Money Tips for Life
FOR ANY STAGE OF LIFE:
No matter how old or young you are, there are some basic things you can do to better manage and protect your money. Here are recommendations from FDIC Consumer News. Comparison shop for Financial services. Just as you would do for any major purchase, look at what is being offered by your bank and a few competitors, then try to find the best deal to meet your needs. For instance, with a mortgage, credit card or other loan, you may be able to negotiate the interest rate and other terms. This can save hundreds or thousands of dollars over several years. Get a free copy of your credit reports. These reports are prepared by companies called credit bureaus. They summarize your history of paying loans, credit cards, and other bills. If you apply for a loan, insurance or a job, or you want to rent an apartment, chances are your credit report will be reviewed. Try to save more and spend less. First, if you don’t already have a monthly budget, consider preparing one to get a better handle on your income and expenses for necessities. Keep banking costs down. With planning, you can sidestep some of the more costly fees and penalties'. Examples: * With credit cards try to pay the card balance in full each month to avoid interest charges. In addition, pay your credit card bill on time. One reason is to avoid late fees. Another is that late payments can damage your credit record. * With your checking account, avoid fees for insufficient funds and bounced checks. Understand your FDIC insurance coverage so you can be fully protected if your bank fails. If you ( or your family) have $100,000 or less in all of your deposit accounts at the same insured bank, you don’t need to worry about your insurance coverage. Your deposits are fully protected under federal law because the basic insurance coverage is $100,000 per depositor per insured institution. For guidance about your FDIC insurance, including how to make sure that all your funds are protected, go to www.fdic.gov/deposit/deposits/index.html to find FDIC brochures, videos and an interactive insurance calculator. Be cautious when borrowing against the “equity” in your home. If you have property valued at $300,000 and you owe $100,000 on your mortgage, your equity is $200,000. Home equity loans and liens of credit are ways that homeowners can borrow money using their home’s value as collateral and gradually pay it back. Home equity products are relatively low-cost ways to borrow money, but they must be repaid like any other loan. Especially important to remember is that if you cannot pay a home equity loan, you risk losing your home.
Prepare for the unexpected. Have adequate insurance, especially for life, health, disability, personal liability, and coverage of property. Review your coverage annually to ensure that it is up to date. Simplify your financial life. Have your pay and benefit checks deposited directly into your bank account. Protect against fraud. Here are basic precautions against identity theft, check fraud and other financial scams:
· Beware of requests to “update” or “confirm” personal information— especially your Social Security number, bank account numbers, credit card numbers (including security codes), personal identification numbers. * If you want to find out if a company is legitimate, look it up using a reliable source. Don’t rely on the contact information that was provided to you on a Web site or in an unsolicited call or e-mail. *Beware of transactions in which another party sends you a check for more than you are due and then asks you to wire back the difference.
· Look at your bank statements and credit card bills as soon as they arrive and report any discrepancy or anything suspicious, such as an unauthorized withdrawal or charge.
· Keep bank and credit card statements, tax returns credit and debit cards and blank checks out of sight.
· Periodically review your credit reports to make sure an identity thief hasn’t obtained a credit card or loan in your name.
FOR TEENS:
· Save some money before you’re tempted to spend it.
· Keep track of your spending
· Consider a part-time or summer job
· Think before you buy
· Be careful with cards
· Protect yourself from crooks who target teens
· Be smart about college
Getting a Loan: A Responsibility to be taken Seriously
Borrowing money can be a great way to buy something now and pay for it over time. And yes, there are ways for a teen to borrow money. But there are some important thing to remember if you borrow money. One is that borrowing usually involves a cost called “ Interest”, which is the fee to compensate the bank or other lender when you use their money. This is the reverse of what happens when the bank pays interest to put your money in the bank. Also when you borrow money you are promising to repay the loan on a schedule. If you don’t keep that promise, the results can be very costly—either in late payments you'll owe or in damage to your reputation, which mean you could have a tougher time borrowing money in the future. Here are some of your options… and important considerations.
For many teens, their first lenders are their parents.
If your parents are willing to lend you money, they probably will set repayment terms (how much to pay back and when).
You may be able to get access to a credit card or bank loan.
Under most state laws, for example, you must be at least 18 years old to obtain your own credit card and be held responsible for repaying the debt. If you’re under 18, though, you can qualify for a credit card along with a parent or other adult.
An alternative to buying with a credit card is to use a debit card, but this also comes with costs and risks.
A debit card allows you to make purchases without paying interest or getting into debt because the money is automatically deducted from an existing saving or checking account. Again, if you’re under 18, you may qualify for this card with a parent . other adult. he best way to pay for it time and money perhaps hundreds of dollars.
