Ask the Experts

Creating credit

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To the experts: I consider myself pretty well educated (or at least getting there, thanks to my professors), but I’ve been concerned for a while about how little I know about personal finance. High school and college (so far) have taught me all sorts of interesting things, but I’m short on practical knowledge about things like taxes and budgeting. One thing that really bothers me is how little I understand credit. I may not have to worry about saving for retirement just yet, but I am definitely doing things--like paying rent and using a credit card--that are affecting my credit score...right? How does this work? I don’t want to arrive in the post-graduation world with a ruined credit score just because I didn’t understand how it worked in college! 

From the experts: Let’s start by establishing what credit is and why you have a credit score. Credit is your ability to buy something without putting money up right away. Your Visa or Mastercard is called a “credit card” because it lets you do exactly that: you buy an item, you use the card, and the credit card company pays for the purchase with the confidence that you’ll be paying for it later on. 

Of course, credit card companies do not pay for unlimited goods for everyone. They would go out of business pretty fast if they did, because not everyone would pay them back! As it is, credit card companies are not going to get back all of the  more than $1 trillion in American credit card debt  that’s out there today. They make up for their losses by charging interest on your credit card balance or fees for the card itself, and most importantly, for our purposes they limit their risk by being careful about how much credit they extend to each customer.  Veteran auto retailers   tell us that car loan companies make the same sorts of decisions, as do mortgage lenders and other financial institutions. 

When it comes to assessing these risks, companies turn to the major credit agencies: Experian, TransUnion and Equifax. These agencies are dedicated to tracking your credit history and collecting reports from the people you have and have not paid back. They put together your credit score, which is a number measured on one of several different scales (FICO, a major one, runs from 300 to 850 — Experian, meanwhile, uses 330 to 830,  with the average American score clocking in at 687  ) — which means we’ve finally arrived at your original question. 

Credit scores are complicated, but you should know that they measure a few basic things. Your payment history is the biggest factor (35%) in your FICO score,  so make sure that you’re paying your credit card bills on time. Your outstanding debt matters, too, but it’s important to note that the credit agencies look at different types of debt in different ways — owing money on a student loan is not the same as running from six overcharged credit cards. Other factors include the length of your credit history, what types of credit you’ve used, and how often you do something (like take out a loan) that triggers a credit check. 

In general, you can count on having decent credit if you pay off your credit card bills, make loan payments on time, pay your rent, and do other obvious things. It’s also a good idea to get your credit report (it is free) from time to time--once a year will work--just to make sure that nothing fishy is going on (if someone steals your identity and takes out a bunch of loans, you want to know!). 

If for any reason you don’t have good credit,  credit experts  have said there are ways to improve it. The longer you wait, though, the tougher it gets. For the 24% of Americans who are worried about making their minimum credit card payments  , for instance, time is of the essence. Debt has a nasty habit of growing, so be careful about taking it on, and keep track of your debts and your credit score. 

“If you don't take good care of your credit, then your credit won't take good care of you.” ― Tyler Gregory. 

Clinic comforts

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To the experts: What makes a good care facility? I always thought the best kind of medical professional to see was simply whomever was the most expert in the field, but it sometimes seems that other people have different priorities. My parents are super picky about their doctors and even their vets, when I really just care if someone can get the job done well. What are those other factors, and why do they matter? 

From the experts: You are right in that the most important element to consider when choosing a professional in any field is the level of expertise. You want a someone who knows what he or she is doing. But there are certainly other considerations as well, and for good reason. While you personally might be willing to sacrifice customer service and atmosphere for a high-quality physician, those seemingly nonessential elements can chase others away. Lots of people stay away from doctors simply because they hate being at the facility, either because the wait is too long or they simply do not care for the atmosphere. 

Clinics that are effective at retaining patients know that it is important to have a live person answer telephone calls, escorting patients around the clinic, and privately addressing billing — rather than in front of a busy waiting room. There are logistical considerations as well. Wait times at clinics have risen 30%  in major cities, even though this often has to do with patients arrive late for appointments, and it can take on average 24 days before a patient can see a doctor, especially if the doctor is a specialist. 

Embarrassment  is also a big factor, and it certainly plays a role in why people might avoid the doctor. OBGYNs tell us that women are often apprehensive about the vulnerability that comes with women’s health, and that providing a highly compassionate atmosphere and level of comfort and assured privacy makes a big difference to their patients — and helps reduce the fear of coming in. Patients prefer doctors who have the kind of bedside manner that helps  reduce embarrassment and promotes comfort and trust. 

But, again, you are right. It’s not worth overlooking competency just for a level of comfort. You mention that your parents are also picky about where they take the family pets. The veterinarians at Petaluma Veterinary Clinic highly stress the importance of both a fear-free atmosphere as well as achieving an AAHA Accreditation. 

If your parents consider your pets part of the family, they will want the animals to be as comfortable as possible, as well as healthy and healed. The same also obviously applies to MDs. 

