Know Your Credit Score
It's that time again. Time to consider those annual routine tasks we need to make sure get on our list and get done!
Yes! Knowing your credit score is important because it shows lenders how responsible you are with money. Don't let this annual task fall by the wayside!If you have a good credit score (generally above 700), you will have an easier time getting a loan, since lenders will see that you are likely to pay it back. And the better your score, the more likely you are to get lower interest rates.Surprisingly, your income does not affect your credit score at all. But more than 25 other factors do, including:
There are three nationwide consumer reporting agencies: Experian, Transunion and Equifax.You can get a free copy of your credit report every year. That means one copy from each of the three companies that writes your reports. The law says you can get your free credit reports if you call Annual Credit Report at 1-877-322-8228 or go to AnnualCreditReport.com.Check your credit report annually and review the information to ensure all of the information is correct and you have no disputes with the data.If you find a mistake, write a letter telling the credit reporting company that you have questions about information in your report. Explain which information you think is wrong and why you think so. Send them a copy of the report with the items circled and send supporting documentation as to what the data should say. Make sure to mail the information Certified mail. Ask the post office for a return receipt. The receipt is proof that the credit reporting company got your letter.The credit reporting company must look into your complaint and answer you in writing.
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Holidays and the Zero-Interest Credit Card
With the holidays right around the corner, zero- interest credit cards sound like a great deal, but are they?
With taglines like "Pay no interest on balances transferred from other credit cards!" and "Make interest-free purchases during the first 90 days!" why wouldn't you take advantage of such an offer?
Although a 0% credit card may be a wise choice for some people, the devil is in the details - and in your individual propensities as a consumer. Consider the following questions:
Source: J.P. Spillane, CPA, PA
Nine Ways to Cut Your Spending Consistently spending more than you earn is an easy way to accumulate debt. To stay out of debt, you'll either need to find a way to earn more or spend less. Here are 10 ways a student can cut his or her spending.
Source: Nine Ways to Cut Your Spending
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Build Your Credit Wisely
Few Americans can afford to pay cash for everything they want or need - a car to get to work, a house to live in, or a college education to increase earning potential. For most people in our modern society, some form of credit has become a necessity. And the way in which a person's credit history is established often affects the interest rates that lenders are willing to offer and the likelihood that loan applications will be approved. So it's important to build credit wisely.
Following are three tips to help establish your credit worthiness in the eyes of potential lenders.
Cash is still king. Just because a financial institution offers to extend credit, don't forget that it's often wiser to defer purchases until later. Pushy sales people may claim that you can "afford" the minimum monthly payments on a luxury automobile that costs more than a lakeside bungalow. But when your bills stretch the limits of every paycheck, you may be headed for financial disaster. Ironically, avoiding certain debts is often a prudent way to establish good credit.
Take it slowly. Apply for one credit card, use it sparingly, and pay off the balance every month. That's the golden rule for bolstering your credit score. Opening multiple accounts over a short time may signal to lenders that you're overextended. When you take out a loan for a car, make sure you can meet the monthly payments even if your other expenses spike in a given month. In other words, establish some wiggle room in your budget. Don't assume that expenses will always remain at current levels. Emergencies happen. Plan for them so you don't end up missing a minimum payment on a loan or credit card bill.
Beware of increased credit limits. As your credit score climbs, banks and other financial institutions will likely allow you to borrow more. Use caution. Remember that lenders have a vested interest in lending money to folks who pay on time. When you take out loans, they make money. Maybe you can borrow; that doesn't necessarily mean that you should borrow. Again, the choice to acquire debt in the form of loans or credit card purchases should be driven by a plan - not an impulse.
Source: J.P. Spilane, CPA: Build Your Credit Wisely
GCU claims no responsibility or ownership for this content.
Needs verses wants is a standard topic when teaching financial literacy, but did you know it can also be the main structure of creating a budget? According to the Harvard Bankruptcy Professor Elizabeth Warren, needs verses wants can be used to create a 50/30/20 budget.
Here's how it works:
Using your after-tax income, allocate 50% of your expenses in the "Needs" bucket. "Needs" include all the basic expenditures you really need to make each month: outlays for housing, utilities, transportation, food, insurance, child care, tuition and minimum loan payments. If you're contractually obligated to pay something (a credit card minimum, child support or a cell phone bill), it's a need, at least for now.
Your "wants" can consume 30% of your after-tax pay. Vacations, gifts, entertainment, clothes, eating out and other expenses are all "wants." Some bills you pay might overlap the two categories. For example, basic phone service is a need. But features such as call waiting or unlimited long distance are wants. Internet access and pay television are two other expenditures that can feel like needs but usually are wants, unless you're on some kind of long-term contract.
Savings and debt repayment make up the final 20% of your budget. Warren's a bankruptcy expert, remember, and she knows the devastation that results from too much debt and too little savings. To achieve financial independence and minimize the chances of disaster, you need to get rid of consumer debt, save for retirement and build your emergency fund.
Once you are done setting up your budget in this new manner, you may be discouraged by how far you are from the 50/30/20 ideal. So what should you do if your numbers are out of whack? Remember that the 50/30/20 plan is a goal to work toward, not something you'll necessarily achieve overnight. Here are some places most people can tweak:
Food. You've got to eat, but most of us could trim our grocery bills, often substantially, without too much effort. Plan your meals, cook from scratch, use up leftovers, clip coupons -- you know the drill.
Utilities. You want the lights to stay on, but the air conditioner doesn't have to blast 24/7.
