Debt Management http://www.wisebread.com/taxonomy/term/7681/all en-US Best Lenders for Personal Loans http://www.wisebread.com/best-lenders-for-personal-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/best-lenders-for-personal-loans" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/45501888.jpg" alt="" title="" class="imagecache imagecache-250w" /></a> </div> </div> </div> <p>Personal loans are often not the first choice when faced with an unexpected expense or financial need, but because of the wide range of lenders available offering lower interest rates, they can sometimes be the least expensive. With the current surge of a variety of lenders online offering personal loans, it is possible to apply, qualify, and receive your loan faster than ever before. Choosing a good lender doesn&rsquo;t have to be complicated. Fortunately, there are many companies that have become popular and well-known among consumers for providing personal loans for all situations, including for those who have bad credit and need emergency funds. Here are the best lenders providing personal loans online.</p> <h2>Lending Tree</h2> <p>One of the most popular providers of nearly any type of loan is <a href="https://www.lendingtree.com">Lending Tree</a>, which is often considered a pioneer in online lending. The company has facilitated more than 32 million loans since 1998 and through the years has become a leader in every type of loan a consumer could need from car loans to mortgages and personal loans for medical expenses. They currently offer personal loans of $1,000 to $35,000, for a term of one to five years, with fixed rates. These loans also do not require collateral, and you can pay the loan in monthly installments.</p> <h2>Kabbage</h2> <p><a href="http://www.kqzyfj.com/click-2822544-11145625-1452787774000">Kabbage</a>, a lender established in 2011, is one of the most popular online lenders for small businesses. If you are seeking a loan to get your business off the ground, Kabbage is one of the first lenders you should consider. Small business loans can be as much as $100,000 deposited into your bank account or even your PayPal account. You can ongoing access to your funds when you need it, in case you don&rsquo;t need to use the full amount at once. Kabbage loans are ideal especially if you haven&rsquo;t yet established any credit for your business. Whether you qualify for a loan is determined by a variety of business data, which includes not just the credit score but business volume and social media activity as well.</p> <h2>Avant</h2> <p>Your credit score still plays an important role in qualifying for personal loans, and if you&rsquo;ve had problems in the past or don&rsquo;t yet have credit established, it might be difficult getting approved for a personal loan. Those with bad credit often get stuck with predatory lending options such as payday loans, or even credit cards with high fees and outrageous interest rates. Although just recently established in 2012 and newer than other online lenders, <a href="http://www.kqzyfj.com/click-2822544-11789034-1427835327000">Avant</a> provides personal loans ranging from $1,000 to $35,000, even if you have less than perfect credit. Although the interest rate can range from 9.95% to 36.00%, Avant considers other factors besides just your credit score.</p> <h2>CircleBack Lending</h2> <p><a href="https://www.circlebacklending.com/">CircleBack Lending</a> provides a variety of loans from $3,001 to $35,000. There is an origination fee based on your credit that decreases the total amount of your loan. As an example, an A-B credit grade would have either a 36-month origination fee of 0.99% to 2.99% or a 60-month origination fee of 0.99% to 3.99%. Part of the process with CircleBack is requesting the loan amount and whether you want a term of 36 or 60 months. Then, CircleBack Investors review your request. Once an Investor commits to funding your request, the money is sent to your bank account. The interest rate or APR is based on the credit grade much like the origination fee. An A-B credit grade would have either a 36-month interest rate of 5.96% to 11.42%, a 36-month APR of 6.63% to 12.82%, a 60-month interest rate of 12.44% to 19.82%, or a 60-month APR of 12.88% to 20.78%.</p> <h2>Prosper</h2> <p><a href="http://prosper.evyy.net/c/27771/27132/994">Prosper Marketplace</a> works differently than other lenders and is categorized as a peer-to-peer lending company. Instead of borrowing money from a bank or company, Prosper loans are funded by other consumers or peers. You can borrow anywhere from $2,000 to $35,000, and qualify depending on your credit score, history, endorsements from friends, and even community affiliations. You can choose either three year or five year terms, with no pre-payment penalty. Although the APR can be as low as 5.99% for borrowers with the best Prosper Ratings, it varies and can be as high as 36.00% for first-time borrowers.</p> <h2>Upstart Loans</h2> <p><a href="https://www.upstart.com/?CJAID=12188828&amp;utm_source=CJ&amp;utm_medium=CPFL&amp;utm_content=2822544">Upstart Loans</a> is another peer-to-peer lending platform that allows you to borrow amounts from $3,000 to $35,000 for debt consolidation, refinancing student loans, to make a large purchase, or a number of other occasions you might need to borrow money. Your rates for borrowing are based on your FICO score as well as how long you have had credit, but unlike other lenders, Upstart also considers your education, area of study, and your job history, which, according to Upstart, has led to borrowers saving 27% compared to credit card rates. The interest rate varies from 4.66% - 29.99%, including the one-time origination fee that ranges from 1% - 6%. You can get an idea what your rate might be without it affecting your credit score.</p> <h2>Lending Club</h2> <p><a href="https://www.lendingclub.com/landing/partner.action?partnerID=87559&amp;utm_dept=INV&amp;utm_source=AFF&amp;utm_medium=CJ&amp;utm_content=Link&amp;utm_campaign=CJ_Inv2&amp;AID=10880284&amp;PID=3720452&amp;SID=227343FOF752865010">Lending Club</a> is considered a leader in peer-to-peer lending and is the largest online marketplace in the world connecting borrowers and investors. You can request a loan to pay for many different expenses including debt consolidation, starting a business, and moving or relocating expenses. This platform allows investors to earn money on loans they fund while borrowers pay down debt at lower interest rates than those that are offered by other lenders. Loans through Lending Club charge rates from 5.99% to 32.99%, with origination fees from 1% to 5%.<strong> </strong></p> <h2>PersonalLoans.com</h2> <p><a href="https://personalloans.com/?aid=10791&amp;cid=1311=052f9c191a6d466a9f38a217a34d7303">PersonalLoans.com</a> matches borrowers with lenders who are part of their network. You can often get the money you need in as quickly as one business day and pay it back anywhere from six months to 72 months. The APR for loans with PersonalLoans.com is typically 5.99% to 35.99%. For this lender, you fill out an application with the loan request, type of credit, and amount you need to borrow. If it is approved, you are redirected to the lender&rsquo;s loan agreement. You can request $500 to $35,000.<strong> </strong></p> <h2>Promise Financial</h2> <p><a href="http://promisefinancial.evyy.net/c/27771/245132/4106">Promise Financial</a> is known for providing funds for life events such as weddings, engagements, and other events that you might need a loan for. Promise Financial offers loans from $3,000 to $35,000 with APRs ranging from 6.99% - 29.99%. You can repay your loan in monthly installments over 36 months by setting up automatic electronic payments from your bank account or paying by check.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/christina-majaski">Christina Majaski</a> of <a href="http://www.wisebread.com/best-lenders-for-personal-loans">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">How to Rebuild Your Credit in 8 Simple Steps</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">10 Surprising Ways to Negatively Affect Your Credit Score</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Don&#039;t Ignore These 4 Things Before Refinancing Your Student Loans</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/want-to-master-your-debt-think-like-a-maze-runner">Want to Master Your Debt? Think Like a Maze Runner</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management best personal loans Wed, 24 Aug 2016 10:30:07 +0000 Christina Majaski 1708326 at http://www.wisebread.com Don't Ignore These 4 Things Before Refinancing Your Student Loans http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-ignore-these-4-things-before-refinancing-your-student-loans" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/beautiful_woman_thinking_74303951.jpg" alt="Woman not ignoring things before refinancing student loans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The average American with student loans has approximately $30,000 in debt, and makes a monthly payment of&nbsp;<a href="http://www.brookings.edu/research/papers/2014/06/19-typical-student-loan-debt-akers">nearly $250</a>. With interest rates sometimes reaching as high as 8%, many people struggle to bring down the balance. One popular solution is to&nbsp;<a href="http://www.wisebread.com/should-you-refinance-your-student-loan">refinance your loans</a>, getting a lower interest rate or lower monthly payment with a different repayment term. For some people, this can be an excellent way to make progress on eliminating their debt. For others, it can be a short-term option that ends up causing more problems later on.</p> <h2>What Is Refinancing?</h2> <p>If you have federal or private student loan debt at a high interest rate, you can refinance your debt by taking out a new loan from a&nbsp;<a href="http://www.wisebread.com/6-things-every-college-student-must-know-about-private-student-loans">private lender</a> to cover your entire current balance. You use that money to pay off your current debt, then make payments at a lower rate or different repayment term on the new loan.</p> <p>If you have high-interest debt, refinancing can be a way to save you thousands over the course of your loans. When you are researching your options, it is important to look at offers from multiple lenders to ensure you are getting the most competitive interest rate and terms. <a href="https://lendedu.com/">LendEDU</a> is a site that allows you to compare multiple offers in one place to get the most attractive loan that meets your needs.</p> <h2>4&nbsp;Factors to Consider Before Refinancing</h2> <p>While refinancing student loans is a good decision for many people, there are factors you need to consider before you sign any agreement.</p> <h3>1. Interest Rates</h3> <p>When refinancing your debt, you will have the option of choosing a variable or fixed interest rate. Variable rates as low as 2% are available. However, they can change every year and can go as high as 8% to 10%. While fixed rates are often slightly higher than the initial variable interest rate, (usually they are about 3%), that interest rate is guaranteed not to increase over the course of your debt. If you have a small amount you can pay off quickly, a variable rate can make sense. However, if you need five to 10 years to pay off your loans, a fixed rate is more secure.</p> <h3>2. Deferment Options</h3> <p>If you have federal student loans, you have the ability to defer your debt if you run into economic hardship, such as if you lose your job. When you refinance with a private lender, you may end up losing that benefit since some companies do not offer deferment options. Make sure you understand their policies regarding economic hardships to ensure you're prepared for the worst-case scenario.</p> <h3>3. Loan Terms</h3> <p>When you refinance, your monthly payment can be cut in half. While that looks great on paper and it frees up money in your budget, you actually will end up paying much more over the length of your loan. To get the payment so low, your repayment term is extended from the standard 10 years to 20 or more. Over the duration of your loan, you can end up paying thousands more in interest. If you opt for an extended repayment term, assess your budget every year. As you move up the corporate ladder and get a better salary, you can increase your monthly payments and pay the debt off more quickly, saving yourself money.</p> <h3>4. Prepayment Penalties</h3> <p>Some private lenders have prepayment penalties, meaning you will owe a fee if you pay off your new loan early. In some cases, the fee may be small, but for some companies, the cost might be prohibitive. Make sure you check if there are any prepayment penalties ahead of time.</p> <p>For some, refinancing student loans can be a great way to save money and pay down the debt faster. It can be a good strategy to get a lower interest rate or to get a more affordable monthly cost. By considering these four factors, you can ensure you are informed and empowered to make the best decision for you.</p> <p><em>Have you refinanced student loans? Has it worked out for you?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-private-lenders-that-can-really-save-you-money-on-your-student-loans">3 Private Lenders That Can Really Save You Money on Your Student Loans</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-times-student-loan-refinancing-can-save-you-big">4 Times Student Loan Refinancing Can Save You Big</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cancel-student-loans-to-save-and-receive-an-interest-free-120-day-loan">Cancel Student Loans to Save — and Receive an Interest-Free 120-Day Loan</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-is-student-loan-forbearance-anyway">What Is Student Loan Forbearance, Anyway?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training deferment interest rates penalties private lenders refinancing repayment student loans terms Thu, 18 Aug 2016 10:00:16 +0000 Kat Tretina 1774333 at http://www.wisebread.com Want to Master Your Debt? Think Like a Maze Runner http://www.wisebread.com/want-to-master-your-debt-think-like-a-maze-runner <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/want-to-master-your-debt-think-like-a-maze-runner" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_corn_maze_85631953.jpg" alt="Friends learning how to master debt like maze runners" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Have you ever been inside one of those massive corn mazes that are carved to look like a famous person or scene? When you were a kid did you collect books of mazes to solve, each more difficult than the last?</p> <p>Mazes can be challenging and fun. And working your way through a maze is very much like working your way out of debt.</p> <p>If you find that you're suffocating under a mountain of financial obligations, it's time to work toward becoming debt-free. And if you're an expert at solving mazes, you'll be able to apply some lessons to changing your lifestyle in order to achieve financial freedom.</p> <p>Here are nine ways that getting out of debt is like going through a complicated maze.</p> <h2>1. It Can Seem Hard at First</h2> <p>The farm that my family travels to each fall has a massive maze, with five sections. It is mind-bendingly complex, and I always start off wondering, &quot;How the heck am I gonna get through this thing?&quot; But inevitably, I do make it out unscathed.</p> <p>All big adventures seem daunting in the beginning, and the process of getting out of debt can certainly fill you with self doubt. The key is to take your time, focus on smaller and achievable goals, and not get discouraged by the bigger picture.