Money and Stress: How a savings account can help
March 12, 2009
I’ve always believed there was a correlation between stress and money. Let’s face it, if you’re struggling financially, there’s a good chance you’re stressing about it.
With all of the recent doom and gloom news about the economy, it stands to reason there are probably quite a few people out there mentally exhausted from worrying about their finances. Even people who are doing fairly well and have jobs are concerned about their financial futures.
It turns out there is a way to ease some of that stress: a savings account.
At Advantage, we always encourage people to build up a savings account. There is a generally accepted guideline in the financial world that you should have at least three months worth of living expenses saved. That can be an overwhelming amount for some people. And facing what seems to be an overwhelming task often leads people to give up.
That’s why we recommend people start with a smaller goal and build from there. Even if you’re putting aside $5 a pay, it’s better than not saving anything. You can always sock away more if you pay down debts or increase your income in the future.
Liz Pulliam Weston just wrote an article on MSN Money that highlights a study that has shown that having even a small savings of $500 helps people to sleep better because it reduces a certain amount of anxiety over money.
If you’re stressed out, you’re probably not sleeping well. A lack of sleep can lead to other health problems, not to mention making it very difficult to get through the day.
If you don’t currently have any savings, try to start putting away a little bit of money each month. Once you reach $500, reevaluate your financial situation and set a new savings goal.
Consumers lose access to Experian credit scores
March 10, 2009
Credit scores have always been one way a lender deems whether or not you are credit worthy enough to get a loan.
Lenders also use credit scores to determine what interest rate you get for a loan.
Unlike your credit report, which you can get at no cost once a year, you must pay for your credit scores. And even when you do pay for them, quite often the score you purchase isn’t the same score your lender will see. This is partially because your score can fluctuate as new information is reported to the credit bureaus. Also, different lenders pull credit scores from different credit bureaus, and some lenders have their own credit scoring methods.
I usually recommend that someone purchase his or her credit score before applying for a large loan like a car or a mortgage. Even though the scores may not be exact, at least you’ll have a rough idea of where you stand before you walk through the lender’s door.
Now, one credit bureau is limiting your ability to see your whole credit picture. Experian has announced they will no longer allow consumers to purchase their Experian credit score. Apparently is because of contractual changes between Experian and Fair Isaac Co., the creator of the FICO score.
Experian will still provide their credit scores to lenders, just not to consumers.
This concerns me. I think we have a right to access information that is compiled about us, especially so when that information can impact our lives. In the case of the credit scores, consumers are left to go into a major transaction without their complete financial picture, a picture your lender can access. It leaves the consumer at a disadvantage.
Consumers can still view their Experian credit report, just not their score.
What do you think about this news?
Know your rights if you’re contacted by a debt collector
March 4, 2009
It is always important to know your rights when it comes to debt collectors. Unfortunately right now it’s even more important. It seems that debt collectors are going to new levels to collect money from individuals who don’t even owe them money.
A friend of mine e-mailed me this week about a situation she is facing with a debt collector. A debt that she does not owe was turned over to a collection agency. When she received the collection notice, she called the collection agency and explained that it was not a valid debt.
The debt collector then proceeded to tell my friend it would just be better if she paid them so that it didn’t end up on her credit report, and she could continue to dispute the original debt with the company that turned her over to collections.
This was nothing more than a scare tactic to try to get her to pay money she doesn’t owe.
I thought that was pretty smarmy until I read an article in the New York Times today about debt collectors going after relatives of deceased people who passed away leaving debt behind.
In many cases when a loved one dies, the family is not obligated to pay off his or debts, especially out of their own pockets. There may be cases where a debt collector would have a legal right to go after the deceased’s estate. But, this story details practices that are down right wrong and manipulative.
If you are contacted by a debt collector, ask for verification – in writing – that the debt is yours. If you are contacted regarding debt left by a deceased loved one, take some time to find out if you are legally obligated to pay the debt.
The Fair Debt Collection Practices Act outlines your legal rights when it comes to dealing with debt collectors.
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