My first thought was to pay off my student loan debt. Would that be a smart financial decision? Probably not. That was a loan so I could leverage myself by paying for my education without using any of my own money. Another reason why it would not make sense to pay off my student loan quickly is the tax benefit and the low interest rate. After thinking about all the advantages, why would I want to expedite paying off a near interest free loan?

My second thought was to put $6,000 into my online savings account and invest the other $4,000 in my individual stock portfolio. This would be great way to increase my net worth and help build my retirement portfolio. I would then have $6,000 which I could use at my own discretion.

Then I thought of how I can use this money to get a higher long term return, and leverage this money as much as I could. Real Estate is one of the only ways that you could purchase a big asset with little or no money. The $10,000 could be used as bargaining money for a down payment on a rental property. There’s a town house community that I’ve been looking at that would be perfect for this kind of investment. I could purchase the property and immediately rent it out to an Atlanta commuter or a fellow college student.

*eFIPO’s Rule* Always think outside the box when it comes to personal finance. There’s never just one way to solve a problem. Learn how you can turn a little money into lots of money.

See if your employer would deduct monthly payments on the loan from your paycheck. That sometimes impresses lenders.

Find someone to co-sign the loan.

Check with credit reporting agencies to make sure your credit report is accurate. Your trouble in getting a loan may be caused by out-of-date information, especially if you’ve addressed your financial problems.

Consider buying a less-expensive car that would require a smaller, and easier-to-get, loan.

Credit approval generally takes less than an hour.

Similarities between most debtors

• Look at their minimum payment as their actual payment.
• Spend 15-20% more than what they make.
• Eat out more than they eat in.
• Present thinkers instead of long term thinkers
• Postpone paying off their credit cards and keep more cash on hand.
• Have trouble sleeping at night because they worry about paying credit card bills
• They have addictive personalities i.e. drinking, gambling, and so on

Automobile Title Loans typically are offered with tiered interest rates. The better your credit rating, the lower the rate. Lenders naturally demand greater return for assuming greater risk. Rates range up to 10 percent, and even higher, depending on the consumer’s credit rating.

Cash advance loans, also known as payday loans, can be a necessity in a financial crisis. You may be forced to give up your paycheck to take care of emergency bills or the stress of living paycheck to paycheck is just too stressful at certain times of the month. There are several excellent finds on online for cash advance loans. You will be able to find many options from the comfort of your own home.

A cash advance is so simple to do over the Internet and many online lenders offer free cash advance loans to people who are using the service for the first time. This can save you a lot and make the process of getting a cash advance cheaper and easier. The process is a breeze and it only takes a few minutes to fill out your online application. All you have to do is show that you are 18, have a job and a checking account and you can be approved within minutes. The money can be in your checking account within 24 hours and your stress will be relieved. If you find that you have extra cash come in, you can pay your loan early on online or allow the lender to withdraw the amount on the loan’s due date.

Borrowing money has never been easier and thanks to the Internet it is as simple as ordering something off of eBay. You don’t even have to leave your house or be seen walking into a payday loans San Antonio or payday loans Boerne TX lending offices, which is often a concern for some people.

There are several reasons why prepaid credit cards are helpful in avoiding foreign financial problems.

You don’t have to carry large amounts of cash, which is irreplaceable if lost or stolen. If your cards are lost or stolen and used by a thief, you generally cannot be held responsible for more than $50 in fraudulent charges, and many credit card companies will replace your cards – sometimes overnight.

You’ll receive an itemized list of your purchases as part of your credit card bill.

You may get a more favorable rate of exchange, since the corporate rate card companies receive is often lower than the rate for individuals.

The booklet, “Using Credit and Charge Cards Overseas,” had input from American Express Co., the National Association of Consumer Agency Administrators, the American Society of Travel Agents, and was reviewed by the U.S. Department of Commerce before getting on the Consumer Information Center’s mailing list.

The 15-page, pocket-size publication, which offers advice on things that may be foreign to you while overseas – shopping, car rentals, securing hotel reservations – also lists the agencies you should complain to if you have a gripe.

According to the booklet, two major prepaid credit cards are enough for most people on an international trip. No matter how many cards you take, carry them separately, so if one is lost or stolen, you’ll still have another to use.

The booklet notes that while the Fair Credit Billing Act, a U.S. law, gives you the right to dispute a charge and temporarily withhold payment while the credit card company investigates it, that’s not always the case when making purchases overseas.

“In most foreign countries, consumer protection laws are different from those in the United States. With the exception of certain protections under the Fair Credit Billing Act, the laws of the country in which you make the purchase prevail, so be sure that you understand all the terms of the sale, including shipping arrangements, before you sign up,” the booklet states.

It further notes that some merchants overseas have “no refund” or “all sales final” policies.

Here are some other tips to help you use your credit cards wisely overseas:

Before you leave, make two lists of your credit cards and the international phone numbers to call in case they are lost or stolen. U.S. toll-free numbers cannot be reached directly from overseas. Leave one copy of the list with a trusted friend or relative and keep the other copy with you in a safe place separate from your cards.