</p> <h2>2. There's Always a Way Out</h2> <p>Every maze, no matter how big or crazy, has a way out. You may think that there's no way to escape, but there always is. No one is playing a trick on you and building a maze with no solution. Similarly, when you are fighting to get out of debt, you need to be aware that it's always possible to eliminate what you owe. Nothing is hopeless.</p> <h2>3. There's More Than One Path</h2> <p>There are no rules about how you get through a maze. The only thing that matters is that you make it out. Likewise, the journey toward financial freedom isn't laid out with specific directions. Sure, there are <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you">debt reduction plans</a> that offer detailed steps to follow, but if you deviate from that, it's not the end of the world, as long as you are making progress.</p> <h2>4. You May Want to Give Up</h2> <p>My wife and I once got stuck in a large hedge maze, and couldn't find our way out. Exhausted and angry at one another, we very nearly called it quits and called for someone to rescue us. But we persevered, and methodically made our way through. It took longer than expected, but we escaped.</p> <p>Getting out of debt can be like this. There will be moments when you feel like you're not making any progress. There will be times when you want to just quit and go back to your bad borrowing ways. Ultimately, you will realize that moving forward is the only way to go, even if it takes more time than you planned.</p> <h2>5. You'll Make Mistakes</h2> <p>You may think you are on the right track, but you'll make a wrong turn and end up back near where you started. You will hit dead ends. You may even have to start over from the very beginning.</p> <p>When you're trying to get out of debt, you may not make the best decisions at every key moment along the way. You might overspend on an item, or fail to pay a bill on time. But that's okay, as long as you keep trying to get on the right path. Eventually, you will find yourself heading in the correct direction and closer to your goals.</p> <h2>6. There Will Be Unexpected Obstacles</h2> <p>Some of the trickiest mazes have rough terrain, tree branches, puddles, and maybe even the occasional Minotaur. Your journey to being debt-free will be filled with challenges you can't predict. You may be on the right track, only to lose your job or face an unexpected medical expense. Don't get discouraged!</p> <h2>7. Success Comes Easier When You Have Help</h2> <p>Navigating through a tough labyrinth is easier if you have a buddy. One of you can look at the map, while the other looks for clues. You can communicate about which paths you've already taken, and which way might lead to a dead end.</p> <p>The same goes for getting out of debt. A partner can keep you from overspending on unnecessary items. A friend or family member can remind you about bills to be paid. They can also boost your spirits when the going gets tough. Don't go it alone!</p> <h2>8. You Might Enjoy the Challenge</h2> <p>People love mazes because they like a mental test. The challenge itself can be enjoyable for them. Reducing your debt can feel the same way. You'll make changes to your lifestyle that will be hard, but over time, you may find that you enjoy the tough work of seeing your obligations decrease. The actual process of saving, paying down debt, developing discipline, and achieving financial freedom can be satisfying in and of itself.</p> <h2>9. You'll Feel Great at the End</h2> <p>It's always a wonderful feeling when you complete a hard task. The sense of accomplishment is often unparalleled. Whether it's making your way through a dense and convoluted maze, or working like crazy to get out from under a mountain of debt, you'll want to raise your arms in triumph when it's all over. It's a downright super mixture of sheer joy, relief, and pride from knowing you worked toward a goal and got it done.</p> <p><em>What navigation tricks have you helped escape your debt?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/want-to-master-your-debt-think-like-a-maze-runner">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">7 Money Moves to Make as Soon as You Conquer Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">5-Day Debt Reduction Plan: Don&#039;t Ever Stop</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what">Oops — I Maxed Out My Credit Cards. Now What?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/account-in-collections-heres-how-to-fix-it">Account in Collections? Here&#039;s How to Fix It</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-people-without-debt-do">10 Things People Without Debt Do</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management accomplishments advice challenges mazes obstacles owing money strategy Tue, 16 Aug 2016 10:00:17 +0000 Tim Lemke 1773243 at http://www.wisebread.com 5 Ways to Prevent a Debt Spiral http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-prevent-a-debt-spiral" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/tablet_credit_card_92649335.jpg" alt="Woman learning ways to prevent debt from spiraling" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you dread opening that credit card statement each month? You're not alone.</p> <p>The big challenge with <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit card debt</a> is that it grows quickly thanks to the high interest rates attached to it &mdash; rates as high as 21%. If you carry a balance on your credit cards each month, this can mean that your debt can quickly spiral out of control.</p> <p>But there are steps that you can take to keep your credit card debt from becoming overwhelming. Here are five moves that can help keep that credit card debt under control while you gradually pay it down.</p> <h2>1. Pay More Than the Minimum</h2> <p>The best move when dealing with high credit card debt? Always pay more than your required minimum monthly payment. Otherwise, your debt will continue to grow, thanks to those high interest rates. (See also: <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Credit Cards with Low Interest Rates</a>)</p> <p>Paying more than the minimum will greatly reduce both the time it takes you to <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">pay off that debt</a> and the interest that you'll pay on it. Even if you can only pay $100 or $50 more each month, do it.</p> <h2>2. Stop Spending</h2> <p>This is an obvious one, but if you want to keep your debt from spiraling, stop adding to it. Move to spending cash until you can reduce your credit card debt. It's tempting to pull out your plastic to pay for that new computer or video game. But instead, save up the money first and <em>then</em> make your purchase. Remember, every time you make a purchase with your credit card, you are making it even more difficult to pay down that debt.</p> <h2>3. Make a Plan</h2> <p>You'll struggle to control your credit card debt if you don't first draft a plan to deal with it. One option? Target the credit card with the lowest amount of debt. Make extra payments each month on that card until it's paid off. You can then move on to the card with the next highest amount of debt, making extra payments on it.</p> <p>Or, if you prefer, follow the same strategy but start with the card with the highest interest rate, making extra payments on it each month until its balance hits zero. Then move on to the card with the next highest interest rate. (See also: <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=article">Snowballs or Avalanches: Which Debt Reduction Strategy Is Best for You?</a>)</p> <p>Finally, if you can commit to a certain time frame to pay off your debt, a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">balance transfer is a great tool</a> for getting rid of debt. Just <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">choose your balance transfer credit cards</a> wisely.</p> <p>Make sure to not close the cards that you pay off. Doing that will actually cause your FICO credit score to fall. Instead, keep the cards open but only use them for purchases that you can pay off in full each month.</p> <h2>4. Cut Unnecessary Expenses</h2> <p>If your <a href="http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit card debt is out of control</a>, you need to make paying it down a priority. One way to do this is to free up extra money each month by cutting down on unnecessary expenses. This could mean reducing the number of times you eat out each month and using those extra dollars on your monthly credit card payments. It could mean ending a gym membership. You can exercise without belonging to a gym, after all.</p> <p>Just make sure that when you reduce an unnecessary monthly expense that you use this money to whittle down your credit card debt.</p> <h2>5. Tackle the Reasons Behind Your Credit Card Debt</h2> <p>The final step in controlling your credit card debt might be the most difficult: You need to determine why you ran up so much debt. What were the reasons behind your excessive debt?</p> <p>If you don't figure out why you abused your cards, you run the risk of running up your credit card debt again after you pay it off. If you want to keep your credit card debt from ever spiraling out of control again, you need to take a close look at your negative spending habits and change them &mdash; permanently.</p> <p><em>How do you keep your credit card debt from spiraling?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make">8 Debt Reduction Mistakes Even Smart People Make</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-reasons-your-debt-isnt-diminishing">12 Reasons Your Debt Isn&#039;t Diminishing</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-which-credit-card-to-pay-off-first">The Simple Way to Decide Which Credit Card to Pay Off First</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-debt-in-10-minutes-a-week">How to Manage Your Debt in 10 Minutes a Week</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management avalanche method interest rates monthly payments saving money snowball method Thu, 11 Aug 2016 09:00:04 +0000 Dan Rafter 1769336 at http://www.wisebread.com What Happens to Your Debt After You Die? http://www.wisebread.com/what-happens-to-your-debt-after-you-die <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-happens-to-your-debt-after-you-die" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/hands_drawing_cash_32706966.jpg" alt="Finding out what happens to debt after you die" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>&quot;In this world nothing can be said to be certain, except death and taxes,&quot; wrote Benjamin Franklin back in 1789. However, more and more Americans are including &quot;debt&quot; in that famous quote. In 2015, one poll found that 21% of Americans believed that they would be in debt forever, up from 9% in 2013 and 18% in 2014. But what happens to that debt when you die? The answers may surprise you.</p> <h2>First &mdash; What Is an Estate?</h2> <p>Your estate includes all of your assets, including real estate, investments, insurance, and any other assets or entitlements. Since your debts and liabilities are also part of your estate, qualifying assets are liquidated upon your death to cover your debts before your beneficiaries can see any funds.</p> <p>Establishing a clear will is key to ensuring your estate is managed as you wish. Even when a will is available, executing an estate and administering a will is serious business. So, it's best to hire a legal professional to cross all t's and dot all i's. (See also: <a href="http://www.wisebread.com/dont-get-screwed-3-surprising-times-when-you-need-a-lawyer?ref=seealso">Don't Get Screwed: 3 Surprising Times When You Need a Lawyer</a>)</p> <p>So, what happens to the debts in your estate?</p> <h2>Credit Card Debt</h2> <p>Recent estimates put average American household credit card debt at $15,762, for those households with credit card debt. But unless your family or friends co-signed a credit card with you, they're all off the hook in the event that you pass away and your estate is too small to cover it. Even when your spouse is an authorized user on your credit card account, they won't be responsible for paying if they didn't cosign at the time of application.</p> <p>However, your survivors shouldn't be surprised if debt collectors <em>still </em>try to get a spouse or child to pay for the debt. The federal <a href="https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text">Fair Debt Collection Practices Act</a> (FDCPA) prohibits debt collectors from using abusive, unfair, or deceptive practices to try to collect a debt. Let your spouse, children, and beneficiaries know that they can <a href="https://www.ftccomplaintassistant.gov/#&amp;panel1-1">file a complaint</a> against abusive debt collectors with the Federal Trade Commission (FTC). (See also: <a href="http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them?ref=seealso">4 Annoying Things Bill Collectors Can't Do &mdash; And How to Stop Them</a>)</p> <p>Of course, you and your family still need to refrain from tricky tactics, such as taking a $20,000 cash advance days before a death, or continuing to use the authorized credit card after the primary cardholder has died, that could provide a credit card company recourse to legally pass on the debt to the surviving relatives.</p> <h2>Mortgage</h2> <p>There are three main scenarios to consider with a mortgage.</p> <p>In the first, you were either required by the company issuing your mortgage or decided that it was a good idea to buy life insurance for the remaining balance of the mortgage. In this scenario, your death benefit clears the mortgage and the property goes to the beneficiary listed on the will or to the surviving property owner.</p> <p>In the second, there is no life insurance, and you and your spouse were &quot;tenants in common,&quot; meaning that each of you owned a stated share of the property. To be eligible to receive their share of the property, your spouse would need to first check that there is enough money in your estate to clear your debts and thus no need to sell the property to cover them. If there is enough money in your estate, your spouse would receive your share and take over the mortgage, if applicable.</p> <p>Finally, there are scenarios in which there was no life insurance and you and your spouse were &quot;joint tenants,&quot; meaning that both of you owned the entire property. In this scenario, upon your death the whole property passes automatically to your spouse. But again, the estate must clear any property-related debt first.</p> <h2>Student Loans</h2> <p>Besides credit card debt, student loans are another type of liability that is rapidly increasing among Americans. According to one estimate, the <a href="http://www.cbsnews.com/news/congrats-class-of-2016-youre-the-most-indebted-yet/">average student loan</a> for a Class of 2016 graduate is $37,173!</p> <p>In the event of your death, your federal student loans, including direct loans, Federal Family Education Loan (FFEL) Program Loans, and Perkins Loans, <a href="https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation#death-discharge">will be discharged</a>. Additionally, Direct PLUS loans are discharged in the event that the parent or student on whose behalf the loan was obtained passes away.</p> <p>But private loans are another matter, and your estate may be responsible for covering any balance. And if anybody co-signed a private loan with you, they'd be on the hook for payment.</p> <p>To learn more about what would happen to your liabilities upon your death, consult a lawyer.