Ask OKMM Q&A Forum


::March Edition::

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

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?

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.



::Budgeting::

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?






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.




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:






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.






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.






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.






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!






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.






Back to Top




::Consumer Issues::


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

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

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

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

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

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

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. 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. 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?

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

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

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?

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. 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?

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. 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. 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?






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?

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.






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.

Most importantly, remember that it’s okay 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.






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.

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.






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.

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.






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.






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.

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






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 pre-tax 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.

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






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


Don'ts


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.






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:






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!






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.






Is buying 100% 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.






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.






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.






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.                                                                                                              

 Estimated cost: $750 to $1,000






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.






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.






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% equity in your home. It’s also possible to refinance if your equity is less than 5%, 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% 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.






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.






My wallet was stolen and I cancelled 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.






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.






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% per year. The honeymoon may be over; prices are already about 4% 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.






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%, is the cost of crude oil. Refining, distribution and marketing make up 19%. Uncle Sam takes 12% through taxes. Finally, your local gas station gets about 3%, 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.






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.






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 babysitting. Have a green thumb? Help the birthday girl or boy plant flowers. Give a unique (and cheap!) present by sharing your natural talents.






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.






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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::Credit and Debt Management::


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

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

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

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

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

Q. How do I check my credit report?

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

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

Q. ’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. 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?

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?






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.

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




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.

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 non-profit credit counseling service that’s affiliated with the National Foundation for Credit Counseling.




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.






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.






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.


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% 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.






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!

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






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% 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% 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.






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% of the equation. While 10% 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.

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.

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






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.

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

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.






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:

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.






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.

Okay, 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?






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.

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.






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.






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.






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% 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.






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% interest on your savings and paying 18% interest on your credit card debt, you’ve got a 16% 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!




Is it really a big deal if I sign up for a store credit card to take advantage of their 10% 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!






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.






I’m paying 22% 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.






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):

You can learn more by contacting a non-profit 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.






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%). However, if you close the account with no balance, your ratio would increase to $300/$1,000 (30%), 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.






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 or CardRatings.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!






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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::Financial Services::

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. 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. 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?






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):

You can learn more by contacting a non-profit 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.






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!






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% 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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::General Money Management::


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?

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. 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. 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?

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. 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?

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. 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?






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.