Should You Co-Sign?

Should-You-Co-Sign-an-Apartment-Lease-620x348It is a question that few want to hear: “Will you co-sign for me?” Typically coming from relatives or friends with no or low credit scores, it can be a difficult request to respond to. Most people do not want to ignore a family member or friend in need, but co-signing comes with risks that make many justifiably nervous to sign on the dotted line. So, should you do it? There are many factors to consider before making a decision.

What are the risks?
One risk that you incur when co-signing is the primary applicant making the payments late or not at all. Even if the primary applicant is the one who is supposed to make the payments, late or non-payments may still be recorded on your credit report, which can lower your credit score. If the primary applicant stops paying, you may also start to experience collection activity, such as phone calls from the creditor. You could even be sued. The creditor is under no obligation to try to collect from the primary applicant before taking action against you. If he or she stops making payments, do you have the money to pay the bill? If not, co-signing may not be a good idea.

Even if the primary applicant makes all of the payments on time, you may still be affected if you are planning to apply for credit yourself in the future. When you apply for some types of credit, like a mortgage, many lenders consider how much debt you already have in deciding whether to lend to you and how much to lend to you. In general, the higher your debt payments, the less you can get. Lenders commonly include debt you co-signed for in calculating your level of debt, even if you are not the one paying it. (However, some lenders will ignore co-signed debt if you have proof that the primary applicant is making all of the payments.) This means that you may not get as much as you would have if you did not co-sign.

Why does the person need a co-signer?
You probably would not co-sign if you knew the person asking you would not make the payments, but how do you know ahead of time if he or she will? A low credit score can be seen as a sign that there is a good chance the person will not repay the debt, but it is also helpful to consider why the person has a low score. Was he not able to pay previous bills due to losing a job but has a well-paying job now? Is she still struggling with bill-paying due to purchasing an expensive house, fancy car, and luxury goods put on credit cards? A person who had problems in the past, but corrected them, is probably less of a risk than someone who continues to experience difficulties or exhibit poor financial habits. If the person has no credit score, you obviously cannot examine past credit use, but you can consider how conscientious he or she has been in other things, such as in saving money and paying household bills, when deciding if you should co-sign.

What are you being asked to co-sign for?
Is your daughter who just graduated from college asking you to co-sign for an apartment so that she will have a place to live or for a $2,000 loan so that she can buy a big screen television? Ask yourself if the person can do without what you are being asked to co-sign for. It may not make sense to put yourself at risk if what you are co-signing for is not even a necessity. The person should be able to work on building his or her credit score so that a co-signer will not be needed to get credit in the future.

Minimizing the risks
If you would like to co-sign, but have concerns, there are steps you can take to minimize your risk. One way would be to pay the creditor directly yourself and have the person send the money to you. He or she could send the payments to you late, but your credit score would not be affected as long as you send the payments to the creditor on time. Another option would be to choose a lender that allows you to see the account information on-line. This allows you to check the status of the account before the due date to see if the payment has been made, instead of waiting for the creditor to call you after the account has become delinquent. If you see that no payment was made yet, you can make it yourself.

Co-signing can help a friend or relative in need, but it comes with risks. Understanding what the risks are, and why the person needs a co-signer, can help you make an informed decision and not unnecessarily jeopardize your financial future.


Copyright©2008 Balance



Wills and Living Trusts: The Basics

living-trusts-versus-willsPreparing for the distribution of your estate (assets you own at the time of your death) can be a very stressful experience. After all, with so many important decisions to make, no one wants to make the wrong one. One of the most common dilemmas is whether to have a will or a living trust – or both. Knowing the fundamentals of each will help you make the right decision.

First begin with understanding probate, as it plays a significant role in estate planning. Probate is the administrative and court process that takes place after you die. It includes proving the validity of a will (if there is one), identifying, inventorying, and appraising property, paying debts and taxes, and (finally), distributing whatever assets remain.

Because probate can drag on for months or even years, much of the wealth you’ve accumulated over your lifetime can be eroded. Wills and trusts have the power to reduce probate dramatically – so your heirs can efficiently inherit what you want them to receive.


A will is nothing more than a set of instructions that specifies who gets what of your assets. If you have property and loved ones, having a will is vital. If you die without one, state law takes over and makes distribution decisions on your behalf. In most cases everything goes to your spouse and/or children. If you have neither, your closest relatives will be the recipients, and if you have no relatives, your entire estate will be absorbed by the state. While the court may make the same decisions you would have, in many cases it does not.

One of the most compelling reasons to draw up a will is if you have children who depend on you for care. A will allows you stipulate guardianship. Without one, the court will make this very personal choice for you.

If your estate is relatively simple, you may choose to create your own will with the help of a quality software program or guidebook. For more complex situations, or if you do not feel comfortable writing your own will, hire an attorney or legal service to do it for you. Because this is such an essential document, you’ll want to be sure its done right. Consider investing in a lawyer to at least look over your finished product.

