Ask OKMM Q&A Forum


::April Edition::

man sitting with a laptop, typing in an Ask OKMM question

I'm considering taking out a payday loan to help with some extra expenses. I like that these loans are relatively easy to get, but I've heard some really negative things about them. What are my other options?

According to nbcnews.com, there are more payday lenders in the U.S. than McDonald’s restaurants. That says a lot - not only about the number of payday loan companies, but also the demand for them. “A large number of Americans are living paycheck to paycheck…they’re one unplanned expense from being in financial distress.” says Greg McBride, Chief Financial Analyst for Bankrate.com

Since you’re considering a payday loan, it’s likely you’ve found yourself in a financial bind. Whether you’re trying to cover an emergency expense like car repairs or a hot water tank replacement, or you’re simply trying to pay everyday living expenses like utility bills, a car payment or rent, payday loans are risky and lead many consumers into an ongoing cycle of borrowing. Interest rates for short-term loans are outrageously high and on-time payday loan payments aren’t reported to credit reporting agencies, while a poor payment history is.

When faced with unexpected expenses, consider these alternatives to payday loans.

If you’ve already borrowed a payday loan, do your best to avoid taking out another one. Consider contacting the payday lender to negotiate a payment plan; this will break the borrowing cycle by dividing the payment into more manageable monthly payments. If you want to pursue that approach, the Consumer Federation of America suggests contacting your bank for information about stop-payment options on the check used to secure the payday loan while you’re working out the payment arrangements. Research your legal obligations before stopping payment; some states consider it a criminal offense to stop payment or close a bank account with pending payments.

Also, be mindful of payday loan debt consolidation scams. Stay away from any agency that requires you to pay an upfront fee to consolidate your loans. It’s better to work with a reputable, nonprofit agency that offers free debt counseling. Focus on building your emergency savings and creating a spending plan you can stick to. With these tools in place, you won’t need to rely on payday loans in the future.



::Spending::


Q. When I was growing up, my uncle always told me “there’s no such thing as a free lunch.” I always thought he was a bit pessimistic, but now that I’m older I wonder if his favorite cliché is true. Is there really nothing that’s truly free?

Q. I’m a movie junkie. Besides renting and going to a matinee, how can I get my movie fix without blowing through my relatively small entertainment budget?

Q. I love shopping at my local dollar store, but I've found they don't always offer the best deals or highest quality products. I don't want to waste money; what items are worth buying at my local discount store?

Q. In an effort to save money, I’m considering joining a warehouse club. Is a membership to a store like this worth it, or should I continue shopping at my regular grocery store?

Q. Should I buy furniture outright or "rent to own"?

Q. Between school, church and community activities, my family is constantly on the go. What are some fast, economical options for feeding my family without resorting to the drive thru?

Q. Is buying 100 percent gas vs. gas-ethanol mix worth it?

Q. How can I save when dining out in the Oklahoma City area?

Q. Everything seems to be getting more expensive lately. Is there any way to stay ahead of rising prices?

Q. Why is the cost of gas so high?

Q. Do you have any good tips for dealing with the high cost of fuel? With skyrocketing gas prices, my budget is really feeling the pinch.

Q. My husband thinks it's smarter to buy a new fridge on credit because it will last longer. I would rather buy an inexpensive second-hand fridge for now and upgrade later. What do you think?

Q. During the summer I thought I’d do some home repairs. Is it smarter to do it myself, which would be cheaper but could take longer, or hire someone to do the job, which could be more expensive but done in half the time?

Q. I know that when talking about ways to save money, one of the first things most people suggest is to cook at home and avoid eating out. But honestly, I’m not a big fan of cooking, so my family eats out a lot. Do you have any tips on ways we can still save money when dining out?

Q. I don’t make a lot of money compared to my friends. They constantly want to go out to eat or participate in expensive activities. I’m afraid that I’m digging myself into a financial hole. What should I do?

Q. My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy?

Q. Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it?

Q. What is the easiest method to track your spending, especially outside the home?


Holidays, Vacations and Other Life Events


Q. Halloween is one of my family’s favorite holidays! This year I promised my wife that we’d scale back and keep the cost to a minimum. Do you have any suggestions?

Q. Help! How do I avoid overspending this holiday season?

Q. As spring approaches, I'm trying to think of new family activities, but money is tight. I'm worried that cutting back may mean sacrificing our fun. Any ideas?

Q. Summer is always an expensive gift-giving time for me and my family. It seems like invitations to weddings, baby showers, graduations and birthday parties never end from May to August! Can you suggest some tips to help ease the pain of purchasing for others?

Q. Now that Christmas is over I should be relieved, but I know I spent too much money (cash and credit) on gifts and entertainment. I don’t want to go through this again next year! What can I do?

Q. My wife’s company rewards their employees with bonuses around Christmas time. In the past, we’ve used this money to pay for gifts or to take the family on a holiday vacation, but we’d like to use the money more wisely this year. Any advice?

Q. With the holidays fast approaching, I’m feeling stressed. Money is tight so I can’t buy presents for my friends and family like I normally would. I want to share some holiday cheer, but I’m out of ideas. Can you help?

Q. This summer I'm planning to propose to my girlfriend of four years. Unfortunately, I feel bad because we don't have a lot of money and I'm afraid she won't say yes if I choose a cheap ring. What should I do?


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::Saving / Investing::


Q. I’ve saved $33,000 in an emergency fund and have invested a substantial amount of money in stocks. Is it a good idea to invest a portion of my emergency savings into stocks, a 529 college savings plan and a Roth IRA so it can earn more money?

Q. I know that saving is important, but after taking care of daily expenses and doing my best to save for emergencies, thinking about stashing money for my child’s college education and my retirement is overwhelming. I’m not sure I can cover it all … which savings goal takes priority?

Q. Which is more important, saving or paying off credit card debt?

Q. Is it better to have all your money in one place?


Emergency Funds


Q. What’s the best way to start an emergency fund?


Retirement


Q. Can you explain more about financial planners - what they do, what their rates may be, and how to find a reputable planner (one that won't simply try to sell you more life insurance)?

Q. I have a CD that is getting close to maturity. How do I know if I should renew it or cash it in?

Q. Are there any rules of thumb for investing in stocks?

Q. What’s the difference between a traditional IRA and a Roth IRA? Which is a better investment option?

Q. Who do you think would accumulate more by age 65?

Q. I would like to be able to retire someday, but I just can’t seem to save money on a regular basis. How can I ever afford to retire if my monthly spending eats up almost all of my paycheck (or more)? Help!


Lifestyle


Q. I know it’s important to save money; in fact, I’m great at stashing money in my emergency fund. I’d like to take it to the next level by cutting back on day-to-day expenses, but everything I’ve tried is too complicated or time-consuming. I need a system that’s easy to stick to. Can you help?

Q. How do I save money to prepare for having kids?

Q. My family and I would like to take a vacation at some point this summer. We have most of the money already saved, but we’re struggling to come up with the last few bucks. Do you have any tips on ways we can save a little extra money throughout the year to make vacation planning easier next summer?


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::Paying for College::


Q. Can you shed some light on Oklahoma's 529 College Savings Plan? How does it work? What about fees? What happens to the money if my child decides not to go to college?

Q. When it comes to paying for college, I imagine I’ll receive scholarships and grants, however, I doubt this will be enough to cover my tuition and fees. I’ve heard about crowdsourcing your tuition. Is this a viable alternative to student loans?

Q. I think we’re going to need student loans to help pay for college. I've done some research and it looks like federal loans are our daughter’s best option. We’re concerned about taking on too much debt and want her to borrow as little as possible. Should her father and I take out the loans, or is it better for her to incur that debt?

Q. My husband and I recently had a baby and we’d like to start a college savings fund, but we don’t know where to start. What are our options?

Q. My kids are 12 and 14, and I haven’t really made college savings a priority. How do I start saving money for college at this stage?


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::Budgeting::


Q. I’m not a shopaholic, but I have no willpower when it comes to walking away from something I really want to buy. Please help me keep from wrecking my budget month after month!

Q. I’ve heard that a member services representative at my local bank may be able to help me set up a budget. Is this a good idea?  If so, how do I take advantage of this service?

Q. For many people, getting paid once a month is extremely hard, no matter how much money you make. Where can I find resources to help me save and still have enough money to last through the month?

Q. How can I keep my budget on track in a tight economy?

Q. How can I manage my money better without following the typical budget?

Q. How do we go about setting a budget or sticking to what we already have?

Q. I’ve heard a lot lately about creating a spending plan, but do I really need one?

Q. What is the easiest method to track your spending, especially outside the home?

Q. It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have?


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::Credit::



Payday Loans


Q. I'm considering taking out a payday loan to help with some extra expenses. I like that these loans are relatively easy to get, but I've heard some really negative things about them. What are my other options?


Q. I’ve taken out several payday loans and I’d really like to break the borrowing cycle, but I’m not sure how. Where should I start?


Credit Cards


Q. I’m interested in getting a credit account through American Express that doesn’t have a credit limit — how do accounts like this affect credit scores?

Q. We have several credit cards with a zero balance; the accounts are in good standing, but we don't need or want them. We've thought about closing the accounts but are worried that will negatively affect our credit rating. What should we do?

Q. Is there some hidden risk to transferring my credit card balance to a new card with a lower introductory interest rate? If I don't pay it off before that period is over, does anything prevent me from transferring it yet again to another card with a similar deal?

Q. I’m a careful credit card user, and I’ve heard creditors have to follow new rules. What changes have been made to the credit card laws?

Q. Is it really a big deal if I sign up for a store credit card to take advantage of their 10 percent off special?

Q. I’m paying 22 percent interest on the credit card I got in college and would like a lower rate. What are my options?


Credit Reports / Scores


Q. I have a few bills that are past due. Some have even been turned over to a collection agency. I’ve been told that this could negatively affect my credit. Is having good credit really important? How can I improve my credit score?

Q. I’m curious; can an employer get a copy of my credit report without my permission?

Q. How long does it take to increase my credit score if I’m trying to rebuild my credit?

Q. What are ways to improve a bad credit score?

Q. I was recently told that applying for a department store card wouldn't affect my credit score. That's different from what I've always been told, so who's right?

Q. How do I check my credit report?

Q. If I maxed-out my credit card, made a payment late, or went through a debt settlement, what effect would this have on my credit score?

Q. Since it’s so important to know your FICO score, is it safe to give your personal info to one of those credit companies via the Internet to get your score? Are they really free?

Q. Over the years, I have collected many different credit cards. Some of them are store cards (Lowe’s, Target, etc.) and some are Visa and MasterCard accounts. I only have a balance on one card right now. I would like to close some of these accounts, especially store accounts, but I’ve heard that closing accounts can hurt your credit score. But, I’ve also heard that mortgage companies use your total available credit to compute your ability to pay. So, what are the guidelines and pitfalls in closing credit card accounts?


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::Debt Management::


Q. Like many people, I have an auto loan. My goal is to pay it off early so I can pay less interest. I’m not sure what approach I should take, can you help?

Q. I have nearly $10,000 in credit card debt. I don’t want to file bankruptcy and I’m afraid a debt repayment program will be too expensive. What other options do I have?

Q. Is a strategic default a good idea, or should it only be considered as a last resort?

Q. What's the difference between good debt and bad debt?

Q. I've heard about the debt snowball method for eliminating my debt. I'd really like to give it a try; can you provide step-by-step instructions?

Q. On my way to work, I see several signs advertising the services of credit repair agencies. Is it best to use one of these agencies or can I repair my credit by myself?

Q. Which is more important, saving or paying off credit card debt?

Q. I’ve noticed that there are a lot of radio and television commercials advertising various credit and debt counseling services. Are all of these businesses legitimate? How do I tell?

Q. Often I find myself overwhelmed when it comes to dealing with my debt. The big picture is often frustrating and leaves me unsure of what to do. Can you give me some tips to help me keep it all in perspective?

Q. When paying toward debt, what should I attempt to pay off first? The smallest debt or the higher interest rate?


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::Consumer Issues::


Q. I start every year with the best of intentions. I set a New Year’s resolution and work toward achieving it, for a month or two. After that, I fall off the wagon and go back to my old ways. I want to succeed this year and have a financially fruitful 2015 – help!

Q. My recent diagnosis of type 2 diabetes has impacted my lifestyle, especially my finances. Doctor’s appointments, prescriptions, medical supplies, exercising and a modified diet are all essential parts of my treatment plan. Even with insurance, these expenses add up. I know if I don't focus on my health now, the long-term negative impact will be greater. Do you have any tips for managing these health-related expenses without compromising my budget?

Q. I’ve been told that playing casino games and purchasing lottery tickets is a great way to earn extra cash, sometimes equivalent to a second income. Is this true? What’s your opinion?

Q. Can you explain how a health savings account could be better than health insurance?

Q. Hypothetically, I've won a $2 million Powerball jackpot. What’s the best way to collect payment? What happens if I die before I receive all of the winnings?

Q. My family is contemplating a change from two incomes to one. What are some things we should consider before taking the plunge?

Q. I’ve heard a lot about disaster-proofing your financial documents. What’s the easiest way to accomplish this task and why is it beneficial?


Relationships and Money


Q. A close friend recently asked me to co-sign for a loan. I’m torn; I don’t want to offend my friend, but I’m not sure that taking on the responsibility of co-signing is the best idea.

Q. My husband always wants the newest, coolest gadgets and services. It seems to physically hurt him to watch movies on our perfectly good 5-year-old television because he knows there are better ones just waiting for him at the store. We need to cut back on spending and pay off some debt; how can I make this as painless as possible for the spender of the household?

Q. I’m engaged to be married this fall. My fiancé and I were raised with different views regarding money. What can we do to make sure we’re on the same page financially before we tie the knot?

Q. One of my closest friends is constantly in a financial bind and comes to me for help. In the past, I’ve done what I can to help but I’m starting to feel taken advantage of. What can I do to stop this cycle of lending money while keeping my friendship intact?

Q. My son is being deployed overseas. I'm worried about maintaining his day-to-day bills while he's gone. At the same time, we both would like to make sure he upholds his debt obligations and that he keep his credit afloat. Do you have any suggestions?


Identity Theft


Q. I’ve heard stories from friends and family about kids who’ve become victims of identity theft. What can I do to protect my daughter’s personal information?

Q. What steps can I take to avoid identity theft?

Q. My wallet was stolen and I canceled my credit cards. Is there something else I should do to make sure no one steals my identity?


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::Big-Ticket Items::



Homes


Q. I love watching do it yourself (DIY) shows that focus on renovating "fixer upper" homes. Typically, the homeowners have large budgets and opt for high-end upgrades. I want to renovate my home, too, but I'm afraid I won't produce the same results as they do on TV. How can I renovate my home while staying on budget?

Q. I’m interested in selling my home, but I don’t want to hire a realtor. I know it’s a common practice, I just don't know where to start. What steps should I follow?

Q. Our mortgage is almost paid in full. My husband wants to move into a new home and get out of our starter home. What would be more practical in our current economy: economical home improvements on an old home or purchasing a newer home?

Q. I’ve been renting for several years and have decided I’d like to own my own home. I’m not sure I can afford a traditional site-built home; are mobile homes a good investment?

Q. When you’re selling your current home and buying a new one at the same time, should you contract with separate realtors?

Q. My wife and I live in an older house. Over the years we’ve been working on updating random odds and ends, but we haven’t done much to the kitchen for the fear of spending a fortune. Do you have any cost saving ideas we can use now while we save money to do what we really want?

Q. With today’s low interest rates, we’ve been thinking about refinancing our home mortgage. What should we consider before making our decision?

Q. I’m planning to sell my home this summer, but I’m worried about the state of the housing market. How can I make my house more appealing –without spending a fortune - so I can sell it quickly and make a healthy profit?


Vehicles


Q. I’m ready to trade in my current car for a newer one. What can I do to increase my vehicle’s trade-in value so I don't lose money?

Q. My car's check engine light recently came on. How do I find a reliable, low-cost mechanic?

Q. When I bought my car, I paid for an extended warranty. Now, a third party company has contacted me claiming my policy might not offer enough coverage. Some resources say third-party warranties are a good deal while others say it's a scam. What do you think, is the added coverage a good investment?

Q. Is gap insurance worth the cost?

Q. I’ve been thinking about buying a new car. In the past, I’ve always purchased new, but this time I’m considering a pre-owned vehicle. I’ve seen the commercials for services like Carfax®, but I’m a little wary. Are reports like these reliable?

Q. I want to refinance my car. Is it best to refinance it with the same bank who gave me the loan or my main bank that I use for all my personal things?

Q. Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it?


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::Kids & Money::



Q. What are some fun ways to teach my middle school students the "good, bad, and ugly" of credit cards?

Q. My husband and I try to live below our means, make wise decisions with our finances, and explain money concepts to our kids. It really bothers me that my oldest child can't watch a cartoon without seeing at least one commercial that convinces her there’s an item she MUST have. Do you have any tips or resources to help us beat the pull of consumerism?

Q. My 8 year-old has been asking me to give her an allowance. I think it’s a great idea, but what’s the best way to teach her about money management and spending at such a young age?

Q. My teenage son landed his first summer job. While I’m extremely proud of him for earning a paycheck, he blew his entire first paycheck in just a couple of days. How do I teach him to manage his paycheck wisely?

Q. How much allowance should I pay my kids? Should it be tied to chores or not? What should I expect my kids to pay for out of their allowance money (birthday presents for friends, family, Christmas gifts, fun stuff for themselves, etc.)?

Q. My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy?

Q. My children are 6 and 8 and I really want them to learn about money before they get any older. What can I do?


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::Taxes::



Q. I owe state and federal taxes, but don't have the money to pay them by April 15. Should I pay with my credit card to avoid penalties from the Internal Revenue Service and the state tax commission?

Q. Is there anything I should know about being audited by the IRS? Together, my husband and I make a substantial amount of money. I’ve heard the more money you make, the higher the chance is of being audited.

Q. I heard that filing my taxes online is better than hiring a tax professional because it provides me with more opportunities for savings and maximizes my refund. Is this true?

Q. I’ve heard that it’s better to have a mortgage for the tax deduction than to pay off a mortgage early. My husband and I have worked very hard to pay off our mortgage in four years. We took out a 30 year note, but plan to pay off this note in April of this year. I’m concerned about the loss of the tax deduction in coming years. Is this going to hurt us in the long run?

Q. I look forward to receiving a tax refund each year, but my family and friends keep telling me that getting money back is a bad thing. I’m not convinced; how can a refund be a bad thing? Why shouldn’t I look forward to a refund each spring?


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Spending


When I was growing up, my uncle always told me “there’s no such thing as a free lunch.” I always thought he was a bit pessimistic, but now that I’m older I wonder if his favorite cliché is true. Is there really nothing that’s truly free? (posted November 25, 2015)

Your uncle was onto something…unfortunately, there’s no such thing as a free lunch. While it’s true you may not have to pay dollars for something that’s promoted as free, in reality, you still give up something anytime you make a choice. Imagine for a moment that your favorite restaurant offers free lunch to the first 50 customers through the door. While you could save a buck or two on a yummy chicken sandwich, it still costs you something to enjoy it. You most likely spent energy, fuel and time in your quest to be one of the 50 participants who enjoyed this free treat. Not to mention all the other options you effectively gave up to take the time required to get and enjoy that free meal.

In financial terms, this concept is called opportunity cost. Opportunity cost is what you have to give up in order to get something else. If you choose to work full-time, you may not be able to attend college classes full-time. If you spend twenty dollars at the movie theater, that’s twenty dollars you can’t spend elsewhere. If you choose to go on a ski vacation, then you won’t be relaxing on the beach. Each and every choice we make - financial or otherwise - has an opportunity cost.

Money and time are limited resources. The key to making the most of your choices is learning to weigh the pros and cons of each option. Carefully consider each path and its corresponding consequences, and choose the course that will satisfy you most and give you the best return on your investment. Every choice has a value, so invest your energy in pursuing the outcomes you value most.


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I’m a movie junkie. Besides renting and going to a matinee, how can I get my movie fix without blowing through my relatively small entertainment budget? (posted October 30, 2015)

What a great question. Movies are a favorite pastime for many people, but as you know a trip to the theater isn’t necessarily cheap. While some towns have dollar movie theaters, that’s not an option for everyone. Consider these cost-saving options the next time you want a movie theater experience without the big-budget price tag.


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I love shopping at my local dollar store, but I've found they don't always offer the best deals or highest quality products. I don't want to waste money; what items are worth buying at my local discount store? (posted March 17, 2015)

Discount retailers like Dollar Tree, Family Dollar and Dollar General are popular with consumers. The wide variety of products, including food, clothing and household supplies often makes these stores an appealing one-stop-shop. Like many retailers, they bank on the impulse buy, hooking consumers with bargains and hoping buyers will pick up additional items while they're there.

To help determine which dollar store items are a good deal, keep the following factors in mind.

Only you can judge whether or not an item is worth purchasing, but seasoned shoppers have shared the following opinions on what's worth buying at their favorite discount store:


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In an effort to save money, I’m considering joining a warehouse club. Is a membership to a store like this worth it, or should I continue shopping at my regular grocery store? (posted Aug. 29, 2014)

Big-box retailers like Sam’s Club and Costco can be great places to score lower-cost deals on grocery items, household products and even bigger ticket items like tires, patio furniture and mattresses. The value of a club membership depends on you - the types of products you buy, how quickly you use them and the amount of storage space you have available.

Before buying a membership, visit your local store to see what it offers. Many retailers host special events that allow non-members a chance to explore the store before making a decision to join. If your store doesn’t offer a preview event, ask a friend or family member who’s already a club member if you can tag along during their next trip. Before your visit, make a list of your commonly purchased items and the prices you typically pay. Remember that big-box stores may not carry the same products you’re used to, so be prepared to review what’s available that’s comparable to items you regularly purchase. It’s a good idea to bring a calculator so you can compare the cost savings to the prices offered where you typically shop. Bigger doesn’t always mean cheaper; calculate the cost per unit to make sure it’s really a better deal. If the potential savings is greater than the cost of membership, joining may benefit your budget.

If you choose to purchase a membership, follow these tips for bulk-shopping success:


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Should I buy furniture outright or "rent to own"? (posted Sept. 30, 2011)

Rent-to-own companies offer products like appliances, furniture and electronics. You can either rent the product for a short period of time and return it, or agree to rent the product until you pay enough to own the item.

If you only need an item for a short period of time, rent-to-own might be a viable option. However, if you want to keep the item, buying from a rent-to-own company will usually cost two to five times as much as purchasing the item from a department or appliance store.

Regardless of where you buy a product, it’s important to comparison shop to find the best deal for your money. If the item you’re interested in is something you want but don’t need right away, consider putting the amount you’d have paid a rental company into a savings account. Once you’ve saved enough money, you can make your purchase outright – saving both interest payments and the possibility of making late payments and having the item repossessed.

After comparing your options, if you choose to go through a rent-to-own retailer make sure you ask the right questions.

  1. What is the total cost over the length of the contract?
  2. Who’s responsible if the item breaks or gets damaged?
  3. Will the item I get be new or used?
  4. What happens if my payment is late?
  5. What happens if I miss a payment?
  6. Are there penalties if I cancel the agreement?

Good luck to you and happy shopping!


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Between school, church and community activities, my family is constantly on the go. What are some fast, economical options for feeding my family without resorting to the drive thru? (posted Oct. 28, 2011)

This is a great question and one that I’m sure many can relate to. If you feel like your to-do list is never ending and you rely on fast food restaurants more than you’d like, one of the following tips may be just what you need.

For more sanity-saving kitchen ideas, check out these online resources:


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Is buying 100 percent gas vs. gas-ethanol mix worth it? (posted June 24, 2011)

This is a huge, and sometimes heated, debate among drivers and unfortunately the answer isn’t as simple as yes or no. We did a little digging and here are some things to consider when comparing your fuel options.

What’s the difference for my pocket book?

Is ethanol good for my car?

Can I use ethanol-blended gas in older vehicles?

Will ethanol blended gas plug fuel filters?

Can I use ethanol-blended gas in small engines like lawn mowers and weed eaters?

Will using an ethanol blend affect my gas mileage?

Is ethanol really better for the environment?

Ultimately, since there are no clean cut answers to the question, it most likely comes down to personal preference and how your particular vehicle performs. Consider doing an experiment to see which type of fuel works best with your vehicle. After your next fill-up monitor your car’s performance and fuel mileage, then when you fill up again, choose the other type of fuel, tracking the same performance factors. Compare the results and decide which fuel is best for your vehicle and driving patterns.


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How can I save when dining out in the Oklahoma City area? (posted April 25, 2011)

We’ve all heard it before. Cooking at home and brown bag lunches are friendlier on the pocket book, but let’s face it - sometimes you just want to eat out. The good news is we have some great tips so you don’t have to break the bank to dine out.






