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Money Management

Oct 01
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5 Money Tips for College Freshmen

By College, Money Management, Saving No Comments

As a college freshman, you are about to embark on an exciting and new adventure of college life.  This great experience requires new responsibilities. So, here are 5 Financial Tips for College Freshmen.

Protect Your Credit Cookies!

One of the most precious and valuable assets that you will have in your life is “Good Credit.”  Your credit history and credit score will either make it easier for harder for you to get what you need or want, like your first apartment, your first car, your own cell phone account, etc.  So don’t just let anyone look at your credit, regardless of the minuscule discount or cheap give away gift you’re offered. Also, avoid getting loans that you will not be able to afford to pay.

[ctt template=”8″ link=”a86pl” via=”yes” ]Don’t just let anyone look at your Credit Cookies! – #MoneyTipsForFreshmen[/ctt]

Use Used!

Used Text Books are the BEST!!!  Trust me. Not only are they more cost effective and less expensive than new text books, but you might get lucky and get a text book with highlighted information by students who previously took the class.

Be a Financial Techy

Don’t just use technology for Social Networking.  Use it to help you manage your bank accounts to avoid unnecessary and excessive fees. Set up online banking and account balance alerts to text or email you when your account balances reaches a certain dollar amount.  This will not only help you stay on target with budget, it will also help you avoid those pesky overdraft fees.

You can also manage your accounts and create a budget using the Mint app or at Mint.com.

Be a Coupon King or Queen

Don’t be the one that eats ramen noodles all semester.  Master the art of virtual couponing. Websites like Groupon.com offer deals on dining out and other services that can help you maintain your budget. You can also take those unused gift cards you don’t want and trade them for cash on sites like Raise.com.

Also get a grocery store discount card to add coupons to it through their website.

Saving is Sexy! 

Being broke or begging for money is not Hot!  But … Saving is Sexy!  Make sure you set aside at least 10% of your income from your job, money from parents, or monetary gifts and put it in a savings account for emergencies or for monthly splurging.  Saving early ensure financial security later.

[ctt template=”8″ link=”ZjJ4b” via=”yes” ]Being Broke is Not Hot! But … Saving Is Sexy! – #MoneyTipsForFreshmen[/ctt]

By following these five easy tips you will be the envy of your broke friends!  Best wishes.

Sep 26
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Your Credit Score Is Not Your Story

By Credit, Money Management No Comments

Remember the time you went to a bookstore? You were surrounded by millions of books and magazines. Your intention was to buy one, maybe two or three books about a general subject. You go to the Subject section and now … you must choose. Hmmmm.

How did you choose?

Was it the cover?

Was it the Title?

Was it the Author?

Did someone refer you to a specific book?

Generally, most book buying consumers look at the cover, then the title to determine if they are going to pick up the book to read the book summary on the back, open it to read the table of contents or a few paragraphs of the 1st chapter.

Ironically, this is how most financial institutions make their judgmental decisions to approve or decline a loan request. Right, wrong or indifferent, the Credit Score is the “Title” to the story that is in your credit report, the “Book.”

If the Credit Score (title of the book) is “attractive,” aka good credit, the lender will look at the credit report based on the loan request (read the table of contents or begin reading the book). If the lender likes what they see (the request and credit is within their lending policies and guidelines), they approve the loan (buy the book).

If the Credit Score (title of the book) is “unattractive,” aka bad credit, the lender will deny the loan request (put the book back on the shelf).

Related: How Credit Scores Are Calculated

Although, not all lenders may be this cut and dry, most DO base their credit request decisions based on the credit score.

Have you ever missed out on an awesome book because it had a horrible title or crappy cover?

It was only when friends, family, or Oprah said that the book was a Must Read that you decided to check it out.

Have you ever missed out on an awesome relationship with someone because they did not fit your desired requirements, physically?

It was only when they married someone else and you later found out that they were a millionaire and wanted to take care of you — for life.

Ok, maybe that one is a stretch, but you get my point.

Lenders may be missing out on wonderful customers who may have a very low credit score and “colorful” credit, but may be a less credit risk because they now have a job or a better job and are willing to do automatic payments (using payroll deduction or direct deposit) to pay on their loan to re-establish their credit.




Yes. There are many people with low credit scores because they were negligent with their credit and intentionally had no intent to pay. These people are DIFFERENT and I’ll deal with them in another article.

We’re focusing on people who low credit scores because of an unfortunate, unforeseen and unexpected life interruption, like medical expenses, being laid off, furloughed, divorced, etc. When they are finally getting back on their feet, they may need a loan. And, they have a Story.

For these individuals who have a willingness to pay and desire to reestablish their credit, here are a few helpful hints when your loan request has been denied due to your credit score:

Ask for Specific Reasons why you were denied.

