Money Blue Book

As a long time apartment renter for many years, I’m finally on the verge on purchasing my very first home. As such, I’ve been super keen on tracking my credit reports and credit scores closely in recent months to boost my attributes as a prospective mortgage loan seeker. For a while now, I’ve been spending a tremendous amount of time learning everything I can about home mortgages and figuring out how to position myself to ultimately qualify for the very best rate on a home mortgage  loan. One of the most crucial pre-requisites I’ve discovered about interest rates for mortgages and personal loans in general – is the shear importance of having a clean credit report and a good credit score. Banks, credit unions, mortgage brokers, and even credit card issuers utilize credit reports and credit scores to ascertain the credit worthiness of loan applicants – mulling over everything from the number of timely on-time credit payments and the severity of late payments, to the age and number of active credit accounts. Such historical data is compiled and reviewed by the lender to determine the appropriate interest rate the lender must charge the loan applicant to compensate the lender for the level of credit risk that it must expend. Those applicants with banged up credit histories and low credit scores tend to get slapped with higher interest rate fees on their loan offers than those with stellar credit histories. Individuals who have decent credit reports with good credit scores to match almost invariably enjoy much greater access to the best mortgage rates and the best credit card offers than those without.

Credit scores are important because they are basically summary reflections of what’s found on your credit reports, and are one of the primary quick and easy short cut tools that lenders use to predict how likely you are to make your future credit payments on time. Thus the revealing nature of your numerical credit score has a direct impact on what type of mortgage loan rates, credit card offers, balance transfer deals, and auto insurance rates you can qualify for. Clearly, having a good credit score makes your financial life a lot easier and helps you save money in the form of lower interest charges whenever you need to apply for a loan or tap into credit based products.

The Definition Of A Good Credit Score Depends On What You Intend To Do With It

For starters, it’s important to understand that the importance of your credit score is relative and contingent on what you intend to with the score. Its utility also depends on which particular credit score you are talking about. While it’s always a great idea to monitor your routine credit score changes if you’re one of those like myself who occasionally depend on 0% balance transfer credit cards and balance transfer alternatives for emergency fund purposes, only if you’re planning on seeking credit or a loan within the next year would I recommend that you place so much immediate attention on your score. If you are not in the market at the present time for a mortgage or aren’t planning on applying for a P2P personal loan or credit card within the next 12 months, your credit score is certainly not something you ought to overly fuss over. While one’s credit score has far reaching effects beyond just loan applications and approvals (impacting prospects such as employment screenings and housing background checks), its primary purpose still revolves around its importance in helping you secure the very best interest rates and terms when you need access to immediate credit. If you’re thinking of getting a mortgage loan for example, knowing your credit score is important because it may let you know if you need to take immediate action to improve your score so that you can push yourself into a higher credit score tier and thereby increase your chances of qualifying for a lower interest rate on your loan application.

A Good Credit Score Also Depends On What Credit Scoring Formula and Range You’re Using

Other than the purpose of what you intend to use it for, another important factor of what constitutes a “good credit score” is also determined by what credit scoring methodology you are using. While all of the different credit scores out there are calculated by information contained in your credit reports, including payment history and ratio of actual credit usage to total available credit, the various scores out there differ in their numerical scoring ranges. Currently, the most popular and widely used scoring system is the FICO credit score formula (the myFICO.com score) developed by the Fair Isaac Corporation. Take a look at my article about FICO credit scores if you want a good background overview on how the scores are calculated and determined. FICO scores range from 300 to 850, with average FICO scores ranging between 680-700 depending on which of the 3 major credit bureaus’ data (Experian, Equifax, or TransUnion) you’re using. Presently in the United States, the median FICO credit score is 723.

While there is no current standardization on what exactly a good FICO credit score is, generally a good number is regarded as FICOs that are at least above average or above the median score (anything above 700). If your FICO score is at least 720 or higher, I would say that you are in pretty good shape as far as your credit rating goes in terms of your chances of securing top interest rates for your loan requests. In the past, most mortgage lenders and banks have traditionally lumped those with FICO credit scores of 720 or higher with those in the 800’s – deeming both groups to be very low default risk borrowers – equally qualified for the best interest rates.