</p> <p><em>Have you ever take on debts from somebody that passed away? Share your experience in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/what-happens-to-your-debt-after-you-die">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash">Prioritize These 5 Bills When You&#039;re Short on Cash</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-personal-finance-calculators-everyone-should-use">15 Personal Finance Calculators Everyone Should Use</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-it-ever-okay-to-cosign-a-loan">Is It Ever Okay to Cosign a Loan?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Don&#039;t Ignore These 4 Things Before Refinancing Your Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management beneficiaries death estate planning federal trade commission loans mortgages spouses student loans survivors Thu, 28 Jul 2016 10:30:09 +0000 Damian Davila 1760584 at http://www.wisebread.com All the Ways Minimum Payments Are Evil http://www.wisebread.com/all-the-ways-minimum-payments-are-evil <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/all-the-ways-minimum-payments-are-evil" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_laptop_credit_card_88164697.jpg" alt="Man learning ways minimum payments are evil" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Anyone who has a credit card is familiar with minimum payments. Most credit cards don't require cardholders to pay off their balances in full every month, but they <em>do</em> require cardholders to pay some minimum amount. This can be as low as 2% to 3% of the outstanding balance, or a minimum of $25 or $35 &mdash; whichever is higher.</p> <p>While paying the minimum technically keeps your account in good standing, there are negative consequences to this decision. Here are five reasons why minimum payments are evil and should be avoided.</p> <h2>They Keep You in Debt</h2> <p>Minimum payments may keep your credit card bills affordable, but you have to consider the big picture. In the end, minimum payments don't benefit your bottom line &mdash; they benefit your credit card company.</p> <p>The truth is, minimum payments are a sneaky trick designed to keep you a slave to credit card debt. The longer you keep a balance on your cards, the more money your creditors earns off you. If you only pay your minimums every month, you'll carry your balances for years to come. For example, if you have a credit card with a $2,000 balance and 17% interest rate, and you only make minimum payments each month (2% of your balance), it will take you <em>over 21 years</em> to pay it off. You'd have paid over $3500 in interest alone &mdash; and that's if you don't put additional purchases on the card.</p> <p>That may seem like a shock, but that's exactly why the minimum payment schedule was designed. Because they're taking a <em>percentage</em> of your balance, every month, the minimum payment required goes down. That does two things &mdash; encourages you to pay <em>less</em> so that you keep the balance longer, and it also tricks you into thinking that you're actually making progress paying off your debt. If you see that your payments are getting lower, you feel like your debt is getting smaller too. But you're actually hardly chipping away at the debt at all.</p> <p>If on the other hand, you pay $50 per month, it will take you five years to pay it off, with about $970 in interest. That's a huge difference compared to 21 years and $3500 in interest. Every little bit of extra you can put into your credit card debt will significantly cut down on your repayment time.</p> <p>If you can make reasonable plan and keep to your budget, a <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">balance transfer will put a pause on interest payments</a> and help you <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">pay off debt faster</a>.</p> <h2>Purchases Become More Expensive</h2> <p>Credit cards might be convenient, but they're also costly &mdash; and unfortunately, if you carry a balance from month-to-month and only make the minimum payment, you end up spending much more for every purchase made with the card. And once you leave a balance on your card, the grace period disappears and you immediately start accruing interest the moment you make your purchase. Grace periods are only active if there is no outstanding balance. (See also: <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=cc_article">Everything You Didn't Know About Credit Card Interest and Grace Periods</a>)</p> <p>If you have to make a large purchase, you can get a card with a <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">0% introductory APR on purchases</a>. For a certain period, no interest is charged on your outstanding balance. This gives you time to pay off the purchase without interest. However, once the intro period is over, the regular APR will kick in. It's important to only use that opportunity if you know you can pay off the balance during the introductory APR time period.</p> <h2>Your Credit Score Can Suffer</h2> <p>In my younger days, I thought as long as I paid my minimum payments on time, my credit score was protected. I was young and dumb and didn't realize how other factors impact credit scoring.</p> <p>Paying only the minimum may not have a direct negative impact on your score, but it doesn't exactly help it, either. A high credit card balance can result in a higher <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">credit utilization ratio</a>, which is the percentage of outstanding debt in comparison to your available credit line. Credit utilization is the second biggest factor making up your credit score, and if your credit card balances exceed 30% of your available credit, your score will take a hit.</p> <p>You can lower your credit utilization ratio &mdash; and subsequently improve your credit score &mdash; by paying more than your minimums every month. Minimum payments are just that &mdash; minimums. Even if you only double or triple your minimum, this will chip away at what you owe and reduce how much you pay in interest significantly.</p> <h2>It Affects Other Areas of Your Financial Life</h2> <p>Paying only the minimum might not seem like a big deal, until you realize how this decision can impact other areas of your financial life. If you're only making your minimum and carrying a high balance on a credit card &mdash; resulting in a lower credit score &mdash; this affects the ability to get other types of financing. If you apply for a mortgage or an auto loan, lenders will take one look at your high balances and low score and consider you a risky applicant. There's a chance you won't qualify for some loans, or the bank might not offer favorable terms.</p> <h2>Minimum Payments Can Increase</h2> <p>Another problem with minimum payments is that they aren't carved in stone. Credit cards are a revolving type of credit account. As your balance goes up, so does the amount you owe. Your minimum payments might be manageable today. But if you continue to charge to your account and don't make any efforts to significantly decrease the balance, your minimum payments can increase. If you're already struggling with your budget just to meet the minimum payments, the most important thing is to sit down and make a <a href="http://www.wisebread.com/5-day-debt-reduction-plan-stop-waiting-for-tomorrow?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">debt repayment plan</a>. Otherwise, you'll be stuck in this cycle of debt for generations.</p> <p><em>Do you pay the minimums on your credit cards?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal">Is a Balance Transfer Offer a Good Deal?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-ways-being-debt-free-can-cost-you">7 Ways Being Debt Free Can Cost You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management APR credit score credit utilization ratio interest rates minimum payments Fri, 22 Jul 2016 09:00:05 +0000 Mikey Rox 1756968 at http://www.wisebread.com 7 Money Moves to Make as Soon as You Conquer Debt http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-money-moves-to-make-as-soon-as-you-conquer-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_sunset_79384959.jpg" alt="Woman making moves after conquering debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Congratulations &mdash; you're debt free! Now what?</p> <p>The road to debt elimination was long and treacherous, but just because the black cloud of lingering bills is no longer hanging over your head, that doesn't mean your financial house is in order. It's in better shape, sure, but you've still got a ways to go. To continue working toward that goal, here are a few smart moves you should make as soon as you get out of the red:</p> <h2>1. Rearrange and Trim Your Budget</h2> <p>Your top priority when getting out of debt is to not get back into debt. To accomplish that, you'll need to make changes to your spending and savings habits. You'll also need to revisit your budget and rearrange your priorities. Now that you don't have credit card or loan payments bleeding you dry every month, you'll have more disposable income &mdash; and you need to decide what you'll do with it to improve your quality of life and set yourself up for the future. Cut out anything that's unnecessary: Maybe it's the cable that you don't watch much of, the gym membership you don't use, or subscriptions to services you can live without. Whatever is it, cut the fat and don't look back.</p> <h2>2. Get Back to Building Your Emergency Fund</h2> <p>If you've been digging yourself out of a negative-money pit, chances are you don't have much of an emergency fund &mdash; and that needs to change ASAP. Building an emergency fund is the best way to avoid a potential debt scenario in the future. You'll be able to draw from that account to pay off life's little surprises in full, so you're not constantly treading water every time something unexpected happens.</p> <p>&quot;I recommend having an emergency fund saved up equal to six months' worth of expenses,&quot; says financial planner Russell Robertson of Alidade Wealth Partners in Atlanta, GA. &quot;This will give you time to get back on your feet if something unforeseen happens without completely disrupting everything in your life.&quot;</p> <h2>3. Check in on Your Credit Situation</h2> <p>Brace yourself. If you've been battling debt for an extended period of time &mdash; especially if you've only being sending in minimum payments &mdash; your credit situation is likely less than ideal. The good news, however, is that you're in the clear now (debt-wise, anyway), and this is the best time to <a href="http://www.wisebread.com/what-does-your-credit-score-mean-good-bad-or-excellent?ref=internal">start rebuilding your credit</a>.</p> <p>Having a solid credit score puts you in a strong position when you need to finance a purchase, like a house or car, or apply for a new line of credit. It's always a good idea to know where you stand with credit and take steps to improve it.</p> <h2>4. Max Out Your Matching-Dollar Opportunities for Retirement</h2> <p>Like your emergency fund, contributions to your 401K and IRA were probably low (or perhaps even nonexistent) while you concentrated on paying down your debt. With more funds freed up now, it's important to start concentrating on your future &mdash; especially your retirement goals &mdash; and that includes maxing out dollar-matching opportunities to take full advantage of free money.</p> <p>&quot;401K plans in 2016 have a contribution limit of $18,000 a year, plus an extra $6,000 for people over 50, so with no debt to pay, you might have the opportunity to reach that limit now,&quot; says financial planner and investment adviser Jaycob Arbogast of Arbogast Advisers. &quot;Similarly, an IRA has a $5,500 limit for people under 50 and a $6,500 limit for people 50-plus, so maxing out those plans might be a good idea too. For example, with a 6% return, adding an extra $5,000 each year to your retirement savings from age 50 to 60 could add an additional $65,000 to your retirement savings. That's a great boost that someone in debt might not be able to maintain.&quot;</p> <h2>5. Start Investing With Long-Term Returns in Mind</h2> <p>Personally, I recommend investing in real estate, but what you invest in is up to you, so long as you're investing. Outside of your emergency fund, your money should never sit in a savings account earning fractions of pennies. Instead, you'll be better off putting that money in places that promise bigger returns over the long term, so you can meet your savings goals sooner and continue making more investments for (hopefully) a more prosperous life.</p> <p>Alternatively, Robertson recommends the stock market.</p> <p>&quot;If your budget still has room for more saving, put that money to work by investing in the markets,&quot; he advises. &quot;Exchange-traded funds (ETFs) are a great way to get diversified, low-cost exposure, and many online brokerages will offer commission-free ETF options as well.&quot;</p> <h2>6. Put Money Back Into the Investments You Already Have &mdash; Like Your Home</h2> <p>For many people, their homes are their biggest investments. To ensure that investment pays off the way you want and need it to, you have to maintain it. Thus, when you've paid off your debt, start thinking about home improvement projects that will increase value. Just be careful that you're not taking on projects that cost more than the house is worth. The last thing you need is to dump your savings into your home if the project doesn't enhance the house enough to make it worthwhile in the long run.</p> <h2>7. Open a Money Market Account for Higher Interest on Savings</h2> <p>If you have a substantial amount of savings in your emergency fund &mdash; and you should &mdash; that money shouldn't be in a traditional savings account. Contact your bank, or research others, to find savings accounts that offer the best interest rates, like money market accounts or high yield savings. Bottom line, there's absolutely no reason you shouldn't be getting the most bank for your buck, especially where savings are concerned.</p> <p>Robertson agrees, and in this particular case, rescinds his recommendation to invest in stocks.</p> <p>&quot;If there is something specific you are saving up for &mdash; a celebratory trip to Europe? A wedding? &mdash; within the next two to three years, I would recommend keeping that money out of the stock market,&quot; he says. &quot;Instead, consider a money market account or CD from an online bank. In many cases you can get close to 1% interest right now on cash that is still guaranteed up to FDIC limits (currently $250,000). In fact, this is a good idea for that emergency fund as well &mdash; something that earns interest and is separate from your everyday checking account.&quot;</p> <p><em>What else should the newly debt-free do with their money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-money-moves-to-make-as-soon-as-you-conquer-debt">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-before-you-start-investing">8 Money Moves to Make Before You Start Investing</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-myths-about-investing">The 10 Biggest Myths About Investing</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-pay-down-debt-first-or-invest">Should You Pay Down Debt First or Invest?