You will get a standard letter with 1 to 3 denial reasons. Call the lender to get specifics as to why your loan request was denied.

For example: You applied for an auto loan, but there is a recent Repossession on your credit report. The lender, may not want to take the risk of you defaulting on the auto loan with them? As a consumer with a story, the repossession may have been because you were laid off and you had to turn in the vehicle because you could not afford it. Now you can!!! How about THAT!

Related: 5 Easy Ways to Improve Your Credit

[ctt template=”8″ link=”Bsx32″ via=”no” ]Denied? Call the lender for specific reasons why your loan request was denied. You can’t fix what you don’t know.[/ctt]

Request to meet with the Loan Manager (or their supervisor) in person, if possible.

Since your Credit Score (the Title of your book) may be … crappy, you may be able to get a second look. Remember, Perception is Everything! So, if you are able to meet with the manager in person, go to the meeting like you would a job interview and be prepared to share your story, answer their questions and ask lots of questions.

Ask for your Loan Request to be reconsidered.

Some lenders may have a loan appeal process. If they do not, ask for a loan manager or supervisor to review your loan request again. Make sure you send this request in writing with Your Story and supporting documentation, if available or necessary.

Related: Anatomy of a Credit Report

Offer to do Automatic Payment (Payroll Deduction or Direct Deposit). 

If the lender knows that they are going to “automatically” receive the loan payments on time, they may see the loan request as less of a credit risk and may reconsider.

Consider a Counter Offer / Ask for a lesser amount.

The more the loan amount, the more the risk to the lender. If the lender does not offer a counter offer, ask for a lesser loan amount.




For example: Ask if they will consider approving $500 for 6 months instead of $1000 for 12 months. Let the lender know that you are open to negotiate.

Consider a Credit Union.

If your bank still won’t consider your loan request, try a local credit union. Unlike many banks, credit unions understand that Credit Scores are not the full story. Therefore, they may pay more attention to what is in the report, rather than just the Credit Score. Even if the credit union cannot approve your loan request, they may provide you with resources that will help you become more creditworthy in the future.

The reality is that not everyone will be approved for the loans they want. BUT… if you have a legitimate story as to why your credit is so “colorful” and you now that the means (income and ability to pay) to restore you credit, these tips may just help.

BTW … don’t forget to get a free copy of your credit reports at www.annualcreditreport.com. No one should know more about what’s in your credit than you do.

Sep 22
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The Secret To Being A Great Saver

By Investments, Money Management, Saving No Comments

“What’s the difference between ‘paying yourself first’ and saving money?” — Ayesha

Paying yourself first is a way to save money. In fact, it’s the best way to save money.

The trick is that rather than setting extra money aside, you’re saving for yourself and your future goals right away, before spending the rest on non-essentials. Treat the savings goal like an important bill — just like your rent or mortgage — that must be paid every month. The only difference is it’s a bill you pay to yourself.

“Anybody can save the remnants of a paycheck after they’ve spent most of it,” says George Galat, a California-based financial adviser.

“[Paying yourself first] is purposeful, proactive and implies a level of progression toward a collection of goals,” says Galat.

Here are a few ways to pay yourself first — without feeling like you’re making a big sacrifice.




Set up automatic payments

A common obstacle to saving your money is that the amount you planned to save tends to dwindle toward the end of the pay period.

“The reality is that some competing interest always comes up to reduce if not eliminate well-intended savings,” says Howard Pressman, a Virginia-based financial adviser.

Related: What In The Wealth is an Annuity?

That’s why one of the principles of paying yourself first is to set up automatic payments into accounts set aside for retirement, debt repayment, or emergency savings. That way you don’t have to consciously think about choosing to save, and won’t be tempted to spend it first.

“If one has automatic savings taking place into the 401(k), Roth IRA or a sweep from checking to savings, it’s going to get done,” Pressman says.

Max out your 401(k) (if you can)

One of the first areas of your financial life you should pay attention to is your retirement savings.

But most people still aren’t saving enough. One in four workers have less than $1,000 saved for retirement.

Setting aside 10% or 15% of your income may seem daunting, but is not as impossible as it might seem.

When Jon Haagen, a New York financial adviser, asks people if they can save 15%, they usually disagree. However, when he rephrases to ask whether they might be able to live on 85% of their income, most say that they can.

“The second way of asking seems less daunting,” he says.

Change your mindset

Once you decide to pay yourself first, you may feel like you have a lot less money at your disposal than you once did.

The key is to change the way you think about your income, and accept that you need to — and can — live off less.

“It’s really about fooling your brain into thinking ‘this is how much I make and this is what I can spend,’ said Jeff Maas, a California-based financial adviser.

“Eventually you will adapt your spending habits to match your perceived income and it won’t feel like a chore or a sacrifice to save.”

