Steps to becoming financially fit

By David Auten & John Schneider

Improve your credit score

From Dancing with the Stars to LGBT vacation hot-spots, there is a measurement and a ranking for everything. Your credit is no different. A credit score is a three-digit number representing an estimation of your ability to pay back loans. A good rating can save a lot of money over a lifetime, while a bad rating can mean thousands of extra dollars spent in interest payments. Whether your credit score is good or bad, here are five ways to improve it.

Pay bills on time. It is only fashionable to be late to the party — not with your credit card, cell phone or car insurance bills. Payment history determines 35 percent of your credit score, so the simplest way to improve your score is to not miss or be late for payments.

Lower your credit utilization ratio. When you see someone double-fisting it at the bar, you know what kind of state she or he will be in by midnight. Your bank has the same perception of you when you have a high credit card balance relative to your credit card limit, so get your credit card balance to less than 50 percent of your limit to improve your score.

Preserve your credit history. Don’t close credit card accounts like doors on an ex — even if they’re paid off — since longer credit histories tend to lead to higher credit scores. Use your card only once in a while and pay it off before your balance is due to let credit rating agencies know you haven’t closed your account.

Correct your credit report.  Nobody likes being the subject of false rumors floating around — make the same effort to correct the record about your financial history, especially as rates of credit card fraud increase. Visit AnnualCreditReport.com or call 1-877-322-8228 once a year to get a copy of your credit report, analyze it for accuracy, and contest errors including misspelled names, incorrect addresses and false claims.

Get a gas station credit card. Because gas station credit cards can only be used at gas stations (not at Nordstrom) and you buy gas anyway, get a credit card for your favorite station and pay the small balance off before it’s due, every month for several months. Your credit score will increase by demonstrating your ability to manage a credit card.

Five ways to save more

Americans are saving at a rate of 4.3 percent for all types of future expenses, including retirement, cars, weddings and education. With that savings rate, no wonder personal debt is higher than Colorado on April 20 — that rate represents an extremely slow march to achieving any financial goal. Here are five tips to help you save more:

Pay yourself first. Set up automatic payroll direct deposits to your 401k, emergency savings, general savings or investment accounts so a portion of your paychecks never touch your hands. Keeping this money out of sight and eliminating your involvement — a la Karen Walker with her step-children — is best for everyone involved.

Increase savings contributions with each pay increase. We’ve all spent a bonus, raise or cash gift just as we received it, doing our savings no good.  Whether you got a pay increase through a job change, promotion or simple raise, send all or most of any pay increase to the bank and beef up your contributions and reach your financial goals sooner.

Reduce and eliminate expenses. There are plenty of ways to cut back on expenses, like switching from cable to Netflix and Hulu, cancelling landlines for cell-phone-only, or making your own coffee and packing your lunch. Cutting your spending by even 5 percent and sending it to a savings account will pay off like a raise.

Do a monthly spending detox. We all look great after a week or two of detoxing, so apply the same principles to your finances by taking an occasional week or weekend off of spending. Ride your bike or walk instead of driving, eat at home instead of eating out, host a game night rather than club hopping, or do anything else you can to eliminate routine expenses and put a little towards your savings instead. Your wallet and belt will thank you.

Make more money. A raise, a promotion or a new job can help secure your financial future. Take a few minutes each month to refine your LinkedIn profile, keep your resume up-to-date, manage your personal brand at work, follow companies or groups on LinkedIn related to your industry and maintain your education to stay fresh, leading to that pot of gold at the end of the gay rainbow.

David Auten and John Schneider paid off more than $51,000 worth of credit card debt in less than two and half years. Using their education, professional and personal experiences, they share what is necessary for anyone seeking financial independence in their upcoming book 4: The Four Principles of a Debt Free Life, and on their blog at debtfreeguys.com.