Everything seems to be getting more expensive lately. Is there any way to stay ahead of rising prices? (posted May 30, 2008)

Every trip to the grocery store or gas station these days seems to carry a fair amount of sticker shock. Inflation - a rise in general pricing, which means your dollar buys less and less over time - is at the heart of this problem. The past ten years have been a period of low inflation by historical standards, with prices rising only an average of 2.75 percent per year. The honeymoon may be over; prices are already about 4 percent higher than this time last year.

Last month, we talked about how to save money on gas. The high cost of gas causes the cost of other things to rise, as well, since the fuel required to transport goods to stores is more expensive. Maybe you’ve noticed the resulting increase in grocery prices, too.

With a little shopping savvy, you can find some relief at checkout the next time you go to the grocery store. Try these tips to ease the pain.

Make (and stick to) a list. Each week, decide what you want to eat for every meal, make a grocery list based on your meal plan, and stick to your list. You’ll end up wasting less food, and you’ll avoid impulse buying. This is by far the most significant way to lower your grocery bill.

Forget the brand. Store-brand groceries are often just as good as the big-name brands, and in some cases, they’re made by the same company! Usually, buying generic products will save you even more than buying name-brand items with coupons.

Flex your neck muscles. Grocers like to put the most expensive items right at eye level, hoping you won’t look up or down to find the better deals. A quick scan of the full aisle can reveal significant savings.

Consider alternatives. Be flexible in your meal planning so you can take advantage of sales. For example, if chicken is unexpectedly on sale, could you substitute it for beef in one (or more) of your meals this week? Also, throw a few less expensive meals in the mix each week, such as spaghetti or soup. You don’t have to eat like you’re in college again, but cheaper meals two or three times per week could slash your food budget and offer an easy alternative after a long workday.


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Why is the cost of gas so high? (posted April 25, 2008)

With prices at the pump soaring, everyone’s pocketbook is feeling the pinch. There are several factors that affect the price of gas. We’ll look at where your money goes when you fill up and provide some tips to help you avoid sticker shock when the pump finally clicks off.

So, why is gas so expensive? Luckily, you don’t need to retake high school economics to understand two simple principles that guide the cost of fuel: supply and demand. As Americans, we consume a lot of gas–178 million gallons daily, to be exact. The more we drive and fly, the more our country’s demand for gas increases, which raises prices.

Supply has an equal effect on price. Oil, the main ingredient of gas, is a limited resource. It must be found, extracted, refined, transported and sold ... that’s a lot of work! Throw in a hurricane or war and oil supplies can drop, raising prices.

So, what does your $3-4 per gallon pay for anyway? The biggest part, about 66 percent, is the cost of crude oil. Refining, distribution and marketing make up 19 percent. Uncle Sam takes 12 percent through taxes. Finally, your local gas station gets about 3 percent, allowing them to cover their expenses and turn a small profit.

Now that you know why it takes so much money to keep your gas tank full, here are some tips to help make sure your pockets aren’t on “E”.

Drive less. The best way to lower your gas bill is to drive less. When running errands, try to combine multiple trips into one. Going only a few blocks? Walk or ride your bike for a gas-free, emission-free and healthy trip! Want to split gas cost? Carpool with a friend or coworker.

Take it easy. Speeding may or may not get you an expensive ticket, but it does waste gas. Driving 70 instead of 60 is like spending an extra $.54 per gallon at today’s prices. You’re not Mario Andretti; accelerate slowly and coast to lights.

Shop around. Gas prices vary in every area, so make sure you aren’t overpaying. Check out GasBuddy.com to find low prices in your area. Remember, don’t waste your savings by driving too far to save a few cents per gallon! Going to gas stations across town can eat up your savings, so find the best price that’s close to home.

Take a wrench to it. To keep your car from becoming a gas hog, proper care is the key. Check your tire pressure often and make sure it's up to par with the manufacturer’s recommendation. Got a clogged air filter? It could be choking your engine; replace it with a new one. Refer to your owner’s manual to keep your car in tip-top shape.


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Do you have any good tips for dealing with the high cost of fuel? With skyrocketing gas prices, my budget is really feeling the pinch. (posted May 25, 2007)

First, we salute you for evaluating the impact on your budget! Spending plans only work if we adjust them when needed. The price at the pump is painful, isn’t it? Don't smack the messenger, but you may have to cut your spending in other areas (and limit your driving!) to accommodate the higher cost. Carpooling when you can will save money, but we recognize that it’s not always possible or efficient.

Since a gallon of gas is now priced higher than the average latte, we did a bit of research to help you get the most out of each tank-full. Here’s what we found:

Easy does it. Your daily drive isn’t the Daytona 500. Instead of flooring it from a traffic light, accelerate slowly to avoid wasting gas and straining your vehicle.

Slow down. We often feel late-late-late like the rabbit in Alice in Wonderland, but speeding is a very expensive way to drive (even if you don’t get a ticket!). Driving 65 mph instead of 75 mph can improve your car’s fuel economy by up to 10 percent! Slow down and save money.

Clean out your trunk. Remove golf clubs, boxes of books, and other heavy items from your vehicle. Driving around with an extra 100 pounds of junk in your car can significantly reduce its fuel economy.

Check your tires. Keep your tires properly inflated; this will help improve or sustain your gas mileage and protect your tires from wear and tear.


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My husband thinks it's smarter to buy a new fridge on credit because it will last longer. I would rather buy an inexpensive second-hand fridge for now and upgrade later. What do you think? (posted March 26, 2010)

As much as we might like them to, appliances don't last forever. Without a doubt, there comes a point in every household when you have to pitch the old fridge and get a new one.

When you have to replace your refrigerator, how do you know if it’s better to buy new or used? You consider the pros and cons, and each option offers positive and negative aspects.

Buy Used! Used refrigerators seem like a good choice because they have the lowest upfront cost. Since many homeowners replace appliances when updating a kitchen, there are quality used fridges out there. However, it can be very hard to tell if a used refrigerator is going to pay-off or give you unexpected headaches. Potentially, you could end up spending more on repairs in upcoming years than you did to buy the refrigerator.

If you do purchase a used refrigerator, avoid buying one that has a pre-existing problem. Don't be fooled by the need for “a simple repair”; if there’s a problem now, you can probably count on more problems later. Bottom line, buying a used refrigerator is a risky move, but if you get lucky, it could be the best decision from an economic perspective.

Buy New! This would likely be the most expensive option for you, and that’s certainly a consideration. Nothing is worth spending more than you can afford to pay. If you can handle the cost, however, there are advantages to spending a bit more for better quality. For example, although buying a new refrigerator will require the highest initial investment, ideally it’ll be years before you have to face major repairs. If for some reason there is a defect in the model, your warranty should cover the cost of those repairs and any necessary maintenance. Additionally, there’s a wide range of new refrigerators that are more energy efficient than ever before, which could yield significant savings in utility bills.

Another benefit of buying a new refrigerator is the flexibility to choose a style and model that best meets your family’s needs and fits your home décor. Most people own a fridge for a long time – up to 20 years or more – so it’s important for the functionality to fit your lifestyle.


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During the summer I thought I’d do some home repairs. Is it smarter to do it myself, which would be cheaper but could take longer, or hire someone to do the job, which could be more expensive but done in half the time?(posted June 29, 2012)

Many homeowners are capable of handling routine maintenance and small repair jobs, but when repairs or improvement projects are more complex, it’s important to look at the situation more critically before trying to do-it-yourself (DIY). Before you jump in with a hammer and drill, ask yourself these important questions.

Do you have the skills to do the job correctly? If you’re handy, own the necessary tools and understand all the steps the project requires, DIY may be the more budget-conscious approach. However, if the repairs require purchasing tools or learning new skills there’s a good chance it’ll be more cost-effective to hire a pro. Inviting someone in to fix mistakes isn’t good for your wallet or your ego, so be honest with yourself before taking on a project.

How long will the project take? If time isn’t an issue and the renovations won’t hamper your ability to comfortably use your home, trying DIY may be the way to go. But if repairs are more time-sensitive, like a project that takes your kitchen or only bathroom out of commission for days on end, it may be smarter (and less stressful!) to hire help.

Is the money saved worth the investment of your time? Even if a penny saved and a DIY project well-done are your greatest sources of satisfaction, it’s still worthwhile to talk to a few contractors and get service estimates. You may find that doing the work yourself actually won’t save you much money in the long run.

If you decide that working with a licensed contractor is the best choice, keep these tips in mind.

Taking the time to research different cost-saving options can yield great results, helping you save time and money and ultimately, make the best decision for you and your family.


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I know that when talking about ways to save money, one of the first things most people suggest is to cook at home and avoid eating out. But honestly, I’m not a big fan of cooking, so my family eats out a lot. Do you have any tips on ways we can still save money when dining out? (posted Oct. 29, 2010)

I think many people enjoy eating out, I know I do! Living within a budget doesn’t mean you have to spend every night cooking at home. Here are some tips to help you eat out more affordably.


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I don’t make a lot of money compared to my friends. They constantly want to go out to eat or participate in expensive activities. I’m afraid that I’m digging myself into a financial hole. What should I do? (posted Dec. 19, 2008)

Enjoying time with friends can be expensive and frustrating, especially if they spend more money on entertainment. Trying to live a luxurious lifestyle on a smaller income can lead to overspending and unhappiness (among other negative consequences). There is good news, though; you can find middle ground without sacrificing your friendship! Here are some tips to stay on course when you’re tempted to overspend with friends.

Tell them about it. Are your friends aware that you can’t keep up without hindering your financial goals? Be honest about your limitations and explain that you’ll need to cut back on expenses. Ask if your group can limit costly outings to once a month or every other month.

Invite your friends outdoors. You don’t have to be a hermit to save money. Suggest a few low-cost options, like hiking, county fairs, picnics, ice skating or outdoor concerts.

Do your homework. Look for events and restaurants that will fit your budget, but also be new and interesting to your pals. Watch for coupons and discounts for additional savings.

Pick and choose. Instead of participating in every activity, choose to join in for the part that’s most meaningful for you. For example, if your friends are headed to dinner and a movie and you want to hang out but spend less, consider meeting them afterward for coffee or dessert. Healthy finances are a priority, so you may have to show up late or leave early sometimes to keep your budget on track.

Who knows, maybe your actions will motivate your friends to take a closer look at their own spending habits!


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My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy? (posted Oct. 26, 2007)

First of all, congratulations! There’s no doubt that babies bring great joy to their families, but many times they’re accompanied by empty wallets (and plenty of sleepless nights).

It’s estimated that new moms and dads spend $6,200 on their baby during the first year, buying everything from clothes to car seats to cribs to diapers. Fortunately, with a little planning - and a few helpful tips - you can ease the financial burden … but you’re on your own for those 3 a.m. wake-up calls!

Nix the new. Let’s be honest—baby stuff is so stinkin’ cute! Small clothes, tiny socks, itty bitty hats… it’s easy to get carried away when buying for a baby, and small items can add up fast. You may want to consider consignment shops, garage sales or online sites (eBay.com, CraigsList.com, Freecycle.org) for a variety of gently used and wallet-friendly items.

Forget fancy furniture. A crib that meets national safety standards is a must. But, do you really need the matching changing table, bookshelf, armoire and hutch? Sure, they’ll all look fabulous in baby’s room, but are they functional or necessary? Join a mom’s group or talk to friends about what you’ll actually need (and use) in a nursery.

Resist the urge to upgrade. Just because you’re having a baby doesn’t mean you immediately need the bigger home next to the elementary school and park (equipped with swings and monkey bars, of course). And, unless you drive a clown car, you probably have enough room to safely transport your precious cargo.

Discuss day care. If both parents plan to work outside the home after the baby is born, investigate the perks of using an employer-sponsored flexible spending account to pay day care expenses. Generally, you can pay for up to $5,000 in child care expenses a year using these accounts, which set aside money from your paycheck pretax.

Considering making the transition from working professional to stay-at-home parent? Test the waters by banking your paycheck during pregnancy to see if you can pay your bills, meet your savings goals, and still have a little fun on one income. Even if you find that you’ll both need to keep working, you’ll build a nice nest egg to start a college fund for baby!

You don’t have to break the bank to bring up baby. For more baby budgeting tips, visit PracticalMoneySkills.com/baby.


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Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it? (Dec. 30, 2011)

That’s a good question and like most financial situations, there’s no cookie cutter answer. As a general rule, it’s best to remain as debt-free as possible. However, there are pros and cons to using both cash and credit.

If you use cash, you’ll own the car outright and won’t have a monthly payment. You’ll also avoid added expenses in the form of interest fees. However, it’s risky to completely wipe out your savings. In the event of an emergency, you’ll be in a bind and could find yourself having to rely on credit at a higher interest rate.

If you choose to finance, your emergency fund stays intact, but you’ll have the routine expense and hassle of a monthly payment. The car will ultimately cost more due to interest charges and if you’re unable to make your payments down the road, you risk defaulting on the loan and ruining your credit. On the other hand, if you shop for a good interest rate and handle the loan responsibly, timely payments will help boost your credit score.

Thankfully, there are several payment options worth considering. You could:

To learn more about purchasing a new vehicle, check out our online self-paced learning module Auto Loans 101 or crunch the numbers with this calculator to see if cash or credit is the better buying option for you.


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What is the easiest method to track your spending, especially outside the home? (posted Oct. 27, 2006)

If only our wallets could talk! If they could, we’d truly know where our money goes and how it’s spent. Unfortunately (or fortunately?), that’s not the case. Tracking day-to-day spending takes diligence, but it’s a critical stepping stone to financial happiness and a building block for other important processes, like creating a budget. Keeping track of purchases allows us to curb wasteful spending and direct our money to true needs and priorities.

While the methods below aren’t one-size-fits-all, they are tried and true tips to help plug the leaks. Find the one that fits your lifestyle and stick with it!

Regardless of which tracking method you choose, the key is staying the course long enough to identify spending trends and shift your financial focus to more important goals, like debt reduction or savings.


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Holidays, Vacations and Other Life Events

Halloween is one of my family’s favorite holidays! This year I promised my wife that we’d scale back and keep the cost to a minimum. Do you have any suggestions? (posted Sept. 24, 2010)

Pumpkins, ghosts, and goblins, oh my! Halloween is the third most expensive holiday of the year. However, you don’t have to spend a fortune to enjoy this holiday. Consider these tips to help you stay within your budget.


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Help! How do I avoid overspending this holiday season? (posted Nov. 20, 2009)

Have you made your list and checked it twice? ‘Tis the season to shop ‘til we drop in preparation for our friends and family this holiday season. Is your wallet prepared? While it’s easy to go overboard and overspend, it’s important to realize the significance of making a shopping budget and sticking to it. Follow these tips to make sure the holidays don’t zap your cash.

Make a list. Put the names of all the people you’ll be shopping for on paper. Next to their name, write in the amount you’re willing to spend. Then, make a list of potential gifts that fit within that budget.

Leave the cards at home. Instead of paying with plastic, use cash; it’s harder to overspend when you can physically see how low your funds are getting. Turn to the envelope system to stay on budget for each person. Write their names on envelopes and place the amount of money you plan to spend on them in each envelope. Once the money is gone, you’re finished shopping for them. If you’re nervous about carrying around large amounts of cash, consider buying pre-paid Visa gift cards to help you stay on track.

Turn to technology. If you have a Web-based phone, like an iPhone, consider downloading the My Christmas Gift List application. This application allows you to track the gifts you purchased, what you need to buy and how much you have left to spend for each person. In addition, it generates a helpful shopping list to assist you in getting in and out of the mall faster.

Don’t make it even. One of the easiest ways to fall victim to overspending is thinking that gifts need to be made even, meaning everyone should have the same amount of presents to open. This isn’t always realistic.


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As spring approaches, I'm trying to think of new family activities, but money is tight. I'm worried that cutting back may mean sacrificing our fun. Any ideas? (posted Feb. 27, 2009

Indeed, money’s tight for many families right now. Here’s the good news – there really are inexpensive activities your family can enjoy. To stretch that entertainment dollar, consider these tips.

Do your research. Newspapers and local websites are a good source of information about free or low-cost events in your area. Check out Wimgo.com to learn about festivals, museums, film showings, sports events, and other budget-friendly activities in your community.

Hit the library. Check out library-sponsored book readings, clubs, film screenings and lectures. While you’re there, borrow a book or magazine instead of buying one.

Go team! Attend a local high school sporting event; they’re usually much cheaper than college or professional games, but generate a lot of the same excitement and fan frenzy. Admission rarely costs more than $5 and concession stand fare is typically less expensive (and sales often support school programs, a nice benefit).

Dig for discounts. Many theaters, museums, galleries, zoos and parks offer discounts or free admission on certain days of the week or month. Don’t forget to check online event calendars; tickets for special events or activities may be free with admission!

Head outdoors. Mother Nature is an excellent source of free or cheap entertainment. Go hiking, fishing or camping for some fun and fresh air. Plan a picnic or try bird-watching in your local park or wilderness preserve.


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Summer is always an expensive gift-giving time for me and my family. It seems like invitations to weddings, baby showers, graduations and birthday parties never end from May to August! Can you suggest some tips to help ease the pain of purchasing for others? (posted June 29, 2007)

Oh, the cost of being popular! Shelling out your hard-earned cash to celebrate special occasions with family and friends can sometimes overshadow the joy of the occasion itself, can’t it?

You don’t have to be a Scrooge; meaningful, inexpensive gift options can be yours with a little planning. Here are some tips to help you support your loved ones’ happiness and still have some money left over to fund your own!

Learn to say no. Of course you can’t turn down a wedding or party invitation from your brother or best friend, but a former co-worker whom you rarely speak to may merit a pass. Sending a celebratory note or card—rather than a gift—will usually suffice.

Take advantage of the off-season. Always be on the lookout for thoughtful birthday, graduation, wedding and baby gifts. Spread the cost throughout the year by purchasing these items on sale and stashing them away for a later day, so you don’t have to part with a BIG lump sum of cash during the gift-giving season.

Be creative. Some of the most special gifts are from the heart. Are you crafty? Make some scrapbook templates for your favorite graduate. Love kids? Offer the mom-to-be an afternoon of free baby-sitting. Have a green thumb? Help the birthday girl or boy plant flowers. Give a unique (and cheap!) present by sharing your natural talents.


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Now that Christmas is over I should be relieved, but I know I spent too much money (cash and credit) on gifts and entertainment. I don’t want to go through this again in 2008! What can I do? (posted Dec. 28, 2007)

The holiday season should be a time to relax and reconnect with people we care about, but we usually exhaust and overextend ourselves looking for the perfect gift (and fretting about paying for it!). According to the American Bankers Association, it takes shoppers an average of four months to pay off holiday bills. Why spend one-third of the New Year paying off last year’s goodies?

You can avoid overspending during the holiday season next year – and the inevitable regret that follows – by taking a few simple steps during 2008:

If you found yourself relying on credit cards to make it through the holiday season, don’t beat yourself up! Focus on paying off the debt and planning ahead for next year.


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My wife’s company rewards their employees with bonuses around Christmas time. In the past, we’ve used this money to pay for gifts or to take the family on a holiday vacation, but we’d like to use the money more wisely this year. Any advice? (posted Nov. 30, 2007)

Financial freedom is one of the best gifts you can give yourself and your family! Only you know what your current needs and savings priorities are, so there’s no one-size-fits-all answer. However, we can recommend a few places to stash that extra cash that will keep you jolly all year!

Scrap debt. Put your bonus to work as a “debt warrior,” slashing credit card debt and loans with no mercy. Pick your favorite enemy: debt with the highest interest rate or the highest balance. Either way, you’ll be one step closer to winning the war against debt. For inspiration, check out the “debt snowball" approach described on the Getting Out of Debt page.

Start (or boost) your emergency account. Experts recommend holding three to six months of living expenses in an easy to access savings account. If that amount is intimidating, aim to save at least $1,000 to start. This will cover most minor emergencies, so you don’t have to fall back on credit cards or payday loans when the unexpected happens.

Finance your future. Who doesn’t dream of life after work? No matter how you envision retirement, it’s important to think about how you’ll fund it. Bank your bonuses in a retirement account, like a Roth IRA, and watch your money grow!

Jumpstart your child’s college fund. Higher education is truly the gift that keeps on giving—not to mention, no batteries are required! Contributions to Oklahoma’s 529 College Savings Plan grow tax-free, are state tax deductible up to a certain level, and may be payroll deducted by employers. Visit OK4Saving.org for more information.


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With the holidays fast approaching, I’m feeling stressed. Money is tight so I can’t buy presents for my friends and family like I normally would. I want to share some holiday cheer, but I’m out of ideas. Can you help? (posted Oct. 26, 2012)

Your question reminds me of a quote by Art Buchwald. He said “the best things in life aren’t things,” and he’s absolutely right! This holiday season, instead of stressing over what you can’t afford, focus on the gifts that money can’t buy.

Remember, when it comes to gift giving, it really is the thought that counts. Here’s to a joyful, stress-free holiday season.


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This summer I'm planning to propose to my girlfriend of four years. Unfortunately, I feel bad because we don't have a lot of money and I'm afraid she won't say yes if I choose a cheap ring. What should I do? (Feb. 26 2010)

First of all…congratulations! Secondly, there’s no need to feel bad because there are many options to purchase a ring for a reasonable price. You should never go into debt for an engagement ring. It just doesn't make sense; why start your life together with debt? To reduce the cost of an engagement ring, mull over these alternatives.

Do Your Research – If you’re willing to put in the time, you can find a great deal. Jewelers usually offer seasonal savings around holidays, so even if you only have a short time to search, go to a few stores and shop online to compare price and quality.

Consider an Heirloom – Using a family ring as an engagement ring can be very sentimental, not to mention it symbolizes a close family connection. It’s a great way to get a beautiful stone, and in some cases a beautiful ring, at no cost.

Buy it Used – Buying a used engagement ring can be a great solution for couples on a tight budget. People sell wedding jewelry for various reasons. If a divorce or break-up prompts the sell, you could possibly snag a great ring at a super low price.

Choose a different stone – Diamonds may be a girl’s best friend, but there's something to be said for going the nontraditional route. Rings set with colored gemstones are very trendy right now — and very affordable.

Go Faux – Consider delaying the purchase of an expensive ring until you can afford the one you truly want. There’s a wide selection of believable, quality faux diamond rings, such as a high-end cubic zirconia or moissanite stone.

Don’t overlook the metal – You can cut your total cost considerably by selecting cheaper metals for your engagement ring such as silver, gold or white gold. These metals are significantly less expensive when compared to platinum.

These are only a few tips you can use to save money on an engagement ring. Remember, the value of a ring doesn’t only depend on its price!


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Saving / Investing


I’ve saved $33,000 in an emergency fund and have invested a substantial amount of money in stocks. Is it a good idea to invest a portion of my emergency savings into stocks, a 529 college savings plan and a Roth IRA so it can earn more money?(posted September 26, 2014)

While it’s natural to want your savings to grow, financial experts advise against investing funds that you’ve earmarked for emergencies. Crises typically happen without warning, so the ideal emergency fund should be kept in a non-investment account, easily accessible and separate from other savings accounts (vacation, college, retirement). While it won’t earn the higher returns you hope for, a savings account at an insured bank or credit union is typically the least risky and most convenient location to stash your emergency fund.

If you’re determined to earn higher returns on your emergency fund, these financial tools are considered low-risk options and generally offer a slightly higher return than a standard saving account.

There’s a vast selection of financial tools and services available, so shop around to find the product(s) that will best meet your needs. Once your emergency reserve is fully-funded (three to six months’ worth of necessary living expenses), consider working with a reputable financial planner to determine the ideal investment plan to help you meet your financial goals. To learn more about working with a financial planner and find one that specializes in your area of need, visit PlannerSearch.org.


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I know that saving is important, but after taking care of daily expenses and doing my best to save for emergencies, thinking about stashing money for my child’s college education and my retirement is overwhelming. I’m not sure I can cover it all … which savings goal takes priority? (posted April 26, 2013)

This is a question many families are asking. Ideally, we should save for both, but in reality, families juggle multiple priorities. Paychecks can be stretched thin. Here are some things to remember when you’re mapping out your saving strategy.

If you must choose between saving for retirement and saving for a child’s college education, focus on your retirement. As a parent, it’s natural to want to focus your efforts on your child(ren), but it’s important to remember that while there are many financial aid opportunities to help fund higher education, the same can’t be said for funding your retirement. When a difficult choice has to be made, take care of your retirement needs first.

For more information about grants, scholarships and preparing for college, visit UCanGo2.org. To learn more about investing and how quickly your savings can grow, check out the Rule of 72. Visit the OKMM website, OklahomaMoneyMatters.org, for more helpful information about saving, financial planning and other important consumer topics.


