Debt Management http://www.wisebread.com/taxonomy/term/7681/all en-US 7 Ways Paying Off Student Loans Early Can Boost Your Finances http://www.wisebread.com/7-ways-paying-off-student-loans-early-can-boost-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-paying-off-student-loans-early-can-boost-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_college_graduate_000020191808.jpg" alt="College grad learning how to pay off student loans early" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you just graduated from college and have a fancy new degree and tens of thousands of dollars in <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most">student loans</a>. Welcome to the club!</p> <p>Those loans could be an albatross around your neck for years, but there are many reasons to work hard to pay them off early. For starters, the long-run cost-savings could be huge, and it will become easier to save for the future. And your overall financial picture can improve immensely by eliminating that debt as soon as you can. Here's why.</p> <h2>1. You'll Save Big Bucks in Interest</h2> <p>Paying loans off early may require you to pay more now, but the overall amount you will pay will decrease because you'll save on interest payments. If you're paying 4.5% interest on a $10,000 student loan over five years, you're on the hook for as much as $37 in interest per month before you even make a dent in the principal. Over time, interest can add up to thousands of dollars that most people would love to have back in their bank accounts.</p> <h2>2. It's Easier to Begin Investing for the Future</h2> <p>There is an argument to be made that it's okay to invest money even when you have student loans, as long as the return on investment is higher than the interest rate on the loan. There's validity to this, but for many people it's not easy to invest <em>and </em>pay down debt at the same time. So, if you're finding that it's hard to do both, focus on paying down the debt. Freeing yourself from student loans means you can start to save for retirement and other long-term goals. The earlier you start investing, the better, so get rid of those loans now, if you can.</p> <h2>3. It May Become Easier to Get a Mortgage</h2> <p>When lenders examine your finances to see if you're worthy of a loan, they look at the price of the home and your income, but they also examine your overall debt-to-income ratio. This is often referred to as your &quot;back-end ratio.&quot; Generally speaking, if your <a href="http://www.fha.com/fha_requirements_debt">debt-to-income ratio</a> with expenses is higher than 40%, you may find it harder to get a loan. If you can pay off your student loans early, lenders may be more kind, because your ratio will be lower. Moreover, if you are free from student loan debt, you may find it easier to make a larger down payment on the house you choose to buy. In turn, this could result in lower monthly payments and you might also avoid any requirements to buy mortgage insurance.</p> <h2>4. Your Last-Ditch Option Becomes a Better One</h2> <p>If there's one thing that's worse than declaring bankruptcy, it's declaring bankruptcy when you have student loans. That's because while debt from credit cards, auto, or home loans can be discharged in bankruptcy, student loans usually can't. Student loans can continue to haunt you even when you've done your best to wipe your slate clean. If you can find a way to pay off the loans, at least you'll have a better chance of truly starting over financially if disaster later strikes.</p> <h2>5. You Can Take the Long View With Your Career</h2> <p>When I was a senior in college, I accepted an unpaid internship at an organization that eventually led to a full-time job. Fortunately, I had no student loans to contend with &mdash; there's no way I could have accepted work for no pay. If you're debt-free, it might mean that you can afford to enter internship or apprenticeship programs. You can accept entry-level positions that offer the promise of growth within a company. This may seem counterintuitive, but a lack of debt can give you financial freedom to choose the career path you really want. And that can pay off in the long term.</p> <h2>6. You Can Be More Entrepreneurial</h2> <p>Small businesses often get started when founders invest their own personal money. It's hard to do that when you're paying off big loans. A study from the University of Pennsylvania in 2014 concluded that the rate of student debt in America was having an <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2417676">impact on formation of businesses</a> with one to four employees. Perhaps it's time to unload your student debt and launch that potentially lucrative enterprise.</p> <h2>7. Your Mental Health Will Improve</h2> <p>A study from researchers at the University of South Carolina found that of more than 4,000 people born between 1980 and 1984, those with higher student loans, <a href="http://www.theatlantic.com/business/archive/2015/02/the-mental-and-physical-toll-of-student-loans/385032/">had poorer mental health</a>. And while the researchers did not examine the impact on earnings, there's plenty of research suggesting that feelings of depression and anxiety can <a href="http://www.webmd.com/depression/news/20030617/depression-affects-work-productivity">impact job performance</a>, and in turn, income.</p> <p><em>Are you paying off your student loans early? Tell us how &mdash; and why &mdash; 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/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-ways-paying-off-student-loans-early-can-boost-your-finances">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/8-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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/6-times-when-its-okay-to-take-a-loan">6 Times When It&#039;s Okay to Take a Loan</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/college/financial-aid">College Financial Aid Options</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/stop-is-that-loan-too-big-for-your-wallet">Stop! Is That Loan Too Big For Your Wallet?