If your cards have credit limits, check how much credit you have available and pay down balances or request higher credit lines.

Familiarize yourself with local currency and its approximate U.S. value before you buy anything. Be aware that in many countries, periods are used instead of commas in numbers. Thus “10,000″ may appear as “10.000.” And vice versa.

Some credit card issuers offer free protection in case of accident, loss or damage to your car rental. This protection is often referred to as collision damage waiver (CDW).

Ask your credit card issuer before you travel if it provides CDW, if it applies in the countries where you will be driving, exactly what is covered (for instance, personal injury or personal property may not be included), what restrictions and limitations may apply, and how claims procedure works.

Also be sure to check with your travel agent or rental company before you leave home to make certain that you can use your credit card CDW. As of this writing, in some countries, including New Zealand and Italy, customers are required to purchase the rental company’s CDW, even if their credit card offers coverage. Choose your prepaid credit card www.prepaidcreditcard.org

Personally, I did everything wrong. I didn’t shop for a mortgage which turned out to be a HUGE mistake. I ended having to shop for a realtor because my first one was dreadful, and I mean horribly dreadful. This realtor made me drive my own car, didn’t know where she was going, brought me to houses that were already sold (for more than a year), took me 15 miles out of the area where I wanted to buy, and knew nothing about the houses she was taking me to. I had to fire her, and get a new realtor. Having a really good realtor makes a huge difference in the home buying experience.

Here is a list of things to do before you start shopping for a house.

1. Get your FICO. Remember the article about why knowing your FICO can save you a ton of money. Well, this is one of the scenarios that involve finding your credit score. Before shopping for a mortgage you need to know what kind of rate and payment you are going to expect to get from lenders.
2. Find how much house you can buy. Like I said in an earlier post, do not buy a house that you really cannot afford. Having a house should be an investment, not a money pit. Use one of these mortgage calculators to estimate a payment that you can truly afford.
3. Now it�s time to shop for a mortgage. Check Bankrate and LendingTree to receive some offers from a lot of lenders without all the work. Another thing, I highly recommend going to the bank your checking or savings account is held at and ask them for their offers. They will sometimes offer you a discount just because you already have business with them. Another great lender is INGDirect if you want low rates and minimal closing costs. For first time homebuyers getting an ARM or hybrid loan is the way to go. Most of the time people who buy their first house usually buy another in 5-7 years. Getting a 30 year fixed mortgage will make your monthly payment higher, and you will end up paying more in interest. First time homebuyers should also look at NACA and other programs (like FannieMae) for first time homebuyers.
4. Make some choices. Choose an area where you want to buy, and decide how much you are willing to spend before you go to a real estate agent. Some real estate agents will bring you all over town which will waste a lot of time.
5. Get a real estate agent. It makes life a lot easier if you have a good agent that has your best interest at heart. Shopping without one can be very time consuming, and they have access to software and websites that non-agents do not usually have. They are also free for the buyer because they usually get a commission paid by the seller. Not too shabby.
6. Take a week off work. This was one thing I wish I would have done when I was looking to buy a house. You need to dedicate yourself and your time looking for the house. Making offers, signing papers and receiving phone calls from your agent and mortgage company can be stressful and extremely important. So, if you can, take a week off work.
7. Find a house that you really like. This house does not have to be your dream house, but it can’t be a dump that you regret buying. A lot of people end up settling and get a house that they truly don’t love. This will create problems in the long run, so shop around. It’s a big investment so take your time, and do not let the agent pressure you into something you do not like. It’s your money not theirs.
8. Hire a pro. Once you find the house you really like hire a construction engineer or house inspector to go through the house before you buy. I recommend getting the engineer if you can find one. Go to a local university or ask around for one. They know what they are doing a lot more than a regular house inspector.
9. Rent a truck or U-Haul and pay some friends to help you out. This is going to be your first house so you are not going to have enough stuff to need a moving company. It cost thousands of dollars to hire a company to do things that you and a couple of buddies can do just as easily. Pay your friends some good money to help you out. They are helping you out and saving you a ton of money (and trust me helping you move is the last priority on their lists).
10. Have a house warming party! It’s a big time in your life and you should be able to celebrate. A lot of times people will buy you gifts which is always a good thing. I recommend having a “stock my bar” party. Everyone buys a different kind of liquor to “stock“your bar. It’s the party that keeps on giving.

Retirement 101

At what age do you intend to retire?
How many years will you expect live in retirement?
How much are you currently earning?
What will be your main sources of income during retirement?
How much money do you need (or want) to spend each month in retirement to achieve your goals and maintain your lifestyle?
How much have you already accumulated in employer benefits?
How much have you already saved or invested for retirement?
How comfortable are you taking risks with your investment dollars?
How many people must you support financially now and in the future?