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Which is more important, saving or paying off credit card debt? (posted July 27, 2007)

To answer this question, let’s turn to our good friend, mathematics (please don’t stop reading!). If you’re earning 2 percent interest on your savings and paying 18 percent interest on your credit card debt, you’ve got a 16 percent problem.

If the interest you’re paying on credit card debt is higher than what you’ll earn in a savings account, pay off your debt first. That said, don’t completely neglect your savings! While several factors affect how your money grows, one of the most important elements is time. Simply put, the earlier you start saving, the more you’ll earn through the magic of compound interest. Also, a cushion in your account will keep you from relying on credit cards or payday loans in a crisis.

Here’s the bottom line: it just doesn’t make sense to pay more interest than you can earn. Use the bulk of your extra money to pay off those pesky credit cards, but make sure you contribute something to savings each month, even if it’s only $50. Once the debt is paid, shift those monthly payments to savings. Since you’re already living without the extra money, you won’t miss it!


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Is it better to have all your money in one place? (posted Jan. 26, 2007)

Assuming you’re talking about savings - not disposable income - the old saying “don’t put all your eggs in one basket” holds true. It’s just too risky to invest all of your savings in one company or industry. The idea is to create a blend of assets that provides the most return for your money. Calculated diversity is the key.

Not sure where to start? Most experts recommend a simple investment mix that can be achieved with the following steps.

1. Start an emergency account to cover unexpected expenses that would otherwise find their way onto a credit card. Experts recommend saving 10 percent of your income each month until you have enough money to cover 3 to 6 months of expenses. If 10 percent seems impossible, start at a lower monthly percentage and work your way up. Since an emergency is never planned, put your money somewhere easily accessible, like an interest-bearing savings account or money market account.

2. Whether you’re 25 or 55, retirement should be on your mind. Take advantage of an employer’s 401(k) or other sponsored investment program, especially if they offer matching funds. At minimum, contribute enough to get the full company match - that’s free money!

3. In addition to maximizing your contributions to a matched savings program, make regular contributions to a traditional or Roth IRA. Learn more about these and other investment options and access calculators and other planning tools at CNN's Money site.

4. Got kids? Consider monthly contributions to the Oklahoma College Savings Plan (OCSP), our state’s 529 plan, for each child. Participation in the OCSP offers several savings perks, including an Oklahoma income tax deduction on contributions and tax-free growth and withdrawals. Visit Ok4Saving.org for more information.

In short, you must create a customized savings plan to fit your long-term goals. A certified financial planner can help you strike the right balance.






Emergency Funds

What’s the best way to start an emergency fund? (posted Dec. 29, 2006)

First, congratulations! You’ve recognized the value of taking a very important step to manage credit debt: funding an account to cover unexpected expenses that would otherwise find their way onto a credit card. Although creating an emergency fund takes discipline – and therefore, isn’t easy – the process is simple. Figure out how much you need to save and commit to set aside money each month to reach that goal. Experts recommend saving 10 percent of your income each month until you have enough money to cover three to six months of expenses. If you can’t save 10 percent right now, don't be discouraged; commit to save as much as you can and work your way up to 10 percent. (The key word is "commit." See the pattern here?) As with any savings plan, consistency is the secret to a healthy “rainy day” fund … save a predetermined amount each month and add any “windfall” money, like bonuses, tax refunds or birthday gifts so you can reach your goal faster.

An emergency is never planned, so put the money where you can reach it quickly, such as an interest-bearing savings account or money market account. Building an emergency fund may seem like a daunting task, but it will allow you the freedom to forego credit should something go awry. Now that’s peace of mind!


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Retirement

Can you explain more about financial planners - what they do, what their rates may be, and how to find a reputable planner (one that won't simply try to sell you more life insurance)? (posted Feb. 23, 2007)

Simply put, financial planners help you manage your resources and achieve your financial goals, like retirement, education and debt management. Professional planners (and price tags!) aren’t one-size-fits-all; services and costs depend on your situation and special needs.

There’s more to choosing a financial planner than opening the yellow pages and saying “eenie, meenie, minie, moe!” You’re trusting someone with information that’s deeply personal - your finances - so you’ll want to be prepared. First, research your own situation and determine your priorities. Planning to retire in 10-15 years? You’ll want a planner to make sure you’re on target to reach your savings goal, and that your money will last. Got little ones you want to send to college? A planner can help you set up a mix of investments that’ll grow as fast as your kids do. Just starting your career? A planner can offer objective advice to help you set long-term savings goals and build a solid foundation for a lifetime of financial success. The Financial Planning Association’s website, FPAnet.org, offers more information about rates, certification and the specific needs financial planners can help you address.

Now that you know your primary financial focus, it’s time to start shopping for a planner! Ask friends and coworkers for referrals. For more options, visit PlannerSearch.org to find local certified financial planners who specialize in your area of need. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.

Like our bodies and our vehicles, our financial lives need a check-up every now and then. Financial planners can give you guidance, but remember this – ultimately, you are the decision maker. Don’t feel pressured into anything you’re not fully comfortable with, and never hesitate to ask for more information or more time to make a thoughtful choice. It’s your money, and it’s your life. Make the most of both!


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I have a CD that is getting close to maturity. How do I know if I should renew it or cash it in? (posted July 31, 2009)

I applaud you for being proactive! It's important to keep track of when CDs are maturing, so you can explore other options and decide whether you want to reinvest in another CD or cash it in and move your money to another investment vehicle.

For those who many not know, a CD (Certificate of Deposit) is a promissory note issued by a bank. It bears a set maturity date, earns a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The term of a CD generally ranges from one month to five years.

Back to your question. Whether the market environment is up or down when a CD matures, it's always a good idea to review all options before making a choice.

Renew?
Most banks will continually renew CDs for you at maturity if you don’t give them alternate instructions. Often, they’ll offer to “renew” and put your money into a new CD with the same term as the previous one. However, the interest rate may be different if CD rates have changed since your initial purchase. Make sure you know the bank’s policy and current rates, and that you give proper instructions if you don’t want the money rolled into a new CD automatically.

Shop around?
Before you choose to renew a CD at your current bank, see what else is out there. Rates are competitive, and the bank knows that you have a variety of choices. Check your newspaper, mail, and other promotional information published by local institutions to compare CD rates and, if the grass is greener, move your money to another institution.

Cash it in?
Are you happy with the return, or are you looking for more income from your investments? CDs offer steady interest earnings and low risk, but they don’t usually offer high returns in comparison with many other types of investments. So, depending on your risk tolerance and savings goals, you might consider cashing a mature CD and investing the money elsewhere.

Here’s the thing - only you can know which option is best for you! Investment decisions must be made in the context of your full financial picture. How do CD’s factor in your family’s overall financial equation? What’s your tolerance for investment risk? What are the tax implications of each choice? How soon will you need to access your money

If you don’t know the answers to these questions, consider meeting with a certified financial planner. A financial planner can help you make the most informed decisions possible based on your specific financial circumstances and goals. To find a local certified financial planner, ask friends for referrals and/or visit PlannerSearch.org.


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Are there any rules of thumb for investing in stocks? (posted Oct. 31, 2008)

Investing of any kind can be confusing and feel overwhelming, even in a strong, stable financial market. Here are a few tips to keep in mind when investing in stocks.

Read up. Before investing, educate yourself about the stock market and companies you’d like to invest in. Do some research online and stay informed about current events.

Go for the long-haul. Stocks are a long-term investment, so don’t panic when the market’s down. If you’re investing for future growth, you’ll have plenty of time to rebound from the lows and ride the highs.

Know your risk level. As with any investment, owning stock involves risk. Before investing, decide how much risk you can handle; a risk tolerance quiz like the one at MSN Money can help you figure it out. Typically, the closer you are to retirement, the more conservative you’ll want to be. Conversely, the younger you are, the more risk you can take on because you’ll have more time to recover from a down market.

Diversify. You’ve heard the saying, “never put all your eggs in one basket.” The same is true with investing. It’s important to diversify your portfolio, which means investing in a variety of industries and products at various risk levels.

Time it right. The key to making a profit is to buy low and sell high. A professional advisor can help you determine when it’s time to cash in or cut your losses.

Remember, it’s your money, so make the most of it! For more information about investing, visit CNN Money’s website or consider taking a local investing course or joining an investment club.


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What’s the difference between a traditional IRA and a Roth IRA? Which is a better investment option?

An IRA, or Individual Retirement Account, is a plan that allows you to contribute a portion of your earned income each year. Currently, the maximum regular contribution per year is $5,000 for an individual and $10,000 for a married couple filing jointly. These limits apply to total annual IRA contributions; in other words, an individual can't contribute $5,000 to a Roth IRA and $5,000 to a traditional IRA in the same year.

While these accounts are similar, the fundamental differences involve the “T” word … taxation. Contributions to a traditional IRA are taken from pretax income, and may be tax deductible in the year they're contributed. Funds in a traditional IRA grow tax-deferred; the money is taxed as ordinary income when you take it out at retirement (if you follow the rules). Eligibility to contribute to a traditional IRA depends on your age, and you’ll pay a penalty for withdrawals prior to age 59 1/2, though there are some exceptions to this rule. You have to begin taking funds from a traditional IRA by April of the year after you reach age 70 1/2, even if you don't need to access the money yet. If you need the tax break now or think you'll be in a lower tax bracket at retirement, a traditional IRA may be the right choice for you.

Contributions to a Roth IRA are taken from post-tax dollars - in other words, you've already paid taxes on the earnings - so unlike a traditional IRA, qualified withdrawals from a Roth IRA are tax free (if you follow the rules). You don't have to begin taking funds from a Roth IRA until you're ready, and there’s no age limit to contributions; eligibility depends on income level. If you expect to be in a higher tax bracket when you reach retirement age, a Roth IRA may be a sound investment.

There's a wealth of free information about IRAs available online. You can start by visiting CNN's Money website, the Motley Fool website or AARP Money Tips site.

Only you can decide what’s right for your budget now and at retirement. A financial advisor can help you explore the implications of these and other options, so you can make informed decisions. No matter which route you take, you’re taking charge of your financial future, and that's something to celebrate!


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Who do you think would accumulate more by age 65?

Contributor A: a person who started saving $1,000 a year at age 21, saved for eight years and then completely stopped.

Contributor B: a person who saved $1,000 a year starting at age 29, and continued saving that amount until age 65.
(posted Dec. 21, 2007)

That’s a great question! Generally, the earlier you begin saving and the more money you contribute, the more your money will grow. Using a savings calculator found at MSN Money, we were able to answer your question. Let’s get to it!

Based on the numbers given and assuming an 8 percent interest rate compounded monthly, Contributor B would end up with more money in the bank by age 65 ($200,541) compared to Contributor A ($189,735). However, Contributor A made a much lower total investment ($8,000) when compared to Contributor B ($36,000).

Our advice? Start saving early—and often—and continue to contribute to your retirement plan as long as you can to maximize your retirement savings. To get the most out of your retirement nest egg, consult a licensed financial planner to develop strategies that make sense for you based on your goals.


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I would like to be able to retire someday, but I just can’t seem to save money on a regular basis. How can I ever afford to retire if my monthly spending eats up almost all of my paycheck (or more)? Help! (posted March 28, 2008)

First of all, you’re not alone in this dilemma. In 2006, the average savings rate in the U.S. was -1 percent, meaning millions of people were not only failing to add to their savings, but dipping into existing savings to cover expenses! Kudos to you for thinking in advance about retirement and wanting to make small changes today that will largely impact your future. Here are some tips to help you stash cash for a happy retirement.

First, take a look at your lifestyle. Are you living close to (or above) your means? It’s time to have an honest conversation with yourself; is your spending now sacrificing your security later? There’s nothing wrong with wanting a bigger house or clothes that would make Nicole Kidman jealous, but learning to live within your means is the most important financial lesson for anyone at any income level. Ask yourself this question - can I live with a little less now to have a better life later? Of course you can!

Once you’ve decided security in retirement is a higher priority than keeping up with the Joneses, trim the fat in your cash flow. We all have priorities in life, and our spending reflects them. To make sure your spending supports your priorities, turn to the B-word… budget! Some people view budgets as restrictive, but they’re actually tools to help you get what you want.

Be sure your monthly budget includes regular savings. Aim to save 10 percent of each paycheck, but don’t stress out if that’s unobtainable right now. Put in what you can and increase the amount at every opportunity. The key is making regular savings a habit. Want to know a savings secret? Set up automatic deposit or automatic transfer to your savings account. You can’t spend what you don’t see!

Put windfalls, like birthday money or the upcoming tax rebate, to work for you in a savings or investment account. You’ll be so glad you did. Shiny cars lose value, electronics become obsolete and clothes go out of style, but an investment in a 401 (k) or IRA will be worth much more in the long run.

Transform yourself into a bargain shopper. Saving just $10 per week on something you normally buy (e.g. groceries, fancy coffee) nets over $500 per year! Call your car insurance company to see if you qualify for discounts or a lower rate. If you’ve been a responsible credit card user, ask to have your interest rate lowered. Search eBay, consignment stores or thrift shops to find steals on household items and clothing. Make saving a game and enlist the help of your whole family.

In the end, the biggest factor in your saving success is you! It takes work to make saving a priority, but a sound financial future is well worth the effort.


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Lifestyle

I know it’s important to save money; in fact, I’m great at stashing money in my emergency fund. I’d like to take it to the next level by cutting back on day-to-day expenses, but everything I’ve tried is too complicated or time-consuming. I need a system that’s easy to stick to. Can you help? (posted Feb. 26, 2016)

Many people find that money-saving options for routine, every day expenses are easier said than done, especially if they require too many “extra” steps, like organized couponing or driving to a variety of stores to catch the best deals. If a complicated system isn’t for you, consider the following smartphone apps and cash-back programs that reward you for spending behaviors you’re already doing.

The key to making each of these options work to your best advantage is to avoid spending money just to earn rewards and always put the money you save into an interest-earning savings account or apply it to other necessities, which frees up more money for your overall savings plan.

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How do I save money to prepare for having kids? (posted Sept. 26, 2008)

Raising a family can be one of the most gratifying (and expensive!) experiences in your life. However, kids don’t have to turn your finances upside down. With a little planning and goal setting, you can maintain financial security as your family grows.

Prepare for purchases. Sit down and think about how a baby will affect your everyday living expenses. Do you have room in your budget to accommodate child-related expenses or are you already living close to (or above) your means? Sketch out a new budget that includes expenses like diapers and day care, and compare it to your current monthly budget. Do your current income and expenses leave room for baby-related items? Are there areas in your budget you could trim now to comfortably support a family life later?

Set specific saving goals. Having a clearly defined goal helps you stay on course to reach your target and motivates you to save. Aim to save at least 10 percent of each paycheck to build a financial cushion. Some families may want to stash away a specific amount—let’s say $2,000—before having children. Break down this larger goal into smaller monthly achievements. For example, if you hope to conceive in one year, you’ll need to put back around $160 each month (or about $40 per week) to reach your pre-baby savings goal.

Keep that thrifty attitude. Throughout your pregnancy and after the baby arrives, continue to look for additional ways to cut costs. Consider borrowing maternity clothes from a friend, and shop garage sales and consignment stores for baby clothes and nursery items.

There’s no magic formula. As it so often does, successful financial planning lies in adjusting your spending to reflect your priorities. Learn more about budgeting for baby at PracticalMoneySkills.com/baby.


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My family and I would like to take a vacation at some point this summer. We have most of the money already saved, but we’re struggling to come up with the last few bucks. Do you have any tips on ways we can save a little extra money throughout the year to make vacation planning easier next summer? (posted May 28, 2010)

Taking a vacation today has become incredibly expensive. Any spare bucks you can save between now and then will help out a lot. Here’s some ways to help you set aside that little bit extra.



There are plenty of ways to save money and cut costs when the pay-off involves a fun family getaway. Just don’t wait to get started.  Make plans to start saving for that wonderful vacation next summer before this summer is over.


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Paying for College


Can you shed some light on Oklahoma's 529 College Savings Plan? How does it work? What about fees? What happens to the money if my child decides not to go to college? (posted May 29, 2014)

You're not alone when it comes to wanting to save for college, but not fully understanding your options. In a recent study, Oklahomans were asked their opinion about saving for college and investing in Oklahoma's 529 College Savings Plan (OCSP). Of those polled, 86 percent said it's very important for their child or grandchild to go to college, but only 43 percent are saving to help them get there. This discrepancy may be due in part to confusion about savings options and a tendency to either under- or overestimate the cost of higher education.

To help you craft a more informed savings strategy, let's explore some of the finer details of Oklahoma's 529 Plan.

To learn more about Oklahoma's 529 College Savings Plan, including investment option performance, how a 529 Plan compares to other investment options and how contributions can affect financial aid, visit ok4saving.org.


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When it comes to paying for college, I imagine I’ll receive scholarships and grants, however, I doubt this will be enough to cover my tuition and fees. I’ve heard about crowdsourcing your tuition. Is this a viable alternative to student loans? (posted March 29, 2013)

Crowdsourcing (in this case, crowdfunding) is growing in popularity as today’s students seek innovative ways to find money to help them pay for higher education. Through sites like SmarterBucks.com, StudentDonate.com, and GoFundMe.com, students are harnessing the power of the Internet to bring friends, family and even strangers together for a common goal – to help them pay tuition or pay off student loans through fundraising campaigns.

On sites like these, students create online profiles they hope will entice people to believe in their educational endeavors enough to contribute money to the cause. How much money is collected depends on how persuasive the profile is and how much the student markets it through social media platforms, emails or simply word-of-mouth.

While crowdsourcing is definitely an option, don’t forget these tried and true methods for finding and receiving financial aid.

If you do need student loans to bridge a financial aid gap, remember to borrow only what you need to pay for school. To learn more about your financial aid options and how to make smart borrowing choices from the start, visit ReadySetRepay.org.


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I think we’re going to need student loans to help pay for college. I've done some research and it looks like federal loans are our daughter’s best option. We’re concerned about taking on too much debt and want her to borrow as little as possible. Should her father and I take out the loans, or is it better for her to incur that debt? (posted Nov. 27, 2013)

It’s wonderful that you’ve researched your daughter’s financial aid options. At Oklahoma Money Matters, we tend to agree with what you’ve concluded. When it comes to choosing between federal and private or “alternative” loan options, we encourage students to maximize their federal student loan options before exploring private loans. That’s because federal student loans tend to have fixed interest rates and more flexible repayment options, like deferments, forbearances, and multiple repayment schedules designed to fit a variety of financial situations.

If she hasn’t already, we encourage your daughter to complete the Free Application for Federal Student Aid (FAFSA). Completing the FAFSA should be your family’s first step in the financial aid process. She must complete the FAFSA to qualify for federal loans, grants and scholarships, as well as some private grant and scholarship programs. Grant and scholarship funds are considered gift aid – aka free money! Encourage your daughter to study hard, make good grades, participate in extracurricular activities and apply for as many grants and scholarships as possible. The more free money she receives, the fewer dollars she’ll need to borrow to pay educational expenses.

Now let’s tackle who should carry the debt. Each and every family handles college funding differently. While we can’t say which solution is ultimately best for your family, we can offer some points for you to consider when making this decision.

Whichever route you choose, we encourage you to have an honest conversation with your daughter. Outline expectations and responsibilities on both sides, explaining what you are and aren’t willing to do to help her financially. Having this discussion upfront helps open lines of communication, setting the stage for ongoing discussions and potentially avoiding future conflict. Also, it’s a proactive and supportive step you can take to teach your child to responsibly handle her college debt – and that’s a lesson that will serve her well for the rest of her life.

To learn more about financial aid and federal student loan options, visit ReadySetRepay.org.


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My husband and I recently had a baby and we’d like to start a college savings fund, but we don’t know where to start. What are our options? (posted Sept. 28, 2012)

It’s great that you recognize the importance of saving for your little one’s educational future. Getting a head start is an effective saving strategy because the longer your savings can grow, the easier it is to reduce or eliminate the amount of money your child may need to borrow later to pay for higher education.

Luckily, your family has choices when it comes to selecting a savings vehicle. It’s important to shop around to find the option that will best meet your needs. To get started, check out these options:

Oklahoma’s 529 College Savings Plan. Contributions to this savings plan grow tax-free, are state tax deductible up to a certain level, and may be payroll deducted by your employer. Other perks associated with this type of plan include no income requirement to participate, a choice of investment options, and the option to transfer saved funds to another eligible beneficiary if your child decides not to attend a postsecondary institution. The money saved in a 529 Plan can be used at schools nationwide to pay qualified expenses (tuition, fees, books, and anything else that the school or the IRS deems necessary to attend that institution.) To learn more or enroll, visit Ok4Saving.org.

Coverdell Education Savings Account (ESA). An ESA is a trust or custodial account created to help families pay for elementary, secondary and college education expenses. While contributions aren’t deductible, they do grow tax free until distributed. If used for qualified educational expenses such as tuition, fees, or required books and equipment, then distributed funds are tax-free. With an ESA there are some limitations to consider; the amount you can contribute is determined by your income level, and the funds must be used by the time your child turns 30, or the earnings become taxable and a penalty is applied. Explore SavingForCollege.com to learn more about ESA options.

Gerber Life College Plan. The Gerber Life College Plan offers a different approach, acting as both an insurance policy and a college saving plan. Families who contribute to this savings plan agree to make fixed monthly payments for a set length of time and in return receive a guaranteed cash payout once the account has reached maturity. Another aspect that’s different from both the 529 Plan and the Coverdell ESA is that the funds saved through this method can be used for anything, not just your child’s education. It’s important to note that because this plan is a life insurance policy, the application does ask for health related information, and there may be some exclusions and limitations. Visit GerberLife.com to learn more.

You may also want to check out From Cradle to College, a great publication from UCanGo2 that’s filled with parent-friendly tips and information that proves it’s never too early to prepare your child for a successful future.


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My kids are 12 and 14, and I haven’t really made college savings a priority. How do I start saving money for college at this stage? (posted Sept. 28, 2007)

This is the million dollar question for a lot of parents! Ideally, college savings would begin at birth; however, we recognize that’s not a reality for everyone. If you’re part of the group that’s getting a late start, don’t panic—but don’t keep waiting, either. Start saving now! Here’s a plan of action to help you build a college savings nest egg.

First, figure out how much money your child will need; it’s hard to hit a savings goal if you don’t know what it is. Check out OKcollegestart.org for information about the average cost to attend one of Oklahoma’s many public colleges or universities. While there, encourage your child to create an online account, which allows students to bookmark favorite colleges and build a personal portfolio of grades and applications.

Now that you have a savings goal, there are several ways to build a college fund; shop around to find the plan that’s right for you (check out SavingForCollege.com to get the ball rolling). Two common methods are described below.

As a supplement to your savings, encourage your child to apply for as many grants and scholarships as possible. Check out local organizations that sponsor scholarships such as your church and community groups (YMCA, 4-H Club, Kiwanis, Jaycees, Chamber of Commerce, Girl Scouts, Boy Scouts). Remember, scholarships are awarded based on a variety of criteria, including need, merit, residency, family history, skills, hobbies, and athletics. Check out the scholarship search function at OKcollegestart.org to learn more.

Also, don’t forget about the best deal in town - Oklahoma’s Promise, formerly known as OHLAP. If you meet certain income requirements and your child meets certain academic requirements and stays out of trouble, Oklahoma’s Promise will pay tuition at an Oklahoma public two-year college or four-year university. Students must apply in the 8th, 9th or 10th grade, so don’t miss the boat! Get the details at OkPromise.org.


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Budgeting


I'm not a shopaholic, but I have no willpower when it comes to walking away from something I really want to buy. Please help me keep from wrecking my budget month after month! (posted October 31, 2014)

Ah, yes - the battle between wants and needs can be epic. Thankfully, winning the fight and salvaging your spending plan doesn’t have to be a nightmare. With the desire to improve and a few mental magic tricks, you’ll be well on your way to protecting to your budget.

To boost your willpower and tackle temptation, practice these steps until they become financial habits.


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I’ve decided to face my fears and create a personal budget. I’ve heard that a member services representative at my local bank may be able to help. I’m a one-on-one learner and figure this could be a great option for me. Is this a good idea? If so, how do I take advantage of this service? (posted July 27, 2012)

Everyone needs a personal budget, so congratulations on taking this positive step toward managing your finances.

A budget, also known as a spending plan, can help you track and manage your income, savings, debt, and living expenses. Before seeking professional guidance, you’ll need to gather some documentation to make the budgeting process easier.

Once you’ve gathered the necessary information, call your financial institution and ask to speak with

a customer service representative. Explain the services you’re looking for to see if they can help.

If your bank doesn’t offer the assistance you need, another source of one-on-one help is Consumer Credit Counseling Service of Central Oklahoma. CCCS has 12 locations throughout the state and offers free personalized budgeting sessions. To learn more or to schedule an appointment, call 800.916.4522 (toll free) or visit CCCSOK.org.

