In the spirit of Santa, credit reporting agencies are keeping track of whether you’ve been financially naughty or nice. Ever owed a debt? Chances are you have a credit file (three in fact). These central files keep tabs on your debts and repayment history. The information they contain (accurate or not) often determines if you can borrow money, the interest rates you’ll pay, which apartment you can rent, and how competitive you’ll be in landing a job.
The big three credit reporting agencies (Experian, Transunion, and Equifax) gather information from your creditors each month about your payments, balances, and missed payments. They compile this data into a report that they sell to lenders, insurance companies, landlords, and even prospective employers.
The Good News: Since most Americans don’t live in small communities where the local banker knows them personally, the credit reporting system provides a universal framework in which each person is judged by a common set of standards. The system allows banks and companies to evaluate your likelihood of repaying money they lend without having to know all that much about you personally.
The Bad News: An estimated 80% of credit reports contain errors, ranging from incorrect biographical and balance information, to missing accounts, to fraudulent or incorrectly attributed accounts. Furthermore, an estimated 1 in 4 credit reports contain an error(s) that could directly result in the denial of credit. Report accuracy overall is very difficult to determine, but we do know that these estimates are in the ballpark. Negative marks, whether accurate or inaccurate, stick around for just over 7 years on your credit report. So the damage lingers.
Such errors can prevent you from getting credit, or severely curtail the amount of credit extended to you. Honestly, a $500 limit on a credit card can do more harm than good (because you’ll likely need to use more than 30% of the card’s limit – see our article on credit scores for more info). In the wake of the financial crisis, more and more landlords are getting credit reports to evaluate who will be a reliable tenant. Those with federal security clearances may recall that their credit report was pulled to evaluate their suitability. Now, many private companies are using credit reports and scores to evaluate your suitability as an employee.
It is important that you establish a good credit history and keep an eye on your report to prevent any errors from hurting you down the road. You can get more information about credit reports from the FTC.
Your credit score—it’s not just about getting a credit card or mortgage anymore.
Азартный клуб Вавада – одно из лучших новых названий в сфере азартных игр!
Азартный портал Вавада — это, бесспорно, сокровища и богатства азартного мира, которые ждут когда игрок зайдёт. Азартное учреждение поддерживается группой специалистов в интернет-казино и опытных игроков отрасли, поэтому на этой площадке предлагается лучшее с обеих сторон индустрии. Лицензии в Ваваде получены Curacao и MGA, по правилам которых оно работает, что также факт того, что на веб-ресурсе приветствуются игроки с разных государств мира.
Программного обеспечения онлайн-казино Вавада
Азартный клуб Вавада функционирует на созданных продуктах основных игроков в сфере iGaming. К ним, к слову относятся:
– Pragmatic Play,
– PlaySon,
– Evolution Gaming,
– Rival,
– Merkur.
Пользователям не надо ничего скачивать, так как казино функционирует на платформе мгновенной игры. Это позволяет вам вести игру как на настольных компьютерах, так и на мобильных устройствах, позволяя игрокам входить в систему и заходить в свои любимые вендеры из отличного выбора по-сути в любом месте.
Казино приобрело игровые продукты многих крутых мировых операторов. Создатели азартной платформы собрали подборку вендеров для самых разных игроков. Охват слотов включает:
– тематические 3D-игры,
– с прогрессивным джекпотом игры,
– тематические азартные продукты,
– игровые аппараты с 3 и 5 барабанами,
– стандартные слоты.
Каталог карточных игр и остальных популярных игр казино также весьма разнообразен, предлагая различные варианты рулетки, крэпса, буры, покера и других игр. Отметим, на стороне живого казино существует несколько столов, где вы имеете возможность играть в современные видеослоты от Evolution Gaming.
