Grow Your Money

Backdoor Roth IRA for High Income Earners, tax efficient wealth

JD Bond · July 10, 2026 · Leave a Comment

Backdoor Roth IRA: The Workaround High Earners Need to Know

You did everything right.

You worked hard, got the raise, climbed the income ladder – and now the IRS says you make too much to contribute to a Roth IRA.

That stings. But there’s a legal workaround that’s been used by high earners for years.

It’s called the Backdoor Roth IRA.

Why the Backdoor Exists

Regular Roth IRA contributions have income limits. In 2025:

Single filers phase out between $146,000 and $161,000
Married filers phase out between $230,000 and $240,000

If your income clears those thresholds, the front door is closed. But the tax code left a side door open – and it’s been there since 2010.

How It Actually Works

The Backdoor Roth IRA is a two-step process:

Step 1: Contribute to a Traditional IRA
You make a non-deductible contribution to a Traditional IRA. There are no income limits for this. The 2025 contribution limit is $7,000 ($8,000 if you’re 50 or older).

Step 2: Convert to a Roth IRA
You then convert that Traditional IRA to a Roth IRA. Because you already paid taxes on the contribution (it was non-deductible), this conversion is typically tax-free.

That’s it. Two steps and your money is now in a Roth, growing tax-free.

The Pro-Rata Rule – the Part Most People Skip

If you have other pre-tax money sitting in Traditional IRA accounts, the IRS doesn’t let you cherry-pick which dollars get converted.

They look at ALL your IRA money and calculate a ratio. Some of your conversion will be treated as pre-tax, which means you’ll owe taxes on it.

Example:
You have $93,000 in a pre-tax Traditional IRA and make a new $7,000 non-deductible contribution. Your total IRA balance is $100,000. Only 7% of that is after-tax money.

Convert $7,000 and only $490 of it is tax-free. The rest is taxable.

The fix: If your employer’s 401(k) plan allows it, roll your pre-tax Traditional IRA money into the 401(k) before executing the backdoor conversion. That clears the IRA slate and the pro-rata rule no longer applies.

Why It’s Worth Doing

Roth IRA accounts offer three things that are hard to find anywhere else:

Tax-free growth – your money compounds without any future tax drag
Tax-free withdrawals in retirement – no mandatory distributions, no tax bill
Flexibility – contributed amounts (not earnings) can be withdrawn anytime without penalty

For high earners in their peak earning years, tax-free retirement income becomes valuable. The Backdoor Roth lets you build that even when the income limits say you can’t.

Who Should Consider It

The Backdoor Roth IRA makes sense if:

Your income exceeds the Roth contribution phase-out limits
You don’t have significant pre-tax Traditional IRA balances (or can roll them into a 401k)
You want tax diversification in retirement – meaning income from both taxable and tax-free sources
You expect to be in a higher tax bracket later in life

What to Do Right Now

Check whether your income exceeds the Roth IRA limits
Check your current Traditional IRA balances – know your pro-rata situation
Talk to a fee-only financial advisor or CPA before executing, especially if you have existing IRA money

The Backdoor Roth won’t work perfectly for everyone. But for the right person, it’s one of the cleanest ways to keep building tax-free wealth when the system says you’ve earned too much to qualify.

This blog is for educational purposes only and does not constitute financial or tax advice. Consult a qualified professional before making investment decisions.

– MoneyNotSpent | JD Bond

What Is a (HYSA) High-Yield Savings Account and Why is it popular for GenZ and millennials?

JD Bond · July 1, 2026 · Leave a Comment

Your savings account is earning you almost nothing right now. Most traditional banks – your Chase, your Wells Fargo, your local credit union – pay around 0.01% APY on savings. That’s not a typo. On $1,000 saved, you’d earn about $0.10 in a year. A dime.

Meanwhile, high-yield savings accounts (HYSAs) exist, and they’re paying 4–5% APY or more. On that same $1,000, that’s $40–$50 a year. Same money. Zero extra risk. Just a better account.

Here’s what you need to know.

What Is a High-Yield Savings Account?