While free services are an option, don’t completely rule out hiring a certified financial planner (CFP). A financial planner may be better prepared to address specific, complex financial situations like saving for educational expenses, preparing for marriage or divorce, or handling an unexpected financial windfall. Visit the Financial Planning Association’s website, FPAnet.org, to learn about the specific needs financial planners can help you address. To find a local CFP, visit PlannerSearch.org. When you have a few good leads, pick up the phone and ask about credentials, expertise, rates and other information you may want to know before setting an appointment.

No matter which service provider you choose, a reputable planner or counselor should take the time to talk to you and answer any questions you have, including asking about your financial goals and priorities, and offering objective advice to help you set long-term saving goals and build a solid foundation for a lifetime of financial success.

Don’t forget, we can help, too! Explore our self-paced Budgeting learning module to get a head start on creating the spending plan that’s right for you.


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For many people, getting paid once a month is extremely hard, no matter how much money you make. Where can I find resources to help me save and still have enough money to last through the month? (posted April 27, 2012)

That’s a great question. Finding yourself with more month than money is a struggle many of us can identify with. It takes discipline to budget your money to last four to five weeks, but it is possible!

Consider this alternative to more traditional budgeting methods. You’ll need three bank accounts – one for savings, two for checking. First, decide how much of each paycheck you want to put toward savings and have that automatically sent to your savings account. Next, put the rest of your paycheck into checking account 1. This is the account you’ll use to pay all your monthly fixed expenses, like rent, car payment and utilities.

Divide the money that’s left over after paying your monthly fixed expenses by four and set up a weekly automatic transfer of that amount into checking account 2. Use account 2 for all variable living expenses, like groceries, entertainment, clothes and eating out. The key to making this budget work is to refrain from transferring more money over or using credit cards.

To take this approach to the next level, consider moving to a cash-based system. It’s a proven fact; most of us spend more when using debit or credit cards than we do when paying with cash. After you’ve determined what your weekly allowance for variable expenses will be, grab some envelopes and write the name of each variable expense category in your budget on a separate envelope. Then, place the weekly amount of cash you plan to spend on that category inside. The beauty of this method is that once the cash in each envelope is gone, there's no more spending until the next week! This tactic forces you to spend only the amount you've allotted for each category.

Remember, there are a multitude of budgeting methods and tools available. If this one doesn’t meet your needs, don’t give up! Instead, try a different one until you find the right fit for you and your lifestyle.

Additional resources to help you maximize your finances:


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How can I keep my budget on track in a tight economy? (posted March 25, 2011)

Thankfully there are a lot of little money-saving steps you can take that can add up in a big way. Of course you can start cooking at home or brewing your own gourmet coffee instead of hitting the drive-thru. Examine your auto or home insurance to make sure you’re getting the best deal. Update your W-4 so only the necessary deductions are taken from your monthly paycheck. Or, you can be more careful about turning off lights when you leave a room. Beyond these simple tips, let’s examine some additional ways to save a dime or two.

You don’t have to make huge sacrifices to stay on budget. Just take a creative look at your spending and find simple ways to cut back just a little and get a better deal.


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How can I manage my money better without following the typical budget? (posted Jan. 28, 2011)

A well-developed budget helps many people manage their money, but some find it difficult to maintain their monthly spending plan. If that’s you, there’s good news! It’s possible to save and manage your money without following the typical spreadsheet budget. Here’s how.


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It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have? (posted Aug. 29, 2008)

Sounds like you’ve got a case of the gift-giving blues, a common problem in many households this time of the year. When setting up your monthly budget be sure to include a “gift-giving” category, setting aside funds for these types of expenses. No parties this month? Roll the funds to next month’s budget or add them to your savings account for next time! It’s also a good idea to build a “miscellaneous” category into your budget to handle other unexpected costs.

Try these tips to get the most bang for your gift-shopping buck and keep your budget on track.


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I’ve heard a lot lately about creating a spending plan, but do I really need one? (posted Nov. 27, 2006)

You bet you do. Spending your money without a plan is like traveling cross-country with no map. Without charting your course in advance, you may reach your final destination, but the journey could be filled with unnecessary twists and turns, dead-ends and road blocks.

Thinking of a budget as a road map to financial happiness - instead of a restrictive, binding “spending diet” - helps us see the big picture. One of the main reasons budgets fail is a negative attitude. Stop your stinkin’ thinkin’ and view your spending plan as a way to reach your financial dreams and goals! Budgets aren’t one-size-fits-all; the structure depends on your spending priorities and saving goals. This means you have control of your money, not the other way around … and that’s the very definition of financial freedom.

Tracking your day-to-day spending is an important part of budgeting. Check out tips to help you stay on top of your spending under the "Spending" section and use those tips to build a workable budget that reflects your true needs and priorities, leaving room to reduce debt and save for the future. Let’s get started!

It’s your life, it’s your money and the budget is your tool. Make it work for you!


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What is the easiest method to track your spending, especially outside the home? (posted Oct. 27, 2006)

If only our wallets could talk! If they could, we’d truly know where our money goes and how it’s spent. Unfortunately (or fortunately?), that’s not the case. Tracking day-to-day spending takes diligence, but it’s a critical stepping stone to financial happiness and a building block for other important processes, like creating a budget. Keeping track of purchases allows us to curb wasteful spending and direct our money to true needs and priorities.

While the methods below aren’t one-size-fits-all, they are tried and true tips to help plug the leaks. Find the one that fits your lifestyle and stick with it!

Regardless of which tracking method you choose, the key is staying the course long enough to identify spending trends and shift your financial focus to more important goals, like debt reduction or savings.


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It seems like every month we have our ducks in a row … then something comes up, like a birthday party, a baby shower or a wedding. Almost every weekend something comes up and at the end of the month our bank account is famished. How do we go about setting a budget or sticking to what we already have? (posted Aug. 29, 2008)

Sounds like you’ve got a case of the gift-giving blues, a common problem in many households this time of the year. When setting up your monthly budget be sure to include a “gift-giving” category, setting aside funds for these types of expenses. No parties this month? Roll the funds to next month’s budget or add them to your savings account for next time! It’s also a good idea to build a “miscellaneous” category into your budget to handle other unexpected costs.

Try these tips to get the most bang for your gift-shopping buck and keep your budget on track.

Shop at discount stores. Stores such as Ross, T.J. Maxx, and Marshalls (among other popular discount chains) are good places to buy brand name items for a lot less. People don’t have to know you didn’t spend a fortune on a gift.

Plan ahead. Typically, wedding invitations are sent out at least a month in advance. This allows a little bit of wiggle room to plan for the upcoming gift purchase. Baby showers are normally set later in the pregnancy, so start your baby gift fund once you receive news from the mother-to-be. In addition, put those lovely once-a-year birthday celebrations on your calendar and set a reminder one month in advance so you have time to save some extra cash. Preparing yourself for these little expenses (that really add up!) is a solid start.

Build a buffer. When balancing your checking account, don’t let yourself reach $0. Instead, designate another amount – $50 or $100 – as your break-even point. This creates a buffer for emergencies and helps keep you from going into the abyss. So, when that surprise birthday party comes up the weekend before payday or that crazy couple you love (but don’t quite understand) runs away to Vegas to get married, you won’t have to turn the cushions over on your couch or vacuum out your car for spare change!

Be creative. Give something homemade or offer your help with special projects. Help the mother-to-be create the baby’s scrapbook templates. Try helping the lovebirds by serving cake or handling the guest book at the wedding. Your time and assistance are worth much more than a lavish gift.


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Payday Loans

I'm considering taking out a payday loan to help with some extra expenses. I like that these loans are relatively easy to get, but I've heard some really negative things about them. What are my other options? (posted April 29, 2016)

According to nbcnews.com, there are more payday lenders in the U.S. than McDonald’s restaurants. That says a lot - not only about the number of payday loan companies, but also the demand for them. “A large number of Americans are living paycheck to paycheck…they’re one unplanned expense from being in financial distress.” says Greg McBride, Chief Financial Analyst for Bankrate.com

Since you’re considering a payday loan, it’s likely you’ve found yourself in a financial bind. Whether you’re trying to cover an emergency expense like car repairs or a hot water tank replacement, or you’re simply trying to pay everyday living expenses like utility bills, a car payment or rent, payday loans are risky and lead many consumers into an ongoing cycle of borrowing. Interest rates for short-term loans are outrageously high and on-time payday loan payments aren’t reported to credit reporting agencies, while a poor payment history is.

When faced with unexpected expenses, consider these alternatives to payday loans.

If you’ve already borrowed a payday loan, do your best to avoid taking out another one. Consider contacting the payday lender to negotiate a payment plan; this will break the borrowing cycle by dividing the payment into more manageable monthly payments. If you want to pursue that approach, the Consumer Federation of America suggests contacting your bank for information about stop-payment options on the check used to secure the payday loan while you’re working out the payment arrangements. Research your legal obligations before stopping payment; some states consider it a criminal offense to stop payment or close a bank account with pending payments.

Also, be mindful of payday loan debt consolidation scams. Stay away from any agency that requires you to pay an upfront fee to consolidate your loans. It’s better to work with a reputable, nonprofit agency that offers free debt counseling. Focus on building your emergency savings and creating a spending plan you can stick to. With these tools in place, you won’t need to rely on payday loans in the future.

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I’ve taken out several payday loans and I’d really like to break the borrowing cycle, but I’m not sure how. Where should I start? (posted July. 26, 2013)

Whether you turned to short-term, high fee payday loans to deal with an emergency or to simply take care of day-to-day expenses, you’re not alone. The Consumer Financial Protection Bureau (CFPB) reports that the average payday lending consumer takes out 11 payday loans in a 12-month period, sometimes paying more than $781 in fees.

Even though payday loans are touted as a temporary solution, meant to be repaid within one pay cycle, that’s often not the case. The majority of payday loan borrowers continue to roll old debt into new loans, creating a vicious borrowing cycle that’s difficult to end.

While digging your way out of payday loan debt won’t be easy, the effort will be worth it. Here are some steps to consider when creating your repayment plan.


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Credit Cards

I’m interested in getting a credit account through American Express that doesn’t have a credit limit —how do accounts like this affect credit scores? (posted Jan. 29, 2016)

Along with some other factors, typical credit scoring methodology compares your available credit limit to how much credit you’re actually using - this is called the credit utilization ratio. Accounts like the ones offered by American Express are referred to as charge accounts, because they don’t have maximum credit limits. Instead of offering a revolving line of credit, allowing users to can carry a balance from month-to-month, they require the borrower to pay the entire bill when it’s due. While this can save the user a lot of money in interest charges, it’s vital that users closely monitor their credit use to ensure they can pay the bill in its entirety - or they risk facing some negative impacts to their credit rating for defaulting on the payment obligation.


Since charge accounts don’t have stated limits, the creditor instead reports the maximum amount that’s been charged to-date. These accounts are also reported as “open” rather than “revolving.” According to NerdWallet.com, when credit reporting agencies see “open” accounts with high limits, they simply omit them when calculating credit utilization ratios. Because of this, the high limit has absolutely no impact on your credit score. However, it’s important to note that how you handle the account can deeply impact your credit rating. Always pay your bill on time and commit to use credit only when absolutely necessary. If you manage credit carefully and consistently, you’ll be well on your way to building and maintaining a positive credit score.


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  • We have several credit cards with a zero balance; the accounts are in good standing, but we don't need or want them. We've thought about closing the accounts but are worried that will negatively affect our credit rating. What should we do? (posted Nov. 21, 2014)

    Some financial experts say that closing accounts is one of the worst things you can do to your credit score. While it's true that closing credit lines can have some negative consequences, such as lowering your ratio of available credit to debt, no one can predict precisely how harmful it'll be. Behaviors affect your credit score in a variety of ways; it all depends on what your score is to begin with, which scoring model is being used and what creditors are looking for in a customer.

    Bottom line, nothing impacts your credit rating as significantly as paying on time, every time and keeping balances low. It's important to note that closing accounts can also come with benefits, like lessening the risk of identity theft and reducing the temptation to overspend.

    If you choose to close idle accounts, be strategic to minimize the negative impacts.

    • If you anticipate making a large purchase in the near future, wait to close accounts until after the deal is finalized. Financing for a big-ticket item like a car or home can be derailed by even the slightest change in your financial situation.
    • Maintain the account that's been open the longest so you can continue to benefit from the positive payment history associated with it.
    • Take a gradual approach to closing your accounts. Major changes in credit behavior are a red flag to creditors. Instead of closing your accounts all at once, stagger the closings over several months.
    • Request confirmation in writing that each account has been closed. To be safe, check your credit report within a few months to make sure the account is reported as closed.
    • Continue to use credit responsibly by making all payments on time and using no more than 50 percent of your available credit limit. In time, you'll recover from any negative impact of closing the unused accounts.

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    Is there some hidden risk to transferring my credit card balance to a new card with a lower introductory interest rate? If I don't pay it off before that period is over, does anything prevent me from transferring it yet again to another card with a similar deal? (posted Nov. 21, 2014)

    The quick and dirty answer is, yes. The balance transfer game is tricky and one that most consumers lose. According to Wisebread.com, a popular personal finance blog, 54 percent of those who try this strategy fail to eliminate their debt and often find themselves with far higher balances on higher rate cards. This plan is only successful for those who are 100 percent committed to paying off the debt as quickly as possible.

    Before you're swayed by a lower, introductory interest rate, remember that balance transfers don't come free. Make sure that the lower rate outweighs the transfer fee. If you take the plunge, avoid accumulating new debt and make a plan to pay off the transferred amount before the introductory period ends. It's a major gamble to bank on the ability to continue transferring debt. Every time you apply for a new credit card, your credit score will suffer. Too many applications and transfers and you might not be able to qualify for a lower interest rate when you truly need access to credit.


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    I’m a careful credit card user, and I’ve heard creditors have to follow new rules. What changes have been made to the credit card laws? (posted Aug. 27, 2010)

    Credit card law has indeed changed over the past year. As a credit card user, you’ve probably noticed pretty dramatic changes in credit terms, interest rates, and fees, as well as the look of your monthly statement. Those changes are a result of the Credit Card Accountability, Responsibility and Disclosure Act. Below are some of the new protections that’ll impact your plastic.

    • Credit companies must give you 45 days’ notice before raising interest rates, changing fees or making other significant changes to your account.
    • Credit card issuers can no longer raise your rates because you missed a payment to another creditor.
    • You now have a full 21 days to make a payment after a bill is delivered. If your due date falls on a weekend or holiday, you have until the next business day to make an on-time payment.
    • Rate increases can no longer be applied to existing balances. If rates change, the new rate(s) only apply to new charges.
    • Promotional interest rates must last at least 60 days.
    • A penalty rate increase can only be charged if your account is 60 days past due. After six months in good standing, your interest rate must be restored to the previous rate.
    • Credit companies can no longer charge you for inactivity, such as fees for not using your card within a certain length of time.

    To learn more about new credit card rules and how they’ll benefit you, visit federalreserve.gov/creditcard. The CARD Act has certainly improved consumer protections, but your best personal credit protection is always smart credit management.


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    Is it really a big deal if I sign up for a store credit card to take advantage of their 10 percent off special? (posted March 30, 2007)

    It’s tempting to save an additional percentage off your purchase, isn’t it? Unfortunately, that small initial savings isn’t worth it in the long run; each time you open a new credit account, your credit score may be affected.

    There are two types of "hits" to your credit: a soft hit and a hard hit. A soft hit occurs when a utility or telephone company checks your credit before opening a service account. This type of hit doesn't affect your credit score. A hard hit occurs when a credit card or mortgage company reviews your credit in order to provide you a direct credit line. This type of hit can, and often does, affect your credit score in a negative way.

    The bottom line is this: if you don't need more credit, don't apply for it. Too much “extra” credit can create a temptation to overspend. Just step away from the credit card!


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    I’m paying 22 percent interest on the credit card I got in college and would like a lower rate. What are my options? (posted Dec. 29, 2006)

    OUCH! There are a couple of ways to lower that astronomical interest rate, which will save you hundreds or more in finance charges. First, pick up the phone and call your current card company to request a lower rate. If you have a solid payment history, chances are they will honor your request and knock off as many points as possible.

    Not sure what to say? Follow this sample script to get the ball rolling:

    Hi, my name is Lacy. I'm a good customer, and other credit card companies are offering lower APRs. Unless you can lower the interest rate on my card, I'll have to close my account and switch companies. What can you do for me?

    If you can’t make headway with the account representative, ask to speak to a manager or call back later to work with someone else. If you’ve exhausted all avenues with your current creditor, pay off and close your account; cut up the card; and seek companies that offer lower rates. Bankrate’s credit card search engine is a good place to start. Remember to read the fine print; often, lower rates are introductory rates, which means the rate is only good for a short period of time before increasing, sometimes substantially.

    If your quest for a lower interest rate is successful, a word of caution - a lower rate is not an open invitation to spend more! A better interest rate is important, but it isn’t a substitute for better decision making. Charge responsibly.


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    Credit Reports / Scores

    I have a few bills that are past due. Some have even been turned over to a collection agency. I’ve been told that this could negatively affect my credit. Is having good credit really important? How can I improve my credit score? (posted March 25, 2016)

    A good credit history is a tool that can help you accomplish many of life’s financial goals. Unfortunately, many people don’t realize the importance of good credit until it’s too late. For instance, bad credit can keep you from renting a house or apartment, getting a cellphone, or qualifying for an auto or other personal loan. Poor credit can even keep you from getting a job.

    Like trying to raise a low GPA in school, repairing your credit isn’t easy, but with time, hard work and determination, it can be done. Here are some tips to help you get in the habit of making better credit choices.

    • Understand (and avoid) choices that negatively impact your credit rating. A number of circumstances can cause your credit score to drop, including late or unpaid utility, cellphone, or credit card bills; broken rental agreements; defaulted student loans or personal loans; vehicle repossession; and even overdue library books. All of these negative credit situations - and then some - can be reported to the credit bureaus and result in a lower credit score.
    • Make a spending plan that works for you. The first step to building a healthy credit score is creating a spending plan, also called a budget. There are many methods you can use to develop a budget and track your spending, such as making an Excel spreadsheet or table, using money management software or using a smartphone app. The best system is the one you’ll actually use and stick to. When making your spending plan, be sure to plan for an emergency by saving a portion of each paycheck.  This will be crucial as you rebuild your credit and reduce debt.
    • Monitor your credit. To measure progress, you need to determine your baseline. At the very least, visit AnnualCreditReport.com to review all three of your credit reports for free. It’s a good idea to do this at least once a year to make sure your reports are free of errors. Reviewing your credit score will cost you a small fee, but you can estimate your score with a free app like the one offered by CreditKarma.com. Many financial institutions and credit card companies now offer a credit tracking benefit, which allows you to view your credit score and simulate scenarios to determine what behaviors might cause your credit score to fluctuate.
    • Pay off debt. If debt reduction is your goal, the debt snowball is an effective way to quickly pay off debt and gain momentum toward a debt-free lifestyle. To see a debt snowball tutorial, visit the Consumer page at OklahomaMoneyMatters.org.
    • Keep a low monthly balance. Keeping your current credit usage low can tremendously affect your credit score for the better. If possible, pay your monthly balance in full when the bill is due. If you carry a balance month-to-month, aim to keep the balance below 30 percent of your available credit limit.
    • Make payments on time. Making late payments can seriously hurt your credit score. Always make your payments on time and try to pay more than the minimum payment amount required. This will reflect a good payment history, boosting your overall credit score.
    • Be a smart borrower. Never borrow more than you can afford to pay back.  Before you sign, do the math and make sure you have a repayment plan in place. Here are some handy calculators to help you make wiser borrowing decisions.
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    I’m curious; can an employer get a copy of my credit report without my permission? (posted Jan. 31, 2014)

    It’s pretty common practice for a potential employer to perform a background check before making a hiring decision, and this background check often includes a review of your credit report(s). However, thanks to a federal law called the Fair Credit Reporting Act (FCRA) there are strict limits on who’s allowed to access your credit report, the circumstances in which it’s requested, and what’s done with the information. Those seeking access must have a valid need before they’re allowed to see your records. That means your nosy neighbor or ex-roommate can’t take a look into your financial background for the sake of curiosity. However, creditors, insurers, employers, landlords and other stakeholders you do business with can.

    The good news is, when it comes to employment, you have to give written permission before someone can access your file. Along with the written consent form, a potential employer should also tell you how your information will be used, and in the event that it’s used to justify an adverse action against you (denial of a job or a promotion, termination, or reassignment) the employer has a legal responsibility to show you the report(s) and tell you how to get your own copy.

    To prepare for a job interview and subsequent background check, there are several things you can do.

    • The Federal Trade Commission (FTC), the folks that enforce the FCRA, suggest ordering copies of your credit reports before applying for a job. This way you can put your best foot forward by disputing any inaccurate, incomplete or unverifiable information listed on your credit report before it’s seen by a potential employer.
    • If the negative information found on your report is accurate, it can’t be removed through a dispute. If you’re really bothered by your credit past and absolutely don’t want employers digging into it, you always have the right to refuse their request. However, bear in mind that if you deny them access, there’s a good chance your job application will be removed from consideration.
    • Consider taking proactive measures to turn something negative into a positive. Prepare an explanation for any potentially damaging information the employer might find. Remember, many people make financial mistakes. Being honest and demonstrating that you’ve learned from past slip-ups can be seen as a favorable trait in the eyes of a potential employer.

    To learn more about credit reports and how they affect more than your borrowing capability, visit the Money & Credit section at FTC.gov.


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    How long does it take to increase my credit score if I’m trying to rebuild my credit? (posted May 25, 2012)

    Like many financial questions, this one doesn’t have a simple answer. How long it will take to improve your credit score depends on your current score, your goal and the factors that caused your score to be lower than you’d like.

    According to the consumer reporting agency Experian, different negative elements stay on your credit report for certain periods of time.

    • Delinquent payments remain for seven years.
    • Most public records stay for seven years.
    • Bankruptcies stay for seven to 10 years.
    • Unpaid tax liens can remain for 15 years.
    • Credit inquiries stay for two years.

    The first step in the credit repair process is checking your credit report and addressing any inaccuracies. Visit AnnualCreditReport.com to request your free annual copy of your credit report from Experian, Equifax and TransUnion. Each report contains instructions on disputing errors.

    Next, since payment history is 35 percent of the equation when factoring your FICO score, make efforts to pay every payment you owe on time, every time.

    These steps alone won’t instantly repair your credit, but they will set you on the right path. Remember, creditors often consider more than just the number on a scoring scale. If you put one year between you and your last late payment or poor credit decision, that may be enough to demonstrate that you’ve changed your negative credit behaviors and taken positive steps toward correcting past mistakes. This may influence a creditor’s decision, even if your score hasn’t significantly increased.

    In an effort to rebuild your credit, a credit card may be a useful tool, if you don’t have debt you’re currently making regular payments on. Making small monthly charges that you pay off in full and on time will work toward boosting your credit history. Since fuel is a necessity for many people, a gas card may be a good option for you. If not, consider applying for a secured credit card which can limit how much you charge because you pay an up-front deposit that acts as your credit limit. Keep in mind, secured cards usually include fees and a higher interest rate. They may still be a good option if you can’t otherwise qualify for a credit card.

    Good luck to you and remember that most likely your credit damage didn’t occur overnight, so it won’t be corrected overnight, either. Try to stay focused on your goals and continue with your good efforts.


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    What are ways to improve a bad credit score?(posted Nov. 28, 2011)

    Improving your credit score is a great goal, especially since a poor credit score can stand in the way of lower interest rates, your dream job or the perfect apartment. Take the following steps to help put your best financial foot forward.

    1. Request copies of your credit reports by visiting AnnualCreditReport.com. Each year, you’re entitled to one free credit report from each of the three major credit reporting agencies – TransUnion, Experian and Equifax. By comparing each report side-by-side, you can get a full picture of your credit history.
    2. Review your information closely and make a list of inaccurate items. Make copies of any documents that support your claim and follow the directions on the report(s) for filing a dispute. Keep copies of everything you send to the credit reporting agency and be sure to follow-up if you don’t hear back in a reasonable amount of time.
    3. After errors have been addressed, focus on paying off debt. One of the easiest steps you can take to repair a poor credit score is to start making all payments on time, and in full. Minimum payments may be easier to make, but you’ll pay more in interest charges in the long run.
    4. Avoid maxing out your lines of credit. A good rule of thumb is to use no more than 33 percent of your available credit line.
    5. Limit access to new lines of credit. It’s not worth it to sign up for new credit cards just for the 10 percent discount at the register. Any time you authorize someone to run a credit check, it dings your credit score.