Good Credit Score Standards Have Increased In Recent Years

However, one thing to bear in mind is that credit scoring standards have increased substantially during the last few years. Particularly as a result of the recent credit crisis and subprime mortgage debacle, lenders and creditors have grown more strict in what they demand out of borrowers for the lowest interest rate offers. The definition of what’s considered a good credit score has definitely gone up the last few years. Not too long ago in 2006 for example, a FICO credit score of around 620-650 would have been regarded as a “good credit score” and more than sufficient to qualify for the cheapest mortgage rates. Those days are long gone and lenders today now demand scores in excess of 750 or more for the top mortgage rates, along with high down payment percentages of 20% or more for home loans. While FICO credit scores of 720 or higher may still be regarded as the baseline standard of constitutes a good credit score, to truly snag the best interest rate offers, you’ll likely need premium FICO’s of 750 or higher.

The Effect Of Good FICO Credit Scores On Interest Rate Qualification

As noted above, the numerical range of what constitutes a good credit score is relative, and depends on what you want to do with it. Different types of lenders implement different credit scoring ranges in their categorization of prospective borrowers in terms of credit risk. Take a look at the two FICO score tables below (one for mortgages and the other for auto loans) to get an idea of how scoring ranges relate to the interest rates each range would generally command from lenders. As you’ll note, mortgage lenders tend to demand stricter FICO credit score standards than say – credit card issuers and even car loan lenders.

Example: 30 Year Fixed Mortgage Rates For A $300,000 Mortgage Loan

Looking at the above sample interest rates on a hypothetical $300,000 home mortgage application as provided by the myFICO.com website, it’s clear that the best interest rates on home loans are available to those with FICO scores in excess of 760 or greater. Of course, it’s also important to remember that such rates are rarely exclusively determined by FICO scores alone. Mortgage lenders also rely heavily on the applicant’s documentation of income sources and available assets when determining appropriate interest rates. Let’s look at auto loans:

Example: 36 Month Auto Loan Rates For A $25,000 Car Loan

As you’ll note from the table above, the best auto loan rates can generally be qualified by individuals with FICO credit scores in excess of 720 or greater. It’s an over simplification, but it sort of gives you a broad view of what constitutes a good credit score in terms of qualifying for the best rates.

If you don’t know where your official FICO credit score currently stands or what’s on your triple credit reports as compiled by the three major credit bureaus of Equifax, Experian, and TransUnion, I recommend finding out sooner than later. You might not need to tap into your credit rating at the present moment, but it’s always good to know where you roughly stand. Here are a few ways to get your FICO scores and credit reports for free.

• Free credit scores – via myFICO.com trial offers
• FICO discount codes – for credit score savings
• Free credit reports – obtained from the federal government’s official AnnualCreditReport.com website

It’s time for my monthly net worth report. As long time readers know, for months now, I’ve been calculating my networth changes and posting an analysis at the end of every month to chart the step by step progress I’ve been making in my lifelong financial journey. The purpose of such networth updates is not to necessarily boast about monetary successes or lament about the investment mistakes made during the preceding month – but rather, it’s to serve as a routine reminder that the daily decisions, actions, and inactions in one’s life truly have a ripple impact on one’s long term financial health. While I post my own financial net worth reports throughout the year for my own statistical benefit and to share with readers a little about about what I’ve been up to during the previous weeks, this habitual exercise is also to encourage others to do the same as well.

It’s About Time – I’m Finally Looking To Buy A Home For The Very First Time

This month has been a bit more hectic than usual. For one thing, I’m in the early stages of becoming a first time home buyer. Right now, my anticipated home purchase date is still likely months away, but I can already envision the prospect of finally moving out of my longtime apartment rental after all these years and into my very own single family home or town house for the very first time. If you’ve been following my previous networth reports, you probably already know that I’ve been mulling the advantages and drawbacks of buying a single family home or townhouse, versus a condominium. After much thought and back and forth debating, I’ve finally decided to focus exclusively on town homes and single family houses at this point. My goal is to find a nice home where I can reside for many years – at least 5-10 years or more. I think a condominium is well suited for single young professionals or busy working types who live in an urban setting and desire maintenance-free living with a kick-ass commute – but I don’t think it’s as appropriate in terms of investment upside or as a long term dwelling for individuals like myself who work from home and anticipate future family plans. I’m not presently married, but that stage in life is something I can see see and taste in the not too distant future. I think a house and particularly a single family residence, will better suit the future plans I have projected for myself.

