Students Should Think About Credit Scores and Retirement Now

Around this time of year, many recent college graduates are settling down into their first full-time jobs and getting their first taste of life on their own – paying bills, shopping around for credit cards and insurance, and trying to pay down student loan debt.

With so many bills to pay, many young people can feel overwhelmed. That’s not surprising, given the fact that the average graduate from the class of 2009 holds $24,000 in student loan debt. Future students and alumni can expect this to rise in the coming years, as this type of debt rose by six percent from 2008 to 2009 alone.

For many young people who are interacting with major lenders and credit card companies for the first time, it’s important for them to understand that, as in many other areas of life, a first impression can be a valuable one.

Those who choose to let their bills go delinquent could end up hurting their credit histories. While this may not seem like a big deal to someone who’s already struggling with a variety of bill payments, bad marks on credit reports often lead to lenders assessing them as increased risks.

This can mean higher interest rates on credit cards, home mortgage payments, and even insurance later in life, and can also lead to credit score damage in the short term.

Another aspect recent graduates may want to consider is developing a plan for their retirement.

“Oftentimes, young adults will postpone saving for retirement because they want to get out of debt before they start to save,” Matt Brandeburg, a certified financial planner, told The Philadelphia Inquirer. “This is very idealistic, but not very practical. If we all waited to be debt-free to begin saving, very few of us would ever be able to retire.”

Bradeburg tells the news source that young people could benefit by setting aside some of their earnings and putting it into savings accounts, investments, and retirement accounts. It’s best to start early, because, by most analysts’ estimates, the average young person will need to save nearly $1.3 million in order to retire comfortably.

While this may seem like a daunting task to people struggling to get by on entry-level salaries, over time, and with a proper financial plan, young consumers will see that the money they’re saving now will eventually blossom into the necessary funds for retirement.

By making monthly payments consistently over time and building a strong credit history, consumers could even add more funds to their retirement accounts, as a good credit score can help individuals save thousands of dollars over the course of a lifetime.

Young people who invest wisely may be able to avoid the retirement issues that plague many elderly individuals today. In recent years, bankruptcy filings and credit card debt have hampered those over 65, forcing many to delay retirement and continue to work well into their golden years.

Never Pay Back Credit Card Debt – A Simple and Legal Way to Eliminate Credit Card Debt

To never pay credit card debt seems like a dream, doesn’t it? Well stop dreaming because now you can actually do this and that too without violating any legal regulations. To never pay credit card debt does not mean that you call your bank manager and tell him that your liabilities should be exempted. This is not the proper process. You have a list of legitimate settlement options and you need to pick the right one. Debt settlement is the best one if you have a fat credit card bill and you are extremely irritated because of the collection calls.

Fifty percent is sufficient for small debts

We see a lot of companies advertising that they provide a minimum reduction of fifty percent. In my opinion, fifty percent is a good deal if you have small payable sums. If you have large liabilities, you need a better percentage in the range of seventy and eighty. If you have been a spendthrift and you need to pay forty thousand dollars to the bank, fifty percent elimination is simply not enough. Even when half of the dues are chopped off, you still have to pay twenty thousand dollars along with the interest charges.

Even if you are employed, this is not a small sum to pay. We are not in a position to sacrifice our entire salaries on paying our liabilities. As banks earn more on high sums of money, you can expect to get high elimination percentages.

Is bulk consolidation preferable as a cheap option?

We commonly see that the bulk consolidation option is criticized by financial analysts on the internet. You will not see a relief professional advising his client to go for bulk consolidation. It includes a lot of risk and a lot of success is not achieved though it.

· The legitimacy factor

· As companies are handling a pool of customers, some of them suffer due to lack of attention

· The same amount of success is not attained for each client, if you don’t get what you deserve you will criticize the firm.

The first point is the most important one. To never pay credit card debt, you need to sure about the legitimacy of your company. Relief networks can help you a lot in getting legitimate firms for bulk consolidation. Through bulk consolidation, it is not that easy to never pay credit card debt. You should look for individual companies provide undivided attention.

Analysis of Financial Statements – Gross Profit – Gross Margin Trends and Operating Expense Analysis

Gross profit usually reflects the type of industry in which the company operates. Once the net sales and cost of goods sold are calculated, it is a simple matter to determine the gross profit which is the difference between the two.

Gross margin trends: The credit analyst should investigate sharp changes in gross margin levels. Deteriorating margins indicate purchasing difficulties, manufacturing inefficiencies or inventory accumulation. Acceptable gross margin levels vary among industries, so as to assess the sufficiency of margins which, includes a comparison with others in the particular market or industry. Gross margin trends usually are best compared as percentage trends and not rupee trends.

Operating expense analysis: Operating expense represents costs not directly related to the production of goods and services. Wages paid to a laborer to shipping products, for example, are considered as cost of goods sold expenses. On the income statement, operating expenses include salaries, selling expenses and general and administrative expenses. However, the borrower usually can supply a more detailed breakdown of operating expenses, listing among other things, salaries by type of personnel, auto expenses, insurance, repairs and maintenance, telephone and entertainment, profit sharing, legal, accounting, advertising and postage costs.

Operating expenses are a reflection of management decisions, because the owner has more control over operating expenses than cost of goods sold. Trends in this area give the credit analyst some insight into management’s style and ability to adjust to change.

Operating income(loss) is calculated by subtracting the total operating expenses from the gross profit. An operating loss occurs if the total operating expenses exceed the gross profit.

Non controllable and controllable expenses:
Operating expenses are subdivided into non controllable and controllable expenses. Non controllable expenses include rental payments, long term lease obligations, salaries, marketing costs and office expenses including rental payments, long term lease obligations, salaries, marketing costs and office overhead expenses. For example, once a decision is made about as to where to rent or lease space, there is little a company can do to control that cost.

Controllable costs include bonuses, profit-sharing plan costs, the travel and entertainment budget and automobile or other short term leasing costs. Segregating non controllable and controllable expenses helps the credit analyst to identify the costs that must be covered for the company to remain in business and the costs that could possibly be reduced in order to improve the profitability.

Another way of measuring as to whether costs are reasonable is to calculate the operating expenses as a percentage of sales and compare them to a similar company or to the industry average.

Interest expense:
Interest expense is a recurring expense that fluctuates in coordination with market interest rates and the amount of company debts.
Interest expense: Interest expense is a recurring expense which fluctuates in coordination with market interest rates and the amount of company debt.

Other income and expense analysis:
Income and expenses falling outside the normal business operations are listed in the other income and other expense accounts on the income statement.

The possible sources of other income are the profit from the sale of fixed assets, interest income and renting excess facilities and equipment. Other expenses include the losses on the sale of fixed assets, losses on the sale of stock of discontinued operations and interest expense.