Mannie wrote: I was married to a U.S. Navy serviceman, and he died in October 2007. While I did not receive his insurance (I have a post in A/T’s Legal Questions Megathread concerning that situation,) I did receive some death benefits totaling ~$122k.
I receive monthly payments from the government now as well - $1288 per month total without educational assistance; $2203 per month with it. I only receive the extra amount during the times I’m enrolled in school.
I have health/dental insurance provided by the government. I receive this for free for three years from the time my husband died, which means I have a little less than two years remaining now. After the free period, I will pay at the retiree rate.
I will be graduating from my university in December 2009 with a B.S. in Management, Human Resource Management concentration. I have a 3.89 GPA right now; I’m confident that it will be in the 3.9s when I graduate. I do not have any student loans; my parents funded my tuition and books for the first half of my college career, and the government now funds the rest.
Because I commute to school, I bought myself a 2006 Honda Civic in February 2008. I paid ~$3k down, placed $15k in a share certificate at my credit union, and then borrowed against it in order to build my credit. I got into some trouble with credit cards when I was younger (I will turn thirty in April 2009,) but my credit report looks clean now. I have a mediocre score of 637, but I fear that it will soon drop because an old closed account in good standing will soon vanish.
I live at home, and I have very little expenses. I pay for the monthly DirectTV bill, and I pay for our family cellphone plan. I also pay my “car payment,” which is just what I call the payment for the loan at my credit union.
I have $100k in CDs at my bank; I took advantage of a 4.16% APR / 4.25% APY promotion there. This rate was only for one year, and my CDs will mature in September 2009. ~$600 is in a special savings account that earns higher interest, but it’s based on transferring $1 from my checking account each time I use my Visa debit card. I can transfer a maximum of $100 to this account each month, which is what I do. The remainder of my funds are in an interest-bearing checking account, but the rate is minuscule at 0.05%.
I do not work, and I have not worked in several years. I’ll be actively trying to find an internship/entry-level job over the summer months.
Okay! Now that everything has been explained, here are my questions:
1. Is there anything that I could/should be doing with my $100k other than CDs? I know I have to pay taxes on the interest.
2. What steps can I take to build my credit score? I’m not ready to buy a house right now, but it’s definitely something I want to do within the next five years. However, I do qualify for a VA loan (up to $200k, I believe.) Also, I have no credit cards - and thus no credit card debt.
3. I will be starting my career “life” at age thirty (provided that I obtain an internship/job this summer, which is a task in which I’m confident I’ll succeed.) Will I still be able to have a nice retirement as long as I plan for it? In other words, have I started financial planning too late?
I know that these may seem like basic questions, but I’m just now learning about financial planning. Even though I’m in the business program at my school, I haven’t had a lot of exposure to the intricacies of investing soundly.
And, to answer the inevitable question of “where will I live after graduation,” let me say that right now I’m not sure. I’ve been set on attending graduate school in my boyfriend’s hometown, which means that I would be staying with him. We’ve been looking at a brand-new two-bedroom apartment that he can obtain for half rent, which means our expenses would be minimal. However, my school supposedly has a program where my graduate program there would be paid as long as I agreed to teach for a year (or so) afterward. I still have to find out information on this program, and the professor who knows is on sabbatical this semester.
I’m aware that it would be in my best interest to speak with a fee-only financial planner, but I want to have a bit more knowledge at my disposal first.
If you don’t belong to USAA, you should join. They tend to have low rates on all kinds of things, especially things like car insurance.
Other than that, does anyone in your family have a credit card with a high limit in good standing? My dad added me to one of his once when I might suddenly need it in an emergency, and it jumped my credit rating a surprising amount.
It seems like most people around here get a card with reward points of some kind and use their cards for everything, then pay them off completely every month. Might be better than a store card if you can get a good one.
Don’t delay with the car insurance. My husband and I both have clean driving records. I know AAA is hardly considered to be cheap insurance, but I was still surprised when we got married and were able to insure both cars and add renters insurance for more coverage and less money than I’d been paying for just my car at AAA. When I went in to cancel, the AAA woman was asking me about why I was leaving, like maybe she was going to offer me something better, but when I said I was switching to USAA, she just dropped it and canceled the policy.
If the store card has advantages, there’s really no reason not to get one, as long as you don’t a) buy more because of the discount, thus wiping out the discount; or b) fail to pay it off in full every month.