YASG. Credit Cards Can Be Friends ... or Enemies

Depending on who you ask, credit cards can be your best friend or your worst enemy. Earning a credit card young, no matter how small, can lead to ease of credit score, earning amazing perks, and even getting discounts at a variety of places. On the other hand, credit cards can ruin your credit, keep you in debt with hefty interest rates, and set you up for bad habits like spending faster than you earn.

Are You Ready For Credit Responsibility? 

Weather or not you should get a credit card really starts with your financial maturity and discipline. Much of this can be developed along the way, with little missteps easily corrected by paying a fee and changing behavior. A couple days late on a payment? Pay us a fee, we'll put a short term mark on your credit score, but overall not a big deal. Make a habit of it, and it'll get ugly for your credit score quickly and the interest and fees will flair up to boot.

Credit Card Perks

The best thing about credit cards are the perks. You can get rewards points, cash back, airfare miles, discounts, and all sorts of things. These perks differ by card and account, but can really add up quickly if the card picked matches the spending you already do. Don't go out of your way to spend money on things for which your card rewards you; instead, carefully choose a card that rewards you for the things you already plan to purchase.

Credit cards boost your credit score. Having the same card for a long period of time could lengthen your credit history (especially when your oldest accounts are things like student loans that will "fall off" to a degree when they are paid off). Also, having a monthly utilization of 0%-20% looks great to most of the people checking your credit score.

In looking to buy a house, neither of us had any credit history, good or bad. We obtained a credit card and had our netflix and internet automatically charge to our new credit card. Then, as soon as they posted I paid them with my very next check. This reflected on my account as a consistent small percentage of utilization with no carried balance. Because it was a shared credit card, both of our credit scores jumped quickly, then continued to slowly climb as we added months of "good" credit usage.

Credit Cards Can Get Ugly

It's very important to avoid a credit card if you have trouble spending less than you make. Falling behind on a credit card can be stressful and very costly. Interest rates will bog you down and drastically inflate the amount you spent if you carry a balance from month to month.

Long story short: only swipe the card up to an accumulated amount that you know for sure you can pay off by the end of 30 days. Then: pay it off. Don't pay minimums on a credit card bill, either. Literally every 50 cents over the minimum payment will save you interest over the next month or months until you can get the balance to zero.

If you have trouble not swiping that card, leave it at home in a safe space. Cancelling it may shorten the life of your credit history or otherwise negatively affect you. Instead, put it somewhere not on your person so that you cannot easily utilize it, but know that no one else can steal it either. The best suggestion I've heard is a locking filing cabinet, such as where you save your tax information outside of tax season. Make sure when you do this that you continue to pay down the balance until it is zero. Make it a priority to over pay as much as you can without hurting yourself in the short term, but recognize that every dollar over the minimum monthly payment will help you get to zero much, much faster.

Minimum payments often are a reflection of the interest gained so that you don't ever pay off that purchase. Everything over the minimum will help you lower the minimum payment by lowering the principal. For example, a purchase of $50 may yield a $5 minimum payment. Pay $5 and next months bill will also be five dollars. Pay $6, and next months payment will be $4.25. Continue to pay at least the $6, and the balance will be paid off eventually. Paying $6.50 will get you there faster. Every penny counts: I promise.

Research, Research, Research

There are a million websites out there that have a wealth of information about money and credit cards. Check out sites like Nerd Wallet and Bank Rate to swim your way through an informative internet wormhole of credit card deals, perks, information and common mistakes. Nerd Wallet has lots of articles with tips and tricks if you're a reader. Bank Rate, on the hand, will watch how you utilize credit things and suggest accounts for you to research specific to you. Both are excellent sources of information, broad and specific.

Podcast. Code Switch

In a diverse country such as the US, sometimes we need to remember to celebrate and learn about that same diversity.

Keep Things Colorful

I've been really enjoying listening to the podcast Code Switch by NPR. In this podcast, journalist of color come together to discuss a wide variety of issues they have faced as journalists of color. Topics covered have included how various minority cultures in the US view outdoor activities, political agendas, and speaking up about racism.

Uncomfortable Conversations Lead to Growth

There are times I've been made uncomfortable while listening to certain topics; however, I think that may be a good thing. At times, hearing these topics discussed in depth has helped me gained a better understanding about where another person is coming from and going toward. I'll continue to listen to Code Switch, with the goal of catching up from the beginnings of this podcast, no mater how difficult the discussions can be.

