The Basics of Money and Credit

In this series, Our team shares their thoughts on the basics of Money and Credit. These topics are typically covered with new customers.

First, let’s start with the basics of credit.

What is Credit?

Credit is other people’s willingness to let you use their money that you will repay sometime in the future.  It is a privilege, not a right. By “other people,” we typically mean banks, credit unions, and credit card companies.

“Credit” can be used interchangeably with “loan.”

How do you earn credit?

To earn the trust of the lenders in the form of “credit, you need to demonstrate you can borrow money and pay back on time. Check out a good article by Nerd Wallet: How to Build Credit

What are the types of credit?

Categorized by how the credit is extended and how it is paid back, credit falls into the following three categories:

Installment Loan: require regular payments, usually monthly, until the principal is paid off. Car loans, student loans, and mortgage all fall in this category.

Revolving Credit: includes bank credit cards, store credit cards, and home equity line of credit. You are required to pay at least the minimum payment by the due date. You can pay the minimum amount, the full payment or anything in-between. You can keep using the credit as long as you pay the minimum and stay within the credit limit.

Service Credit: used for monthly utility bills, such as electricity, gas, and yes, your cell phone bills. You set up an account, use a service and get billed by the service provider.

What Are the Advantages of Credit

You can get instant gratification, “buy now and pay later”;
Usually, no interest is charged when credit card bills are paid in full by due date;
Credit cards are safer to carry around than large sum of cash around;
Keep record of how you spend money so you can analyze your spending habit;
Some credit cards offer “bonuses” such as cash back or frequent flyer miles.

What Are the Disadvantages of Credit

Interest costs can be very high. How high? 15-20% for unpaid credit card balance is very common.
If you only pay the minimum each month, then the pay-off period will extend to very long
Since you owe so much money to other people already, you may not have much buying power left in the future

What is a Credit Report?

Lenders do not take your word for it when they come to determine whether to extend credit to you; instead, they pull your “credit report”.  It is kind of like your “school report” but lists different things. It describes your past use of credit, such as being on time in paying back debt, types of credit accounts opened, number of loans applied for, and a number of outstanding balances.

Three companies, called credit bureaus, gather information about you and give it to lenders. These three companies are:

Equifax (www.equifax.com)
Experian (www.experian.com)
Trans Union (www.transunion.com)

You can order your credit report once a year to check for errors or see if your identity has been stolen. Following the directions that come with the report, you can fix the errors.

What are Credit Scores?

Sometimes referred as a FICO score, a credit score is a three-digit number that describes your trustworthiness, or your future bill-paying behavior. It ranges from 300 to 850.  Lenders look that the number and decide whether to give you a loan and on what terms if any (interest rate, down payments, etc.).

These factors affect your credit score:

Previous payment history
Amount money owed
Number of recent credit inquiries
Length of credit history

These are only a few of the money basics we go over with new clients. If you have any questions or need help in any of the areas we discussed here, please don’t hesitate to reach out for a Free Initial consultation with one of our counselors M-F 9am-5pm pst at 854-888-0321

Top 5 Reasons People Seek Credit Counseling

We have helped thousands of people overcome financial challenges through Credit Counseling and other programs. We are committed to educating our clients and the general public on ways to spend less, save more and work towards becoming financially fit. Over the years, we have had clients seek Credit Counseling for a wide variety of reasons, but certain life events keep coming up again and again. Here are the top five reasons people seek Credit Counseling and some things you can do if you find yourself in any of these common situations.

Loss of Income or Reduced Income- Few things are as stressful as losing a job or being told you have to take a pay cut to keep your job. You’ve built your lifestyle based on receiving a consistent income and suddenly it disappears or gets smaller. If you don’t have savings to fall back on, you’re immediately in financial crisis mode. Taking the following steps can help ensure you’re if you experience lost or reduced income:

Work toward having 6 months of living expenses in an emergency savings account
Keep your resume up-to-date and maintain contacts with potential employers
Develop a marketable skill that will allow you to temporarily freelance if neededUnexpected Expenses- Whether it’s a major home repair, car repair or even something fun, like being asked to stand up at a friend’s wedding, unexpected expenses are a part of life. If you’re not ready for them, they can throw your finances into a tailspin that’s hard to get out of. But even though you can’t predict the future, you can take steps now that will make unexpected expenses less shocking:
Set money aside in an emergency savings account
Plan a budget that includes fixed, variable and periodic expenses
Stay current with home and auto maintenance to avoid large repairs