In terms of housing location, I’ve yet to come to a definitive decision. As a long time resident of the Washington D.C. suburbs, I would very much like to stay in the same relative metropolitan area. However, due to the fact that I run my network of businesses from home, proximity to work and commuting time are not factors I have to really take into account. Thus, I am amicable to the prospect of moving out to the less crowded and less traffic jammed boonies of Maryland – areas like Ellicott City, Gaithersburg, and Germantown. For now at least, I’m passing on the resales, and focusing exclusively on new housing developments. There’s something sparkling refreshing about owning a brand new home that greatly appeals to me. Particularly in a down housing market as it is now, due to all of the amazing closing incentives and free options that new home builders are shelling out for prospective buyers, it makes a lot of sense to purchase a new home instead of buying an existing one. As I don’t have any immediate plans to move out of my current rental as of yet, I’m willing to be extraordinarily patient in my housing search – intending to move on to the next housing prospect if I can’t sufficiently price gouge the prospective home builder to my utter capitalist satisfaction. Sure, I’m being a rather greedy profiteer about this whole thing, but I’m just doing my part to ultimately and forcibly put the pricing equilibrium back into this housing market. I still think housing prices remain grossly overpriced in most areas.

Hopefully I can work the plunging home value and foreclosure supply pain felt by the major home builders to my advantage as I negotiate prices, option upgrades, and improved floor plan bump outs. As a prospective first time home buyer in the aftermath of the worst real estate market collapse in decades, I’m so thankful to have dodged the housing bubble bullet just a few years. I almost purchased a starter condominium home a few years ago at the height of the boom. I missed out big time on the housing surge, but thankfully also wasn’t locked in for the pricing collapse that ensued. My hope now is to snap up a great deal at the present time as housing prices are in the doldrums – and ride the price elevator up when the market recovers years from now. Those of you who are also prospective home buyers, don’t forget to take advantage of President Obama’s $8,000 tax credit incentive for new first time home buyers (assuming you qualify and aren’t phased out due to your income).

My Current Net Worth and Financial Status Update Compared To Last Month

Planning Ahead and Saving Up For A Home Mortgage Loan Down Payment

In anticipation of my upcoming home purchase (hopefully sometime in the next few months), I’ve been saving up cash for the 20% down payment I’ll inevitably need for a 30 year – 20% down – home mortgage loan within my approximate price range. If my dream of purchasing a brand new home at pre-construction comes to fruition, chances are I will probably only need to put down around 5% as a contractual security deposit for now. The rest of the money and even the mortgage application won’t be needed and processed until the home is actually entirely built 6 months from the date that I authorize the home construction to begin.

Usually, the vast bulk of my savings are duly invested in stocks, exchange traded indexes, and mutual funds. However, to ensure that I set aside the necessary amount of funds for a potential mortgage down payment sometime in the near future and to protect myself from unwittingly investing the funds away, I’ve transferred a sizable amount of funds from my discount broker accounts into various high yield savings accounts at a number of online banks for more liquid access should I need to call upon them at the desired time.

Boosting My FICO Credit Score To Qualify For The Best Home Loans and Mortgage Rates

In my earlier days, I used to take advantage of the availability of free credit report and free credit score trial offers to check my FICO score and credit report history (promptly canceling each individual trial offer after I had obtained the desired information for no money down). But now that I’m more financially established and can actually afford to purchase more advanced credit management applications, I’ve been using the MyFICO Score Watch tool to track my FICO credit score updates and changes on a regular basis. The MyFICO tool automatically monitors my triple credit reports and FICO credit score – emailing me instant alerts whenever my FICO score changes due to sudden updates to information on my credit reports (doubling as a useful identity theft prevention tool as well). The best part is that whenever the online credit score tool informs me of an increase or decrease to my credit score, it also informs me of the reason why my FICO score changed the way it did. For example, about a months ago, my FICO score suddenly and rather inexplicably dropped 15 points. The culprit (as was automatically reported to me by the online tool) was a sudden increase in my overall credit limit usage due to several large credit card purchases I had recently made.

