"Man's maturity: to have regained the seriousness that he
had as a child at play." Friedrich W. Nietzsche

Finances 101

One of the more trying parts of life is juggling finances. Some tips include:

Start off right by being a fiscal conservative (borrow ONLY WHAT YOU REALLY NEED even if you qualify for more, use cash instead of a credit card if you can't have enough control to pay it off each month, brown bag, get a roommate to split the rent, buy used books/clothing, use free parking, go to afternoon movies or use university discounts). Some employers now look at credit records when hiring, especially if the position will involve any fiscal responsibilities (and many jobs do). While your education might mean more money long-term, entry salaries are rarely gold mines, so being fiscally responsible early on is important.

If you have several student loans when you graduate, see if consolidation makes sense for your situation. It's not always a good deal, so do some serious analysis, make sure you are dealing with a reputable company and get help from an astute person.

Be patient. You really CAN wait to have the "perfect" apartment/house. Real friends will understand and being fiscally sound is worth it.

Be creative in being a wise consumer and in having what you want.

Finances 201: Credit

Credit bureaus compile credit scores for individuals and the score can range from 350 to 850. The higher your score the better, and getting an "A" loan (market rate) may require a score in the low/mid-600s though it varies from lender to lender. You can find out about your credit record/score by requesting a copy of your information from the major sources for this information - Trans Union, 1-800-916-8800; Experian, 1-888-397-3742; or Equifax, 1-800-759-5979. There is a cost, but most credit counselors recommend that you request a copy from EACH of the above. Then examine the information you get and request that any errors be corrected. Something as simple as a typo on a social security number can end up putting someone else's information into your credit file. These three credit bureaus also have Web sites and you can order your credit report online, but consider whether or not you want to give your social security number online or not.

You can improve your credit score by paying your bills on time, using all your financial tools (checking account, credit cards, etc.) in a responsible manner, closing accounts you do not use (but only close one at a time and give it a few months before you cancel another one because any large amount of activity, even for a good reason, can be a red flag to the credit reporting agency) and limiting the number of credit inquiries from potential lenders and applications to open new accounts (for example, when the stores are offering 20% off on purchase if you sign up for their credit card, don't go from store to store signing up for these as that creates too much activity and can be a red flag).

Finances 202: Loans *

When obtaining a loan:

Don't take the first offer you get (especially if THEY contacted you), shop around, check references (Better Business Bureau or Attorney General's office) and don't fall for ads promising, "No credit? No problem." If it sounds too good to be true, it usually is.

Just because you qualify for x amount, doesn't mean that's the amount you should borrow. Be conservative, and borrow only what you need. The lender may not be aware of other financial obligations that you have that could make the maximum loan amount inappropriate for YOUR situation.

Never sign a blank document that the lender promises to fill in later saying "it's all standard."

Be sure you know the TOTAL cost of your loan, the monthly payment amount, the interest rate and whether it's the same throughout the loan period, how long you have to make payments, what the fees are, whether all payments are for the same amount, whether they gave you the interest rate they originally quoted you and whether the loan will be fully repaid after all payments are made or a balloon payment is due. Knowing the annual percentage rate (APR) is also important as it gives you a clue as to how much you are paying in fees. The less difference there is between the interest rate and the APR the better - one percent difference is not unusual but much beyond that needs to be examined. Get the answers to your questions in writing!

Watch out for things such as fees that are payable up front, balloon payments, high interest rates, high fees/closing costs, penalties for paying extra payments on the principal or paying off the loan early, monthly payments you cannot afford and lenders who say, "Don't worry if you can't make your payment, we'll help you refinance it."

If it's a mortgage loan, ask whether the payment includes taxes and homeowner's insurance or if you'll need to pay those separately. Compare your appraisal to what similar homes in the neighborhood have sold for and beware if your appraisal is a lot higher. Those who lend to those with poor credit might be providing a good service or they might be taking advantage of the person for their own gain by allowing them to get in over their heads. Those with poor credit are often targets of predatory lenders so extra caution is advised.

Ask whether costly items such as life or disability insurance have been added to the loan and make sure the cost and benefits are in your best interest, then shop other trusted insurers' rates/coverage and compare to what is offered by your lender. Make sure the policy can be cancelled and that the premium is added to your payment, NOT financed into your loan. The lender may make it seem easy for you to just go with them on this, but easy does not always mean it's what's best for you; caution is advised.

If you don't understand something, ask the lender to clarify or get advice from:

• Indianapolis Neighborhood Housing Partnership - (317) 610-4621 or 610-4632 (especially if you have taken the Home Buying series or Predatory Lending session offered on campus)
  
  
• Momentive - (317) 266-1300 or (888) 711-7227
  
  
• Indiana Legal Services - (317) 631-9410 or (800) 869-0212 (for low income or those over 60 only)
  
  
• Neighborhood Christian Legal Clinic - (317) 415-5337 (for low income; Spanish available)
  
  
• Union Members - many unions offer free legal advice, call your union
  
  
• Office of the Attorney General - (800) 382-5516 (to inquire about complaints against a lender, broker, realtor or contractor OR to make a complaint if you feel you've been victimized by a lender, etc.)
  
  
• Better Business Bureau - (317) 488-2222 (to see if complaints have been filed)

*Note: The information in the above two sections is courtesy of the Indianapolis Neighborhood Housing Partnership, Momentive and the Greater Indianapolis Mortgage Bankers Association. This information is of a general nature and is not intended to be legal advice. Be a wise consumer; do the homework before deciding.

Preventing Identity Theft

Recently a member of the HRA staff received a call at home. The person who called gave the last four digits of the person’s credit card number and said that to continue the subscription to the [local publication] they needed the rest of the credit card number. The HRA staffer did NOT share the rest of the card number and instead called the local publication, gave details of the phone call and asked if they legitimately needed this. Indeed, they did not need this information, the account was fine and the caller was likely a scam artist.