</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/college/federal-student-loans">Federal Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management borrowing college education loans student loans Wed, 27 May 2015 17:01:23 +0000 Tim Lemke 1431226 at http://www.wisebread.com Debt Management Resources http://www.wisebread.com/debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/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-iStock_000026101069_Small.jpg" alt="woman looking at paperwork" title="woman looking at paperwork" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Debt becomes a slippery slope &mdash; and a downward spiral &mdash; if you don't know how to manage it well. Learn how to live alongside debt without accumulating more of it, what steps you can take to eliminate debt, and important information on the kinds of professional help that's available for people in debt. Use the links below to jump ahead to any section.</p> <ul> <li><a href="#living">Living with Debt</a></li> <li><a href="#eliminate">Steps to Eliminate Debt</a></li> <li><a href="#professional">Getting Professional Help</a></li> </ul> <p><a name="living"></a></p> <h2>Living with Debt</h2> <p><a href="http://www.wisebread.com/acknowledge-you-have-a-problem-with-debt"><strong>Acknowledge You Have a Problem with Debt</strong></a><br /> There is a reason why nearly every &quot;recovery&quot; program has the exact same first step. The wording may vary slightly, but the underlying message is consistent: acknowledge the problem.</p> <p><a href="http://www.wisebread.com/debt-free-living-is-attainable-if-you-want-it-you-can-have-it"><strong>Debt-Free Living IS Attainable: If You Want It, You Can Have It</strong></a><br /> We need to recognize that living a debt-free life is actually within our grasp.</p> <p><a href="http://www.wisebread.com/get-a-grip-on-your-debt-how-to-obtain-a-clear-concise-financial-snapshot"><strong>Get a Grip on Your Debt: How to Obtain a Clear, Concise Financial Snapshot</strong></a><br /> Before we can know where we are going, it helps to know where we currently are. We want to examine our current situation, stop the bleeding, and keep our focus on moving forward and on the new habits we will be installing (not the old ones that led to our problems).</p> <p><a href="http://www.wisebread.com/funding-your-401k-when-youre-in-debt"><strong>Funding Your 401(k) When You're in Debt</strong></a><br /> If there are two pieces of financial advice that get hammered more often than any others, they're &quot;Get out of debt&quot; and &quot;Put enough in your 401(k) to get any corporate match.&quot; With times getting tough, how do you balance those two choices?</p> <p><a href="http://www.wisebread.com/contributing-to-a-roth-versus-paying-down-debt"><strong>Contributing to a Roth Versus Paying Down Debt</strong></a><br /> Usually it makes more sense to just get the debt paid off, but the Roth is a special case because of the tax advantages and the very long time-scale. Wise Bread blogger Philip Brewer walks through his approach to this problem.</p> <p><strong><a href="http://www.wisebread.com/tallying-the-true-cost-of-debt">Tallying the True Cost of Debt</a></strong><br /> On the human side, the consequences of debt are never isolated. As hard as we try to compartmentalize our problems, the lines often become blurred.</p> <p><strong><a href="http://www.wisebread.com/how-debt-fools-people">How Debt Fools People</a></strong><br /> The reason debt fools people is that even when the cost of the debt is perfectly reasonable, the lost flexibility means any little problem can kick off a debt spiral.</p> <p><a href="http://www.wisebread.com/worried-about-debt-tips-on-managing-your-loans"><strong>Worried About Debt? Tips on Managing Your Loans</strong></a><br /> If you've got a lot of loans under your belt, you'll want to make sure to manage them well, or risk wrecking your credit by making a late payment somewhere. Here are a few tip to keep your debt under control and ways to speed up the process of reducing your debt load.</p> <p><strong><a href="http://www.wisebread.com/how-to-deal-with-collection-agencies">How to Deal with Collection Agencies</a></strong><br /> Regain your power as a consumer from the collection agencies.</p> <p><a href="http://www.wisebread.com/dealing-with-nasty-debt-collectors"><strong>Dealing with Nasty Debt Collectors</strong></a><br /> You may (or may not) be delinquent with a debt payment, but debt collectors don't have carte blanche with regards to how they can hustle the money from you. They can only go so far, and it pays to know your rights.</p> <p><a name="eliminate"></a></p> <h2>Steps to Eliminate Debt</h2> <p><a href="http://www.wisebread.com/six-steps-to-eliminating-your-debt-painlessly"><strong>6 Steps to Eliminating Your Debt Painlessly</strong></a><br /> If you have a number of different debt, you might be wondering where to start paying them off. Here's a smart strategy that will get you going.</p> <p><a href="http://www.wisebread.com/5-strategies-to-wipe-out-your-credit-card-balance"><strong>5 Strategies To Wipe Out Your Credit Card Balance</strong></a><br /> So you're ready to stop using your credit card(s) recklessly, but what to do about a balance that has been piling up every month? Here are 5 strategies to help you reduce the debt on your cards <i>and </i>maintain a monthly balance that works for you.</p> <p><a href="http://www.wisebread.com/when-to-use-savings-to-pay-off-debt"><strong>When to Use Savings to Pay Off Debt</strong></a><br /> You have $X in savings but $Y in credit card debt &mdash; should you use the savings to pay down the debt? The answer, of course, depends on your situation. Here's how to do the analysis.</p> <p><a href="http://www.wisebread.com/suze-orman-tells-us-to-pay-only-the-minimum-on-credit-cards-wait-what"><strong>Suze Orman Tells Us To Pay ONLY&nbsp;The Minimum On Credit Cards</strong></a><br /> Current economic times call for drastic measures, and Suze Orman has changed her stance on paying off all credit card balances as the very first money management advice.