Because I am now on the verge of purchasing a new home and anticipate the need to take out a home mortgage loan in the coming months, I’ve been taking appropriate actions to improve my credit report history and boost my FICO score to the highest it can reasonably be. Because one’s overall credit utilization ratio is such a major component piece of the FICO credit score pie, by making frequent extra payments towards my existing credit card balances and reducing balance transfer loads, I’ve been able to essentially reduce my credit usage ratio to nearly zero. As a result, my FICO credit score has recently enjoyed a very positive and significant spike. Due to aggressive and corrective actions I’ve been taking, my FICO score now stands at 813 – on a scale of 300-850. Generally 750-775 is sufficient to qualify for the lowest prime interest rates. My goal is to keep that number high – at least until I have completed the home mortgage loan process (whenever that may be). As home lenders rely heavily on an applicant’s credit scores and credit reports to gauge risk level and to assess interest rates, it’s in my own self interest to keep my credit rating as pristine as possible for the next few months.

As the economic paddy wagon continues to hee and haw its way through the recessionary mud, once available avenues of emergency funds are steadily drying up. Credit card consumers and account holders across the nation may have noticed that they are receiving fewer credit card junk mail in their mailboxes these days. While this reduction in the volume of paper junk mail received may be counted as a blessing, it’s also a sign that the once bountiful availability of lucrative 0% APR credit card offers are slowly coming to an untimely end. Due to the deterioration of the mortgage and credit industries, major credit card issuers such as Citi Card, Chase, Bank of America, American Express, and Discover have significantly pulled back their credit card marketing efforts and drastically reduced the quantity and quality of introductory 0% balance transfers offered.

Currently, the most popular 0% balance transfer card offers that still remain in effect today include the following short list of active promotions. As always, before applying for a balance transfer card, it’s important to read the fine print carefully and be fully cognizant of the advertised 0% rate duration, the availability of any balance transfer fees, the regular interest rate after the end of the 0% period, and the availability of any underlying cash back or credit card reward offers.

• Discover More Card: 0% balance transfer for 15 months and 6 months on purchases, 4% transfer fee. Get cash back on up to 5% on select purchases and earn 1% back on everything else.
• Citi Platinum Select Master Card: 0% intro apr for 18 months on balance transfer and 12 months on purchases, 5% transfer fee.
• Miles by Discover Card: 0% balance transfer for 6 months, 3% transfer fee. Earn bonus airline mileage rewards with this travel credit card.
• Chase Slate Card With Blueprint : 0% balance transfers and 0% purchases for 12 months, with a one time transfer fee of 3%.

Disappearing Balance Transfer Credit Card Offers Due To Changing Times

In response to the market trend of vanishing balance transfer deals and low interest credit card offers, it certainly doesn’t help that we currently have an anti big business leader at the helm in President Barack Obama. With the passage and issuance of new credit card rules and more aggressive federal regulations designed to crack down on the more unethical credit card issuance practices, the new rules are now making the business practice of providing 0% APR durations extremely unprofitable for the major credit card issuers – and threatening to push the remaining 0% balance transfer offers to the brink of extinction.

During the glorious heydays of credit card arbitrage and App-O-Rama’s, it was easy for most Americans to count on the availability of 0% balance transfers for cheap personal loans and low interest debt consolidations. Only a mere few years ago, those saddled with a mountain of high interest credit card debt could simply leverage their good FICO credit scores and apply for new credit cards that offered 0% balance transfer promotions as a short term way to consolidate their oppressive debt into a zero percent account for 12 months or more while they slowly chipped away at the payment principle. If after the conclusion of the one year duration the consumer needed to extend the 0% balance transfer consolidation period, the cardholder could simply seek out another interest free credit card and transfer the unpaid balance over to the new zero percent account.

Now, those days are all but gone as credit card issuers have had to drastically cut back on their offerings to comport with economic realities and standards brought on by new, tougher governmental rules on lending practices. Back during my earlier student days, I was one of those individuals who actively used balance transfer credit cards to keep my personal budgets afloat. Now, if I were to ever encounter the same cash strapped conditions again, I would have to resort to using balance transfer consolidation terms that aren’t as favorable as they once were, or seek out alternatives to credit cards altogether. Major balance transfer issuers that once dangled lucrative free balance transfer promotions of 12-18 months, with no balance transfer fees or fees capped at $75 or $99, with some that even offered attractively cheap lifetime balance transfer terms – are now witnessing the complete pull back of these former offers. Today, while a handful of low interest 12 month 0% balance transfer promotions remain, most card issuers now require some upfront balance transfer fees, have shorted 0% credit card transfer rate durations to an average of 6 months, and have pretty much withdrawn most of the sign up incentives that used to exist just a few years ago.