Overspending- Whether as a result of relying on credit cards to pay for everyday expenses, spending more than you earn or carrying balances on multiple, high-interest rate credit cards, overspending is a cause for concern. When credit card debt becomes unmanageable, your life can feel like it’s spinning out of control. Here are some ways you can help control the urge to overspend:

Try your best to live a cash-only lifestyle; don’t carry credit cards with you
If you do have to charge something, pay the balance in full the following month to avoid paying interest.
Steer clear of retail store credit cards and other credit cards that charge interest rates of 20% or more

Illness in the Family- Serious illness and high medical bills that accompany it are incredibly stressful for any family. While there’s no way to predict when an accident or illness with strike, there are some things you can do to lessen the impact when they occur:

Work toward having at least 6 months of living expenses in an emergency savings account (see a pattern here?)
Ensure all health insurance premiums are paid on time so there’s no lapse in coverage
Try to live a healthy lifestyle and practice preventive care

Divorce or Separation- Since money issues are one of the leading causes of marital strife, it’s no surprise things can get quite complicated when working out the financial details of a divorce or separation. Here are a few tips that can help you get through this difficult time:

Find a lawyer you’re comfortable with and who answers questions quickly
Seek the support of friends and family members who have been through a similar situation
Check your credit report for errors regularly to ensure it’s not reflecting your spouse’s debts

Click here for more information on credit and debt services!

Experian, TransUnion, and Equifax Announced Major Changes That Could Give You a Better Credit Score

Some Americans may see a boost in their credit scores this summer thanks to new policies adopted by credit report agencies Experian, TransUnion, and Equifax.

The big three credit bureaus will eliminate some negative information from appearing on credit reports, according to the Consumer Data Industry Association, a trade association that represents them.

But before you anticipate more credit approvals on the horizon, it’s important to keep in mind that these changes will likely affect only a small portion of the population. Here’s how these credit report updates may impact you this year.

Policy Changes Address Consumer Complaints
Experian, TransUnion, and Equifax will exclude tax liens and civil judgments from credit reports if the data does not include the borrower’s full name, address, and either a Social Security number or date of birth.

The credit bureaus say the new policy will take place on July 1, 2017. It will apply to new tax lien and civil judgment data added to credit reports, as well as existing data.

Many debt collection firms that take borrowers to court do not have all of the above identifying criteria when suing for unpaid debts. Therefore, the credit bureaus may eliminate most civil judgments resulting from unpaid debts from the credit histories of some borrowers.

This change springs from regulatory concerns raised by the Consumer Financial Protection Bureau (CFPB) earlier this month.

According to the CFPB, there have been 185,700 complaints related to credit report disputes since February 1 of this year. Consumers often complain that the credit bureaus include damaging inaccuracies on credit reports or disproportionately lower credit scores because of non-loan related debt.

And even after they dispute inaccuracies or issues and the credit agencies resolve them, consumers say their credit scores do not improve.

Since 2015, the three credit report agencies have reached settlements with more than 30 states over how they handled credit reports. They also now remove non-loan related items such as unpaid gym memberships and traffic tickets.

Additionally, all three credit bureaus will remove medical debt collections accounts that have been paid by a patient’s insurance company from credit reports by 2018.
How it Will IMpact Credit Scores:
Removing tax leins and civil debts could potentially cause credit scores to raise. Some consumers will appear more creditworthy tanks to these developments.

But even for those who will benefits, an increase in their credit scores will be modest. FICO projects that just under 11 million people will experience a score improvement of fewer than 20 points, according to The Wall Street Journal.

What’s more, lenders will still be able to check public records on their own to find information about tax leins or other debts, even if the credit bureaus don’t report it.

Still, lenders may be nervous about this change. Even a modest bump can make formerly ineligible borrowers suddenly eligible for loans or other forms of credit they would not otherwise receive. And that means lenders will be shouldering more risk when it comes to debt.
Will You See a Change?:
While some people will see an increase in their credit scores, the updates from the credit bureaus will not affect the majority of the population. Experts expect 12 million people in the United States to be affected. That’s only six percent of the population.

This is because the changes do not impact how the credit bureaus report common debts such as missed bill payments for rent or utilities, credit card debt, or student loans. These common forms of debt will stay on your credit report as they are today.
What Can you do to improve Your Score?:
Before the changes go into place on July 1, you can take action now to ensure your credit report is in good shape and that your credit score is accurate.

One of the best ways to maintain an excellent score is to monitor your credit report regularly. Remember, you are entitled to a free credit report from each of the three credit bureaus once every year.

You can collect all three credit reports at once or stagger reports and take out one every four months. The latter option allows you to check your credit throughout the year without having to pay for an additional report.

