Kids and Credit Cards

A recent study by the Credit Abuse Resistance Education (CARE) program showed the number of 18- to 24-year-olds declaring bankruptcy has increased 96 percent in the last ten years. Credit payment problems are one of the key reasons younger people file for bankruptcy. According to the CARE report, Bad credit can negatively affect teens in the future -- their ability to get a job, a loan, basic insurance or even an apartment. According to a Teens and Personal Finance poll conducted by Junior...

Top Ten Tax Deductions for Owning a Home

They say owning a home is the American dream, and borrowing to pay for one is a taxpayer's dream. Having recently purchased my first home, I was interested in the tax benefits now available to me. Here are the top ten: (more…)

Money Camp For Kids

There are countless summer camps out there. Summer camps that teach survival skills are pretty common, but what about a camp that teaches financial survival? Teens have a lot to learn. Only half of high school students in a recent survey correctly answered questions about saving, budgeting and retirement. Money camps are growing in popularity and that's good news because many schools don't cover the topic and parents aren't always the best teachers. They've made mistakes with their own mone...

FHA Loans

An FHA loan is a mortgage loan in the United States insured by the Federal Housing Administration. The loan may be issued by federally-qualified lenders. FHA loans have been helping people become homeowners since 1934. FHA's mortgage insurance programs help low and moderate income families become homeowners by lowering some of the costs of their mortgage loans. The FHA does not make home loans--it insures them. If a home buyer defaults, the lender is paid from the insurance fund. To get an FHA ...

My Credit Score

Beginning the process of searching for a mortgage, I recently received my credit report. The numbers look pretty good as I received scores of 783, 783, and 778. So, what the heck is a credit score anyway? When you apply for credit – whether for a credit card, a car loan, or a mortgage – lenders want to know what risk they'd take by loaning money to you. FICO® scores are the credit scores most lenders use to determine your credit risk. You have three FICO scores, one for each of the three credit...

Inflation

Why was a cup of coffee 10 cents in 1960 but over a $1 today? The answer- inflation. A Nexis search in 1996 found that inflation is the most commonly used economic term in the popular media. They found 872,000 news stories over the past twenty years that used the word inflation. "Unemployment" ran a distant second. Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a whole. The Inflation-Recession Cycle. Inflation often coincides...

How does the national debt affect the individual?

The U.S. national debt is the amount of money owed by the United States federal government. This does not include the money owed by states, corporations, or individuals. The national debt is over 8.1 trillion dollars. That puts each citizens share of that debt to over $27,000. The National Debt has continued to increase an average of $2.28 billion per day since September 30, 2005. U.S. Public debt is more than ten times the amount of United States currency in circulation as of 2005, estimated to...

What is the Efficient Market Hypothesis?

In finance, the efficient market hypothesis (EMH) asserts that financial markets are "efficient", or that the current price of a share reflects everything that is known about the company and its future earnings potential, and is, therefore, accurate in the sense that it reflects the collective beliefs of all investors about future prospects. (more…)

Do You Need an Emergency Fund?

We typically hear that everyone should have an emergency fund equal to three to six months (or more) worth of basic living expenses. But, do you really need such an emergency fund? I'm not sure you do. Emergency funds give you something to fall back on if you become ill or disabled and can't work, if you or your spouse lose your job, incur large medical bills, or have an unexpected large bill such as a major car or home repair. (more…)

How Taxes Affect Your Returns

Last week I discussed why costs matter when investing. By considering taxes as an additional expense, you'll be able to make informed decisions that, all else being equal, can help your portfolio's returns over the long run. Research by Vanguard's Investment Counseling & Research group shows that taxes on dividends and capital gains can be a significant drag on a fund's overall performance—in many cases, the largest single drag. And that's particularly true for stock funds. (more…)