A high-yield savings account is a savings account that pays a significantly higher interest rate than traditional bank savings accounts. They work the same way – you deposit money, it’s FDIC insured (meaning protected up to $250,000 by the federal government), and you can withdraw it when you need it.

The difference is the interest rate – sometimes 400–500x higher than a traditional savings account.

Most HYSAs are offered by online banks. Because they don’t have physical branches and the overhead that comes with them, they pass the savings on to customers through higher interest rates.

Why Does the Interest Rate Matter?

Let’s do some real math.

You have $5,000 in savings.

Traditional savings account at 0.01% APY:

After 1 year: $5,000.50
After 5 years: $5,002.50

High-yield savings account at 4.5% APY:

After 1 year: $5,225
After 5 years: $6,230

That’s over $1,200 more – earned on the exact same $5,000 with zero additional effort. Just by having it in the right account.

Now multiply that across a larger emergency fund ($10,000–$20,000) and the difference becomes significant money every year.

Where Do You Find High-Yield Savings Accounts?

Most major online banks offer competitive HYSAs. Some of the well-known options include:

Ally Bank – consistently competitive rates, no minimum balance, no monthly fees
Marcus by Goldman Sachs – straightforward HYSA with strong rates
SoFi – offers a HYSA with additional perks if you set up direct deposit
American Express High Yield Savings – simple, no frills, strong reputation
Discover Online Savings – no minimum, no fees, reliable rates

Always check current rates before opening – rates move with the Federal Reserve’s benchmark rate and can change over time. A quick search for “best high-yield savings accounts” will show current rankings.

What to look for when comparing:

APY (annual percentage yield) – the higher the better
No monthly maintenance fees
No minimum balance requirements (or a low, achievable minimum)
FDIC insured
Easy transfers to your primary checking account

Is Your Money Safe in an Online Bank?

Yes – as long as it’s FDIC insured. The FDIC (Federal Deposit Insurance Corporation) insures deposits up to $250,000 per depositor, per bank. If the bank fails (which is rare), your money is protected.

Before opening any account, confirm it’s FDIC insured. Every legitimate online bank in this guide is FDIC insured. You can also verify any bank at fdic.gov.

The fact that it’s online doesn’t make it less safe. Online banks are held to the same federal regulations as your neighborhood branch.

What Should You Use a High-Yield Savings Account For?

A HYSA is not an investment account. It’s not where you put money you’re hoping to grow dramatically over decades. It’s where you park money you need to keep safe and accessible – but you still want it working for you.

Best uses for a HYSA:

Emergency fund – The most important one. Your 3–6 month emergency fund should live in a HYSA, not a checking account earning nothing.
Short-term savings goals – Saving for a car, a vacation, a down payment on a house? HYSA is the move for 1–3 year goals.
Sinking funds – Irregular but predictable expenses (car repairs, annual insurance, holiday spending) belong in a dedicated HYSA bucket.
Tax money for freelancers – If you have a side hustle or self-employment income, stash your quarterly tax payments here so they earn interest while you hold them.

What a HYSA is NOT for: your retirement savings, long-term investing, or money you won’t need for 5+ years. For that, you want index funds inside a Roth IRA or 401(k), where returns historically average 7–10% annually.

How to Open One (It Takes About 10 Minutes)

Opening a high-yield savings account is easier than opening most social media accounts.

Here’s what you’ll need:

Your Social Security Number
A government-issued ID
Your current bank routing and account number (to link for transfers)

Steps:

Go to the bank’s website (Ally, Marcus, SoFi, etc.)
Click “Open Account” or “Get Started”
Fill in your personal information
Link your existing checking account for transfers
Fund it with an initial deposit (many have no minimum)

Once it’s open, set up an automatic transfer from your checking account on payday. Even $25 or $50 per paycheck adds up faster than you think – and automation means you never have to think about it.

What About Interest Rate Changes?

HYSA rates are variable – they move up and down based on the Federal Reserve’s federal funds rate. When the Fed raises rates, HYSA rates tend to go up. When the Fed cuts rates, HYSA rates come down.

