Develop a budget plan that is based on your cash flow.  You should know on a weekly basis when money will be showing up in your bank account or in the mail so you are looking for it.  You should know how much money you have and how much is coming in so if a check doesn’t show up, you get right on the problem and find that financial resource.  You should also know what your weekly expenses are.  If you have your living expenses paid for so you have a student cash card to use for your meals, keep track of that card and of the balance on the card.  The last thing you want is to show up for breakfast one morning and you have no money to pay for food.

When you went back in the house for dad to show you how to balance a checkbook, learn also how to organize a budget that can help you keep track of all of these expenses and income resources.  A good computer spreadsheet is a great way to organize your tuition payments, your food expenses, budget money for gas, clothing, and books and even for dating.   You can get quite specific on your budget so you have money set aside for everything from your next haircut to your car payment or the money you send off to help feed starving orphans in Africa.  Make a plan and live within that budget and you will find your financial woes much less troubling for your entire college career.

When you have learned to manage the many financial “events” that go into our first year at college, you may then be ready to move off campus into your first apartment.   Even if this means moving in with some roommates, think about the responsibilities you should be prepared to attend to for this first home away from home that you can call your own.

Talk to the apartment management and have them explain the lease to you. If it is a one year lease, you don’t want to sign that if you only have a few months left before summer when you might be moving back home.  Also get a feel for the extra fees that are part of having your own apartment.  That includes first and last months rent, security deposits as well as living essentials like furniture and kitchenware.

Going to college is a growing up experience.  Managing your money by yourself is a big part of being an adult so you keep your bills paid and have a little money in your wallet for fun each week as well.  So take the financial side of your first year away from home seriously.  If you do, you will have a very successful first year at college that is exciting and fun because you know you have your financial life under control.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

There are other automated systems at your disposal to help you manage your money.  Online banking and automated alerts when your account is in trouble can really help you out when you have a million things on your mind relating to your schooling.  By using online resources, you can manage your money and still keep up with your school work.

Your wallet is going to fill up with cards because along with your ATM and debit card, you should also launch into the world of credit cards by heading off to college with a credit card to use when appropriate.  The good thing about learning to use a credit card wisely in college is that you build a good credit history this way which is a real asset for you when you graduate and you need a credit history so you can buy a car or for other necessities of getting your adult life underway.

Which credit card you decide to apply for may be something worth discussing with your financial advisers which are probably your parents.  In some cases parents will take out a student credit card and the bill will go to mom and dad to pay.  The credit limit is low so you cannot abuse the card but it gives you some credit to fall back on and it gets your credit history moving.  This is a great way to get your start in the world of credit.

If you are trying to pick between several credit cards and you don’t have parental or other issues to consider, take into account the interest rate they are going to charge, whether there is an annual fee for having the card and what their policies are if you pay the card a day late.  While all credit cards charge a fee for late payments, there is a lot of variety to these policies so pick the one that have policies that are best for you.  It will mean reading the fine print of the credit card offer which is usually on the back and printed small to discourage you from reading it.  But get a magnifying glass and read those terms and conditions of the card so you don’t get broadsided by credit card charges you agreed to without knowing it.

Financial aid is an important part of paying for college, particularly if your parents are not paying for everything out of a trust fund.  Even if you are not paying the bills yourself, you may need to work with your parents to make sure financial aid has been researched and that you are getting everything you can from low interest students loans, grants and scholarships.  There are dozens of tuition wavers and other financial aid resources out there if you look for them.

Click here to see Part 3: What Every Bright Eyed College Freshman Must Know About Money Part 3

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

First of all, you are going to need some help with the movement of funds.  Even if mom or dad are paying your bills, you will need a bank account for money  that is sent to you for your daily expenses.  If you work as well as go to school, you need a reliable checking account to manage your earnings and to pay bills with.  Banks near universities usually offer checking accounts to students that carry no fees.  Take advantage of these programs.

Make a plan for how you will get cash from your checking account each day.  An ATM card is perfect but before you even go to the bank to open your account, scout out the campus and the neighborhood around campus to be sure there are ATM machines that are easy to get to.  If you don’t have a car, you will need an ATM you can walk to.