During your credit report review, look for any inaccuracies or fraudulent activity. It’s possible to find a simple mistake, such as an account belonging to someone else with a similar name listed on your report. If someone fraudulently took out a loan in your name, you can catch it early this way, too. By reaching out to the reporting credit bureau, you can have these items removed and boost your scores.

Make sure you also keep up with the minimum payments on all of your debts, including credit cards, student loans, and car payments. Making payments on time significantly impacts your credit score in a good way.
Managing Your Credit Score:
While the changes made by the three credit reporting agencies are a huge shift in the industry, it is unlikely that these updates will dramatically affect many people.

So before getting excited about your credit score improving  overnight, take stock on your current situation and identify areas for improvement. By taking an active role now, you can set yourself on the path to a more secure financial future.

Stop Paying These 5 Fees

Looking for a way to save a few extra dollars to put toward paying down debt or increasing the amount in your emergency savings account? It can be as easy as eliminating unnecessary fees from your financial life.
Review the list of fees you are paying. They all represent pure profit for institutions charging them and giving you virtually nothing in return.
You will be surprised at the savings that will add up over time when you stop paying these fees. Start keeping more of your money today! Just say no to the following fees:Credit Card Fees
If you are paying an annual fee just for having the use of your credit card, find one that doesn’t charge and annual fee, transfer the balance, and close the card. Additionally, if you find yourself racking up over-the-limit or late payments fees, sign up for account alerts to tell you when you are about to exceed your limit or when a payment is due. Better yet, enroll into automated payments and never miss a payment again. If you are routinely maxed out on cards or have trouble making payments, consider seeking credit counseling to evaluate your overall financial situation.
ATM Fees
Quite simply, it should never cost you money to get your money. The good news is, ATM fees are easy to avoid. Simply use ATMs only at your financial institution, or look for a bank or credit union that reimburses fees charged by other ATMs. An easy alternative to ATM use is getting cash back when using your debit card to pay for transactions. Or you can go old-school and actually go inside the bank and get cash directly from the teller.
Overdraft Fees
Ouch! Bounce a check and it could set you back as much as $38 a pop;  more than one and suddenly you cant make the mortgage for the month. Better record-keeping and cash flow management can help you avoid overdraft fees. And if you need more assurance, see about adding overdraft protection or a line of credit to your checking account. If you have to dip into either, be sure to pay back quickly to avoid incurring interest charges.
Extended Warranties
These are usually offered on bigger ticket electronic items like TVs or computers – and may seem tempting. But don’t take the bait. Most of these products already include a manufacturer’s warranty. Additionally, if you pay for the item with a credit card that offers purchase protection, you will have a safety net, too.
Checking Account Fees
Much like ATM fees, if your financial institution charges you a monthly fee for simply having a deposit account with them, close it and go elsewhere. Many online banks, credit unions and traditional banks still offer truly free checking.
Click here for information on the student loan relief programs!

Free Resources to Help Improve Your Credit

Establishing and maintaining good credit is an important part of any financial plan, but it can be hard to strike a balance between building credit and building debt. With a steady stream of credit card offers arriving in your mailbox or popping up online, it is easy to obtain new credit – but how do you build up your credit score without risking to much debt?If you are looking for a new credit card, take advantage of the wealth of free online resources to explore your options, understand the fine print and find the right card for you:
www.optoutprescreen.com:  First, if you are tired of the deluge of credit card offers, take advantage of the Fair and Accurate Credit Transaction Act, which will help you put a stop to unsolicited credit card mail. Visit the website or call 888-5OPTOUT to remove your name from the prescreened mailing list. You will need to provide your name, address, Social Security number and birthday in order to confirm your identity.
www.annualcreditreport.com: If you are unsure of your credit score, take advantage of the opportunity to get a free annual credit report from each of the three credit bureaus – Equifax, Experian and TransUnion. But tread lightly here, and be sure to type the URL into your browser window rather than clicking on a free credit report offer from another website. There are many companies that offer a free credit report, only to hook you with a monthly fee for ongoing credit auditing that you may not want or need.
 www.credit.com:  This website is a one-stop resource for tips, tools and a comprehensive learning center that teaches you how to build and manage your credit. In addition to providing a solid financial foundation, good credit will help you secure better terms on credit cards as well as mortgage, auto and all other types of loans.
www.comsumerfinance.gov: The Federal Consumer Finance Protection Bureau has created a website to help people make sense of common credit terms. This helpful resource shows you how to avoid penalty rates and fees, spells out the terms of introductory APRs and balance transfer offers, and even maintains a database of credit card complaints.
www.creditcards.com: This site allows you to search and compare credit cards to find the best card for your personal financial situation. You can find cards with low interest rates, balance transfer offers, travel rewards and other numerous perks.
www.responsiblelending.org: Tips, articles and a credit card repayment calculator spell out the hidden costs of credit cards and empower consumers with the information they need to build good credit and avoid deep debt.
 
