With wedding season around the corner, many couples will soon take a financial “plunge” together. But before signing a lease, mortgage or marriage license, stop to think about how well you know your significant other, financially. For example, is he/she in debt? How about long-term financial goals?

FICO, the leading credit score provider, shares these tips to help couples get ready for the big day: 

1)     Be honest, discuss finances with your partner – People tend to steer clear from discussing finances – but your partner’s financial burdens will affect your credit if you help out with their debts and obligations. After you marry, you may keep some assets to yourself; however, everything you acquire together will be merged.

2)     Good debt vs. Bad debt – For certain things, going into debt is worth it. Discuss what you’re willing to sacrifice with your partner early and set financial goals to fund each of these decisions. For example: Are you willing to put your kids through private school, even if you have to take out a loan to do it? How important is getting a new car, when finances are tight? Set a budget and identify common goals that work for you both before you accrue any debt.

3)     Bills, bills, bills – Before the wedding, map out a plan and decide who will pay for what or if you plan to share these responsibilities. People with a long history of paying their bills on time are expected by lenders to continue their good payment pattern, and will be more willing to obtain credit in the future. Late payments are one of the most common ways in which your score will be affected negatively.

4)     Don’t run up debt when planning the big day – Buying lavish seat covers and trucks full of flowers is easy, but paying them off years later is no honeymoon. Spend within your means; if you have a lot of debt, adding more debt or maxing out your credit cards will hurt your FICO score, making it harder to get a loan on big ticket items later (a home or a car, for example).

5)     Apartment, condo or house? Discuss home buying before marriage; timeline, size, price point, and financing should be agreed upon BEFORE visiting any open house. This talk may also spark conversation of each of your financial standings and credit scores.

If you would like to learn more about how FICO can help keep you in top credit shape, please visit myFICO.com or contact me via the below information.

Health care costs are a large component of each of our yearly expenditures. It's important to know how this new law might affect you.

We’ve seldom seen a piece of legislation so widely misrepresented, and misunderstood, as the new health care law. We stopped counting the number of articles and items we turned out on the subject after the total reached 100.

Read the entire post for a great detailed breakdown that dispels many myths about the health care reform bill signed into law by President Obama.

More Malarkey About Health Care | FactCheck.org

Technorati Tags: health care reform, health care reform myths debunked, health care reform facts
 

The holiday hangover is not over yet – most of us still have a stack of holiday shopping bills piled up on our coffee tables or desks to deal with. In a recent post, we addressed one way people can rebound from the holidays and start anew this year, but just like any hangover, the ultimate cure involves more than just one simple trick.

Let’s take a look at some reasons why shoppers often end up with a massive debt headache and arm you with some simple but effective money-saving tips that will help you stick to your budget and avoid the infamous holiday shopping hangover.

The Cause

During the holiday season, shoppers are often rushed to check off all the items on their list and will forgo some of the easiest ways to save money such as checking out competitive prices or using coupons. As they get caught up in the holiday buying frenzy, many are forced to make impulsive purchases while last-minute shopping at stores, instead of researching different options online. The holiday rush causes consumers to forget how much they are spending and rack up massive credit card debt, which has shoppers making New Year’s spending resolutions they know they’ll never keep.

The Cure

Instead of making all those impossible resolutions, we’re going to let you all in on a little secret that will leave you debt-free after every holiday shopping season: you never have to pay full price for anything again! As a result of the recession, more retailers than ever are giving you the chance to save money via online coupon codes and deals. It’s simple, just follow these rules:

1. Go Online: Stop printing and start clicking! If you come across an invalid coupon, it’s easier to find a replacement when you’re shopping online rather than when you’re at a store.
2. Think Outside the Grocery Cart: Step away from the idea that coupons should only be used to buy groceries. There are coupon codes for almost every item that you can buy online – from magazine subscriptions to electronics and flowers.
3. Time it Right: The best online deals are offered three times a month: the very beginning, the very middle and the very end. Online stores post fresh coupons the 1st-3rd of the month, the 14-16th, and the 28th through the end of the month.
4. Avoid Shared Coupons: Avoid using sites that let users post coupons because the likelihood they will be faulty or expired is much higher. Instead use sites which ONLY post coupons that are approved by the retailer.

Coupon Craze is an online coupon code and deal site that will help you follow these coupon commandments. Like we said last time, if you’re hungover, you take aspirin, have a greasy breakfast, get hydrated and sometimes swear that you’ll never do that again! Treat a financial hangover the same way. Create a budget and then stick to it by using online coupons.