Be aware of ATM branding when you scout out the locations around the area for you to use.  ATMs are owned by particular banks so just because you find five ATMs on campus, that doesn’t mean all of them are operated by the same bank.  Use the bank that has the most ATMs you can get to because if you only use ATMs from that bank, you will not have to pay any fees.  Using ATMs from other banks will almost always result in a hefty fee being charged against your account.

Keep in mind also that the use of a debit card or by overwriting checks when you make purchases, you can get cash without fees.  By just thinking ahead, you won’t come up short when you want to take that cute coed on a date and you have to pay for the pizza.  Debit cards are great because you can use them like a credit card but the money comes right out of your account like writing a check.  Merchants love them too because they get paid immediately for your purchases.  A debit card is a powerful tool but it can hurt you too.

Learn early on to keep track of your transactions including debit card purchases.  If you are about to leave home to go to college and don’t know how to balance a checkbook, go back in the house and get dad to show you how.  A great way to manage your checking account is to use a computerized check ledger like Quicken so you just enter your checks or other bank transactions and the computer does all the math.  This is a godsend when you need to keep your brain energy preserved for classes, assignments and exams.

Learning to balance your checkbook may be the most important skill you learn in college because it is vital to avoid overdraft fees.   If you spend all of the money in your bank account, the bank has a system where they either bounce the checks you write or put your account into what is called “overdraft” which means it has a negative balance.  But banks make a lot of money this way because every time you have a check or transaction that there are insufficient funds to pay, the bank hits you with a hefty fee for each overdraft they handle.

That means that if you wrote five checks for ten dollars and each of them went into overdraft, that doesn’t mean your account is $50 overdrawn.  For each check, the bank might charge your account $25 in overdraft fees.  So for covering $50 worth of checks, you wake up one morning with your account $175 overdrawn.  You can see that you should do everything in your power to avoid over drafting your account.  And the number one weapon against letting banks nail you for these fees is to learn to manage your account by keeping an up to date checking account ledger and learning to balance your checkbook every week.

Click here to see Part 2: What Every Bright Eyed College Freshman Must Know About Money Part 2

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Similarly, the company or individual who you pay the rent to may have checked your credit score and they may check it from time to time even if you are a good customer and you pay your bills on time.  If your landlord notices that your credit score has begun to get worse, he might begin to get concerned about whether you will be able to continue to pay your bills long term.  But if you have a good history of making your payments, that should not be a problem.  Pay attention if your credit report is drawing the attention of property managers particularly if you want to sign a lease on a new apartment.   If your credit score is questionable, that may affect your ability to rent that perfect apartment or house.

Utility companies and other businesses that you pay regular bills to will often check your credit score before setting up your account.  While you probably will not be denied service just because your credit score is low or falling, it could cause businesses that you need for your daily essentials to feel they need to charge you a higher deposit for their services or even charge higher rates because you represent a risk.  The same is true of cell phone providers because that contract you sign with them for several years of service is something you have to pay each month.  They want to know that you can pay your bills.

You could even find that a prospective employer wants to check your credit history before making you an offer for that new job you want.  This is most likely to happen if the job you are going to take involves managing money for the company.  But employers also want to know you are handling your life in a responsible fashion so they know you will handle your job with them just as well.

In most of these situations, you have to give your permission for a future employer, landlord or a utility company to check your credit. And since you gave your permission, when you see that business how up on your credit report, that should not be a big shock.  It should also not be a cause for concern because none of these inquires drive down your credit score.  Only new credit applications can do that and you have control over that by simply being very conservative in the amount of credit you apply for.  By using good sense in how you handle your credit, even though you know people are watching you, you can relax because you have nothing to hide.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Just about anyone that you enter into a financial relationship with may have looked at your credit report in the last couple of years.  That includes landlords or the mortgage company if you tried to buy a house.  It includes employers, banks and even utility companies.  They all take a peek at your credit report to make sure you are a reasonable person to do business with.

