Money & Finance #59: Credit, Money Management, and Saving

Now that we've covered banking and budgeting, we'll take a look at credit reports, money management, and your HCPL retirement in the second and final post of the Money & Finance Module. You have until June 15 to complete the module (post 58 & 59) for 2 hours of training credit.

Credit Reports & Scores:

When organizing your finances an essential step in the process is reviewing your credit report and credit score. Your credit report is a document that contains all of your credit history. In this report you and your creditors can view all credit transactions that have occurred under your name, how much credit you’re allowed, and any other relevant credit related information.

In your report, you’ll find a three digit credit score, which is a numerical summary of your entire credit report. There is no set scale regarding credit scores, since each credit bureau has differing credit scoring systems. This credit score does not stay static. When any changes involving your credit occur, this number will adjust to the changes taking place. Credit scores serve the purpose of allowing creditors to better predict if the borrower can repay the loan amount based on their payment history. According to Experian, “paying your bills on time is generally the single most important contributor to a good credit score”.

In December of 2003, the U.S. Federal Trade Commission (FTC) issued a consumer provision into the Fair and Accurate Credit Transactions Act's (FACTA) law that allows individuals the right to free credit reports. Under this law a person is allowed to obtain a free copy of their credit report from each of the three major credit bureaus (Equifax, Trans Union and Experian) once every 12 months. Use caution when obtaining a free copy of your credit report through an online or televised source. Many of these companies offer this service with a hidden catch. The FTC endorses AnnualCreditReport.com site as an authorized source for obtaining reports, but it is unclear if a credit score will also be provided. This site allows you the option to receive a report from all three bureaus at one time or spread the reports into three (one from each company) throughout the year. Also, check with your bank and credit card company to learn if you can access your credit report and/or score free of charge or for a nominal fee.

If you wish to learn more about how to repair a bad credit report, About.com has an informative article. About.com also has an article that aids users through the steps to follow when disputing credit report information. For additional information and to view some interesting examples, read the article Your Credit Scores.

Money Management

Money Grab
Originally uploaded by Steve Wampler

Another great way to keep your finances organized is by fine tuning the art of managing your money. The most difficult part of this process is simply getting started. The US government created the site MyMoney as a resource designed to assist individuals with the basics of financial education. This site provides a wealth of financial information, with features such as finding an FDIC bank, how to read though the trading ads, and the Emergency Financial First Aid Kit (EFFAK). MyMoney also provides a link to access the information found on the site in Español, making this a good resource for Spanish speaking patrons as well. Another comprehensive resource, CNN Money, has a detailed step-by-step guide to aid individuals in gaining control of their personal finances. The page is divided into 23 separate lessons on key topics. These lessons range from setting your priorities to estate planning and every financial topic in between.

Spending plans are a popular first step strategy especially for beginners. The University of Florida created a page designed to educate individuals on the steps needed to create a spending plan. If you’re pressed for time About.com’s Frugal Living Section has a spending plan that only requires one hour of your time to complete.

There are many popular experts in the field of financial advice. It is important to note that each expert has their own particular style and that the names listed below are just a few chosen as examples for this module. These links to Suze Orman, Robert Kiyosaki, David Bach, Jean Chatzky, and Dave Ramsey can be used to access a wealth of free resources, but be aware that most of these experts’ sites are commercial and may try to sell you their merchandise. Many of these experts have authored books on the subject, and most are available through the HCPL Catalog.

The BankRate site has an interesting article in which eight experts were asked to recall the best personal financial advice they have learned. There are many other sites found on the Web that offer financial advice, such as: Yahoo! Finance, MSN Money, Money Week Houston, Oprah, and Iowa State University.

HCPL Retirement

Piggy savings bank
Originally uploaded by alancleaver_2000

If you’ve ever had questions about HCPL’s retirement benefits program the Texas District & Retirement System (TCDRS) site will have many of the answers you’re looking for. The TCDRS Employee page provides information on services, benefits, forms/publications, account access, and additional resources.

Each year TCDRS mails each Harris County employee an annual account summary, but did you know that you can access the information pertaining to your retirement account on the Web? The TCDRS Log-In page allows Harris County employees instant access to view this information.

Coming Soon: a pot-luck post featuring recession busters we can all use to save money!

Exercises:

1. Read the article How Credit Scores Work then take the Credit Score Quiz. Write about any new information you learned regarding credit reports and/or scores.
2. Have you ever made a spending or budget plan? Is so, did you find the process difficult or easy? Also, discuss any additional thoughts you had about the process.
   If you have never made a spending/budget plan, discuss if you are interested in creating one. Also, provide a brief outline of the steps you’d take to begin the process.
3. What did you find most useful on the TCDRS site to help understand your retirement benefits?

This module brought to you by Monica Norem (CYF), Rhiannon Perry (LAP), & Melanie Metzger (CYF).

HCPL Staff: Have you completed this exercise? Then Submit your Registration of Completion