    Cleaning up your credit is a process that takes time and determination, but stick with it and it will pay off in the end.

    If your debt situation has grown to a point that you feel is beyond your ability to handle alone, contact a reputable credit counseling service that’s affiliated with the National Foundation for Credit Counseling (NFCC.org). If you’re in the Oklahoma City metro area, contact Consumer Credit Counseling Service of Central Oklahoma at 800.364.2227 (toll free) or visit their website at cccsok.org.


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    I was recently told that applying for a department store card wouldn't affect my credit score. That's different from what I've always been told, so who's right? (posted Aug. 26, 2011)

    Your credit score is the number used to determine how likely you are to repay your debts. Many factors come into play when calculating your overall credit score, with credit inquiries accounting for 10 percent of the equation. While 10 percent doesn’t seem like much, inquiries are an important factor to keep in mind, especially if you have few credit accounts or a short credit history.

    All credit inquiries fall into one of the following categories. While you’ll see both types listed on your credit report, only one impacts your credit score.

    • Soft inquiries are those you didn’t initiate. Reviews for pre-approved credit or insurance offers or checks by potential employers fall into this category. These types of inquiries don’t appear to creditors when they review your report and they don’t affect your credit score.
    • Hard inquiries are placed on your report any time you apply for new credit like a car loan or credit card. These inquiries are reviewed by potential creditors and have an impact on your credit score. Inquiries remain on your credit report for two years, but only those made within the last year count toward the calculation of your credit score.

    Too many hard inquiries can negatively impact your credit score; however, not all credit inquiries are treated the same. Lenders typically make allowances for instances of rate-shopping, where it’s good for consumers to comparison shop for the best deals. For example, when shopping for a car or home loan, multiple inquiries are either ignored or counted as one inquiry as long as they fall within a certain window of time, usually 15-45 days.

    If you’re in the market for a new line of credit, be a wise consumer. Follow these guidelines to limit the impact to your credit score.

    • Research credit products to find the one that best fits your need.
    • When you’re ready to purchase a big-ticket item, like a car or home, rate-shop within a 30-day window of time.
    • Apply for credit only when you really need it.
    • Don’t apply for multiple credit cards in a short amount of time.
    • Don’t apply for credit just to save a percentage at the register.

    To learn more about your credit score and how it affects your financial life, visit the Education tab at MyFICO.com.


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    How do I check my credit report? (posted May 27, 2011)

    Savvy consumers should have an idea of what their credit looks like because whether we like it or not, it’s often how our character is judged. Not only do lenders -- like banks and car dealerships -- check your credit, but so do employers, insurers and landlords.

    Each year, you’re entitled to one free credit report from each of the three major credit reporting agencies – TransUnion, Experian and Equifax. Each report will be slightly different because different creditors may report to one agency and not the others. If you’ve never requested your report before, consider pulling all three reports at once so you can see your entire credit record at a glance or if you prefer, spread your requests throughout the year.

    Making the Request:

    1. Visit AnnualCreditReport.com, the only federally-authorized source of free credit reports. When going through this site, you won’t be charged to see your credit report. However, if you’re interested, you can view your credit score for a nominal fee.
    2. Once at the site, you’ll choose your state of residence from a drop-down menu. Then you’ll enter your personal indentifying information: name, birth date, Social Security number and address.
    3. Next choose which of the three credit reporting companies you’d like to request your report from. If you’ve previously requested a free report from an agency in the last year, you’ll be prompted to choose a different agency or proceed with your current selection for a fee.
    4. Once you’ve made your choice, you’ll be taken to that credit reporting agency’s website. You’ll be asked security questions based on information found in your report; this is a privacy measure to ensure that you’re the one requesting your information.
    5. It’s a good idea to print a copy of your report for your records. Each agency is different; some will allow you to create a log-in and return to view your report for up to a month while others will only allow online viewing one time.

    Things to look for:

    • Make sure that your personal information is correct. Check that the employers and addresses listed are ones that should be associated with you.
    • Look for anything that might indicate identity theft -- accounts that you didn’t open or credit inquiries that you didn’t authorize. If you find an account that doesn’t belong to you, place a fraud alert on your report through the credit reporting agency, contact the creditor to close the account, file a local police report and log a complaint with the Federal Trade Commission.
    • Ensure that your accounts are correctly reported. Sometimes dates will be entered incorrectly or on-time payments are reported as late. If you find inaccurate negative information, file a dispute with the credit reporting agency. They’ll investigate the claim and if warranted they’ll correct the error. It may take several attempts to get corrections made, so stick to it until it’s fixed.

    Don’t panic if you find mistakes because it’s pretty common for errors to occur. Whether clerical or malicious, there are steps you can take to correct the issue. Each credit report contains your rights and responsibilities as a borrower, including that agency’s step-by-step instructions on how to file a dispute.


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    If I maxed-out my credit card, made a payment late, or went through a debt settlement, what effect would this have on my credit score? (posted Dec. 18, 2009)

    For a three-digit number, your credit score packs a big punch. Figuring out how each action would impact your score is difficult. The exact formula of the FICO and other scoring models remains quite complicated, but FICO recently released more information about the effect certain actions may have on your score.

    The chart below shows the impact of five common credit mistakes on the score of someone with a current score of 680 or 780. As you can see, the size of the hit depends on your credit score before the mishap occurs.


    Credit Score Effects

     
    Effect on a 680 score
    Effect on a 780 score
    Maxed-out card -10 to -30 -25 to -45
    30-day late payment -60 to -80 -90 to -110
    Debt Settlement -45 to -65 -105 to -125
    Foreclosure -85 to -105 -140 to -160
    Bankruptcy -130 to -150 -220 to -240

    Source: FICO



    Remember, your score considers both positive and negative information in your credit report. While late payments, maxed-out cards, and other actions will lower your score, establishing (or re-establishing) a good track record will help you raise it.


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    Since it’s so important to know your FICO score, is it safe to give your personal info to one of those credit companies via the Internet to get your score? Are they really free? (posted Jan. 26, 2007)

    Unfortunately, it’s not your FICO score that’s currently offered free of charge. The government requires the three largest consumer reporting agencies (Experian, TransUnion and Equifax) to provide American consumers with a free copy of their credit report - not their credit score - yearly.

    Don’t trust every credit-related site; be careful and selective. Recommended websites like myFICO Credit Scores and AnnualCreditReport.com are popular and secure options for obtaining your credit score. You’ll be prompted to enter your Social Security number and other personal information, but these sites guard your privacy through various security protocols.


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    Over the years, I have collected many different credit cards. Some of them are store cards (Lowe’s, Target, etc.) and some are Visa and MasterCard accounts. I only have a balance on one card right now. I would like to close some of these accounts, especially store accounts, but I’ve heard that closing accounts can hurt your credit score. But, I’ve also heard that mortgage companies use your total available credit to compute your ability to pay. So, what are the guidelines and pitfalls in closing credit card accounts? (posted Sept. 29, 2006)

    This is an excellent question. The answer, like many personal finance solutions, depends on your circumstances. In general, closing credit accounts can lower your credit score, because the score is partially based on your ratio of debt to available credit. Closing accounts reduces the amount of open credit you have access to, but haven’t used; this effectively increases your proportion of credit debt. Let’s say you have two credit cards, each with a $1,000 limit, and carry a $300 balance on one of the cards. As such, your debt to available credit ratio is $300/$2,000 (15 percent). However, if you close the account with no balance, your ratio would increase to $300/$1,000 (30 percent), doubling your debt proportion. Make sense?

    When evaluating your creditworthiness, mortgage lenders consider your total available credit in addition to your credit score and other factors. In the eyes of a mortgage company, access to a large amount of available credit can be a liability, because you could get in over your head after the mortgage is approved. Since new debt may jeopardize your ability to make that mortgage payment, you could be labeled a high-risk borrower.

    Now that you know the scoop, which is the right move for you? In this case, the answer depends on your short-term plans related to housing. If you know you’ll be in the market for a new home in the next few years, close your newer accounts, but leave the seasoned accounts alone (closing older accounts makes your credit history appear “young,” which can also hurt your score). Conversely, if you plan to stay in your current home for the foreseeable future and you’re trying to improve or repair your credit score, limit new credit debt; make monthly payments on time and pay more than the minimum amount required to reduce your debt as quickly as possible; and keep accounts open as you pay them off.


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    Debt Management


    Like many people, I have an auto loan. My goal is to pay it off early so I can pay less interest. I’m not sure what approach I should take, can you help? (posted July 25, 2014)

    Assuming you won't be hit with a penalty fee for paying the loan off early, accelerating your payments to shorten the length of your repayment term and pay less in interest is a great goal. Here are three simple, yet effective, approaches to consider.

    • Round it up. Consider rounding your regularly monthly payment up to the nearest hundred dollar increment. If you financed a $20,000 vehicle at 3 percent interest for 48 months, your monthly payment would be $442.69. If you rounded the payment up to $500, you'd pay the loan off six months sooner and save $144 in interest.
    • Add one. Another money-saving strategy to consider is paying one extra payment a year. If you have the extra cash on hand you can pay it all at once or you can divide your normal monthly payment by 12 and add that amount to your regular payment.
    • Make it snow. You may have heard of the debt snowball, but have you heard of the debt "snowflake"? Essentially, by implementing this approach, you're paying as much as you can whenever you can. Shop with coupons? Put the amount you saved toward your car loan. Took advantage of a rebate offer? When the check comes in the mail immediately use it to make an extra loan payment. Find a $50 bill in your birthday card? Lucky you! Now use that money to lower your balance. Little bonus payments can really add up over the life of your loan.

    Remember, you don't have to throw large amounts of money at your debt to reap big rewards. Even small amounts, paid consistently, can reduce your interest fees significantly. Use this accelerated payoff calculator to explore how making additional payments to your loan's principal balance can help you reach your financial goal.


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    I have nearly $10,000 in credit card debt. I don’t want to file bankruptcy and I’m afraid a debt repayment program will be too expensive. What other options do I have? (posted Dec. 27, 2013)

    While $10,000 is a fear-inducing amount of debt for many people, paying it off isn’t an impossible feat. It will take effort, determination and perseverance, but in the end the satisfaction of having a zero balance will be worth it. Below are several payoff strategies to consider.

    • Self-help. You don’t have to rely on professional assistance to get your debt under control.
      • Keeping debt reduction in mind, use our customizable budget calculator to create a realistic budget that you can stick to. Begin by listing all your sources of income. Then allot money for your fixed expenses – the ones that are the same each time you pay them. Next estimate how much you spend on variable expenses, like groceries, fuel, and entertainment. Aim to ensure that your basic needs are met and then prioritize the rest. Reduce variable expenses as much as possible and allocate the money you’ve saved to your debt reduction goal.
      • Once your budget is set, list all of your debts in order from smallest to largest. While continuing to make the minimum payment on all your accounts, accelerate your debt payoff plan by implementing the debt snowball.
      • To get more bang from your bucks, consider contacting your creditors to negotiate modified repayment schedules, reduced interest rates, or see if they’ll waive any late fees or penalties you may have incurred.
    • Debt consolidation, which is the process of combining the balances on your individual credit cards into one new loan. Some people consolidate debt through a credit card balance transfer while others choose to take out a home equity line of credit or a personal loan from a bank or credit union. If you choose a loan that requires you to put up your home as collateral, be cautious. If you fail to make your payments as agreed, your home could be in jeopardy.
    • A debt management plan, also known as a DMP, is a strategic repayment system through which you agree to make monthly payments to a credit counseling agency that redistributes payments to your creditors. The credit counselor will generally negotiate with creditors on your behalf to lower interest rates and possibly waive certain penalty fees you may have incurred. If you work with a nonprofit counseling agency, the initial counseling session is typically free. The counselor should conduct a thorough review of your financial situation to determine if a DMP is your best course of action. If you choose to participate in a DMP, you’ll most likely have to pay an enrollment fee. These fees are usually affordable if they’re calculated on a sliding scale, taking your income into account. Keep in mind that not all debt management plans are created alike, so shop around and ask questions before committing to a program.

    No matter which debt relief method you choose, it’s important to identify the factors that caused you to accrue this debt in the first place. If you don’t take measures to address the root cause, you may find yourself in debt again in the future. For personalized help or to learn more about debt management options, consider making an appointment with a local nonprofit credit counseling service that’s affiliated with the National Foundation for Credit Counseling.


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    Is a strategic default a good idea, or should it only be considered as a last resort? (posted Nov. 30, 2012)

    A strategic default, also known as a voluntary foreclosure, is the decision by a borrower to stop making payments on a debt, despite having the financial ability to continue paying. While there are varying reasons a homeowner might choose this option, this action is usually considered by those who are significantly ‘upside down’ on their mortgage and no longer view the property as a viable investment.

    Once a borrower defaults on a home loan, the lender will begin the process of selling the property in an attempt to reclaim what is owed. It’s important to know that depending on the type of agreement made with the lender, the borrower may be held responsible for paying the difference between the balance on the loan and the amount the lender gets from the sale of the home. This scenario leaves the borrower with the debt, damaged credit and no roof overhead.

    Much like filing for bankruptcy, strategic default is an extreme step and is generally recommended in only the direst of circumstances. Only you can decide if the financial consequences of a strategic default are worth walking away. Here are some things to consider when weighing your options.

    • If your payment record is current and you have no foreseeable need to relocate, consider waiting it out. The housing market is starting to recover, which should result in an increased value for your home over time. Plus, with regular on time payments, you’ll eventually reach a tipping point where you’re no longer under water.
    • A foreclosure remains on your credit report for seven years and can make it very difficult to qualify for new credit in the future. If a lender does extend credit to you, the terms may be very unfavorable.
    • A strategic default can affect more than just your credit rating and future buying ability. Foreclosures lower the value of neighbor properties and communities, too.
    • The Mortgage Forgiveness Debt Relief Act of 2007, a federal tax break for short sales and foreclosures, will expire this year - resulting in severe tax penalties for defaulting. Any forgiven loan balance will be reported to the IRS as income.
    • Lenders are usually willing to work with borrowers who sincerely want to stay on track, and almost any other option is likely a better financial choice. Talk to your lender about renegotiating the terms of your loan, holding a short-sale or trying a deed in lieu of foreclosure (this is when the homeowner deeds their property to the lender in exchange for being forgiven the entire amount of the mortgage. The lender then sells the property to retrieve as much of the unpaid mortgage as possible. For more information about this process, visit HUD.gov).


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    What's the difference between good debt and bad debt? (posted July 29, 2011)

    Going into debt for items that are disposable or lose value is considered bad debt. For example, if you regularly eat out and charge it to your credit card, charge clothes that you want but don’t need, or buy a new vehicle every two years that loses value as soon as it’s driven off the lot, you’re racking up bad debt. Bad debt happens when we use credit to buy things that create unhealthy financial situations. Clothes, toys and vacations are fun, but they don’t build wealth or earn value over time.

    Good debt, on the other hand, gains value, helps builds wealth and adds to our personal well-being. For example, careful borrowing of student loans to help pay for school is a good investment, because a degree provides more job stability and earning potential. The mortgage on your home is another example of good debt. Not only is the equity in your home an asset, but the interest you pay on the loan is tax deductible.

    While it’s always a better practice to remain as debt-free as possible, few people can buy a home, car or other big ticket item without using some form of credit. So, before you charge it, ask yourself these questions to decide if using credit is a good risk.

    • Do I need this item?
    • Will the value of the item increase or decrease?
    • How long would it take me to save for this purchase instead of charging it?
    • Am I willing and able to pay the bill when it’s due?
    • Is there a cheaper alternative that I’d be just as happy with?

    If you decide it’s necessary to charge a purchase, keep these tips in mind for keeping debt under control:

    • When possible, make a significant down-payment. The more you pay in advance, the less you’ll have to borrow and pay back, with interest.
    • Pay all your bills in-full and on time. Not only will you save on interest charges, making on-time payments is a great way to maintain a good credit score.
    • If you can’t pay the full amount, make your own repayment plan. Always pay more than the minimum monthly payment due.
    • Borrow or charge only what you can afford to repay.
    • Shop around for the lowest interest rate to get the best deal possible.

    If your debt situation has become more than you can comfortably handle, talk to a professional, nonprofit credit counselor at Consumer Credit Counseling Service of Central Oklahoma, 800.364.2227.


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    I've heard about the debt snowball method for eliminating my debt. I'd really like to give it a try; can you provide step-by-step instructions? (posted Feb. 25, 2011)

    The debt snowball is a highly effective way to quickly pay off debt and gain momentum toward a healthy financial lifestyle.

    Before we explain how to create your own snowball, there are three important things you should know.

    1. The success of the debt snowball is contingent upon finding extra money to put toward your debt. In our example, we’ll use $200. Where do you find extra money in your budget? Cut cable television, limit eating out, earn extra income…do what you can to aggressively attack your debt. If you can’t afford $200, start with $50 or $100. To make the snowball work you must find a way to pay extra on your debt.
    2. Don’t worry about interest rates. It makes sense logically to go after the debt with the highest interest rate first because you’d save more money in interest. However, changing behavior often isn’t a logical decision; it’s more of an emotional one. Using the debt snowball, you’ll pay off your lowest-balance debt first, helping you feel a sense of relief and accomplishment almost immediately. Although we aren’t focusing on interest rates, if you feel like your interest rates are too high, call your creditors to see if they’d consider lowering them.
    3. It’s important that you make your minimum payment on every debt you owe. The extra money you set aside to help blast your debt (see number 1) will be added to the minimum payment on the debt listed first. Pay this new amount on this debt only, but continue to pay your minimum on all other accounts.

    OK, let’s get started.

    The first thing you’re going to do is pull out all your statements and files to locate every account which has a balance. Don’t worry about your mortgage, yet. Focus on credit cards, medical bills, car payments or student loans.

    Make a list which includes the creditor’s name, account balance and minimum payment due for all debts. Organize your debt from smallest to largest. Your list may look something like this.


    Creditor
    Account Balance
    Minimum Payment Due
    Target
    $450
    $25
    Chase
    $1,200
    $100
    Bank (auto loan)
    $9,500
    $375

     

    Now, using the extra money you identified—$200, in this example—increase the minimum payment on your lowest debt. Remember, continue to make the minimum payment on all other debt! Here’s what that looks like.


    Creditor
    Account Balance
    Minimum Payment Due
    New Minimum Payment

    Target

    $450

    $25

    $25 + $200 = $225

    Chase

    $1,200

    $100

    ---------

    Bank (auto loan)

    $9,500

    $375

    ---------


    So, the first month of your debt snowball you’ll pay Target $225, Chase $100 and your bank $375. After only two months, the Target card will be paid off! How exciting! What do you do next?

    With your first debt eliminated, you’ll take the monthly amount you paid on it and add it to the minimum payment of your next lowest debt.


    Creditor
    Account Balance
    Minimum Payment Due
    New Minimum Payment

    Chase

    $1,200

    $100

    $100 + $225 = $325

    Bank (auto loan)

    $9,500

    $375

    ---------

     

    So, now you’re paying $325 to Chase. Why $325? Well, your minimum payment is $100 and since the Target account is paid off, you’re going to take the monthly amount you were paying them ($225) and add it to your minimum payment for Chase. Continue to make your minimum payment of $375 to your bank for your auto loan.

    As you can see, by paying $325 each month, the Chase account will be eliminated in just a few months, assuming you’ve stopped charging expenses to the account. Once that debt is paid, take the monthly amount paid and add it to your next debt—the auto loan.


    Creditor Account Balance Minimum Payment Due New Minimum Payment

    Bank (auto loan)

    $9,500

    $375

    $375 + $325 = $700

     

    Now your new car payment is $700, so you’re paying almost double what you previously were! Do you see how you’re able to snowball your payments and eliminate your debt all by finding an extra $200?


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    On my way to work, I see several signs advertising the services of credit repair agencies. Is it best to use one of these agencies or can I repair my credit by myself? (posted Aug. 31, 2007)

    “Credit problems? No problem!”

    “We can erase your bad credit in 10 days — 100 percent guaranteed!”

    These days, it seems everyone has seen these signs or heard the commercials advertising the services of credit repair companies. While some of these companies are legitimate, many make promises they just can’t keep. Forget the hype - there’s no quick and easy way to erase bad credit.

    While repairing your credit isn’t fast or pretty, the truth is, most folks don’t need outside help to turn things around. You can take the same approach the professionals do to clean up your credit, without shelling out your hard-earned cash. Bankrate.com, a popular money management website, recommends consumers take this five step approach for do-it-yourself credit repair.

    1. Place a credit report order. Find out what each of the top three major consumer reporting agencies—Equifax, TransUnion and Experian—are saying about you. Ordering all three in tandem allows you to review your full credit history. Since creditors don’t have to report to all three agencies, each credit report may differ. The Annual Credit Report Service (877-322-8228, AnnualCreditReport.com) will provide one free copy of your credit report from each agency per year as required by the Fair Credit Reporting Act. Equifax, Experian and TransUnion will provide additional copies of your credit report and your credit score for a small fee. Instructions for ordering your report and addressing any errors are available on the website.
    2. Inspect your reports. Odds are you’ll have at least one error on your report; most people do. consumer reporting agencies generate a report based on information provided by your creditors. They don’t verify the information…that’s your job! Review your information closely and make a list of items you need to dispute and why. If the negative information on your report is accurate, only time will help you change that. Late payments remain on your report for 7 years and bankruptcies remain for 10. If you want more information, Bankrate.com has more details about reading and understanding your credit report.
    3. Tell ‘em about it. Once you’ve identified any errors on your report, it’s now time to dispute them. Your consumer reporting agency should provide you with a dispute form, or you can write a letter. Clearly state the error you’re disputing; you may consider attaching a copy of your credit report with the error highlighted. Be sure to keep copies for your files and document the date you sent the information and/or spoke with someone on the phone. The consumer reporting agency has 30 days from the time they receive the letter to investigate your dispute. Keep in mind that you may have to work with your creditor to fix the mistake. If any changes are made to your credit file as a result of your dispute, the consumer reporting agency will send you a free, updated copy of your credit report.
    4. Knock out debt. Now that your credit history has been cleaned up, it’s time to take a look at your current debt. If you’re having trouble making your payments, be sure to communicate with your creditor or lender. You may be eligible for reduced monthly payments, or you may be able to change due dates to spread out the timing of your monthly bills. It’s also time to look closely at your spending habits. Are you living a lifestyle you can’t really afford? What needs to change? For tips on paying off debt already accrued, visit our Getting Out of Debt page. Paying off debt takes time and dedication; you can do it!
    5. Be positive. You’ve cleaned up your past credit history and taken aim at your current debt. Now it’s time to focus on building a solid credit future!

    The bottom line is this: legitimate credit repair companies do exist, but they can’t work magic. In most cases, you can achieve the same result with a do-it-yourself job. If you still want to use the services of a credit repair agency, avoid for-profit companies that make you pay before services are provided. Consider nonprofit credit counseling services, such as Consumer Credit Counseling Service (DebtHelpNow.com) or the National Foundation for Credit Counseling (NFCC.org), and always visit the Better Business Bureau to investigate company complaints before you enter into a business relationship.


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    Which is more important, saving or paying off credit card debt? (posted July 27, 2007)

    To answer this question, let’s turn to our good friend, mathematics (please don’t stop reading!). If you’re earning 2 percent interest on your savings and paying 18 percent interest on your credit card debt, you’ve got a 16 percent problem.

    If the interest you’re paying on credit card debt is higher than what you’ll earn in a savings account, pay off your debt first. That said, don’t completely neglect your savings! While several factors affect how your money grows, one of the most important elements is time. Simply put, the earlier you start saving, the more you’ll earn through the magic of compound interest. Also, a cushion in your account will keep you from relying on credit cards or payday loans in a crisis.

    Here’s the bottom line: it just doesn’t make sense to pay more interest than you can earn. Use the bulk of your extra money to pay off those pesky credit cards, but make sure you contribute something to savings each month, even if it’s only $50. Once the debt is paid, shift those monthly payments to savings. Since you’re already living without the extra money, you won’t miss it!


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    I’ve noticed that there are a lot of radio and television commercials advertising various credit and debt counseling services. Are all of these businesses legitimate? How do I tell? (posted Oct. 27, 2006)

    It is confusing, isn’t it? We salute you for recognizing that this is an issue, and for seeking help to regain control of your debt! As a good rule of thumb, look for organizations with the following characteristics (adapted from a related article in The Oklahoman):

    • Tax-exempt status. Visit IRS.gov/eo and click on “Search for Charities” to find out if an organization is tax-exempt.
    • Accreditation. The most common agency is the Council on Accreditation, which requires operation under strict quality guidelines.
    • Membership in a national industry organization. The National Foundation for Credit Counseling has been the gold standard since the 1960s.
    • Better Business Bureau approval. Visit BBB.org to see if complaints have been filed against the company.
    • Affiliation with the United Way. They’ve been deemed charitable and most likely are active in the community.
    • A local office. This allows consumers to develop personal relationships with financial experts through face-to-face interaction and customized counseling.

