Money and Finance

[topher]

You youngters should check with your employer about their 401K programs. Some companies have great programs where they match up 100% of what you put in. That's free money.

[Auroranorth]

I just opened a Roth IRA today- I feel so grown up! And old.

Topher, I opened my 401(k) as soon as I started the first job that had one. Dad was thrilled. (Does this make you our surrogate dad?)

hides

[topher]

Congrats on the Roth.

It is one of the best programs the gov't has ever did. Nothing like earning tax free money.

[Deleted]

I contribute to a 401k and I don't even miss the money and I like looking at my statement and seeing it grow. If your company offers it and matches contributions, invest at least the minimum they will match.

I will also second or third the "if you need to, pay some bills with student loans" advice. I also know a couple of people who didn't want student loans and so they used credit cards to finance school instead. BAD IDEA.

[chonies]

Two things I am currently fretting about

1. Student loan consolidation. Does anyone have advice on how to deal with this? I'm still in school but will finish next year with a debt load in the neighborhood of $50K. I think I should start with my Financial Aid office and see what they say but I would appreciate some been there/done that advice.

2. I had a rather heated conversation with a friend the other day. She mentioned that once she pays off her credit card, she was not going to have any credit cards, ever, for any reason and go cash or debit card only. I was somewhat stunned and mentioned that I thought it was practical for people to have a card for emergencies--not the hurricane evacuation or pretty shoe variety, but pricey car repairs, funerals, etc. She said if that was the case, and she didn't have any money, she wouldn't go to the funeral or get the car repaired. But doesn't having an open credit card help build FICO credit? As long as you're paying on time, of course. It seems kind of extreme to not have a financial cushion like a credit card, but isn't there some other advantage? The discussion quickly escalated into a bicker so I'm not out to prosyletize but I just want to be sure I'm not stuck in a 1980s financial mindset.

I mean, I'm opposed to the usurious interest rates charged by many credit card financiers but in the consumer-indignation way. I don't mind making interest on savings accounts, and so.

Hmm.

[Sunnyhorse]

I guess if you know you're prone to racking up debt, going credit-card-free is a good idea, but we pay ours off each month and get airline miles and hotel points to boot -- we're going out of town soon and won't be paying anything for our hotel rooms. If you can control your spending, I don't see anything wrong with credit cards.

Topher, two questions: (1) What exactly is a "hedge fund"? (2) I put my paychecks into a money-market account, and Mr. Sunnyhorse and I both put money away for retirement -- the mister through his 401(k) plan and me through a Roth (I also have a rollover account from previous employers). What are some other options we should ask our financial-advisor guy about as far as investing our liquid assets? (Gold, I guess, is out. ;D)

[chonies]

Thanks for the back-up, Sunnyhorse! I was controlling for the possibility of getting into credit card trouble--if I was in a position to not trust myself with my cards I would cut them up.

And yes, Topher. What is a hedge fund? The first thing that came to mind was Barings Bank.

[Auroranorth]

I lived with the card for emergencies only scenario for a while, and believe me, even if you have to keep the card frozen in a chunk of ice the rest of the time, having one (that you pay off monthly) is worth it.

[Oxynia]

We got rid of our credit cards except for Amex. We were both a little credit-happy in our youth and discovered the hard way the perils of excessive debt. So w got rid of credit cards altogether.

Using only Amex forces us to only buy what we can afford to pay off at the end of the month. It does have a revolving credit feature for pricey items and we'll use that for emergencies. It's a nice combination of charge and credit card and it's all we use outside of our debit cards.

[sleepy]

How does a charge card (not a credit card) work? [/dumb question]