Those like myself who have grown dependent on 0% balance transfers and low interest credit cards as sources of emergency funds need to start bracing ourselves and preparing for the slowdown effects of credit card consolidation loans (for those who have not already done so). With national unemployment rates almost certainly to exceed 10% and banks and lenders still fumbling with the credit crisis, it’s important to figure out contingency options in case of unexpected personal finance emergencies. Those who are currently relying on balance transfers to help pay down high interest credit card debt also need to know what other balance transfer alternatives are out there. You never know when you or your family may encounter a sudden reduction in income stemming from an out of the blue layoff or unexpected illness on the part of the head bread winner. We are currently in difficult times – it’s best to stay prepared.

As always, maintaining a good credit score is essential to keeping that dwindling balance transfer pipeline open. Securing a high FICO credit score is also highly relevant to the accessibility of the litany of balance transfer alternatives out there as well. If you make it a habit of making late payments or neglecting your existing debt account obligations, your credit report history will suffer – closing the door on the secondary loan consolidation options that may have been available to you.

List Of Credit Card Loan Consolidation and Balance Transfer Alternatives

If your attempt to take advantage of available 0% balance transfer offers or negotiate lower interest rate terms with your current credit card company have failed, you may wish to consider these plausible loan consolidation alternatives.

1) Introductory 0% Credit Card Balance Transfers: Obviously, before finding alternative loan solutions, the first step is to make sure and confirm that you’ve truly exhausted the list of available balance transfer offers to you. If used diligently with timely and proper adherence to minimum payment rules, zero percent credit cards are the easiest available method to consolidate high interest debt. Some of the issuers even provide balance transfer consolidation checks that can be used to directly pay off non credit card debt as well.

2) Lifetime Balance Transfer Credit Cards: In the old glory days of balance transfers, there were such things as lifetime 0% balance transfers. Obviously those days have past. Nowadays, the zero percent lifetime balance transfers have been replaced with low interest life-of-the-loan type deals. For card customers trying to pay off high interest credit card debt, these new lifetime low interest balance transfers may be substantially cheaper than the other personal loan alternatives out there. Some issuers like Discover Card have been recently offering lifetime balance transfer rates as low as 0.99% APR to 2.99% APR. Of course, while lifetime balance transfer credit card rates may be cheaper than other personal loan alternatives, they do require the card account holder to exercise super diligent repayment habits to continuously benefit from the perpetually low rates. Failure to do so will result in a figurative whack over the head by the issuer in the form of substantially higher rates and penalty fees.

3) Lending Club – And Other Popular Peer To Peer Online Personal Loans: For those with less than stellar FICO credit scores or credit reporting histories, online peer to peer lending services have emerged as viable balance transfer and personal loan alternatives to traditional banks. The leaders in this new and emerging industry are presently Lending Club.com (see my Lending Club review for more of my personal insight into the company’s operations) and Prosper.com. Peer to peer services like Lending Club (or P2P lending as it’s commonly known), offer a way for ordinary Americans to lend to their fellow man and woman by way of an online matching system – complete with personal profiles and blog messages written by prospective borrowers. By making use of credit scores, credit reports, debt usage ratios, and income & asset verification details, services like Lending Club allow prospective ordinary lenders like you and I to determine the risk level for the loans they extend and the appropriate interest rate compensation for that risk. Presently, Lending Club loan rates for prospective borrowers start as low as 7.88% for those with at least a qualifying FICO score of 660.

4) Secured Credit Card Debt Consolidation Via Home Equity Lines of Credit: In many state jurisdictions, those who own their own homes can open up a home equity line of credit (a HELOC loan) via a bank, and use the built up equity to pay off and consolidate their existing credit card debt. In almost all cases, a HELOC loan offers a much lower interest rate than most personal loans via banks or ordinary non-promotional credit card offers. However, this option is a very controversial alternative to credit card balance transfers as it basically entails the legal shifting of unsecured personal credit card debt – and turning it into a debt that is now secured by one’s home. This distinction is important, because ordinarily in the event of a failure to pay back the credit card loan (a credit card default), the card issuer can not immediately go after your home to satisfy the unpaid debt. But once the debt consolidation is made via a HELOC loan, this turns the unsecured credit card debt into one that is secured by a condominium or single family home, subjecting the home to possible seizure for non payment. Utilizing a home equity line of credit loan for short term credit card relief is rarely a good idea, but it’s an option and balance transfer alternative nonetheless.