Living Trusts

A living trust is a bit more complicated in concept than a will, but in essence it is a separate legal entity that holds title or ownership to your property and assets. While you are alive, and acting as the trustee, you hold full control over all the property held in the trust.

The primary reason to create a living trust is to avoid probate. Property held in a trust won’t have to go through probate before your loved ones receive their inheritance. More, where wills are public, trusts are private, and usually harder to contest.

As with a will, you can create your own living trust by using software and guidebooks developed for “do-it-yourselfers.” However, living trusts by nature are often more involved than wills, so having a lawyer draw it up for you in the first place may be the better way to go.

Not everyone needs a living trust though. Before spending the money to create one, be aware that they can be costly to arrange, are time-consuming to put together, and require considerable ongoing maintenance (adding to the cost). Changes to a trust can take a long time, and moving certain assets such as real estate, savings, and brokerage accounts into the trust requires re-titling, which can be cumbersome.

A Will Plus a Trust

Wills and living trusts are not mutually exclusive estate planning devices. In fact, if you have a trust, you should probably have a will to make sure all of your assets will be distributed according to your wishes. Most trusts do not provide instructions for everything in your estate. A will acts as a back up for what is not included in the trust, as it would have a clause naming a person who you want to receive all leftover property. Without a will, anything you didn’t transfer into the trust will go through that long and expensive probate process. Once again, those assets will be distributed according to state law – and most likely not the way you would choose to have your property dispersed.

While estate planning certainly can be an anxiety provoking process, knowing the fundamentals of wills and living trusts should ease some discomfort.

Copyright © 2005 Balance

Star Trek(TM)-Themed Credit Cards Are Here

Star Trek Cards HiOur new Star Trek™-branded credit cards are now available! The four new cards, under license by CBS Consumer Products, provide unique benefits of Star Trek merchandise and experiences, as well as the outstanding value of the current NASA Federal Credit Union Platinum Advantage Rewards credit card.

The cards made their pre-launch debut in early August to significant fanfare at the Annual Star Trek Convention in Las Vegas, where over 5,000 Star Trek fans converged daily. “As soon as I saw NASA Federal Credit Union’s credit card with Star Trek emblems on it,” stated one Star Trek fan, “I had to have one!” To date, nearly 1,000 people have signed up for new cards in anticipation of official availability today.

The new Star Trek Credit Cards include: the Starfleet Academy Alumni, Starfleet Command, United Federation of Planets, and the Captain’s Card. In addition to exclusive Star Trek merchandise and experiences, all four cards feature a competitive interest rate, no balance transfer fee, and a very generous rewards program.

Star Trek fans may become NASA Federal members and apply for the new cards online at


TM & © 2015 CBS Studios Inc. STAR TREK and related marks and logos are trademarks of CBS Studios Inc. All Rights Reserved.


3 Financial Tips to Help Prepare Young Adults

College-Financial-Literacy-1-friends2_400wNow, more than ever, children are becoming young adults at a seemingly lightning fast speed. The internet has allowed them to have access to a wealth of knowledge at a much earlier age, while toys and board games have long since been replaced by ever-evolving technology like video games, tablets, and phones.

I mean we live in a world where kids don’t know how to mail a letter and are no longer taught script in school, but if you need someone to restart your wireless router or teach you what all the emojis mean on your iPhone, they have you more than covered. A huge part of growing up (especially at a quicker rate), is developing a sense of understanding for the many financial aspects of life.

Since we now live in a world where you can buy almost anything with the click of a button or the swipe of a finger, it is crucial that our children learn the value of money and how to manage it. Here are a few easy ways to get your son or daughter on the right track to financial success.

  1. Develop a Respect and Understanding– Let your kids shadow you at the store and while paying bills early in life. Show them the importance of buying things on sale and budgeting common purchases to fully have a manageable plan. They can also learn a lot by experiencing how a paycheck should be broken down, with certain percentages going to savings, taxes, and of course groceries. More importantly, let them see the inner workings of owning a home, so they can fully understand utilities bills, mortgage payments, taxes, etc. Obviously, choose a participation that is fitting for their age, but the more they can get a grasp on before they themselves are thrown into it, the better.
  2. Let Them Work!- You can teach your children a million things about money, but nothing will hit them harder and with more purpose that understanding the value of THEIR OWN money. While they are younger, let them work around the house for a small allowance; if you resist helping them pay for larger items outside of their birthdays and holidays, they’ll develop a strong connection to work being their means to fun. As they get older, after school jobs will also allow them to get their first experiences with taxes and maybe even a bank account or credit card. Take them to get their taxes done at the end of the year so you can help them with questions, and be sure to limit credit card spending to emergencies in the beginning. Resisting the urge of credit card dependency early in life is vital! Too many young adults become dangerously enamored with cars and clothes the moment they can get a card at 18. It’s extremely hard for an after school part time job to keep up with wild, foolish spending.
  3. Take Care of Their Health and Their Future– Hopefully, your son and daughter are young, healthy, and full of possibilities for a bright future. Keep them on the path to success by getting them to save for college early, and more importantly, making sure they understand and purchase health insurance when it’s time for them to leave your coverage. Too many people think that health insurance is a waste of money because “they are never sick,” and “you don’t get the money back if you stay healthy.” Yea, well the flip side of that is you could trip on the curb and sprain an ankle tomorrow, costing you upwards of five figures if you were too stupid to have coverage. Remember, health insurance is a precautionary expenditure that is absolutely pivotal to building stability and economic growth. No one can fully plan for life’s craziness; never gamble with your health and your wallet.