Маркетинговые сюрпризы игрового клуба Вавада
Азартные лица, которые выбирают акции, могут быть довольны тем, что может предоставить Вавада. Его приветственный бонус похож с другими казино, то есть бонус на первые три ставки. Новые азартные участники также получат бесплатные вращения при регистрации. Со временем Вавада продолжит быть добросердечным, так как игроки могут улучшать баланс своих счетов с помощью определённых предложений. Однако, прежде чем подключиться к рекламным акциям, вам нужно ознакомиться с Условиями использования, чтобы понять их детали, которые могут включать задачи по утилизации и похожие условия.
Казино принимает местные валюты из определённых разных регионов. Игроки способны использовать евро, USD, швейцарские кроны, австралийские и канадские доллары. Пополнить счет легко, так как доступно несколько определённых вариантов оплаты, среди которых:
– Visa,
– MasterCard,
– Maestro,
– Jeton Wallet,
– Instadebit,
– Qiwi,
– Piastrix,
– банковские переводы.
Все это безопасные варианты, в которых доступны новейшие технологии шифрования, поэтому их есть шанс использовать без опасений.
Если из-за чего-то вам потребуется помощь департамента поддержки, казино Вавада предлагает исчерпывающий блок FAQ, где размещены ответы на самые распространенные вопросы. Если это не помогает, пользователи могут выйти на связь с представителем службы поддержки, нажав кнопку «Живой чат» или заполнив определённую форму. С казино реально связаться в любое время ежедневно, а представители приветливы, компетентны и помогут найти ответ на интересующий вопрос очень быстро.
Иначе говоря, каждый, кто захочет играть в веб-казино Вавада попадает в захватывающее королевство азартных интриг, крутых раундов и замечательных бонусных начислений! Азартное учреждение имеет обильное число отличных вендеров, отлично запускается на ваших смартфонах и предоставляет возможность совершать платежи при помощи определённых вариантов оплат. Веб-сайт в целом удобен и прост в использовании, и вы сможете пользоваться VIP-привилегиями, где бы вы ни находились! Готовы ли вы осознать, что может предложить казино Вавада с точки зрения новых функций и веселья? Тогда скорее регистрируйтесь, и не забудьте забрать свой бонусный пакет, который состоит из 3 блоков!
Community Ladders–Out in the Community
Community Ladders is giving a free financial planning seminar to the Young Souls group of All Souls Unitarian Church next weekend. This is similar to the free seminars we’ve run for graduate students at the University of Maryland.
Volunteering in the community is important to us. If you have a cause or a group that could benefit from Community Ladders’ un-evil take on finances, drop us a line at volunteer@comlad.com.
What to Expect When You’re Expecting
They say having kids changes everything. With your finances, this is certain – the average cost of raising a child from birth through age 18 is about $250,000. Whether pregnancy catches you off-guard or is long anticipated, preparing for a baby is more than simply life insurance and wills. It’s a commitment to reorganizing your finances so funds are available to meet your increased expenditures.
First, prior to the arrival of your baby, you need to make sure your health insurance is in order, and that you have funds set aside for out-of-pocket expenses (this includes things not covered by insurance (e.g. birthing classes, car seat), your medical insurance deductible, and your co-insurance after your deductible is paid). Without adequate health insurance, hospital costs for delivery could run up to $8,000; this figure rises significantly if it’s a high-risk pregnancy or there are complications.
Second, any financial planning you are currently doing requires an assumption that your monthly expenses will shoot up by about 10% when you have children. While (sadly) your nights on the town and other personal expenses may decline with children, the costs of baby clothes, diapers, doctor’s visits, and the myriad of other expenses means that your monetary outflow will be significantly higher than when you were childless.
Third, it will be helpful to rethink work arrangements if you are part of a two-parent household. Given work-related costs such as child care, commuting, taxes, and other expenses, it may not make financial sense for a lower-income partner to continue working. This requires a rigorous examination of your financial needs and budget, and your Community Ladders advisor can sit down with you well in advance to discuss possible scenarios.
At Community Ladders, many of our members come in wanting to avoid the financial mistakes their parents made, and they feel like no one has ever taught them how to think properly about finances. If you have teenagers, now might be your last shot to instill a sense of financial responsibility in them before they go off to the loose-credit world of college and young adulthood. Here are some tips for nudging them in the right direction.