It doesn’t take Sherlock Holmes to figure out who is watching you.  You can order a copy of your credit report and get details of every organization who has checked your credit report over a two year time.  When you receive your copy of your report, just look down at the section called “credit inquiries” and you will learn all you need to know.  This can be a very revealing study and in a way, you will feel like a detective looking down the list of who is checking up on you and setting about to figure out why.

Now it is appropriate to get some perspective on what you are seeing under “credit inquiries.”  Be prepared to see quite an impressive number of entries from companies that you don’t know.  Don’t panic.  This is not a sign of a hoard of identity thieves storming your credit report.  Those entries are from companies who submitted a request for your report to determine if the wanted to send you a promotional offer or in some other way try to capture your business.  These are harmless inquiries that will not drive down your credit score.

Another classification of organizations you might see watching your credit report are institutions that you already do business with.  Your bank, the companies who handle your bad credit cards and other lending institutions pay a lot of attention to the credit reports of their customers.  And like the inquiries of advertisers, these types of credit report requests are nothing to worry about.  Your credit score cannot be hurt just because people who know you are keeping track of your credit progress.

The entries on the list of people checking up on you that can give you cause to worry are the ones from businesses that are looking at your credit because of a new credit application from you.  You should know every one of these businesses because they would not have sent in an inquiry except to have credit check to determine if they would enter into a financial relationship with you.  Now, if your credit score is strong and you don’t apply for new credit very often, this is not a cause to worry.  But if you have a problem credit score and particularly if there are a lot of new credit applications on your credit report, that will lower your credit score noticeably which will only make it more difficult to build your good credit back up.

This is no cause for paranoia particularly when you are doing some credit resource shopping for a major purchase like a automobile loan.  If you open discussions with several lenders to get the best deal you can, each of them might pull your credit report.  But these are not the same kind of inquiries as calls for your credit report that are the result of a definite credit application.  So shopping for a good credit deal will not hurt your credit score.

Click here to see Part 2: Credit Inquiries: Watching People Who Are Watching Your Credit Report Part 2

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Send in your package by certified mail.  This is normal because you will get a return receipt showing that your information reached its destination and action will get underway quickly to correct the problem.  For best results, send it next day priority.  It costs a little more but it gets things moving more quickly as well.  You can get a tri merge credit report and check your credit score ratings. Here are the addresses and web site locations of the three agencies for your use…

TransUnion
2 Baldwin Place
P.O. Box 2000
Chester, PA 19022
1-800-916-8800
http://www.transunion.com/corporate/aboutUs/contactUs.page

Experian
https://www.experian.com/consumer/cac/InvalidateSession.do?code=CDIRESELLER&rid=R002

Equifax
P.O. Box 740256
Atlanta, GA 30374-0241
http://www.equifax.com/online-credit-dispute/

You should allow about a month for the process to take place.  But the credit agency is required to take action within 30 days and investigate the reported dispute.  If they find out that they should make changes to your credit report, they will do so and send you detailed documentation that the problem has been fixed.  If they cannot confirm that the inaccuracy is valid, they will contact you with information on why they could not change the entry you disputed.

The good thing about working directly with a credit agency is that they will also contact the other credit agencies so the problem entry will be fixed in all three credit reports.  They will follow up with the company that was affected by the change to alert them that they changed your credit report also.  This is one benefit of checking your national credit report. You can even take the correction to the next level by asking the credit agency to contact anyone who has asked for your credit report in the last few months and give them an updated report.  This can go a long way to fix issues with your credit that come out of mistakes or flaws in your credit report.

Even if the credit agency cannot fix the problem on your report, you have actions you can take to record that you disputed the item.  You can have a note put on your credit report that relates to the disputed item that briefly documents that you think that entry is incorrect.  That argument can help reduce the damage of problem entries when companies you want to do business with check your credit.

Another approach is to contact the company or institution that is responsible for the problem entry and dispute it through them.  If you can make progress getting that institution to recognize that they put that entry on your credit report in error, they may be willing to contact the credit boroughs and make the correction.