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-its-okay-to-delay-retirement-savings">5 Times It&#039;s Okay to Delay Retirement Savings</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/401k-or-ira-you-need-both">401K or IRA? You Need Both</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management Investment 401k advice credit score emergency funds ETFs home improvements IRA money moves retirement stock market Fri, 15 Jul 2016 09:00:17 +0000 Mikey Rox 1752364 at http://www.wisebread.com The Key to Debt Reduction May Be a Simple Picture http://www.wisebread.com/the-key-to-debt-reduction-may-be-a-simple-picture <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-key-to-debt-reduction-may-be-a-simple-picture" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_art_drawing_92715063.jpg" alt="Woman using simple picture to reduce debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you do a quick Google search for &quot;debt art,&quot; you'll be either confused or underwhelmed. It's likely you'll find articles on artists accumulating or <a href="http://www.wisebread.com/5-things-debt-collectors-dont-want-you-to-know" target="_blank">dealing with debt</a>. But, there is another type of debt art that you need to know about. Not only can it help you pay off debt more quickly, or reach a financial goal, but it can brighten up your environment with something that represents a real personal success story.</p> <h2>First Thing's First &mdash; What Is Debt Art?</h2> <p>Quite simply, debt art is a piece of art that helps you reach a financial goal in a creative way. Whatever the goal is, be it eliminating credit card debt, a student loan, saving for a vacation, or paying back taxes, debt art removes the hard-edged numbers and spreadsheets and instead lets you visualize, and track, your progress.</p> <h2>How to Create Debt Art</h2> <p>It may sound corny, but the only limit to debt art is your imagination. Of course, people with more artistic flair can really go to town on it, but all you really need to do is find a fun way to track your progress. It's also good to have the debt art in a prime location in your home or office, so that you are reminded daily of your development.</p> <p>The simplest solution is a series of squares that you color in. Each square can represent a set amount that you are putting towards your goal &mdash; say, $50 per square. You want to save $1,000 for a vacation, so you create 20 squares that need to be colored in. As you save each $50, you color in a square. When every square is filled in, congratulations! Debt art has helped you reach your goal.</p> <p>Of course, that's not very interesting. Some people have taken debt art to much more creative extremes. Take, for example, Amy Jones. On her blog, <a href="http://mapyourprogress.com/blog/how-i-paid-off-more-than-26000-in-debt-by-coloring-this-in/">Map Your Progress</a>, she outlines a truly wonderful piece of art that helped her reduce her debts by $26,000!</p> <p>The art was not difficult to create. As you can see, it's a series of swirls, arranged in a kind of floral pattern. At first, the lack of color on the poster looks overwhelming. The goal, to have every $100 swirl filled in, looks like an impossible task.</p> <p>However, slowly but surely, Amy colored in those swirls. The sense of achievement, and the visual indication of reaching a goal, was powerful enough to keep her going. &quot;Coloring in those swirls month after month helped me feel like I was doing something, &quot;she said. &quot;It helped me see that I was making progress toward my goal of zeroing out my credit cards.&quot;</p> <h2>Why Debt Art Works So Well</h2> <p>It's all about breaking down something insurmountable into something very achievable. If you look at a debt like $5,000, it can seem incredibly overwhelming. So much so, that it's easier to forget it, ignore it, or hope it goes away.</p> <p>But, when you split up that $5,000 into more manageable chunks, it suddenly doesn't feel as tough. Instead of $5,000, you're looking at a picture of 200 circles, each one representing $25. How easy is it to color in one of those $25 circles? One leads to two, and three, and before you know it, you've made a $200 dent in that debt.</p> <p>The ability to track progress based on these much more achievable goals means that it's easy to see and make progress quickly. The great thing is, you can customize it to something you believe will work for you. If $25 chunks are too big, try $10, or even $5. You might like the feeling of coloring in several $5 chunks in one day, or week, over one $50 chunk. But as you see the black and white canvas become a rainbow of colors, you are spurred on to achieve your financial goal.</p> <h2>Ideas for Your Own Debt Art</h2> <p>You don't have to have artistic abilities or flair to create something that will be both fun to look at, and easy to track. Here are some ideas to get you started:</p> <ul> <li><strong>Bricks in a Wall</strong> &mdash; You can print out a simple brick pattern from a Google search, and then use it to create a building or tower. Each brick can represent a specific sum of money.<br /> &nbsp;</li> <li><strong>Legos</strong> &mdash; Here, you don't need to draw anything. And you can approach this piece of debt art in two ways. Either build something up, or knock it down. Each Lego brick can represent a sum of money, and you can either add to a tower, or remove a brick (perhaps revealing something behind it&hellip;an image of something you're saving for is one fun example).<br /> &nbsp;</li> <li><strong>Circles</strong> &mdash; Draw a series of circles until you have covered the page. You could have different sized circles for different amounts (big circles = $50, small circles = $20). When all the circles are filled in, you have reached your goal.<br /> &nbsp;</li> <li><strong>Coloring Books</strong> &mdash; If you really feel put off by the idea of creating your own art, why not find a coloring page from a book and have it enlarged? These <a href="http://amzn.to/29IGiYh">adult coloring books</a> are all the rage right now. Find a pattern that easily translates to something that can be used to track finances, and print it out poster-sized.<br /> &nbsp;</li> <li><strong>Ask the Kids </strong>&mdash; Kids of all ages love creating and coloring. If you want something that you can have as a keepsake after, ask the kids to draw something that you can fill in every week. Maybe they will draw a bunch of happy faces, cats, trucks, or fruit. They can help you color it in, too, giving you something that has meaning beyond the monetary success story.<br /> &nbsp;</li> <li><strong>Use Amy's Debt Art Maps</strong> &mdash; Amy has some available for <a href="http://mapyourprogress.com/fancy-prints/">purchase at her site</a>. They come in a variety of sizes and shapes.</li> </ul> <p><em>Have you used art to motivate you to reach a goal?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/the-key-to-debt-reduction-may-be-a-simple-picture">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">5 Ways to Prevent a Debt Spiral</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">5-Day Debt Reduction Plan: Don&#039;t Ever Stop</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/try-these-6-money-saving-challenges-now">Try These 6 Money-Saving Challenges Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management coloring creativity debt art drawing goals saving money Tue, 12 Jul 2016 10:30:07 +0000 Paul Michael 1749902 at http://www.wisebread.com Avoid These 5 Common Mistakes While Rebuilding Your Credit http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/avoid-these-5-common-mistakes-while-rebuilding-your-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/holding_credit_cards_79349747.jpg" alt="Learning to avoid common mistakes while rebuilding credit" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know your three-digit credit score is terrible. And this makes it difficult to qualify for auto loans, a mortgage, or credit cards. Even if you do qualify, you're hit with sky-high interest rates.</p> <p>Still, you <em>can&nbsp;</em><a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">rebuild your credit score</a>. It just takes time. Pay your bills on time every month. Pay off as much credit card debt as you can. Eventually, your score will rise.</p> <p>Just avoid these five common mistakes that consumers often make when rebuilding their credit.</p> <h2>1. Closing Paid-Off Credit Cards</h2> <p>Paying off a credit card is cause for celebration. Just don't cancel that card once you hit a zero balance. If you do, your credit score will take a hit. This is because of something called your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">credit-utilization ratio</a>. Basically, your credit score will fall if you use too much of your available credit.</p> <p>Here's an example. Say you have $10,000 worth of credit card debt and three open credit card accounts with a total available credit limit of $15,000. This gives you a credit utilization ratio of 67%. If you pay off one of the cards and bring your debt down to $7,000, your credit utilization ratio falls to 47%. This will boost your credit score. However, if you close that credit card account and lose that available credit (say it was $5,000), your total available credit will drop to $10,000, and your credit utilization ratio jumps to 70%, even higher than when you had $10k of debt but three open accounts.</p> <p>The better move? Keep that paid-off card open, just make sure to avoid running up its balance again.</p> <h2>2. Missing a Payment, Even Once</h2> <p>When rebuilding your credit score, your most important job is to make your monthly payments on time <em>every</em> month. Late or missed payments can send your credit score falling by 100 points. These financial missteps will stay on your credit report for seven years, too.</p> <p>So don't forget to send in that car or credit card payment on time. And if you do miss your due date? Send your payment as quickly as possible. Lenders won't report a payment as missed to the three national credit bureaus until it is 30 days or more past the due date. So even if you missed the official due date, you can still spare your credit score.</p> <h2>3. Swearing Off Credit Cards Forever</h2> <p>It's tempting when you're trying to rebuild your credit to swear off credit cards completely. After all, it's often credit card debt that has gotten consumers into credit score problems. But using a credit card responsibly is actually one way to help improve a credit score. Your score will rise if you pay your credit card bill on time each month. Not using credit cards at all can actually hurt your score.</p> <p>The key, though, is to never charge more than you can afford to pay off in full each month. If you charge too much, you'll simply increase the amount of credit card debt you carry from month to month. This will increase your credit-utilization ratio, thus hurting your score. So do use your card. Just don't use it so much that you have to carry a balance.</p> <p>If you find that you're having trouble getting approved for a credit card because of your bad credit, look for <a href="http://www.wisebread.com/the-5-best-secured-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">secured credit cards</a> which often do not require a credit check.</p> <h2>4. Looking for a Quick Solution</h2> <p>Rebuilding a weak credit score takes time &mdash; lots of it. It might take a year or more of making on-time payments and whittling down your credit card debt to improve your score enough to make you a good risk in the eyes of lenders. Don't make the mistake of trying to rush this process. Many companies claim that they can instantly boost your credit score. Unless there are errors on your credit reports, they can't. There is no quick way to raise an ailing credit score. Any company that tells you otherwise is lying.</p> <h2>5. Not Ordering Your Three Credit Reports</h2> <p>The three national credit bureaus of TransUnion, Equifax, and Experian each maintain a credit report on you. These reports list all the open credit accounts in your name and any missed or late payments in the last seven years. They also list any negative judgments such as foreclosures and bankruptcies in the last seven to 10 years.</p> <p>You are entitled to one free copy of each these reports every year from AnnualCreditReport.com. When rebuilding your credit, it's important to order these reports and to study them. Look for errors. One report might say that you missed a car payment last year that you know you paid on time. Correcting that error could provide an <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">immediate boost to your credit score</a>.</p> <p><em>Have you improved your credit? What steps did you take?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/building-a-credit-history">Building a Credit History</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score">This One Ratio Is the Key to a Good Credit Score</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-credit-card-truths-you-wish-you-could-tell-your-younger-self">10 Credit Card Truths You Wish You Could Tell Your Younger Self</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-bad-credit-isnt-the-end-of-the-world">Your Bad Credit Isn&#039;t the End of the World</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-expect-when-youre-expecting-a-huge-credit-card-bill">What to Expect When You&#039;re Expecting a Huge Credit Card Bill</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management credit history credit reports credit score credit utilization ratio debt paying bills rebuilding credit Fri, 08 Jul 2016 10:30:10 +0000 Dan Rafter 1747445 at http://www.wisebread.com 5 Careers That Offer Student Loan Forgiveness http://www.wisebread.com/5-careers-that-offer-student-loan-forgiveness <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-careers-that-offer-student-loan-forgiveness" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_69856403_XLARGE.jpg" alt="looking for a job with student loan forgiveness" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you are like millions of other graduates, you might've experienced sticker shock when you received your first student loan bill after graduation. While taking out a student loan to complete your degree seemed like a good plan at the time, you might be having some regrets when faced with the monthly payments.</p> <p>Thankfully, there are a lot of careers that offer student loan forgiveness. Look into one of these fields to kiss your student debt goodbye.</p> <h2>1. Public Service</h2> <p>Federal Perkins loans can be forgiven if an individual qualifies through full-time employment and has not consolidated their loans. The loan forgiveness is not based on what job you do, but who you work for.<a href="https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service"> Qualifying employers</a> include:</p> <ul> <li>Government organizations at any level (federal, state, local, or tribal);</li> <li>Not-for-profit organizations that are tax-exempt under Section 501(c)(3) of the Internal Revenue Code;</li> <li>Full-time positions at AmeriCorps and Peace Corps.</li> </ul> <h2>2. Doctor</h2> <p>It is hard to feel like a successful doctor when the majority of your paycheck goes to your student loan repayment. Thankfully, you can find a list of scholarships and Federal loan forgiveness programs through the&nbsp;<a href="https://services.aamc.org/fed_loan_pub/index.cfm?fuseaction=public.welcome&amp;CFID=1&amp;CFTOKEN=D3ADCE60-B544-6679-82EB218E8D3F6455">Associations of American Medical Colleges</a>.</p> <p>Many of the loan forgiveness programs for doctors require employment in a Health Profession Shortage Areas (HPSA) or a Medically Underserved Area.</p> <p>The&nbsp;<a href="https://www.lrp.nih.gov/">National Institutes of Health (NIH)</a> offers up to $35,000 per year in loan repayment for highly qualified health professionals going into biomedical or biobehavioral research careers.</p> <p>You can also take your stethoscope overseas and qualify for loan forgiveness through the military service. The&nbsp;<a href="http://www.navy.com/careers/healthcare/medicine.html#ft-education-opportunities">Navy Financial Assistance Program</a> offers tuition coverage for current medical students, as well as student loan forgiveness or grants for those with their medical degree.