5 No Cost Things You Can Do to be Financially Stable

People that teach financial education often talk about lowering your expenses and increasing your income to increase your financial stability. Of course those things are good but today I want to focus on the five free things you can do to increase your financial stability.

For all of my personal finance tips, order my book “10 Things College Students Need to Know About Money“. If you already have a few challenges, order my Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook“.

 

#1 Open an Account at a Credit Union

One of the best financial decisions you can make is to open a checking account at a credit union. It costs nothing to open an account and the benefits are many: better customer service, often lower account fees, usually cheaper car loans, mortgages, and credit cards, and the opportunity to build a relationship with a financial institution with all these great benefits before you need to ask for a loan. Check here to find the credit union closest to you.

 

#2 Check Your Credit Reports

You may know that there are three credit reports and three credit scores for each of us but did you know that you can have free access to your reports? The credit bureaus have the right to control who has access to the scores that they’ve created the mathematical formulas to create, BUT the records …  the information that make up the data those formulas use is your data and is free for you to access. Visit AnnualCreditReport.com to get a free copy of your reports once every 12 months.

 

#3 Collect Your Change

For years I’ve told people that an easy way to find money to build up your Emergency Fund or invest in a no-load mutual fund was to throw your spare change in a jar. I still believe it’s true. On average, you’ll have about $50 per month is quarters, dimes, nickels, and pennies. Instead of that spare change ending up under the couch cushions, in your car’s ashtray, and at the bottom of your purse throw it in an empty water jug or an actual piggy bank. Don’t believe me? Check out this blog.

 

 

#4 Open a High Yield Savings Account

Since I’ve been badgering you to create an Emergency Savings Account, I thought I’d help you out by providing you with the latest lists of accounts with the highest interest rates (you’ll earn more money than at your local financial institution) across the US. Check out the highest yielding savings accounts here.

 

#5 Choose You

This is the hardest free thing you might ever have to do: choose yourself over everything. Choose to save some money for an emergency instead of eating out. Choose to invest some money in a mutual fund instead of purchasing an extra excursion on a trip. Choose to think you’re going to create the exact life you’d like to have …   and then do the prep work so when your opportunity comes, you’re ready.

 

 

 

 

 

 

Credit Scores Could Rise This Fall

This fall credit scores across the country may rise. There are four new changes to the VantageScore  (a new thing created by the big 3 credit bureaus) that may increase credit scores for those that need it most. Unfortunately for those looking to buy a home the FICO scoring model will not be effected.

KETV says, “The new method is being implemented later this year by VantageScore, a company created by the credit bureaus Experian, TransUnion and Equifax. It’s not as well-known as Fair Isaac Corp., whose FICO score is used for the vast majority of mortgages. But VantageScore handled 8 billion account applications last year, so if you applied for a credit card, that score was likely used to approve or deny you.”

The changes include:

Trended data – CNBC says, “Using what’s known as trended data is the biggest change. The phrase means credit scores will take into account the trajectory of a borrower’s debts on a month-to-month basis. So a person who is paying down debt is now likely to be scored better than a person who is making minimum monthly payments but has been slowly accumulating credit card debt.”

Legal data – Civil judgments, medical debt and tax liens will no longer affect your score. Mortgages are still primarily using FICO scores so don’t get too excited but for other types of loans (credit cards, auto loans, etc.) this could really help some folks out.

High Limits – the debt ratio portion of scoring for VantageScore is about to be turned on it’s head. Instead of the lower the debt ration, the better people with “excessive” credit card limits could be hurt. the rational is that those with higher limits could rack up more debt, faster.

Less Robust History – According to the Motley Fool those that have fewer items on their credit histories may also see an increase in their score due to, “The model will examine thousands of various consumer behaviors in an effort to identify those who have a propensity to pay their bills on time, because these are the people that lenders want to attract.”

Some changes may help and some may hurt depending on what’s going on with your credit scores right now. Motley Fool gives the easiest explanation of the biggest changes. Read more here.

 

Shay Olivarria is the most dynamic financial education speaker working today. Previous clients include: the Yorba Linda Water District, Verizon, and Friends of Allensworth, among others. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times.The 2nd edition of “10 Things College Students Need to Know About Money” is available now.

7 Things High School Grads Must Do This Summer to Prepare for Life

Congratulations on graduation. Ready for life?

 

Congratulations on graduating from high school! Whoo hoo!

