April 4th, 2011

Monday Roundup: Personal Finance & Credit News

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Retirees are struggling these days, even the ones who’ve been saving for retirement all their lives. Low interest rates have them in a bind, and threaten the earning potential of the rest of us looking towards retirement.

The Wall Street Journal reports that in January the average interest rate paid on accounts such as short-term savings accounts, time deposits, and money-market funds was 0.24%. That’s one-tenth of what it was in the last quarter of 2007 and the lowest it’s been on record since 1959.

Low rates are good news for consumers when it comes to credit, and can help stimulate the economy by encouraging more consumers to go for low-interest loans, mortgages, and credit cards. But when it comes to savings and retirement accounts, low interest rates are punishing those who are saving to secure their futures.

If you aren’t currently, start saving for your retirement now. And take the following steps toward all-around financial health when it comes to your savings and debt.

  1. Make saving a priority. Treat putting money away for retirement like a bill, not a luxury, by setting up automatic withdrawals.
  2. Maximize your investments. If your employer offers to match your 401(k) contributions, make sure you’re taking full advantage of that match. With your other investments, make sure you are monitoring your portfolio and making adjustments so that your money is working hard for your future.
  3. Get your debt under control. You may not be able to eliminate all of your debt now, but set up a plan, such as getting a balance transfer card or lowering your mortgage payments.
  4. Live within your means. Once you rid yourself of credit card debt, don’t let it creep back into your life. Learn to say “no” to expenses you can’t afford now, and budget in your necessary expenses.

Bottom line: You can’t control how low or high the interest rates will be when you retire, but you can control how you save and prepare for your own future.

Today’s Roundup will teach you that small financial sacrifices can lead to big achievements, how to recover your credit score after a foreclosure, how you can afford two-month vacations, and lots more.

Personal Finance News

  • Small Financial Sacrifices For Big Achievements. My monthly rent just went from $1,500 per month to $350 per month. Yes, you read that right – I just started saving $1,150 on my rent each and every month! (Do I sound like a Geico insurance ad?) My Two Dollars
  • How Misplaced Priorities Lead to Financial Excuses. I love it when people make excuses for why they are always too poor to pay their bills, or unable to afford certain things in life. What I find particularly funny is how it’s always everybody’s fault but their own. Len Penzo
  • How I afford two-month vacations. Not so long ago, I took a winter trip to Rio de Janeiro during Carnival season. Instead of staying near a fashionable beach like Ipanema or a storied tourist district like Copacabana, I got a room in an inexpensive guesthouse in the slightly seedy Catete neighborhood. CNN Money
  • Earning, Spending, and Saving: The Building Blocks of Personal Finance. If you spend more than you earn, you have a negative cash flow. You’re losing wealth and in danger of going into debt. (Or, if you’re already in debt, you’re digging the hole deeper.) If you spend less than you earn, you have a positive cash flow, which will let you climb out of debt and build wealth. Get Rich Slowly
  • 5 Money Making Activities You Can Do Today. Living below your means is the only way to long lasting wealth, but cutting expenses can only get you so far. At some point, earning a bit more money is just the ticket to a much merrier financial picture and best of all, some of these ideas are actually not that hard. Wise Bread

Credit Report & Credit Score News

  • Do You Understand Your Credit Score? Talk about credit scores seems to be everywhere – it’s on the ten o’clock news, your credit card company keeps asking you to sign up for credit monitoring, and a young man with shaggy hair and a guitar is always popping up on your TV whining about driving a used subcompact. SF Gate
  • Use care, common sense to prevent identity theft. That’s where credit reports come in handy because they display every account in your name — every credit card, auto loan, mortgage and bank account. Silicon Valley Mercury News
  • Credit Score Recovery Time After a Foreclosure. Wondering how long it will take your credit score to recover from a home foreclosure or short sale? That depends on how good your credit was in the first place. The New York Times

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

One Comment

  1. I think number is the most important. Saving is difficult for people so treating it like a bill is really the best way to put money aside.

    J at 11:12 am on April 15, 2011

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