SABEW panel advises grabbing hold of personal finance stories

Personal finance call summary, Thursday, Oct. 16

Pam Yip, personal finance columnist, Dallas Morning News;
Gail MarksJarvis, personal finance and markets columnist, Chicago Tribune
John Wasik, personal finance columnist, Bloomberg News

Moderated by Marty Steffens, SABEW Chair and business journalism professor, University of Missouri
      
With the rollicking market, investors are confused and don’t want to open their 401K statements, but now’s the time to grab hold of personal finance matters. Calls and e-mails to all the columnists indicate that many Americans are scared of the market and banks, and are worried about the safety of their money.

Also, readers are contrained by crashing home values – in fact 40 percent of homeowners now own more on their homes than they are worth, says Wasik.

Car loans and mortgages have tightened up,  and MarksJarvis said that in many areas, loans are only going to the best credit scores, perhaps as high as 740. The average FICO scores is 680.
     
Yip says that reporters can find out how their regions fares in credit scores. Experion, the credit rating agency, can give reporters a regional outlook by contacting their media relations departments. Texans, say Yip, have lower scores than most Americans because of chronic late payments and frequent credit inquiries.. “They say, I got it in – it was only a day late, but days or even hours matter for credit scores,” Yip says. 

MarksJarvis says to remind readers that credit history is the largest part of the credit sores, and to check your scores by requesting a free report from AnnualCreditReport.com, the official site.

Repairing the score should be a prime focus for readers, says Wasik, and you can write letters to credit card companies to fix any errors, or to close accounts you thought were closed.

Now’s the time for families to live within their means, the columnists agreed. College students should especially not succumb to credit offers. “Learn to use your debit card, “ says MarksJarvis. That card can also be used for online purchases.

Best advice for readers:  Stay the course. History tells us that even if you invested at the bottom of the market from the 1929 crash, you would have recouped your money in 10 years. Also, look at your portfolio – you can’t just hold onto one or two stocks for the long haul…you need to re-evaluate.

Worst advice: Pulling in your money out at the bottom of the market. Any investment in hedge funds, as they are unregulated and opaque. And don’t buy gold, says the panelists, it’s too volatile.

Worst political idea:  Allowing Americans to pay off credit card or other debt by taking money from their 401Ks without penalty.

Posted Oct. 16, 2008