Money education

Self-Directed IRA

Become Your Own Bank

The Self-Directed IRA (SDIRA) puts you in control of your qualified accounts such as IRA’s, 401(k)’s,  403(b)’s, Keogh’s, SEP’s and more. With a SDIRA you have the flexibility to invest in real estate, mortgages, businesses, franchises, tax liens etc.  This gives you, not Wall Street, discretionary control of investment options, whether traditional or non-traditional. A Self-Directed IRA is a retirement plan that allows the account owner to direct investment decisions on behalf of the retirement plan. Basically, an SDIRA is a unique hybrid tool that utilizes a self-directed IRA custodian and a specialized legal structure. With an SDIRA you will have a checkbook, a debit card and all the tools that come along with a business checking account.

The SDIRA owner can use his retirement funds for a multitude of investments providing a higher potential rate of return. All you need to know are the few things you cannot do and the rest is up to your imagination.

Payday Loan Consolidation

Guest Speaker Angela Sanders

Earlier this month we posted an article about Payday Loans, and the possible pitfalls connected to this institution. This post was evidently compelling enough for a reader to ask to be a guest writer and post her own story. The following is from Angela Sanders, who writes a Blog of her own called A Financial Journal. We are always excited in bringing you the very best in information and calls to action on this blog. Here is Miss Angela…

Is it possible to consolidate your debts?

“The consumers take out payday loan to manage their emergency expenses at the middle of the month. When you apply for payday loan you are not required credit check so the interest on this loan is comparatively higher than other loan programs. Make sure that you pay off the owed amount on scheduled date to avoid the accruing interest on the principal balance.”

Your Children and Credit

Educate Your Children about Money and Credit

Parents, start building your children’s credit early – and do it well. Build credit early for your children – even before college starts, if they plan to take out student loans. Sign over an account that they must pay on time each month. Get a credit card with a low limit, and a bank account that you help them manage monthly. Avoid opening several charge cards at once in their name – not only will they be hard to repay, but having new accounts when they have a short credit history will cause their credit rating to drop. Encourage them to get a part-time job.

“The Credit Card Act of 2009 sought to temper aggressive marketing of credit cards to students by restricting campus promotions and requiring students younger than 21 to have a co-signer, unless they have enough income to get their own card.” And banks are unwilling to offer credit education to their customers. “They do not tell us that no credit is as bad as poor credit. Banks and educational institutions certainly do not think it is their responsibility to conquer the critical task of teaching children about credit.”

Online Loan Comparisons

Be careful when using Online Loan Comparisons

Be careful of online loan rate comparisons, timing is everything. Online loan rate quotes are easy to get – type in some personal information and you can get a quote on a car loan, personal loan, student loan, or mortgage in seconds. This is free and convenient, leading many people to compare several companies at once in order to make sure that they get the best deal possible.

Inquiries

The problem is that since online quotes are a fairly recent phenomenon, Credit Bureaus count each such quoted estimate as a “Hard Inquiry.” This means that if you compare too many companies online by asking for quotes, your credit score will fall due to too many “Inquiries.” This does not mean that you shouldn’t seek online quotes for loans – not at all. In fact, online loan quotes are a great resource that can help you get the very best rates on your next loan. What this information does mean, however, is that you should research companies and narrow down possible lenders to just a few before proceeding.

Credit Card Piggybacking

Credit Card Piggybacking can raise your scores

Credit card “piggybacking” isn’t a new practice. For years, parents have done it to help their children get a jump start on their credit. However, it recently came under scrutiny because shady credit repair companies and unscrupulous consumers used the practice to artificially boost bad credit scores.

What is Credit Card Piggybacking? Credit card piggybacking is much like the childhood game of being carried around on someone else’s back; but instead, you’re “carried” on someone else’s credit card account. Once you’re added as either a joint card holder or  an authorized user to a credit card account, the entire credit history typically appears on your credit report and included in your credit score.

Being a joint card holder or an authorized user on an account with a positive payment history would boost your score. While late payments and high credit card balances could lower your score depending on the other information on your credit report. Note that not all credit card companies report authorized user accounts to credit bureaus, partly because of the cost and partly because of the way the practice has been abused by some.

Pay Day Loans

Avoid Payday Loan Scams

Payday Loan Cycle

As the Thanksgiving and Christmas Season looms just over the horizon, having available money for holiday shopping swings into the forefront of our thoughts. As enticing as it may be, you should avoid payday loans except as an absolute last resort. Payday loans are also called “cash advance loans” and they are small, short-term loans that carry very high interest rates. Some companies have even begun to advertise them as “loans to help you repair your credit”, but this is very misleading. Some companies suggest that these loans can help you pay off your bills and so establish good credit, but if you cannot afford to pay your payday loans back on time, you have to “roll-over” or extend the loan – often at huge expense and interest. Many people get into a “payday loan cycle”, whereby much of their monthly paycheck goes towards paying off their ever-growing payday loans.

Learn About Money

Make learning about money a priority

There’s a lot to learn about money, and there’s plenty of free information available. The Federal Reserve education web site,  offers personal financial education information and links to many useful resources.

Money education

Look for organizations in your community that can help you learn more about setting financial goals, budgeting, saving, using credit wisely and getting the best deal. Whether you attend information sessions at different venues, read about money in books, magazines, newspapers, or online, learning how to manage your money is an important part of life.

Here are some other possibilities:

• Nonprofit credit counseling service.
• Library.
• Community college.
• Bank or credit union.
• Nonprofit community development corporation.
• Nonprofit housing organization.
• Religious organization.
• Senior citizen center.
• Employee assistance program.
• Cooperative extension service.