Tips, advice, and the latest news from the savings world.
Saving Money: Are Credit Cards Good, Bad or Just Plain Ugly?
August 8, 2012
By Lila Quintiliani, AFC®
Military Saves Assistant Coordinator
I have counseled servicemembers who had lots of debt and I have counseled very young servicemembers who had no debt at all, and they both faced the same problem -- very low credit scores. How could this be, you might ask? How can someone who has no credit cards and no car payments still have trouble getting a loan or applying for a store card? Well, you can think of credit scores as your “reputation” with the credit bureaus and the Fair Isaac Corporation (the company behind FICO scores): a good credit history, showing on time payments and a low debt to available credit ratio,goes a long way toward building a positive credit “character.” But the sad reality is if you are very young, just starting out, and have no credit cards and have never had a car note or other type of loan, you can look just as risky to a potential creditor as someone with lots of debt. And the same goes for someone who has paid off their debts and has closed all their credit card accounts. Suddenly they may find that they have an incredibly low credit score. When they go to apply for an auto loan, they may find themselves being offered rates in the 20+% range, or they may even be turned down.
August 2, 2012
By Lila Quintliani, AFC®
Assistant Coordinator, Military Saves
I heard a statistic I found really shocking the other day: according to the Center for Retirement Research at Boston College, 50% of 60 year olds have less than $37,300 in their retirement accounts. As you might guess, that’s not nearly enough to live off of in retirement. In fact, according to the Boston College analysis, Americans are a collective $6.6 TRILLION dollars short of the amount they need to retire. I don’t know about you, but I don’t plan on working to age 75. Nor am I counting on Social Security (or any type of pension) to make up the entire shortfall. The only solution I see is to save now for later. My husband and I are consciously not living to the full extent of our paychecks now. We are delaying gratification for the sake of a nebulous future that we are only starting to be able to visualize. And I’m here to tell you, sometimes delaying gratification really stinks. So sometimes we *do* “live in the present” – we go on vacations, or buy gadgets, or go to a Broadway play. But always, always, we are socking away a part of our pay.
I realize it’s tough to save in today’s economy. It’s also tough to save when you’re starting out, and not making much. But if you make it a habit, and commit to saving even a small percentage of your salary, then you’ve made a start. You can always bump up the percentage later on.