5) Personal Loans Via Banks and Local Credit Unions: Those with good to excellent FICO credit scores may be able to apply and get approved for a personal loan from their local bank or community credit union. However, bear in mind that while these type of loans for credit card consolidation purposes are generally widely available to most borrowers, they frequently demand interest rates that are higher than available home equity line of credit solutions. Furthermore, oftentimes before banks or credit unions will extended such personal loans for existing credit card debt consolidation reasons, they frequently require the borrower to close out his or her existing credit card accounts to ensure that further debt is not accrued.

6) Debt Consolidation Counseling: If your credit score or credit report history is simply too damaged to utilize the available low interest credit card debt consolidation alternatives above, you may be able to seek out affordable credit counseling services from accredited non profit organizations to help you consolidate your existing debt in a manageable way via fee waivers and lifestyle changes. Many colleges, universities, military bases, veteran organizations, community credit unions, and even local government consumer protection authorities operate such non profit credit counseling programs. Of course, keep in mind – just because an organization touts itself as “non-profit”, there’s no clear cut guarantee that the services are free, affordable, or even legitimate.  Beware of hidden fees or suspiciously high up front charges by the so-called non profit credit and debt counseling services. Those looking for a list of credit counseling agencies provided by the U.S. Department of Justice for various state jurisdictions may want to check out this approved agency list. It’s a good starting point for those who need debt repayment help.

7) Payday Loans (Or Car Title Loans): This balance transfer alternative is the most controversial of all. I only offer it up here because it is a potential option for those seeking an alternative to credit cards, albeit an extremely costly one. Payday loans or cash advance loans provide people with a quick infusion of cash when all other immediate options have failed. Car title loans are simply payday loans that are secured by your car, subjecting your vehicle to possible seizure if you fail to pay back the loan. For those with poor or damaged credit scores, payday loans are frequently the only loan options available. With nothing more than a verified pay stub and a job, borrowers can secure a quick personal loan to pay off emergency bills such as home utility charges, car repair fees, or even credit card bills. Unfortunately, the easy accessibility of payday loans and the lack of any substantial credit history documentation needed to get approved also explains why they are so incredibly distasteful. Payday cash advance loans frequently charge the highest and most outrageous fees of any type of loan out there. I highly advise readers to stay away from high interest payday loans if possible. If you absolutely must play with fire, only borrow as much as you can afford and pay the loan back as soon as possible without delay.

A few days ago, the legendary and super talented pop icon, Michael Jackson, suddenly and inexplicably passed away at the age of 50 due to cardiac arrest. After a long and glorious (but controversial) entertainment career that spanned 40 years and included the world’s best selling music album of all time – “Thriller”, the self anointed King of Pop was finally laid to rest in peace. Perhaps it was his enormous talent or his seemingly gentle nature, but I have always managed to overlook his eccentricities, the oddness of his perpetually changing skin color, and the lurid details of the tabloid controversies that followed him – particularly the allegations of child molestations and quirky behaviors and activities at his infamous Neverland Ranch. For me, I grew up as an adoring fan – enjoying amazing hits like “Black and White”, “Billie Jean”, “PYT”, “Thriller”, and “Jam”. I will always remember Michael Jackson for his music, his stunning liquid pop locking dance moves, the ground breaking music videos, the moon walking, and his one of a kind “hee hee” falsetto squeals. Inevitably, artists in the future will continue to pay homage to Jackson by attempting to emulate his moves and his songs, but there will never be another one quite like him ever again.

Unfortunately, the story of Michael Jackson is also one of great tragedy. Aside from the eccentricities of his life and the untimeliness of his death, the man was a text book case on how absolutely not to live one’s life. Despite building a massive music empire with an iconic brand unto himself, and despite raking in more than hundreds of millions of dollars as one of the most successful pop music artists of all time, Michael Jackson was more than $500 million in debt at the time of his death, according to The Wall Street Journal. Despite his celebrity fame as a money making machine, a great deal of multi-million dollar financial and legal troubles followed him his entire life. Well known for his insatiable and outrageously lavish shopping sprees for toys and priceless antiques, he leaves behind a mega mountain of debt and an unfinished comeback tour he had hoped would cure his financial troubles once and for all.