    You can learn more by contacting a nonprofit provider, such as Consumer Credit Counseling Service or the National Foundation for Consumer Credit. Bottom line, a trustworthy credit counseling service will be more concerned with helping you get out of debt than in selling you something. You should never feel pressured into a repayment plan or to make a purchase of any kind.


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    Often I find myself overwhelmed when it comes to dealing with my debt. The big picture is often frustrating and leaves me unsure of what to do. Can you give me some tips to help me keep it all in perspective? (posted Aug. 25, 2006)

    First and foremost, don’t panic. Facing your debt can be overwhelming, but it’s absolutely possible to dig yourself out – even if the hole is deep. I commend you for recognizing that this is an issue you must address!

    Step 1: Be honest with yourself. Assuming you’re referring to credit card debt, take control by figuring out how you landed in this position. Are you using credit to support a lifestyle you can’t really afford? If so, evaluating how and why you spend will help you manage your spending in the future (so you don’t find yourself in this position again). A realistic monthly budget will allow you to set healthy parameters.

    Step 2: Know where you stand. Do you know how much you owe, and to whom? Pull statements and call creditors to find out exactly what you’re dealing with. Once you have the facts, create an at-a-glance debt chart that shows the total amount owed, interest rate, minimum monthly payment, and monthly payment due date for each account. If you have a card with a high interest rate, ask your creditor for a rate reduction or transfer your balance to a low-rate card (pay attention to the fine print … some cards only offer a low rate for the first few months). Compare credit card interest rates online at BankRate.com.

    Step 3: Cease Fire. You can’t pay off your debt if you keep adding to it. Leave your credit cards at home - lock them up, freeze them, whatever works – so they aren’t readily accessible. (Don’t close all your credit accounts, as this can actually hurt your credit score.)

    Step 4: Activate your pay-off plan. Select one account and pay as much as you can each month, doubling your payment if possible. Continue to pay the minimum payment on your other accounts. Once the first account is paid off, add that payment to your payment on another account until it’s paid off (keep increasing your payments whenever you can). Continue this process until all accounts have a zero balance. To make more headway, apply all “windfall” funds - birthday money, inheritance, tax refunds - toward your debt.

    If you’ve examined your situation and feel that you may need professional help to reclaim your financial power, take the next step and learn more about dealing with excessive credit debt.

    Focusing on one account at a time will help you keep “the big picture” in perspective. You’ve already admitted that you need to make a change; that’s the hardest part. You can do this!


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    When paying toward debt, what should I attempt to pay off first? The smallest debt or the higher interest rate? (posted Aug. 25, 2006)

    There are several schools of thought on this topic. Some experts recommend paying off the card with the highest interest rate first, because that approach will ultimately save you the most money (in interest). While that logic is sound, I disagree. Let me explain.

    When you get down to it, the most important factor in debt reduction is commitment, because it takes discipline to change your spending habits … and it takes time, since you can’t pay off thousands of dollars in debt overnight. A sense of accomplishment will help you stay the course, so I recommend starting with the card that carries the smallest balance. Let that success boost your dedication to becoming debt free!


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    Consumer Issues


    I start every year with the best of intentions. I set a New Year’s resolution and work toward achieving it, for a month or two. After that, I fall off the wagon and go back to my old ways. I want to succeed this year and have a financially fruitful 2015 – help! (Posted December 18, 2014)

    You're not alone. Studies show that up to 92 percent of people who set New Year's resolutions fail to reach them. So this year, resolve to stop making financial resolutions. That's right, just say no!

    The most common money-related resolutions are eliminating debt and increasing savings, but with goals this broad it's easy to get frustrated and give up. Instead of making empty promises to make large-scale changes, begin practicing realistic habits that you're more likely to continue long after the New Year has come and gone.

    How? Break your BIG goal into smaller, short-term steps that will create healthy, long-lasting habits. For example, if your aim is to spend less, work to develop a healthy habit each month that will help you reach your ultimate goal:

    • In January, focus solely on cutting back on small impulse purchases at the grocery or convenience store.
    • During February, monitor your vending machine purchases and start buying snack items in bulk to reduce costs.
    • When March rolls around, bring your lunch from home to cut back on dining out.
    • In April, look for sources of free entertainment and cancel services you don't use.

    Each month, continue making small changes while maintaining the habits you've already put into place. By the end of the year, you'll feel better about how far you've come.


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    My recent diagnosis of type 2 diabetes has impacted my lifestyle, especially my finances. Doctor’s appointments, prescriptions, medical supplies, exercising and a modified diet are all essential parts of my treatment plan. Even with insurance, these expenses add up. I know if I don't focus on my health now, the long-term negative impact will be greater. Do you have any tips for managing these health-related expenses without compromising my budget? (Posted April 25, 2014)

    It’s been said “without your health, you have nothing,” so kudos to you for making your long-term health and wellness a priority. Implementing drastic lifestyle changes can be overwhelming; however, there are many budget-friendly ways to maintain a healthy lifestyle.

    • Doctor appointments, prescriptions and supplies. Before each doctor appointment, make a list of all your questions and concerns. You may think you’ll remember everything you want to talk about, but in the fast-paced medical world, it’s easy to let something important slip by. It’s better to go in prepared; otherwise you may forget something and have to make a follow-up appointment, incurring the expenses that go along with it. When talking about prescriptions and supplies, ask your doctor if generic medications are available and appropriate for you. Generic options often have the same effect as name brand medications, but cost significantly less. If a suitable generic isn’t available, ask about samples, cost-effective refill options or subscription services that might be available for necessary medications and medical supplies.
    • Healthier diet. While it may be tempting to shave dollars off your food budget, investing in healthier foods can do a great deal for your overall well-being. Many experts agree that it’s best to shop the outer aisles of the grocery store, avoiding overly processed items and focusing on whole foods like fresh produce and lean meats. Maximize your food budget by planning your meals around items that are on sale, using coupons, and shopping at stores that offer price matching. And remember, buy only what you can use relatively quickly – spoiled food is a common budget buster.
    • Exercise. Luckily, this is the cheapest wellness issue to tackle. You can exercise your way to better health, absolutely free. Aerobic exercise (walking, jogging and moderate-to-heavy gardening) and strength training (pushups, sit ups, squats and lunges) are beneficial types of exercise for people living with diabetes. There’s also a wide variety of free exercise videos available on websites like YouTube.com and Self.com.

    Don’t let cost concerns prohibit your efforts to work toward a healthier you. For more tips on healthy eating, fitness and living with diabetes, explore the American Diabetes Association’s website, Diabetes.org.






    I’ve been told that playing casino games and purchasing lottery tickets is a great way to earn extra cash, sometimes equivalent to a second income. Is this true? What’s your opinion? (posted Sept. 29, 2006)

    Hold the phone! Please remember that casino night and a handful of lottery tickets are options for entertainment, not sources of income. Betting your hard-earned dollars in hopes of earning more is risky business that rarely yields success. Your odds for winning the lottery are about 1 in 12 million … you actually have a significantly better chance of being struck by lightning!

    While there’s nothing wrong with calling on Lady Luck every now and then - and supporting Oklahoma education through the lottery - sacrificing your financial goals and obligations isn’t playing responsibly. Remember, few people get rich the easy way, but many people go broke trying.

    Afraid you may be in trouble? Learn more about gambling behaviors and resources by visiting the Oklahoma Department of Mental Health and Substance Abuse Services website.


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    Can you explain how a health savings account could be better than health insurance? (posted Dec. 28, 2012)

    This is a great question with a relatively simple answer. A Health Savings Account (HSA) isn’t better than health insurance … the two go hand-in-hand. In order to participate in an HSA, you must be enrolled in a high-deductible health insurance plan (HDHP) that meets specific federal requirements related to deductibles and out-of-pocket expenses.

    An HDHP offers lower monthly premiums with a higher annual deductible and is designed to provide coverage for large medical expenses. If you choose this type of medical coverage, you’d be responsible for your day-to-day health care expenses until your deductible is met. Pairing an HSA with an HDHP allows you to use pretax dollars to offset the cost of qualified medical expenses until you’ve paid enough out-of-pocket to meet your deductible.

    Here are some things to consider when deciding whether or not to participate in an HSA.

    • Contributions can be made by you, your employer or anyone else who’d like to contribute on your behalf. Contributions are tax deductible and the interest that accrues on the money in your account is tax-deferred.
    • Even though your employer may make contributions to your account, you own the HSA. That means if you lose your job or choose to change jobs, your account will follow you.
    • Withdrawals from your HSA account are tax-free as long as the funds are used to pay qualifying medical expenses (e.g., contact lenses, braces, acupuncture, bandages, etc.). For a full list, search ‘qualified medical expenses’ at IRS.gov.
    • If withdrawals are made for non-medical purposes, the funds will be taxed and subject to a 20 percent penalty.
    • Anyone using HSA funds should keep all of their receipts in case they’re audited.
    • Unlike a flexible spending account, contributions don’t have to be used in a calendar year. Unspent funds will roll over from year to year.
    • Any money remaining in your account when you turn 65 can be used for any purpose. If the expense isn’t health related, there will be no penalty fees, only normal income tax.

    For more information about HSAs, talk to someone in your Human Resources department or visit hsarsources.com.


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    Hypothetically, I've won a $2 million Powerball jackpot. What’s the best way to collect payment? What happens if I die before I receive all of the winnings? (posted Feb. 22, 2013)

    After the initial shock and awe of winning a big cash prize wears off, you’d have to determine what would be best for your personal situation. In Oklahoma, Powerball offers two payout choices - a lump sum payment or annuity payments. Annuity payments are a fixed amount paid over several years.

    In order to better understand these options, it may help to explore the anatomy of a jackpot. If the billboard touts a jackpot of $2 million, the cash value of that prize is actually more like $1 million. While this may seem misleading, the advertised amount represents an estimate of the total payments you would receive over 29 years if the cash amount were invested in an annuity for you. Ultimately, if you’re willing to accept smaller payments over time, you’ll receive the full $2 million. And rest assured, if you choose this option and pass away before the final payment is made, the payments would then go to your estate and be distributed to your beneficiaries as directed in your will or as determined though probate proceedings.

    If you don’t like the idea of prolonged payments and opt to receive a lump sum, you’ll receive the current cash value of the prize - in this case, approximately $1 million, minus taxes. In this scenario, the total payout is obviously less, but it allows you the freedom to invest the winnings on your own. If you’re confident in your investment strategy and think your strategy can earn a better rate of return than the guaranteed rate of the annuity, the lump sum may be the better option.

    If any lessons can be learned from past jackpot winners, perhaps the most important is that collecting the money is the easy part; managing a big windfall is where things can get tricky. Did you know that one in three lottery winners experiences some form of financial trouble within five years of winning? If you’re lucky enough to win, don’t become a statistic. Take proactive steps to make your winnings last.

    • Seek guidance from an attorney or financial planner who specializes in working with clients who’ve suddenly acquired large sums of money.
    • Avoid making hasty decisions or drastic lifestyle changes. Allow yourself a cooling-off period so you can avoid making decisions you may later regret.
    • Create a realistic budget and stick to it. Don’t live as if the money is unlimited. If not managed wisely, the money can be spent quickly and once it’s gone, it’s gone.

    Just for fun, check out WebMATH.com to calculate your odds of winning. One more thing … there’s nothing wrong with playing the lottery; however, if playing games of chance or gambling is negatively affecting your ability to meet your financial obligations, don’t wait to get help. Contact A Chance to Change Foundation at 405.840.9000 or info@chancetochange.org.


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    My family is contemplating a change from two incomes to one. What are some things we should consider before taking the plunge? (posted Aug. 31, 2012)

    Transitioning from two paychecks to one can be both scary and rewarding. Before one spouse quits a job, it’s important to examine your family’s priorities and values to make sure you can still function the way you’d like while living on a smaller income. The following suggestions will help you decide if this lifestyle change is right for you and your family.

    • Make sure everyone has a voice. With careful planning, making this transition is doable but not necessarily easy. Be sure that you, your spouse and your children know the sacrifices that may need to be made to comfortably live on one income. Talk about your current situation and your future goals, and discuss how a reduced income may impact them in both positive and negative ways. Some of the perspectives may surprise you.
    • Examine your budget. You may be able to eliminate some work-related categories from your budget, but more than likely they’ll be replaced with other expenses. For example, if one spouse becomes a stay-at-home parent, then child care may no longer be an expense; however, you may incur additional insurance costs if that spouse was previously covered by a company plan. You’ll also want to factor in potential impacts to expense areas like wardrobe, meals, fuel, car maintenance, parking fees and other career-related expenses.
    • Determine if you’re willing to make bigger sacrifices. Eating out less often or cutting cable TV may not be enough to make up for lost income. Downsizing your home and automobile may be necessary. Vacations, concerts and other entertainment may also need to go. Making this shift isn’t just a financial change; it’s a lifestyle change. Be prepared for the decisions your family will face, recognizing that it’s best to avoid skimping in the areas of retirement planning and insurance coverage. Know where your priorities fall and decide if your quality of life will be significantly hampered by less income.
    • Don’t count on credit. Relying on credit can be dangerous with two incomes and even more tempting for families supported by only one salary. To set yourself up for success, avoid using credit to live a lifestyle you can’t afford and instead focus on building an emergency fund to help you cover unexpected expenses. We recommend saving three to six months’ worth of living expenses so that you won’t have to rely on credit cards or payday loans in the event of an emergency.
    • Forget (keeping up with) the Joneses. Remember that if you decide to make this change, it’s important to avoid comparing yourselves with two-income families. When friends and family members frequently take vacations or upgrade vehicles, it’s easy to feel envious. Instead of focusing on what you aren’t able to do, you’ll need to remind yourselves of the reasons you chose a one-income lifestyle in the first place. Whether the perks outweigh the sacrifices is a question only your family can answer.

    As you talk it through with your family, create a pro/con list for each scenario and evaluate the consequences of each. If you’re still undecided after this process, consider a one-income trial period. Put one spouse’s wages into savings and see if your family can realistically live on one paycheck. Not only will this give you a feel for this potential change, it can also help you build your emergency fund. Best of luck as you make this important decision.


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    I’ve heard a lot about disaster-proofing your financial documents. What’s the easiest way to accomplish this task and why is it beneficial? (posted June 27, 2008)

    Quick, grab all your important documents—Social Security card, birth certificate, insurance, marriage license, credit card statements, wills, property titles … would you be able to gather these items in only a few minutes? If the answer is no, you could benefit from disaster-proofing your pertinent papers. This is a crucial and often overlooked part of the financial planning process.

    Follow these tips to ensure your documents are safe from the storm, making it easier for you to get back on your feet if disaster strikes.

    • Collect important financial and personal papers, and put original documents in plastic covers.
    • Identify a single location, like a fire-proof box or safe-deposit box, to store these crucial papers. Fire-proof lockboxes can be purchased from a variety of stores and they’re relatively inexpensive. Make at least two copies of the key: one for your home and one for another person, like a trusted friend or family member.
    • Create certified copies of government-issued documents and store them with trusted family or friends.
    • Stash some cash with your bank statements in case you can’t access your account. Depending on the level of damage, computer networks and electricity may be down, so having cash on hand is beneficial.

    In addition to the steps above, consider completing an emergency financial first aid kit for your family. You can download this comprehensive worksheet and checklist from the Federal Emergency Management Agency (FEMA), Operation Hope and Citizens Corps at OperationHope.org/effak/.

    Taking the time to prepare for an emergency may seem like a daunting task, but if disaster ever strikes, you and your family will have all the paperwork you need to ease the process of getting your life back in order.


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    Relationships and Money

    A close friend recently asked me to co-sign for a loan. I’m torn; I don’t want to offend my friend, but I’m not sure that taking on the responsibility of co-signing is the best idea. (posted June 30, 2015)

    You’re right that co-signing a loan is a big responsibility, and one that shouldn’t be taken lightly. Here’s what you need to know before saying yes or no to signing on the dotted line.

    1. When borrowers need a co-signer to secure a loan, that generally means they’ve been deemed too risky by a financial institution to gain financing on their own. Ask some hard-hitting questions to find out why you’re being asked to co-sign. Is it that your friend doesn’t have an established credit history, or has s/he been irresponsible in using credit in the past? Keep asking questions until you’re satisfied, then weigh the answers carefully.
    2. When you co-sign a loan, you become legally responsible for the debt. If your friend forgoes his or her responsibility to pay, any late or missed payments will be reported on your credit report and can impact your ability to access affordable credit in the future. Since the loan was based in part on your credit rating, the lender will come after you first to try to recoup the remaining balance if your friend stops making payments. If necessary, legal action can be taken against you, including garnishing your wages or placing a lien on your home.
    3. Agreeing to co-sign on a loan could destroy your relationship. Given the potential impact on your own financial life, you may find yourself constantly monitoring your friend’s spending habits or worrying if loan payments are being made – which means your friendship will likely suffer despite your best efforts to help.

    Weigh the benefits and risks associated with co-signing. While it can be hard to see your friend struggle – and perhaps even more difficult when it’s a family member, not a friend, who’s asking - your own financial future must be your priority.

    If you’ve decided against co-signing but still want to help, consider offering moral support instead of financial support. Help your friend pull free credit reports from AnnualCreditReport.com, so s/he can review and address any negative items in the credit history. Cleaning up errors and addressing past mistakes on a credit report can help borrowers be considered less risky to lenders in the future.


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    My husband always wants the newest, coolest gadgets and services. It seems to physically hurt him to watch movies on our perfectly good 5-year-old television because he knows there are better ones just waiting for him at the store. We need to cut back on spending and pay off some debt; how can I make this as painless as possible for the spender of the household? (posted January 30, 2015)

    Your relationship is proof that opposites often attract. Here are some things you can do to gain insight into how you both value and spend money, get on the same page and work toward some common goals.

    • Identify your money personalities. Everyone is hard-wired to view, value and spend money differently. Some people are avid spenders while others are die-hard savers; many people fall somewhere between. To better understand how you each view money, visit TheMoneyCouple.com and take the free Money Personality Profile quiz. Your results will show you your primary money personality and the pros and cons that come along with it. Use this insight to determine your differences and examine how they can be complementary to make your union stronger.
    • Get a reality check. Sometimes those who live on the spending end of the money management spectrum don't realize the true cost of ongoing debt. To help your husband better understand your financial situation, set a date to review your budget and current debt load. Aim for a time when you're both relaxed and in a good mood. Seeing your financial status in black and white can be powerful, and looking at it with open minds may help you find more common ground.
    • Set shared goals. Behavior change often requires some positive reinforcement. If the prize at the end of the fight is worth it, almost anyone can buckle down and pinch pennies long enough to pay off debt. Tally up how much of your monthly income is going toward debt payment and then brainstorm other, more enjoyable ways that money could be spent once your debt is paid in full. Focus on things that you would both enjoy so you can work as a team to get there.
    • Commit to a realistic plan. Once you decide what you'd like to work toward, make a plan to pay down your debt so that you can move forward with more financial freedom. Identify expenses you can easily reduce (like smartphone apps, afternoon sodas or drive-thru trips), then dedicate the money you save to debt reduction. If you have multiple sources of debt, consider implementing the debt snowball to quickly reduce your balances. If there are things your husband simply can't give up, ask him if there are ways he could make substitutions without feeling he's sacrificing too much. If you both do your best to stick to the plan, you can successfully reduce your debt.

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    I’m engaged to be married this fall. My fiancé and I were raised with different views regarding money. What can we do to make sure we’re on the same page financially before we tie the knot? (posted March 30, 2007)

    The majority of Americans spend hundreds of hours planning a wedding—what colors to use, who to invite, what kind of cake to serve—but seldom plan for their marriage. So, kudos to you for thinking about your financial future as Mr. and Mrs.!

    As part of your prenuptial planning, consider the following tips to help ensure marital—and financial—bliss.

    Discuss your goals and values. The majority of financial plans are based on long-term goals, so it’s important to discuss your values and priorities. Work together to develop a family financial plan that reflects those objectives, and put it into practice before you say “I do.”

    Review each other’s credit histories. You can’t begin to build your credit future until you understand your credit past. Create a plan of action to eliminate debt you’ve both incurred. Visit AnnualCreditReport.com to order a free copy of your credit report from the three major consumer reporting agencies.

    Develop spending guidelines. Limit how much money you can spend without first consulting your partner, especially if you have a joint checking account. Set aside money as each spouse’s weekly or monthly “allowance” – money you can spend freely without compromising your goals.

    Be honest and communicate. Make finances a part of normal conversation, and when it’s hard to stick to the plan, focus on the positive choices you’re making instead of thinking about what you might be giving up. If you talk about money openly and honestly, you’ll avoid one of the biggest sources of marital stress.

    Check out our Love & Money module, too!


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    One of my closest friends is constantly in a financial bind and comes to me for help. In the past, I’ve done what I can to help but I’m starting to feel taken advantage of. What can I do to stop this cycle of lending money while keeping my friendship intact? (posted Sept. 27, 2013)

    If you type “money and relationships” into a search engine, you’ll get approximately 266 million results ranging from expert advice to rants from miffed roommates. While the details of each article likely cover a wide range of issues, it’s safe to assume each hits a common note - discussing money with those you care about can be touchy.

    The desire to help a friend is admirable, but trying to plug someone else’s money leaks is a surefire way to strain a friendship. It won’t necessarily be easy to address this pattern of behavior, but with the right approach you can gently, yet firmly, talk about the situation and set some clear boundaries and expectations.

    • Find the right time. Choosing the right moment for “the talk” will help set the stage for a more positive outcome. If a natural opening in conversation presents itself, take advantage of it. If the discussion feels organic rather than forced, you’ll both be more comfortable. If the right time doesn’t present itself, wait to talk about sensitive issues when you’re both relaxed. This is a heavy topic that shouldn’t be addressed in a heated moment.
    • Don’t be wishy washy. Some situations require a straightforward approach so that there’s no uncertainty about the point you’re trying to make. Set a positive tone without sounding judgmental by framing any constructive criticism between two truthful positives and use “I” statements rather than “you” statements. “I” statements are less hostile and allow your friend to see the situation from your perspective – which means your friend is more likely to hear what you have to say without becoming defensive.
    • Offer support, but not financially. Sometimes money strain is a symptom rather than the root cause of the problem. Instead of continually giving money, see if there are other ways that you can offer support. Let your friend know that in the future, you’re willing to lend a sympathetic ear, brainstorm ways to overcome similar financial issues, or recommend a financial expert who can provide money management counseling, but you won’t be able to lend more money.

    Most importantly, remember that it’s OK to say no. Regardless of your reasons, saying no shouldn’t come with feelings of guilt or regret. For additional resources to help you talk to your friends or family about money, visit the online resource clearinghouse at OklahomaMoneyMatters.org.


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    My son is being deployed overseas. I'm worried about maintaining his day-to-day bills while he's gone. At the same time, we both would like to make sure he upholds his debt obligations and that he keep his credit afloat. Do you have any suggestions? (Jan. 29, 2010)

    Dealing with an overseas deployment can make paying bills on time difficult. However, there are some steps that can help automate his payments and make it easier for him to maintain his credit history.

    Step 1: Check out available banking options. He'll want to choose one that allows online bill-pay (preferably for no fee), uses a wide variety of ATMs and has online account access. Many banks offer personalized alerts that send an email or text when balances reach a certain level and for many transactions, including deposits received and checks cleared.

    Step 2: Enroll with the bank. Spend some time helping him set up the system for each bill. He'll likely find that some payments can be automated, so that the transit time to the payee is quicker, while other bills will have to be paid by check. That's where a third party - maybe you - could come into play.

    Step 3: Discuss the plan of action. He should consider sitting down with you (or whomever will be handling his finances while he's gone) to talk about bills that will be paid automatically and those that can't be paid online. He'll need to be as specific as possible, including contact information for vendors, payment amounts and due dates. He may also want to add you as a custodian for some accounts in the event he needs you to contact a vendor on his behalf.

    While all of these steps require some up-front work, ultimately, they'll help him stay on track during his deployment. That will save both of you time in the long run and provide financial peace of mind.


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    Identity Theft

    I’ve heard stories from friends and family about kids who’ve become victims of identity theft. What can I do to protect my daughter’s personal information?(posted Sept. 25, 2015)

    You’re right to be concerned about this area of your child’s life, and it’s essential to take proactive steps to protect her information. When people consider safety measures they often think of car seats, child-proofing and stranger danger. Preventing identity theft is equally important, but many parents aren’t aware of the danger or how to effectively guard against it. Here are some practical steps you can take to guard your child’s identifying information and lower her risk of identity theft.

