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Oklahoma Money Matters
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Learn how to make your money matter in every stage of life! From buying a car or house, to getting married and having kids – our modules walk you through these big decisions and can give you the tools you need to make informed financial decisions.
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Financial Planning


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Top 5 Tips For The Top 5 Consumer Issues


Mortgages

  1. Spend no more than 2 1/2 times your annual income on a home. This is a general rule of thumb; to figure out what you can really afford, use one of many online calculators to see how your income, debts and expenses affect what you can comfortably purchase.
  2. If possible, make a 20 percent down payment. While a sizeable down payment is best, don’t panic if you can’t swing it. There are plenty of public and private lenders who offer qualified buyers low-interest mortgages with a down payment as low as three percent of the purchase price.
  3. Beware the implications of adjustable rate mortgages. Only you can decide if an adjustable rate mortgage (ARM) or a fixed-rate mortgage is better for you. A fixed-rate loan carries the same interest rate and monthly payment month after month, while the rate and payment for an ARM fluctuate. When interest rates are down, ARMs seem like a bargain, but when interest rates go up, they can wreak havoc on a tight budget.
  4. If you can cut your interest rate by at least one point, consider refinancing your mortgage. Refinancing at a lower rate can save you a significant amount of interest over the life of your loan. Shop around to make sure you’re getting the lowest possible offer. You can compare interest rates at bankrate.com.
  5. Be careful when tapping into your home’s equity. Since mortgages are a secured and tax deductible debt, many consumers use home equity loans to finance other purchases. Home improvements and debt consolidation are smart ways to use your home’s equity; pursue other options first to pay for college, big ticket items or medical expenses.

Buying a Car

  1. Use the Internet. Research different makes and models, compare prices and check the value of your trade-in from the comfort of your home via the Web.
  2. Sell your old car yourself, if possible. Generally, you can make more money on your vehicle if you sell it to a private party, versus trading it in to a dealer.
  3. Decide if it makes more sense to lease or buy. While monthly payments are typically lower, leasing isn’t for everyone. If you don’t have money for a down payment or if you trade your car every two to three years, leasing might be for you. However, if you plan to keep your car for a long period of time or if you typically put a lot of miles on your vehicle, you’re better off buying.
  4. Buy used. A car loses up to 30 percent of its value in the first year. Plus, many used cars are in mint condition. Evaluate your priorities and financing options to determine if buying used is right for you.
  5. Don’t be afraid to haggle. Know what you want and what price you’re willing to pay. Be firm, but be courteous; if the dealer won’t come down on the price, request free upgrades or an extended warranty.

Insurance

  1. Aim higher. When purchasing insurance, choose the highest deductible you can afford. It’s the most effective way to lower your premium.
  2. Take advantage of group discounts. Group coverage, especially when it’s employer-subsidized, is usually the best deal.
  3. Research your options. Group meetings with healthcare providers can be boring, but paying close attention to the information they present can save you money. Examine plan differences carefully and make a decision based on what’s best for your family.
  4. Ask for discounts. Auto insurance providers usually offer discounts to reward good behavior that reduces risk. However, many consumers forget to ask if they're eligible for these programs, leaving up to $300 billion per year in their insurer’s pocket.
  5. Protect your family. Make sure your life insurance is adequate. It’s best to have enough insurance to replace at least five years of your salary - as much as 10 years if you have several young children or significant debt.

Hiring a Financial Planner

  1. Know your priorities. Understand your life stage and what’s important to you and your family. To find a planner who specializes in your area of need, you have to know where you are and where you want to go.
  2. Credentials matter. Look for a Certified Financial Planner or certified Personal Financial Specialist. For a list of planners in your area, visit the Financial Planning Association’s website, www.fpanet.org.
  3. Comparison shop. Interview several financial advisors before you settle on one. Ask about expertise, rates and anything else you want to know before setting an appointment. A reputable planner will offer references to verify quality of work and overall customer satisfaction.
  4. Be honest. Your planner’s advice is only beneficial if you’re open and honest about your situation. Be truthful about your finances, goals, risk tolerance and philosophy.
  5. Speak your mind. Don’t be too embarrassed or intimidated to ask questions. Knowledge is power, so ask for clarification if you just don’t get it. If you need more time to make a thoughtful choice, say so.

Teaching Children about Money

  1. Start early. Even young children understand basic money concepts, like saving and spending. Use daily tasks to bring these concepts to life; for example, while grocery shopping, teach your children about price comparison and payment methods.
  2. Help them understand the difference between needs and wants. Children may think they need a cell phone or iPod, but food, shelter and clothing are needs that must be met before wants are considered.
  3. Offer an allowance. Make a list of household duties your children can do to earn an allowance. Then, slowly begin shifting some spending decisions to them. By making their own decisions with earned resources, they’ll quickly learn the value of a dollar and how to spend it wisely.
  4. Teach them to spend, share and save. Make sure your children know that it’s okay to spend their hard-earned money, but it’s also important to save for the future and to help others.
  5. Give them more financial responsibility. When your children become teenagers, help them open savings and checking accounts at a local bank. Monitor their spending, help them learn to properly balance their account after each transaction and show them how to reconcile their monthly bank statement.