Since you’re graduating, you either 18 years old or about to 18 years old very soon. That means that you are, or will be, legally an adult. It’s time to think about starting your financial empire. Below, you’ll find 7 financial things high school graduates must do this summer:

Check Your Credit Report
It’s imperative that each graduate get a print out of their credit report from each of the “Big 3” credit reporting agencies. The government has passed a law that makes our credit reports available once a year for free from www.AnnualCreditReport.com. This is the only site that will provide a copy of your credit report at no cost to you, from each of the “Big 3”, once a year. You will not get your credit scores though; scores are computed through separate companies.

Tip: Nothing in life is free. Any company offering you a free credit report and/or score is more than likely trying to sell you a monthly credit monitoring service. Read the fine print.

 

Figure Out How Much College Will Cost
Whatever college you choose, it’s important that you understand how much the total cost of your degree will be. Consider the costs of tuition, books, dorm fees, and any other monies you’ll have to pay. Take a look at estimates fees per semester and then multiple that by eight semesters, perhaps ten semesters if your school is impacted. Once you see the costs in terms of tens of thousands of dollars it might make you a little more motivated to be responsible with your money. Apply for as many scholarships and grants as possible because you don’t have to pay those back. When you take out loans not only will you have to pay the money back, you’ll have to pay it back with interest.

Tip: Look for opportunities to make small financial changes that make a big difference. Buying used textbooks can save you hundreds over four years.

 

Consider the Return on Investment
You are going to make some decisions in the next year or two that will be the foundation for your life. Don’t make decisions based on your emotions or what your friends are doing; look at the return on investment. If you are spending money on something, it’s because you are expecting to get some kind of benefit. If you choose to attend an Ivy League university you expect to command top salary at a major fortune 500 company. If you choose to attend a community college it’s because you want to save a few dollars on your foundation classes. Did you know that you can attend a community college, transfer as a junior to a university and no one will know? You’ll cut your college expenses by half and end up with the classes you need. You must consider the return on investment with any purchase and paying for college is a big one.

Tip: If you’re undecided about a purchase, sleep on it. Never make a decision in a hurry.

 

Save 30%. Buy now.

Create a Spending Plan
Writing things down is good. I’m sure you have a general idea of how much money you’re expecting from jobs, financial aid, etc., but unless you have a written plan to spend it the money will pass through your account and you’ll have no idea what happened to it. Have you ever taken $20 out of the ATM and the next day you have no idea how you spent it? Research studies have proved that writing down your goals makes it easier to achieve them. When I want coaching clients to focus on spending, I ask them to write down the financial goal on a Post-It Note and stick it onto their debit card or credit card. The same thing works with writing a spending plan. Knowing how much money you want to spend in each category will help you stay on track.

Tip: making the plan before you actually have the money is the key to putting the spending plan into action.

 

Move Your Money
Visit www.aSmarterChoice.org to find a credit union in your area. Credit unions are financial institutions that offer the same products and services as traditional banks, but they are not-for-profit. The only purpose of credit unions is to serve the community; each credit union member loans money to the other members so loan interest rates are usually lower than a bank. Pretty soon you’ll want to purchase a car and in the not-too-distant future, a home. Credit unions tend to be smaller, offer more personalized service, and offer better rates on loans so having a relationship is a good thing. Moving your checking and savings account to a credit union could potentially save you thousands of dollars over your lifetime.

Tip: Search for a financial institution that is a good fit for you, don’t just choose whatever your parents have.

 

Start an Emergency Fund
Ever heard of Murphy’s Law? It states, “Anything that can go wrong, will go wrong”. It’s up to you to make sure that you have at least $500 in an Emergency Fund at your credit union or bank because there will always be something that you need money for unexpectedly. Having at least $500 in an account that you can have access to when times are rough might be the difference between having to borrow from a family member or take out a cash advance loan or being able to borrow from your stash and go on about life without being a hindrance to anyone. Start by opening a money market account at your credit union or bank and then add $20 a week to the account until you have at least $500.

Tip: Don’t touch it unless it really is an emergency.

 

Open a Retirement Account
Did you know that investing $5 a day will make you a millionaire by retirement? You read that correctly, investing just $5 a day in an average performing mutual fund account that returns 9% a year (industry average is 10%) will put $1.3 million in your pocket. The first step is to find a mutual fund company that will let you open a no-load Individual Retirement Account (IRA) with no money as long as you contribute at least $50 a month. Put your money in an account that’s not too risky and not too safe. You have a long time horizon so don’t be scared to invest more in stocks, but you have to be able to sleep at night. A fee-only advisor can help you determine how comfortable with risk you are and suggest some mutual funds to you. The process is as easy as filling out a one page application and sending in your credit union or bank checking account information. The second step is to commit to adding at least $50 a month to the account. The third step is to watch your account become fatter every month.

