Many of you know that we, the US taxpayers, have taken over mortgage giants Freddie Mac and Fannie Mae. The U.S. Treasury acted in an effort to calm world financial markets. So far, the results of the decision have been mixed and the press seems more concerned about swine wearing makeup than the financial outlook for the world. (The Treasury pledged up to $200 billion to recapitalize the firms. We will undoubtedly borrow the money and pay it back with interest over time. Given today’s estimated U.S. population, your share of this potential debt is $655. “Thank you for your continuing support,” as the old commercial used to say.)
Regardless of the news, our academic department had a visit this week from Dan Iannicola, Jr., Deputy Assistant Secretary of the U.S. Department of the Treasury. Mr. Iannicola is responsible for the Treasury’s efforts to improve the nation’s financial literacy. While in Columbia, he spoke to one of our classes and to a class at a local high school. He left some tips for building wealth…
- Pay yourself first. Make savings a priority over non-necessary spending.
- Track all expenses for a month. Write a budget. Stick to it.
- Set specific, realistic savings goals: education, home ownership, retirement.
- Enjoy the magic of compound interest. Save early and often. Use your employer-based retirement savings plan.
- Use tax-advantaged methods for saving for goals like retirement, education, and healthcare.
- Establish an emergency fund.
- Avoid high cost credit.
- Pay your bills on time to help build your FICO credit score. Not doing so can limit your employment and housing choices, as well as increase the cost of insurance.
- Comparison shop for credit and credit cards.
- Get a free credit report at least once per year. Use www.annualcreditreport.com .
Sound familiar? Enjoy your financial success…..