We all know what a credit score is. Sort of. But what really goes into your credit score? In this video, Investopedia breaks it down. Here are the top 3 factors that affect your credit score — and what you can do about it.

If financial difficulties are keeping you awake at night, take action and tackle your problems head on otherwise they are likely to get worse. The ability to pay for rent, mortgages, bills, and food are fundamental to our quality of life.

It is important to plan for future financial hardship by making saving a goal and budgeting carefully. It’s impossible to predict what will happen in the future, so to cushion any financial hardship, it’s worth putting a little money aside each month.

Developing a savings plan now will enable you to get on with living your life stress-free! Here are the financial tips to start building your wealth.

Reduce monthly bills

List all your current outgoings and look to see if you can make any savings. Often it’s tempting to keep the same standing order from the same insurance company for year upon year. You are likely to be paying too much for your premiums and it’s worth shopping around and switching.

Look at the amount of interest you are paying on loans, mortgages and credit cards, you could be able to secure a better deal. One thing to remember is to check your credit score if it is poor lenders won’t give you the best interest rate.

It is possible to repair your credit score by using the expertise of a credit repair company.

Utility bills can be reduced by switching utility providers. Use an online comparison site to secure the best deal. Switching is easy as most of the work is completed for you by your new supplier.

Budget

To budget carefully you need to be in control of your spending and to be in control you need to be aware of your income and outgoings. List every necessary outgoing that must be met on a monthly basis and you will be left with an amount which will have been spent on miscellaneous items such as eating out.

You can then design a budget plan so that you can put a certain amount into a savings account. You will probably be surprised at how much your morning coffee costs when added up over the month.

Cut it down to once or twice a week and you will make significant savings.

Make savings work to your advantage

Savings (if you have them!) can work to your financial advantage. Ensure you choose the best financial products that give the maximum return on your savings. Financial products change rapidly to factor in a financial audit of your savings every couple of years to check savings are in the best account.

You could also consider investing your savings property or financial shares. This has the potential to be lucrative but is not without risk. Consider hiring a professional and independent financial advisor for advice.

Ideally, you should set apart some of your salaries each month in order to build up an emergency fund. Life can be unpredictable and without savings to fall back on, your car breaking down or your roof leaking could plunge you into more debt as you borrow to rectify the situation.

Savings will cushion the blow of any financial hardship.

Stop Paying Extra Bank or Late Fees

Late fees are not helping you. They add up over time – fees can even accrue fees!

If you are the kind of person who always forgets to pay their bills on time, you can get around this by automating your finances so that the money automatically goes out of your account.

You should also avoid making any extra charges on your credit card unless you are sure that you are able to pay it off in full at the end of the month.

Don’t Pay Full Price!

Paying full price is a really common financial mistake that a ton of people make.

In today’s world, you can find a sale on just about any item. If you see something you need at the store, take a few moments to shop for it online and you’ll probably be able to save 10-20%

Not only does this method stop you from overpaying, it also gives you a moment to think and decide whether or not what you were thinking of buying is actually a worthwhile investment.

Create a Financial Defense Plan

All of us need to not only earn our living and grow our finances if we’re to live a comfortable and happy life, but we must also defend them.

That means ensuring you stay rational, sensible and forward-thinking in all matters related to your financial health.

There are a few considerations you can take care of in order to make this so, and generate a cognitive and systemic financial defense to keep your money yours, and flowing in the direction you most want.

Here are the keys to defending your financial interests

Know Good Lawyers

The most important thing is to have good counsel and good advice. So, hire the best attorneys that you can afford. From real estate to contracts to brand protection, you need someone behind you making sure you aren’t making any major missteps.

The world practically runs in the courtroom now, unfortunately. So, with good attorneys on your side, it will keep you out of the courtroom and focused on running your business.

Have A Contingency Plan

It’s always best to have a fail-safe.

This might mean never tying up all your investments in one basket. It might mean diversifying your investments .

Or, it could mean allowing only one or two financial handlers to have any kind of insight into your money matters in the first place.

The key is to be able to have a solid plan but also be able to pivot to something else should the first plan fail.

With the willingness to keep a backup plan, or a mode of operation to take when something fails or doesn’t go the way you expect, you at least won’t lose anything.

Keeping a solid contingency is also reliant on keeping solid discipline with your financial means – without this none of your decisions are likely to land effectively.

Pore Over Contracts

Whenever signing a contract, or forging a new one, you need to know exactly what terms are referring to.

You also need to read between the lines, and consider what situations a certain stipulation could affect in the future. Remember, even vaguely written terms in a contract do not fall there unexpectedly.

They are either there to make or defend a certain form of income, or persuade and dissuade a certain type of behavior. Every word counts.

Remember the first recommendation? Well, here’s where they come in. But, it’s important to know how to read and interpret the contracts yourself as well.

Study contract terminology and simply dedicate the time to observe and understand.

Look For Weak Spots

What are the weak spots in your defense system?

Could it be family members having access to your accounts? Do you think it could it be emotional family members asking for financial help, when this is not genuine?

Or perhaps it could it be the services you bank with.

Don’t forget about the way you log in to your accounts and store passwords.

To prevent your finances from being breached, keep up to date on modern security measures. From there, you should be settled.

Conclusion

To reduce your financial stress, the key is to lower your costs, increase your passive income, and protect your assets.

To know more about real estate hack, money tips, and building generational wealth, subscribe to Wealthlab and learn how to bust through the barriers preventing you from becoming a millionaire.

This article originally appeared on IdealREI.  Follow them on Facebook, Instagram and Twitter.

Anyone who has been in debt — college debt, credit card debt, you name it — knows the crushing weight it exerts over daily life. But one Seattle couple can offer some insight.

Back in 2014, Cody and Georgi Boorman found themselves $83,000 in debt, between student loans and a car loan, Penny Hoarder reported. And the couple was living in Seattle, Washington, a city with nearly a 10 percent higher cost of living than the American average.

The Boormans paid off their debt in just 20 months, according to the same report. Read on to find out how you can use their hacks to start getting debt-free living.

Start Small

The Boormans started off with just one goal: pay off their car. Pick one thing in your debt life that you want to pay off and focus on that first. Don’t try to attack all of your debt at once or you’ll just end up feeling overwhelmed.

Budget, Budget, Budget

Switch cellphone plans. Shop around your neighborhood for the best prices on food. Set a budget for yourself and stick to it.

Expenses Are Not Your Friend

Take a look at what you’re spending money on each month. Chances are a couple of those Seamless orders can go.

Re-evaluate Your Lifestyle (and Maybe Take the Bus)

The Boormans ended up deciding to sell their car and opt for public transport. Especially in a centralized city, this is often a great option for those tightening their belts.

Bottom Line

You can also live a debt-free life. Once you decide you want to be debt-free, you must take the first step!

To know more about real estate hack, money tips, and building generational wealth, subscribe to Wealthlab and learn how to bust through the barriers preventing you from becoming a millionaire.