February 28, 2011

Debt in Focus Repayment Calculator

“Brought to you by the nation’s credit unions, this free and anonymous service will help bring your debt into focus. After answering a few questions about your income and current debts, a simple financial analysis will provide a wealth of information – debt to income ratios, debt payment schedules, and suggested personal action strategies to help keep your finances moving forward.” This website comes highly recommended by a former student who works as a financial counselor and has used the tool extensively. Try it out: http://debtinfocus.com/
Before you do, if you haven’t checked your credit report recently, get a free copy of your report from: https://www.annualcreditreport.com/cra/index.jsp  This site WILL ask from your Social Security # which is necessary to access your credit report.  This is the only safe, free website for obtaining your free credit report. Remember, you can get one free report each year from each of the three major credit bureaus; spread out your requests over the year to monitor your report for identity theft.
Credit Reports, Credit Scoring and Identity Theft
Learn how creditors decide to grant credit and what interest rate to charge, how to protect yourself from identity theft, and why you need to review your credit report.
FTC credit score brochure (July 2007)
Fair Isaac and Co.
Credit info Center
Credit Scoring module:

Understanding How Insurers Use Credit

“A growing number of personal auto and homeowners insurance companies now use consumer credit information to decide whether to issue policies and what premiums to charge for those policies. This fact sheet is designed to help you understand how your credit information is being used, and how it may affect your insurance purchases.” Source: Utah Insurance Department

February 27, 2011

Income tax time is savings time!

Don’t squander that tax refund! Commit today to save part of your tax refund. With as little as $50, you can save in a safe, guaranteed, accessible, and competitive savings instrument.  Moreover, taxpayers can receive the remainder of their refund (the part not saved in a Savings Bond) through a direct deposit. Details at: http://bondsmakeiteasy.org/
“Generally, there are three big barriers to saving - having money to save, having access to a good product at the right time, and being motivated and encouraged to save.  With this opportunity, two of those obstacles have been removed.   
  • Money to Save: At tax time, many Americans receive large refund checks. In tax year 2007, approximately 100 million Americans received a federal tax refund, totaling over $246 billion. Families who make less than $40,000 a year received more than $120 billion in refunds, averaging $1,780 per filer.   Because some of this is due to over-withholding taxes each paycheck - many Americans have basically been saving all year long! With this option, now they can funnel that year of savings into an actual savings account with interest.
  • Good Product at the Right Time: Savings bonds are a safe, familiar, government-issued savings vehicle that offers an interest return rate in line with Certificates of Deposit (CD) at banks, but CDs usually require a much higher minimum investment, which puts CDs out of reach for many low-income families.  Bonds are also flexible - they can be used towards any savings goal including: education, retirement, or housing.”
Thanks to: Joanna Smith-Ramani, Director of Strategy for the D2D Fund (Doorways to Dreams), a non-profit organization that seeks to expand access to financial services, especially asset building opportunities, for low-income families by creating, testing and deploying innovative financial products and services.

February 21, 2011

Spousanomics: Love, Marriage & Dirty Dishes

“Housework—who does what, when, and how often—is the source of many a recurring marital complaint. Splitting chores 50/50 often seems like the answer, but couples who do often find themselves as resentful and unhappy as couples who set up no plan for dividing the work that makes a house run.”
If this sounds intriguing, check out the website and especially the comments “from the community” at the end.  I recommended that Logan Library buy this book!
“The authors, both accomplished journalists (Szuchman: Wall Street Journal and Anderson: New York Times, where she spent years covering Wall Street and delivered award-winning coverage of Merrill Lynch) decided the time was right for an economics-approach how-to for a successful union for a few reasons. One was a pretty tough first year of marriage for Szuchman, who was surprised it was harder than she thought to merge two lives and that “something as banal as housework could get in the way” of all the fun she heard people were having being married. Another was the prevalence of economic terms suddenly in the national lexicon at the time of the financial meltdown.”
Spousanomics: Using Economics to Master Love, Marriage, and Dirty Dishes.

February 19, 2011

What is a Credit Score Notice?

