Should I Pay Down Debt Or Invest My Monthly Surplus?

pay down debt

 

When you have some surplus cash on hand, it is sometimes difficult to determine whether you should use it for investment purposes or to pay down your debt. If your after-tax return on investments is more than your after-tax cost of debt, it is probably better to invest.

Just remember to consider the nature of risk behind the investment you choose (i.e., you may lose the money you invest, but you may still have financial obligations to pay back the liability). Use this calculator to help analyze your current situation.

 

© 2010 Visa

 

Saving Green With Your Car Color

car_and_cash

 

When picking the shade of a car to buy, you might be thinking mostly about making a personal statement. But you may also want to think about how the hue will affect your bank statement too. Here are some factors to consider when making the choice.

Safety

One of the keys to avoiding costly accidents is to be seen by others on the road as clearly as possible. If you do a lot of driving at night, a dark car might not be a good buy since it will be harder for drivers around you to make you out from the surroundings. White is a good choice both for driving at night and in general. Gray cars on the other hand can be very difficult to see under certain conditions. Some manufacturers have even stopped making gray cars because of this.

Resale value

Unless you are buying a vehicle on its last legs, you will want to give some thought to your ability to sell the car after you are done with it. That lime green ride may fit your zany personality, but it could cost you hundreds of dollars when it comes time to sell the vehicle. Silver and white tend to be popular choices for those buying a used car.

Cooling

If you live in an area that experiences high temperatures, having a dark car could mean more of the sun’s energy absorbed into the vehicle and more money spent on gas because of the need to run the air conditioning longer.

Cleaning

Unlike with clothes, the color black doesn’t hide stains very well on cars. In fact, black might be the worst color for dirt and grime – they tend to really stand out against the dark background. If you buy a darkly-colored car you may end up paying for more trips to the car wash to keep your vehicle looking sharp. Silver cars are known for keeping a clean appearance longer.

A couple of myths dispelled

There is no evidence that red cars get more speeding tickets. Also, no insurance company has ever said it charges more or less for certain car colors.

 

2014 BALANCE

 

Increased Card Security Coming This Fall

EMV-security-CHAIN-tRANS

At NASA Federal, we know security is a top member concern. That’s why we’ll be adopting chip card technology this fall to increase the security of NASA Federal Credit and Debit Cards.

Chip card technology is becoming the standard in the U.S. for card payments, with its next level of protection and successful fraud reduction around the world. As it rolls out here in the U.S., NASA Federal is bringing it to you as a commitment to your security. So be on the lookout for more information over the coming months!

Criminals Phish for Passwords to Re-Use on all Sites

Group of anonymous hackers or terrorists with laptop.It’s probably no surprise to most that cyber criminals have been targeting big brands of late. According to a survey from the Anti-Phishing Working Group (APWG), more than 54% of all targeted phishing attempts were toward just three brands in the second half of 2014: Apple, PayPal, and Chinese company Taobao.

The surprising news from this study was that it seems the phishers are now changing their tactics and targeting smaller companies more often. The companies that were victims fluctuated a lot toward the end of the year, indicating that perhaps the criminals are trying new strategies to see what works, while maintaining their success with the top brands. Seventy-five percent (75%) of the all phishing during the survey period involved the top ten brands, with over 1,000 separate instances per month.

Within the report is a suggestion that victims re-use passwords across various online sites. If the phishers can get those credentials from smaller sites in niche industries, perhaps they will be used in other places and result in success.

Most of us have multiple online accounts and it can get overwhelming to remember separate user name and password combinations for all of them. However, it is important to do just that for reasons such as this. This is a common strategy for cyber criminals and even though perhaps you are a frequent online shopper at a small local businesses that may be completely unknown to most, and therefore suspected to be less of a risk for a breach, re-using those credentials may get your bank account drained at some point.

Often smaller organizations are easier targets for hackers because they often cannot or do not invest the resources in hardened information security measures. After all, it’s not cheap initially. Cyber criminals know this and will take advantage of any open doors. And even if a company isn’t well-known outside of your small town, if it’s on the internet, it can be scanned and found by the bad guys. If they do find it and there is a weakness, they will exploit it.

So, don’t re-use login credentials. This was blamed in a breach of Yahoo! systems, as well as a theory in the Apple “naked celebrity” incident, the Uber breach of last year, and many others.

The most targeted sector for phishing attempts in this survey period was e-commerce with 39.5%. Not too far behind were banking (22%) and money transfer services (20.7%).

© Copyright 2015 Stickley on Security

Paying Student Loans

debt free zoneYou have the education. Now it’s time to start paying for it. Easier said than done. But the following information may make paying back your student loans just a little bit easier.