First, as with any habit, you get the best results when you start early. Many parents find it useful to provide their children with financial remuneration in exchange for household chores. My parents set up a mock bank for me when I was a pre-teen, and “deposited” my weekly allowance along with monetary gifts I received. Then they stopped paying for the non-essentials for me. If I wanted a the latest Ninja Turtles NES game or VHS movie (this was the early 1990s, after all), I had to examine my bank account to see if I could afford it—which forced me to prioritize my spending at an early age and budget long-term for big purchases. To this day, I’ve never missed making a full payment on my credit cards.
Experts also encourage parents to make their children partners in saving for their college education. Parents should be frank about the extent of their ability to pay for college tuition and expenses from an early age, and prepare their kids for the possibility of future loans to support educational goals. Regardless of whether college students will need to take on student loan debt or not, adolescents and teenagers should consider contributing to their college savings plan*, such as a tax-advantaged 529 plan. Parents and future college students can sit down together and look at this useful expense calculator from FINRA, which highlights how investment costs can lower returns (in other words, use this calculator to make sure you’re not putting your broker’s kids through college instead).
More hardcore parents can take my dad’s approach. He mandated a full 50% split of all my limited income sources, between my personal spending money and college savings. For years I thought my dad a tyrant. I watched half of my allowance, birthday gifts, and even paychecks from my after-school jobs flow toward my college savings, this abstract thing which seemed an eternity away. I didn’t understand how smart this was until I was older, obviously, and appreciated just how expensive a college education was. I graduated with a BA and no debt.
Proactive parents can work with their teenagers to develop effective financial planning habits. But, talking with kids about money (especially if you’ve had financial trouble in the past) can sometimes be awkward. In these cases, you might consider getting your son or daughter a Community Ladders membership. The organization has a $10/month membership for students from high school through graduate school. The whole reason for this $10 program is to develop positive financial habits from an early age into adulthood and full independence. An advisor can work with your teenager or college student to get them on the right path to realize their personal, educational, and professional goals.
In general, modeling responsible behavior is one of the best ways to encourage kids to develop healthy financial habits. If your financial situation is under control, keep up the good work! Loop your child into your financial decisions and the expenses you face every day. If your finances need some work though, perhaps consider a Community Ladders membership for yourself. Even if you are struggling with finances, it’s OK to share this with your kids. Let them know that it’s difficult and explain why. Don’t leave them to figure it out on their own 5 years from now.
Young people with children often rely on financial and other forms of assistance from family, friends, and local and federal government programs. Long-term planning is particularly important for young families who want to be self-sufficient; however, in a place like the Washington, D.C. region, the cost of living makes financial self-sufficiency difficult.
The DC Metro Area Self-Sufficiency Calculator (DCMASSC) is a financial and career planning tool that determines the cost of living in this area, and incorporates costs for a range of expenses such as healthcare, childcare, food, and transportation. Once you determine your costs, the calculator will show what income is required to meet your needs. With this information, you can make long-term choices about education, career and vocational training, and other ways to generate the income required for economic self-sufficiency.
There’s now an iPhone app that feeds stock news and marketplace sentiment instantly, presumably so the user can trade more (capitalize on trends) and protect her/himself from fluctuations in stocks currently owned. This app, ultimately, is designed to promote the rash behavior that’s been shown to be a consistent long-term loser for most investors – market timing and frequent trading.
A recent survey of 2,000 high net worth individuals from around the world showed that even the wealthy lament that emotional trading affects their decisions; they wish they could be less … well … human. Now along comes technology that reinforces our human failings and allows us to make poor choices more efficiently.
A MarketWatch article states that, “Barclays has found that emotional trading can cost up to 20 percent in returns over a 10-year period, and showed that those that employed rules over decision making – who had a concrete strategy – had 12 percent more wealth on average.”
Barclays’ survey found that investors make 3 key mistakes:
1) They go with what’s done well lately (e.g. technology in the 90s and real estate in the noughties).