Click here for student loan relief information!

5 Little-Know Facts About Credit Cards

Living a cash-only lifestyle is one of the best ways to avoid overspending and staying out of debt. But to do things such as purchasing airline tickets or renting a car, having at least one credit card is almost a necessity. Plus, using a credit card responsibly can help build a positive credit history. But how much do you really know about these little rectangles of plastic we keep in our wallets.
Here are five interesting or little known facts about credit cards you can bring up the next time there’s a lull in the conversation (a few of them might even save you money, too):
Charge plates where the precursor to credit cards- Used until the early 1960s, charge plates were small, aluminum or white metal embossed plates about the size of dog tags. They had a paper or cardboard backing with the merchant’s name and customer’s signature, and were often kept on file at the issuing store. The clerk would have to retrieve a customer’s charge plate from a file when they wanted to use it.The first general-use credit cards were sent unsolicited…To residents of Fresno, California by Bank of America in 1958. These BankAmericards were maed of paper and had a credit limit of $300. By late 1959, more than 2-million people throughout California had received one of these cards. And not long after that, 20% of those accounts became delinquent, costing the bank nearly $9 million dollars. The Federal Truth in Lending Act eventually made it illegal to send credit cards unsolicited, however, the practice of spending pre-approved applications for credit cards is still alive and well.
$50 is the maximum liability for unauthorized use- If your credit card is lost or stolen and used without your consent, you’re on the hook for $50 maximum. You can thank the Fair Credit Billing Act for this rule, which also says that once you report a card as lost or stolen, you are not responsible for any transactions that occur following the report. So it is really important to let the card issuer know immediately if you lose track of your card for any reason.
You can’t use your credit cards overseas…unless you request a version that has a microchip, rather than a magnetic strip. European credit cards use chip-and-pin technology for added security, which makes our magnetic strip cards incompatible with their card readers, Chase, Citi, and US Bank are among the card issuers who offer cards with a chip. Just be sure to request your new card well in advance of your trip to be sure you receive it in time.
Your card might be declined if…You are getting dangerously close to your spending limit. Gas pumps automatically authorize a $50 sale (even if your actual transaction amount is lower), so if you have less than that available to charge, your transaction will be denied. Restaurants will typically authorize an amount equal to the total amount on the bill plus 25% gratuity. If you think your card might not be able to handle it, pay with cash to avoid the embarrassing “Excuse me, but your card was declined…” speech. (If you are at or near your max on one or more cards, credit counseling can help you budget and get your spending back on track).
 
Click here for information on student debt relief programs!

Financial Resolutions for 2017

The first of the year always brings with it the promise of new beginnings and the burden of self-improvement. Fueled by the nostalgia of the holidays, armed with a year’s worth of regrets, and unleashed by the ceremonialism and ritual of the calendar’s turn, some 45% of Americans decide to make New Year’s resolutions each January. They are, it seems, taken by the spirit that led Benjamin Franklin to write that one should, “Be always at war with your vices, at peace with your neighbors, and let each New Year’s find you a better man.”

We all certainly have our fair share of vices, especially as they relate to money. Financially-themed promises for improvement are, unsurprisingly, always among the most popular resolutions made each New Year. Unfortunately, only about 8% of resolution-makers are ultimately successful in their endeavors – a statistic that does not fare well for money management improvements.

Neither historically low odds of success nor uncertainty about the best resolutions to make should discourage you from improving your financial habits in 2017, however. We have come up with the following list of Financial Resolutions for 2017, along with some helpful pointers for bringing them to fruition.

-Get Reacquainted With Your Finances and Reassess Your Priorities: The first step toward financial improvement is to get the lay of the land. That means carefully reviewing at least one of your major credit reports, in addition to checking the status of all your financial accounts, taking stock of your assets and debts, and evaluating your monthly cash flow.

Going over your fiances at the account level will enable you to identify spending trends that need adjustment as well as determine whether a new account would save you money. Not only are your financial needs bound to change from year to year, but there are also a number of interesting market developments that you would do well to take advantage of. For example, credit card companies are offering extremely lucrative sign-up perks – such as $625 initial bonus or 0% for the first 21 months- to new customers with above average credit standing. Online- only bank accounts now offer vastly superior terms to branch-based accounts as well, and you can still save a lot of money by refinancing your mortgage in the current low-rate environment.