That’s okay. Even when rates drop, an HYSA almost always pays significantly more than a traditional savings account. The gap between online and traditional banks tends to persist regardless of the rate environment.

If rates drop significantly in the future, your emergency fund is still better off in a HYSA than earning 0.01% at a big bank.

The Bottom Line

You’re working too hard for your money to let it sit in an account that pays you a dime a year.

A high-yield savings account is one of the simplest, no-risk moves in personal finance. You’re not gambling. You’re not locking your money away. You’re just putting it in an account that pays you a fair rate for holding it there.

Open one this week. Move your emergency fund there. Set up an automatic transfer. Let it grow while you focus on everything else.

This is one of those small moves that takes 10 minutes and pays off for years.

MoneyNotSpent: simple financial moves, real results.

*Education only, not advice:

How Does the Stock Market Actually Work? A Simple Guide to understand investing.

JD Bond · June 26, 2026 · Leave a Comment

If you’ve ever heard someone say “I’m investing in the stock market” and thought – what does that even mean? – this post is for you.

The stock market sounds complicated. Wall Street. Traders yelling. Numbers flashing red and green. But underneath all of that, the concept is actually pretty simple. Let’s break it down.

What Is a Stock?

A stock is a small piece of ownership in a company.

When a company wants to raise money to grow, it can sell pieces of itself to the public. Each piece is called a share. When you buy a share of Apple or Nike or any other company, you literally own a tiny slice of that business.

If the company grows and becomes more valuable, your share becomes worth more. If the company struggles, your share loses value. That’s the basic deal.

What Is the Stock Market?

The stock market is just the place where people buy and sell those shares.

Think of it like a farmers market – except instead of tomatoes and honey, people are trading ownership stakes in companies. There are buyers, there are sellers, and a price gets set based on what people are willing to pay.

The two biggest stock markets in the U.S. are:

NYSE (New York Stock Exchange) – one of the oldest and largest in the world
NASDAQ – where a lot of tech companies like Apple, Google, and Amazon are listed

When you hear “the market went up today,” that usually means most stocks gained value. When it “went down,” most stocks lost value.

How Do You Make Money From Stocks?

Two main ways:

1. Price appreciation
You buy a stock at $50. It grows to $80. You sell it. You made $30 per share. That’s price appreciation – the stock went up in value.

2. Dividends
Some companies pay you just for owning their stock. These payments are called dividends. Not every company pays them, but many established ones do – think Coca-Cola or Johnson & Johnson.

Why Do Stock Prices Go Up and Down?

This is where people lose their minds trying to predict the market. Prices move based on:

How well the company is performing (profits, growth, new products)
What investors think the company will do in the future
Bigger economic factors like interest rates and inflation
News, drama, and sometimes straight-up emotion

No one can accurately predict when to time the market. I’ll say that again – no one. Not the experts on TV. Not the hedge fund managers. The best strategy for most people is to invest consistently and not panic when the market drops.

What Is a Bear Market vs. a Bull Market?

You’ll hear these terms a lot:

Bull market – the stock market is going up. Investors feel good. Confidence is high.
Bear market – the stock market has been going down, usually by 20% or more. This is when fear kicks in.

Bear markets are temporary. Every single bear market in U.S. history has eventually recovered. The investors who lost money were the ones who panic-sold at the bottom.

Should Beginners Invest in Individual Stocks?

Picking individual stocks is way harder than it looks. Most professional fund managers don’t even beat the market consistently.

For beginners, I recommend starting with index funds or ETFs (exchange-traded funds). These let you buy a little piece of hundreds or thousands of companies at once, which spreads your risk.

(Check out our post on index funds if you want to go deeper on that.)

The Main Thing

The stock market isn’t a casino – but it’s not a guaranteed ATM either. It’s a long-term wealth-building tool that rewards patience and consistency.

You don’t need to be a Wall Street genius to invest. You just need to start, stay consistent, and not freak out when things dip.

The market has gone up over every 20-year period in U.S. history. That’s a pretty good track record. *Education only not advice . For more education content follow , like and share MoneyNotSpent

Index Funds Explained: The Guide to what they track and why are popular strategy.