2) They keep too much of their money in ultra-safe, near-zero return assets, and then use a small portion for rather risky investments and strategies.
3) They focus too much on short-term returns, because they feel twice as much pain from a loss as a gain. This can cause them to jettison investing strategies when the market hiccups.
Reference: An excellent MarketWatch article by Charles Jaffe.
Past is Not Prologue
Many investing advertisements tout past results to earn your confidence in future performance. This is only natural; in most endeavors we look to the past to predict the future (does anyone shop for an inexperienced plumber, or a doctor with a host of malpractice lawsuits?).
As with most things in the world of finance, though, our gut instincts lead us astray. Past mutual fund results have almost no predictive value for future returns. Take, for example, technology funds in the 1990s that were crushing the market year after year. Then, one day, they imploded and lost well over half their value. If a fund manager is beating the market when s/he is out ahead of a trend, it is generally only a matter of time before that trend starts to work against the fund and the market tops over it.
Even though the government requires mutual funds to specifically disclaim such a connection (“past performance does not guarantee future results”), most potential investors will assume that past results are predictive of future success. This assumption is wrong, as several academic studies have demonstrated that past performance has almost no predictive value for future returns. In fact, one recent study recommended that the government replace its current disclaimer with a new one: “Do not expect the fund’s quoted past performance to continue in the future. Studies show that mutual funds that have outperformed their peers in the past generally do not outperform them in the future. Strong past performance is often a matter of chance.”
Reference: New York Times’ “Bucks Blog“
The vast majority of us think we are better drivers than average, with above average intelligence. Obviously, this can’t be right. Similarly, most investors think they will beat the market average. In fact, the opposite is true – most investors HAVE to underperform the market, by definition. The market’s average return is the net sum of all investments before the costs of those investments. These costs, it turns out, are substantial.
Investors incur heavy fees, such as the fund’s expense ratio (usually listed in a fund’s description and averaging 1 or 2 percent). But these are only the most explicit costs, there are also: brokerage commissions, sales loads (which Community Ladders HATES), advisor fees, and the costs of portfolio turnover. Pretty soon your 1 or 2 percent mutual fund is really costing 3 or 4 percent. With those kinds of costs, you need to do 3 or 4 percent better than the market to actually achieve market returns.
Advertisements from investing firms, however, will try to persuade you otherwise. Such advertisements will promise that they have broken the old paradigm and have a foolproof strategy. They’ll support their view with recent results (more likely than not, based on returns before costs are subtracted). Ultimately, however, we know the vast majority of mutual funds will not achieve the market average over the long term.
Many of our members distinctly remember the first time they carried a credit card balance. Some felt trepidation, some titillation. For most it was the start of a downward spiral, a spiral that takes many months to present itself as a serious problem. It doesn’t seem like a big deal at first – you’ll get to it next month or the month after that. But, that seemingly manageable debt has a way of quickly getting out in front of you.
Overspending is easy when you have several lines of credit, all with sky-high limits, unless you are a particularly careful consumer. During the housing boom of the early 2000s, banks doubled and tripled credit limits and issued cards like free candy to kids because Americans’ home equity soared. Unfortunately, as we all know, this time of plenty didn’t last forever.
Credit card issuers are using stricter standards now, although loosening gradually. Many banks have cut credit limits with little warning, and this can really hurt your credit score. You see, the formula that determines your credit score likes to see that you have a lot of available credit, but use relatively little of it. Yes, it’s counterintuitive. Try to keep your credit card utilization rate (that is, the percent of available credit you use) below 30% (actually 20%, if possible). If a bank lowers your limit and you continue to spend at your regular rate, your utilization rate rises. This, in turn, lowers your credit score. Be aware!
Some people have sworn off credit cards entirely after the recent financial mess. At Community Ladders, we tend to disagree with this strategy for most of our members.
What do you think? Leave your comments below.
References:
USA Today, How rising home values, easy credit put your finances at risk
CreditCards.com, Lower credit limits can hurt consumers’ credit scores