-Sign Up for Credit Monitoring: IT’s quite stressful to be a consumer in this day in age, with our new digital economy spawning unfamiliar financial threats and extending the time frame for vigilance well beyond traditional banking hours. But new tools have also emerged to ease our transition to this new 24/7 personal finance environment, and credit monitoring is among the most helpful.

Credit monitoring is essentially a surveillance system for your credit report, notifying you anytime key information on your file changes. It therefore, increases the odds that you will find out about any administrative errors or suspicious activity before it can cause much damage. The biggest thing to watch out for is the frequency with which the underlying reports that are being monitored get updated.

-Make a Strategic Budget: Only about 40% of adults have a budget, according to survey data form the National Foundation for Credit Counseling. The fact that we’re on pace to rack up nearly $68.5 billion new credit card debt during 2016 is perhaps a bit less surprising as a result. But those statistics also signal the need for greater urgency on our part. We, as a country, need to cut back if we want this prolonged economic recovery time to continue.

The best way to make a budget is to gather together all of your bills from the past few months and then make a list of all your recurring expense in order of importance – with true necessities like housing, food and health care obviously taking precedence. You can then compare the cost of these expenses against your monthly take- home and eliminate any outlays that would outpace your spending power. After that, just make sure to compare your ensuing monthly spending to your planned budget to make sure you’re abiding by it.

-Implement the Island Approach: The Island Approach is a personal finance technique based on the theory of comparmentalization that encourages consumers to isolate different financial needs on different financial products- as if they are a chain of related islands. For example, this might entail getting one credit card for everyday purchases that you can pay off in full by the end of the month and another for revolving debt.

Doing so will enable you to get the best possible terms on each card (i.e. great rewards earning rate on your everyday card and an extended 9% term on your debt card) rather than compromising for middling terms on a single card. It will also help you to reduce the cost of your debt, since everyday purchases won’t be inflating your average daily balance, and garner valuable perspective on your finances – if you ever incur interest on your everyday card, you know you have spent too much that month.

-Automate ad Much as Possible: One of the most easily avoidable mistakes that people make in regards to their finances is missing due dates. Often due to pure forgetfulness, tardiness can have a serious ramification on your financial life – such as missed credit card payments fostering credit score damage.

Luckily, avoiding such a negative event is as simple as setting up recurring monthly payments from a checking account. You can do so for your full balance, the minimum amount required or a customized amount, and this applies to a variety of different types of bills – from credit cards to cable. Of course, you will have to remember to review your monthly statements in order to avoid being overcharged or missing a sign of fraud, but you’r not on the clock for that like you would be with a manual payment.

– Build an Emergency Fund: Roughly 56% of Americans do not have a rainy day fund, according to the Financial Industry Regulatory Authority’s National Financial Capability Study. Like someone without insurance, folks who lack an emergency fund are merely tempting fate and putting themselves at risk of financial catastrophe in the event of prolonged job loss or significant emergency expenses. Building up some monetary reserve should therefore be one of the first orders of business for any financial makeover.

While we recommend ultimately building a fund with about 12-18 months “take-home income, it’s important to understand that won’t happen overnight. As a result, you needn’t put the rest of your financial life on hold until your emergency fund is complete, but rather chip away at it over time. That is key because we actually recommend creating a 6-month safety net before beginning to even pay down your debts in earnest. Doing so will help ensure that you do not end up right back where you started upon finally reaching debt freedom.

“Just as you might dress for success, spend for failure.” said Scott C. Hammond, a clinical professor of management at Utah State University. “Assume you will go 6-12 months every ten years without a pay check. Save accordingly. Live on a budget. Store a little food. Have a solid savings account with liquid assets.”

-Get Out of Debt: We clearly have a problematic, sordid love affair with debt. After curbing our enthusiasm for over leveraging during the struggles of the Great Recession, we have reaffirmed our affinity for it as the economic skies have cleared. We racked up an average of $41.1 billion in new credit card debt – a useful indicator of consumer spending habits – each year from 2011 through 2013, in addition to $57.4 billion in 2014 and a projected $68.5 billion in 2015. something must change.

Some of the steps mentioned above – including budgeting, automation and the Island Approach – will obviously help in terms of reducing your future reliance on debt, but the problem of what to do about existing balances still remains. The combination of a 0% balance transfer credit card and a credit card calculator can help the average household save more than $1,000 in finance charges and get out of debt months sooner than they would otherwise. Taking aim at your highest- interest balances first, while attributing only minimum payments to the rest, is also a strategic way to pay off what you owe at the lowest possible cost in terms of both money and time.

