Military Saves Blog
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.
July 31, 2012
By Katie Bryan, America Saves Communications Manager
Cars, credit, and home repair and construction once again topped the list of complaints made to state and local consumer protection agencies, according to a survey by the Consumer Federation of America (CFA) and the North American Consumer Protection Investigators (NACPI). Thirty-eight agencies from across the United States provided information about the most common, fastest-growing, and worst complaints they received in 2011.
“The information compiled in the survey helps us as consumer protection agencies follow trends in consumer fraud, educate the public, and share information with each other, which will ultimately assist us in our investigations against fraud,” said Tonya Hetzler, Interim President of NACPI.
July 30, 2012
by Lila Quintiliani, AFC®
Military Saves Assistant Coordinator
There are some topics in personal finance that can be terribly exciting (Buying a house! Investing in stocks!), but then there are others that are about as thrilling as watching paint dry. Insurance falls in to the latter of the two categories, but it is a vital part of your financial safety net. And really, you can’t get to the fun stuff until you have covered your bases with the boring stuff first. When I teach classes on basic personal finance, people’s eyes glaze over when the subject of insurance comes up, yet many military folks either don’t have any type of insurance on their belongings, or are carrying vastly insufficient coverage on their things.
Are you struggling with credit card debt? If so, you’re not alone. Paying off credit cards and other higher interest debt is one of the most common goals that people try to save for. Unfortunately, having to pay off a large amount of debt with ridiculously high interest rates can make you feel hopeless, especially if your budget is already stretched. But it turns out that you don’t necessarily need to make huge sacrifices to become debt free much sooner than you may have thought was possible.
Let’s take a look at an example. Suppose you have 4 credit cards. One has a balance of $1,800 at 19.8%. The second has a balance of 1,500 at 16.99%. The third has a $1,100 balance at 16.7%. The last has a balance of $1,000 at 5.9%. If you just make the minimum payments, it would take over 30 years to pay all that off! Sounds pretty discouraging for someone on a tight budget, huh?