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You may think your youngster seems too young to venture out into the world. However, a variety of benefits await children who attend preschool. Learn about the social, emotional, and academic perks for kids who spend time in a classroom before entering kindergarten.

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Kids who have classroom exposure before entering kindergarten usually benefit significantly from the extra academic instruction and exposure. Expectations for whos vs who’s students entering school have risen in recent years. Youngsters must have math and literacy skills that will enable them to dive right into the curriculum once they start the elementary grades. Preschool will also provide children with opportunities for building cognitive and language skills. Kids will expand their vocabularies, receive practice solving problems, learn how to apply logic to situations, and begin foundational work for reading.

Little ones need lots of practice as they work on developing gross motor skills. Gross motor skills include running, jumping, skipping, and climbing-all the large movements that involve numerous body parts working together. Preschool offers opportunities for organized physical education with class times devoted to playing active games as a group.

A preschool classroom typically provides abundant creative activities for children to explore. Centers around a classroom may offer activities such as make-believe play, science, cooking, blocks, painting, sculpting, reading, building, and reading. While you might be able to provide some of these activities at home, a classroom setting often gives children more motivation and variety. Some kids may struggle with too many choices in the classroom. In this situation, teachers can help by offering gentle suggestions to help a student focus without becoming overwhelmed.

Spending time away from home and parents can be effective for boosting both emotional and social development in children. A child learns that it is possible to develop a trusting relationship with adults other than parents, thanks to spending quality and positive time with a teacher. Kids will also learn important social skills as they spend time with peers. Youngsters learn how to take turns and how to listen to other people when they speak. Students also begin learning skills such as how to handle frustration and anger, how to empathize with others, and how to resolve conflicts.

Remember that old Clint Eastwood film? While it was never clear who was best, worst or ugliest, if you apply that title to the debt game, there won’t be many questions. Debt truly can be good, bad and ugly. The basic proposition is that someone borrows money from someone else. If it were only that simple. Next come questions about the rate of interest charged, the time, the terms, the security, and the ability to pay it back. It is the oldest financial game in recorded history, oft criticized in the Bible and the Qur’an.

Recognizing that the great business school libraries in the world devote thousands of cubic feet of space to books on debt when we only have a couple of pages, let’s take a look at debt, add some spice from the internet, and see if we can identify some helpful rules of engagement. Fasten your seat belts. Features Principal-this is the amount of money you are borrowing. But wait, it also can include the costs of winning the loan in the first place. It is here that fees can be added, such as for originating the loan (covering the costs of processing) and discounting the rate (buying down the rate to below the cost of the money born by the lender). It can also include interest if it is later determined that your rate is below the cost of the money to the credit issuer (sometimes called “negative amortization”). We’ll cover more about these costs when we discuss something called “APR.” Time-this is the time that you are allowed to owe the money. But again, wait. It can mean the time of the underlying note that can be different than the amount of time you have to pay it back. Sometimes loans can be based upon the traditional 30 years, but your obligation to pay the loan back might be something less.

Risk-The risk to the lender is directly converted to the rate of interest. The higher the risk, the higher the rate. Risk translates to comfort that the debt will be paid off. Comfort can come from the borrower’s contribution of cash to the deal, often called equity. It also comes from the terms of the deal that can include a security interest in the thing that is being purchased, such as a mortgage that ties the loan to the purchase of real estate or a UCC filing that ties the debt to the purchase of a thing, like a car, truck or refrigerator. If the debt accrues through a credit card purchase, there is often no security other than the confidence that the borrower will pay it off. In each one of these scenarios, the risk is significantly influenced by the borrower’s credit score.

There are three basic scores, one each from Equifax, TransUnion and Experian. Mortgage lenders usually use the middle score for their lending. A good score is 700+. A middle score is 660 to 700 or so. Questionable scores are between 620 or so and 660. Bad? Below 620. Ugly? Below 600 or if there has been a bankruptcy in the last two years. Interest-This is the rate of interest applied to the principal over time. But yet again, wait. Is it simple interest or compound interest? Simple interest is that rate applied to the principal. Period. A rate of say 8% on a debt of $1,000 creates an interest obligation of $80 after one year. Compounding however involves the application of the rate of interest on the unpaid interest obligation on top of the principal. It actually adds to the obligation. For example, a monthly compounded interest adds the accumulated interest to the principal each month. Compounded daily? Each day’s interest is added to the obligation. The lesson here? Read the fine print on your obligation, often found in small print on the back of the documents! Rate basics-Here’s where you go to find today’s rates (WARNING-these rates can be somewhat distorted by the reporting lenders so rely upon them at your peril): Prime Rate Navy Marine Corps Relief APR-This deserves special attention. It is the Annual Percentage Rate applied to the loan. It includes the rate of interest, of course, and the fees added to the deal such as origination, discount, and any other junk fees that can be lobbed into the deal. In the Truth in Lending Act, Federal law committed lenders to announce the APR in all of their loans, almost-there are some fees that don’t count such as legal fees and other charges from third parties. It is also not impossible that a great deal has an APR significantly higher than the underlying interest rate. For example, you can “buy the rate” on a loan with the discount points significantly boosting the APR.

The key is the break even point where the discount points are “purchased” by the rate that can be significantly below market rates. Let the math drive your bus-take the payments, all of them, and stretch them out through the last month of payment. Compare the answers to all choices you are reviewing and let the math dictate the selection. Debt to Income-Lenders don’t stop at credit scores, security, and cash into the deal (equity). They also want to know about your ability to pay off the debt. This means your income. If you have a sterling credit score, and you put plenty of cash into the deal, they will still want to know if you can cover the monthly payment. For this measure, the lender will examine your credit report to see what trade lines are demanding monthly payments. They call this the Debt to Income ratio. Note that a Trade Line is one that reports your monthly payments to the credit bureaus, such as credit cards, car loans, and mortgages. What is not reported as a trade line is your rent, medical bill, electricity, phones, water and other utilities, unless you are guilty of missing enough payments to earn a dreaded “derogatory” on your credit report. 

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