</p> <p>See:&nbsp;<a href="http://www.wisebread.com/8-tax-tricks-to-try-if-youre-stuck-with-student-loans?ref=seealso">8 Tax Tricks to Try if You're Stuck With Student Loans</a></p> <h2>3. Teacher</h2> <p>Teaching is a calling, and many people feel the call to instruct the next generation. So it's only fair that the government helps lighten the debt load of those devoted to teach. Teachers can gain loan forgiveness through the same public service loan forgiveness programs mentioned above.</p> <p>Teachers also can qualify for the Federal Teacher Cancellation for Perkins Loans. For teachers with a Perkins loan, 15% of your loan can be canceled when you teach for one year in a low-income area. If you teach for five years, your full loan will be forgiven.</p> <p>Be sure to check with your state to see what special teacher loan repayment programs there are. Here are just a few:</p> <ul> <li><strong>California:</strong> <a href="http://www.csac.ca.gov/doc.asp?id=111">APLE</a></li> <li><strong>Maine:</strong> <a href="http://www.famemaine.com/files/Pages/education/borrowers/Maine_Loan_Programs.aspx">Educators for Maine</a></li> <li><strong>Iowa:</strong> <a href="http://www.iowacollegeaid.gov/content/iowa-teacher-loan-forgiveness-program">Teach Iowa Scholar Program</a></li> <li><strong>New York:</strong> <a href="http://www.teachnycprograms.net/">Teach NYC </a></li> <li><strong>Texas:</strong> <a href="http://www.hhloans.com/index.cfm?objectid=a85b6795-9731-b000-c93ca1848b604db8">Teach for Texas</a></li> <li><strong>Mississippi:</strong> <a href="http://riseupms.com/state-aid/mtlr/">Mississippi Teacher Loan Repayment Program</a></li> </ul> <h2>4. Lawyer</h2> <p>Tempted by earning big figures down the road, many potential lawyers take on huge amounts of debt to make their career dream come true. Luckily, there are a few student loan forgiveness programs available just for lawyers.</p> <ul> <li><strong>Attorney Student Loan Repayment Program</strong>: In order to retain lawyers in the field, current employees are able to apply for the assistance program. Only certain loans apply, and current employees must have at least $10,000 in federal loan debt to qualify. To see which loans qualify, visit&nbsp;<a href="https://www.justice.gov/oarm/frequently-asked-questions-0#c">Justice.gov</a> for more information.</li> <li><strong>John R. Justice Student Loan Repayment Program</strong>: For lawyers working in the public sector, the&nbsp;<a href="https://www.bja.gov/Funding/JRJStateAgencies.pdf">John R. Justice Student Loan Repayment Program</a> offers $10,000 to $60,000 in loan forgiveness to eligible lawyers working as public defenders.</li> <li><strong>Herbert S. Garten Loan Repayment Assistance Program</strong>: This program awards 70 attorneys up to $5,600 in award money each year for student loan debt. This award comes with more strings than the other two. Eligible candidates must be employed by one of the&nbsp;<a href="http://www.lsc.gov/grants-grantee-resources/our-grantees">program's grantees</a> and have at least $75,000 in outstanding loan debt.</li> </ul> <h2>5. Dentist</h2> <p>Future dentists, here is something to smile about. You can also qualify for loan forgiveness on either the national or state level.</p> <p>National programs include service with the military. The Army offers the&nbsp;<a href="http://www.goarmy.com/amedd/dental/corps_benefits.jsp">Active Duty Health Profession Loan Repayment Program</a> (ADHPLRP) and the Healthcare Professionals Loan Repayment Program (HPLR). The Airforce offers Air Force Active Duty Health Professions Repayment Program (ADHPLRP). All of these programs offer up to $40,000 to $50,000 in debt repayment per year. Research each individual program to know about maximum caps, eligibility criteria, and other benefits.</p> <p>And the&nbsp;<a href="http://www.ada.org/~/media/ADA/Education%20and%20Careers/Files/dental-student-loan-repayment-resource.pdf">American Dental Association</a> has a full list of state-level programs that offer loan forgiveness.</p> <h2>Finding and Qualifying for Student Loan Forgiveness Programs</h2> <p>It's important to note that many of these careers cannot grant student loan forgiveness if your loan does not qualify. This means that if your loan is in default or in a grace period, or you are still attending school, companies may not be able to make qualified loan payments. Also, most student loan forgiveness programs are for federal loans only, and private student loans will not be forgiven. Finally, inquire with your college or university's financial aid department for more available loan forgiveness programs.</p> <p><em>Are you planning on using loan forgiveness for your student loans? Share with us!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/5-careers-that-offer-student-loan-forgiveness">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/escape-your-dying-industry-with-one-of-these-8-careers-instead">Escape Your Dying Industry With One of These 8 Careers, Instead</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-ways-youre-being-a-terrible-employee">12 Ways You&#039;re Being a Terrible Employee</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/contributing-to-a-roth-versus-paying-down-debt">Contributing to a Roth Versus Paying Down Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-easy-ways-to-avoid-student-loan-debt">12 Easy Ways to Avoid Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-job-perks-that-can-lead-to-a-dream-career">6 Job Perks That Can Lead to a Dream Career</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management career career path job hunting student loan student loan debt student loan forgiveness Thu, 23 Jun 2016 09:00:04 +0000 Ashley Eneriz 1736930 at http://www.wisebread.com How to Escape the Paycheck-to-Paycheck Cycle http://www.wisebread.com/how-to-escape-the-paycheck-to-paycheck-cycle <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-escape-the-paycheck-to-paycheck-cycle" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_80116831_XLARGE.jpg" alt="stop living paycheck to paycheck" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're living paycheck to paycheck, you probably think it's a normal part of life and accept it for what it is. To that, I stick my tongue out and blow. There are plenty of people who've broken free from this rut, but your particular cycle won't break until <em>you </em>break it.</p> <p>Living paycheck to paycheck can mean you're one paycheck away from being without lights, a car, or a home &mdash; and that's just not acceptable. Granted, this is worst-case scenario, but it's a possible scenario. This isn't meant to scare you, of course, but it is meant to build motivation to help you improve your financial outlook and say so long to a house-poor existence. Here's what you need to do to stop living on the edge. (See also: <a href="http://www.wisebread.com/5-ways-to-grow-your-savings-without-a-steady-paycheck?ref=seealso">5 Ways to Grow Your Savings Without a Steady Paycheck</a>)</p> <h2>1. Take Stock of What You're Working With</h2> <p>If you want to stop living paycheck to paycheck, you have to live below your means. It's that simple. Some people are happy just to break even every month, but if you never have extra income, you'll never achieve some of your goals.</p> <p>To stop the cycle, do a financial checkup.</p> <p>Here's a little exercise: Comb through your most recent bank statements, credit card statements, and receipts, and then write down every monthly expense from housing to groceries. Calculate how much you're spending on clothes, miscellaneous items, groceries, fuel, etc.</p> <p>Once you have this figure, compare it with your take-home pay. The amount you're spending every month may be the equivalent of what you bring home, or more than what you bring home. If the latter is the case, it's time to trim.</p> <h2>2. Cut the Fat</h2> <p>Don't listen to anyone who says living paycheck to paycheck is normal. It's not, and whoever says that will probably be sad for the rest of their life. Alas, many people have been conditioned to think this way, and it's this exact thinking that keeps people stuck.</p> <p>There's a better way to live, and it starts with trimming your expenses. At this point, it's not about your wants; you have to focus on your needs and get rid of any unnecessary expenses. What to cut? These extras:</p> <ul> <li>Gym memberships</li> <li>Eating out for lunch</li> <li>Grabbing coffee</li> <li>Spending $50 a week on entertainment</li> <li>Subscription services</li> </ul> <p>These costs don't seem like a lot, but they add up. Getting rid of nonessential expenses can give your budget some wiggle room, creating more disposable income than you thought possible.</p> <h2>3. Stop Being Enslaved to Debt</h2> <p>The more debt you have, the more likely you are to live paycheck to paycheck. This is because debt robs you of extra money. Even if you can't get rid of your house payment, car payment, or student loan debt immediately, you can start chipping away at credit card balances.</p> <p>Take the money you're saving from trimming unnecessary expenses and dump all or a large portion of this cash on your debt. You can tackle your debt with the smallest balance first, or the debt with the highest interest rate first. It doesn't matter which approach you choose, as long as you're paying down balances. The less you owe, the more you can keep. To help you, I've recently written an <a href="http://www.wisebread.com/topic/5-day-debt-reduction-plan">entire five part series on eliminating debt</a>.</p> <h2>4. Pay Yourself &mdash; No Matter What</h2> <p>Once you've got a handle on your debt, it's time to start paying yourself. If you build a cushy savings account, you may never have to borrow money or use a credit card again &mdash; at least not for an emergency or an unexpected expense.</p> <p>Take the money you were putting toward <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt">debt repayment</a> and set up an automatic savings schedule. Each pay period, automatically transfer a specific amount from checking into savings. Schedule this transfer before you pay your bills to ensure you're always paying yourself first.</p> <h2>5. Create Additional Income for Yourself</h2> <p>Sometimes, it isn't enough to trim expenses and pay off debt. You may earn just enough to get by, and despite living simply, you're still trapped in a cycle of living paycheck to paycheck. The truth is, getting ahead may require more income.</p> <p>Now, as a freelancer, I can run down a list of <a href="http://www.wisebread.com/can-you-really-make-a-living-in-the-gig-economy">side hustles to increase your income</a>. This includes moonlighting as a consultant, cutting lawns, buying and selling online, watching pets, renting out extra space in your home, etc. But I also realize that not everyone has the entrepreneurial spirit. But even if you don't want to be your own boss, there are ways to build your income.</p> <p>Depending on your circumstances, a part-time job might fit your schedule perfectly. If you can earn as little as an extra $20 a day, you'll have an extra $400 a month. For example, you can search online for local office-cleaning companies, and call these companies to see if they're looking for part-time help in the evenings. I have a friend who cleans a small office every day after work. It only takes two hours and the cleaning company pays him $20 per cleaning. It's not the most glamorous or high-paying part-time job, but it's easy work and pays okay.</p> <h2>6. Learn How to Say &quot;No&quot;</h2> <p>One of the best ways to improve a budget is to learn how to say no. If you have a large social circle, there's always someone inviting you to a restaurant, a movie, or another event. If you get into a pattern of constantly saying yes and accepting invitations, you could end up broke. You should never sacrifice your bank account at the expense of fun, especially when there are too many ways to enjoy yourself for free. The key is having an airtight entertainment budget. Decide what you can realistically afford to spend on fun, and then stick to this budget. I learned how to say no, and now &quot;No&quot; is my favorite word.</p> <h2>7. Face Reality and Downsize</h2> <p>Making simple adjustments to your budget can improve cash flow tremendously, but not when you're too far in the hole. Accept that you'll have to let go of stuff. Ideally, your house payment should be no more than 28%-30% of your gross income. If you're paying more, you're overspending and it's time to face reality. You're never going to get ahead when you're struggling to keep up with the basics. Downsizing your house can create a smaller house payment, cheaper utilities, and less maintenance. Your finances also may improve if you downsize from an expensive car. You can enjoy a lower car payment and cheaper insurance premiums.</p> <p><em>Are you living paycheck to paycheck? What are you doing to change the situation? Let's discuss in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/how-to-escape-the-paycheck-to-paycheck-cycle">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tips-for-increasing-your-financial-literacy">Tips for Increasing Your Financial Literacy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/johnny-says-read-this-post-and-get-riyyyyyyyyyyatch">Johnny Says: Read This Post and Get Riyyyyyyyyyyatch</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-audacity-to-waste-money-for-better-finances">The Audacity to Waste Money for Better Finances</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/life-after-debt-whats-next">Life After Debt: What&#039;s Next?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/uk-banks-are-blocking-customers-credit-cards-will-the-usa-be-next">UK banks are blocking customers&#039; credit cards. Will the USA be next?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management debt management finances income paycheck paycheck to paycheck payday personal finance Fri, 17 Jun 2016 10:30:04 +0000 Mikey Rox 1732946 at http://www.wisebread.com 5-Day Debt Reduction Plan: Don't Ever Stop http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-day-debt-reduction-plan-dont-ever-stop" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_happy_work_91823869.jpg" alt="Man never stopping with his debt reduction plan" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>[Editor's Note: This is part five of a five-part series on debt reduction. To read more, see the rest of the <a href="http://www.wisebread.com/topic/5-day-debt-reduction-plan">5-Day Debt Reduction Plan</a>.]</p> <p>The harsh truth about debt reduction is that many people don't stick with their plan long enough to see real results. They start off motivated and excited, but they lose steam after a while and never cross the finish line. Paying bills isn't super fun, after all. But if you want to get back in the black, it's important that you think long term without false expectations of overnight success. Luckily, there are plenty of tricks to stay on track, or get back on track if you've lost your way. Here are a few to consider.</p> <p>See also: <a href="http://www.wisebread.com/6-ways-life-is-wonderful-when-youre-debt-free?ref=5dayplan">6 Ways Life Is Wonderful When You're Debt-Free</a></p> <h2>1. Switch Up Your Strategy</h2> <p>As I mentioned in the previous entry of this series, you can pay off balances successfully using the <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you?ref=5dayplan">avalanche or snowball debt methods</a> or a combination of both; you have to decide which method works best with your psyche. Just because you start off using one method doesn't mean you can't change it up. If you start the avalanche method and notice your motivation dwindling after a few week or months, give the snowball method a try, or vice versa. It's a matter of trial and error and finding the method that builds momentum.