Transportation. More carpooling and public transportation, less time alone in your car. Your car payment could be what's killing you.
Insurance. Higher deductibles can help reduce your premiums, as can shopping around and taking advantage of all available discounts. Ditch insurance you don't need, such as life insurance if you don't have financial dependents, or collision and comprehensive coverage on a clunker.
Ditch the contracts. Early termination fees might make canceling your cell service too expensive, for example, but once your contract is up, consider switching to prepaid or pay-as-you-go service.
If it's your debt that's unmanageable, you may need to consider some more drastic solutions -- credit counseling, or debt settlement.
Once you get back on your feet, though, the 50/30/20 plan can help you stay there.
Tips to Survive Working through Grad School
Balancing 40-hour-plus work weeks with a personal life is a challenge. Add graduate school to the mix, and finding time to fit it all can seem impossible.
With hopes of enhancing their resume and expertise and garnering a higher earning potential, many workers head back to graduate school while working full time. According to a study conducted by the Graduate Management Admission Council (GMAC), grads from two-year full-time MBA programs reported a 73% increase in their post-degree base salary compared with their earnings before beginning their studies, an increase from the 64% average salary boost seen by the class of 2010.
Grad students who work their way through grad school will be faced with challenges, frustrations, and hopes of more hours in the day, but with the proper planning and time management skills, fitting it all can be done.
Find the Program That Fits Your Schedule
Interested students have a variety of graduate school opportunities available to them, ranging from part-time graduate programs, evening MBA programs, and online degree programs that can make juggling obligations more manageable. Working students need to research all their potential offerings and find a program that best suits their lifestyle.
"Holding down a full-time job and taking two or three classes at the same time will put them in a situation where, at any minute of the day, they will always have something they could be working on," say Scott Shrum, director of admissions research at Veritas Prep.
Start Managing Your Time - Full Time
The biggest mistake that grad students make when juggling both work and school simultaneously is failing to properly organize their time, says Diggs. He suggests student employees to sit down at the beginning of the week to plan out the entire week for both school and work-be sure to include deadlines, upcoming tests, projects and personal life commitments.
"There are only a certain number of hours in the day, so by mapping out a schedule and making the commitment to really manage your time will help things run a lot smoother," he says.
Communicate with Your Employer
Emergencies happen, and even the most organized person can overlook a scheduling item. Experts recommend that employees be upfront with their school plans and course load. Keeping them apprised about the workload will limit miscommunication and show respect for the employer's time and position.
"When it comes to scheduling issues and school/work deadlines, you want your employer to be understanding and give you leniency when necessary," says Emory grad student Lola Ogunyemi. "I always tell my employer when I have projects, tests, etc. or when my school schedule changes."
Use Campus Resources
Working students should use their on-campus resources to their full potential, particularly the academic advisement department.
"I'm a big believer in interactions and meetings [with advisors]," says Patrick Osmer, graduate dean of The Ohio State University. "It's the most effective way to get questions answered and make sure people are on the same page--both sides should be confident that this can work out." Students should not hesitate to reach out for help if they are having a hard time balancing work and school, says Shrum.
"If you find that you're falling behind or need to cut back your academic workload for some reason, err on the side of sounding the alarm early, so that an academic advisor can help you work through it," he says. "Remember that they've already admitted you, so they do want you there, and they want you to successfully complete the program."
Choose 5 and Start on a Path Towards Financial Health
We are half way through 2013, and now is a perfect time to review your financial behaviors that could be prohibiting you from reaching your financial goals.
"Start by taking a realistic look at your financial situation and what things you would like to improve," states Jana Castanon spokesperson for Apprisen, a Financial Counseling Firm. "Then, review the following tips and try to incorporate a minimum of 5 into your routine. Once you are experiencing success with those, add a few more!" Changing financial behaviors doesn't happen overnight, it is a process, but you need to take the first step.
1.) Evaluate the cost of your current lifestyle.
2.) Know your net worth - (Assets - Liabilities = Net Worth).
3.) Put your next pay raise towards your 401K.
4.) Look in your refrigerator and cupboards for items you can use for meals before you go grocery shopping.
5.) Plan your weekly food menu and shop with a list accordingly.
6.) Make a list for the food you need at the store.
7.) Donate your time or goods to charity; it may be a tax deduction, but will definitely make you feel good.
8.) Make gifts instead of buying them.
9.) Be a savvy shopper, do your homework to find coupons and sales before you leave the house.
10.) Look for phone apps that can assist you in tracking expenses, coupons, financial tips, etc.
11.) Track every penny of what you spend for two weeks.
12.) Save your change.
13.) Pull your free credit report and pay the nominal fee to check your score.
14.) Change one spending behavior a week, and put that money you would have spent in your savings account.
15.) Pay more than the minimum payment on your credit cards.
16.) Take care of your own financial responsibilities before taking on those of others.
17.) Give yourself a weekly cash allowance for food and entertainment.
18.) Teach your children the difference between wants and needs.
19.) Shop only with a specific purchase in mind.
20.) Know the terms and conditions of every credit agreement before you sign them.
21.) Refuse to pay bank fees! Go only to network ATMs, and use a check register to record your account balance.
22.) Subscribe to multiple coupon sites, but unsubscribe if you can't turn down a good deal.
23.) Cosign for a loan only if you are prepared to pay for it.
24.) Recycle clothing through consignment shops.
25.) Make an appointment for a no-cost initial consultation with a certified finance counselor if you don't know where to start getting your finances on track.
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