Congratulations! You've finished school and are looking for your first full-time job (or just found one). Now that you're out in the world, you may have a lot of financial questions. Get answers here.

• Why are 401(k) plans called “401(k)s”?
• How do I establish credit without risking credit card dept?
• How much life insurance do I need?
• I don’t have a family that depends on me. Why do I need life insurance?
• Why do I need to worry about retirement now?
• I got a new job. What should I do with my money?
  
  

Participants in most employer-sponsored 401(k) plans and 403(b) plans for employees of public schools and certain tax-exempt organizations can contribute up to $15,500, unchanged from 2007.

Internal Revenue Service

Establishing a good credit history is more important than ever. Qualifying for mortgages, auto loans, apartments, and even jobs have become dependent to some degree on your credit history. So graduating from college without any or just a little credit is bound to be rough at first. Building credit after graduation may also be tougher because credit card companies may no longer assume your parents will pick up the bill. Fortunately, there are steps that can be taken to build credit after college. Here are some things to consider:

• Consolidate your student loans, so you have one monthly payment, and make all your payments on time! Timely loan payments are the best way to build a good credit history.
• Apply for a gas or department store charge card. These credit lines may be easier to qualify for than major credit cards, and most report to the national credit bureaus. However, before applying for a department store, gas, or even a major credit card, make sure the company reports to the major credit bureaus. There’s no point maintaining a charge card if it won’t be reflected in your credit report.
• Because you often need credit to build credit, obtaining major credit cards can be tough. One option is to open a secured credit card account. A secured credit card requires you to deposit and maintain money in a savings account for security. The required deposit and APR vary by credit card company; interest rates can be anywhere from 10% to 25%.
• High rates are a fact of life when you have little or no credit. With no credit history, lenders and creditors will treat you as high risk, which means high interest rates until you establish good credit.
• Once you qualify for your own credit card, use it, but make sure you always pay off your credit card bill on time. A late payment of even 30 days can show on your credit report for up to 7 years.
• Try not to exceed 30% of your credit card’s credit limit. Large credit balances can cause your credit score to drop. Credit scores are statistical scores based on your credit report that predict the probability of your defaulting on your credit obligation. A good credit score can be helpful to obtain more credit when you need it and at a lower interest rate.
• Some financial advisors suggest taking out a small installment loan, for example an auto loan, to help establish your credit history. Again make sure the lender will report your credit history to a credit bureau, and remember that in order for the loan to reflect positively on your credit report, always pay your bills on time! Late payments equal derogatory information on your credit report and may lower your credit score. Again, a timely payment history is the best way to prove you are responsible with credit.
• If you do not qualify for a loan by yourself, or you simply want lower interest rates, consider having a close friend or parent with established credit co-sign a loan with you. Paying your bills on time will be even more important with a co-signer, because your payment history will now appear on their credit report as well as your own.
• Only apply for one credit card at a time. Each time you apply for credit, creditors may pull a copy of your credit report. This is recorded at the credit bureaus in your credit file as an “inquiry”. Too many inquiries can hurt your credit score.
• Numerous accounts are not needed to build good credit. A few strong credit lines, like a major credit card (a revolving account) and an auto loan (an installment account), may be enough to get you started.

Assisted living is licensed by state governments and is known by many different names including the following: residential care, board and care, congregate care, and personal care. Assisted living care is not a substitute for, but rather a complement to, nursing facility care.

In summary, be careful with credit. Approach it prudently. Apply for a little at a time; only enough so you can control it, not the other way around. Keep in mind that if you are not careful, too much debt can easily become a depressing financial burden instead of a useful tool to enrich your life. It’s your choice. Good luck!

Copyright 2007 Credit Reporting.com

The purpose of life insurance is to provide a source of income for your children, dependents, or whomever you choose as a beneficiary, in case of your death. Life insurance can also serve other estate planning purposes, such as giving money to charity on your death, paying for estate taxes, or providing for a buy-out of a business interest.

Whether you need to buy life insurance depends on whether anyone is depending on your income. If you have a spouse, child, parent, or some other individual who depends on your income, you probably need life insurance. Here are some typical families and a summary of their need for life insurance:

1. Families or single parents with young children or other dependents. The younger your children, the more insurance you need. If both spouses earn income, then both spouses should be insured, with insurance amounts proportionate to salary amounts.

2. Adults with no children or other dependents. If your spouse could live comfortably without your income, then you will need less insurance than the people in situation (1). However, you will still need some life insurance. At a minimum, you will want to provide for burial expenses, for paying off whatever debts you have incurred, and for providing an orderly transition for the surviving spouse.

3. Single adults with no dependents. You will need only enough insurance to cover burial expenses and debts, unless you want to use insurance for estate planning purposes.

4. Children. Children generally need only enough life insurance to pay burial expenses and medical debts. Many advisors recommend self-insuring for children rather than buying an insurance policy.

5. Retirees. There is less of a need for life insurance after retirement, unless it is to be used for estate planning purposes. You may need to provide an income for the second spouse to die if your retirement assets are not large enough. Further, you will need some insurance to pay burial expenses, final medical costs, and debts.

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If your spouse could live comfortably without your income, then you will need less insurance than people in the opposite situation. However, you will still need some life insurance. At a minimum, you will want to provide for burial expenses, for paying off whatever debts you have incurred, and for providing an orderly transition for the surviving spouse.

If you have no spouse or children, you will need only enough insurance to cover burial expenses and debts, unless you want to use insurance for estate planning purposes.

Ideally, you should begin saving for retirement in your 20s. More time to save enhances your chances of having the kind of retirement lifestyle you want. If you wait until you are in your 40s or older—and haven't saved much (or anything) yet— you may have trouble building the retirement fund you need. The shorter your time frame, the less room you have for error.

The following rules of thumb may work for some people. But they do not make financial sense for everyone. What’s important is to be able to know whether a rule suits your situation. Here are some of those rules, and some considerations that should not be overlooked.

"Your life insurance should equal five times your yearly salary." This rule of thumb has been used to answer the question: How much life insurance should I have? The ideal amount of life insurance is the amount that will, when invested, generate enough income to allow your survivors to maintain the level of income they are used to. "Five times your salary" will accomplish this objective in some cases, but there is no substitute for making the calculations necessary to find out how much life insurance you in particular need to buy. The amount you need will depend on how many people there are in your family, whether there are other sources of income besides your salary, how old your children are, and other factors.

Save 10% of your salary per year. You may need to save much more than ten percent of your gross income to have a comfortable retirement. The amount you need to save for retirement depends on how large your existing nest egg is and how old you are. Those who started saving late in life—in their 40s—need to save at least 15 or 20% per year.

You need 80% of your pre-retirement income to retire comfortably. Although people may need 80% of your salary during the first few years of retirement, later on they are often able to live comfortably on less. The amount of income you need depends on whether you have paid off your mortgage, whether you will have other sources of retirement income, and on other factors.

Subtract your age from 100, and invest that percentage in stocks. This is one of those "cookie cutter" rules that only pans out for certain investors. For others, it results in a portfolio that is much too conservative. The best method of allocating your investments among various types of investments depends on your investment goals and needs, and your willingness to risk your capital. In this case, rules of thumb do not serve the investor at all.

Maintain an emergency fund of six months’ worth of expenses. Depending on your family’s situation, three months’ worth of expenses might be enough of an emergency fund; or six months’ worth might be totally inadequate. The amount you should keep on hand depends on how easy it would be for you to take out a short term loan, and how much money you have in savings and investments, among other things.

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