</p> <p>See Also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=5dayplan">Fastest Way to Pay Off $10,000 in Credit Card Debt</a></p> <h2>2. Track Your Progress</h2> <p>It's hard to stay motivated if you don't track your progress. If you're carrying a large amount of debt, it can feel like you're spinning your wheels and getting nowhere. It can take awhile to make a noticeable dent in your balances, and if you don't think you're making progress, you're likely to give up. Although you don't have to obsess about your balances or check statements on a daily basis, it doesn't hurt to recalculate what you owe every couple of months and post your updated balances. Sometimes, we need a visual reminder of our progress to stay motivated.</p> <p>See also: <a href="http://www.wisebread.com/10-smart-ways-to-make-yourself-love-saving-money?ref=5dayplan">10 Smart Ways To Make Yourself Love Saving Money</a></p> <h2>3. Celebrate Milestones &mdash; You Deserve It</h2> <p>Paying off debt is hard work, so it's okay to reward yourself for a job well done. This doesn't suggest going on a small spending spree every time you make a payment, but you can (and should) reward yourself with an inexpensive treat for hitting milestones.</p> <p>&quot;Humans are emotional not logical creatures. Even though logically you don't need to splurge to pay off a debt faster, this small reward triggers the need you have for emotional fulfillment,&quot; says investing blogger Trey Henninger. &quot;It's important to have these small rewards in order to be successful in a hard task like paying off credit card debt.&quot;</p> <p>If you're on a spending freeze and haven't seen a movie outside the house in months, take yourself to a movie after paying off the first $250 of debt, and then plan another low-cost activity after paying off the next $250. Just make sure you pay with cash and not credit; that'll defeat the purpose, and I don't want to come to your house and wag my finger at you.</p> <p>See also: <a href="http://www.wisebread.com/20-free-and-fun-ways-to-reward-yourself?ref=5dayplan">20 Free and Fun Ways to Reward Yourself</a></p> <h2>4. Find an Accountability Partner</h2> <p>Sometimes, we do better when we're accountable to somebody else. Not that you should go around announcing your debt to everyone, but a trusted friend or relative can be the right person to help you stay on track. This person can check in with you from time to time, help you gauge your progress, and offer support when you're on the verge of burnout or resisting an impulse buy.</p> <p>Getting an accountability partner means you'll always have someone in your corner encouraging you. At the same time, stay away from those in your life who <a href="http://www.wisebread.com/is-peer-pressure-keeping-you-poor?ref=5dayplan">encourage or trigger spending</a>. If you have a friend who always wants to shop or go out to dinner, let them know up front that you're on a spending hiatus so they'll give you the space you need to work on your finances. Or, better yet, invite this person to join your debt-eliminating crusade as well; they could probably benefit from it.</p> <p>See also: <a href="http://www.wisebread.com/5-ways-to-dodge-peer-pressure-to-spend">5 Ways to Dodge Peer Pressure to Spend</a></p> <h2>5. Remember Why You're Paying Off Debt</h2> <p>Since it can take months or years to pay off debt, you might forget why you started this journey in the first place. Whenever you feel like giving up, or if you feel that your efforts aren't paying off, think back to the day you decided to work on eliminating your debt. What was your motivation? Did you want to improve your credit so you could buy a house, or were you tired of stressing about high balances? Whatever the reason, focus on the big picture and imagine how amazing your life will be once you are debt-free.</p> <p>See also: <a href="http://www.wisebread.com/the-1-rule-and-other-ways-to-make-goals-manageable?ref=5dayplan">The 1% Rule and Other Ways to Make Goals Manageable</a></p> <h2>The Debt Is Gone &mdash; Now What?</h2> <p>Finally, you've paid off your debt and you can breathe a sigh of relief. It was a rough road and at times you didn't think you would succeed, but you did and it's an indescribable feeling.</p> <p>For the first time you know what it feels like to have no debt and disposable income, and your mind might start thinking of uses for the extra cash. One of the worst things you can do, however, is to take your disposable income and go on spending binges. Yeah, you can have a little fun, but now that your debt has dwindled, it's the perfect opportunity to fix other areas of your personal finance.</p> <p>Building a solid financial foundation isn't only about getting rid of debt. Saving should also be a priority, and now that you're debt-free, you can focus on saving your money.</p> <p>You've already done the hard part, which was to search and destroy unnecessary expenses. Rather than add these expenses back into your budget, take the money you were using for debt repayment and start paying yourself. With an adequate savings, you're less likely to end up in debt again. If you were giving a creditor $300 a month, think of your savings account as another expense and deposit this amount into your account every month.</p> <p>You can slowly build a three to six-month cushion, start a down payment fund for a house, or if you haven't already, open a retirement account or increase your retirement contributions. Whatever you do, never stop saving.</p> <p>See also: <a href="http://www.wisebread.com/5-ways-to-make-yourself-accountable?ref=5dayplan">5 Ways to Make Yourself Accountable</a></p> <h2>Bottom Line</h2> <p>Bad debt can rob you blind. It can take your joy, your motivation, and your options. But once you start on the path to being debt-free, the dark cloud hanging over you becomes lighter and lighter. You can fight back against debt, but you have to take it one small step at a time.</p> <h2>Debt Management Resources</h2> <ul> <li><a href="http://www.wisebread.com/how-to-manage-your-debt-in-10-minutes-a-week?ref=5dayplan">How to Manage Your Debt in 10 Minutes a Week</a></li> <li><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask?ref=5dayplan">5 Debt Management Questions You're Too Embarrassed to Ask</a></li> <li><a href="http://www.wisebread.com/6-free-debt-management-tools?ref=5dayplan">6 Free Debt Management Tools</a></li> <li><a href="http://www.wisebread.com/12-reasons-your-debt-isnt-diminishing?ref=5dayplan">12 Reasons Your Debt Isn't Diminishing</a></li> <li><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make?ref=5dayplan">8 Debt Reduction Mistakes Even Smart People Make</a></li> <li><a href="http://www.wisebread.com/should-you-use-peer-to-peer-lending-to-pay-down-credit-card-debt?ref=5dayplan">Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?</a></li> <li><a href="http://www.wisebread.com/6-common-debt-reduction-roadblocks-and-how-to-beat-them?ref=5dayplan">6 Common Debt Reduction Roadblocks -- And How to Beat Them</a></li> <li><a href="http://www.wisebread.com/six-steps-to-eliminating-your-debt-painlessly?ref=5dayplan">6 Steps to Eliminating Your Debt Painlessly</a></li> <li><a href="http://www.wisebread.com/8-organizations-that-really-can-help-you-with-your-debt?ref=5dayplan">8 Organizations That REALLY Can Help You With Your Debt</a></li> <li><a href="http://www.wisebread.com/should-you-sell-your-home-to-pay-down-debt?ref=5dayplan">Should You Sell Your Home to Pay Down Debt?</a></li> <li><a href="http://www.wisebread.com/taming-your-debt-aggressive-repayment-strategies?ref=5dayplan">Taming Your Debt: Aggressive Repayment Strategies</a></li> <li><a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies?ref=5dayplan">7 Best Credit Card Debt Elimination Strategies</a></li> </ul> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-budgeting-skills-everyone-should-master">11 Budgeting Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make">8 Debt Reduction Mistakes Even Smart People Make</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-search-and-destroy">5-Day Debt Reduction Plan: Search and Destroy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/try-these-6-money-saving-challenges-now">Try These 6 Money-Saving Challenges Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management 5 day debt reduction plan accountability expenses progress repayment plan saving money strategy tracking Fri, 10 Jun 2016 10:30:11 +0000 Mikey Rox 1727862 at http://www.wisebread.com 5-Day Debt Reduction Plan: Pay It Off http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-day-debt-reduction-plan-pay-it-off" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_creative_artist_94781499.jpg" alt="Woman paying off debt as part of debt reduction plan" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>[Editor's Note: This is part four of a five-part series on debt reduction. To read more, see the rest of the <a href="http://www.wisebread.com/topic/5-day-debt-reduction-plan">5-Day Debt Reduction Plan</a>.]</p> <p>You've combed through your budget and you've found extra money to direct toward debt repayment &mdash; which means the time has finally arrived to pay it off.</p> <p>Getting rid of debt isn't only about improving your budget and having the right tools &mdash; you also need the right strategy to succeed. Although there isn't necessarily a &quot;best&quot; way to pay off debt, some strategies can get you to the finish line quicker. You need to understand different pay off methods and do what works best for you.</p> <p>See Also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=5dayplan">Fastest Way to Pay Off $10,000 in Credit Card Debt</a></p> <p>There are two popular ways to attack your credit card debt. The first is to pay the minimum on each card except the card with the <em>smallest balance</em>. That card you'll throw all the money you can at it. This is called the Snowball method.</p> <p>The other method is to pay the minimum on each card except the card with the <em>highest interest rate</em>. You'd put in all the money you can into that card. This is called the Avalanche method. Which one is best for you depends on your personality.</p> <p>See also: <a href="http://www.wisebread.com/the-simple-way-to-decide-which-credit-card-to-pay-off-first?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=5dayplan">The Simple Way to Decide Which Credit Card to Pay Off First </a></p> <p>Here are the details of the debt example we're using in this series:</p> <p>&nbsp;<img width="605" height="298" alt="" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202016-06-08%20at%2011.47.55%20AM.png" /></p> <h2>Debt Avalanche</h2> <p>There are two factors to consider when paying off debt: the amount you owe and your interest rate. When you <em>avalanche </em>your debt, you focus on paying off the debt with the highest interest rate first, regardless of the balance. This approach prioritizes debt according to costs. The higher your interest rate, the more it'll cost to carry the balance. So the idea is to get rid of your most expensive debt as early as possible.</p> <p>If you've been following this series, you've (hopefully) already written down your debts including amounts and interest rates. The next step is taking your &quot;found&quot; money and making higher payments on the debt with the highest rate, while only making minimum payments on your other debts. Once you've paid off this debt, move on to the balance with the next highest interest rate and continue the cycle until you're debt-free.</p> <p>Using the debts in the example from <a target="_blank" href="http://www.wisebread.com/5-day-debt-reduction-plan-add-it-up?ref=5dayplan">Day 2</a>, you'd target Credit Card #3 first, then Credit Card #2 and so on until Credit Card #1 is paid off.</p> <p><strong>Total Debt</strong>: $10,000</p> <p><strong>Monthly Payment</strong>: $200 minimum + $300 &quot;found&quot; money = $500</p> <p><strong>Months to Payoff</strong>: 25</p> <p><strong>Interest Paid</strong>: $1,811</p> <p>This method will result in you paying the least amount of interest possible.</p> <h2>Debt Snowball</h2> <p>This method is similar to the Avalanche, but instead of concentrating your efforts on the debt with the highest interest rate, you focus on the debt with the smallest <em>balance</em>. You'll make higher payments on this debt and minimum payments on all other debts. And once you've paid off this balance, you'll funnel the money to the debt with the next smallest balance, and so on. Using the debts in our list, you'd start at Credit Card #4, move to Credit Card #1, and so on until you paid off Credit Card #3.</p> <p><strong>Total Debt</strong>: $10,000</p> <p><strong>Monthly Payment</strong>: $200 minimum + $300 &quot;found&quot; money = $500</p> <p><strong>Months to Payoff</strong>: 26</p> <p><strong>Interest Paid</strong>: $2,092</p> <p>Although the Snowball takes a month longer than the Avalanche &mdash; and costs more in interest &mdash; it's still very popular. The Snowball lets you tackle easy balances first, and you see results of your efforts right away, which can give a psychological push to continue on the path. Even that small amount of encouragement will help you stay the course over the long term.</p> <h3>A Simple Debt Repayment Calculator to Try</h3> <p>You can use the same <a href="https://www.calcxml.com/calculators/restructuring-debt">debt repayment calculator</a> we used to crunch your own numbers and compare strategies. You'll find a payment plan, too, that tells you how much to send to each creditor every month of the plan until it is paid off. How easy is that?</p> <h2>Debt Repayment Tactics That Work</h2> <p>Whichever method you choose, remember that debt repayment isn't easy. But don't give up. I never promised this would be a walk in the park, but there are several tactics to keep you on the right track.</p> <h3>1. Don't Forget Your Budget</h3> <p>Finding extra money for repayment required revamping your budget and coming up with a monthly spending plan that prioritized expenses. For any repayment plan to work, you have to remember and stick with your budget, or else you'll revert to bad habits. Don't forget to revisit your budget every week and look back month-to-month to track your income and spending. You don't want frivolous spending to creep back into the picture and throw you off track.</p> <h3>2. Make a Payment Every Two Weeks</h3> <p>Some creditors accept partial payments and allow customers to make more than one payment a month. Rather than make one monthly payment, break up the payment over two weeks. Since credit cards typically charge interest on a daily basis, the sooner you get a payment to your creditors, the less interest you pay. Also, making bi-weekly payments allows you to get in one extra month of payment each year (you'll make 26 payments, the equivalent of 13 months). This is an important tip to remember! If you owe $3,000 on a credit card with an interest rate of 16% and you make a $100 payment each month, you can save $100 and pay off the balance four months sooner by switching from a monthly payment to a bi-weekly payment.</p> <h3>3. Redirect Money From &quot;Almost&quot; Impulse Buys</h3> <p>You're only human, so yeah, at times you'll be tempted to make an impulse buy. Like all vices, you have to learn ways to overcome these urges.</p> <p>&quot;If you feel the urge to buy a new pair of shoes or sunglasses, take a quick peek at your credit card debt by viewing your mobile app,&quot; recommends consumer and money-saving expert Andrea Woroch. &quot;This will remind you of your debt-free goals and every time you seriously avoid an impulse purchase, make a payment in the amount that you would've used on that item.