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The Credit Beacon exists to help you grow your knowledge about money and credit without having to learn the hardway. We have lived through tough times and have learned first hand the things everyone should know about their finances. This site is dedicated to helping you find the best and most useful financial information on the internet. Read about the staff here.
Three Mistakes Caused by FTB
Posted by Bonnie on October 25th, 2008 filed in BudgetingWhy You Need to Budget
Posted by Bonnie on October 22nd, 2008 filed in BudgetingTen years later, the study was revisited to see how each student was performing in the business world.
- The 13 percent who had made goals were earning about double, on average, of what the 84 percent who had made no goals were earning.
- The 3 percent who wrote their goals were earning ten times as much as the remaining 97 percent put together.
9 Outrageous Things To Know About the Bailout
Posted by Bonnie on October 2nd, 2008 filed in EconomyAs a reminder of how your government operates, the Senate cannot originate a spending Bill. Article 1, Section Seven of the Constitution says, “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.” So what the Senate did was pass amendments to the H.R. Bill 1424 that was passed by the House of Representatives. The bill starts out with an amendment to the Employee Retirement Income Security Act of 1974.
When I heard that the bill is 451 pages long, I wondered how they had time to read it since they have been in meetings most of the time. Actually the bailout part is from page 2 to 113, so it is only 111 pages. That is still a lot to read.
Take Control and Own Your Future by Budgeting
Posted by Bonnie on October 1st, 2008 filed in BudgetingCan you agree on where you want to be financially in 5 years or 10 years? What will it take to get there? This may sound like it will cause more arguments. But once you agree on your budget and your goals and both of you agree to stick to them, your marriage will be much happier and more peaceful.
How to Manage Too Many Credit Cards
Posted by Rachel on September 26th, 2008 filed in Credit Advice, Credit Cards, Credit ScoreThe Answer
The amount of credit cards you have open do not directly impact your credit score. However, your amount of debt to credit ratio does. For example if you have $10,000 worth of credit and $2,000 worth of debt, then you debt to credit ratio would be 20%. The higher this percentage is, the lower your credit score will be. It is a good rule of thumb to use less than 30% of your line of credit on any single credit card.
What Went Wrong in the Mortgage Industry
Posted by Bonnie on September 26th, 2008 filed in Debt and LoansInvestment banks had previously assisted lenders in raising more lending funds. They had the ability to offer longer-term fixed interest rates by converting loans into bonds. The banks would make house loans in the form of a mortgage, and then use the investment bank to sell bonds to fund the debt. The money from the sale of the bonds can be used to make new loans. This is called securitization. The banks began to securitize loans themselves, and the investment banks also became lenders.
Is the Secretary Paulson and Ben Bernanke Bailout a Good Idea?
Posted by Bonnie on September 24th, 2008 filed in GeneralThe bailout shifts the burden of the losses to the taxpayer. Another problem with that is that we are not even getting fire-sale prices. They say the bailout will not be effective if bottom dollar is paid. So they are trying to speculate on what it will all be worth in the future.
The Secret to Living Without Credit
Posted by Rachel on September 22nd, 2008 filed in Credit Advice, Credit ScoreIf you think it is impossible, then I am glad to tell you that you are wrong because people live without credit every day.
The Secret
The secret to living without credit is…
Which Debt Should I Pay Off First?
Posted by Bonnie on September 22nd, 2008 filed in Debt and Loans| There is good debt and bad debt. Good debt is called good debt because it is tax deductible if you itemize your taxes. This includes mortgages, some types of student loans and business loans.
It makes no sense to speed up paying off low-interest, tax-deductible debt if you have any other kind of debt. You should first pay off your highest-rate, nondeductible debt first. Do not pay more on your mortgage at the expense of not saving more for retirement. The sooner you start saving for retirement the more you will save because of compounding. Plus you can’t get back an opportunity to contribute to a tax-advantaged retirement plan once you have missed your chance. Withdrawing from your retirement early should never be considered. The money you will lose in the long run, plus the taxes and penalties that you will have to pay now make this a very bad choice. You will sacrifice 1/4 to 1/2 of what you withdraw to taxes and penalties. Borrowing from your retirement is a bad idea also. An additional risk to borrowing from your 401(k), is if you lose your job, you have to pay back the loan in a short amount of time or it will be taxed and penalized as a distribution. |
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If things get really bad and you end up in bankruptcy, the credit card debts can be wiped away. You don’t want to risk losing your retirement money also.
Focus on paying off bad debt which consists of credit cards, unsecured loans, and loans that are not tax deductible. Start with the highest interest bad debt and pay more towards it each month until it is paid off. Then focus on the next highest.
Are You Prepared for the Worst?
Posted by Bonnie on September 18th, 2008 filed in GeneralWhite House spokeswoman Dana Perino questioned whether doing something in the middle of a market correction was wise and acknowledged it could be difficult to approve something quickly.
The government says that the facility would be similar to the Resolution Trust Corporation which was set up on 1989 to take on all the failed thrift assets during the savings and loan crisis.