What about a “Risk-Based Pricing Notice” or “Account Review Notice”? Good? Bad? Indifferent?  Read on and check out the link below for more details. 
“Starting in 2011, many credit-seeking consumers will get more information about how their credit report or credit score can impact a lender's decision to grant credit and the terms under which credit is offered. Beginning January 1, new rules from the Federal Reserve and the Federal Trade Commission require lenders to provide new information to consumers under certain conditions.”
Depending on the circumstances, when you apply for credit through a bank, credit union, or other lender, you may receive a notice with information about your credit report or credit score. The new rules introduce several types of notices:

Credit Score Notice: provides your credit score and how your credit score compares to other consumers' scores.

Risk-Based Pricing Notice: you are being offered credit on terms that are less favorable than the terms offered to other consumers. Hmmm… NOT a good sign!

Account Review Notice: your APR on an existing account is increased based on a review of your credit report. Ouch!


Credit reports and credit scores

It’s time. Time to order a free copy of your credit report to check for any mistakes and to monitor for possible identity theft. Remind your spouse/partner, parents, grandparents, and adult kids to do the same.  This comprehensive website tells you all you need to know about credit reports and scores. Have you noticed that your auto insurance company is checking your credit report? Why should you check your credit report? Who else besides lenders has a legal right to view your credit report?  Who decides whether you get credit? Click the link and read on! http://www.federalreserve.gov/creditreports/default.htm
“Your credit history is important to a lot of people: mortgage lenders, banks, utility companies, prospective employers, and more. So it's especially important that you understand your credit report, credit score, and the companies that compile that information, credit bureaus. This site--maintained by the Federal Reserve Board--provides answers to some of the most common, and most important, questions about credit.” This is THE authoritative source for information on credit reports, credit scores, and how to resolve credit report errors.

February 16, 2011

Start Retirement Planning NOW

“94% of Americans wish they did a better job of managing their money,” according to the ING Retirement Institute Research Institute. “ING found that the more financially literate someone is, the happier and more confident they are.” “Startlingly, only 53% of Americans are currently saving for retirement, even though 97% realize that the earlier one starts saving for retirement, the better off one will be. Twenty-nine percent said they didn’t know where to start, 23% said they were procrastinating, and 18% said they needed help but didn’t know where to get it.”
Think you don't have time?  Turn off the TV and start learning and planning for financial security in later life.  
This report Insights: Retirement expectations, confidence, and realities can be downloaded at the ING Institute for Retirement Research: www.ingretirementresearch.com (Select “Publications”)

February 15, 2011

Compare insurance costs before buying a vehicle

The cost of insurance can vary widely for vehicles that appear similar. You might save money on the purchase only to lose the advantage with higher insurance costs year after year.  So compare the cost of insuring new or used vehicles you are considering before you buy!
InsWeb's QuickQuote (www.insweb.com/quickquote/quickquote.html) gives you a general idea. Once you narrow down your choices to 2 or 3 vehicles, get the VIN # and give them to your insurance agent for a specific quote.
Additional websites to comparison shop for insurance:

February 10, 2011

In the market for a new vehicle?

Thinking of buying a vehicle? Gently used vehicles are a great choice because the first owner sustained the large first year depreciation. There are LOTS of late model vehicles available and the way to find them is on the internet. My most recent vehicle purchase was a low mileage one year old vehicle that had been “detailed” by the dealer so it looked brand new.  After test driving the vehicle I pointed out to the salesman that the price on the internet was about $1,000 less than the price posted on the vehicle. So we started negotiating from the lower internet price. If we had walked in off the street we would have paid more! So it pays to use the internet.
However, if you are planning to get a loan and finance this depreciating asset, rates on new car loans are lower than for used car loans so it may make sense to buy new and finance at a lower APR.  Keep in mind one of my favorite quotes (from bankruptcy researchers Sullivan, Warren and Westbrook): “Cars depreciate faster than they roll downhill.” 
Check the April issue of Consumer Reports magazine for ratings on both new and used cars. In addition to extensive info on new car models, CR lists the “best of the best” used cars (including Honda Civic, CR-V, Odyssey and Accord), and the “Worst of the worst” (see p. 77 of the April 2010 issue for vehicles to avoid).  Most libraries subscribe to Consumer Reports or go online (and pay a fee for site access).
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