</p> <p><a href="http://www.wisebread.com/get-out-of-debt-first-then-focus-on-saving"><strong>Get Out of Debt First, Then Focus on Saving</strong></a><br /> When you're in debt, it's nearly impossible to save money. Here are some tips for getting out of debt so you can save or invest the money you're currently using to make your debt repayments.</p> <p><a href="http://www.wisebread.com/goal-setting-getting-out-of-debt-once-and-for-all"><strong>Goal Setting: Getting Out of Debt Once and For All</strong></a><br /> Getting out of debt is easier said than done, so start off on the right foot by setting the <i>right</i> kind of goal.</p> <p><a href="http://www.wisebread.com/when-its-time-to-destroy-debt-start-with-a-goal"><strong>When It's Time to Destroy Debt, Start With a Goal</strong></a><br /> If you have a vague idea of a destination &mdash; like living debt-free &mdash; but you're not really sure how to get there or how long the trip will take, it could be because you don't know what your specific goals are.</p> <p><a name="professional"></a></p> <h2>Getting Professional Help</h2> <p><a href="http://www.wisebread.com/dealing-with-debt-credit-counselors"><strong>Dealing With Debt: Credit Counselors</strong></a><br /> Hiring a credit counseling counselor is a great way to get help with debts. There's no shortage of them out there, and many will help you for free. But look before you leap.</p> <p><a href="http://www.wisebread.com/credit-counseling-when-you-need-it-and-when-you-dont"><strong>Credit Counseling: When You Need It and When You Don't</strong></a><br /> Is it time to see a credit counselor about your debt? If it is, find out how to find and what to ask to get the most out of it.</p> <p><a href="http://www.wisebread.com/solving-a-debt-dilemma-with-debt-settlement"><strong>Solving a Debt Dilemma with Debt Settlement</strong></a><br /> Debt settlement companies are advertising a lot these days on TV, radio and online. If you're in a jam, they might sound tempting. Should you bite?</p> <p><a href="http://www.wisebread.com/how-you-know-when-it-s-time-for-bankruptcy"><strong>How You Know When It's Time For Bankruptcy</strong></a><br /> Bankruptcy is the ultimate debt destroyer, because rather than paying it back, you're often wiping it out, or at least partially so. When is bankruptcy the right choice? Ultimately, you file bankruptcy because there's no other way out.</p> <p><strong><a href="http://www.wisebread.com/debt/bankruptcy">How to File for Bankruptcy</a></strong><br /> Bankruptcy is the last resort to dealing with debt: when a person finds himself in so much debt that paying it off simply isn't an option, bankruptcy can be the only way to handle the situation.</p> <p><strong><a href="http://www.wisebread.com/life-after-bankruptcy-whats-next">Life After Bankruptcy: What's Next?</a></strong><br /> Whether you file for Chapter 13 or Chapter 7, there are repercussions to going through this process. However, like with other setbacks in life, you can recover.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/amy-lu">Amy Lu</a> of <a href="http://www.wisebread.com/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-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/debt-free-living-is-attainable-if-you-want-it-you-can-have-it">Debt-Free Living IS Attainable: If You Want It, You Can Have It</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/runaway-debt-can-you-ever-pay-it-back">Runaway Debt, Can You Ever Pay It Back?</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/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-4 views-row-even"> <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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-ways-to-pay-back-student-loans-faster">15 Ways to Pay Back Student Loans Faster</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management pay off debt Fri, 22 May 2015 22:55:19 +0000 Amy Lu 1433872 at http://www.wisebread.com 7 Ways to Help Protect Your Financial Future From Unexpected Medical Expenses http://www.wisebread.com/7-ways-to-help-protect-your-financial-future-from-unexpected-medical-expenses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-to-help-protect-your-financial-future-from-unexpected-medical-expenses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/injured-woman-605.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In life, anything can happen. Injuries and illnesses cannot always be prevented. But there are things you can do now to help protect your financial future from unexpected medical expenses, and keep yourself happy and healthy in the process.</p> <h2>1. Start a Medical Emergency Fund</h2> <p>The time to set money aside for just-in-case scenarios is now. You never know what can happen and having savings set aside will give you comfort and peace of mind. Surprisingly, very few Americans save enough money for emergencies, unexpected job loss or long-term disability. Of the people ages 18 to 29 that <a href="http://www.newsmax.com/Finance/StreetTalk/Bankrate-saving-5income/2015/03/30/id/635308/">Bankrate.com recently surveyed</a>, nearly half said they save 5% or less. Nearly one in five don't save anything at all. In a Cigna&nbsp;<a href="http://newsroom.cigna.com/weathering-unforeseen-financial-storms">survey</a>, individuals were asked how long their finances would last without a paycheck. 59% said they would exhaust their resources in 12 weeks or less. Almost a third (29%) said their finances would only last a month or less.</p> <h2>2. Keep That Emergency Fund for Emergencies Only</h2> <p>Okay, so you've created a cushion in your bank account. That's great! Almost as difficult as creating an emergency fund is keeping the money until you absolutely need it. Do not dip into it for frivolous purchases.</p> <p>Think about what might happen if you come down with a serious illness or an injury. You need enough money in that account to cover your living expenses while you heal and recover, especially if you're unable to work.