Part 6: Build for the Future: Credit, Savings, and Confidence After Prison
Starting over is often a day-to-day goal. But once you’ve laid the groundwork with by creating a budget and figuring out how to manage debt, it’s time to look ahead.
This means building or rebuilding your credit, saving money even if it’s just a little at a time, and planning for emergencies and bigger goals.
Let’s break down how to get started with credit building.
How to Start Building (or Rebuilding) Your Credit
Using credit cautiously is a tool, not a trap. It’s what lets you rent an apartment, get a phone, or eventually buy a car or home. But if your credit history is limited or damaged, it can feel like a wall you can’t climb.
Take Marcus, for example. After his release, he found it tough to rent a place because of his credit score. He started with a secured credit card, using it for small purchases like groceries and paying it off every month. Over time, his score improved, and he was finally able to secure an apartment of his own. Marcus says, “It felt like rebuilding a broken window—one brick at a time.”
- Check Your Credit Report: Start by getting a free copy of your credit report from annualcreditreport.com or Credit Karma. Look for mistakes and make sure everything is accurate.
- Consider a Secured Credit Card: These cards require a deposit that becomes your credit limit. Use it for small purchases and pay it off on time. This builds positive payment history.
- Pay Bills on Time: Even if you don’t have credit cards, paying rent, utilities, and phone bills on time helps your overall financial reputation.
- Keep Balances Low: If you use credit, try to keep your balance under 30% of your limit. This shows lenders you’re responsible.
- Avoid “Credit Repair” Scams: No company can magically fix your credit. Building good credit takes steady, honest effort.
Ways to Save—Even Just a Few Dollars a Month
Saving money might feel impossible when you’re starting out, but the habit matters more than the amount.
Jasmine was barely making ends meet, but she committed to saving $5 a week. She kept it in a jar on her kitchen counter. Months later, she had enough to cover a surprise car repair without borrowing money. “It wasn’t a lot at once,” she says, “but it was peace of mind.”
- Start Small: Even $5 a week adds up. Put it in a jar or a savings account.
- Automate Savings: If you have a bank account, set up automatic transfers of a small amount to a savings account.
- Cut Unnecessary Expenses: Look back at your budget and see if there’s anything you can reduce or pause.
- Use Community Resources: Food banks, thrift stores, and public transportation can help you stretch your dollars.
- Celebrate Progress: Every dollar saved is a step toward stability.
Plan for Emergencies and Bigger Goals
Life throws curveballs. Having a plan for emergencies protects you from falling back into crisis.
David knew that emergencies could happen anytime. He set a goal to save $500 for unexpected expenses, breaking it down to just $10 a week. When his furnace broke in winter, he didn’t have to ask for help or go into debt. “That fund saved me from going backwards,” he says.
- Build an Emergency Fund: Aim for $500 to start to cover unexpected expenses like a car repair, or medical bill.
- Set Clear Goals: What’s next? A phone, a car, a place to live? Write down your goals and estimate how much you’ll need.
- Break Goals into Steps: Save a little toward each goal. For example, $10 a week toward a phone fund.
- Keep Goals Realistic: Celebrate small wins and adjust as needed.
You’re Building More Than Money—You’re Building Confidence
Financial habits are a foundation for confidence and independence. It’s okay if it feels slow or hard. Every payment made, every dollar saved, every bit of credit built is progress.
Look for support from financial counselors or trusted mentors. This step is about creating options—options that open doors instead of closing them.
Useful Resources for Building Your Financial Future
- AnnualCreditReport.com: Get your free credit reports from all three bureaus once a year.
- Consumer Financial Protection Bureau (CFPB): Guides on credit building, savings, and budgeting.
- MyFICO: Learn about credit scores and how to improve them.
- National Foundation for Credit Counseling: Free or low-cost counseling for credit and debt.
- Local Credit Unions: Often offer secured credit cards and savings accounts with low fees.
Keep This in Your Pocket
Building a financial future takes time, patience, and persistence. Celebrate every small step and remember this is about more than money. It’s about gaining control and building stability in your life.