, perhaps you want to:

• Pay off a credit card
• Lower your utilization rate
• Try to negotiate for a letter of deletion
• Create a plan so that you pay your bills on time every time
• Eliminate or reduce expenses
• Increase your income

Whatever your goal, write it down every single day this year.
Too often, life gets in the way of our long-term goals.
Jobs, personal lives, and hobbies seem to take precedence over organizing bills, establishing financial goals, and getting a grasp on the credit-scoring rules.
As a result, we forget about where we want to go. So there’s an easy fix …
If you start each day (or end each day) by re-writing your financial / credit goal, you will be much more likely to make decisions that support that goal.
Tip #2: Sit Down to Organize Your Bills
This might seem silly, but there are a host of byproducts that can come from simply making a list of your bills, the date the bills are due, and the approximate amount.
1. You will be less likely to pay them on time.
Forgetting to pay bills is an ever-increasing problem. Some bills are sent via e-mail. Others come in the postal mail.
Some bills are paid using auto-payment features, others are paid by credit card, still others require a check.
Without a centralized method of paying these bills, today’s modern conveniences actually make it less convenient to pay bills on time. It’s just too confusing!
2. You will see opportunities to cut your finances. When was the last time you reviewed your phone bill? And HOLY SMOKES! Do you really pay that much for your cable?
3. You will see how much money you are spending on discretionary items. If your bills add up to $2,500 a month, and you bring home $5,000 a month, but you only save $500 a month, you are spending $2,000 in discretionary spending. By listing your bills, you might be more inclined to set a budget.
Tip #3: Read a Book
Do you think that if you read one financial self-improvement book that you would be better off at the end of the year? Of course you would!
Remember: A person who does not read learns the same amount as the person who cannot read.
Each year, a bevy of books about taking control of your financial life hit the bookstores. Though some are better than others, each and every one of them will expand your knowledge simply by forcing you to focus on your financial situation.
Simply by making the choice to read a book, you will dramatically increase your likelihood of reaching your financial goals because you will spend more time thinking about and planning your future.
Pick a book you want to read.
Now, order the book today! Even if you read just one page a day, the power you gain by focusing on your finances will change your life forever!
That’s it: Pick and write down a goal, list your bills, and read a book.
It’s that simple.
What book will you read? And what is your goal for 2013? Let me know by leaving a comment below.
Here’s to a great 2013!
Philip Tirone
P.S. If you have already read great books about financial management, share your recommendation below!

What if… today was THE day.
Today was the day when you stopped worrying about that thing that has been nagging you all year.
Today was the day when you realized that the struggles you have been going through have been blessings in disgu
ise… and now, the blessings are filling your heart with joy.
Today is the day that you will look back with immense gratitude, as this was YOUR day.
Today is the day to feel blessed, because 2013 is going to be unlike any other year of your life.
Are you ready for it?
This is YOUR year!
This year is going to be easier for you and your family.
This is the year you will have the breakthrough you wanted financially.
This is the year that the pain you feel… will be taken away from you.
Together, let’s all come together and me 2013 the best years of our life. That’s what I’m going to do… will you come with me?
Post any thoughts below.
With all our love… have a Merry Christmas, and if you don’t celebrate Christmas, have a wonderful Holiday!
To an awesome 2013,
Philip, Lily, Ava, Dominic, Lucas and Emma

With Christmas just a couple of weeks away, I wanted to share this tip for protecting your wallet when you hit the malls.
I call it the “envelope system.” It works like this:
1. First, create a holiday spending budget. I know a lot of parents who want to create lasting memories for their children, so they go overboard, buying tons of presents for their kids.
But think back to your own childhood. How many gifts are etched into your memory?
Probably not many. Your children will remember the time they spend with you more than the gifts they will receive.
And if you are racking up your credit card bills, you probably feel stress and anxiety, which will detract from the time you spend with your children.
So create a reasonable budget, determining how much you can afford to spend on each person on your list.
2. Leave the credit cards and debit cards at home.
I’m totally serious about this. If you don’t take credit cards or debit cards, you cannot overspend. It’s that simple.
If you do take credit cards and debit cards, you can. So just leave them at home.
The more radical this idea sounds to you, the more important it is that you implement it.
Taking credit cards with you is just too tempting, even to the most disciplined shopper. The allure of “buy now, pay later” will allow you to make impulse purchases.
If you take only cash, on the other hand, you will limit your spending to the cash in hand. Those impulse purchases will be impossible.
3. Create “wallets.”
This is where my “envelope system” comes into play …
Before jumping in your car and hitting the local mall, pull out some plain white envelopes and write the name of each person you are going to purchase a present for on individual envelopes. (If you have eight people to buy presents for, you should have eight envelopes.)
Within each envelope, place the appropriate amount of cash you have budgeted for this person—no more and no less.
Each of these envelopes represents the wallet you have for each person on your list.
You might want to bring a little extra money for lunch, but be sure to leave your credit and debit cards at home.
When you purchase a present, use the money from the appropriate “wallet.”
This method will create a psychological barrier to impulse shopping. If you are tempted to splurge on a gift, you will be dissuaded when you consider whose wallet you will withdraw money from in order to cover the impulse shopping.
What do you think? Does this help you avoid the “holiday credit card hangover”? Leave a comment below and let me know.
Cheers!
Philip Tirone
P.S. You can use this tip for other events: birthdays, anniversaries, and other events that call you to the mall!

