Newsletter Highlights

::Big Trends in Tiny Homes::

Small houses are the newest craze in home ownership. Why are people choosing this option instead of renting an apartment, purchasing a manufactured home, or buying an RV? Enthusiasts say that tiny homes allow people to live a minimalist lifestyle, lower housing costs and reduce carbon footprints, which gives small home owners peace of mind.

The trend seems to be gaining ground thanks to popular television shows like HGTV’s Tiny House, Big Living and fyi, Network’s Tiny House Nation. There are also books on construction and design, and expert advice from organizations that specialize in small home ownership and construction such as the National Association of Realtors® and the American Tiny Houses Association. Even cities are joining this movement by creating tiny home communities to help curb chronic homelessness or to restore neighborhoods such as New Orleans’ Lower Ninth Ward, which suffered extensive destruction during Hurricane Katrina in 2005.

So how small is small? The American Tiny House Association limits a tiny home’s structure to no more than 500 square feet. As for the construction of a tiny home, the Association suggests that builders look to their county and state’s building codes for guidance. For those who construct tiny houses on wheels (THOWs), the Association offers construction guidelines for sturdiness and safety. One of the characteristics that make small homes so successful is the focus on using all available space, especially vertical space. For example, in a traditional house, additional living spaces, such as a bedroom, add square footage to the structure. In a tiny home, a bedroom is built vertically in the upper rafters of the home’s structure. This construction is similar to recreational vehicles or micro apartments.

Tiny homes encourage builders to become creative with multi-functional space for eating, lounging, and playing. Tiny homes aren’t ideal for everyone. There are drawbacks to consider. First, think about the potential resale value. Even with the home’s creative use of space, some people can’t see past the restricted size. Second, many standard appliances and possessions may not fit in the limited space.

For instance, you may not be able to accommodate a full sized shower or you might have to forgo a washer and dryer, instead relying on a laundromat to wash your clothes. Another potential drawback is what the tiny home movement champions: minimal space. Conditions like claustrophobia may become a challenge as you adapt to living in a smaller space.

Many people choose a tiny home because of the cost savings. The cost of a minimalist home depends on what type of home you choose (foundation or THOW) or if you build it yourself. One Oklahoma-based tiny home custom manufacturer prices their homes between $49,000 and $67,000 with five floor plans to choose from. For more information about tiny homes and to determine if a small home is right for you, visit the American Tiny Houses Association’s website at Also, visit the consumer page at to learn more about becoming financially prepared for homeownership

::Thrift Shopping Tips::

Walking into a thrift store can be a little overwhelming if you’re not familiar with the store’s system. Believe it or not, there’s a method to the madness of thrift shopping.

For the best result, plan ahead. Search online for the “best thrift stores” in your city. When you identify some you’d like to visit, call to find out when new items are stocked.

As you arrive, pay attention to any notices posted on or near the front door. It’s common for thrift stores to use a system of color coded tags to cycle through sales. Here are a few more tips to help you find thrift shopping success:

::Q & A ::

Impact of Student Loans

Cynthia Campbell, Director of Innovation and Strategy

Ms. Campbell answers some frequently asked questions from students regarding education loans and the ways they can impact borrowers’ creditworthiness.

When financial institutions evaluate a borrower’s creditworthiness, how much consideration is given to student loan debt?

Credit scores are calculated based on certain aspects of a consumer’s credit report, including payment history, how much available credit is being used, the age of credit and the credit types used. A wellmanaged student loan can have a positive impact on credit scores. Failure to make payments as scheduled, or file forms in a timely manner to defer payments, may result in negative reporting to the credit bureaus.

As far as credit reporting is concerned, is there a difference between federal student loans and private student loans?

No, both the federal government and banks and credit unions report the active trade line, which includes the disbursement date, amount owed and payment history. However, a federal student loan can be in deferment or forbearance status, which is unique to that loan type.

If a borrower defaults on student loans, what impact will that have on his or her credit score?

Defaulted loans show as an unpaid debt, which reduces a credit score substantially and shows lenders that you’re not repaying money you’ve borrowed. The credit score is a statistical model of risk that tells lenders your likelihood of defaulting on a loan, so if you already have a defaulted student loan, you’ll have a lower credit score and be a higher risk to lenders. If you’re struggling to make your student loan payments, you can consider loan consolidation, a different payment plan that aligns with your income, an extended deferment or forbearance. The key is to communicate with your lender before going into default so that your credit score isn’t damaged.