Are you ready to make online coupons a part of your shopping routine? Let us know!

About the Author

Christian Gordun is the founder and CEO of Coupon Craze, a free consumer resource with online coupon codes and deals from over 10,000 retailers. He founded the company in 2000 as a hobby, and prior to taking it on fulltime, spent five years as a senior programmer and technical project manager. He received his master’s degree from London Business School in 2008.

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If you're really concerned about online ID theft, get a really good security program like Trend Micro Internet Security Pro and a password manager like LastPass or RoboForm. Anonymizer is a good program for covering your online tracks.

For the most comprehensive ID theft prevention available, check out LifeLock.

Tackling the Little Things

Getting debt under control and improving savings habits are two big steps to a better financial life, but those actions only are possible if Americans have more specific aspects of their financial lives under control.

While the economy recovers, job stability remains a vast and very valid concern. Without income, saving stops and debt can spiral. Even if they still have a job, Americans need to assess their marketability and increase their professional value by networking and upgrading job skills.

If someone experiences a job loss, it’s important to be proactive. They should negotiate severance pay, file for unemployment benefits and look into alternative insurance plans, because living unprotected will risk their family’s security. Individuals who have lost their jobs also should immediately start looking for work. Most states allow people to work a certain number of hours, and earn up to half their previous income, and still retain unemployment benefits.

Those who are struggling financially also might find it difficult to pay their mortgage. If individuals have missed a payment, they should immediately search through financial records or identify spending habits to find out what caused the missed payment. They also should contact their lender, who is required to examine their client’s financial life before taking any drastic action against the client’s home.

Even without a job loss or mortgage trouble, it’s time for Americans to involve their entire family in assessing the household budget. Tracking spending for a month will reveal some easy places to cut back without causing any significant lifestyle changes. Turning off lights and appliances, cutting down on weekend trips and dinners out and eliminating habits such as smoking all will help reduce household spending. And, it will give the family a head start on saving in case of emergencies.

For Americans to recover, maintain or rebuild their financial lives after this recession, they need to make permanent changes so they’re prepared for any future trouble in the economy. Identifying areas in which they are struggling, scrutinizing bills and spending habits and prioritizing aspects of their financial lives will help individuals create a proactive financial plan to last the whole year, and beyond.

Next Up: Seven Resolutions

Control spending: If you spend less you'll have more money available to pay down debt and save for the future. Write down your expenses for a month to see where your money is going. You might be surprised by how easy it is to find places to scale back.

Create a debt repayment plan: If you carry credit card debt, write down everything you owe and make a plan to pay it off. Start with small items you can act on right away–it will make tackling the bigger debt easier. Also, try buying with cash only. It’s a sure-fire way to prevent increases in your credit card debt.

Set up auto-savings plans: Arrange with your bank or another financial institution to have a set amount deducted from your checking account to a savings account each pay period. Of the Americans who have been able to contribute to emergency savings funds, automatic withdrawal is the most popular method, according to the Consumer Federation of America.

Boost retirement savings: If your employer offers a 401(k) plan, increase your contributions. If you don't have an employer plan, open an Individual Retirement Account (IRA) and arrange for contributions to be made automatically from your checking or savings account.

Create a long-term plan: Write a list of your long-term goals, such as buying a home or saving for college or retirement. Visit the Life Events section of Smart About Money for concrete tips on accomplishing those goals.

Protect Yourself: Be prepared for the unexpected by making sure you, your family, your assets and investments are insured and fully covered. If you do not have a will, make 2010 the year you establish a life plan.

Find a financial buddy: Share your financial resolutions with a friend, colleague, or family member, and you’ll be more likely to keep them. Find someone else who wants to turn around their debt or cut their spending, and establish a mutual support system.

NEFE operates the site Smart About Money and have developed a series of articles filled with tips to help you make 2010 the year of financial freedom.  You can also find Economic Survival Tips, worksheets and articles focused on financial education related to housing, spending, credit and job change. Follow NEFE on Twitter at @nefe_org.