</p> <h2>3. Consider Disability Benefits</h2> <p>You might think this is an expense you can't afford, but protecting your income when you are sick or hurt and cannot work can be <a href="http://www.disabilitycanhappen.org/diam/CDA_Infographic.pdf">worth the cost</a>. According to the National Safety Council, one in eight Americans seek medical treatment for an accidental injury each year.<sup><a href="#i">[i]</a></sup> And one in four twenty-somethings will become disabled before they retire.<sup><a href="#ii">[ii]</a></sup>&nbsp;These numbers are quite sobering. The median American salary is $53,000,<sup><a href="#iii">[iii]</a></sup>&nbsp;and a disability plan would typically cover 50%-60% of that income. And, don&rsquo;t forget to look for value-added benefits available with many disability plans such as discounts on memberships to a local gym.</p> <h2>4. Understand Your Body's Signals</h2> <p>It's crucial to pay attention to how your body feels and reacts to things. You are the only person who can tell if something is off and when that's the case, call your doctor. Catching something in the early stages can save your life, and your budget. Some health plans offer access to telemedicine services. These services allow you to connect with a doctor remotely at any time of day. Emergency room visits can also cost a lot out of pocket, even with medical coverage. Before you get sick, scout out urgent care offices near you and save yourself a surprise medical expense later on. Of course, if you&rsquo;re in a serious medical situation, don&rsquo;t hesitate to call for an ambulance.</p> <h2>5. Lose the &quot;I'm Invincible&quot; Mentality</h2> <p>Just because you're young doesn't mean you're immune to health problems. A happy, successful future starts with taking care of yourself now. According to <a href="http://www.cigna.com/KnowYourBenefits">a recent study</a>, sacrificing care for other household needs (food, rent, etc.) is especially prevalent among younger consumers. One-third of younger consumers make these types of tradeoff decisions occasionally, while one in four make them at least once per month. Anything can happen, so make your health a priority. Poor health can be more difficult to fix as you get older.</p> <h2>6. Learn More About Preventive Medicine</h2> <p>When it comes to overall health, there are always improvements to be made. And even if you've been diagnosed with a certain condition or disease, there are things you can do to keep your health from worsening. The key is to educate yourself. Talk to your doctor about proactive ways you can improve your health. Check out available resources, professional organizations and support groups through your health plan carrier or in your community. Don't be afraid to reach out. Each group has a vested interest is helping you with your health.</p> <h2>7. Live a Healthier Lifestyle</h2> <p>Good health and bad health are cyclical. A <a href="http://newsroom.cigna.com/knowyourbenefits/good-health-financial-security/">2014 health study</a> indicated that those in very good to excellent health tend to focus on exercise. Those in fair or poor health are more likely to establish bad habits like smoking. Bad habits cost more because they are gateways to other conditions. For example, obesity can lead to back and knee problems and even diabetes. So if you're obese or overweight, losing weight, eating healthy, and exercising consistently will help you stay on a healthy track. Staying healthy makes you happier now and in the future, and can help you keep more money in your wallet.</p> <p><i>What steps have you taken to prevent a life altering illness or injury from harming your financial future?</i></p> <p><i>This article is sponsored by Cigna. Visit <a href="http://newsroom.cigna.com/knowyourbenefits/good-health-financial-security/">Cigna.com</a> for more great information on the <a href="http://newsroom.cigna.com/knowyourbenefits/good-health-financial-security/">link between health and financial security</a>. This article is for educational purposes only and is intended to promote consumer health. It is not intended as financial or medical advice and you should always consult a professional for financial or medical advice.&nbsp;</i></p> <p><sup><a name="i"></a>[i]</sup> National Safety Council, Industry Facts Summary, 2011.<br /> <sup><a name="ii"></a>[ii]&nbsp;</sup>U.S. Social Security Administration, Fact Sheet February 7, 2013.<br /> <sup><a name="iii"></a>[iii]</sup> Household Income: American Community Survey Briefs; United States Census Bureau, U.S. Department of Commercial, Economics and Statistics Administrations; September 2014.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/chrissa-hardy">Chrissa Hardy</a> of <a href="http://www.wisebread.com/7-ways-to-help-protect-your-financial-future-from-unexpected-medical-expenses">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/4-surprising-places-to-find-deals-on-health-care">4 Surprising Places to Find Deals on Health Care</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/going-without-health-insurance-in-2015-heres-what-itll-cost-you">Going Without Health Insurance in 2015? Here&#039;s What It&#039;ll Cost You</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-times-a-gym-membership-isnt-worth-it">5 Times a Gym Membership Isn&#039;t Worth It</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-ways-social-media-saved-someones-life">5 Ways Social Media Saved Someone&#039;s Life</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-ways-to-spend-your-last-minute-health-care-fsa-funds">8 Ways to Spend Your Last-Minute Health Care FSA Funds</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management Health and Beauty Cigna disability health care medical expenses Fri, 22 May 2015 18:15:12 +0000 Chrissa Hardy 1432682 at http://www.wisebread.com Is Your Personality Sabotaging Your Saving? http://www.wisebread.com/is-your-personality-sabotaging-your-saving <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-your-personality-sabotaging-your-saving" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/nervous_guy_000034996236.jpg" alt="Man with personality type that sabotages savings" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>They say it takes all types &mdash; but some types have a harder time <a href="http://www.wisebread.com/7-unexpected-ways-stay-at-home-parents-save-big">saving</a> than others. Are you allowing some of your less flattering character traits to derail your finances? Here are four personality types that sabotage saving.