Use the same attention to detail that you employed when you filed the report with the credit agency.  Your documentation that you kept in that first effort can be used again to file a complaint with the company that has put a bad entry on your credit file.  By sending the letter certified and following up on the request diligently, it is very likely you can get the disputed item removed from your credit report.

Its hard work but its worth it.  When you get your credit report cleaned up, you will find that you will see the results in a better credit rating and the ease that you can get credit for the purchases you need to make.  But even after you have achieved success, you must continue to be diligent to watch your credit report each year to make sure that once it is in good shape, you keep it that way.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

It is vital that your credit report is correct, error free and that you keep an eye out for credit fraud or identity theft.  There are so many times in life when you go to buy a new home, a car or apply for a credit that your credit score quietly makes those things happen for you.  So as much as your credit report takes care of you, its a smart idea to take care of it and take action when things show up on that report that are not right.

There is a lot of personal information on your credit report including your name, social security number, address as well as your employment history and detailed data about every credit account you have and the history of those lines of credit.  Because any institution that you need to do business with from a bank to a mortgage company to the company that rents you an apartment can check your credit report, working hard to keep it correct is a worthwhile priority.

The first essential step to making sure your credit report stays correct is to check it at least once a year.  There are three credit reporting agencies, Equifax, Experian and TransUnion.  It’s the law that each of these credit reporting agencies must give you a free copy of your credit report once a year.  So keep track of the information on how to order your credit report and make it as much a part of your annual financial management as filing your income taxes. You can get credit report monitoring services from any of the three agencies as well as buy one time credit report.

It is not a complicated process to order a report from each of the major credit reporting organizations.  It is as easy as using the web site www.AnnualCreditReport.com.  Or you can simply call 1-877-322-8228 to get the ball rolling.  There is ample information on the internet about how to step through the process of getting your credit report.  One excellent article about the steps you will complete to order your own copy of your credit information is at http://www.credit.com/credit_information/credit_report/How-to-order-your-free-annual-credit-reports.jsp

These resources will show you how to scrutinize each section of your credit report to look for errors and potential red flags of tampering by identity thieves.  When you do find an error, taking action right away is best.  Start out by contacting each credit agency and giving them all of the information they need to correct the problem.  A letter is best because you can go into detail. Equifax, Experian and TransUnion all have online methods to report problems.

When you put together your report, be as specific as possible. Go through the entire credit report so that you can report multiple problems with one letter if you find them.  This is better than sending in multiple problem reports.  Also be sure you make a copy of your credit report and mail it in along with your detailed documentation of what is wrong.  That gives the reviewer at the credit agency everything they need to fix what is wrong.

Click here to see Part 2: Taking Control Of That Credit Report Once And For All Part 2

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Your Credit Report Copy: Is it true that just asking for a copy of my credit report will drive down my credit report?

Actually, that is completely false.  You can get a free copy of your credit report twice a year from each of the three major credit reporting agencies and it will never hurt your credit score.  Your request for a copy of your credit report is a soft inquiry that will show up on your copy of the report but not on the copy that your creditors see.  If anything, you should be encouraged to review your credit report frequently so you are aware of how your credit stands.

Credit Inquiries and Your Score: Should I Worry About How Credit Inquiries Drive Down My Credit Score?

No because even credit inquiries that do affect your score represent under 5% of the all of the elements that go into figuring up your score.  If you have a strong credit report, that figure is even smaller.  It is difficult to tell how much a credit inquiry will affect your credit score.  It affects everyone differently.

But it still is good to limit how many new credit card, insurance or cell phone accounts you open.  If you are trying to get a mortgage, keeping the number of credit report inquiries low is good credit strategy.  Even though the effect of credit inquires is low, even little fluxuations can make a difference.

Can a Divorce Hurt My Credit Rating?

Many times when you get married, you add your new husband or wife to your existing credit cards.  The problem is that account is still in your name and if the account is abused in some other way, that will bring down your credit rating.