Tip: Set up the account so that the money is added to the retirement account automatically every month from your checking account. Add at least $150 per month to reach that million with no sweat.

 

 

In case you’d like to find out more financial information, you can order 10 Things College Students Need to Know About Money from Amazon or directly from the author through PayPal. Happy summer!

 

 

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ReasonCode.org

This Sunday I read about ReasonCode.org in the LA Times. Reason Code is a website powered by the new Vantage Score that aims to help people understand their credit reports a bit better. The name Vantage Score might ring a bell because I wrote about the new Vantage scoring system over at Black Voice News a few years ago.

When you visit the website, you can enter the code that was given to you by a lender that refused to give you a loan and you’ll be provided with an explanation of what the code means. From what I understand, the codes don’t always align with the codes from the FICO scoring system that Equifax, TransUnion and Experian use however if you type in a word or two with the code you’ll more than likely be able to get a reason.

This is a new service so I can’t say how well it works, but when I put in a few codes to test it they all came back correct. Give it a whirl yourself and let me know what you think of it.

 

Student Loan Debt Infographic

In case everything we’ve been talking about isn’t clear …

 

It’s important to think about:

Order a copy from Amazon.com.

Choosing to attend college. (Look at the ROI)

Choosing which college to attend. (Look at the ROI)

Having a strategy for paying for that college.

Having a strategy for paying any loans taken out.

 

3 Reasons to Buy Money Matters

Order Money Matters on Amazon.com

If you are looking to make some changes and get on track financially, Money Matters by Shay Olivarria is the book for you. There is a check-up for where you are with your financial goals. The book addresses savings; short term and long term. It tells you how to set up retirement accounts, investments, and how NOT to get into deep debt. This is great for those beginning their journey into the real world. Also, for those that have already messed up, Olivarria has steps on how to get back on track.

Olivarria creates a great guide for you to create your own individual plan to get out of debt and on the track to financial freedom. She states that you have to be patient and consistent. It is never too late to turn it around. I suggest you gift this book to college graduates. It is straight to the point and interactive.

This book was provided courtesy of the author for review.

DCSquared

 

#1 You want to know more about personal finance, but you’re not sure where or how to begin.

We all want to make better financial decisions. The challenge is that sometimes we’re not sure what to do or we have hard decisions to make where both options seem like bad ideas. We get so caught up in running from day to day that we forget that we can make changes if we take a moment to plan instead of react. Money Matters was written with that in mind. The very first worksheet is one page long and helps you see the bigger picture by asking a few simple questions.

#2 You are intimidated by personal finance jargon.

Have you ever tried to read a personal finance book or spoke with someone in the financial services industry and you didn’t understand what they were saying? Me too! Personal finance is not complicated, but it’s easy to make it seem complicated by using industry jargon. Money Matters is written clearly. I don’t try to confuse the reader by making things sound harder than they are. That’s why media outlets across the country have quoted me and asked me to write for them. I make money management simple.

#3 You want to know what you need to know to make things change.

Take a look at the Table of Contents from Money Matters in the image above. This book covers “just the facts ma’am”. There are tons of books that do into depth about any area of personal finance that you might be interested in. This is not that book. Money Matters is a bare-bones, simple read with worksheets to help you make good decisions about money. The book covers net worth, retirement planning, paying off debt, managing your credit score, payday loans, rapid tax refunds, and even saving money on your groceries.

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com

NBC Latino

Shay Olivarria was interviewed by NBC Latino! Whoo hoo!

 

We’re so proud that Shay Olivarria was interviewed by Kristina Puga of NBC Latino for this article with tips about dealing with the possible doubling of the student loan interest rate that’s coming July 1. Read it and share it!

 

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com

Free Library of Philadelphia

Shay Olivarria with staff from the Free Library of Philadelphia.

Thursday, April 5, 2012 Shay Olivarria was pleased to present financial education workshop “Creating a Foundation for Wealth” based on her book 10 Things College Students Need to Know About Money to student-workers at the Free Library of Philadelphia. Wow! The students were so much fun! We weren’t able to film because the students were minors, but there are some comments from the evaluation to give you an idea of how the workshop went.

