The U.S. Department of Agriculture estimates that the average middle-income family will spend over $190,000 raising a child until the age 17 -- and that doesn't include college costs. But just as you find the extra time and energy to take care of the little bundle of consuming joy, you will find ways to work it out financially. Brace yourself. You will spend much more than expected to buy things you never even thought of. Start planning financially for having a baby as soon as you can - before conception, if possible.

Set aside as much as you can every month in a savings account. The actual event of birth can be expensive as well as all the first-time purchases you'll make. Don't forget to save some money for your maternity or paternity leave. This is usually unpaid time off work. How much do you need? As much as you can save. Any funds left over make a great starter for a college fund. If you've amassed a considerable amount well before the due date, you can invest in a short-term CD or other insured investment.

Have a brainstorming session with an experienced parent to figure out all the things you need to purchase before the delivery. It will be extremely helpful to have most of what you need before the baby is born. Your spare shopping time after birth is reduced drastically. If you need to shop after the baby is born, try the Internet.

Here's a starter list for items you’ll need:

 

• Car Seat
• Crib
• Bassinet
• Stroller
• Baby Monitor
• Safety Gate

The recession has caused many Americans to cut their spending, pay down their debts and build their savings. And with the economy's tepid recovery, it's still important to keep your spending in check. Even if you think you've cut just about all the fat from your budget, you can probably slash even more. Keep reading to find out how to cut your expenses in these areas.

Health Care

• Shop the supermarket sale cycle. Food staples like cereal and chicken hit their lowest prices once every 12 weeks. Make a note when you see sales and you'll know when to stock up next.
• Make coupon searches simple. There are so many online coupon sites that searching all of them could be a full-time job. To save time, stick to just a couple of them. Coupons.com and SmartSource.com usually have up to 100 deals at a time, compared with no more than 30 coupons in newspaper circulars. And both sites have new mobile versions that let you scroll through offers from a smart phone without downloading special software or apps.
• Bid on your groceries. Food auctions aren't common yet, but they're a growing trend. Auctioneers say you can save 40 percent or more off typical supermarket prices. For example, in a recent online auction a box of three DiGiorno Cheese Stuffed Crust Three Meat Pizzas was $14, about half the price at a local market; Hickory Farms Summer Sausage and Kellogg's Rice Crispy Treats were 78 percent less than Amazon.com's prices. Look for local events at www.auctionzip.com and www.craigslist.org. Check the prices of the items you want first so you won't overbid, and bring a cooler for pickup.

• Comparison shop every year. If you have a choice of health plans at work or through Medicare, review your options during the open-enrollment period (usually in the fall). Find out what each plan covers so you know what you'll have to pay. Consider deductibles, co-payments, and other cost-sharing in addition to the monthly premium. If you're buying your own policy, go to HealthCare.gov, which lets you screen every plan sold in your state to find one that will meet your needs. Then consult an independent broker to sort through your options.
• Seek cost-effective treatments. Check out prescription drugs on BestBuyDrugs.org, a Consumer Reports Web site that compares medications and lists the most cost-effective and safest ones for your condition.
• Buy drugs at big-box stores. Over-the-counter drugs can be up to 50 percent less expensive at Target and Walmart than at local supermarkets across the U.S. Those two stores also charge just $4 for a 30-day supply of many generic prescription drugs. For an even better bargain, get a 90-day supply for $10. Similar programs are offered by CVS, Kmart, Kroger, Rite Aid, Sam's Club and Walgreens, although some, like CVS, charge an annual membership fee. Some local pharmacies will match the low prices at chain stores, but you have to ask.

Almost 90 percent of cars aren't bought by consumers at all; they're purchased by financial institutions. Only about 10 percent of buyers pay cash outright. The rest either borrow or lease a car from the real owner: a bank, an automaker's finance arm or a credit union. Shopping for a loan isn't as fun as shopping for the car itself, but it's not as difficult as securing a mortgage, either. Shop around for a loan before you go to a dealership. Before you can shop for a loan, though, you'll need to determine a few things.