A divorce by itself will not hurt your credit rating.  But your ex may still be able to exceed the credit limit on it or run up the balance, which is hard on your credit rating.  Moreover, if you expect your ex to make the payments on a credit account that is attached to your credit history and he or she doesn’t make that payment, that will hurt your credit rating directly.  This makes a good case for doing a review of credit accounts when you come to that place in your marriage is headed to divorce.  Close any joint accounts and if you have added your spouse to your accounts, take his or her card away so it is your account only from now on.

The best way to share a credit account is to take out a joint account that is in both of your names.  That way, if one spouse takes out of the marriage the responsibility for that account, missing a payment hurts both of your ratings.  It is also wise to maintain some separate credit accounts when the marriage is healthy and doing well.  You don’t want to be left high and dry if your disgruntled ex cancels all of your credit card accounts.

Fixing Credit Score Problem: What can be done about the double whammy of a bad credit score and a lot of debt?

One step that can help you really make some progress on your debt is to use a debt consolidation service to get all of your debt into one credit account.  That one step can help to lower your monthly payment and your interest rate so you can finally start seeing the huge amount you pay on debt each month actually begin to bring down your indebtedness.

Another option to make more progress on your debt is to call the credit card companies you owe and ask them to lower your interest rate.  If you explain to them that you are considering bankruptcy or default, they would far rather help you pay off the debt than see you default so they have to eat the debt.

Balance transfers and using a second mortgage to get your interest rates down are also viable options to give you the breathing room you need to start getting some control over out of control credit debt problems.  But above all, keep making at least the minimum amount due on time and don’t open any new credit accounts.  These steps taken together will eventually bring up your credit score.  But it will take some time.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Family Debt: How can I help out my adult child if he or she has fallen into a lot of debt?

We all know that just because your child is an adult, they still need mom and dad sometimes.  Debt management is a skill so you can use their plight as a teaching opportunity.

However, if your child has called with that panic voice about the debt he or she owes, it’s easy to want to bail them out.  But being your child’s safety net may or may not be the right idea.

Before you rush to a child’s financial rescue, be the counselor they need in a parent.  He or she may just need some lessons in how to manage money.  An afternoon helping the youngster set up plan for living on the income he or she has may be all that is needed.

If after some counseling, it is clear you do need to get involved to bail out a troubled kiddo, it might be better to give them the money rather than set it up like a loan.  If you loan him or her the money, that could cause bad feelings when you have to become a creditor to your own child.

If giving the child a loan is the best way to help, the loan can be structured like a formal loan using a loan service that will handle the billing, the interest calculation and the collection.  That way, you remove the loan from your parent/child relationship and it is just another bill the youngster has to pay.

Inherited Debt: What are my options if I inherit a lot of debt from when my parent or spouse passed away?

If the loved one who passed on is a parent or sibling, their debt is not transferable to his or her children or siblings.  So don’t let the creditors of your loved one try to collect from you because that debt is not your responsibility.  If the debt belonged to your husband or wife, it depends on if the state you live in is a community property state.  If so, the debt of your spouse is now your property so you are responsible to pay it off.

Many creditors will not go after the debt of someone if they die.  If they do, the co-signers to the loan that is owed to the creditor are the ones who will be responsible for the debt.  If you feel you are being harassed for a debt of a loved one who passed away and you are not accountable for that debt, get some help from a lawyer because something can be done to make them stop.

Senior Citizen Debt: What can be done for an elderly loved one who is on a fixed income and he or she is being harassed by credit card companies for debts they cannot pay back?

People who are no longer producing income and are living on retirement accounts and social security are protected so they are not responsible for old debts.  They are “judgment proof” because even if the credit card company did sue, social security and most retirement accounts cannot be seized to pay old credit card debts.  You may feel inclined to help your elderly loved one file for bankruptcy but that is not necessary because they are already protected from legal action by creditors.