</p> <h2>1. The Insecure</h2> <p>In a consumer economy, advertisers work tirelessly to link products to personality. Do you drive a domestic car, or an import? Are the countertops in your home Formica or granite? Are you a Mac person or a PC person? Often, the answers don't simply explain what we prefer &mdash; they suggest who we are, or at least who we'd like to be.</p> <p>Playing upon consumers' insecurities works like a charm. Ego sells lots of products and keeps huge swaths of the population on a treadmill of debt. Fight back by getting comfortable in your own skin and learning little ways to feel more confident every day.</p> <h2>2. The Impulsive</h2> <p>Let's admit it: we live in a consumer-centered universe. Every screen we gaze into promises to deliver more delights to our doorstep (with free shipping and cashback rewards, of course). There are entire armies of designers, marketers, and retailers whose sole purpose is to anticipate what will tickle us next and magically make our wallets fall open.</p> <p>In a consumer Candyland like ours, those who haven't learned how to overcome impulse spending don't have a chance. Without a dependable restraint system, they're sure to wander toward the Gumdrop Mountains, fall into the Molasses Swamp, and never be heard from again.</p> <h2>3. The Impatient</h2> <p>Just one word separates a saver from a spender. A saver says, &quot;I need it.&quot; A spender says, &quot;I need it <em>now</em>.&quot; Purging that one pesky word from our consumer vocabulary can save us thousands of dollars over a lifetime. &quot;Now&quot; eliminates the option of shopping around for the best deal, it means we don't have to plan and save, and it means we'll think about the consequences to our budget later. If you're trying to spend wisely, stop being impatient and start thinking of &quot;now&quot; as a hair-curling, four-letter word.</p> <h2>4. The Fearful</h2> <p>Spending wisely and saving for the future takes a bit of fortitude. To make real progress, we have to know who we are deep down, learn how to conquer fear, and take a few chances. Those who are afraid of money likely don't understand it, or grew up in households where money was a constant source of anxiety. They might be able to pinch a few pennies, but profound success will always be elusive. The fearful wouldn't dream of negotiating on price, they don't feel comfortable making independent investment decisions, and they're afraid to spend when presented with real wealth-building opportunities.</p> <p>Saving money over the long term is no different than achieving any other goal. We have to duck and weave around our own insecurities and impulses and surround ourselves with like-minded people who can cheer us on and serve as role models for success. If you find yourself struggling, it might be time to take a hard look at the company you keep.</p> <p><em>Is there someone in your life who's sabotaging your saving success or their own?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/is-your-personality-sabotaging-your-saving">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/6-smart-things-to-do-with-your-bonus">6 Smart Things to Do With Your Bonus</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-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in Debt</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/how-does-the-fannie-mae-and-freddie-mac-bailout-affect-you">How does the Fannie Mae and Freddie Mac bailout affect you?</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/when-to-use-savings-to-pay-off-debt">When to Use Savings to Pay Off 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/conspicuous-spending-fading-to-black">Conspicuous Spending: Fading to Black</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Personal Development money personality savings self sabotage Thu, 21 May 2015 11:00:10 +0000 Kentin Waits 1424390 at http://www.wisebread.com High Credit Limit and Low APR: UNITY Visa Secured Credit Card http://www.wisebread.com/high-credit-limit-and-low-apr-unity-visa-secured-credit-card <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/high-credit-limit-and-low-apr-unity-visa-secured-credit-card" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_credit_card_000025461089.jpg" alt="Woman shopping online with credit card" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Although not as well known as other banks, OneUnited Bank out of Boston, Massachusetts, provides a number of consumer and business financial products. In 1999, OneUnited Bank became the first African-American owned bank in the country and focuses on providing loans, bank accounts, and credit cards to diverse and urban communities across the country.</p> <p>The <a target="_blank" href="http://track.linkoffers.net/a.aspx?foid=22986012&amp;fot=1214&amp;foc=1" rel="nofollow">UNITY&reg; Visa Secured Credit Card</a> includes an opportunity to build or rebuild credit if you happen to have less than perfect credit, by reporting your account activity to the three major credit bureaus, TransUnion, Equifax, and Experian. While many features are standard for secured cards, the Unity Visa does offer a few that you won't find offered by others. (See also: <a href="http://www.wisebread.com/the-5-best-secured-credit-cards">Best Credit Cards for Rebuilding Credit</a>)</p> <h2>Some Card Highlights:</h2> <ul> <li>Introductory APR of 9.95% for six months on balance transfers.</li> <li>Low fixed APR of 17.99% through card expiration.</li> <li>High credit limit up to $10,000 depending on the amount of your deposit.