&quot;</p> <h3>4. Implement a Spending Freeze</h3> <p>A spending freeze can jump-start debt elimination, and it doesn't have to be for an extended period. If you can't handle a six or 12-month freeze, shoot for one to three months. For this to work, you must commit to only buying necessities &mdash; no matter what. This means no eating out, no movies, no coffee runs, no hair and nail services, no eBay shopping, no extras of any kind. A spending freeze doesn't mean you can't have fun, but you'll have to get creative and look for ways to entertainment yourself for free. Keep track of how much you're saving and put this money toward debt. Always remember to &quot;bank your savings!&quot;</p> <h3>5. Automate Your Payments</h3> <p>If you don't think you're disciplined enough to increase monthly debt payments on your own, automate your finances. You can set up automatic payments between your creditor and bank. You choose the payment amount and the payment date. All you have to do is make sure there's enough funds in your account.</p> <h3>6. Inquire About a Cheaper Interest Rate</h3> <p>Remember when your mom told you that &quot;You'll never know unless you ask?&quot; Well, she was right (again!), and getting a cheaper credit card rate is often a matter of asking for it. Your creditors may not voluntarily lower your rate, but they might cut you some slack if you request one, especially if you have a good payment history and threaten to take your business elsewhere. If your credit card company won't budge on your rate, you can apply for another <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=5dayplan">credit card with a lower APR</a> and move your balance from a high-rate card to a low-rate credit card. You also can look into refinancing loans to see if you qualify for a lower interest rate. A lower rate reduces your monthly payment, but if you want to chip away at your debt faster, continue making the original payment.</p> <h3>7. Do a Balance Transfer</h3> <p>If you can commit to a certain repayment budget, you can look into getting a new credit card with a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=5dayplan">0% APR for balance transfers</a> promotion. How this works is simple: transfer your existing debt from your old cards to your new one. During the promotional time period, you are charged <strong>zero interest</strong>.</p> <p>For example, the <a href="http://www.wisebread.com/chase-slate-visa-review?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=5dayplan">Chase Slate card</a> (our favorite for balance transfers) offers 15 months of 0% intro APR on balance transfers. Let's say you transfer $10,000 to your new Slate card. (Most cards will charge a balance transfer fee between 3%-5% but Slate charges <strong>no intro fee</strong> for balance transfers made within the first 60 days of account opening.) After 15 months of $500 payments, your balance will be a mere $2500. After that, the interest rate kicks in (for Slate, it's a variable 13.24%-23.24%). At 13% interest, you'll pay off the rest of the balance in 6 months with $85 in interest. That means instead of 25-26 months and $2,000 in interest, the balance transfer option saved you $1,900 in interest and you're debt free four to five months earlier!</p> <p>There are several things to <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=5dayplan">consider when doing a balance transfer</a>. The most important thing is that you don't deviate from your repayment budget just because you're no longer paying interest.</p> <p>See also: <a href="http://www.wisebread.com/7-important-things-you-should-know-about-balance-transfer-cards?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=5dayplan">7 Important Things You Should Know About Balance Transfer Credit Cards</a></p> <p>Debt repayment is a process, but you'll finish strong as long as you keep your eye on the prize and remain on the right path. I'll share some tips about that &mdash; and what comes after you've eliminated your debt in the final installment of the series.</p> <h2>Debt Management Resources</h2> <ul> <li><a href="http://www.wisebread.com/how-to-manage-your-debt-in-10-minutes-a-week?ref=5dayplan">How to Manage Your Debt in 10 Minutes a Week</a></li> <li><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask?ref=5dayplan">5 Debt Management Questions You're Too Embarrassed to Ask</a></li> <li><a href="http://www.wisebread.com/6-free-debt-management-tools?ref=5dayplan">6 Free Debt Management Tools</a></li> <li><a href="http://www.wisebread.com/12-reasons-your-debt-isnt-diminishing?ref=5dayplan">12 Reasons Your Debt Isn't Diminishing</a></li> <li><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make?ref=5dayplan">8 Debt Reduction Mistakes Even Smart People Make</a></li> <li><a href="http://www.wisebread.com/should-you-use-peer-to-peer-lending-to-pay-down-credit-card-debt?ref=5dayplan">Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?</a></li> <li><a href="http://www.wisebread.com/6-common-debt-reduction-roadblocks-and-how-to-beat-them?ref=5dayplan">6 Common Debt Reduction Roadblocks -- And How to Beat Them</a></li> <li><a href="http://www.wisebread.com/six-steps-to-eliminating-your-debt-painlessly?ref=5dayplan">6 Steps to Eliminating Your Debt Painlessly</a></li> <li><a href="http://www.wisebread.com/8-organizations-that-really-can-help-you-with-your-debt?ref=5dayplan">8 Organizations That REALLY Can Help You With Your Debt</a></li> <li><a href="http://www.wisebread.com/should-you-sell-your-home-to-pay-down-debt?ref=5dayplan">Should You Sell Your Home to Pay Down Debt?</a></li> <li><a href="http://www.wisebread.com/taming-your-debt-aggressive-repayment-strategies?ref=5dayplan">Taming Your Debt: Aggressive Repayment Strategies</a></li> <li><a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies?ref=5dayplan">7 Best Credit Card Debt Elimination Strategies</a></li> </ul> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">5-Day Debt Reduction Plan: Don&#039;t Ever Stop</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-simple-way-to-decide-which-credit-card-to-pay-off-first">The Simple Way to Decide Which Credit Card to Pay Off First</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">5 Ways to Prevent a Debt Spiral</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-budgeting-skills-everyone-should-master">11 Budgeting Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-use-peer-to-peer-lending-to-pay-down-credit-card-debt">Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Credit Cards Debt Management 5 day debt reduction plan avalanche method expenses repayment plan saving money snowball method spending freeze strategies Thu, 09 Jun 2016 10:30:06 +0000 Mikey Rox 1727206 at http://www.wisebread.com 5-Day Debt Reduction Plan: Search and Destroy http://www.wisebread.com/5-day-debt-reduction-plan-search-and-destroy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-day-debt-reduction-plan-search-and-destroy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_piggy_bank_52822932.jpg" alt="Woman searching and destroying her current debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>[Editor's Note: This is part three of a five-part series on debt reduction. To read more, see the rest of the <a href="http://www.wisebread.com/topic/5-day-debt-reduction-plan">5-Day Debt Reduction Plan</a>.]</p> <p>Some people give up on the idea of paying off debt because they think they don't earn enough money. Yes, life can be expensive, especially when wages don't keep pace with the cost of living. We're all victims of the tough economy, but this doesn't mean we can't win the war against consumer debt.</p> <p>If you talk with anyone who's <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=5dayplan">successfully paid off debt</a>, you'll likely notice a common thread: Commitment. While these folks may not be rich or have a ton of money, what they do have is an air-tight spending plan, and they know exactly where their money is going.</p> <h2>You Need a Budget</h2> <p>To get a handle on debt, you first have to get a handle on your budget and monitor your spending. Like adding up your debt, you'll need to write it all down rather than relying on your own estimates. There's a good chance that you're spending more than you think you are in many categories. In fact, &quot;financial advisers who press clients to tally their spending say the numbers are often at least 20% higher than the individuals had thought,&quot; according to the Wall Street Journal.</p> <p>Coming up with a <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=5dayplan">budget isn't hard</a>. It's simply a matter of identifying your fixed and variable expenses. The good news is that with modern technology, you don't have to budget the old-fashioned way with a pen and paper. There are plenty of apps and software programs that simplify budgeting, and many are free to download. For example:</p> <ul> <li>Mint</li> <li>Pocket Guard</li> <li>Good Budget</li> <li>Mvelopes</li> <li>Home Budget</li> <li>Level Money</li> <li>Spendee</li> <li>...and many more, including a simple spreadsheet.</li> </ul> <p>See also: <a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget?ref=5dayplan">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</a></p> <p>These apps are effective because they allow you track income and expenses, and you're able to see what you're spending on a daily, weekly, or monthly basis. Some budgeting apps also include pie charts and graphs so you know the percentage of your income that's spent in different categories. When you see where your money goes, it's easier to identify areas where you need to cut back.</p> <h2>Tracking Your Expenses</h2> <p>It can be hard to account for every cent when you first begin, but if you're following along with the series, on Day Two you collected all of your recent credit card statements, which is a good place to start. If you're at a loss for spending details, go ahead and make estimates now, and create a <a href="http://www.wisebread.com/start-saving-more-with-this-one-simple-tool?ref=5dayplan">spending book</a> and track every penny you spend (every one!) for a month. You can update the estimates you make today afterward.</p> <p>Group your expenses into two categories: Fixed and Variable. Fixed means you can't change it (immediately). For example, these might include your mortgage, car payments, and insurance. The other expenses are variable, which means that you can adjust them easily, for example groceries, dining, and even subscriptions like Hulu or Netflix (you can cancel them or lower the subscription level at any time).</p> <p>If you're overspending on a fixed monthly expense like a house or car, you can't get rid of those expenses overnight. But depending on how much debt you're in, how quickly you want to get out of it, and whether you've suddenly realized you've been living outside of your means, you should <a href="http://www.wisebread.com/this-is-how-you-downsize-your-home-and-start-living-a-better-life?ref=5dayplan">consider downsizing</a> or even <a href="http://www.wisebread.com/10-of-americas-awesomest-cheap-cities">moving to a different city</a>.</p> <p>See also: <a href="http://www.wisebread.com/10-big-expenses-you-can-easily-get-rid-of?ref=5dayplan">10 Big Expenses You Can Easily Get Rid Of</a></p> <p>But in the meantime, take a hard look at your variable expenses and start cutting.</p> <h2>Keep Your Goals Attainable</h2> <p>As we saw in <a href="http://www.wisebread.com/5-day-debt-reduction-plan-add-it-up?ref=5dayplan">Day 2: Add It Up</a>, if you want to get rid of your $10,000 in credit card debt in two years, you'll need to allocate $500 per month toward debt repayment. If you're currently paying $200 a month, rework your budget to free up an additional $300 every month. This breaks down to about $75 per week.</p> <p>See also: <a href="http://www.wisebread.com/101-ways-to-save-money-around-the-house?ref=5dayplan">101 Ways to Save Money Around the House</a></p> <p>Here are some ideas about how you can drum up that extra cash.</p> <ul> <li><strong>Reduce your weekly grocery budget</strong>. You can save money by skipping the brand names and buying generic and by planning meals based on the weekly sales. Use a <a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=5dayplan">credit card that offers rewards for groceries</a> and always bring a list and stick to it!</li> </ul> <p>See also: <a href="http://www.wisebread.com/save-100s-next-month-with-these-10-grocery-shopping-tips?ref=5dayplan">Save $100 Next Month with These Grocery Shopping Tips</a></p> <ul> <li><strong>Cut back on entertainment</strong>. If you're currently spending $40 a week on entertainment, which might include movies, dinner, and drinks with friends, scale back to $30 a week. Something as simple as <a href="http://www.wisebread.com/how-water-can-save-you-977-a-year?ref=5dayplan">ordering water</a> instead of a soda or iced tea can save you $5-$10 each week.</li> </ul> <p>See also: <a href="http://www.wisebread.com/tips-for-eating-out-cheaply?ref=5dayplan">Tips for Eating Out Cheaply</a></p> <ul> <li><strong>Travel mug and brown bag it</strong>. So what if you have to <a href="http://www.wisebread.com/heres-how-rich-youd-be-if-you-stopped-drinking-expensive-coffee">brew your own coffee</a> or <a href="http://www.wisebread.com/are-you-wasting-300000-on-lunch?ref=5dayplan">brown bag your lunch</a>? You'll be glad you made the sacrifice as your debt starts to disappear.</li> </ul> <p>See also: <a href="http://www.wisebread.com/9-ways-to-save-money-on-your-cup-of-coffee?ref=5dayplan">9 Ways to Save Money on Your Cup of Coffee</a></p> <ul> <li><strong>Cut your home entertainment spend</strong>. Instead of subscribing to Netflix <em>and </em>Hulu, pick one and cancel the other. Or keep both streaming services and get rid of cable.</li> </ul> <p>See also: <a href="http://www.wisebread.com/how-everyone-can-cut-cable-and-still-watch-what-they-love-even-sportsfans?ref=5dayplan">How to Cut Cable and Still Watch What You Love</a></p> <ul> <li><strong>Cancel your gym membership</strong>. Instead, <a href="http://www.wisebread.com/10-clever-ways-to-improve-your-home-gym?ref=5dayplan">work out at home</a> or at the park, or join a nearby recreation center, like the YMCA.</li> </ul> <p>See also: <a href="http://www.wisebread.com/12-cheap-home-workout-hacks-for-people-with-no-equipment-and-no-room?ref=5dayplan">12 Cheap Home Workout Hacks for People with No Equipment and No Room</a></p> <ul> <li><strong>Cut car expenses</strong>. Carpool, walk, or bike to work a few days each week to save on gas and reduce your transportation costs. I did this for a couple years with a buddy and it saved us both thousands of dollars.</li> </ul> <p>See also: <a href="http://www.wisebread.com/5-simple-ways-to-cut-your-car-expenses?ref=5dayplan">5 Simple Ways to Cut Your Car Expenses</a></p> <ul> <li><strong>Shop around for cheaper insurance</strong>. If you don't drive often, ask your provider about a low-mileage discount. You can also save by bundling insurances with the same company.</li> </ul> <p>See also: <a href="http://www.wisebread.com/4-tips-to-save-on-car-insurance?ref=5dayplan">4 Tips to Save on Car Insurance</a></p> <ul> <li><strong>Become an avid DIYer</strong>. Stop paying for stuff you can do yourself, such as washing your car, cutting your grass, and cleaning your house</li> </ul> <p>See also: <a href="http://www.wisebread.com/5-household-fixes-you-should-stop-paying-others-for?ref=5dayplan">5 Household Fixes You Should Stop Paying Others For</a></p> <p>As you can see, improving your cashflow isn't hard or impossible, but it does require action. If you can cut $10, $20, or even $30 here and there, the <a href="http://www.wisebread.com/16-easy-ways-to-save-100-this-month?ref=5dayplan">savings can add up to hundreds</a> every month. Once you have a solid savings plan in place, you can finally begin redirecting found dollars toward debt repayment.