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.