50 Smart Money Moves

1. Decide on financial goals.
For some people, there’s nothing more appealing than saving for a three-bedroom house with a white-picket fence. Others dream of taking a trip around the world or a sabbatical from work. Choosing your own personal money goals makes it easier to work toward them.

2. Create a spending plan.
Most people spend about two-thirds of their income on three essentials: food, housing, and transportation. Then there are debt payments, savings, household costs, and optional items such as entertainment to consider. Create an annual budget by allocating spending goals for each category.

3. Resist retailers’ enticements.

Stores are in the business of getting us to spend money, but if we know their tricks, we can better resist the temptation. Rewards cards, enticing smells (such as cinnamon around the holidays), and short-term flash sales are a few of the techniques that retailers use; being aware of them can make it easier to just say “no.”

Written By: Kimberly Palmer. If you would like to continue reading, click here.

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How to Make Sense of a Credit Card’s Terms and Condition

A zero percent introductory interest rate sounds great. So does a juicy rewards program. And who couldn’t use a sweet $100 sign-up bonus? We’ve all seen credit card commercials touting such offers, but most close with those dreaded words: “terms and conditions apply.”

Digesting the high volume of information contained in a credit card offer is not only time-consuming for many people but headache-inducing. Fortunately for consumers, credit card issuers must include a Schumer box in the terms and conditions, named for Sen. Charles Schumer, D-N.Y., which contains basic information in large type, including the card’s annual percentage rate. The Credit Card Accountability Responsibility and Disclosure Act of 2009 also gives credit card users legal protection from unfair practices. For example, issuers can’t raise the interest rate for the first 12 months after opening the account unless the cardholder is more than 60 days late on a minimum payment.

Despite these protections, long disclosure statements can be overwhelming, and the language can confuse the average consumer, says John Ulzheimer, president of consumer education at SmartCredit.com. “Even if they wrote them in fourth-grade English, I don’t know if people would take the time to read them or fully understand them,” he says.

Written By: Daniel Bortz. If you would like to continue reading, click here.

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Stop Keeping Up With The Joneses – They’re Broke

It used to be that spending money on status symbols for the sake of flaunting your wealth was an activity reserved for celebrities and millionaires. That has all changed. Conspicuous consumption, what was once referred to as “keeping up with the Joneses”, has brought the lifestyles of the rich and famous to suburbia.

Just as most people consider themselves to be above-average drivers, most people assume they aren’t the ones doing all this needless spending. They aren’t wearing ten pounds of gold chains, or gowns created by famous designers. Four-hundred-dollar haircuts, sprawling mansions, Rolls Royces and private planes aren’t in their budget, so they assume their spending is reasonable. However, a closer look at what you’re spending might put your own lifestyle in a different light.

The Trappings Of Success

The competition is on. Everyone is looking for the smallest phone, the cable provider with the most channels and the television with the biggest screen. Add in desktop computers and high-speed internet access and you’ve created a list of America’s growing “necessities”. According to a 2006 survey entitled “Necessity or Luxury” by the PewResearchCenter, 33% of Americans now view cable or satellite TV as a necessity. In 1996 that number was 17%. Also, 51% now can’t live without a home computer, up from 26% in ’96.

Written By: Lisa Smith. If you would like to continue reading, click here.

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How Interest Rates Affect The Housing Market

Mortgages come in two primary forms, fixed rate and adjustable rate, with some hybrid combinations and multiple derivatives of each. A basic understanding of interest rates and the economic influences that determine the future course of interest rates can help consumers make financially sound mortgage decisions, such as making the choice between a fixed-rate mortgage or adjustable-rate mortgage (ARM) or deciding whether to refinance out of an adjustable-rate mortgage.

In this article, we’ll discuss the influence of interest rates on the mortgage industry, and how both will ultimately affect the amount you pay for your home.

Written By: Barry Nielsen. If you would like to continue reading, click here.

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Why You Shouldn’t Worry Too Much About New Student Loan Rates

A new federal loan interest rate went into effect on Monday, doubling from the previous rate of 3.4% to 6.8%.

In 2007, the College Cost Reduction and Access Act sought to lower rates on subsidized Stafford Loans for four years. After the four years were up, Congress extended the 3.4% for another year. This year, lawmakers didn’t act fast enough to come to a decision before the July 1st deadline before they went off for a 10-day July 4th break, which meant the rates automatically reverted back to 6.8%.

Despite a lot of media coverage on the new rate, it actually only affects one type of federal loan. The direct subsidized loan is the only federal loan whose rate is doubling to 6.8%. This loan is a very particular loan, in which the government pays the interest on the loan when the borrower is still in school, during the six-month grace period after he/she leaves school, and while the loan is in deferment if the borrower needs to defer payments.

Written By: Amy He. If you would like to continue reading, click here.

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How Your VantageScore Credit Report Is Calculated

Since the 1970s, credit scores have played an increasingly vital role in the lending industry. Fair Isaac and Company began assigning credit scores to consumers based upon various factors over 40 years ago, and these scores are now reviewed not only by prospective lenders, but also by landlords, insurers and governmental agencies. But the computation process for the FICO score has some limitations; for example, a consumer has to have a credit line open for at least six months before it will show up on a FICO credit report. This and other deficiencies have led the three major bureaus to establish a new credit score model known as VantageScore, which evaluates customers according to a somewhat different set of criteria that can be much more forgiving in some instances.

A Collaborative Effort

The three major credit bureaus have used the FICO scoring model for decades, but the differences in how each agency computes its scores has led to numerous discrepancies that are often problematic for both lenders and consumers. The VantageScore model is designed to provide a much more standardized grading system than the one used by Fair Isaac and Company. The first version of Vantage appeared in 2006, followed by Vantage 2.0 in 2010, which was modified in response to the changes that swept over the lending industry after the Subprime Mortgage Meltdown of 2008.

Written By:Mark P. Cussen. If you would like to continue reading, click here.

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What the Doubling of Student Loan Interest Rates Means for You

The fact that Congress failed to act on student loan rates does not mean the world is ending.

Nor does it mean you will now go bankrupt or have to sell all your worldly possessions in order to pay back the money you borrowed for college. In fact, if you already have a student loan, your interest rate won’t be affected at all.

If, however, you plan to take out a new student loan, your interest rate might double from 3.4 percent to 6.8 percent. That’s right. “Might.” Here are the facts:

What just happened?

Congress was unable to come to a decision on student loans by the deadline of Monday, July 1. As a result, interest rates on some federal student loans doubled. The key word is “some.” Not everyone or every student loan is impacted.

Written By: Investopedia. If you would like to continue reading, click here.

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