Next time you go to the doctor, try out a clinic that has good ratings and reviews that indicate a strong bedside manner and a comfortable facility. You might notice that your stress level goes down and that you feel more inclined to share important information with your doctor. A tidy waiting room itself can subliminally improve your mood and trust of the doctor. 

“Health is hearty, health is harmony, health is happiness . ” ― Amit Kalantri 

Understanding assets

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To the experts: I was having a dorm-room discussion the other day with a business-savvy friend, and I learned a lot — or, rather, I learned that there is a lot I don’t know! As sometimes happens with these things, I ended up talking to a bright guy and becoming increasingly confused. I never realized how “net worth” calculations take into account possessions like cars and boats and things like that. And I guess I never realized that all of these things are “investments” in the way that, like, stocks are — is that right? I always thought of finance as a dollars and cents thing, and never really considered that you could transfer your worth from money into physical objects (and have it grow, too!) ... can you explain how all of this works? 

From the experts: Sure! Your friend is absolutely correct that calculations of net worth typical include major assets like homes. Your net worth is just that — everything you are worth — so it should include all of the things you own. You would not starve to death while driving around a Corvette, because that Corvette would be worth money, and you would  be able to sell it. So it’s a part of your worth! In fact, so are some other things you wouldn’t expect. Experts tell people to include insurance policies, jewelry, art, furniture, and other valuables that might not immediately come to mind when we talk about finance. You’ll also have to subtract things like outstanding loans (which is why many recent college graduates technically have negative net worths). Americans tend to peak in net worth at around 65 to 69 years old, at a median of $194,226.

It’s true that many of the assets we’re talking about here can also grow in value. That’s the hope with any home purchase, real estate experts say that, in time, you may be able to sell your home for more than you bought it for. That does not always happen, but with today’s healthy real estate market, it’s a common story — with a median value of $200,000, homes in the United States have never been more valuable. In this sense, real estate assets are just as you described them — like giant stocks. Of course, that’s not the primary reason a person might own a house, but it’s a nice perk! 

With that said, not all assets are investments in the sense that they can grow in value. It would be nice if vehicles all increased in value, but the experts at Boat Crazy said that it is extremely rare to see a vehicle of any kind go up in value. Boats, cars and other vehicles have moving parts that suffer wear and tear, which is why their values drop as soon as they are purchased by their first owners (this is why you can sometimes get a great deal by shopping for used vehicles). But, certain rare vehicles can become collector’s items and increase in value. And just as with homes, it’s important to view expensive vehicles as assets to protect the value of. Regular maintenance and care will go a long way towards preserving the value of a vehicle — and, as we just learned, that will mean better protecting your net worth. 

“At the end of the day, your relationships with the people in your life will be greater assets than any material things. Take time. Be present. You'll thank yourself for it later.” ― Vironika Tugaleva 

Superior sleep

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To the experts: I​ ​have​ ​a​ ​simple​ ​question​ ​that​ ​I'm​ ​sure​ ​will​ ​have​ ​a​ ​complicated​ ​answer:​ ​how​ ​do​ ​I​ ​get​ ​better sleep? I​ ​know​ ​that​ ​sleep​ ​is​ ​important​ ​and​ ​I​ ​know​ ​that​ ​there​ ​are​ ​tons​ ​of​ ​benefits​ ​to​ ​maintaining​ ​a good​ ​sleep​ ​cycle.​ ​But​ ​I'm​ ​having​ ​trouble​ ​sleeping​ ​properly​ ​here​ ​at​ ​school.​ ​I'm​ ​sure​ ​the solution​ ​is​ ​as​ ​complicated​ ​as​ ​the​ ​causes,​ ​which​ ​are​ ​all​ ​over​ ​the​ ​place:​ ​my​ ​roommate snores​ ​(he​ ​says​ ​I​ ​do,​ ​too!),​ ​I'm​ ​in​ ​a​ ​new​ ​and​ ​unfamiliar​ ​place,​ ​my​ ​bed​ ​isn't​ ​comfortable, my​ ​room​ ​is​ ​cold,​ ​I'm​ ​working​ ​late​ ​(and​ ​partying​ ​late,​ ​too)...​ ​and​ ​so​ ​on.​ ​Can​ ​the​ ​experts give​ ​me​ ​any​ ​tips?

From the experts: Sleep certainly is important — and not enough of us get the amount we need. Experts say we should sleep between 7 and 9 hours a night (the exact amount that we need varies from person to person). The average college student gets 6 to 6.9 hours . That may not be as bad as some of us assume, but it's still less than ideal. Of course, some students sleep more than others — and studies show that those differences register on report cards. Students who sleep for an average of more than 8 hours a night have measurably higher GPAs than those who sleep for an average of less than 6, studies say. No wonder we get so many questions like yours! 