If you ever took a traditional economics course, you learned that human beings make rational decisions about their finances, and choose things that are in their best interests.
But you only have to look around you to find evidence that human beings are far from rational, particularly when it comes to finances.
We all consistently make irrational and stupid choices that cost us more, both in the short and the long run, because we are not always capable of deciding what is in our best interests.
This understanding of how real people make real financial decisions comes from the (relatively) new field of Behavioral Economics. This discipline looks at the intersection of psychology and economic theory, and it paints the human animal as a far more irrational creature than Adam Smith ever imagined.
Check out these five ways that humans make poor money decisions, and see if you can recognize any of your past blunders:

1. Seeing a High Price Can Make us Pay More

We like to think that we know a fair price when we see one, but the truth is that we’re remarkably suggestible. For instance, take a look for the most expensive wine on the menu the next time you are out to a nice dinner. Often, you will see a single bottle listed at $100 or even more, while the rest of the wines are listed at about $25-$50 per bottle. That one expensive bottle is listed on the menu to make the $50 bottles seem much cheaper in comparison.

Many restaurants literally only keep one bottle of the expensive stuff, because they don’t intend for anyone to actually buy it. It’s there to sell the $50 wine, which would have otherwise seemed far too expensive compared the other options.

What’s happening here is something Behavioral Economists describe as anchoring. Once we have a number in our heads, it anchors our expectations for price. Dan Ariely, in his book Predictably Irrational tells how Williams-Sonoma was frustrated at poor sales of its bread machine, priced at $275. The solution they came up with was to offer another model – one that was larger and priced at $400.
Suddenly, sales of the cheaper model rose, while no one bothered with the spendy version. This was because shoppers suddenly had something to compare the original to, and $275 no longer seemed like too much to spend- at least not compared to $400.

2. We Hate to Lose, Even When we Already Have

If you’ve ever held onto a tanking stock because it’s sure to regain its value, then you have been a victim of loss aversion. Loss aversion is psychological quirk that makes us work much harder to avoid a loss than we will to achieve a gain. In terms of the stock market, once a stock starts doing poorly, we think of the money we have already lost, and we fear further losses. But instead of cutting our losses, and accepting the fact that the money we’ve already spent is a sunk cost, we hold onto those stocks in the hope that they’ll pick back up again.
You can see loss aversion in nearly every aspect of life. This is the reason why we keep those bread machines we spent nearly $300 on, even though we never make bread in them – and we could certainly get something for them at a garage sale. The simple fact that we will never see that $300 again is enough reason to let the machine gather dust, because we’ll kick ourselves for “only” getting 10 bucks on a resale.

Loss aversion is also why we are so unwilling to cancel memberships to gyms we don’t attend, clubs we don’t go to, and cable packages we don’t use. We think about how much it will cost to rejoin if we were to quit- forgetting that every month we’re allowing more money to go down the drain for fear of “losing” the original enrollment fee.

It’s very difficult for us to remember that that money is already gone.

3. We Overvalue Free Things

How many times have you ordered a book that you’re not entirely certain you want, just to make sure you qualify for free shipping from Amazon?
When you do that (and we all do), you end up paying more money overall and end up with an unwanted item, to boot.
This is clearly irrational.
For some reason, the word “free” seems to scramble our brains. When we are offered a free item or service, we forget what other costs there might be to that item or service because we are so focused on the fact that we’re not paying money. What’s really interesting is that we are willing to pay more in order to get something free. That’s why Amazon offers free shipping for orders over $25, and why many marketers and retailers give out free gifts with purchase.

4. Future Needs Vs. Today’s Wants

We think things in the future are less important than things happening now. Human beings have a very hard time planning for the future. Apparently, 75% of Americans nearing retirement in 2010 had less than $30,000 saved, which is a pretty horrifying statistic. But before we write off three-quarters of the retiring population as irresponsible laggards, we should look at our own behavior.

• How many times have you bought something with a credit card without a specific plan to pay it off?
• How often have you promised yourself you’d diet only to be tempted off the path the moment you see a box of donuts?
• How many times have you left work for yourself to do in the morning, only to curse yourself the next day?

What’s going here is something called hyperbolic discounting. That’s a 50¢ word for our unconscious feeling that now matters more than later. We know that we ought to put money aside for retirement, but man is that far away! And the money is here now. So, we tend to think that retirement will take care of itself, while the money can be put to “good use” now.

