MONEY & FINANCE #59: CREDIT, MONEY MANAGEMENT, AND SAVING


EXERCISE #1


I read the article on how credit scores work and took the quiz. I got everything right on the quiz. Of course, I had just read the article right before I took it.


I was surprised to learn that inquiries into your credit can lower your score. I didn't know that opening new credit cards can negatively affect your score, although for only a short time. This means I won't be taking stores up on the offer to get their credit card just to get a 10% or 15% discount for that day's purchase. I have done this once or twice several years ago, but I won't do it again. I never use the cards again, so there really is no point. I have one credit card that I pay off monthly. I also thought it interesting that insurance companies are using your credit score. Since I have a good credit score, I'm not too concerned. It is interesting that they have found a correlation between credit scores and insurance claims.

EXERCISE #2

I don't have a spending or budget plan. However, I am very conservative with my spending, so I usually know in my head what I can afford. I might be interested in creating a budget plan if I had more time. In the last exercise I used Expensr, and I like the way it shows your expenses graphically, but I haven't had time to use it.

To create a budget, I would start by estimating my monthly expenses, like electricity, gas, auto expenses, etc. I have done this on several occasions, and monthly expenses do add up quickly. I would then estimate how much I want to save each month. Right now, I just put into savings what I have left over after bills are paid. I would allocate money each month for special treats, such as eating out, clothes, movies, and other entertainment. It would also be a good idea to track these type of expenses for a couple of months to see what I am spending money on besides my monthly bills. Expensr would be a useful tool for this.

EXERCISE #3

I found the TCDRS site had several useful bits of information. I didn't log in to my account, since I need to look up my pin number. However, I did just receive my yearly statement. I have a retirement fund from a previous job, TMRS, which works with TCDRS. The Proportionate Retirement Program publication on the website describes how this works. I didn't know that we get a guaranteed 7% interest rate on our money. I also didn't know you had to take your money out when you are 70 1/2, although I'm sure I will be wanting to retire a few years before I'm 70. I thought it was very interesting that your spouse has to sign a form if you choose to withdraw your money, and they won't receive benefits. It seems like if it's your money, it shouldn't concern them, but then I don't have a spouse. I found the website to be most helpful. The publications cover about any aspect you might have questions about.

Money & Finance #58 Banking, Budgeting, and Spending

1) My bank has been offering online banking for free for several years. I love the ease of online banking. Both of my college age children use the same bank, and it is very easy to transfer funds to their accounts. I can also easily transfer to my investment accounts with another company. Bill paying can be done with a click of a button. One thing I don't like is all of the e-mails they send me about services they offer that I am not interested in, but they can be easily deleted.



I honestly did not know what safeguards the bank offers, so I went online to check it out. They offer 100% coverage of funds that may be taken out of your account unauthorized. One thing that I do is I change my password every 6 months or so, and I'm very careful about giving out any personal information. I didn't even give the name of my bank in this blog. :)

2) I looked at the 3 budgeting websites and decided I liked Expensr. I signed up, and I think it's something I would like to continue to use. I really like the graphs. It gives you a very visual picture of what your expenses are. I set up a budget, and it gives you a nice bar graph, showing if you are staying within your budget. I will be curious to see how my graphs look after I have completed my expenses for the month. This is a very useful website.

3) I took the quiz, "DO YOU HAVE A SPENDING PROBLEM?". I scored very high for not having a problem, but I have always been very "tight" with my money. My parents were products of the depression, and my dad was from a very poor, but happy family. I learned to save from them. I was also a single mother of two, and we all know what a librarian's salary is like. I already do almost all of the things the article suggested for saving money. I always buy generic store brands and generic drugs. I have a high deductible on my insurance, and I pay off my credit card (only one) monthly. I knew about keeping your tires inflated to help save on gas, but I don't keep up with that as much as I should. I will try to do that more in the future.