 

Originally appeared on Money.CNN.com by Laura Sanicola @laurasanicola

Sep 21
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3 Signs You’re Living Beyond Your Means

By Money Management No Comments

It’s a frightening statistic that 47% of Americans would struggle to come up with $400 to cover an unplanned expense. Yet nearly half of today’s workers are living paycheck-to-paycheck, with no financial cushion whatsoever, and a big part of the reason boils down to living beyond our means.

Now you might be thinking: I work hard for the money I earn, so shouldn’t I spend it? And there’s some truth to that. We all deserve to enjoy the fruits of our labor, but many of us take that to an unhealthy extreme by not only spending every penny we bring home, but exceeding our earnings and racking up debt.

If you’re not sure where you fall on the spectrum, here are some clues that your spending needs to be scaled back — immediately.




1. Your credit score is low

There are several factors that go into your credit score, some of which carry more weight than others. The two biggest, however, are your payment history, which speaks to your ability to pay your bills on time, and your credit utilization, which is the extent to which you’re using your available credit. If you’re living beyond your means and spending too much, you’ll be less likely to pay your bills in a timely fashion. Similarly, if you’re using a large percentage of your total credit line, it’s probably because you’re racking up too many charges and not paying them off quickly enough.

Credit scores can range from 300 to 850, but a score below 580 is considered poor, according to Experian, one of the three major credit bureaus. If your score has plunged into unfavorable territory, it’s a sign that your lifestyle is too large for your income.

Related: 5 Easy Ways to Improve Your Credit Score

2. Your housing costs eat up more than 30% of your paycheck

Housing is many Americans’ largest monthly expense, and while it’s natural to want to live in a home that’s spacious and conveniently located, it’s also easy to fall into a trap where you’re overspending on housing, and thus putting your finances at risk.

No matter how much you earn, your housing costs, which include your mortgage payment, property taxes, and homeowners’ insurance, should never exceed 30% of your take-home pay. If your current housing expenses surpass this limit, it’s a clear indication that you’re in way over your head.

Related: How to Reduce Expenses in Every Budget Category

Between 2011 and 2014, 52% of Americans had to make at least one major sacrifice to cover their housing costs, according to the MacArthur Foundation. These included delaying retirement savings and cutting back on healthcare.

Though you might justify an expensive home as your one indulgence, so to speak, taking on too much house also puts you at risk for higher-than-average maintenance costs, which can wreak havoc on your budget and compromise your financial security. You’re better off finding a less lavish home you can more comfortably afford — meaning, one whose total anticipated monthly costs equal less than 30% of what you bring home in your paychecks.

3. You’re not saving any money

Working Americans are generally advised to set aside a minimum of 10% of each paycheck for emergency savings or retirement. If your expenses are such that there’s absolutely no money left over each month to stick in the bank, it’s a sure sign that you’ve adopted too costly a lifestyle.

Now what if you fall into that category of people who are saving some money each month, but perhaps nowhere close to that 10% target? If that’s the case, your spending may not be too egregious in the grand scheme of things, but it could mean that you’ve already embarked on a very dangerous path.

If any of these circumstances apply to you, it’s time to start changing your ways — before your long-term finances take an irreversible hit. To start, create a budget that outlines your current spending, and compare it to what you’re getting from your monthly paychecks.

Next, work on cutting expenses so that you’re not only spending less than what you bring home, but have at least some money left over to add to your savings.

Related: 5 Methods to Help Your Save Money

You can approach your cost-cutting efforts in one of two ways. Some people prefer to slash one major expense, like housing or a car payment, to improve their financial picture. Others might opt to eliminate a number of smaller, less significant expenses, like cable, restaurant meals, and lawn or house-cleaning services. Whether you go with the former or the latter really boils down to which situation you think you’ll adjust to more easily. Some folks might have a hard time moving to a new home, and so they’d rather cut 12 other expenses to stay put.

 

Originally appeared on Money.CNN.com by Maurie Backman for The Motley Fool.

Sep 19
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Bitcoin Wallets And How to Use Them

By Investments, Money Management No Comments

Are you new to Bitcoin and you recently purchased some? If so, I know you’re excited and happy about the bright future that Bitcoin has to offer. But like your real money, you have to be mindful of where you put it and how you spend it. Here are the different Bitcoin wallet types, how to safely store your new digital wealth and where to spend it.

There are two types of Bitcoin wallets, Hot and Cold, and I’ll give you a quick 50,000 foot overview of them.

Hot Wallets

Hot wallets are generally defined as wallets that exist on exchanges and are used primarily over the Internet. If you buy your Bitcoin from places like Coinbase or Bitstamp and leave them there, your wallet is a “web-based wallet.” Hot wallets offer users easy use that cold wallets do not. They are usually used in conjunction with apps that installed on your smart phone or on your PC. Think of your hot wallet the way you do a checking account at a bank. Just like you have to make certain that your checks and your ATM cards are secure at all times because people can steal them and make unauthorized purchases, Hot Wallets are exactly the same.