Determine What Car You Can Afford

It might seem difficult to make this determination before test-driving a bunch of cars, but it's best to steer clear of the sales floor until you've done your research. Affordability isn't just about the car's price; it's about the cost of financing, insuring, fueling and maintaining it. If you're like most shoppers, you have an idea of the type of car you want and how much car you're likely to get for the amount you have to spend. As well as one-time charges like taxes, title and license fees, the destination charge and continuing costs such as insurance and gas.

Shop for Loans Before Going to the Dealership

Zero percent financing and other seemingly too-good-to-be-true offers come from so-called "captive" finance companies like GM's GMAC and Toyota Financial Services. Often they're not too good to be true (though the best terms are limited to specific models, loan periods and buyers with the best credit ratings). Dealers don't always have the best deals, though, and when they're not operating through a captive finance company they get a commission for setting up a loan with a financial institution you could go to directly. After you've negotiated the car's purchase price, the only way to know if the deal you're presented with is a good one is for you to have shopped around beforehand. You may not be able to shop rates from the captive lenders before actually buying a car, but you can find out what kind of rates are available at financial institutions.

Know Your Credit Rating

To know what kind of rate to expect, and to head off any obstacles you may encounter, you'll need to know your credit rating. Any lender will look it up as soon as you sit down with them to negotiate a loan. The rating takes into account how long you've had credit, how diligently you pay bills, how much of your available credit you've used, and your mix of revolving credit - such as credit cards - and more desirable debt, like a mortgage and previous car loans.

The rating is in the form of a score between 300 and 850, with higher numbers reflecting a better credit history. Whereas lenders for years had been liberal in their lending practices, the pendulum has swung the other direction recently, so the cutoff points for different credit tiers - and the corresponding loan rates - are higher than they had been. Still, the cutoff points can vary from one lender to the next, so comparison shopping is essential. Finding your credit score is simple, and free once a year, from AnnualCreditReport.com.

Prepare to Open Your Books

Though the credit rating takes into account much of your credit history, a loan application will ask for more. The basics include your full name, address, date of birth and Social Security number. Expect to be asked for information on your current employer or employers, your income and how long you've held your job. Assume that any lender will confirm all information with your employer. The application might also ask for your monthly gross income, meaning your income before any taxes or deductions are taken out.

Even if you fill out an online "short form," it's sure to lead to a more detailed one. The higher-risk you appear to be to lenders, the more information they're likely to request. The most detailed application will ask about your assets and expenses, including bank account numbers and if you've filed for bankruptcy within the past seven years. Whether you own or rent your home also plays a part in your eligibility. You may be asked your monthly rent or mortgage payment, and possibly for an estimate of your monthly expenses.

Thanks to the Equal Credit Opportunity Act, lenders are prohibited from discriminating based on marriage status, but you might be asked anyway, as a way of uncovering obligations, such as alimony.

Legalese

An application should request authorization to obtain a credit report and to confirm any information you submit. Make sure you know if there's an application fee ahead of time, especially if you're experimenting on the Web.

Preparing ahead of time doesn't just make the process faster and simpler, it ensures that you'll get the best possible loan and helps prevent complications. Surprises that can be remedied, such as an erroneous credit rating, are best found by you when you have time to correct them, not after you've committed to a more expensive loan because you didn't know better.

Article courtesy of Yahoo Finance
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Anyone who has recently applied for a mortgage knows that lenders are already looking much more closely at your financial affairs. But soon, they'll be able to easily delve into the deepest recesses of your financial life, accessing information that never before appeared on your credit report.

Recently, CoreLogic introduced a new type of credit file, which is based on the giant repository of consumer data it maintains on just about everything that most of the traditional credit bureaus do not: missed rental payments that have gone into collection, any evictions or child support judgments, as well as any applications for payday loans, along with your repayment history.

The new report also includes any property tax liens and whether you've fallen behind on your homeowner's association dues. It may reflect that you now owe more than your house is worth or if you own any other real estate properties outright. It also is supposed to catch mortgages made by smaller lenders that the big credit bureaus may have missed.