    • Secure personal information. Always keep personal paperwork (electronic and hardcopy) that contains sensitive information in a secure location. Store it at home in a fire-proof lock box or in a safe deposit box at a bank or credit union. If you no longer need the paperwork, shred the documents with a cross-cut paper shredder or destroy the electronic files.
    • Question any requests for information. Avoid providing personal information to people, organizations or companies unless it’s absolutely necessary, you’re confident they’re properly securing it and you know there’s a valid reason to require it. If providing your child’s information is indeed required, ask why it’s needed, how it’s used and how they dispose of it when it’s no longer needed. For safety’s sake, ask if using an alternative identifier is an option. Even something as simple as her birth date, her middle name or your maiden name can be used fraudulently by identity thieves.
    • Know who has access to her information. Your family’s personal information could be included in phone directories, surveys and forms. Organizations like your child’s school, church, day care or after school programs typically collect personal information for enrollment and/or reporting purposes. The federal Family Educational Rights and Privacy Act, or FERPA, outlines rules that govern how schools handle privacy issues when working with minors. Review your child’s school policy regarding collection, usage and handling of personal information and talk to the organizers of any other programs she participates in to make sure you’re comfortable with their policies and practices.

    If you discover that your child’s information has been compromised, report the incident immediately to protect her from further fraudulent activity. Check out the Federal Trade Commission’s Child Identity Theft page for helpful resources, including identity theft warning signs and instructions for reporting fraud and initiating a fraud alert with the major credit bureaus.


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    What steps can I take to avoid identity theft?(posted Feb. 24, 2012)

    This is a great question because identity theft can affect anyone, at any time. It’s important to be proactive to protect yourself from becoming a victim.

    Identity theft takes place when someone uses personal information, such as your Social Security number (SSN) or credit card number, without your permission to commit fraud or other crimes. Here are some "Do’s" and "Don’t" to help you protect yourself from identity theft.

    Dos

    • Keep documents containing personal information in a fireproof lockbox.
    • Invest in a cross-cut paper shredder to destroy mail and other documents containing personal information.
    • Monitor your credit report. You can order a free credit report each year at AnnualCreditReport.com. Monitor your kids’ credit as well. For requirements to check activity on your child’s credit report, contact Equifax (800.525.6285), Experian (888.397.3742) and TransUnion (800.680.7289).
    • Opt out of receiving pre-approved credit offers in the mail. Call 888.567.8688 or visit OptOutPrescreen.com. You will be required to provide your SSN.
    • Make sure Web addresses start with "https://" rather than "http://" when you are shopping or banking online. The "s" indicates that the site is secure.

    Don'ts

    • Keep your Social Security card in your wallet or purse, and don’t have your SSN printed on your checks.
    • Throw away mail or documents containing personal information. This includes junk mail!
    • Give out your SSN or other personal information in email or over the phone if you didn’t initiate the inquiry.
    • Leave a paper trail. Switch to paperless billing or use online bill pay whenever possible.
    • Use your pet’s name (spouse’s name, birthday, etc.) as a password. Use both characters and numbers. Then use the Microsoft.com password checker to check the strength of your password.
    • Put personal information on social networking sites. Make sure your kids understand why it’s important to keep certain things private online.

    If you’d like more information about preventing identity theft or if you’d like to know what steps to take if you become a victim, visit FTC.gov.


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    My wallet was stolen and I canceled my credit cards. Is there something else I should do to make sure no one steals my identity? (posted Nov. 21, 2008)

    First, condolences to you … losing a wallet can leave you feeling anxious and exposed. Cancelling your credit cards was a good first step to protect your identity, but there are other steps required to keep identity thieves at bay.

    Pick up the phone ASAP. You’ve already notified your credit card companies, but don’t forget to contact your bank to cancel your debit card and checks. Also, alert the three major consumer reporting agencies—Experian, Equifax and TransUnion—and ask them to place a fraud alert on your name and Social Security number. If your driver’s license was stolen, contact the Motor Vehicles Bureau to place a stolen card warning in your file.

    File a police report. Contact the local police and file a crime report. Be sure to request a copy of the report for your records.

    Monitor your accounts. Review your bank and credit card statements for fraudulent charges. Visit AnnualCreditReport.com to request a copy of your credit report. Look closely for accounts opened without your knowledge and other suspicious activity.

    Don’t focus exclusively on finances. If you carry usernames, passwords, membership cards, extra car keys or other important items in your wallet, be sure to take special precautions to safeguard your private information in those areas, too.

    The key to preventing identity theft is immediate action. Be diligent in your quest to protect your good name. In the future, consider making copies of everything in your wallet, especially both sides of your credit and debit cards and your driver’s license. Never carry your Social Security card in your wallet; keep it safe in a fireproof lock box.

    For more information about identity theft prevention, visit the Federal Trade Commission’s website, FTC.gov.


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    Big-ticket Items


    Homes

    I love watching do it yourself (DIY) shows that focus on renovating "fixer upper" homes. Typically, the homeowners have large budgets and opt for high-end upgrades. I want to renovate my home, too, but I'm afraid I won't produce the same results as they do on TV. How can I renovate my home while staying on budget? (posted July 31, 2015)

    DIY shows are fun to watch, but getting the same results on your own can be tricky. Luckily, budget friendly renovations are possible. Before you break out a sledgehammer and start knocking down walls, consider these tips.

    • Have realistic expectations. TV shows take advantage of editing and a full team of trained professionals to make large-scale projects appear to come together in record time, with very little effort. For the average person, home renovations will most likely take more time and effort. If your aim is a new coat of paint and some updated hardware, you can create a fresh look in a relatively short amount of time. If your dream includes a bigger project, like a completely overhauled bathroom or revamped gourmet kitchen, completion could take a while and you may need to prioritize your wish list so you don’t find yourself overwhelmed and over budget.
    • Evaluate your talents. Do you have the necessary skills and equipment to complete the job? If you happen to be handy with tools and have a natural talent for all things DIY, it could be cost-effective to tackle a home renovation project on your own. But, if the task requires more than elbow grease and a YouTube tutorial, it might be wiser to hire a pro. Ask your friends and family for recommendations or check with the Better Business Bureau to find a reputable contractor or handyman. Require a written contract and make sure you understand (and agree with) the terms before any money changes hands.
    • Set a budget, and stick to it. Remember, projects with bigger budgets make for better TV. That’s not real life, though, and your situation may not be the same as what you see on the screen. It’s easy to get wrapped up in the excitement of a project and the prospect of having nice, new things, but it’s important to crunch the numbers and set a budget you can easily afford. If you can’t have everything you want right now, prioritize and work toward the goal that will give you the most satisfaction or the most bang for your buck.

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    I’m interested in selling my home, but I don’t want to hire a realtor. I know it’s a common practice, I just don't know where to start. What steps should I follow? (posted April 24, 2015)

    To cut costs and pocket more profit, some homeowners skip hiring a realtor. Taking the “for sale by owner” route when selling a home is doable, but Bankrate.com cautions sellers that it takes more than a well-worded newspaper ad to sell your property. Here are five things you’ll have to do to take on a DIY home sale.

    • Know your home’s worth. It’s important to get the price right. If you aim too high, your home won’t sell. If you aim too low, you’ll miss out financially. Set a fair asking price by determining the market value of your home. To do this, compare it with similar properties in your area that have sold within the past six months. To get a true comparison, look for properties that are alike in type, size, age, condition, lot size and style to yours. Movoto.com provides an infographic explaining the process of conducting your own comparative market analysis.
    • Dedicate effort to marketing your property. Begin by staging your home to highlight its perks and downplay its flaws. Remove clutter and reduce evidence of your personal style so that potential buyers can see themselves in your home. Take photos and craft an inviting description to entice potential buyers to visit for a showing. If necessary, consider hiring a professional photographer to capture your home in its best light. List your property for sale in multiple locations through multiple mediums (“for sale” signs, classified ads, social media, online listing services, etc.) and make yourself readily available when potential buyers ask to see your home
    • Educate yourself. If you hire a realtor, you’ll rely on them to guide you through the process of selling your home. In the absence of this expertise, it’s necessary to research competing listings, brush up on industry lingo and visit open houses to learn how the professionals market and show properties. It’s also a good idea to review the state laws governing real estate transactions and possibly hire a real estate attorney to review your contract to ensure you’ve met your legal obligations.
    • Put your emotions aside. You love your antique fixtures and faux paint finishes, but buyers may not share your enthusiasm. Look at your home objectively and do your best to not be offended if potential buyers start nit-picking your style or pointing out flaws during showings
    • Screen potential buyers. When selling your home, you must be prepared to turn down unacceptable offers or conditions. Asking for a lender’s preapproval letter is a good way to ensure that your buyer is financially qualified to purchase your property. Don’t take your home off the market or sign a contract before you confirm that the purchase can proceed as agreed.

    If you choose to forgo working with a realtor, you don’t have to walk through the process completely alone. Companies like ForSaleByOwner.com and HomesByOwner.com help FSBO sellers navigate the process for a fee; to ensure you’re making the best financial move, compare the cost to a realtor’s potential commission fee.


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    Our mortgage is almost paid in full. My husband wants to move into a new home and get out of our starter home. What would be more practical in our current economy: economical home improvements on an old home or purchasing a newer home? (posted March 28, 2014)

    Choosing between improving your current home and buying a new home can be a challenge. To determine the best solution for you and yours, start by considering the following questions:

    1. Is your current home suitable in terms of size, space and location for your family?
    2. What could be done to improve your current home to make it more suitable, and how much would the improvements cost?
    3. Is your home “market-ready,” or would you have to make improvements to help it sell?

    Now that the gears are turning, prepare a side-by-side comparison of improvements needed to make your home more suitable to stay and improvements needed to get the house ready for the market. Do a little research and add cost estimates for each item on the list. How does the total compare to the additional cost of buying a newer/different home that already has the features on the list? This exercise will help you see what approach would be more cost effective in the long run.

    If you find you’re leaning toward selling, talk to an experienced realtor to get an idea of what could be done to make your home more marketable. Sometimes all that’s needed is a little fresh paint, but, in other cases, big ticket items are in order. How might that information impact your decision?

    If you think that you may be better-off staying put, consider doing some of the improvement projects yourself, if possible, to help save money. Create a budget for the improvements and only take on one project at a time to spread out the spending.


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    I’ve been renting for several years and have decided I’d like to own my own home. I’m not sure I can afford a traditional site-built home; are mobile homes a good investment? (posted June 28, 2013)

    For many, home ownership is the pinnacle of the “American dream” and luckily there are many housing options available to choose from. In addition to site-built homes, you can also explore a wide array of modular and manufactured homes. When determining which option is the best investment for you, consider the differences between these types of houses, how much home you can reasonably afford, and the financing options available to you.

    Both modular and manufactured homes are considered ‘prefab’ houses. These homes are built in climate-controlled factories and then transported to their final location and set in place. While their origins are similar, there are some distinct differences.

    • Modular homes come in many shapes and sizes: from single-story to multi-story, Victorian to bungalow. Once constructed, the pieces are shipped in block format on flatbed trucks. Upon arrival at the home site, the pieces are placed together - much like a puzzle - and the interior construction is completed. While the layout of a modular home is generally more basic than a site-build home, they’re said to be sturdier because they’re built to withstand being transported. Modular homes are held to the same local, state and regional building standards as traditional site-built homes and are also treated the same by lenders in regards to financing. Another similarity is that they tend to increase in value over time.
    • Manufactured homes (previously called mobile homes or trailer houses) are always single-story and are available in three sizes: single-wide, double-wide, and triple-wide. They’re built on permanent steel chassis that allows them to be delivered in whole or in sections on their own wheels. Once the home is placed, these wheels are typically hidden by skirting. Manufactured homes conform to construction and safety standards regulated by the U.S. Department of Housing and Urban Development.
    • When it comes to financing, many manufactured homebuyers take advantage of options available through the home’s retailer. While it’s possible to obtain a long-term mortgage through a bank or credit union, it’s usually contingent upon the home being placed on your own land, on an approved, permanent foundation.

      These homes are inspected after initial construction is complete, but structural approval isn’t required once the home is placed at the site. It’s also important to note that generally, the value of manufactured homes tends to decrease over time due to the difficulty of making updates or additions to the home.

    To learn more about modular and manufactured homes, visit the National Association of Certified Home Inspectors at NACHI.org. To determine how a new house payment will affect your household budget, use the budget calculator at OklahomaMoneyMatters.org.


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    When you’re selling your current home and buying a new one at the same time, should you contract with separate realtors? (posted Jan. 25, 2013)

    There’s no single answer to this question. It will most likely depend on how you feel about the realtors in your area and whether or not you think they’ll provide the services you’re looking for.

    Here are some points to consider that may help you make your decision.

    • Ultimately, you’ll want to work with someone who’s knowledgeable about the local real estate market(s). If both homes are in close proximity to each other, you may be able to rely on the expertise of a single agent. However, if you’re moving to the other side of a large city or to a different town, choose one realtor to sell your current home and find another who’s familiar with your new location.
    • Using the same agent for both purchasing and selling may enable you to negotiate the commission rate. Since one agent will receive commission from both sales, s/he may be willing to lower the fee by a percentage point or two.
    • A single agent may be able to coordinate simultaneous closings through one title or abstract company, which can make the entire process a bit smoother.
    • Ask for referrals from friends and family, then schedule interviews with several agents. Before signing a contract, make sure you have a good rapport and that you’re on the same page about important aspects of the process, such as pricing strategy, home staging and marketing the sale.
    • Some realtors work only as a buying agent or a listing agent, not both. When interviewing potential realtors, be open about your plans for consecutively buying and selling. A reputable agent will be honest about whether or not his or her experience is sufficient to represent you on both sides of the transaction. If it isn’t, maybe s/he can provide a referral.

    For more information about buying and selling real estate, explore the Advice page at Realtor.com.


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    My wife and I live in an older house. Over the years we’ve been working on updating random odds and ends, but we haven’t done much to the kitchen for the fear of spending a fortune. Do you have any cost saving ideas we can use now while we save money to do what we really want? (posted July 30, 2010)

    A total kitchen remodel can be extremely expensive. While you’re waiting to save that last dime, break out your toolbox and try a few of these options.

    Dress up old appliances. Buying new appliances right now doesn’t make sense if you’re planning a total kitchen overhaul in the future.  What could do the trick for now? Try a fresh coat of white, black or silver appliance paint on your refrigerator and dishwasher. This will give your old appliances a fresh new look.

    Estimated cost: $20 to $30 (to cover the fridge)

    Replace drawer pulls and knobs. This is one of the fastest, simplest and most inexpensive ways to makeover the look of an outdated kitchen. Take a trip to your local home improvement store to find the latest looks in cabinet hardware. If your budget allows, get more bang for your buck by choosing the style you’d want to use in your larger remodeling project.

    Estimated cost: $50 to $100

    Update your backsplash. This quick solution is like updating your kitchen’s ‘jewelry’. If the thought of grouting new tile scares you, consider other alternatives, such as peel-n-stick tiles. Once you’re ready to fully remodel your kitchen, these tiles can be removed, repurposed or reused with new adhesive.

     Estimated cost: $500 to $600

    Make your own countertops. A chipped laminate or dingy tile countertop can really make your kitchen look dated (and dilapidated).  If you’re not ready to go for new laminate, granite or composite counters, consider using a polished, colored concrete. Concrete has all the burn and scuff resistance and visual appeal of granite and often costs less.


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    With today’s low interest rates, we’ve been thinking about refinancing our home mortgage. What should we consider before making our decision? (posted June 26, 2009)

    To “refi” or not to “refi,” that’s the new question! Interest rates may be at an all time low for qualified buyers, but it doesn't make sense to refinance if it’s not a great deal for YOU. Consider these factors before jumping to refinance.

    Do you have enough equity? It’s realistic to refinance if you’ve built up at least 10 percent equity in your home. It’s also possible to refinance if your equity is less than 5 percent, but you might get stuck paying cash up front to make up for the difference in equity.

    Have you reviewed your credit? When refinancing your home, lenders use the same criteria to evaluate your creditworthiness as they do for a first mortgage. So, make sure your credit score is in tip-top shape. Otherwise, you may not get a low rate or even qualify to refinance.

    Have you checked the rates you could qualify for? If they’re not more than 1 percents lower than the rate on your current loan, refinancing may not be worthwhile.

    What are your future plans? If you’re thinking of selling in the next three to five years, the amount you save on refinancing your mortgage may not cover the closing fees. The goal is to save money over the long-term.


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    I’m planning to sell my home this summer, but I’m worried about the state of the housing market. How can I make my house more appealing –without spending a fortune - so I can sell it quickly and make a healthy profit? (posted July 27, 2007)

    You’re right; it’s no longer a seller’s market out there, but don’t throw in the towel just yet! There are plenty of ways to build your home’s value and make it stand out in the neighborhood. Here are some tips to make sure your home is in tip-top shape when buyers come callin’.

    Focus on the front. Potential buyers will form a first impression of your home from this vantage point. Be sure your trim is painted and the porch is clean and clutter-free. You may also want to paint your front door and spring for new door hardware.

    Work hard in the yard. Trim bushes and shrubs, take care of plants and keep your lawn clipped and edged. Have a small yard? Use curving pathways and flower beds instead of straight lines. Curves trick the eye and make an area look bigger.

    Open a can. Painting is one of the least expensive ways to change the look of a home. Experts recommend using a neutral color palette because it allows buyers to better visualize their furniture and décor in your home. Just because you like hot pink walls and turquoise trim doesn’t mean buyers will, and that might just be enough reason for them to walk away.

    Get cookin’ in the kitchen. The kitchen is one of the most important rooms (if not the most important room) in any home, but an overhaul can cost thousands. Breathe new life into an old kitchen by painting cabinets, adding new hardware and replacing the backsplash.

    Say “yes” to clean and “no” to clutter. Wipe down baseboards, windowsills, faucets, switch plates and anything else that collects dust or grime. Pack up knickknacks, collectibles and extra furniture. While you’re at it, go ahead and pack up one third of the stuff in each room; more space means more profit!

    Say goodbye to 1970. Remove outdated wallpaper, shag carpet and anything avocado green. If people refer to your home as “retro,” you need to make some changes before putting it on the market.

    Shine a little light on the subject. Get rid of old light fixtures and use a consistent style throughout the house. Consider using accent lighting over photos, wall décor or pictures.


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    Vehicles

    I’m ready to trade in my current car for a newer one. What can I do to increase my vehicle’s trade-in value so I don't lose money? (posted August 28, 2015)

    According to CarsDirect.com, there are four key elements that factor into a car’s trade-in value:

    • Age – newer vehicles are typically easier to sell.
    • Make and model – certain vehicles retain value better than others.
    • Condition – maintenance means a lot; anything that needs repairs will have a lower overall trade-in value.
    • Mileage – used car buyers generally want a vehicle that looks and feels newer, so cars with higher mileage aren’t as desirable.
    • Appeal – above all else, trade-in value is determined by how likely it is that the dealer will be able to re-sell your car in a reasonably short amount of time.

    Ultimately, you have the most control over number three, the car’s condition. Here are some tips for making sure your vehicle is in tip top trade-in condition.

    • Get detailed. It’s worth the investment to hire someone to thoroughly wash, wax and clean every nook and cranny of your car. If you prefer to take care of the detailing yourself, look at the car from the dealership’s perspective. Be meticulous, because they’ll look for anything that would cause a potential buyer to hesitate. While you’re at it, it’s a good idea to change the oil and air filter, too.
    • Fix all visible issues. Address problems that immediately leave a bad impression, like excessive dents and scratches, worn tires, broken taillight covers or a cracked windshield. When people see obvious cosmetic flaws, they immediately make a judgement about how well the vehicle has been maintained and ultimately, how it will perform. Even if everything under the hood is impeccable, the look of the vehicle may break an otherwise good trade-in deal.
    • Learn its worth. Online research can help you better estimate your car’s trade-in value. Websites like Kelly Blue Book  or Edmunds can help you determine a realistic price range for your trade-in negotiations. However, it’s important to realize that what you find online is just a guide; ultimately, trade-in offers are up to the dealer and depend on how profitable they think your vehicle will be and how quickly it can be sold to someone else. If you’re not happy with the trade-in offer you’re given, shop your vehicle around to different dealerships or consider selling it privately. On average, private sales are more profitable.

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    My car's check engine light recently came on. How do I find a reliable, low-cost mechanic?nties are a good deal while others say it's a scam. What do you think, is the added coverage a good investment? (posted May 29, 2015)

    Routine maintenance and timely repairs are essential for reducing overall costs and improving the long-term performance of your vehicle. Luckily, there are many options when it comes to quality car care. If your vehicle is under warranty, taking it to your dealership is probably the most cost-effective option. However, if the service you need isn't covered by a warranty, ConsumerReports.org found that consumers tend to report greater satisfaction when working with an independent shop. Consider the following tips to help you find a mechanic you can trust.

    • Seek references. Personal recommendations from friends, family and fellow car enthusiasts are a great way to find a reputable mechanic. You can also turn to websites like Yelp.com, AngiesList.com or CarTalk.com to search for, and read reviews on, local mechanics and car dealerships.
    • Check connections. Look for a mechanic who's affiliated with AAA, the National Institute for Automotive Service Excellence or the Automotive Service Association. Links to these groups are no guarantee of top-quality service, but it's a good start. It's also wise to check with the Better Business Bureau, because auto repair shops rank highly on their list of consumer complaints.
    • Conduct a test run. If possible, test out a local shop's service with a smaller maintenance task, like an oil change or tire rotation. This can help you gauge how well you connect with the staff, the level of customer service and the overall environment before committing to a long-term service relationship.

    Ultimately, look for a mechanic who's courteous, readily answers your questions and has proven experience working on the type of vehicle you own. In the meantime, consider visiting an auto parts store like Auto Zone, O'Reilly Auto Parts or Pep Boys for a free check engine diagnostic test.


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    When I bought my car, I paid for an extended warranty. Now, a third party company has contacted me claiming my policy might not offer enough coverage. Some resources say third-party warranties are a good deal while others say it's a scam. What do you think, is the added coverage a good investment? (posted June 26, 2014)

    According to Consumer Reports the average consumer spends more on an extended warranty than the warranty saves them in repairs. Since you’ve already purchased an extended warranty, chances are you won’t need additional coverage.

    Consider this. Since you already have extended coverage, forgo purchasing the third-party warranty and instead, set that money aside each month in a savings account. You won’t have to worry about potentially wasting funds and you’ll have money readily available if uncovered repairs are needed.

    If you’re still leaning toward purchasing the added coverage, AutoTrader.com says that warranties provided by third-party providers may not be the best option. Third-party providers may take longer to approve repairs and the warranty may not pay for authorized work to be done at a franchised dealership. Regardless of warranty provider, it’s important to read the contract thoroughly to make sure that the items most likely to fail, break or otherwise wear out are covered.

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    Is gap insurance worth the cost? (posted June 26, 2014)

    Gap insurance comes in handy if your car is totaled and its cash value is lower than the amount you owe on the loan. Your regular auto insurance only pays what the vehicle was worth before it was damaged, so the value of this type of coverage really depends on how much your car has depreciated and how much you owe on the loan.

    You might consider purchasing gap insurance if you:

    • Lease a vehicle.
    • Drive more than 15,000 miles per year.
    • Pay less than 20 percent down when purchasing the vehicle.
    • Opt for an extended financing term (60 months or more).
    • Roll the remaining balance of a previous loan into a new car loan.
    • Purchase a vehicle with a higher than average rate of depreciation.

    While it’s up to you to decide if investing in gap coverage is worthwhile, it’s important to know that you don’t have to buy gap insurance at the point of purchase. In fact, it’s typically much cheaper if you shop around and purchase coverage through an insurance company rather than a dealership.

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    I’ve been thinking about buying a new car. In the past, I’ve always purchased new, but this time I’m considering a pre-owned vehicle. I’ve seen the commercials for services like Carfax®, but I’m a little wary. Are reports like these reliable? (posted May 31, 2013)

    There’s nothing wrong with being cautious; in fact, many experts would say that careful consideration is a sign of a wise consumer. Reports provided by businesses like Carfax® offer vehicle information including accident history, mileage discrepancies, flood or fire damage, and “lemon” status. The general idea behind this type of reporting is to provide as much information as possible so buyers are empowered to make a confident purchasing decision. While this data is gathered from seemingly reliable sources, like police reports, insurance claims, and repair facilities, it’s important to remember that not every individual who has a car accident or other significant incident files a police report or works through an insurance company to make needed repairs.

    While reviewing a vehicle history report is a good starting point when evaluating a used car, it’s always a good idea to ask additional questions and do your own research rather than accepting the report at face value. Here are some additional steps to take when shopping for a pre-owned vehicle.