JD Bond · June 26, 2026 · Leave a Comment

Index funds changed the game for everyday investors – and Jack Bogle, founder of Vanguard, is the reason most of us can access them. Here’s what you need to know.

What Is an Index Fund?

An index fund is a type of investment that tracks a market index – like the S&P 500, which represents the 500 largest U.S. companies.

Instead of picking individual stocks, you’re buying a tiny slice of all 500 companies at once. When the market goes up, your investment goes up. When it dips, yours dips too – but over the long term, the market has always recovered and grown.

The key advantages:

Low fees – index funds have some of the lowest expense ratios available (sometimes as low as 0.03%)

Built-in diversification – you’re spread across hundreds of companies

Passive – no stock-picking, no active management

Historically strong returns – over long periods, most actively managed funds fail to beat the index

That last one is worth pausing on. Most professional fund managers, with all their research and expertise, don’t consistently beat the S&P 500 over 10–20 years. That tells you something.

Index Funds vs. ETFs: What’s the Difference?

You’ll hear both terms a lot. The quick version:

Index funds are bought directly through a fund company (like Vanguard or Fidelity). You buy at the end-of-day price.

ETFs (Exchange-Traded Funds) trade throughout the day like stocks. Many ETFs track the same indexes – like the S&P 500 – just in a different wrapper.

For most beginners, the difference doesn’t matter much. Both are great tools. The important thing is what index the fund tracks and what the fees are.

Popular Index Funds to Know

Here are some well-known options across major platforms:

VOO or VFIAX (Vanguard S&P 500 ETF / fund) – tracks the S&P 500

FXAIX (Fidelity S&P 500 Index Fund) – same index, zero minimum

VTI (Vanguard Total Stock Market ETF) – broader than the S&P 500, covers nearly the entire U.S. market

SWTSX (Schwab Total Stock Market Index Fund) – similar to VTI through Schwab

Any of these are solid starting points. Pick one that’s available on the platform you use and check that the expense ratio is under 0.20%.

How to Actually Start Investing in Index Funds

Open a brokerage or retirement account – Fidelity, Vanguard, or Schwab are all beginner-friendly. If you have a 401k at work, check if index fund options are available there.

Fund your account – transfer money in from your bank account

Search for the fund by name or ticker symbol

Buy shares – start with whatever you can. There’s no minimum on most ETFs.

Set up automatic contributions – recurring investments build the habit

The account isn’t doing anything if you just deposit money and don’t invest it. That’s a common beginner mistake. Go all the way.

What About Market Crashes?

A bear market means the stock market has pulled back significantly – sometimes 20%, 30%, or more. It feels scary. Every headline says it’s getting worse.

No one can accurately predict when to time the market. Not me, not Wall Street analysts, not the financial gurus on social media.

What history shows is that staying invested through downturns – and continuing to buy – has rewarded long-term investors consistently. The people who panic-sell lock in their losses. The people who stay in recover.

Invest money you won’t need for 5+ years, stay consistent, and ignore the noise.

The Main Thing

Index funds are how most everyday investors build wealth. They’re simple, low-cost, and proven over decades. You don’t need a lot of money to start. You just need to start.

Jack Bogle gave regular people access to the same basic wealth-building tools as the wealthy – use them.

7 Steps to better credit Score, get an 800 FICO Credit Score

JD Bond · August 11, 2023 ·

7 Simple Steps to Help You Raise Your Credit Score
money not spent savings

When I got my first credit card the lesson my dad shared with me was simple:
You only have a credit card for the sole intent and purpose of raising your credit score.
After that, he instructed me to make sure I used my credit card for specific purchases only such as fuel for my car or essentials during college, and to always make sure I paid my balance in full.
The purpose of raising my credit score starting at a young age was to set myself up for the future when it came to buying cars, landing the best insurance rates, and even buying a home down the
road.
That being said, sometimes the opportunity to start young when it comes to credit scores has passed, but that doesn’t mean you can’t raise your credit score.
Today, I will share with you the steps to help you raise your credit score, but first, let’s identify the
reasons why you want to have a higher credit score!