“I think credit card debt is one of the most difficult obstacles that people face,” says Deena B. Katz, associate professor in the Department of Personal Financial Planning at Texas Tech University. “It’s very easy to pull out a card and buy, particularly online or during the holiday seasons when you want to do special things for your family and it doesn’t need to come out of your pocket today. I believe that if you were buried in debt that a priority resolution would be to pay off your debt as quickly as possible to avoid overpaying for the things you bought on credit.”

-Improve Your Credit Score: In case you weren’t aware, the annual difference in cost between good and bed credit is roughly $650 in credit card payments, $1,400 on your auto loan and $2,300 on a mortgage. The savings inherent to good credit extend well beyond that as well, considering that your credit standings impact your insurance premiums, your ability to buy a car, rent an apartment and the types of jobs you can get – in addition to the loans you’re eligible for.

The best way to improve your credit is to maintain an open credit card account that is in good standing. The card will then report positive information to the major credit bureaus each month, either building out your thin credit profile or helping to devalue mistakes from the past. You don’t have to get into debt to benefit from the credit building capabilities of a credit card, unlike with a loan, and you don’t even need to make purchases with your card. If you don’t have the credit standing necessary to qualify for a normal credit card, you can always place a refundable deposit on a secured credit card and benefit from what’s tantamount to guaranteed approval.

– Save 16% More Than You Normally Would:  Most people are pretty good at wasting money. Many of us don’t have budgets or emergency funds; we rack up expensive credit card debt by the billion; and we prioritize short-term desires over long-term needs. After all, 1 in 4 people nearing retirement age have absolutely no money saved up, according to the Federal Reserve.

Retirement obviously isn’t your only savings need. You also need to save for college, weddings, vacations, ect. The best approach to meeting all of these savings needs is to establish separate accounts for each, which you fill with automatic monthly contributions from a bank account. This gives you some useful perspective on each of your goals and enables you to better track progress. Your goal for the year should be to boos the value of each of your accounts by 15%. This will obviously take hard work and sacrifice, but figure out how much you’ll need to put away each month in order to meet that goal and get cracking.

-Give Back to Charity: Charitable giving is beneficial in terms of self-perception, tax liability and basic humanity. Perhaps that is why monetary donations totaled more than $358 billion in 2016, according to data from Giving USA and Indiana University. Even though that represents a 60-year record, we should make it our mission to be even more benevolent in 2017, with special emphasis on donations involving money rather than time.

Why? Well, most people can actually make a bigger impact on charities by spending extra time at work and donating cash than by volunteering. More specifically, the average America – who earns $30,176 annually and volunteers one hour per week – would be able to donate more than 8,350 meals to hungry children, provide roughly 2,040 measles vaccinations or give nearly 170 refugees a year of clean water just by working an extra hour instead of volunteering, and than donating the proceeds. Unless you’re the Iron Chef, you’re probably not going to cook over 8,350 meals in 52 hours.

-Do Your Taxes Early: Up to 25% of Americans wait until April to file their taxes each year, according to the IRS. As with anything else, procrastination breeds mistakes and 2.6 million people made math mistakes on their taxes in 2015 – the most-recent statistics available. Many people also end up filing late and underpaying, incurring expensive penalties along the way. Starting your tax prep early is the best way to avoid these unfortunate events, not to mention lowering your stress levels. Not only can getting organized take a considerable amount of time, but foresight will also enable you to adjust your with holdings in order to avoid a tax deficiency as well as ensure that you are not over- or underpaying.

-Make Financial Literacy A Family Priority: While gradually improving in many ways, financial literacy levels in this country are still rather anemic. In fact, the U.S. ranked 14th globally for financial literacy in a 2015 survey by Standard & Poor’s, behind the likes of Canada, the United Kingdom and Germany – Just to name a few. What’s more, roughly 41% of Americans grade their financial know-how at a C-level or below, according to the National Foundation for Credit Counseling.

This is important not only as it relates to our finances, but also in terms of how our children will manage money once they mature. children tend to learn by example, which means yours are likely continuously internalizing how you handle money – information that will serve as the foundation for their future relationships with finance. You therefore need to do your best to improve your own financial performance in order to impart beneficial lessons upon your children.