5. We Overestimate the Possibility of Unlikely Things Occurring.

Our brains are wired to think that things we can easily come up with an example of are likely to happen. This is something called the availability heuristic. What that means is that we think we’re much more likely to win the lottery or win big in Vegas than is statistically possible just because we can think of examples of people who have won.
Since we can think of those examples, we think the outcome is more likely. And every time you read a news story or see a movie about such winners, your brain believes that you winning is even more probable.
Even if you are able to sidestep the availability heuristic, you may still fall victim to the similar gambler’s fallacy. This is when you believe that something is “due” to happen because it hasn’t for quite some time. For example, you might bet on a coin coming up heads on the 21^st toss after it has come up tails every time for 20 tosses. It seems as though the coin is “due” to come up heads, but it’s still only 50/50 odds.
Otherwise rational investors may find themselves following the gambler’s fallacy by avoiding buying stocks that are going gangbusters, for fear that there has to be a fall eventually. Statistics may show a general regression toward the mean (i.e. – everything evens out eventually), but general statistics are meaningless when talking about individual events.

Irrational Money Decisions Affecting Your Life

Approaching all of our financial decisions rationally is remarkably difficult to do. It pays to think about the money choices we make, and try to figure out what our motivation is each time. A little mindfulness and self-knowledge can do wonders for combating irrational decisions.
Source: Good Financial Cents

It’s that time of year where I have to issue my big warning:
Steer clear of retail store credit cards!
From now until Christmas, you will likely spend a few days in shopping malls. And more than a few of the retail stores you visit are going to try to seduce you into applying for a retail store credit card.
“You’ll save 10 percent on today’s purchase by applying for a retail store credit card,” they will tell you.
You’ll hear it over and over. In fact, just about every major store has a promotion intended to lure people into signing up for a retail store credit card.
Beware!
Retail store credit cards will hurt your credit score.
And they will hurt your wallet.
Let’s say that you go into Banana Republic to buy your mother-in-law a sweater. The cashier tells you that if you sign up for a Banana Republic Card, you will get a 15 percent discount on that day’s purchases.
Let’s do the math and see how this adds up …
Imagine that the sweater costs $55. This means you will save $8.25 if you sign up for a Banana Republic Card.
But consider all the different ways you might end up spending MORE money:

1. You will have to pay interest on the sweater, assuming you do not pay the bill immediately. And you will also have to pay interest on all future purchases.
2. And there will be future purchases. If you have a credit card, you will be more likely to engage in retail therapy, and you will be more likely to spend more money at the store. (In fact, this is why the stores want you to sign up for their credit cards. They know people who use credit cards end up spending more money than people who use debit cards or cash.)
3. You might even spend more money that day. I should take advantage of this offer, you might think, piling a few more items in your shopping cart and thinking that you are “saving” money because of the 15 percent discount.
4. You have added a credit inquiry to your credit report. Credit inquiries count for 10 percent of your credit score, so your score drops a few points. This will cost you money in the future as a lower credit score means you will have a higher interest rate on other credit cards, your home loan, or your car loan.

My point is this: The $8.25 “savings” ends up costing you a bundle.
Think of it this way: Why would retail stores promote these cards with discounts unless they know they can eventually make money off the retail store credit cards?
As always, be sure to leave a comment below, particularly if you successfully fight off a pushy sales clerk trying to get you to sign up for a retail store credit card!

I wanted to let you know that we are about to put together some great new content for our weekly blogs. And since we want to make sure that we are over-delivering on our promise to you, we are wondering if you can help us prioritize.
We want to know what your favorite blog posts are. Would you mind taking a short survey to let us know?
Here is the link.
Thanks for your time.
Philip Tirone
P.S. The survey is only four questions long, and it won’t take more than a couple of minutes … Once again, here is the link to the survey.

Have I told you how much I LOVE getting letters and emails from people who have been through my program?
I received some feedback a couple of weeks ago from a student who has called into my one-on-one Q&A session. She’d unexpectedly had her credit card limits reduced, which affected her debt-to-limit ratio, which in turn caused her how to save money on car repairs score to drop.
Credit card companies do this regularly—they promise you a big limit, and then a few years later, they lower your limit out of the blue. This hurts your credit score, which is in part based on the debt you carry as a percentage of a limit.
For instance, let’s say you have a $10,000 limit and a $1,500 balance. Your balance would be 15 percent of your limit, which would be looked upon favorably by the credit-scoring bureaus.
But if the credit card companies went and dropped your limit to $2,000, your balance of $1,500 would be 75 percent of your limit, which would be looked upon negatively by the credit-scoring bureaus.
It’s a scam!
Well, this happened to one of my clients, and I told her how to fight back. Then I got this letter (which I’m editing slightly so that you have the complete context):
“I had one card with a limit that had been lowered, and I decided to try for the second time to get it raised because they refused my request the first time. I called, and after spending 1.5 hours on the phone with five or so people (who by the way, got a little more patronizing with each one), they still would not do it.
“But … during the conversation, one of them mentioned something about calling the “Portfolio Risk Department.” After just five minutes on the phone with ONE person in the Portfolio Risk Department, they restored my full credit limit! Done!
“I never would have known to even try this if not for your fabulous program and awesome encouragement! Thank you so much once again!”
At times like this, I love my job more than usual. I’ve said it before: Your credit score is your financial reputation, and I’m tickled pink to help people fight back when their reputations are being tarnished!
With that in mind, let me know if you have any questions about rebuilding your score. From time-to-time, I answer them in my weekly email/blog. Leave a comment below, and I’ll try to answer it in the coming months.