Why You Need a Higher Credit Score (5 Benefits):

Here are a few quick reasons as to why there are immense benefits in raising your credit score
or the 5 Perks of Higher Score:
1. Better Odds of receiving Lending or being approved for loans
2. Lower interest rates the higher the tier score of credit, less interest you pay on loans such as
car loan or mortgage.

When I got my first credit card the lesson my dad shared with me was simple:
You only have a credit card for the sole intent and purpose of raising your credit score.
After that, he instructed me to make sure I used my credit card for specific purchases only such as
fuel for my car or essentials during college, and to always make sure I paid my balance in full.
The purpose of raising my credit score starting at a young age was to set myself up for the future
when it came to buying cars, landing the best insurance rates, and even buying a home down the
road.
That being said, sometimes the opportunity to start young when it comes to credit scores has
passed, but that doesn’t mean you can’t raise your credit score.
Today, I will share with you the steps to help you raise your credit score, but first, let’s identify the
reasons why you want to have a higher credit score!

Why You Need a Higher Credit Score (5 Benefits):

Here are a few quick reasons as to why there are immense benefits in raising your credit score
or the 5 Perks of Higher Score:
1.Better Odds of receiving Lending or being approved for loans
2.Lower interest rates the higher the tier score of credit, less interest you pay on loans such as
car loan or mortgage.
3.Rewards- Get rewards and discounts on things you purchase already.

Travel Rewards and hacking. I have a friend Nick who travels off his credit rewards. He has
gone on a round trip from Iowa to Europe for only about $300. My Dad has used his rewards to
get nearly free trips to Jamaica and California.
Credit Scores after 760 are just bragging rights, but its more acceptable and celebrated than
bragging about finance milestones. Having high score shows being responsible and that’s reason to celebrate because good credit can potentially open up doors that poor credit or no
credit wouldn’t be able
Now that you know why there are numerous benefits to raising your credit score, here are
actionable steps to help you do just that!

How to Raise Your Credit Score in 7 Steps:

Here are hacks and simple steps to boost your crest score (that I personally used and I learned
along the way):

Pay Your Card Automatically
Set your credit card to pay off automatically before the bill is due. I like to pay my balance off 5
days before due. I do this to lower my utilization rate to 0 when monthly credit is reported by the
bank. Utilization under 10% boost credit score. Your credit utilization ratio — the amount of
credit you use, compared to your credit card limits is one of greatest overall factors impacting
credit score.
As example below using Credit Karma Payment History , credit cards use and derogatory marks
make up High impact on credit scores. These three factors make up the most significant impact
to credit score.
Credit History Keep Oldest Card Open

Scores will be higher than the long history you have of on-time payments. Before college, I
added a credit card and took out student loans which I have paid off early. Paying off early
ironically decreased my score but still in the sweet spot between 760-800 (Though 850 is
perfect about 760 is great, 800 is bragging rights)
Another option for younger people become authorized user on parents accounts. According to
Credit Karma showed below is chart lenders look for in the Credit Age. Credit Age makes a
medium impact on credit score. While just beginning Credit you are limited on credit history it is
a factor in credit score. The older your good credit the better history you’ll have and will be
better score in this area on credit report

Limit Hard Inquiry Credit Pulls

Limit the hard inquiries for credit, more than 2 in a 6-month period can hurt your score, only
apply for loans or credit you need.
What are hard inquiries?
When you want to apply for a new loan or new line of credit, refinancing or increase in credit,
you have the lender see your eligibility they pull an inquiry which tells them if they’d approve you
based on current credit.
You don’t want to have too many inquiries within year before attempting to get a major loan or
mortgage.
If you have too many inquiries in a short period of time, your score will drop and creditors will
see you as being potentially more risky.
Below tips from Credit Karma to limit your hard inquiries on your credit report.

Keep your longest credit card account active,

If you can have the card paid off and keep it consider doing so. I did this strategy with student
loans for a bit as I paid all but $300 because interest was only 3% and help me up to my score,
(also figured I could get higher return investing with such minimal debt and interest could
leverage, saving in Roth IRA.
Length of credit history is important, my credir score actually went down after I closed my
student loans off entirely last year. Impacted my score as only having my credit card and
student loans history, dropping my average age of credit.
Important to keep initial credit cards open until you have established credit history as longer
length of credit history improves your credit score.

