Winning the credit 'Game of Thrones'
These lessons can help you conquer and rule the realm of credit
The good news is if you consider these lessons from the hit show, based on George R. R. Martin's novel series "A Song of Ice and Fire," you can conquer and rule the realm of credit.
Lesson 1: A Lannister always pays his debts. From a morality standpoint, we may not be fans of this ruthless royal house that beheads innocents and starts wars, but when applied to one's finances, this is one piece of advice we can get behind.
Taking your debt seriously is vital if you want to stay in good credit standing and increase your credit score, and not just if you're shopping for a great home mortgage rate. "Some people think that if they're not in the market for buying a home, they don't have to worry about credit scores," says A.J. Smith, managing editor of SmartAsset, a website that provides personal finance tools, calculators and information. However, she points out, the ability to pay your bills on time can impact everything from qualifying for the best auto loan interest rates, to scoring an apartment, to getting a new job.
In fact, according to a 2012 study by the Society for Human Resource Management, 47 percent of employers conducted credit checks on potential hires.
Lesson 2: Winter is coming. This motto of House Stark means that we must be prepared for darker times that loom ahead. Modern day translation? Building an emergency fund now can save you from getting into debt later.
While that may seem like a challenge if you're barely getting by, taking a close look at your expenses and spending might surprise you, says April Lewis-Parks, director of education and certified credit counselor for Consolidated Credit Counseling Services.
"Look at your finances to make sure you're not spending more money than you need to," she says. For example, are you getting hit with fees and charges for services you're not using? "People don't think of these collectively, but it all adds up," she explains. Go over expenses with a fine-toothed comb, and make some hard decisions about where you can cut back; that's where you'll find the extra money to start your emergency fund.
Starting the saving habit is the best thing you can do, adds Smith. "People might want to wait until they make more money, but don't. Put even $20 a month away and increase it when you get a raise, a birthday gift or tax refund," she says. Strive to reach $1,000 for your "winter" fund, and keep growing it so you don't have to pull out the plastic for unexpected expenses.
Lesson 3: Be your own Master of Coin. Lucky for you, you don't have to manage the finances of the Seven Kingdoms and deal with the corruption that comes with the job, but finding the right balance between mastering your debt and enjoying life can be a challenge nonetheless.
"We can't live our lives just paying off debt," says Ornella Grosz, author of "Moneylicious: A Financial Clue for Generation Y." Once you reach the mini goals you've set for yourself (such as that $1,000 for your emergency account), start a splurge fund. "Reward yourself. It can actually be good for growth and development to take a little vacation to relax and calm down," she says.
That doesn't mean you should max out your credit cards to go on a dream vacation or throw a lavish party beyond what you can afford, says Lewis-Parks. "Shop around and start planning ahead if you have an event coming up. That way you know what your budget is, you can save, and you can negotiate with vendors for the best deals."
Lesson 4: Stick 'em with the pointy end. Using credit without understanding the fine print is like going into battle without knowing how to use a sword. (Good thing Arya had Jon Snow to tell her how it's done!)
"With credit cards, the most important thing is to have a clear understanding of what an APR is," says Grosz. "Many people don't realize how quickly interest compounds, and how it will impact you in the long run."
You also don't want to fall victim to a sneak attack like the guests at "the red wedding," so be sure to look for signs that an offer is too good to be true. "It's important to ask questions when opening up a line of credit," says Lewis-Parks. Things like: Is there a late fee penalty? Can I make payments for free over the phone or online?
Lesson 5: Join the watch. Taking the black and becoming a member of the Night's Watch is for life on "Game of Thrones." Likewise, watching your credit and banking accounts should become a lifetime commitment, especially if you've opted for paperless statements. "Automatic deposits can be great tools to automate savings strategy, and auto bill pay can help you make sure you don't have a late payment fee," says Smith. "But that doesn't mean you shouldn't look closely at your statements." Not only can keeping tabs on your accounts help identify times when you're overspending, it can also help you spot fraudulent activity or banking errors.
Now that you're armed with these Westeros-inspired credit strategies, you can restore financial peace of mind to your own house, and enjoy a long and prosperous reign.See related: What reality TV teaches us about credit and spending
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