Money FAQs

Is credit always a bad thing?

Using credit can be a real help or a trouble spot--depending upon how you use credit. The biggest problem usually is that families overextend themselves and become committed to larger payments than they can meet.

Credit terms differ, too. Shop carefully for credit--as carefully as you do for goods and services. Be sure time installments fit into your budget and don't take on more than you can handle. Know the cost of credit terms--the real cost. Keep track of expenditures made with charge accounts or credit cards, so the bills won't come as a big surprise to you. And pay on time to keep your credit rating solid.

I don't have any extra money to pay towards debt. What can I do?

Don't be discouraged if the extra amount looks pitifully small. Even if you only have a few extra dollars each month, it will quickly add up; and you can be out of debt faster than you might think. Just think how quickly the last two years went by.

How much of a cash reserve should I have on hand?

Financial experts recommend that every family have a cash reserve of at least 50% of their annual income. To acquire this means developing good saving habits and self-restraint in spending. There is a definite need to save so you have an emergency fund when unexpected expenses arise.

Knowing you have a safety margin of savings will also give you a feeling of security and greater peace of mind. And don't forget a savings account enhances your credit standing.