MONEY TIPS

Good advice is not always useful to you. You need to examine your situation and decide what will work best for you. So obtain advice and information from knowledgeable sources and then determine what will fit your needs.

Financial institutions are in business to make money and they do offer some great products on accounts that will benefit you if you use them. Go to your bank or credit union and talk to a representative or go to their website and see what they offer to see what you might be missing. Read your statement each month. Check for:

Certificates of deposit ---time sensitive

Money market—higher interest—minimum balance required

Sub-shares for you to keep track of certain funds

Share-secured loans—using your own money for building credit

A loan benefits both parties--- you get what you want and the bank makes money (interest) from your payments. Remember you don’t truly own something until it is paid in full so be careful that you don’t borrow more than you can comfortably afford. In short, you are at the mercy of the lender if you choose to borrow, know the terms of the loan.

Kinds of loans:

Signature---based on your credit rating—no collateral, high interest rates

Share-secured---your money is held in account until balance is paid off

Balloon—sometimes 1 year same as cash---you may pay a minimum payment each month with the balance due at the end of 12 months or you will be charged the interest from the beginning of the term.

Collateral---money is given based on the value of a piece of property, house, car, boat, trailer, etc. Use collateral loans to pay off higher priced cards (as long as you are going to keep the property for a long time).

Mortgage---loan against your home

1^st mortgage ---has priority—lower interest rate

2^nd mortgage—2^nd position—higher rate—shorter term

Retirement

Start as young as you can.

Save for retirement—take advantage of employer benefits, if they match, put the maximum in. Good investment in yourself.

Debt ratio

Divide your gross income into your debts that are on the credit report. Try to stay between 35 and 40%. This leaves 60% for payroll deductions, food, clothing, gas, insurance, incidentals etc.

Credit report

Your credit is a record of how you keep your word and it is based on several factors. Did you pay as agreed and on time, how long have you had credit, types of credit, is unsecured maxed out or is there some available to use and how many inquiries in recent months?

Score needs to be above 680, preferably over 720.

If you are having problems call your lender and ask to speak to someone in the risk department and see if you can make arrangements to modify or adjust your payment so you can continue to pay something each month so your credit doesn’t suffer. If you don’t pay at all or pay less than agreed, after 30 days it will be reported on your credit report and lower your score.