</p> <h2>Increase Your Income</h2> <p>The other part of your budget includes the money you have coming in. The more you make, the more you can allocate to your debt reduction. Often it's easier to get a side gig to get the extra money than to cut costs. Here are ways you can increase your income (make sure you're putting in all that extra money into your credit card payments!).</p> <ul> <li><strong>Ask for a raise.</strong> Consider whether it's an appropriate time to ask for a raise. Has the company been doing well? Have you been with the company for a while and have gotten positive feedback regarding your performance? Don't be shy. The worse that can happen is your boss will say &quot;no.&quot;</li> </ul> <p>See also: <a href="http://www.wisebread.com/5-times-you-should-demand-a-raise?ref=5dayplan">5 Times You Should Demand a Raise</a></p> <ul> <li><strong>Get a side job.</strong> There's a whole <a href="http://www.wisebread.com/13-ways-to-make-money-online-that-arent-scams?ref=5dayplan">online gig economy</a> out there. Find something you can do. Do it.</li> </ul> <p>See also: <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job?ref=5dayplan">15 Ways to Make Money Outside Your Day Job</a></p> <ul> <li><strong>Sell your stuff.</strong> We all have things sitting in our garage or the back of the closet that haven't seen the light of day in years. Go through them and see what you can sell. Better yet, if you're crafty, start <a href="http://www.wisebread.com/the-5-best-sites-to-sell-your-arts-and-crafts?ref=5dayplan">making stuff to sell</a>.</li> </ul> <p>See also: <a href="http://www.wisebread.com/clear-out-that-clutter-15-places-to-sell-your-stuff?ref=5dayplan">15 Places to Sell Your Stuff</a></p> <ul> <li><strong>Sell your services.</strong> Think about your skillset and consider whether <a href="http://www.wisebread.com/make-your-hobby-pay-its-way?ref=5dayplan">others may find it valuable</a>. Find places to showcase your skills and get some exposure.</li> </ul> <p>See also: <a href="http://www.wisebread.com/10-awesome-money-making-hobbies?ref=5dayplan">10 Awesome Money-Making Hobbies</a></p> <ul> <li><strong>Be a host.</strong> You don't have to have multiple homes lying around to make money <a href="http://www.wisebread.com/turn-your-home-into-a-rental-in-9-easy-steps?ref=5dayplan">renting out your property</a>. You can rent out a room, a couch, even a parking space. You can also host a foreign exchange student.</li> </ul> <p>See also: <a href="http://www.wisebread.com/turn-your-home-into-a-rental-in-9-easy-steps?ref=5dayplan">11 Best Sites for Renting Your Extra Space</a></p> <ul> <li><strong>Be creative.</strong> You don't have to have a lot of extra time or fancy skills to make some extra cash. Take <a href="http://www.wisebread.com/what-pays-more-online-surveys-or-the-gig-economy?ref=5dayplan">online surveys</a> or spend a few hours a week on <a href="http://www.wisebread.com/find-a-side-gig-at-these-4-best-micro-jobs-sites?ref=5dayplan">micro job sites</a>. Look around for opportunities.</li> </ul> <p>See also: <a href="http://www.wisebread.com/9-ways-to-earn-extra-cash-when-money-is-tight?ref=5dayplan">9 Creative Ways to Earn Extra Cash When Money Is Tight</a></p> <p>In part four, I'll discuss some strategies that will make the most of your hard-earned money and get you to financial independence faster.</p> <h2>Debt Management Resources</h2> <ul> <li><a href="http://www.wisebread.com/how-to-manage-your-debt-in-10-minutes-a-week?ref=5dayplan">How to Manage Your Debt in 10 Minutes a Week</a></li> <li><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask?ref=5dayplan">5 Debt Management Questions You're Too Embarrassed to Ask</a></li> <li><a href="http://www.wisebread.com/6-free-debt-management-tools?ref=5dayplan">6 Free Debt Management Tools</a></li> <li><a href="http://www.wisebread.com/12-reasons-your-debt-isnt-diminishing?ref=5dayplan">12 Reasons Your Debt Isn't Diminishing</a></li> <li><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make?ref=5dayplan">8 Debt Reduction Mistakes Even Smart People Make</a></li> <li><a href="http://www.wisebread.com/should-you-use-peer-to-peer-lending-to-pay-down-credit-card-debt?ref=5dayplan">Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?</a></li> <li><a href="http://www.wisebread.com/6-common-debt-reduction-roadblocks-and-how-to-beat-them?ref=5dayplan">6 Common Debt Reduction Roadblocks -- And How to Beat Them</a></li> <li><a href="http://www.wisebread.com/six-steps-to-eliminating-your-debt-painlessly?ref=5dayplan">6 Steps to Eliminating Your Debt Painlessly</a></li> <li><a href="http://www.wisebread.com/8-organizations-that-really-can-help-you-with-your-debt?ref=5dayplan">8 Organizations That REALLY Can Help You With Your Debt</a></li> <li><a href="http://www.wisebread.com/should-you-sell-your-home-to-pay-down-debt?ref=5dayplan">Should You Sell Your Home to Pay Down Debt?</a></li> <li><a href="http://www.wisebread.com/taming-your-debt-aggressive-repayment-strategies?ref=5dayplan">Taming Your Debt: Aggressive Repayment Strategies</a></li> <li><a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies?ref=5dayplan">7 Best Credit Card Debt Elimination Strategies</a></li> </ul> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-day-debt-reduction-plan-search-and-destroy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-add-it-up">5-Day Debt Reduction Plan: Add It Up</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">5-Day Debt Reduction Plan: Don&#039;t Ever Stop</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/beyond-debt-free-getting-by-in-the-new-economy">Beyond Debt-Free: Getting By in the New Economy</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-apps-that-make-budgeting-fun-no-really">7 Apps That Make Budgeting Fun — No Really!</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management 5 day debt reduction plan apps cutting expenses payoff plans spending book Wed, 08 Jun 2016 10:30:07 +0000 Mikey Rox 1726483 at http://www.wisebread.com 5-Day Debt Reduction Plan: Add It Up http://www.wisebread.com/5-day-debt-reduction-plan-add-it-up <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-day-debt-reduction-plan-add-it-up" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_bills_calculator_64784797.jpg" alt="Man adding up his debt during debt reduction plan" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>[Editor's Note: This is part two of our five-part series on debt reduction. To read more, see the rest of the <a href="http://www.wisebread.com/topic/5-day-debt-reduction-plan">5-Day Debt Reduction Plan</a>.]</p> <p>Excuses and bad habits might have stopped you from <a href="http://www.wisebread.com/5-day-debt-reduction-plan-stop-waiting-for-tomorrow?ref=5dayplan">achieving financial success</a> in the past, but now that you're ready to tackle debt like a boss, it's time to get down to business. Paying off debt is hard work. In fact, it's probably one of the hardest financial challenges you'll take on, aside from actually making the money you'll need to pay it off. Considering that then, you won't get far without provisions in place.</p> <p>See also: <a href="http://www.wisebread.com/5-steps-toward-financial-independence?ref=5dayplan">5 Steps Toward Financial Independence</a></p> <p>To get to the finish line &mdash; or even come close to it &mdash; you'll need a certain amount of courage to attack your debt head on. It's a frightening prospect, for sure, and maybe you've tricked yourself into believing your debt problem isn't that bad. While this mindset might help you sleep better at night, it doesn't reduce balances. So before you can move forward in this process, you have to add up what you owe. Chances are, the final number will be a scary one.</p> <h2>1. Decide Which Debts to Include in Your Payoff Plan</h2> <p>Some people come up with a plan to pay off <em>all </em>of their debt, including student loans, auto loans, and mortgages, whereas others focus on unsecured debts like credit cards and personal loans. All debt isn't created equal. We're focusing this plan on credit card debt which can have more of a <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score?ref=5dayplan">negative impact on credit scores</a> and usually comes with higher, often much higher, interest rates.</p> <h2>2. Take a Few Minutes to Gather Your Statements</h2> <p>Since you're adding up what you owe, create a simple spreadsheet to record this information. It's important to get everything down. Some people have no idea of how much they owe. They might have an estimated number in their head, but it's not until they see their debt on paper that they're able to grasp the severity of a situation &mdash; and subsequently reach for a solution (or a drink).</p> <h2>3. Next, List All Your Debts</h2> <p>Include detailed information about your debt, such as your current balances for each account, minimum monthly payments, and interest rates.</p> <p>Your spreadsheet might look something like this:</p> <p>&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5171/Screen%20Shot%202016-06-06%20at%201.56.13%20PM.png" width="605" height="299" alt="" /></p> <p>After writing down your debts, calculate the total balance and total minimum payment due. You'll see how much you owe down to the cent, as well as how much you're currently paying in minimum payments each month.</p> <h2>The Cost of Minimum Payments</h2> <p>Debt elimination works best when you <a href="http://www.wisebread.com/the-1-rule-and-other-ways-to-make-goals-manageable?ref=5dayplan">set attainable goals</a> for yourself. I've harped on this practice in plenty of my Wise Bread posts before and I can't stress the importance of goal setting enough. It isn't enough to know your numbers; you need a plan that allows you to pay down balances sooner rather than later, or else you could carry debt for decades and pay thousands of dollars in interest. You also need to do it in a reasonable way so you'll stay on track.</p> <p>At $10,000, your total minimum payments due is $200 (credit cards usually charge between 1%-3% of the balance due as their monthly minimum payment). The following month, your minimum payment due will be lower, because your balance is (slightly) lower. But if you follow this course and only make the minimum due each month, it will take you <strong>50 years</strong> to pay that off, along with paying over $28,000 in interest. I'm sure you don't want to hold on to that debt for decades, nor pay tens of thousands in interest.</p> <p>If however, you kept your monthly payments at $200, you'd be debt free in eight years, and the interest you'd have paid would be $8,916. See the difference?</p> <p>See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=5dayplan">Stop Paying Credit Card Interest with a Balance Transfer</a></p> <h2>Set Achievable Goals</h2> <p>Understandably, you want the balance gone within the next few weeks or months. But you have to be realistic. Unless you strike gold or get a windfall (or start being really <em>really</em> nice to the old rich person down the street), you probably won't be able to pay off $10,000 in credit card debt in three months. But you definitely can punch those numbers and get out of debt in less than eight years.</p> <p>See Also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=5dayplan&amp;utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=5dayplan">Fastest Way to Pay Off $10,000 in Credit Card Debt</a></p> <p>Let's say that you are able to find an extra $300 a month in your budget to steer toward debt reduction, bringing your total debt payment to $500 per month (your current minimum due plus $300). Without interest to pay, you'd knock this down in just 20 months! Unfortunately, you actually do have to pay interest until your debt is cleared.</p> <p>The average interest rate on your $10,000 is a whopping 17.88%. (Ouch!) That means it'll actually take you two years and almost $2,000 in interest, (still a huge improvement over the eight years and almost $9,000 in interest if you just paid $200 per month).</p> <p>Every little bit you can add to your monthly debt reduction budget helps. For example, if you can increase your monthly payment by just another $50, your debt is gone in 22 months, and you'll have paid $1,600 in interest.</p> <p>The key to remember is that small amounts really do add up over time. The more of those small amounts you can find and put to work for you, the faster you will be able to eliminate your credit card balances. You won't get out of debt without making some sacrifices, however. Which leads us to the next step in this series: How to search for unnecessary costs and destroy these to improve your cashflow and free up more of your money to retire debt.</p> <h2>Debt Management Resources</h2> <ul> <li><a href="http://www.wisebread.com/how-to-manage-your-debt-in-10-minutes-a-week?ref=5dayplan">How to Manage Your Debt in 10 Minutes a Week</a></li> <li><a href="http://www.wisebread.com/5-debt-management-questions-youre-too-embarrassed-to-ask?ref=5dayplan">5 Debt Management Questions You're Too Embarrassed to Ask</a></li> <li><a href="http://www.wisebread.com/6-free-debt-management-tools?ref=5dayplan">6 Free Debt Management Tools</a></li> <li><a href="http://www.wisebread.com/12-reasons-your-debt-isnt-diminishing?ref=5dayplan">12 Reasons Your Debt Isn't Diminishing</a></li> <li><a href="http://www.wisebread.com/8-debt-reduction-mistakes-even-smart-people-make?ref=5dayplan">8 Debt Reduction Mistakes Even Smart People Make</a></li> <li><a href="http://www.wisebread.com/should-you-use-peer-to-peer-lending-to-pay-down-credit-card-debt?ref=5dayplan">Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?</a></li> <li><a href="http://www.wisebread.com/6-common-debt-reduction-roadblocks-and-how-to-beat-them?ref=5dayplan">6 Common Debt Reduction Roadblocks &mdash; And How to Beat Them</a></li> <li><a href="http://www.wisebread.com/six-steps-to-eliminating-your-debt-painlessly?ref=5dayplan">6 Steps to Eliminating Your Debt Painlessly</a></li> <li><a href="http://www.wisebread.com/8-organizations-that-really-can-help-you-with-your-debt?ref=5dayplan">8 Organizations That REALLY Can Help You With Your Debt</a></li> <li><a href="http://www.wisebread.com/should-you-sell-your-home-to-pay-down-debt?ref=5dayplan">Should You Sell Your Home to Pay Down Debt?</a></li> <li><a href="http://www.wisebread.com/taming-your-debt-aggressive-repayment-strategies?ref=5dayplan">Taming Your Debt: Aggressive Repayment Strategies</a></li> <li><a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies?ref=5dayplan">7 Best Credit Card Debt Elimination Strategies</a></li> </ul> <p><em>Have you recently chipped away at a decent amount of debt? How did you do it? What tactics did you employ? I'd love to hear from you in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/5-day-debt-reduction-plan-add-it-up">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-search-and-destroy">5-Day Debt Reduction Plan: Search and Destroy</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off">5-Day Debt Reduction Plan: Pay It Off</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-dont-ever-stop">5-Day Debt Reduction Plan: Don&#039;t Ever Stop</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-you-spend-on-a-new-car">How Much Should You Spend on a New Car?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-dark-side-motivations-to-start-saving">8 Dark-Side Motivations to Start Saving</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management 5 day debt reduction plan goals interest rates loans minimum payment payoff plans Tue, 07 Jun 2016 10:31:03 +0000 Mikey Rox 1725700 at http://www.wisebread.com