If I have a large student loan balance, can I still qualify for a home loan?

Lenders considers your debt-toincome ratio and credit score when making lending decisions. Your debt-to-income ratio tells them how much of your monthly income is already dedicated to other loans (student loans, auto loans, credit cards, etc.) and helps them determine if you’ll have the ability to pay a mortgage payment. A large student loan balance doesn’t automatically preclude you from a home loan if your income supports the payment plan and the loan is in good standing.

How do financial institutions view student loan deferments, forbearances and consolidations?

Consolidating student loans can be seen as a smart move when managing debt. For example, consolidating four loans with varying interest rates into one payment with a lower rate would save money and effort. As for loans with deferments and forbearances, financial institutions still view them as outstanding loan balances that need to be repaid and will consider them in a lending decision. If you’ve been granted forbearance due to economic hardship, creditors may hesitate to lend additional funds knowing you’re already experiencing financial difficulty.

What’s the best piece of advice you can give regarding student loans and credit?

Only borrow the amount you absolutely need. Apply for federal student aid first by completing the Free Application for Federal Student Aid (FAFSA) and seek scholarships throughout your college career. Consider working part-time during school and fulltime during summers to minimize the need to borrow funds for your education. Repay the money you borrow to build a strong credit score so you’ll qualify for better interest rates in the future.

::Eliminate Careless Spending with a No Spend Weekend::

An epic end-of-season sale or specialty item that screams “buy me” can wreak havoc on your carefully crafted budget. The next time the shopping bug rears its tempting head, try these methods for keeping your spending habits in check.

You’ve probably heard of no-spend months, when you only pay for things like rent, bills and very basic groceries. The idea behind this is not only to save money, but also to become more aware of how much you spend on things you don’t actually need.

If avoiding spending for an entire month seems too intimidating, maybe you could start smaller. How about a nospend weekend?

After a no-spend weekend or two, you might find yourself ready to amp up your saving game and tackle a week… or even an entire month!

  1. Instead of the theater or Redbox, go to the library and borrow your entertainment. In addition to books, magazines and CDs, browse their DVDs and take home a blockbuster.
  2. Instead of dining out, go on a picnic. Pack your meals, fill your reusable water bottles and head to the park with a blanket. You can talk, people watch and maybe get a little exercise in before you leave.
  3. Take advantage of any media subscriptions you already have, such as cable, Amazon Prime videos, Hulu or Netflix. Even YouTube, which is already free, can provide a cinema fix.
  4. Have a family night. Cook together, dust off the board games and enjoy some quality time while making lasting memories.
  5. Indulge in one of your hobbies. Knit a shawl, construct a puzzle, or break out your sketchbook.
  6. Look up free events in your area, which can be found in the newspaper, online, and even on your mobile apps.
  7. Self-improvement projects could be a great fit for nospend weekends. Search for online tutorials on a skill you’ve always wanted to learn, get in a workout or volunteer for an organization you admire.

::Healthy, Frugal Cookouts::

It’s summer, and that means it’s cookout season! You don’t have to break the budget or sacrifice a healthy eating plan when planning a barbecue. Here are some tips for hosting a healthy and frugal cookout.

::The Wrong Way to Pick a College::

Choosing the school that’s right for you isn’t always easy. In fact, for some students it can be really complicated. Luckily, we’re here to help. Here are four student-tested strategies to avoid when considering which school to attend.

When comparing schools, consider the overall cost, the classes offered, the student support available, and the overall impression you get of the campus and professors. How does each campus fit with your needs and wants?

::College Dorm Room Checklist::

Moving into your college dorm roomand buying the items you need to furnish and decorate it-can be very exciting. When shopping for your dorm, however, you don’t want to overdo it and end up wasting money on unnecessary items or items that don’t meet dorm room regulations. Below are some items that, if allowed, can make your college living more comfortable.

::Follow These Tips Tonight to Have a More Productive Day Tomorrow::

A productive day isn’t always based solely upon your intense work ethic and natural talent. While theses attributes are important, a few tweaks to your evening routine can have a significant impact on your success for tomorrow.