Ah, the holidays. A time for generosity, tidings of joy… and lots of spending. In these last days of holiday shopping, ask yourself if these actions apply to you. If they do, it could be affecting your credit score:

Number One: Use of store credit cards. Store credit cards can be enticing – 20% off here, $100 off there. In fact, the New York Times just wrote a lengthy story detailing the in’s and out’s of store credit cards. But buyer beware – they can have sky-high interest rates, and, opening any new line of credit will almost certainly lower your FICO score immediately. To make matters worse, many of these credit cards have very low credit limits – $500 in some cases. If you spend even as little as $250, this will change your utilization rate – or the ratio of outstanding balances to your credit limit – which should be kept as low as possible (usually 30% utilization is recommended). The lower your utilization, the better your score will be.

Say you open a store card with a credit limit of $500 and you spend $250 on pajamas and t-shirts for Jimmy and Janelle: that card would right away have a 50% utilization rate, which could impact your score. Cardholders can also understand the factors that affect their credit score and learn how to improve it using the FICO simulator tool to make sure they are spending responsibly.

Second issue: closing a card. As we get ready for the New Year, we think more about New Year’s resolutions, and, inevitably, finances. A recent FICO survey found that 40% of Americans see credit card debt as their biggest worry heading into 2010. Although it’s great that we all are being a little more careful this year — the survey also found that three out of four consumers are planning to reduce or not use credit this year to pay for holiday gifts and expenses – we could see a push among consumers to close secondary credit accounts, which is another way to change their proportion of available credit and hurt their credit score. Consider this:

Say you have 3 credit cards. Credit card 1 has a $500 balance and a $2000 credit limit. Credit card 2 is an unused card with a zero balance and a $3000 limit. Credit card 3 has a $1,500 balance and a $1,500 limit. In this scenario your credit utilization ratio looks like this:

•    Total balances = $2,000 ($500 + $1,500)
•    Total available credit = $6,500 ($2,000 + $3,000 + $1,500)
•    Credit utilization ratio = 30% (2,000 divided by 6,500)

Now, if you decide to close credit card 2 because it's an old card that you never use, your credit utilization ratio looks like this:

•    Total balances = $2,000 ($500 + $1,500)
•    Total available credit = $3,500 ($2,000 + $1,500)
•    Credit utilization ratio = 57% (2,000 divided by 3,500)

You can see that your utilization ratio rose from 30% to 57% by closing the unused credit card. If you’re paying bills and get your finances in order before the holidays and want to see what will happen to your score if you close that unwanted credit card, FICO’s cheap credit simulator that I mentioned before can help with this, too, that can tell you the estimated range your score will change based on certain actions. Go to www.myfico.com – and better yet – enter MYFICO HOLIDAY and get 30% off.

For additional tips on this topic check out the myFICO forum:  http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=196197
 

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Here are some fail-safe tips from FICO Credit Guru Shon Dellinger to help enthusiastic shoppers stay financially sound:

1. Be Smart with Credit. Using a credit card is ok – experts agree having 3-5 credit cards helps your credit, if used responsibly. But carrying a balance on your credit card leaves you (1) stuck paying interest that could cost you, in some cases, double or triple the cost of those gifts in the long run and (2) with a much lower credit score, which could jack up interest rates on your credit cards and jeopardize your chance of getting lines of credit elsewhere (buying a house, a car, etc.). Services like FICO Score Watch combat this by providing emails or texts alerting you to any changes in your FICO score (either positive or negative), and notifying you when you’ve qualified for a better interest rate. A credit score increase of 30 points will save the average consumer $105 per year.

For more information on FICO Score Watch, go to: www.myfico.com/Products/ScoreWatch/Description.aspx.

2. Resist “Short Savings.” The salesperson at your favorite department store offers you an instant 20% savings just for opening up a credit card in their name. While that $20 seems tempting at the time, it can quickly put you in debt if you’re not careful. The temptation of the deal is also one reason why the average consumer has a total of 13 credit cards. Opening new lines of credit can also hurt your credit score, so make sure the card meets your overall needs and not just your desire for quick savings.

3. Don’t Wait Till April! Many holiday shoppers use their Tax refund to pay off credit card balances left over from the holidays, which can be incredibly expensive, not to mention detrimental to your credit standing. A credit card balance of $500 dollars from January until April will cost you $237 dollars based on today’s average credit card interest rate.

4. Get Info on Your Credit. Go to the myFICO Forums, where you can connect with thousands of other people all in your same boat. Don’t wait til after the holidays, when the damage is done. FICO is offering 30% off all products on its web site if you enter the discount code MYFICO HOLIDAY.

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