</li> </ul> <p>&nbsp; &nbsp; &nbsp;<a rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22986012&amp;fot=1214&amp;foc=1" target="_blank"><img alt="" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/apply-now.png" /></a></p> <h2>How This Card Works</h2> <p>The UNITY&reg; Visa Secured Card requires a deposit from $250 to $10,000. When your account is approved, you receive a credit card in the amount of your deposit. You can then, use your card as you would any credit card. Your payments and account activity are reported to the credit bureaus, which can help you establish or reestablish your credit rating through responsible card use. When you have paid your balance and closed the account, your security deposit is refunded.</p> <h2>Costs</h2> <p>The annual fee is $39. The foreign transaction fee is 2%.</p> <p>The card offers an introductory APR of 9.95% for the first six months of the date your account is opened. The purchase APR and the balance transfer APR after the introductory period is 17.99% which is a fixed rate through expiration of the card. Cash advances are also a fixed rate of 17.99%, with a cash advance fee of $10 or 3%, whichever is greater.</p> <h3>Additional Card Fees</h3> <ul> <li>Customer service by phone: no fee</li> <li>Expedited card delivery: $35</li> <li>Credit limit increase: $10</li> <li>Stop payment: $25</li> <li>Payment assistance by phone: $1</li> </ul> <h2>Pros</h2> <p><strong>Introductory APR on Balance Transfers</strong>. The UNITY&reg; Visa Secured Card is one of the only, if not the only, secured card which offers an introductory APR on balance transfers. If you have a balance on a card with a higher APR than 9.95% and can pay it off within the first six months, you can save money in interest while paying down your balance. If the APR on the card you are transferring the balance from is higher than 17.99%, you have even more time to pay it down at a lower interest rate. Keep in mind, however, that there is a balance transfer fee of 3% or $10, whichever is the greatest.</p> <p><strong>Low Fixed APR</strong>. The APR of 17.99% is among the lowest APRs offered by secured cards, except for the <a href="http://www.wisebread.com/first-choice-bank-primor-secured-visa-gold-card-review">primor Secured Visa Gold Card</a> and the <a href="http://www.wisebread.com/first-choice-bank-primor-secured-visa-classic-card-review">primor Secured Visa Classic Card</a>. &nbsp;The benefit of having a fixed APR is knowing that your interest costs won't flutuate throughout your card membership. Additionally, UNITY's APR applies to cash advances, which is also among the lowest offered by secured cards, and is often as much as 23%. If there is a chance you will need a cash advance from your card, you should consider the fees involved as well as the interest you will be charged.</p> <p><strong>High credit limit of $10,000</strong>. Your credit limit is determined by the amount of your security deposit, and in this case can be as much as $10,000. The maximum on most secured cards is $5,000 which can be limiting if you need to make purchases with your card that exceed that maximum.</p> <h2>Cons</h2> <p><strong>No interest on deposit</strong>. Although you are able to deposit and receive a credit limit as high as $10,000, you won't earn any interest on the deposit while it is being held. Cards such as the primor <a href="http://www.wisebread.com/first-choice-bank-primor-secured-visa-gold-card-review">Secured Visa Gold Card</a> and the <a href="http://www.wisebread.com/usaa-secured-card-american-express">USAA Secured Card American Express</a>&nbsp;hold your deposit in CDs or savings account so that when the deposit is returned to you, it has earned a little extra money.</p> <p><strong>Extra fees</strong>. There are extra fees for services such as payment assistance by phone and credit limit increases that are often included with secured credit cards.&nbsp;</p> <p><strong>Foreign transaction fee</strong>. If you travel outside of the U.S. frequently, you need a card for foreign purchases that does not incur a foreign transaction fee. This fee can be as much as 3% and is common on secured cards. The <a href="http://www.wisebread.com/capital-one-secured-mastercard-credit-card-review">Capital One Secured MasterCard</a> is one of the only secured cards without a foreign transaction fee and the <a href="http://www.wisebread.com/usaa-secured-card-american-express">USAA secured cards</a> carry foreign transaction fees of 1%, which is slightly lower than that of the UNITY&reg; Visa Secured.&nbsp;</p> <p><strong>No card benefits</strong>. There are no extra card benefits with this card, which isn't outlandish for secured cards. However, if you prefer card benefits such as travel insurance or extended warranties, you might instead choose a card which includes these benefits. The <a href="http://www.wisebread.com/capital-one-secured-mastercard-credit-card-review">Capital One Secured MasterCard</a>, for example, includes many of the card benefits you would find on an unsecured credit card.</p> <h2>Who This Card Is Best For</h2> <p>The UNITY&reg; Visa Secured Credit Card is best for those who are building or <a href="http://www.wisebread.com/a-secured-credit-card-can-repair-your-credit-score-heres-how-to-pick-the-best">rebuilding credit</a> and who want to deposit more than most secured cards allow. Furthermore, if you have balances on higher APR credit cards, this card is a great option for transferring and paying down those balances because of the introductory APR offered on balance transfers and the relatively low, fixed APR, offered in general.</p> <p><a rel="nofollow" href="http://track.linkoffers.net/a.aspx?foid=22986012&amp;fot=1214&amp;foc=1" target="_blank"><strong>Click here to apply for the UNITY&reg; Visa Secured Credit Card today!