Use Apps to monitor your score.
While FICO score and app estimated score give a good idea usually on credit habits. Apps also
break down important factors and grade you on your account.
I learned a lot through Credit Karma and Credit Sesame app Good idea to also do a free credit
check on Annual Credit Report.com and check the score and any possible wrong information
that can impact the score. Having apps at the tips of my phone was a great resource to monitor
and learn about credit scores. Several apps to choose from including Credit Karma, Credit
Sesame, Nerd Wallet, Money Lion, Mint that are free to use. Below is the Credit Sesame and
grading system. They have to see your strengths and weaknesses impacting credit score. I like
the feature as it gives letter grades and also gives guide to ratio lenders typically like to see.

Pay Off Debt , increase Income, spend less

Two ways to improve score decrease the amount of debt you owe, or earn more income / cash
flow
If you can have an Income to debt ratio, with a smaller percentage of debt compared to the
income that’s good news because you are deemed a less risky borrower. You may decide to
purchase necessities and not wants. In one of my favorite books “Your Money or Your Life” by
Vicki Robin, the author breaks down money as your life energy and how many hours of your life
a purchase is, opportunity cost. Before I make impulse buy online I give myself a two day period
to check that I really want it, or impulse buy. Being a long time broke college student, I’ve
learned the ability to sacrifice things such as cutting cable bills, riding my bicycle to work
everyday, renting with college grad students off of campus to pay down debt faster.

Increase Credit Limit
Increasing your credit limit can improve your credit score. If you are able to increase limits and
budget same you can improve credit score , as it drops your utilization rate percentage down.
When your credit limit goes up and your balance stays the same, it instantly lowers your overall
credit utilization. When applying for a higher credit limit you may get A “hard” credit inquiry,
which can temporarily drop your score a few points, but will be taken off after 6 months.
Assuming spending the same amount, having a higher limit allows for your credit usage rates to
improve, which benefits credit score.
Increase your credit limit. I had a $500 limit in high school, 1000 in college, now up to 5,000 but
my budget remains the same, keep balance utilization under 10% of the available balance.
Utilization rate had been my biggest key to building my score despite my relatively younger age.

Final Thoughts on Raising Your Credit Score:
My “Credit Score” was a term I thought was just reserved for older people up until High School
when my Dad told me I needed to get a credit card to establish my credit history.
We went to a local credit union where I signed up for a card designed for beginners with no
credit history. We set a $500 monthly limit,( later in college up to 1,000)
The card if late had horrible interest rates around 19%, which motivated me to never be late on
payment. I had always heard growing up credit cards were terrible and should only be used in
emergencies.
Dave Ramsey (I have Total Money Makeover book) advises against Credit Cards, which to a lot
of people who aren’t fiscally responsible or would be tempted to spend more his philosophies
may be sound advice, but if responsible opening Credit card young can have advantages.

The topic interested me as I achieved my goal of an 800 FICO Credit score before 30, while
studies suggest many fellow millennials report bad credit card scores. Many of my friends have
asked me for tips, which inspired this blog post.

wards- Get rewards and discounts on things you purchase already.

Travel Rewards and hacking. I have a friend Nick who travels off his credit rewards. He has
gone on a round trip from Iowa to Europe for only about $300. My Dad has used his rewards to
get nearly free trips to Jamaica and California.
Credit Scores after 760 are just bragging rights, but its more acceptable and celebrated than
bragging about financial milestones. Having a high score shows being responsible and that’s a reason to celebrate because good credit can potentially open up doors that poor credit or no wouldn’t be able to.
Now that you know why there are numerous benefits to raising your credit score, here are
actionable steps to help you do just that!

