Posted by – July 29, 2010
We were all raised to believe that simply saving money is the prudent thing, right? Well, yes and no.
When you keep your savings in a bank account without a great interest rate, you may actually be losing money over time. Here’s why: INFLATION.
With inflation averaging about 3% a year (this is a loose estimate based on an average over many years, but still more or less accurate), your money is going to be worth 3% less in a year.
And taxes, of course, further erode the value of your money. For this reason, some financial advisors recommend a tax-deferred retirement account (using a Roth IRA) as a better way to get your money’s worth, so to speak.
Posted by – July 27, 2010
I read a statistic today that 50% of all women (in the U.S., presumably) have a fear of becoming destitute bag ladies…. and this ratio holds true especially in the higher income brackets.
What is it about being a lady that makes us freak out about losing everything? Maybe us girls are just better worriers in general, but I’d like to think in this day and age that we have an equal opportunity to support ourselves and be autonomous… should that be necessary now or ever.
The good news? We have all the tools at our disposal to manage our money well now and save for the future. Centrro is dedicated to providing equal-opportunity credit information to the entire gamut of consumers… male, female, and everything in between!
Posted by – July 22, 2010
Here’s a fun internet tool. You can plug in any amount of money and compare its worth in different years. For example, if you want to know how much your income was worth in the year you graduated college—voila! Not sure why would ever want to know that, but fun nonetheless, if that kind of thing is your bag.
In very general terms and over a long period, inflation has average about 3% per year in the last century or so.
Although we generally don’t think of inflation as a good thing, it does have its positive effects. Inflation wards off recession, and it can also reduce the so-called “real level of debt.” Think of it as a necessary evil.
Posted by – July 20, 2010
We all know that defaulting on loans, being late on payments, and acting with generally reckless disregard to our financial future could impact our credit score for the worse, but there are plenty of other insidious little things that can put a dent in your credit, such as:
- Never taking out a loan in the first place. While you’d think that your pristine money-management skills will rock the house when it comes to your credit score, the truth is, good credit relies on your proven ability to pay back loans. If you never take out a loan in the first place (and that includes credit cards), you certainly can’t prove your mettle when it comes to paying one back.
- Taking a long time to shop around for a deal. Every time a potential creditor pings your credit report for information, it stays on your history for two years! If it seems like you’re constantly on the verge of opening new loans, a potential creditor could get nervous about your commitment.
- Same deal with constantly moving your debt around. It may seem like a no-brainer to take advantage of low interest rate promotions, but be wary of how it sucks up your available credit and messes with your debt-to-credit ratio.
- Forgotten overdue library fines and unpaid parking tickets. These may get passed along to a collection agency, and although newer laws say that items under $100 won’t affect your FICO score, well, better safe than sorry!