</strong></a></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/high-credit-limit-and-low-apr-unity-visa-secured-credit-card">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/retire-your-credit-card-debt-with-citi-simplicity-card">Retire Your Credit Card Debt With Citi Simplicity® Card</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-5-best-secured-credit-cards">The 5 Best Secured Credit Cards</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-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</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/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-5 views-row-odd views-row-last"> <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> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management credit card review OneUnited Fri, 01 May 2015 07:26:44 +0000 Christina Majaski 1406706 at http://www.wisebread.com 4 Ways to Stop Your Spouse From Overspending http://www.wisebread.com/4-ways-to-stop-your-spouse-from-overspending <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-to-stop-your-spouse-from-overspending" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_saved_piggy_banks_000055929726.jpg" alt="Learning how to keep your spouse from overspending" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Spouses aren't always honest with each other when it comes to money. A study released earlier this year by CreditCards.com found that nearly one in five U.S. consumers have hidden purchases of $500 or more from their live-in partners or spouses. The same study found that nearly 7.2 million people have hidden a bank or credit card account from their spouse or partner.</p> <p>It's no surprise, then, that partners often butt heads over spending decisions. One partner wants to save. The other likes to spend, and will spend enough each month to break the household budget, often hiding these purchases until they show up on next month's credit card statement.</p> <p>What if you are the financially responsible partner in a relationship? Is there anything you can do to stop your partner from blowing your household savings on video games, clothes, or expensive electronics?</p> <p>There might be. Changing a partner's bad spending habits requires plenty of work and even more communication. To start, check out these four tips for changing your partner's free-spending ways.</p> <h2>Set a Regular Money Meeting</h2> <p>Robert Stammers, director of investor education at the CFA Institute &mdash; a trade association serving investment professionals &mdash; says that couples need to be willing to talk about money. Unfortunately, too many couples never hold these financial talks.</p> <p>This isn't surprising: Money often scares couples. A survey released in early 2015 by the National Foundation for Credit Counseling found that 47% of couples say that money disagreements are the most common <a href="https://www.nfcc.org/press/multimedia/news-releases/january-nfcc-survey-reveals-top-financial-relationship-stressors/">cause of stress</a> in their relationships.</p> <p>But not talking about money as a way to avoid these disagreements is a mistake. A partner who overspends needs to realize the consequences of this behavior. That can't happen if partners never talk about money. Stammers recommends that couples set a regular meeting date &mdash; maybe once a month &mdash; to talk about money issues.</p> <p>&quot;No two people have the same ideas and philosophy about money and investing, so it is important to determine upfront what is important to the both of you,&quot; he says.</p> <h2>Set Aside Some Fun Money</h2> <p>Creating a separate bank account for fun money might be a solution, says Kelley Long, resident financial planner for El Segundo, California's Financial Finesse, and a spokesperson for the National CPA Financial Literacy Commission.</p> <p>This account will give the overspending partner a bit of financial freedom, and might prevent this spouse from breaking into a couple's main account set aside for paying the mortgage, car payment, and other bills, Long claims.</p> <p>&quot;This money can be spent without restriction or comment,&quot; Long says. &quot;When the money in the account is gone, the spender has to wait until the next payday to spend again.&quot;</p> <p>If the overspending partner raids other accounts after cleaning out the &quot;fun money&quot; account? Then a relationship has more serious trust issues that must be addressed, Long says.</p> <h2>Don't Let the Money Come Home</h2> <p>Michael Chadwick, chief executive officer of Unionville, Connecticut-based Chadwick Financial Advisors, has a more practical solution: Send more of the money you're earning into a retirement account and less of it into your savings account. Your overspending spouse can't spend the money you've stashed in a 401(k) account.</p> <h2>Let the Spender Take Control &mdash; For a Month</h2> <p>It may be counterintuitive, but it might help to have your free-spending partner pay the bills and manage the budget for at least a month. As Chadwick says, this might provide your partner with some insight into why wasting money on unnecessary purchases is such a problem.</p> <p>If none of these tips work? Your overspending partner might have a more serious issue, one that perhaps only counseling can solve, Chadwick says. &quot;Spending and shopping when out of control are no different than smoking, drugs, or alcohol.&quot;</p> <p><em>How do you and your spouse or partner manage money?</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/4-ways-to-stop-your-spouse-from-overspending">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/10-relationship-rules-you-should-be-breaking">10 Relationship Rules You Should Be Breaking</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/heres-how-delaying-marriage-or-kids-saves-you-money">Here&#039;s How Delaying Marriage or Kids Saves You Money</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-money-saving-tricks-to-know-before-buying-an-engagement-ring">12 Money-Saving Tricks to Know Before Buying an Engagement Ring</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/6-times-when-its-okay-to-take-a-loan">6 Times When It&#039;s Okay to Take a 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/get-a-grip-on-your-debt-how-to-obtain-a-clear-concise-financial-snapshot">Get a Grip on Your Debt: How to Obtain a Clear, Concise Financial Snapshot</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Family couples finances marriage Spending Money Tue, 28 Apr 2015 13:00:28 +0000 Dan Rafter 1399139 at http://www.wisebread.com 10 Things People Without Debt Do http://www.wisebread.com/10-things-people-without-debt-do <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-things-people-without-debt-do" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_on_roadtrip_000038793128.jpg" alt="Woman without debt on vacation spending cash" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We live in a world where car payments, credit card bills, and other forms of consumer debt are just assumed to be facts of life &mdash; as inevitable as death, taxes, or Kanye West interrupting a music awards show. Anyone lucky or disciplined enough to buck the trend gets little exposure in media. How they did it &mdash; and the benefits they enjoy &mdash; go largely undiscussed. Maybe it's time to explore the lifestyles of the debt-free. Here are 10 things people without debt do.