Should you pay off debt or should you build your savings?

Good afternoon! The question of whether you should pay off your debt or build your savings is a common one. Usually, we recommend that you have some savings, but that paying off your debt faster will actually save you more money in the long run. Unfortunately right now, there are some things happening in the credit world that may change the way we do our personal business.

Some credit card companies are lowering the credit limit on consumers, even those that have been good customers. What does this mean? It can mean a lower credit score if you are carrying a balance on any of your cards. And it can mean that you have reduced access to credit. This can be a problem for anyone that is hoping to use their available credit for emergencies.

Loans may not be as readily available as they have in the past because creditors are tightening their criteria for lending money.

What can you do about all of this?
1) First, take a deep breath. Then get to work and make a plan.
2) Look at your net worth, including your savings and your assets. You might want to make sure that you have enough savings available if you were to need it. We recommend 3-6 months of living expenses in an account that is readily accessible (like savings and checking accounts and money market accounts).
3) Set financial goals.
4)Make a spending plan and track your expenses. Look at ways to cut back on expenses, even if this means cutting back temporarily on things that you really want. Make a plan for paying off your debt as soon as you can. Afterall, this will save you the most money in the long run!

These tough economic times will be hard for all of us, but it will be important to focus on what your family really needs.

Where can you find resources for financial planning? You can go to the Virginia Cooperative Extension website: http://www.ext.vt.edu/. You can also check out "eXtension", a great resource of materials from the nation's Cooperative Extension System. There is even a special page for dealing with "Financial Crisis". You can find the website here: http://www.extension.org/financial_crisis

And as always, if I can be of any assistance, please don't hesitate to contact me by e-mail at cristin@vt.edu.

Gift Cards for the Holidays

Good afternoon! As you are preparing for the holidays and are out shopping for gifts, please remember to be careful when buying gift cards. Make sure that you read the fine print about the fees and restrictions. Some gift cards incur a fee after a certain period of inactivity, so the value of the card can shrink while it sits in your wallet or in your drawer.

There has been an e-mail recently received in in-boxes that relates to gift cards and stores closing or declaring bankruptcy. While the spirit of the e-mail is true, not all of the information is accurate. You do need to be careful when buying gift cards for stores that are closing. That gift card will be useless if the recipient can't use it because the store near them is closed or the company no longer exists. If you do give gift cards this season, remind the recipient to use it soon. For the e-mail specifics, please check out this link: http://www.snopes.com/politics/business/bankruptcies.asp

I hope that you and your family have a very Happy Holiday season!

Welcome!

Welcome to my new blog! I'll be posting information about financial topics and consumer issues here, as well as addressing questions that I get from consumers. If you have a question, please let me know. I won't post any names on this site, so please feel free to contact me. You are also welcome to sign up to receive notices when I update the blog. Thanks for reading!