YASG. Buying a House is Hard, but Worth It

Buying a house is hard. There's no other way of saying it, really. A couple years ago, my spouse and I bought a house, and we still get little surprises along the way.

Down Payments Are Scary

The traditional down payment recommendation is 20% down. In my area, $300k is the price of most starter homes, not in the city, with a small yard. This equals $60k just to sit down and sign the initial paperwork. It doesn't even include inspections and appraisals.

Private Mortgage Insurance

There is a thing often referred to as PMI or Private Mortgage Insurance that is added to your mortgage payment every month. Figure out the exact monthly payment for your PMI if it applies before deciding if you're up for trading saving a bunch of money first or paying more money every month. In the right market, you'll gain quite a bit of equity as the value goes up along side you paying down the mortgage principal over time. On the other hand, having more money saved up before you make such a large purchase allows you to also build up your credit score over time, watch the interest rates, and avoid the extra charge added to your mortgage payment each month.

Federal Housing Association Insured Loans

We used the FHA or Federal Housing Association loan. This loan is available through certain lenders, and is insured by the Federal Housing Association and has an associated PMI monthly charge. This loan does have only 3.5% down requirements, and doesn't require great credit. Look into the requirements from your lender for this type of loan, and consider if the trade off is a good fit for you and your situation.

USDA Backed Loans

Another option if you're willing to buy in more rural areas, is a USDA loan. The main two requirements are a house within certain geographies and an income below a certain limit. Both of these limits change occasionally, but are fairly easy to find online and double check with a lender that is approved to service USDA loans.

The perks of a USDA loan include less money down (depending on income tiers)and lots of educational information along the way. This loan also comes with a PMI monthly charge with your mortgage, and care should be taken to consider if this trade off is right for you and your situation.

If you meet the requirements of this loan, it's a good idea to find a lender that can help you with it incase the house you choose also qualifies. This opens up your different financing options so that you receive even more information as the process goes on.

Go With Who You Know

Our mortgage is with a major national servicer, but we went through our credit union. This route allowed us to utilize a major servicer with all the built in features, but also to have a local contact person at our local branch. The servicer looked at both of our incomes and credit scores, and the credit union added in information that does not show up on our credit reports: personal account history, how often we were late on a payment for a car loan we had with the same credit union, etc.

This "personal" information that the credit union knew first hand really helped us out with getting slightly better terms for our loan. We had a similar experience when looking for credit cards. The bank where my spouse had an old unused account saw a mature customer that never had a negative balance. The lack of negative balance was due to the account being used little to none since age 16, but the age and statistics on the count that the were brought up in the banking history report were much more favorable than the skimpy credit report we otherwise had to show.

Our credit union had ties to traditional, FHA and USDA loans. Because of this, we were able to compare all three along the way to see which option worked best for the house we chose, our situation, and the exact terms within each offer.

You Are the Landlord

When something goes wrong in your apartment, you call the landlord. You are your own landlord once you buy a house. You get to call the plumber, appliance repair, electrician, and insurance guy. You have to juggle calls, information and payments.

It's overwhelming at times, but helpful to utilize family, friends and neighbors if you need references for a repair guy or company. Don't forget to check out any reviews you can find online as well. Take everything with a grain of salt though: family can do positive reviews, and the angrier someone is the more they spin an issue that may have nothing to do with the company.

Mortgage Payments Do Go Up

It's a common misconception being spread around: mortgage payments stay the same as long as you don't have any balloon payments or non-fixed interest rates. This isn't true. Part of the mortgage payment includes property taxes and home insurance. Even if the interest payments and principal are fixed at one rate, taxes and insurance go up over time.

Insurance can be affected by the positive gains in your property value as well as overall inflation in your area. Taxes can also be affected by positive gains in your property value, but also go up after taxes are passed to fund social projects like road improvements or public school education. I'm all for funding schools, roads, and firefighters, but it still stung a bit to see how much my payments went up when my escrow account came up short at the six month escrow review after my city and state each passed through vote increased taxes.

When the escrow account did not have enough money to pay insurance and taxes, I have the choice of coming up with the difference quickly and having a slightly higher monthly payment to cover the change in the future... or my monthly payment goes up high enough to cover the difference quickly and guess at any changes on the horizon.