How to Raise Your Credit Score in 7 Steps:

Here are hacks and simple steps to boost your crest score (that I personally used and I learned
along the way):

Pay Your Card Automatically
Set your credit card to pay off automatically before the bill is due. I like to pay my balance off 5
days before the due. I do this to lower my utilization rate to 0 when monthly credit is reported by the
bank. Utilization under 10% boost credit score. Your credit utilization ratio — the amount of
credit you use, compared to your credit card limits is one of the greatest overall factors impacting
your credit score.
As an example below using Credit Karma Payment History, credit cards use and derogatory marks
make up a High impact on credit scores. These three factors make up the most significant impact
to credit score.
Credit History Keep Oldest Card Open

Scores will be higher than the long history you have of on-time payments. Before college, I
added a credit card and took out student loans which I have paid off early. Paying off early
ironically decreased my score but still in the sweet spot between 760-800 (Though 850 is
perfect about 760 is great, 800 is bragging rights)
Another option for younger people become authorized users on parent’s accounts. According to
Credit Karma shown below is the chart lenders look for in the Credit Age. Credit Age makes a
medium impact on credit score. While just beginning Credit you are limited on credit history it is
a factor in credit score. The older your good credit the better history you’ll have and will be
better score in this area on credit report

Limit Hard Inquiry Credit Pulls

Keep your longest credit card account active,

Use Apps to monitor your score.
While FICO score and app estimated score give a good idea usually on credit habits. Apps also
break down important factors and grade you on your account.
I learned a lot through Credit Karma and Credit Sesame app Good idea to also do a free credit
check on Annual Credit Report.com and check the score and any possible wrong information
that can impact the score. Having apps at the tips of my phone was a great resource to monitor
and learn about credit scores. Several apps to choose from including Credit Karma, Credit
Sesame, Nerd Wallet, Money Lion, Mint that are free to use. Below is the Credit Sesame and
grading system. They have to see your strengths and weaknesses impacting credit score. I like
the feature as it gives letter grades and also gives guide to ratio lenders typically like to see.

Pay Off Debt , increase Income, spend less

Two ways to improve score decrease the amount of debt you owe, or earn more income/cash
flow
If you can have an Income to debt ratio, with a smaller percentage of debt compared to the income that’s good news because you are deemed a less risky borrower. You may decide to
purchase necessities and not wants. In one of my favorite books “Your Money or Your Life” by
Vicki Robin, the author breaks down money as your life energy and how many hours of your life a purchase is, opportunity cost. Before I make impulse buy online I give myself a two day period
to check that I really want it, or impulse buy. Being a long time broke college student, I’ve
learned the ability to sacrifice things such as cutting cable bills, riding my bicycle to work
every day, renting with college grad students off of campus to pay down debt faster.

Increase Credit Limit
Increasing your credit limit can improve your credit score. If you are able to increase limits and
budget same you can improve your credit score, as it drops your utilization rate percentage down.
When your credit limit goes up and your balance stays the same, it instantly lowers your overall
credit utilization. When applying for a higher credit limit you may get A “hard” credit inquiry,
which can temporarily drop your score a few points but will be taken off after 6 months.
Assuming spending the same amount, having a higher limit allows for your credit usage rates to
improve, which benefits credit scores.
Increase your credit limit, but keep budget the same, keep balance utilization under 10% of the available balance.
Utilization rate had been my biggest key to building my score despite my relatively younger age.

Final Thoughts on Raising Your Credit Score:
My “Credit Score” was a term I thought was just reserved for older people up until High School
when my Dad told me I needed to get a credit card to establish my credit history.
We went to a local credit union where I signed up for a card designed for beginners with no
credit history. We set a $500 monthly limit,( later in college up to 1,000)
The card if late had horrible interest rates around 19%, which motivated me to never be late on payment. I had always heard growing up credit cards were terrible and should only be used in
emergencies.
Dave Ramsey (I have Total Money Makeover book) advises against Credit Cards, which to a lot of people who aren’t fiscally responsible or would be tempted to spend more his philosophies
may be sound advice, but if responsible opening Credit card young can have advantages.

The topic interested me as I achieved my goal of an 800 FICO Credit score before 30, while studies suggest many fellow millennials report bad credit card scores. Many of my friends have
asked me for tips, which inspired this blog post.