You should also take steps to give your kids hands-on monetary experience while they’re young. This should begin with games – like Financial Football or Savings Spree – that are designed to teach kids about the value of money and encourage positive habits like saving regularly. Then, as your children age, you can provide them an allowance on a series of financial vehicles – starting with a prepaid card, progressing to cash and a checking account, and ending with a student credit card – while requiring them to pay some of their own discretionary expenses.

This will confer a range of practical benefits, from building account management skills to encouraging budgeting – especially if you actively participate and make the process fun.

-Change Your Email Password Every 3 Months: Cybercrime has become a major theme for both the modern consumer and corporate America, with a number of notable banks, retailers and entertainment companies getting hacked in recent years. In fact, there were roughly 750 data breaches in 2016 through mid-December, resulting in the exposure of nearly 188 million personal records, according to the Identity Theft Resource Center. And while there is only so much you can do if your credit card information gets pilfered from a store- all credit cards offer $0 fraud liability guarantees anyway – there are a number of steps you can take to otherwise make yourself a much harder target for fraudsters.

Perhaps the most important, yet underrated measure you can employ in defense of identity theft is a strong password for your primary email account that you can change on a regular basis. You can also add your cell phone number to your account contact information and enable two-factor authentication to take things to the next level. Protecting your email is essential because it is likely what you will use to reset passwords for other accounts, and thus serves as a gateway to your finances.

Robust email security doesn’t, however, represent the extent of the simple changes you can make to improve your anti-identity theft protections. For instance, shredding sensitive financial documents before throwing them away and putting a lock on your mailbox when you’re out of town will shield you from opportunistic criminals targeting your trash or correspondence. Making a credit card your primary spending vehicle and only signing for debt card purchases (rather than entering your PIN) will confer the most robust fraud liability benefits on you as well. Checking your credit report every few months will also enable you to spot fraudulently opened accounts before they do too much damage.

-Shoot For Top Physical & Financial Fitness: There is a clear connection between physical, emotional and financial health. Not only are health care expenses the leading cause of bankruptcy in the U.S., but they also comprise a great deal of our annual spending between insurance premiums, out of pocket costs, gym memberships and more. Money, work, the economy and family responsibilities – all financial concerns in one way or another – are also the most commonly reported causes of stress, according to the American Psychological Association.

This all serves to underscore the importance of getting our financial houses in order as well as getting regular exercise and engaging in the other healthy practices aimed at keeping our health care costs low. It won’t be easy, but this is one resolution that will certainly pay dividends across the scope of your life.

-Help Other Consumers: We consumers need to stick together. After all, it’s hard enough trying to lead a financially responsible lifestyle in this era of economic turmoil, political obstinacy and unbridled spending without some support. One of the best ways to aid others in the pursuit of financial responsibility is to share your experiences with different financial products, companies and professionals.

Reviews have the power to drastically improve transparency in the personal finance space – as has been the case with the hospitality industry -enabling people to avoid the bad apples, gravitate to the best deals and ultimately save money. That is especially true now that the Securities and Exchange Commission is allowing financial ad visors to interact with consumer review for the first time. The financial industry is rip for disruption in the regard, as there are likely more review for the dog walkers that for the professionals managing our retirement plans.

-Stress Test Your Finances: People are generally optimistic in nature, which means it can be difficult to imagine and prepare for the worst0case scenarios. Responsible financial management is all about preparation, though, which means it is very important that you put your personal finances through the paces – much like banks and other financial institutions are required to do in order to verify their stability.

For example, you may wish to determine if your finances are equipped to handle job loss or the death of the family’s breadwinner. This clearly isn’t an uplifting exercise, but it will enable you to determine if you have the savings, insurance policies and contingency plans necessary to overcome potential hardship.
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5 Signs You May be in Trouble with Credit Card Debt