What was the most important thing you learned today?

“Stop being idiot and save some cash!”

“Savings and a bright, ready mind can get you ANYWHERE!”

“How to think critically about money”

“The difference between a bank and a credit union”

“Invest in retirement and have an emergency fund”

“”I learned about small opportunities that make a big difference”

“The most important thing I learned today was how I can start saving now, to benefit my future”

“Avoid fees was the most important thing I learned. The fees can add up and put you in a hole”

“You can buy stock at any age”

“I leaned about saving money and shopping smart”

Book Shay to speak at your event today.

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com.

Colleges Withholding Transcripts

The Nation just did an article on colleges withholding transcripts from graduates that are in default with their student loans. Re-read that last sentence. You take out loans to pay for your college education banking on the hope that a person with a college degree will have a better chance of getting a decent paying job and firmly settling into middle-class-hood. Then you graduate and you start looking for a job. The loan folks give you six months to find a job before they start requiring repayment.

The Problem

Imagine you’ve graduated, find a low-paying job, move back in with your parents, and start working. You can’t put gas in your car, give a few dollars to your parents for bills, and pay your student loan. You’re trudging along and then one day to see a job posting for the job of your dreams! You’re a perfect fit and it’ll pay you enough to repay your student loans and maybe move out to a small roommate situation. The company requires a copy of your transcripts so you call your alma mater only to find out that you can’t get a copy of them because you’re in default on your student loans. This could become a huge problem.

Documentaries such as Default: The Student Loan Documentary are showing the problems that students are facing repaying student loans.

Debt bomb?

Yahoo! explains the problem perfectly:

A year ago, the Institute for Higher Education Policy published a study tracking the dismayingly high delinquency and default rates of the class of 2005. But as the sum of outstanding student loans has climbed towards the $1 trillion mark, passing total credit card debt along the way, the fact that America’s students are essentially putting themselves into hock for an education has more than a few people panicking. As William Brewer, head of the National Association of Consumer Bankruptcy Attorneys, told the WaPo, “This could very well be the next debt bomb for the U.S. economy.”

Suggestions

I have no answers other than the traditionally held:

#1 Attend a community college to complete your lower division classes.

#2 Choose a college with good return on investment (ROI).

#3 Get as many grants and scholarships as you can.

#4 If you have to take out loans, only take what you need. You can deny portions of your loan package.

#5 Start paying the loan off while you’re in school. Interest is a beast.

What suggestions do you have for dealing with paying for college?

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com.

Student Loan Forgiveness Bill

I saw this post on Default: The Students Loan Documentary‘s Facebook page and I knew that you would be interested in reading about it:

Rep. Hansen Clarke (D-MI-13) introduced the Student Loan Forgiveness Act of 2012 (H.R. 4170) on March 8, 2012. If enacted, this legislation will provide student loan forgiveness for federal education loans, allow private student loans to be refinanced into federal direct consolidation loans and cap all federal student loan interest rates at 3.4%.

This legislation would address some of the calls for student loan forgiveness raised by forgivestudentloandebt.com and the Occupy Wall Street protesters.

Of course this has not been passed, but it’s a great step in the right direction. To read the whole article on Fastweb, click here.

To read about more ways to manage your money order a copy of 10 Things College Students  Need to Know About Money. Not sure what’s in it? Check out the reviews here.

 

 

National Consumer Protection Week

A few months ago, I wrote about the new Consumer Financial Protection Bureau and their work to help average Americans. Well, this week is National Consumer Protection Week! I thought I’d help get the word out, so here it is:

In case you forgot what the CFPB does, the website says:

We’re taking your complaints. We started with credit cards, moved on to mortgages, and now have the ability to take your complaints about a wide range of financial products and services provided by banks and credit unions.

We launched our supervision program. We are responsible for supervising not just banks, but also other financial businesses, such as payday lenders, mortgage companies, private student lenders, and others – collectively known as nonbanks. We will visit these businesses to make sure they are following the law and assess risks to consumers.

We adopted a rule to increase protections for consumers who transfer money internationally. One of our jobs is to write rules that tell financial institutions how to follow the law. This regulation will help protect consumers who send money electronically to another country.

We’re developing tools to help you make better financial decisions. Our Student Debt Repayment Assistant helps people with student loans determine their repayment options. We’re also working to provide educational materials to service providers working directly with consumers in their communities. Nearly 5,200 Volunteer Income Tax Assistance (VITA) locations around the country received materials from us that they can use to help encourage taxpayers to save some of their 2011 federal income tax refunds.

