q MONEY MATTERS
If you are truly “on your own,” managing your finances will quickly become an important issue. Most people starting out do not make enough to do everything and to get everything they want. Sometimes, there isn’t enough for what they need. Whether your source of income is a job, parental support, a public assistance program, or a combination, you will need to learn about the following:
Bank Accounts
Banks and credit unions will take your money and hold it for you, or pay it out on your instructions. The old categories of a savings account and a checking account have given way to a wide range of options. Become an educated consumer and learn about those options. Do you want and can you qualify for overdraft protection? Would you prefer a monthly fee or a per check charge? Do you need copies of your cancelled checks?
You should also understand the implications of opening a joint account with someone else. Typically, either person can take out all of the money; and if one person overdraws, both are liable.
Borrowing and Credit
Sooner or later, you will want or need to borrow money for some purpose. Your ability to borrow depends on your credit. Often, a new loan applicant without a prior credit history or at least a steady job for a year or more is turned down. Someone with established credit can “co-sign” for you, but they become liable if you default.
Your credit history is maintained by one or more credit reporting agencies, and most of your credit transactions, including your payment history, will be recorded and then the information will be released to prospective lenders when you apply for a loan. Once again, if you are on a loan or credit card with someone else, and they default, that default, and the responsibility for it, may go on your credit report.
Ours is a credit society, and because of this, there are several things you should know about credit, your credit rights, and how to use credit wisely.
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On Your Own, 2008 Edition
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