When used sparingly, credit cards can be an effective financial tool. Careful use of credit cards can help build and maintain a solid credit history, and credit cards can be useful when unexpected expenses com up (though an emergency savings account is a better way to handle those). Unfortunately, it is all too easy to accumulate credit card debt to the point it becomes unmanageable. Here are 5 signs you may be in over your head with credit card debt.
 Making Only Minimum Payments- Many people assume that if they are able to pay the minimum payment on multiple cards every month, they are successfully managing their debt. This simply isn’t true. In most cases the minimum monthly payment barely covers the interest that accrues month-to-month. Paying just the minimum means even modest balances could take years to pay off.
 Having One or More cards at Their Limit-  Keeping one or more cards at or near their limit is a sign you need to cut back on your reliance on credit cards. Having cards at their limit can also negatively impact your credit score by showing high credit utilization ratio, which is the amount of outstand balances on all cards divided by the sum of each cards limit.
 Using Credit cards to Pay for Everyday Expenses- If you are using credit cards to pay for things like coffee, gas and groceries and not paying off the balance every month, stop! Think like this; do you really want o be paying for this week’s groceries six months (or more) from now?
 Not Contributing to Savings- If there is nothing left to put into savings after you have paid off all your credit card bills, that is an indication that your debt is becoming overwhelming. Remember that advice to ‘pay yourself first’? It still applies. Even just putting away a small amount every payday can help build a cushion that will eventually eliminate the need for credit cards.
 Falling Behind on Payments- Probably the most obvious sign the credit card debt has become overwhelming is paying credit card bills late or skipping payments altogether. Even one missed payment can start building up late or skipping payments altogether. Even one missed payment can start building up late fees and my negatively impact your credit score. If you are falling behind on credit card payments on credit card payments it is important to ask for help and create a plan to start paying off debt.
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Money-Saving Tips for Renters

Whether you are rending your first apartment, renting while saving up for a home or simply prefer the convenience and freedom of renting where you live, you are in good company. According to the National Multifamily Housing Council, more than 100.8 million American Households rent their primary residence. If you are among that group, check out these money-saving tips for renters:
Negotiate- Before you sign a lease, see if the landlord is willing to negotiate the monthly rent. Quite often, committing to a longer lease (12 months vs 6 months, for example) can be enough to get rent reduced. If they are absolutely not willing to budge on the monthly rent, ask if there is a chance to receive free utilities, additional storage space or garage parking.Split the Costs- One tried-and-true method to reduce rental costs is to split them with a roommate (or two). Having roommates can yield huge cost savings, but it wont be worth it if you have completely dissimilar lifestyles or different expectations of the roommate partnership. Interview potential roommates much the same way you would interview job applicants, including asking for references from past roommates and landlords. Also be sure to check the terms of your lease to ensure you don’t exceed the maximum number of residents allowed.
DIY Décor- Since any rental situation is ultimately temporary, you don’t want to spend a fortune decorating your place- and you don’t have to. Check Pinterest for easy and cool decorating ideas you can replicate for next-to-nothing. Keep any eye out on Craigslist and Facebook for freebie hand-me-downs and scout local thrift stores for deals on furniture, wall art and knick-knacks. Sometimes all it takes is some sandpaper, spray paint and a Saturday afternoon to transform cheap finds into one-of-a-kind treasures.
Get Renter’s Insurance- While it is an additional monthly expense, it is a small one, and well worth it. In fact, many landlords now require proof of renters insurance before allowing a renter to even sign a lease. According to the Independent Insurance Agents and Brokers of America, the average cost is only $12 a month for $30k of property coverage and $100k of liability coverage- That is just $144 per year. It is a small price to pay for peace of mind.
Take Advantage of Amenities- Whatever you can do or get as part of your monthly rent, stop paying for it elsewhere. For example, if your complex has workout facilities and/or a pool, quit paying for a gym membership and use the one in the community instead. If they host movie nights, pizza parties or other community activities, attend those and skip spending the money on a night out.
Refer Friends- Check to see if your complex offers renters credits for bringing in qualified new renters and if they do, start referring friends! You will not only get a nice break on rent, you will start to build a community of people you already know and like.
 
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Do You Actually Need to Know Your Credit Score?

 

Knowing your credit score is just one part of being an informed consumer. But even if you know the magical three-digit number, do you know what it actually means? Here is a quick overview.
A credit score is a three-digit number that reflects the information in your credit report. Most folks are familiar with the FICO model that generates a score from 300-850. A 300 is very low, while an 850 means lenders will be extreamly eager to lend you money. A score of 720 or above is generally considered ‘very good’.Scores were developed so that loan officers wouldn’t have to actually read and understand credit reports. They are widely used and apparently the scores really do indicate the likelihood that a consumer will repay a debt. That means the lenders can trust someone with an 810 and charge extra interest for some with a score of 610.
Of course the lenders get to decide what they think is a good score or a cut off score. And here is something you probably didn’t know: the score you have before you visit a car dealer is not the same score the dealer will see. They get a special score based on auto deals. And if you looked at your score from the three major reporting agencies, you would see three different scores. Plus scores can fluctuate up or down in as little as a few days. 
Want to know more about your credit? You will be better off reviewing your complete credit report, rather than just paying to receive your FICO score. You get a free copy of your full credit report at www.annualcreditreport.com. It will tell you every issue have and you will be able to start work on fixing the problems you see. You can’t do this with just one of your credit scores alone.
 
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