People always remember their "firsts." Their first kiss...first concert...first job...first thing they bought with a credit card. Well okay, maybe I'm the only one who remembers the first thing I charged to a credit card. It was a bag of groceries (and I think I paid interest on my Fruit Loops for six months).
As a whole, we are not that well educated on credit. And we like to spend. In fact, the government said the personal savings rate for the nation in 2005 was negative 0.5 percent. That means consumers not only spent what they earned—they also spent money they didn't have.
Credit cards and loans have a lot to do with that spending statistic. The thing is, most of us need credit, especially when it comes to buying a car, a house, or even a new wardrobe for that dream job. The key is educating yourself and knowing how to manage your credit.
Whether you're 22 and just getting started or 42 and want to clean up your credit, understanding the way things work can be a big help.
Review your credit report As you accumulate credit card accounts and apply for loans, you build a credit history. This history is tracked on your credit report, and it includes everything from the types of accounts you open to the number of late payments you make. All your information is broken down into six sections so it's easy to review.
Check for danger signs There are certain things on a credit report that lenders just don't like to see—and this could hurt your chances of being approved for loans; or you could pay higher interest rates. For example, late payments and maxed-out credit card accounts can damage your credit. By getting rid of these types of danger signs, lenders will see you as more credit worthy.
Consider loan consolidation If you have to pay back a school loan or any other outstanding debt and the amount is pretty hefty—usually around $10,000—you may want to consider consolidation. The main advantages of loan consolidation are being able to lock in on a fixed interest rate and you'll have just one payment to make (that can really cut down on paperwork).
There are, however, some drawbacks of consolidation. When you consolidate during the loan grace period, you have to begin repayment immediately and may lose possible interest benefits on subsidized loans. And, if interest rates go down, you will not be able to take advantage of the lower rates.
Create a plan When you know what to do, it's a lot easier to do it, right? By making an effort to improve your credit, you'll slowly but surely get to where you want to be.
Even doing something as simple as signing up for automatic payment to avoid late payments may cause a positive change in your credit. Or maybe the first step is creating a spending plan, there's a handy worksheet that can help show you how.
If you're just getting started, make a plan to build your credit history. You'll see doing a little homework now can save you money and headaches down the road.
So you've graduated from college. Congratulations, that's no small feat. Now it's time to roll out the resume and dive headfirst into the job market. Chances are you'll endure your share of interviews and meet a few nice and not-so-nice people along the way before you get that first job offer. When it comes, it's time to celebrate. Your four (or more) years of hitting the books have finally paid off. The company will likely hang an enticing salary number in front of you.
However, before you bite, make sure to look ?under the hood? of that company. Sure, the salary might look nice, but make sure to pore over their benefits package before signing on. A lucrative package can be worth thousands more to you in the long run than just your salary. Meanwhile, a healthy pay rate with shoddy benefits could cost you dearly.
Generally speaking
Start by talking about generalities. Do you have to sign up for the entire package or can you pick and choose your benefits? Who's covered? Is there a monthly fee? When do benefits kick in? Are they taxable? All questions you should ask before signing up for anything.
Medical, Dental & Vision
These are undoubtedly the biggest features of a benefits package, as they can save you thousands in medical care. For medical, weigh your options carefully. Find out what types of plans are offered (indemnity, managed care), who will be covered, what your premiums, deductibles and co-pays will be, and if there are any exclusions. For dental, learn if the plan covers preventative, surgical and orthodontic care and to what extent. When looking at vision care, find out exactly what the plan covers and what the maximums are. Vision care might not be a big deal to you now, but down the road you'll probably need it.
Life & Disability
Life insurance probably isn't a top priority for you, and it shouldn't be. But in case something should happen to you and you have a family to care for, life insurance is an excellent benefit to have. If you can get a good rate?some employers even offer a set amount for free?look hard into signing up. As far as accidental death and business travel insurance, if they offer it free of charge, why not?
Disability insurance is also something you should look into, especially if your employer is offering it at a cut rate. Accidents happen, and if you're put out of work for any amount of time, disability insurance could save you.
Vacation, Holidays & Time off
Take a look at what the employer offers first-year employees for vacation time. Many times it's little to nothing. Find out how you can accrue vacation time, the maximum you can have, and if you can cash in unused days. Look into the company's paid holiday schedule. There should be at least six, and anything above that is to be considered a bonus. Also find out if they offer ?floating? holidays. As far as sick or personal days, look into how many you get per calendar year and if you can use them for vacation time as well.
Retirement
Most employers offer 401(k) retirement plans. Check to see how much of your contribution the company will match a percentage of and when you will be vested in that money. If you're lucky, the company will also offer a pension plan, though these are becoming endangered. A pension plan is where a company will put money into a retirement account, with no contributions from you. You'll surely have to work a set amount of time to receive any pension dollars, but it's an excellent benefit if you can get it.
Stock Options & Profit Sharing
If you're being wooed by a publicly traded company, chances are they'll offer you their stock. They'll sell it to you at a discount of 10 to 15 percent with no broker fees. This is huge. Often times you'll be able to sell or reinvest your dividends without incurring a commission fee. It's a fabulous benefit and one you should definitely take advantage of. Often times a company will reward their employees through profit sharing plans. It's not guaranteed every year, and the amount fluctuates, but hey, it's free money.
On the fringe
In a never-ending quest to retain employees, many companies today are going above and beyond the run of the mill benefits package to keep their workers happy. These fringe benefits include employee assistance programs, parking reimbursement, commuting cost reimbursement, tuition reimbursement, health clubs, and even on-site child care.
Both Elena Laramie & Joe Kenny are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Elena Laramie has sinced written about articles on various topics from Credit Card Offers, Finances and Free Credit Report Score. TransUnion's TrueCredit empowers consumers to manage their credit health, providing information on credit-related issues that range from the significance of a credit report to identity theft protection. TrueCredit's offerings include free monthly newslett. Elena Laramie's top article generates over 246000 views. to your Favourites.
Joe Kenny has sinced written about articles on various topics from Mortgage, Credit Cards and Life Insurance. Joseph Kenny writes for the Loans Store who can offer cheap to UK residents and. Joe Kenny's top article generates over 49500 views. to your Favourites.