This is just one of the tactics scammers use. While identity thefts may be difficult to prevent, there are some steps you can take to make it tougher for the scam artists. Here are some suggestions:

• Never give out your Social Security number, credit card numbers, bank/investment account numbers or other personal information online or on the phone unless YOU made the call. If online, be sure you’re using a secure Web site. Be aware that many cell phones are less secure than land line phones. An HRA staff member once heard her neighbor’s phone conversation over a baby monitor.
  
  
• Shred all papers that contain social security, credit card or bank/investment account numbers or other personal information. This might include bank, credit card and investment statements; tax documents; mortgage papers; Social Security information; cancelled checks; bills with account information and pre-approved credit card offers. Use a shredder that cross cuts or is designed for high security documents and then deposit shreds in several different containers that will go to the curb on different days. There are also CD shredders to destroy computer CDs.
  
  
• Opt out of receiving pre-screened credit card offers by calling: 1-888-5-OPTOUT (1-888-567- 8688). The three major credit bureaus use the same toll-free number to let consumers opt out of pre-screened credit offers.
  
  
• When you pay bills, don’t put in your home mailbox with the flag up. Use a locked mailbox or the post office. If you stop receiving mail, check with the post office to see if someone has changed your address and is having your mail sent to their address.
  
  
• Check your credit report at least yearly and, if your wallet has been stolen recently, do it immediately and on a periodic basis. Look for address changes you did not make, new accounts you did not open or activity that is not yours and call the credit card company as soon as possible to cancel the fraudulent accounts and inform the credit card company of fraudulent activity.
  
  
• Cancel unused credit accounts, but close accounts one at a time and allow a few months time in between so that you don’t create credit bureau “red flags.” Cut up the cancelled cards and dispose of pieces on different trash pick-up days.
  
  
• Take care with checks, ATM/debit cards, passports, etc. If you are missing any checks or your ATM or debit card is lost/stolen, let your bank know right away as it could affect the amount you are responsible for. Contact the U.S. Department of State about stolen passports.
  
  
• Check your bank and credit statements each month. Are there checks listed that you did not write or charges listed that you did not make?
  
  
• Be careful at ATMs. Some people may look over your shoulder when you enter your PIN. Don’t write PIN numbers down and place in your wallet/purse; memorize them.
  
  
• Don’t carry your Social Security card in your wallet except when you MUST have it (for employment verification on a new job, for example).
  
  
• Don’t have your Social Security number or driver’s license number printed on your checks. If you order new checks, ask to pick them up at the bank rather than having them delivered by mail.
  
  
• When companies/organizations ask for your Social Security number, ask what will happen if you don’t give it to them. Then decide if this is a company/organization you want to deal with or not.
  
  
• Install firewall/virus software on your computer, use a secure browser that encrypts information you send over the internet and, if disposing of a computer, use a “wipe” program to erase all information from the hard drive of the computer. If possible, don’t even keep your Social Security, bank/investment account information, birth date, etc. on any computer documents, but if you do use a complex password for access to the files.
  
  
• Acquire/Read information about identity theft and steps to take if you are a victim. The Federal Trade Commission (FTC) has several good information booklets (including “When Bad Things Happen to Your Good Name”). You can download a copy by visiting the FTC's Web site http://www.consumer.gov/idtheft/ , calling 877-382-4357 or by writing to the FTC, 600 Pennsylvania Ave., NW, Washington, D.C. 20580. You also may want to call 1-877-ID THEFT, the FTC’s toll-free ID Theft Hotline, where counselors help consumers who want or need more information about dealing with the consequences of identity theft.
  
  
• Notify the three major credit bureaus that you do not want personal information about you shared for promotional purposes. To ask the three major credit bureaus not to share your personal information, write to:

Equifax, Inc.
Options
PO Box 740123
Atlanta, GA 30374-0123

Experian
Consumer Opt-Out
701 Experian Parkway
Allen, TX 75013

TransUnion
Marketing List Opt-Out
PO Box 97328
Jackson, MS 39288-7328

Sources of information: AARP Bulletin, February 2004; Federal Trade Commission Web site; and an article in the Houston Chronicle by Ronald Lipman.

Decorating Your First "Place"

• If you have a lease, learn what your lease allows and plan accordingly.
  
  
• Measure ALL dimensions of the area(s) you plan too work on to guide your purchases of paint, fabric, curtain rods, etc.
  
  
• Get ideas from the internet by searching "rental decorating" or "apartment decorating."
  
  
• Go to consignment home décor shops, but be sure to check price/quality.
  
  
• Look at what you already have and try to select paint and fabric that will complement. Hint: If the arm of the chair has a protective cover, take that with you when you shop, or take a snippet of fabric from underneath the furniture piece.
  
  
• Painting is the cheapest thing you can do, so consider changing from white walls to your favorite color. (Hint: Dark colors usually require more than one coat of paint.)
  
  
• Use fabric (sheets are great due to their size but can be more expensive unless purchased on sale) to cover walls, windows or furniture - bold graphics (stripes, etc.) really add punch but choose what YOU like; spring rods for curtains are great because they require no hole drilling for brackets. If you don't sew, use iron-on, double-stick fabric tape - it won't be quite as durable but will probably last as long as you care to look at those curtains. Bonus: If you sew, you have even more creative options and could even line the curtains with used (but clean, good quality) white sheets.
  
  
• Change hardware on cabinets in bath and kitchen. Keep old hardware so that it can be put back on when you leave.
  
  
• Add an inexpensive rug and/or lamp from a discount or consignment store.

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