    • Search for vehicle-related recalls by visiting the National Highway Traffic Safety Administration’s website, NHSTA.gov.
    • Locate the Vehicle Identification Number (VIN). The VIN can be found in several locations (the driver’s-side of the dashboard near the windshield, the steering column, the driver’s-side wheel well and on the driver’s-side door). Once you’ve located the VIN in several placements on the vehicle, compare the numbers to ensure they all match. If they don’t, the original parts may have been replaced.
    • If possible, take the car to your own mechanic for inspection. If that’s not feasible, perform a thorough walk-through on your own. If the sellers hassle you about this, they may have something to hide.
    • Take a test drive. Don’t rush this step; check the dashboard lights, listen for engine noise, test the brakes and pay attention to steering vibration.

    If you’d like to learn more about conducting a thorough self-inspection and identifying signs of potential problems, check out Step 6 of Kelly Blue Book’s 10 Steps to Buying a Used Car.


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    I want to refinance my car. Is it best to refinance it with the same bank who gave me the loan or my main bank that I use for all my personal things? (posted Sept. 30, 2011)

    It’s probably best to start with your regular bank because financial institutions usually avoid refinancing their own loans. Banks and credit unions often run refinancing promotions but they’re geared toward gaining new loan business, not restructuring the loans they already own. However, don’t count your current lender out. If you’re a good customer, it might be worthwhile to ask if they’d be willing to make an allowance in order to keep your business. Even if your current lender is willing to negotiate new loan terms, it’s worthwhile to rate shop to ensure you’re getting the best deal.

    In order to truly comparison shop and know who’s offering the best rates, you’ll need to gather all the information on your current loan – pay-off amount, interest rate, number of remaining payments and whether there’s a penalty for paying off your loan early. If there is a pre-payment penalty, you’ll need to determine if the potentially lower interest rate will offset the fee you’ll have to pay.

    Once you’ve gathered all the facts, visit with different lenders to get quotes and see if they can beat your current deal. Ask about loan qualifications, interest rates and fees associated with a new loan.

    Even though refinancing offers the potential for lower interest rates, more favorable loan terms and lower monthly payments, if refinancing is going to lengthen the life of your loan it may not be worth it in the end. Only consider this as an option if you’re dangerously close to missing payments or defaulting on your loan.


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    Should I use all of my savings to purchase a new car with cash, or should I finance some or all of it? (Dec. 30, 2011)

    That’s a good question and like most financial situations, there’s no cookie cutter answer. As a general rule, it’s best to remain as debt-free as possible. However, there are pros and cons to using both cash and credit.

    If you use cash, you’ll own the car outright and won’t have a monthly payment. You’ll also avoid added expenses in the form of interest fees. However, it’s risky to completely wipe out your savings. In the event of an emergency, you’ll be in a bind and could find yourself having to rely on credit at a higher interest rate.

    If you choose to finance, your emergency fund stays intact, but you’ll have the routine expense and hassle of a monthly payment. The car will ultimately cost more due to interest charges and if you’re unable to make your payments down the road, you risk defaulting on the loan and ruining your credit. On the other hand, if you shop for a good interest rate and handle the loan responsibly, timely payments will help boost your credit score.

    Thankfully, there are several payment options worth considering. You could:

    • continue your current saving habits until you’ve saved enough money for the car without depleting your emergency fund.
    • buy the car with cash and continue saving until you’ve rebuilt your emergency fund.
    • consider purchasing a less expensive used car with a smaller portion of your savings.
    • use part of your savings to make a sizable down payment and finance the rest at the lowest possible interest rate.
    • finance the vehicle and use the money you’ve been putting in savings to make extra loan payments. This strategy will pay the loan off quicker and reduce your overall interest expense. (This option is only recommended if you’ve already established an emergency fund large enough to cover at least 3-6 months’ worth of living expenses.)

    To learn more about purchasing a new vehicle, check out our online self-paced learning module Auto Loans 101 or crunch the numbers with this calculator to see if cash or credit is the better buying option for you.


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    Kids and Money


    What are some fun ways to teach my middle school students the "good, bad, and ugly" of credit cards?(posted Jan. 27, 2012)

    Cheers for infusing a little fun into your lessons! Often, financial education isn’t that exciting, especially for younger students. Luckily there are some great resources available to make personal finance instruction a little more enjoyable. And here’s the best part - these resources are free!

    • The Federal Reserve Bank of Kansas City offers a credit lesson for students ages 12-15 called "Professor Finance & Fed Boy Meet the Catastrophe Clan." This role play activity introduces students to the world of credit in a funny format while emphasizing the importance of wise financial decision-making. Access the lesson plan by visiting the Fed’s website or download the PDF.
    • Wells Fargo Bank offers a free financial curriculum for educators called Hands on Banking® . These engaging lessons are fun and align with national and state educational standards for economics, financial literacy, mathematics, and English/language arts, making it easy to integrate them within classroom activities. To learn more, visit handsonbanking.org.
    • Financial Entertainment, developed by The Doorway to Dreams Fund, offers an innovative way to teach money management through playing online games. The game Celebrity Calamity gives the player a peek into the world of credit by making them the financial manager of three up-and-coming celebrities. To win, keep the celebrities on the right path financially even though they love to spend beyond their means. To learn more and explore other available games, visit financialentertainment.org.
    • The FINRA Investor Education Foundation offers an interactive tutorial called Avoiding Deceptive Credit Practices, which explains the dangers of doing business with companies that offer a quick fix for debt or credit concerns like payday loans, title loans and credit repair scams. This and other financial games and tutorials can be found at saveandinvest.org.

    To explore more games and tools that make financial education fun, search our online resource clearinghouse or visit the National Jump$tart Coalition Clearinghouse.


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    My husband and I try to live below our means, make wise decisions with our finances, and explain money concepts to our kids. It really bothers me that my oldest child can't watch a cartoon without seeing at least one commercial that convinces her there’s an item she MUST have. Do you have any tips or resources to help us beat the pull of consumerism? (posted Oct. 25, 2013)

    Kids are targeted by advertisements on a routine basis, and it’s a billion dollar business. Even extreme measures, like boycotting the TV and blindfolding the kiddos every time you leave the house, probably won’t work. Instead, consider these three tactics for turning your child’s temptations into teachable moments.

    • Tell a tale. Not only is reading with your child a great way to relax and bond, it’s also a fun way to teach long-lasting financial lessons. Here are several examples of children’s literature that entertains while teaching money concepts.
      • The Berenstain Bears Get the Gimmies by Stan and Jan Berenstain demonstrates how Mama and Papa Bear deal with an ugly case of the “gimmies” by teaching their cubs about the family budget and appreciating all the things they already have.
      • Little Bird by Germano Zullo is a colorful tale of a big-hearted man and a truck full of birds. This simple picture book shares the powerful message that the small things in life are the true treasures.
      • Too Many Toys by David Shannon introduces children to Spencer, who simply has too many toys. When Spencer’s parents ask him to give some of his goodies away, he struggles, but in the end discovers the most happiness with the simplest of play things.
      • Stuff by Margie Palatini is a fun story about Edward, who loves his stuff more than anything in the world. When his stuff begins to take over the house, Edward must decide which stuff counts and which is just…stuff.
    • Embrace commercials. It may seem counter intuitive, but next time your child is sucked in by clever advertisements, use it to your advantage. Instead of finding a distraction or changing the channel, help your daughter identify the clever marketing tricks that make her yell “I want it!” Explain that commercials use tactics like catchy jingles, cartoon or celebrity spokespeople, and misleading messages to convince consumers they need to buy the item being advertised. Make it fun by turning it into a game – ask her to identify as many marketing strategies as possible before the commercial is over.
    • Craft a plan. If your child is adamant that she must have an item, teach her that it’s ok to have “wants,” but it’s important to identify the ones that mean the most so we can prioritize. Ask your daughter to identify one or two special “wants” and help her map out a strategy for earning enough money to purchase the item(s). After she’s reached her saving goal, ask her to re-consider her potential purchase for 48 hours. You both may be surprised to find that the must-have item she so desperately craved isn’t quite as important to her as it once was.

    For more resources to help you teach children about money, explore the Parents section and online resource clearinghouse at OklahomaMoneyMatters.org.


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    My 8 year-old has been asking me to give her an allowance. I think it’s a great idea, but what’s the best way to teach her about money management and spending at such a young age? (posted March 30, 2012)

    An allowance can be a great tool for teaching your child the do’s and don’ts of money management! The lessons she learns now can have a huge impact on how she’ll budget her money and manage debt in the future. Consider these strategies for imparting some financial wisdom.

    • Set boundaries and expectations. Based on the amount of your child’s allowance, decide what purchases she’ll be solely responsible for (e.g. snacks at basketball games, toys, gifts for her friends) and which costs you’ll still cover (e.g. lunch money, school supplies, toiletries.).
    • Encourage saving and giving as well as spending. Consider using the 60:30:10 rule. Allow your child to spend 60 percent of her allowance as long as she saves 30 percent toward long-term goals and gives 10 percent to charity.
    • Let your child make mistakes. As hard as it is to watch our children make bad choices, sometimes mistakes are the best teaching tools. Even if you know your child will regret the buying decision she’s about to make, let her do it. When she comes to you complaining about her choice and asking for more money, say no and take the opportunity to help her think through why she regrets her decision, the importance of carefully considering a purchase before making it, and what she can do differently next time.
    • Introduce real-world examples. Next time you go grocery shopping, let your daughter take an active role. Set a goal together, like buying healthy after-school snacks or choosing something nutritious for dinner. Decide on a budget, then let her take control. This exercise provides a great opportunity for her to learn about the cost of feeding a family and explore comparison shopping.

    Regardless of the methods you choose, try your best to be consistent and be willing to talk openly and honestly about how you earn and spend money. Your influence and example are the greatest teachers!


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    My teenage son landed his first summer job. While I’m extremely proud of him for earning a paycheck, he blew his entire first paycheck in just a couple of days. How do I teach him to manage his paycheck wisely? (posted June 25, 2010)

    Summer jobs give teens a new-found freedom and money to spend. Teaching them about money management can be difficult, especially when it’s cash they’ve earned. However, it’s extremely important to help teach your child some solid financial strategies.

    • Talk about tax. It’s important to explain the difference between gross vs. net income before your teen makes big plans to spend his wages. Try sitting down with him to go over that first pay stub, explaining how and why taxes are taken out.
    • Take it to the bank. If he doesn’t already have one, help your son open a savings account and a checking account. Be sure to teach him how to write and record checks and how to balance statements.
    • Share your saving secrets. Saving is an important lesson, so emphasize the value. Help him develop a budget and suggest putting savings first, setting it aside from the rest of his income. He may not be inspired to stash cash for retirement, but he may be swayed to the saving habit with a short-term goal, like buying a plasma TV for his room.
    • Don’t micromanage. While it can be tempting to swoop in and save the day, allow him to learn his lesson. Let kids have space to make spending decisions, even if they’ll end up with buyer’s remorse. There’s nothing like wasting your own hard earned cash to make you more careful with your money the next time.

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    How much allowance should I pay my kids? Should it be tied to chores or not? What should I expect my kids to pay for out of their allowance money (birthday presents for friends, family, Christmas gifts, fun stuff for themselves, etc.)? (posted July 25, 2008)

    To give or not to give, that’s the question! Providing an allowance is a decision parents struggle with and there are various opinions on the matter. One approach that works well for many families is starting with a weekly base allowance - about $1 per year of the child’s age - to cover chores the child is responsible for as a contributing member of the family, as well as a list of chores that can be completed for extra cash.

    A list for an eight-year-old might look like this:

    Weekly Allowance: $8

    Everyday chores:

    • Make the bed
    • Put dirty clothes in the hamper
    • Set the table
    • Feed the dog

    Chores for extra money:

    • Unload dishwasher, 25¢ per occurrence
    • Fold laundry, 50¢ per load
    • Dust furniture, 25¢ per occurrence
    • Vacuum carpet, 25¢ per room

    Be specific about each task so your child knows when the job is complete. You may want to display the list of daily and additional chores in your child’s bedroom to serve as a visual reminder. Help your kids develop a weekly chart to keep track of chores they complete. Designate one day of the week as payday, and help your children add up the extra allowance they earned by doing additional chores. Encourage them to set aside a percentage of each week’s earnings for savings and charitable giving.

    Now to the fun part…spending! Slowly start to shift spending decisions to your child. Don’t buy toys or clothes on demand; encourage your kids to save their weekly allowance to purchase what they want. It’s easy for them to spend your money, but it’s hard to part with their own! In addition to paying for toys and fun activities, have your child contribute to gifts for friends and family. This practice helps kids understand that sometimes we skip buying what we want so we can do special things for others.

    However you decide to handle allowance in your home, try your best to be consistent and be willing to talk openly and honestly about how you earn and spend money. Your influence and example are their greatest teachers!


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    My wife is pregnant with our first child, and we’ve already spent loads of money on clothes, blankets, books, etc. I’m worried that once the baby is born, we’ll be broke! Do you have any tips or suggestions to help us save money while getting ready for our little bundle of joy? (posted Oct. 26, 2007)

    First of all, congratulations! There’s no doubt that babies bring great joy to their families, but many times they’re accompanied by empty wallets (and plenty of sleepless nights).

    It’s estimated that new moms and dads spend $6,200 on their baby during the first year, buying everything from clothes to car seats to cribs to diapers. Fortunately, with a little planning - and a few helpful tips - you can ease the financial burden … but you’re on your own for those 3 a.m. wake-up calls!

    Nix the new. Let’s be honest—baby stuff is so stinkin’ cute! Small clothes, tiny socks, itty bitty hats… it’s easy to get carried away when buying for a baby, and small items can add up fast. You may want to consider consignment shops, garage sales or online sites (eBay.com, CraigsList.com, Freecycle.org) for a variety of gently used and wallet-friendly items.

    Forget fancy furniture. A crib that meets national safety standards is a must. But, do you really need the matching changing table, bookshelf, armoire and hutch? Sure, they’ll all look fabulous in baby’s room, but are they functional or necessary? Join a mom’s group or talk to friends about what you’ll actually need (and use) in a nursery.

    Resist the urge to upgrade. Just because you’re having a baby doesn’t mean you immediately need the bigger home next to the elementary school and park (equipped with swings and monkey bars, of course). And, unless you drive a clown car, you probably have enough room to safely transport your precious cargo.

    Discuss day care. If both parents plan to work outside the home after the baby is born, investigate the perks of using an employer-sponsored flexible spending account to pay day care expenses. Generally, you can pay for up to $5,000 in child care expenses a year using these accounts, which set aside money from your paycheck pretax.

    Considering making the transition from working professional to stay-at-home parent? Test the waters by banking your paycheck during pregnancy to see if you can pay your bills, meet your savings goals, and still have a little fun on one income. Even if you find that you’ll both need to keep working, you’ll build a nice nest egg to start a college fund for baby!

    You don’t have to break the bank to bring up baby. For more baby budgeting tips, visit PracticalMoneySkills.com/baby.


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    My children are 6 and 8 and I really want them to learn about money before they get any older. What can I do? (posted April 27, 2007)

    What a great question! Obviously, you realize that teaching children to respect money early in life shapes their future spending and saving priorities, which could spare them the stress - and other consequences - of financial mismanagement.

    Children are very receptive to money management lessons; the key is to make it relevant by talking about money as it applies to daily life. Below is a list of everyday occurrences that can serve as teaching moments.

    Grocery shopping. Many parents dread shopping with their children because they never know what will end up in the basket! Make shopping a learning experience by involving your children in the process before you leave for the store. List the items you need and ask your children to help you clip and sort coupons. At the store, engage your children by asking them to compare prices based on product size, function and brand; discuss how these differences relate to the item’s value. This approach teaches kids the importance of comparison shopping.

    Commercials. Instead of changing the channel or muting the television, ask your children to identify the advertised products as either a “want” or a “need.” Discuss the difference. Children may think they need a cellphone or iPod, but food, shelter and clothing are needs that must be met before wants are considered.

    Household chores. Make a list of duties your children can do to earn an allowance. Then, slowly begin shifting some spending decisions to them. By making their own decisions with earned resources, they’ll quickly learn the value of a dollar and how to spend it wisely. Talk to them about ways people earn income and how a college degree increases lifetime earning potential.

    Family decision-making. We make choices constantly. While some decisions are simple (what to have for dinner, what to do on Friday night) and some are much more complicated (where to vacation, when to buy a new car), every choice we make has financial implications. Discuss the decision-making process as a family and encourage kids to share their perspectives. Through your actions, teach your children to spend, share and save. Make sure they know it’s OK to spend hard-earned money, but it’s also important for families to save for the future and to help others through charitable giving and volunteer service.

    Want more ideas for teaching your children about money, no matter their age? Visit the Oklahoma Council on Economic Education’s website, EconIsOK.org, to download a free publication entitled, “How to Raise a Financially Fit Child.”


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    Taxes


    I owe state and federal taxes, but don't have the money to pay them by April 15. Should I pay with my credit card to avoid penalties from the Internal Revenue Service and the state tax commission? (posted February 27, 2015)

    This tax season, about 25 percent of consumers will find themselves owing Uncle Sam. Thanks to the Taxpayer Relief Act of 1997, credit cards are considered an accepted form of payment, helping tax payers avoid penalty fees for late filing and late payments. While paying with credit can help you meet the filing deadline, the convenience will cost you.

    • Interest and processing fees. Even though you'll save yourself from government fees, you'll still be responsible for the interest that accrues until the balance is paid off. Depending on how much you owe, your credit card's interest rate and the length of your repayment, your ending balance could be larger than you originally anticipated. In addition to interest charges, you'll also be responsible for the processing costs associated with the credit transaction. With traditional credit card transactions, retailers absorb the processing fees. Unfortunately, the IRS doesn't have the same liberty, so those fees will be passed on to you. This fee is a percentage of your outstanding balance, so depending on the amount of your bill; the processing fee could be pretty substantial.
    • Credit scores and more. According to FICO, there are five areas considered when calculating your credit score: payment history, amount owed, length of credit history, new credit available and types of credit used. Any time your credit behavior impacts one of these factors, your credit score will fluctuate. If charging your tax debt to a credit card significantly increases your debt-to-income ratio and/or credit utilization ratio, your credit score could suffer. If you're in the market to finance a big-ticket item in the near future, this could make the borrowing process more difficult and/or costly.

    Credit cards aren't your only option. You could elect to make monthly payment arrangements with the IRS. Even if you can't pay your balance in full, it's important to file your taxes on time to avoid additional penalties. For additional information that could help ease your tax burden, visit the IRS's "What Ifs" for Struggling Taxpayers page.


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    Is there anything I should know about being audited by the IRS? Together, my husband and I make a substantial amount of money. I’ve heard the more money you make, the higher the chance is of being audited. (posted April 30, 2010)

    Many taxpayers worry about being audited, but actually, the IRS audits only a small percentage of the millions of tax returns filed each year. If you’re one of those few to be selected, here are some tips to help you prepare.

    • Get organized. Your first step should be to take a good look at the details of your return to refresh your memory. Once you have a thorough understanding of the contents of your tax return, you'll need to organize your records to support the items questioned by the IRS.
    • Don’t delay. Be sure to take any action required within the time frame allotted. Otherwise, the dispute could become a final assessment and move to the collections department with no grace period. If you’re not given enough time to adequately respond or prepare, request an extension or postponement.
    • Consider hiring a pro. While many taxpayers handle audits on their own, if your situation is complicated, you may want to request help from a professional, such as a CPA. Most audits are conducted by mail, with the IRS simply requesting documentation to verify a specific part of the return. If the audit requires an in-person meeting, the review will probably get into greater depth on certain issues. In that scenario, hiring a professional with audit experience might be a smart move.

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    I heard that filing my taxes online is better than hiring a tax professional because it provides me with more opportunities for savings and maximizes my refund. Is this true?(posted Jan. 30, 2009)

    Maybe. While it’s true that tax preparation software and online services can cost less money than hiring a professional to tackle your taxes, you could be losing out on important deductions a professional would recognize.

    To determine the best choice for you, ask yourself some important questions:

    • Do I understand my tax situation? Before you decide to fly solo, think about your familiarity with your current tax situation and industry lingo. For example, do you know your filing status? Do you know which credits and deductions you’re eligible for? Do you speak the language? If you’re uncomfortable navigating these questions alone, you’ll probably want to hire assistance.
    • Do I have the time and knowledge to get it right? Filing state and federal tax returns takes time. Do you have the patience to complete the forms yourself? What will you do if you encounter a question or option you don’t understand? When hiring a CPA or other tax professional, you’re not only paying for their time - you’re paying for their knowledge, as well. A pro may be able to quickly identify deductions (or obligations) you might otherwise miss. If you decide to prepare your own returns, educate yourself before starting your forms. Bookmark the IRS website, IRS.gov, as a resource.
    • Are my taxes complicated? If you started a business last year, had a child, enrolled a child in college, bought or sold a house, or experienced any other major financial event, you may want to consider seeking the aid of a tax professional. Conversely, if your financial situation is simpler or comparable to last year, doing your taxes on your own might be the right fit for you this year.

    Here’s the bottom line: the complexity of your financial life really determines the best approach to tax preparation, and you should review your circumstances each year and make the best choice for your current situation. If you do choose to prepare your own taxes, consider consulting with a tax professional, such as a CPA, at least once every three to five years. Visit KnowWhatCounts.org for a helpful listing of CPA’s and services.


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    I’ve heard that it’s better to have a mortgage for the tax deduction than to pay off a mortgage early. My husband and I have worked very hard to pay off our mortgage in four years. We took out a 30 year note, but plan to pay off this note in April of this year. I’m concerned about the loss of the tax deduction in coming years. Is this going to hurt us in the long run? (posted Jan. 26, 2007)

    If you asked three different financial planners this question, you would probably get three different answers. Several variables determine the best course, such as how long you plan to remain in the home, expected growth (or decline) in property values in your area, and your long-term financial goals, to name a few. While your best move is to discuss your specific situation with an accountant or financial planner, we can offer some information that may be helpful.

    Generally, it's always a good idea to minimize your tax liability to the extent legally possible. You want to pay only what you're responsible for - no more and no less. The tricky thing is, like many deductions, a mortgage interest deduction isn’t a "dollar-to-dollar" savings. In other words, if you claim $5,000 per year in mortgage interest, you don’t get to subtract $5,000 directly from your tax liability.

    Ultimately, how this decision affects your tax liability depends on the makeup of your tax deductions. If mortgage interest is your biggest deduction, then you may need to earmark some savings specifically for taxes or have additional money withheld from your check to compensate. (A financial professional can help you figure out how much to save. Remember, your goal is to break even ... you don’t want to owe Uncle Sam and you don’t want to get a big refund (which is, essentially, a free loan to the IRS). In most cases, even if you have to set aside tax savings or have more money withheld each month, the money you can save in the long run on monthly mortgage payments and interest will more than make up for it.

    Here's the bottom line - a home is most folks' largest asset. Assuming that you plan to stay put for the long haul, owning your home outright is an excellent financial position. No monthly mortgage payment will allow you to save much more for retirement and other long-term goals. The more you save and the sooner you save it, the more compound interest you can earn!


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    I look forward to receiving a tax refund each year, but my family and friends keep telling me that getting money back is a bad thing. I’m not convinced; how can a refund be a bad thing? Why shouldn’t I look forward to a refund each spring? (posted Feb. 28, 2014)

    Aw, tax time. For many people it’s a greatly anticipated season filled with visions of future purchases to be made. And as much fun as it is to imagine all the lovely items you can buy with your refunded money, your friends and family are right – getting a tax refund isn’t ideal. If you receive a refund, it means you’ve had too much withheld from your paycheck. You’ve essentially given Uncle Sam an interest-free loan throughout the year! Instead of aiming for a refund, a better tax strategy is to try to break even – ideally, you don’t pay the IRS and they don’t pay you. To start the process of finding that balance, visit your employer’s HR office ASAP to adjust your withholdings by completing a new W-4 form. This simple step will leave more money in your paycheck; that’s like giving yourself a raise.

    If you’re like many people who use their annual tax refund to kick-start their savings or pay down debt, it’s important to know that there’s a better way to maximize your money. Instead of waiting for the IRS to cut you a check at tax time, take full control of your finances by cutting out the middle man. Once you’ve adjusted your withholdings, continue living off the monthly amount you were previously bringing home and put the “extra” to work for you. If paying down debt is your goal, commit this money to debt reduction by implementing the debt snowball. If padding your emergency fund rates high on your priority list, consider having this “extra” income automatically deposited into an interest-bearing savings account at a bank or credit union and watch your savings grow. This time next year you’ll have a nice amount of money saved, plus the interest it’s earned.

    For more information about income taxes, tax forms and withholding, visit IRS.gov. While there, explore the IRS withholding calculator to help you determine how much tax should be withheld from your paycheck.



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