You're right, of course, that the causes of your rough sleep patterns are all over the place. And you can, in fact, address these things one by one. You may not be able to upgrade your bed or mattress in your dorm room, but you can get softer and cozier sheets and blankets. The comfort experts at Plumeria Bay point out that duvets and duvet covers are good options for college students: duvets are big, comfy, and warm, and duvet covers are conveniently removable and washable. As for snoring, there are solutions there too. Experts in snoring and sleep apnea and companies that are changing the way you sleep are battling against the remarkably common issue of snoring (45% of us snore, and 25% do so habitually!).

There are also, however, some steps you can take to tackle your sleep patterns more broadly. Rather than address each individual thing messing with your sleep, you may find that it helps to take a broad view of your sleep patterns. There are apps that track your sleep habits, and you can do the same thing yourself with a pen and paper. Recording when and how well you sleep can give you a sense of what's going wrong: maybe you sleep more poorly after hard-partying weekend nights, and ought to take it a little easier. Maybe you're allowing your bedtime to drift later and later as the week goes on, or maybe you're simply not waking up when you should —throwing your schedule off for the next day. Track and realign these macro patterns, and you may find that your sleep schedule can return to normal without many changes to the smaller things you identify as causes of your sleep deprivation.

“Put my head under my pillow, and let the quiet put things where they are supposed to be.” — Stephen Chbosky

Roaming retirees

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To the experts: My​ ​grandparents​ ​have​ ​worked​ ​all​ ​of​ ​their​ ​lives​ ​to​ ​save​ ​money,​ ​and​ ​now​ ​they’re​ ​enjoying their​ ​golden​ ​years.​ ​I​ ​think​ ​that’s​ ​great — I’m​ ​obviously​ ​in​ ​a​ ​very​ ​different​ ​phase​ ​of​ ​my​ ​life, but​ ​I​ ​can​ ​totally​ ​understand​ ​that​ ​they​ ​deserve​ ​to​ ​do​ ​whatever​ ​they​ ​want​ ​in​ ​their​ ​old​ ​age.

But​ ​I​ ​can’t​ ​help​ ​but​ ​worry​ ​about​ ​their​ ​passion​ ​for​ ​traveling.​ ​They​ ​end​ ​up​ ​all​ ​over​ ​the world.​ ​I​ ​worry​ ​they’ll​ ​fall​ ​ill​ ​while​ ​in​ ​Asia​ ​or​ ​get​ ​hurt​ ​while​ ​in​ ​Africa​ ​or​ ​Europe.​ ​I​ ​worry they’ll​ ​be​ ​pick pocketed​ ​or​ ​mugged​ ​in​ ​cities​ ​here​ ​in​ ​the​ ​U.S.​ ​or​ ​all​ ​around​ ​the​ ​world.​ ​I​ ​worry they’re​ ​not​ ​cut​ ​out​ ​for​ ​hotels​ ​and​ ​resorts — my​ ​grandmother​ ​slipped​ ​and​ ​fell​ ​in​ ​her​ ​own bathroom​ ​the​ ​other​ ​day,​ ​so​ ​I​ ​don’t​ ​see​ ​how​ ​she​ ​can​ ​be​ ​safe​ ​in​ ​strange​ ​hotel​ ​rooms​ ​with slick​ ​tile​ ​floors.​ ​But​ ​I​ ​don’t​ ​know​ ​how​ ​to​ ​or​ ​even​ ​if​ ​I​ ​should​ ​bring​ ​this​ ​up.​ ​What​ ​do​ ​the experts​ ​say?

From the experts: It’s wonderful that your grandparents have been able to save so much money for their golden years. Many Americans have trouble doing so — in fact,  studies show that the median amount saved is just $5,000 per household. For those who do properly save, though, the retirement years can be full of excitement and joy.

Of course, you’re right that older folks can’t keep traveling forever. Older people fall ill more easily and get injured more easily (21.8% of noninstitutionalized seniors are in “fair” or “poor” health). They can be victims of crimes and can struggle when lost or confused abroad. The experts behind American Standard walk-in tubs say that older people who are in danger of slip-and-falls should maintain safe spaces with fixtures and installations that help reduce risks, like stairlifts, handrails and the aforementioned walk-in tubs. With that said, though, there are hotels that offer features like these, and that can make travel less risky.

And while it’s true that some countries present more health dangers than others, many popular tourist destinations have healthy environments and quality healthcare. Travel insurance policies and Medigap plans can give your grandparents the health coverage they need while they’re out of the country. In fact, experts in travel visas say that some countries now require prospective visitors to show proof of travel health insurance before they can be approved for a visa!

It’s very possible that your grandparents are already aware of the importance of health coverage abroad, and have already taken care of this. None of this means that you can’t raise your concerns in a gentle and polite way. But it would serve you well to assume that your grandparents know what they’re doing and are making their own safety and health a priority. If you phrase your concerns well and express that your worries come from a place of love, not of condescension, you may learn some reassuring things about their planning and travel habits.

“To travel is to live.” — Hans Christian Andersen