The private keys to your Bitcoin account (which are similar to your Account and Routing numbers) are not controlled by you. They reside with the exchange that houses your wallet. If you lose your smart phone or your PC or the exchange gets hacked, you can lose all of your investment. As a good rule of thumb, you should never keep large amounts of Bitcoin in a Hot Wallet.

Best practice is to never keep more than $100 USD in a hot wallet, unless I know you’ll be making a purchase more than that.

Cold Wallets

The vast majority of seasoned Bitcoin holders and traders keep their investments in a Cold Wallet. Cold wallets do not exists on the Internet and are controlled by you with private keys. Think of a cold wallet like a savings account at a bank. Using a banking scenario, savings accounts that are not linked to your debit card are a secure way of storing your funds. Cold wallets are the same way.

There are different types of cold wallets, which are paper wallets and hardware wallets. Paper wallets are wallets that you print and have both private and public keys displayed. Cold paper wallets rarely interact with the Internet, unless you are transferring funds to make a payment. There are lots of different ways to create Cold wallets. Here is a how to make your own.

The other type of cold wallets are hardware wallets, like a Ledger Wallet. They plug into your smartphone or PC via USB and have a separate interface that allow you conduct transactions. This method of Bitcoin storage is not quite as easy as a hot wallet but it is far more secure. This video explains how to purchase your own hardware wallet and how to use them.

When using Bitcoin, you are solely responsibility for securing funds. Pick a wallet or a combination of wallets that work for you. For more information, visit http://www.investnoir.com.

Sep 18
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What To Do When a Relative Dies and You Can’t Afford the Funeral

By Estate Planning, Insurance, Money Management No Comments

When Apple co-founder Steve Jobs passed away, he left behind a huge legacy – and a huge financial fortune too. Since Jobs was one of the richest men in America, his family undoubtedly had no problem paying for his funeral and putting Jobs to rest.

Unfortunately, that’s not the case with many other Americans. It’s a sad reality that many families and individuals have to deal with, but the truth is that when many people pass away, their family members or close friends struggle to afford the funeral.

Knowing what to do when you can’t afford to bury a relative can help to relieve some of the stress and heartache of this difficult time.




According to the National Funeral Directors Association, the national average cost of a funeral with a vault was $7,775 in 2010. The cost of a burial without the casket was about $4,265 that same year. For many grieving families, paying thousands of dollars to bury a relative just isn’t economically feasible.

If a loved one passes away and the burial and funeral costs are out of your budget, here’s what you need to do:

Analyze the individual’s life insurance policy

Determine whether some or all of the burial and funeral costs are covered under the deceased’s life insurance policy. Talk to an agent in person or over the phone to go over all of the details, limitations and stipulations associated with the policy so that you understand what is and isn’t covered. You may find that a good percentage of the funeral costs are already covered based on life insurance the individual had on the job or a life insurance policy they bought on their own.

Review low-cost burial options

Cremating someone is usually less expensive than burying the individual in a casket or vault. If your state doesn’t require embalming the body, consider a “green burial” where you don’t have to pay for a vault, headstone or expensive caskets. You can also shop around to find an affordable casket online.

Consider getting a loan

If you have good credit and are comfortable with taking on a personal loan, consider applying for financing from a local bank or credit union in order to pay for the burial. Avoid taking out a cash advance on a credit card because you’ll be responsible for paying very high interest charges and could end up carrying that debt for several months, even years.

Ask other family members to chip in

You may not have to shoulder the responsibility of paying for the burial all by yourself. Consider asking family members to pitch in and help with the costs. Be specific and candid with relatives about how much the funeral costs; ask everyone involved how much they can reasonably contribute; and put together a cost sheet or budget to help you keep track of all of expenses.

Talk to your county coroner’s office

If you simply can’t come up with the money to pay for cremation or burial costs, you can sign a release form with your county coroner’s office that says you can’t afford to bury the family member. If you sign the release, the county and state will pitch in to either bury or cremate the body. The county may also offer you the option to claim the ashes for a fee. But if these also go unclaimed, they will bury the ashes in a common grave alongside other unclaimed ashes.

Obviously, when a person dies it’s a terribly emotional time for that individual’s family members and friends. But it needn’t cause financial turmoil too.

You can do yourself and those you care about a favor by planning ahead and making sure you at least set aside money or have enough life insurance to cover your own burial costs in the event of your unexpected death.

 

Originally appeared on BlackEnterprise.com by Lynette Khalfani-Cox, The Money Coach.