Unfortunately, even if Michael Jackson had lived on for many more years and had successfully raked in millions more from his concerts and performances, I still believe he still would have eventually left this Earth utterly in debt and plagued with financial issues. The man was an absolute music god, but a complete failure in the personal finance department. Living to great excess and spending grossly beyond one’s means with no accountability, and perhaps blindly assuming the financial windfalls will never end – are recipes for financial disaster. It’s not just the celebrities either. Even those who suddenly win the lottery and find themselves instant millionaires have the potential to lose it all if they aren’t careful and diligent with their investment strategies, savings, and even income tax responsibilities. Hopefully we can all learn something valuable about the need for proper personal financial management from the tragic life and unfortunate passing of Michael Jackson.

My Current Net Worth and Financial Status Update Compared To Last Month

Tracking My Income and Expenses With Free Budgeting Tools

Working that full time job, and finding ways to generate a steady income stream and make money are important endeavors, but so is finding an efficient and cost effective way to track those expenditures as well. There’s no way any reasonable person can expect to save money for the long haul if he or she is spending more than what he or she makes. You can’t expect to save or plug up those cash leaks if you don’t know where your daily funds are going. While I utilize a wide variety of account aggregator programs like Yodlee-powered Fidelity Full View and free Quicken Online to chart my bank account and credit card balances, I utilize various free budgeting software tools to help me track my spending habits.

Seeking Growth Opportunities In The Stock Market Via ETF’s

Investing in exchange traded funds (ETF’s) is the easiest way to put your money to work in the stock market without the expenses of mutual funds or the volatility risks of individual stock picking. Frankly, I’ve given up trying to buy and invest in individual companies, acknowledging that there is just too much unpredictability and uncertainty with any one particular company’s operations and disclosures. I’ve been burned too often and am finally starting to learn my lesson after all of these years. For now on and indefinitely into the future, I intend to stick solely with broader index funds that track major market indexes and industry sectors.

This month, I’ve finally transferred the vast bulk of my cash and savings account balances into my online brokers in anticipation of imminent index fund trading opportunities. However, I’ve yet to invest the funds and they continue to sit as brokerage cash reserves, waiting for me to pull the buying trigger. Call it market timing if you wish, but I’m just waiting for a good opportunity, or at least until the market settles down a bit more. I think the massive and irrationally exuberant run up in March is due for a significant series of pull backs between now and September.

Checking My Free Credit Reports and Free FICO Credit Score

For many years now I’ve lived in apartment rentals, hopping from one place to another as my various jobs necessitated. However, while I am currently still a renter, I’m gradually contemplating the prospect of becoming a first time home buyer within the next 6-12 months. It’s actually somewhat ironic since only 1-2 years ago, I was griping vehemently that home prices had soared to such ridiculous levels that the American dream of owning a home was starting to fly beyond the reach of most average citizens. It’s interesting how much the housing market has deteriorated (finally approaching rational equilibrium) and how significantly my personal financial balance sheet has improved since then.

With a thriving buyer’s market and home prices at historical lows that continue to drop, I’m in absolutely no rush to buy. While I’m still in the very early stages of interviewing real estate agents and scouting locations, I’m eager to get the ball rolling in anticipation. First thing’s first – I’ll need to know where I stand credit report and credit score-wise. Fortunately, there are a variety of ways to get my three free credit reports from Equifax, Experian, and TransUnion, and obtain my free FICO credit score from myFICO.com via a variety of cancellable trial offers.

Currently, I also utilize myFICO ScoreWatch to track my credit score changes and avoid identity theft. Recently my FICO score dropped down to 791 (scale of 300-850), due to an increased credit utilization on one of my reward credit cards. Hopefully after paying it back in full my FICO will return back into the 800’s. As a prospective home mortgage rate seeker now, I want to boost my credit score as much as possible for the next few months.

Buying A New Home – Detached Single Family Home Or Town House?

As a newbie first time home buyer, I’m still scratching my head and going back and forth between the pros and cons of buying a detached single family home versus buying a town house. I’ve already ruled out condominiums as I feel they make comparably worse investments for the long run with all things being equal – so right now my focus is on free standing houses and townhomes. As a single guy who probably won’t be getting married anytime soon for the next few years, I don’t really need all of the extra space that a detached home could conceivably provide, however I do like the extra privacy and parking conveniences that one affords. This is definitely one decision I’ll be pondering for quite some time as I spend my next few months talking to real estate agents and pouring over listings on real estate sites like Trulia.com and RedFin.com. Advice anyone?