Smart Military Money
Personal finance tips andadvice for the military lifestyle.
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The 12 months leading up to a home purchase can be extremely stressful. From the preapproval process to the signature on the dotted line, it’s a timeline cramped with intricate decisions that ultimately influence one of the most substantial purchases a person will make in his or her lifetime.
Some of these are more insignificant details, while others can be of major concern. However, when it comes to decisions that could completely jeopardize the opportunity altogether, there are four main things a person should avoid doing at all costs in the year leading up to a home purchase.
Bankruptcy is one of the most foreboding words in the world of loans and mortgages. This problem is a headache that causes apprehension and financial uncertainty for borrowers. Luckily, bankruptcy isn’t financial doom.
Declaring bankruptcy doesn’t mean you’ll be unable to purchase another home, but it takes hard work to build back credit. The first step to bouncing back from being bankrupt is understanding one’s credit score.
“I use my credit card and pay it off in full every month. Shouldn’t that help my score?”
As one of the questions loan consultants receive most frequently, there tend to be some common misconceptions concerning credit cards and credit scores. Ranging from credit limit to time limit, here are the answers to three of the most misunderstood myths.
Few things are more detrimental to your finances than payday loans. As a tool to effectively get paid before an individual receives a paycheck, a payday loan can lead to serious debt.
These loans require repayment of the principal and a fee measured as a fixed dollar amount per $100 borrowed. Military personnel are no less susceptible to these loans than civilian consumers, as a 2010 Financial Industry Regulatory Authority report found that 32 percent of enlisted and junior NCO respondents used non-bank borrowing and 11 percent of them had used a payday loan. Of civilian respondents, 9 percent had used a payday loan.
Now a recent Consumer Financial Protection Bureau white paper examined consumer behavior within the payday loan industry. Take a look at how dangerous this loan option can be for military consumers.
You might be surprised to know that errors in a credit report can and do happen. In fact, a recent study suggested that as many as 1 in 4 people found a discrepancy in their own file, and it isn’t just spelling errors that might be causing damage. Certain kinds of omitted information can be harmful as well, triggering a drop in your credit score and a limited access to future credit.
How can you determine if your credit report is hurting from missing information? What should you do about it?
Nobody lives a mistake-free life. Imagine how boring that would be. A life with no mistakes, no lessons learned and no maturation sounds unfulfilling.
At the same time, humans try to avoid disastrous mistakes. Learning to handle your money will undoubtedly cause mistakes. Just ask Cyprus.
Last week the island country’s two major banks sought a $13 million bailout. It’s really not much compared to the $650 million Eurozone leaders have handed out in the last three years. But alas, Cyprus did not receive the funds. There’s more to the story that can teach all consumers four important things.
Passive income sounds like a sweet deal. You set something up, then you sit back and let the money roll in. You can be an author and collect royalties. You can invest and make money off of interest. You can set up an ad campaign on your blog and earn income every time someone clicks on one of the ads. You can be a landlord and rent out property, and this is one of the more popular passive income options.
These are only a few ways in which you can generate passive income, but they all have one thing in common. Do you see it? They all require some form of initial investment. The author has to write the book. The investor has to have money to invest. The blogger has to build a high trafficked, well-maintained blog. Finally, the landlord has to have property to rent out. This means you have to buy property (and probably fix it up). If you want to pursue this popular form of passive income, you should take the time to learn what is involved.
When it comes to paying your children, you’ll consider allowances. But thanks to Justin Bieber and other celebrities, prepaid and credit cards are grabbing the attention of children nationwide.
Bieber, Hello Kitty and even Elvis Presley have cards with their likeness on them. That means you’ll have to figure out if there’s a suitable plastic option for your child, whether they’re 15 or 7 years old. Children see their favorite star endorsing a card and not the costs of using it. You’re the parent, so you must do the legwork.
“When will I get my refund?”
“How much will I get?”
These are the two most common questions people ask when tax season comes around, both of which depend on Form W-2, Wage and Tax Statement. Before you file this year’s tax return, you should have received a W-2 from each of your employers. Per IRS guidelines, companies had until January 31 to mail out the forms, but sometimes they are late, or misplaced, or sometimes they just get lost altogether. If you are caught in the predicament of a missing W-2, follow these three steps to recovery.
Your credit report won’t defend itself.
When a nationwide consumer reporting agency — Equifax, TransUnion or Experian — makes a mistake on your credit report, it’s up to you to get it fixed. Those companies don’t make exceptions for military consumers, as nice as that would be. As a consumer, you need to be vigilant in checking your credit and disputing errors. See More
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