The idea, CoreLogic says, is to provide lenders with more details about prospective borrowers, supplementing what they already know through the more traditional credit reports furnished by the big three credit bureaus, Equifax, Experian and TransUnion. Moreover, CoreLogic has formed a partnership with FICO - the provider of one of the most popular credit scores used by lenders - which will formulate a new consumer score based on the new data.

For many consumers, the files are likely to reveal black marks that previously went undetected, which may damage an otherwise clean record. But the companies contend that it works both ways: The added information could help consumers with thin credit files by illustrating positive behaviors elsewhere, say making timely rent payments.

So why now? Clearly, the two companies saw a business opportunity. Lenders, who just a few years back looked the other way, remain particularly skittish about mortgage lending and are looking for more information about prospective borrowers’ ability to pay their debts.

An estimated 100 million American consumers will have a CoreScore credit report, while more than 200 million people have traditional reports from the big three bureaus. Though the new information can influence a lender’s decision, the new score isn’t replacing the classic scores used in the automated mortgage underwriting systems kept by Fannie Mae, Freddie Mac or the Federal Housing Administration, which buy or back the vast majority of mortgages (though CoreLogic said it has let the agencies know what it is doing). But the added information may sway a lender to charge you more (or less) in interest on a mortgage. Lenders of all stripes, including auto lenders, have access to the reports, and they will be marketed to employers and insurers, too.

The reason all of this is such a big deal, according to John Ulzheimer, president of consumer education at SmartCredit.com, is that CoreLogic already has major inroads with many lenders. When lenders want to pull your credit file, they go to a company like CoreLogic, which collects all three reports from the traditional bureaus, cleans them up a bit and merges them into a more user-friendly report.

The company gleans its information from a variety of databases and sources, including its own customers, and says that it updates its reports daily. It says, for instance, that a new mortgage obligation doesn’t show up on a traditional report until about 60 days after closing, whereas it sees the new mortgage within 23 days. A lot of its information is derived from the nation’s courthouses and public records. And through its SafeRent business, it has “substantial coverage” of the multifamily rental management companies. It receives information on payday loans through its Teletrack unit, which has agreed to pay $1.8 million to settle Federal Trade Commission charges that it sold its credit reports to marketers, which is against the law (CoreLogic declined to comment). Next year, it will begin to evaluate whether to include even more data, including your payment history on utility and cellphone bills.

All of this worries consumer advocates, who question the type of information being fed into the new files. Some consumers tend to fall behind on their bills during the more expensive winter months, but typically catch up later in the year. And sometimes, people don’t pay their rent for very good (and legal) reasons; perhaps their landlord failed to correct a vermin or hot water problem. Advocates wonder if these reasons will be fully and fairly reflected on the report?

Since CoreLogic is now subject to the Fair Credit Reporting Act, which governs consumer reporting agencies, you will be able to dispute any information that you believe is incorrect. But if the data is accurate, albeit unflattering, it will trail you for a long time. Information culled from public records stays on your report for about seven years (or 10 years for bankruptcies). If you do find any inaccuracies - and the big three bureaus have been known to make their fair share of mistakes, including confusing the records of people with similar names - you can file a dispute.

Check the new credit report for any errors. Within a year, the new report will be available at AnnualCreditReport.com, where consumers are entitled to one free copy annually. That same rule applies to each of the big bureaus’ reports on the site currently. Until the new report can be requested online, you can call (877) 532-8778 to get a copy.

CoreLogic and FICO said that you will probably be able to buy the new score at some point. If you are turned down for a loan or don’t get the best rate, lenders are generally required to send you a notice that includes the score, as well as information about how your score ranks nationally and the major factors that weighed it down. But if lenders use more than one score to judge you, they can choose which one they want to include in the notice. So while the credit bureaus may not yet know every last detail about your financial life, you should assume that they are watching.

Article courtesy of The New York Times

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