Stow away the fireworks and fire up the grill – summer may still be in full swing, but the passing of July Fourth means the year is half over already. Now that we’ve reached the mid-point – more or less – of 2011, let’s look back on where we’ve been and determine where we’re going next.
We’ve read a lot of advice and given our fair share here on this blog . Here’s our best money advice of 2011 – at least, so far.
Before you co-sign a car loan for your child , consider buying a used car for cash instead. Co-signing a loan means the debt will show up on both your credit report and the co-borrower’s report, and if either one of you defaults on the loan, it will affect both your credit scores. That’s a lot of pressure for a young person and a lot of risk for you. If you can buy a used car for cash, or help your child buy with cash, you’ll avoid the risks of co-signing and teach them a valuable lesson about budgeting.
Start saving in small increments, then step it up! You know you need savings as a cushion against financial emergencies, but it can be difficult to save money in this economy. Start with small steps, like foregoing one dinner out a month and putt that $50 into your savings.
Pay off the most detrimental debt first. When you’re drowning in debt, it can be hard to decide what to try to pay off first. Your best bet is to get rid of the debt that is most damaging to your credit score. For example, if you’ve got a credit card that’s maxed out, it’s cutting into your ratio of available credit versus credit used, which can adversely affect your credit score. Paying it off will improve your ratio, and possibly your score as well.
If you’re job hunting, pay attention to your credit score. Many employers are now considering credit history during the application process.
Don’t let summer derail your savings and spending habits. Summer fun can tempt you to overspend on things like summer camps and vacation, and under-fund your savings account. But savings and smart spending should supersede season.
Want to help your child learn good credit habits? A summer job can be a great opportunity for you to help your child learn about credit.
With half the year left to go, we’ve still got lots to talk about. Happy half-way point, and here’s to hoping the best money advice of 2011 will help you take control of your credit and manage your money wisely.