Income Infusion: Ideas for Generating Extra Cash

income-generationThe landscape of earning extra income has changed dramatically over the past decade. Not only are there many more ways to find added money, but a bevy of new ways to make that cash. To take advantage of these opportunities, it helps to start thinking about how the available techniques mesh with your skills and desires.

Start by making a list of your skills and expertise, taking a broad view to include anything that could potentially be useful to others. Many times people find that just by doing the things they enjoy, they inadvertently develop skills that can be turned in moneymakers. For example, if you are good at finding information on the internet, include that. Great at throwing parties? Put that on the list.

If you are struggling to come up with ideas, just make a list of everything you have done with your free time over the last month. Once you have your list completed, start thinking about how each of those things could get you paid. Try a few out and you just might find that you get to earn extra cash by doing something you would have been doing anyway!

To get your creative juices flowing in your quest for a “side gig,” here are some common ways that folks earn a little something extra:

  • Hire out your unique skills on a freelance basis
  • Get tutor jobs
  • House or pet-sit
  • Do some babysitting
  • Pick up seasonal/holiday work
  • Sell items on auction websites
  • Have a yard sale
  • Take on a renter
  • Sell gold jewelry or other gold items
  • Do marketing company surveys or participate in focus groups
  • Take part in research studies at hospitals or universities
  • Have your car wrapped in an advertisement
  • Become a mystery shopper
  • If you speak another language, sign up with a translation service
  • Deliver newspapers or phone books
  • Create a blog on a favorite topic and make money off advertising
  • Recycle scrap metal or take in bottles and cans for refunds
  • Start a dog-walking service
  • Start a business transferring old film, pictures or video in digital formats
  • Become a topic expert at About
  • Rent out parking, storage or “studio” space
  • Use photography skills to sell stock images or offer event or portrait services
  • Sell unused gift cards online
  • Go to Volition for a list of companies that will pay you to perform online tasks for them
  • Sell your crafts at Etsy
  • Inquire at a local temp agency about positions that fit your schedule
  • Make money recycling empty printer ink cartridges for others
  • Become a sales rep for a company that sells cosmetics, vitamins or other products
  • Perform surveys at online sites that pay people to do so
  • Offer a scrapbooking service
  • Perform car washing/maintenance services
  • Become a telephone interviewer for companies that conduct research surveys
  • Host foreign exchange students
  • Sell clothes to a consignment shop
  • Provide gardening services or sell fruits or vegetables from your own garden
  • Offer up your large truck or van as a rental for moving or hauling
  • Supply personal tech support for those learning modern technologies
  • Use the equipment or tools you already own to provide services like snow blowing, painting, power washing or garden tilling

© 2012 BALANCE

Baby, it’s Cold Outside: Reducing Fall Energy Costs

Energy-Saving-Tips-for-Fall1Fall is here and it’s getting cold outside. For many of us, this means high energy bills, but sitting in the dark or turning off the heat are not your only options. Here are some ways to improve your home’s energy efficiency and save money:

Cold air can get in around the sides of windows, doors, and vents. If you hold a piece of tissue near the frames inside on a windy day and it flutters, you need to seal the window. Stroll on down to your local hardware store and pick up some weatherstripping – talk to an employee there or do research online about the right product.

Insulating your attic can increase your home’s energy efficiency significantly, and it’s usually fairly easy. Consult with a professional or do some research at the Zip-Code Insulation Program, created by the Department of Energy, at

Heating and Cooling Systems
These account for about 56% of the energy in a typical U.S. home, so updating can save a lot. You can retrofit or replace your furnace or boiler, depending how long your system has to live and how much each option costs. New heating systems can achieve an efficiency of up to 97%.

Appliances and Electronics
Appliances account for 20% of energy use in a typical U.S. home. Old ones can be energy hogs. To find energy-efficient products, look for the Energy Star label – for more information, check

Water Heaters
Insulating or increasing the insulation on your water heater tank and pipes can decrease heat loss and lower your energy bills for a fraction of the price of replacing your water heater. On the other hand, if your water heater is nearing the end of its life, it is probably a good idea to replace it.

Solar Panels
Solar panels typically have high upfront costs, though they can provide clean, free energy for years to come. Use the Solar Calculator at to estimate the cost of installing panels and how long it will take for your investment to pay you back.

Many cities and states have programs to help pay for green renovations. Contact your state’s energy department to see what low-interest loans, rebates, or other benefits are available. You may also qualify for tax benefits; visit the IRS’s website at

*Energy usage and efficiency figures come from the Department of Energy. For more facts and tips, visit

© 2013 BALANCE