If the retired person still has assets like property or bank account monies that are not protected, you are smart to get some help from a lawyer.  In most cases if you just write a letter to the credit card company or the collection agency explaining that there are no assets available to pay the debt, that is sufficient to stop the phone calls and letters.  Be direct when you write to them in asking them to stop pursuing the debt.  In most cases, they will write off the debt and forget about it.  But keep copies of your letter and any interaction that happens with the creditor in case you need to use that in a legal action if things get worse.

Credit Problems Due to Cosigning for My Child: If I discover that I have a credit problem because I co-signed on a loan for my child and he or she has not been making payments on the loan on time, what can I do to repair my credit score so my child’s poor judgment doesn’t hurt my financial standing?

This is the problem with co-signing for a youngster who may not be ready to make wise financial choices.  Co-signing makes you responsible for your child’s debt if they don’t make the payments, which ties you and your son or daughter together financially.  That means that late payments on that loan will hit your credit report and hurt your ability to use your credit.  It’s good to know that before you co-sign on the debt because if the damage is done to your credit report, that is just a byproduct of co-signing in the first place.

The best course of action you have is to first work with your child so he or she does not make payments late on that loan any more. You might monitor how the child is doing making those payments for a few months just to make sure the debt is being handled.  Then you might contact the credit institution that is carrying the loan to talk about the situation.  If they see that you are going to manage the account more proactively, they may be open to removing the negative mark on your credit rating.  You might even set it up that if the loan is not paid on time, you get contacted as well as your child so problems don’t sneak up on you in the future.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Out of Control Interest Rates: Can credit card companies raise interest rates even if I am a good customer?  If so, what can I do to put a stop to it?

There is a clause in that fine print cardholder agreement you got when you signed up with the account that allows credit card companies to jack up your rates on existing accounts.  They called this process “Universal Default”.  In fact, all the credit card company has to do is send you an update to that hard to understand cardholder agreement and they can change the rules to suit them.  This is probably the most maddening thing about trying to deal with credit card companies but it is something we have to recognize as a reality.

You might be surprised how effective it is to just call the credit card company to talk about the interest rate.  Often if the credit card company fears you are going to close the account and give your credit business to another company, they will lower your rate and cap it.  This makes it in your advantage to maintain more than one credit account because the credit card company will see that you have options and be more willing to play ball with you.

But your first option is to ask them to lower your rate.  They won’t lower them if you don’t ask and they might if you do.  If they refuse, simply close the account and move the outstanding balance to a credit resource that will do business honestly with you.

Debt Collection Agencies: What if the credit card company turns over my outstanding balance to a debt collector?

This can be a scary situation as debt collectors have a reputation of being rough on people to get that money.  Be aware that even if the debt collector is harassing you, you still have legal recourse.  If the debt is old, there may be a statute of limitations in your date that dictates how long the credit card company can continue to harass you about the debt.  So one step you can take to defend yourself if things have gotten so bad between you and the creditor that a collections agency is involved is to contact the Attorney General in your state.  There are laws against harassment even if you owe them money and you can get protection from threatening phone calls.

If the statute of limitations on the debt has run out, you can write a letter to the collection agency to let them know they don’t have a leg to stand on.  Be forceful that you are requesting them to stop and have the letter delivered certified so it is a legal document if you need to turn the problem over to the authorities.

If the debt is before a consolidation or bankruptcy, that step has already removed the amount you owe.  It does happen that a creditor comes after a debt that is quite old threatening to ruin your credit rating.  But if the debt is over 7 years old, they can’t follow through on the threat so don’t let it get to you.

How Many Credit Cards?: Is it Bad to Carry More Than One Credit Card?

From a credit score point of view, as long as you don’t have dozens of credit accounts, you won’t be harmed by having two or three accounts.  Most adults will carry different accounts for different reasons.  You may have an account for gas and another one for large purchases because of the rewards.  When using reward based credit cards, just keep in mind if the fees and interest make it worth running up that balance.

You can carry two or more credit cards without harm to your credit rating.  Of greater importance is that you make the payments on time and keep the balances significantly below your credit limits.  It is even healthy to put a few transactions through a credit card that you don’t use very often just to keep it active.  Your credit rating will improve if it shows you have good credit and you know how to use it.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.