Research, Research, Research

There are a million websites out there that have a wealth of information about money and mortgages. Check out sites like Nerd Wallet and Bank Rate to float through an informative wormhole of mortgage information, tips, and warning signs.

podcast. I Hope They Hear This

Sometimes, you just have to let your thoughts out. That's exactly why David Shin created the podcast I Hope They Hear This.

Exciting Titles & Calming Monologues
David Shin has a calming voice and a lot of thoughts. When I found his podcast on Podcoin, I expected to be angry, prompted to begin fiery discussions about my thoughts after each episode. With episode names such as I hope Korean Americans Hear This and I Hope Trump Haters Hear This and I Hope People Who Think Hitler Was Evil Hear This, how could this podcast disappoint my want for opposition at times? I was awkwardly surprised at the intellectual monologues that crept through my headphones.

Shin adorably references his wife's critiques of his episodes on occasion, and works to make his episodes easier to follow as he experiments with his new found hobby. His opinions are well formed and often analytical, but need some time to explain. I found myself growing better understanding not only for his points, but also for the many possible sides presented by Shin. This is an amazing listen whether I agreed or disagreed with each point of discussion, and I look forward to hearing the many more episodes.


(Note: My referral code for Podcoin is Alir2jd5, if you feel so inclined. The previous links do not include my referral code.)

YASG. Young Adult Survival Guide

I've just seen a meme that said

"We need to make a new survival guide. Idk what I'm doing anymore." 

I agree wholeheartedly. We really need to help each other out in this sense. Each of us has something to add to this conversation, but we may each need help figuring out what it is. Send me an email or leave me a comment that tells me a bit about a topic you know.

What Can You Share?

Do you know everything about taxes, and can write a blog about the cliffnotes for those really drowning? Recently purchased a house and want to share all the tips you learned along the way? Do you interview for entry level positions and can write about the major "red flags" of old ways of narrowing down interviewees that often are just habits of our socially awkward generation? What are we as a generation needing to work on that you as an individual can spread fixin' knowledge about for the masses?

Already doing a blog about this? Let me know! I'll send people to your blog or site.

Drop me a line! I'm open and love to learn. Let's help each other and the next generation!

Stool or Chair: Where is The LINE!?

In my household we regularly hold ridiculous debates. Our current one is where exactly is the line between a chair and a stool?

We begin by attempting to define them of our own accord to see if we agree. When this fails and words cannot be agreed upon, we google definitions for a reputable source to define each individually and attempt to find a line we can agree upon... and when this fails, we devolve into extreme exceptions to the other person's definitions.

Chair vs. Stool

Google defines a chair as follows: Noun,"a separate seat for one person, typically with a back and four legs."

Google defines a stool as follows: noun, "a seat without a back or arms, typically resting on three or four legs or on a single pedestal."

This brings us to the discussion of the where the line is. Can a seat be both? there may be two lines: chair, chair-stool, and stool. The use of the word "typically" in both definitions is really what is throwing us with this discussion: the word "typically" allows for so many exceptions to the "rule" we are attempting to define.

Help Us Decide!

Where is your line? When is it a chair? When is it a stool?

Podcast. White Lies

I quite enjoy listening to podcasts that investigate and retell the various angles of a story and how it has evolved both socially and factually. The ever-evolving game of telephone we play as kids can be so harmful as adults in social circles, and so very difficult to unravel when an entire community plays it for over five decades.

A Story of Law & Social Influence

The podcast White Lies by NPR takes two young men from Alabama to the small town of Selma, Alabama to investigate a trial that occurred shortly after, and likely was related to, the Bloody Sunday Massacre after a peaceful march led by Martin Luther King, Jr. in the mid-1960s.

The two podcast hosts search desperately for the trial transcripts for the murder of a white religious leader and northerner who had come to Selma after Bloody Sunday in an attempt to help the turbulent town. Along the way, they interview people alive at the time including trial jurors, discover various media circulated at the time, and unravel stories told down through generations of the stories told socially through the many grapevines. Depth is added to the investigative story by way of current political and historic structures and stories of the town that help paint a picture of how the town may have looked in the 60's.

The White Lies podcast is well written, well executed, and well balanced. I highly recommend it to the podcasts listeners among us.