Exit Interview

If you have taken student loans, your school is required by law to give you an exit interview. This is simply a time to meet with a financial aid advisor to discuss your repayment obligations and options. Make sure not to miss the opportunity.

Grace Periods

Because some college students don’t get jobs immediately after graduation, lenders usually offer a grace period of about six months before you need to start repaying your student loans. Take time during your grace period to organize your finances and evaluate your options.

Create a Plan

Knowing what you owe and when you need to start making payments is the first step to handling your debt well and keeping that credit score high. Storing your loan paperwork in one safe place is another key to staying on top of your loans.

Ways to Repay

There are many different ways you can arrange your payment schedule, depending on what you can afford:

  • The standard payment plan, if you can afford it, will offer you the lowest total loan cost.
  • A graduated payment plan will start you out with lower payments that increase as time goes on. It’s convenient for now, but you’ll be paying more interest over the long haul.
  • With income-related payment plans, your monthly payment amounts are tied directly to your income instead of rising gradually no matter what your income.
  • Extended repayment allows you to make smaller payments for a much longer period of time. Of course, the longer you owe money, the more interest you pay, and the total amount in the end goes up dramatically.
  • Consolidation can happen when a lender offers you a lower interest rate and allows you to combine all of your loan payments into one convenient payment. You can save a lot of money over the life of your loan.

Don’t Default

Blowing off your loans is one of the worst financial missteps you can take. After six months of missed payments, you will likely be faced with collectors and a destroyed credit rating. So if you’re having trouble making payments, call your lender and find out your options (including deferment) right away.

Reducing Your Debt

Depending on your career path, there are few prime ways to knock out big portions of your loans:

  • Peace Corps: By joining the Peace Corps, you can get a 15% cancellation of your loans during your first two years and 20% during your third and fourth years.
  • AmeriCorps: If you like the idea of the Peace Corps but don’t want to leave the country, AmeriCorps could be for you. Get up to $4,725 toward your education.
  • Military Service: All five branches of the military offer education assistance programs. Check with your local recruiter to find out how they can help you.
  • Teaching: Depending on where and how long you teach, you can get complete loan cancellation or at least a deferment of some loans by filing specific understaffed teaching positions.
  • Legal and medical service: If you decide to study medicine or law, research programs that offer partial cancellation of loans for public service.

© 2000-2015 Visa. All rights reserved.

Automating Your Finances

easy-ways-to-automate-finances-fThese days, you can pay your mortgage or rent, utilities, insurance, loans, and credit cards every month without lifting a finger. Automation is a great time saver—and it can also reduce your vulnerability to identity theft—but it is important to use it wisely.

How it works

There are few different methods you can use to automate paying your bills. If available, the most convenient option is to use your NASA Federal’s Bill Pay service. You log into your checking account online, input who, how much, and when you want to pay, and your financial institution sends an electronic or paper check. You can do it as a one-time thing or set up recurring payments.

Another option is to set it up directly with your creditor or service provider—generally all you need to do is let them know when you want the payment taken out of your checking account and submit an authorization form. For some bills, you may also have the option of having the payment charged to your credit card.

To avoid interest, don’t charge more to your card than what you can pay in full the next month. You can also use a third-party service to pay your bills. It generally does not make sense to shell out money for this if you can use one of the other two options, which are usually free.

Avoid complications

Putting your bills on AutoPay does not mean that you can completely forget about them. First, you want to make sure that you have enough money in your account to cover the withdrawals. If your $1,200 mortgage payment is supposed to be deducted, but there is only $800 in your account, then either your account will become overdrawn when the debit occurs or the debit won’t occur and the bill won’t be paid. Either outcome can result in fees.

You also want to verify that the withdrawal actually occurred when it was supposed to. Mistakes sometimes happen, and you are still responsible for paying your bills on time even if someone else messed up. Don’t forget to review your statements too—if you don’t, you may miss an unauthorized charge or notice of a change in terms.

Lastly, if you close a checking account or credit card that you are paying bills from, be sure that you update your bill pay information so that future payments are assigned to your new account.

Automatically save

Don’t just AutoPay. AutoSave as well. If you wait and see what money you have left over at the end of the month, you may find that you have little or nothing there. There are typically two options for AutoSave: have a portion of your paycheck directly deposited into your savings account, or set up an automatic, monthly or biweekly transfer from your checking account to your savings account. If you choose the second option, it is best to schedule this to coincide with your payday. By automating, it will be easier to build toward your goals and establish an emergency fund.

 

© 2013 BALANCE