Thanks for the great post. Jeremy like most people said pay debt with the highest cost(rate) first and so on.

 

I thought you could only put a certain amount per year in an IRA type account. Or is that only a certain amount thats tax deductable? Last year I opened an IRA with 3 grand, I think this year I can do 4 grand or something like that.

 

You are correct. There is a limit to an IRA and a 401K. If you have more money to save, there are other investiment vehicles.

 

I agree with the others about paying off the credit cards first. However, if you do that, you must not put anything back on the credit card. Otherwise, it defeats the purpose of paying it off and you would be better off putting the money into an IRA.

Once you pay off the credit card, take 1/2 of your previous monthly credit card payment and put in into your 401 or IRA. Keep the other half as a reward for yourself.

DON'T PUT ANYTHING ELSE ON THE CREDIT CARD!!!

 

C/C are good as long as u pay them off each month. Paying interest is burning money so dont do it on meaningless purchases.

 

14,000 for 2005
15,000 for 2006

This is for a Traditional each plan is different be sure you choose the right plan.

If you over contribut to a plan it is included in your income and is subject to a 10% penalty IRC.402(g)(1), (g)(2)(A)(i) and Code Sec. 4979. The employee may withdraw the excess contriution from the plan before April 15 of the following tax year along with any attributable income. If the excess contriution remains in the plan after April 15th distribution date, it will be taxed a second time when distributed Reg. Sec. 1.402(g)-1(e)(8)(iii). The penalty will not apply if the excess is recharacterixed or distributed with in 2 1/2 months following the plan year in which the excess contribution arose.

 

Shermie came through with a useful post!!

 

If you over contribut to a plan it is included in your income and is subject to a 10% penalty IRC.402(g)(1), (g)(2)(A)(i) and Code Sec. 4979. The employee may withdraw the excess contriution from the plan before April 15 of the following tax year along with any attributable income. If the excess contriution remains in the plan after April 15th distribution date, it will be taxed a second time when distributed Reg. Sec. 1.402(g)-1(e)(8)(iii). The penalty will not apply if the excess is recharacterixed or distributed with in 2 1/2 months following the plan year in which the excess contribution arose.

 

Please do not use the above code for your personal use unless you are advised by a CPA. I bear no responsability if this information is used incorrectly.

 

LOL. He even had to cover his a$$ after his first useful post. After 973 posts, Dan posted something good, thought about it then said, **** man, I better but a disclaimer on that.

 

yeah well, i have a BK in Jan 2002, so my goal since then is to try to get my credit as good as possible. the BK is a long long story an involves a lawsuit from a creditor with a car, dont ask.... so anyways i have been trying to get as much available unsecured credit as i can since then. my score is now up right over 700 which is not great but good according to what i have been through

ok another question, i have payed all my bills on time since jan 2002, i have had four cars, lots of credit cards, blah blah blah,

any tips on building your credit back faster, you know besides just paying everything on time

i am thinking about taking say $5000 and doing a secured loan with a very small interest rate where they lock the amount in a cd which yeilds more back than the interest rate anyways. plus you get the 5000 back right when you do the loan, so it ends up being kinda like a savings plan that builds your credit


thanks everyone for some good tips, i will have it all figured out one day and hopefully some younger kids will learn something too from this post...

 

One thing that will hurt your credit score is to close credit card accounts when they are paid off. It increases your debt to available credit ratio. Leave the accounts open and they will eventually drop off after about 2 years.

You can go to www.myfico.com and play around with different things to see how they affect your credit.

Also, check out http://clarkhoward.com for a ton of consumer advice and listen to his show on 580 AM WDBO M-F 1-3.

 

Its good if you can find a CD that will bear an interest rate higher than the bank will let you borrow money for. Doing this is hard if not impossible to come by. If your looking to get your credit score up the just pay your credit cards bills timely for about six months straight and that will boost your credit score about 30 points or so depending on your beacon score. If your beacon score is high enough already this wont help to much. If your in that upper Beacon ratings the only way to raise it is to borrow money and repay on time each time raise the amount borrowed. However your credit score could be negatively affected if you have too much debt to income ratio. Your debt payments for longterm items i.e. cars, house, loans for more than one year the sum of the monthly payments shouldnt exceed 28% of your income, if it does banks look at this as being a risk and your credit score may go down. Not sure if all this is exactly when i was getting a mortgage, she is a manager for mortgages at a well known bank. Hope it helped.