Questions created byUniversity of Illinois at Urbana-Champaign

If you think you are prepared for retirement these questions should be a breeze to answer. If you are not prepared and you are struggling to come up with answers make sure you read some previous posts I made about retirement.

The first step to making a realistic budget without it being chiseled in stone is to decide how much money you want to put into your budget. A lot of people don’t put in all their income in their budget. Most people will save a portion of their money before they want to pay for things. *Paying yourself first: see my top 10 ways to save money* Now, what should you do with the money after you’ve saved your 10-20%?

Here are my recommendations of what should be paid off beginning with the most important.

1. Rent or mortgage (40-45% of your income). This is a reoccurring cost that you will have to pay on a monthly basis – unless you like living outdoors. If you do not have any kind of living expenses because you have paid off your house, or if you are living with your parents, you should be putting the money you would be paying in rent/mortgage into your savings account. *A good mortgage calculator to make your rough budget*
2. Food and necessary bills (20-30%). What do I mean by food? NOT the food when you go out for dinner. Food you purchase at grocery stores that you will be eating on a daily basis. You need money for food or else you would die of starvation (I do not recommend doing that). The bills that are essential for a healthy lifestyle, such as water, electric, gas, and insurance bills are right after food. *Learn how to lower your utility bills*
3. Secondary bills (10-15%) – such as cable, internet, phone, and cell phones – come in third. These services are usually perks, but for some people these costs are also a necessity. Technically you could live without them, but a lot of people will argue this point. If you need to reduce these costs, but you cannot survive without them go for the bare minimum.
4. Fun and leisure activities (10-15%) are still a must. A lot of personal finance advisors, such as Michelle Singletary, recommend dropping any activities that will inevitably get you into serious debt. BUT, in my opinion, Singletary’s advice takes the fun out of life. She is a huge penny pincher when it comes to finance, and I don’t really agree on anything she has to say (sorry about the rant but I watched her show last night and I couldn’t help myself from pointing and laughing at the TV).

When I went through high school I always thought to myself, “When am I ever going to use an equation to measure the volume of a pyramid, or how will knowing the classes of bacteria benefit my life.” There are so many important things that I wish I knew before leaving high school that would have really helped me in my college career. It is almost like 20% of the educational fluff you learn in high school will only help you in random bar trivia. Why doesn’t school teach you ways to become knowledgeable in finance instead of dissecting a frog? The last job application I saw didn�t have a question on whether or not you know how to dissect a frog, and I’m pretty sure I’ve never had to do it again. What I didn’t know is that when I left high school I would get bombarded with credit cards and student loan packages. I basically thought that all this money that is being given to me is free. Wrong. Extremely wrong.

What happens when you don’t pay your bills, credit cards, or default on your student loans? Many freshmen in college go through this process. Right when they turn 18 they receive a pre-approval in the mail with a $1000.0 credit limit. Like I discussed in a previous post (Social inSecurity), should we leave this heavy burden of how teach our kids financial advice up to parents that also need to be taught the simple rules of saving? I don’t think so. High school juniors and seniors need to be taught why personal finance is going to be one of the most important parts of their lives.

There is a simple curriculum that needs to be introduced to the upper level high school students to handle the college lifestyle, and a key to financial freedom.

Budget & Banking
Making a healthy and fun budget
Good spending and bad spending
Paying yourself first and automation

Loans & Interest
Student loans and consolidations
Credit Cards
Car Loans
Mortgages/Home Loans/Equity Loans

FICO/Credit Score
Why its so important
Do’s and Don’ts
How to improve

Investments & Planning
Buying a House
IRA
401(k) and 403(b)
Insurance
Wills and Trusts

This set of courses would prepare students for the real world. Our country would no longer look like a financial mess if the younger generation wouldn’t have to worry about Social Security, or pension plans. They would learn why it is important to be proactive in politics, and in personal finance. It would empower the youth and give them the ability to live life the way they want.

*Do you think there are classes that need to be introduced in high school? Do you like the idea of a personal finance class introduced in high school? Please feel free to comment on this post*

The highest score possible is an 850 while the lowest is a 300. The FICO score is roughly put together using this formula: 35% punctuality of payment in the past, 30% capacity used: the ratio of current revolving debt (credit card balances, etc.), total available revolving credit (credit limitations), 15% length of credit history (how long credit you have been using credit), 10% types of credit used (installment, revolving,), and 10% recent search for credit and/or amount of credit obtained recently.

Knowing your score before you apply for a loan can save you hundreds of dollars monthly, and thousands yearly. Here’s a quick example of a 30 year fixed $100,000 mortgage having two different credit scores: A score of 760 and above, your avg. payment would be 632.07(using 6.5%), but having a credit score of 620-639 your avg. payment would be 740.05(using 8.09%). A difference of nearly $1300.00 a year. When you apply for a loan this score will cut your shopping time by 75% because you will know a ballpark range of the interest lenders will offer you. If you don’t know your score find it out now. Go to myFICO and start saving money!