We’re looking out for you. All finance is personal, but some populations have unique needs. Staff from our offices for older Americans, servicemembers, and students are out in the field gathering information and looking out for consumers’ interests.

Tell a friend!

Hoover HS 2011

Shay shares a tip about saving early and often at Hoover HS in San Diego.

Financial education speaker Shay Olivarria had a wonderful time at Hoover High School in the City Heights part of San Diego! It was really special because Shay graduated from Hoover 15 years ago. She delivered two seminars entitled “Money Tips for Seniors” to the graduating class. Students really got a lot from the seminar. Don’t believe it? Students said they learned:

“It’s important to use your money the right way. I’m going to spend less money on junk food and start saving up all my coins”

“A lot about credit and how to smart choices ’cause you don’t want to have bad credit”

“To keep trying”

“Everything is propaganda, the 5 things that keep your credit score high, don’t get store cards”

“I learned that it’s better to put my money in a credit union”

“Think and use the available resources for our future career”

“The more money I have in the bank, the more money I get; called interest”

“That it’s better to have a money market account than a savings account. I am planning on opening an account at a credit union”

“Money is power”

“Make sure not to be fooled by commercials that promote free money”

Shay talks about how amazing credit unions are at Hoover HS.

Students love talking about credit unions! Who knew? One of the central tips Shay talks about is knowing the difference between a bank and a credit union. Many of the student mentioned that they learned more about what credit unions are and how they can use them.

If you’re considering a credit union, check out “Are You a Good Fit for a Credit Union?” on FoxBusiness.com.

Two students from each seminar won books from Shay Olivarria.

At each seminar, two students won copies of “10 Things College Students Need to Know About Money“. You should have seen them scrambling to find the winning ticket under their chairs. It’s really great to see students excited about learning personal finance tips.

Talk about a complete speaker! Shay is amazing!

Want to know more about Shay? Visit www.BiggerThanYourBlock.com.

“It was fun and interesting. =) Shay was real open about her experiences!”

Book Shay to speak at your event today (323) 596-1843.

College is Overemphasized

What's your ROI?

I’m sure I’m not the only person that remembers all the “a mind is a terrible thing to waste” commercials promoting college attendance in the 1980’s and 1990’s. Many a young person attended college and maybe even grad school in hope of graduating and starting a wonderful career that would provide for them financially. That’s a wonderful possibility, but we need to understand that it’s only one possible outcome. Some people graduate from college and can’t find a job or find a low paying job and struggle to pay back student loans.

I just read an article about America’s overemphasis on promoting college as the only pathway to success. There are certainly careers that require a college degree. There are also careers that require master’s degrees, doctoral degrees, and various types of training. I’m not for or against attending, and graduating, from college. I do want people to know that there are several paths to success. Don’t do things because you think you’re supposed to. Understand the return on investment (ROI) that you’re going to get from different career paths. Most high net worth individuals are business owners, corporate executives, and doctors/dentists. If you’re planning on one of those careers paths, you need to think long and hard about what skills you need to achieve your career goals and what the best way might be to get/grow those skills.

(Time + cost (fees, books, loans, etc.))/ expected yearly income = return on investment.

Would you spend $40,000 to earn $32,000 a year? That’s just what some of us were trained to believe we should do. Whatever you choose, make sure that it’s a choice that you’re making. Don’t choose not to attend an educational program (community college, trade school, university, etc.) or choose to attend one based on the influence of people that may have something to gain from selling you an educational experience. Figure out what you want and choose the path that you believe will help you get there.

PEACE

Financial Impact Factor Radio Show

I just completed a wonderful interview with Paul Petillo (managing editor of BlueCollarDollar.com and Target2025.com) and co-hosts and founders of FinancialFootprint.com Dave Kittredge and Dave Ng (both of whom have extensive backgrounds in the world of financial services) of the Financial Impact Factor Radio Show.

We talked about financial education for students, 401k options for recent grads, the awesomeness of credit unions, and why those for-profit colleges aren’t what they are cracked up to be. Listen to the show here.

I am opinionated aren’t I? LOL Enjoy!

Retirement Survey

I’m working on a new article on retirement savings and I’d love to have your help. I’ve put together a really short (9 questions) anonymous survey on retirement planning. Please take a moment and share your experiences.

Also, I’d love it if you would pass it on. The more data, the better.

=)

Thanks!