</p> <h2>1. They Wait</h2> <p>When it comes to spending money, patience really is a virtue. Debt-free people achieve their rare status by keeping their needs in check and carefully considering their wants. Then, they save their money, wait for great deals, and shop around for amazing second-hand bargains.</p> <h2>2. They Keep Their Egos in Check</h2> <p>Fat egos usually mean skinny wallets. Credit-fueled conspicuous consumption keeps more households in the red than mortgages and college loans combined. Those who are debt-free try to keep their egos separate from the material stuff they own and rest comfortably in the knowledge that true luxury is freedom from debt servitude.</p> <h2>3. They Spend (When the Deal Is Right)</h2> <p>Our frugal friends and neighbors get a bad rap. They're usually dubbed &quot;tightwads&quot; and quickly dismissed as a fringe group out of touch with reality. But they're not afraid to spend; they're simply selective about what and when they buy.</p> <h2>4. They Pay Cash</h2> <p>People who are debt-free know why <a href="http://www.wisebread.com/6-reasons-why-cash-is-still-king">cash is still king</a>: When you spend it you <em>feel</em> it; it's impossible to spend more cash than you actually have; and when you're negotiating on price, the green stuff gets attention.</p> <h2>5. They Negotiate</h2> <p>And while we're on the topic of negotiating, let's get something straight: The price of almost everything is negotiable. The debt-free realize this. They've learned the <a href="http://www.wisebread.com/the-7-laws-of-negotiation">rules of negotiation</a> and haggle on the price of everything from cars to cable TV. After all, paying retail and being debt-free don't mix.</p> <h2>6. They Get Great Interest Rates</h2> <p>When the debt-free choose to take on debt strategically, they tend to benefit from <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">lower interest rates</a>. Thanks to a history of responsible credit use, low balance-to-limit ratios, and a modest debt-to-income ratio, they have strong FICO scores.</p> <h2>7. They Avoid Incremental Expenses</h2> <p>If you haven't noticed, marketers are getting more reluctant to share actual prices with consumers. Instead, they frame big expenses in more palatable monthly terms. You can get in that $29,000 new car for only $203 a month; that new cell phone will cost you a mere $18 a month &mdash; you get the idea. But, debt-free folks know that big expenses lurk behind those tiny payments, and they understand how dozens of small cuts can quickly bleed a budget.</p> <h2>8. They Expect the Unexpected</h2> <p>I'll be the first to admit: I'm not an optimist. When it comes to the economy, my work, and the prices of things in relation to income growth, I'm a Debbie Doubter, if not a full-blown Debbie Downer. And I'm in good company. The debt-free have a <a href="http://www.wisebread.com/emergency-plan-better-than-an-emergency-fund">financial emergency plan</a> and even in the boom times, buckle up for the bust.</p> <h2>9. They Sleep Well</h2> <p>But far from a sense of powerlessness, keeping a low financial profile, being prepared for emergencies, and saving for the future builds a deep sense of security. When the debt-free drift off to sleep, they're not worried about credit card balance shuffling, how to delay payments to the very last second, or if their car might get repossessed in the dark of night. They sleep well knowing that no one has a claim on what they earn tomorrow.</p> <h2>10. They Enjoy More Freedom</h2> <p>High levels of long-term consumer debt limit our choices in life. If a dozen creditors can each take a slice of your income, there's less left for you. That means less choice about what you'll be doing next week or next year (hint: you'll be working). But others know the <a href="http://www.wisebread.com/the-freedom-of-a-debt-free-life">freedom of a debt-free life</a>. They try to keep as much of their income as possible and invest in things that generate wealth, expand their opportunities, and ultimately reduce the number of years they'll have to work.</p> <p>It's important to remember that everyone's financial situation is different and sometimes debt is simply unavoidable. But a debt-free lifestyle doesn't have to be the stuff of legend either. Real people can reap real rewards when they consciously decide to control how they spend, what they spend on, and how vigorously they attack even the smallest debt.</p> <p><em>Are you debt-free or well on your way? How does it help you live differently from your friends, family, or co-workers?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/10-things-people-without-debt-do">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/working-on-the-road-a-book-review-for-professional-nomads">Working on the Road: A Book Review for Professional Nomads</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/6-false-assumptions-about-debt-free-living">6 False Assumptions About Debt-Free Living</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-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget">10 Sites and Apps to Help You Track Your Spending and Stick to Your Budget</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-to-erase-your-medical-debt">How to Erase Your Medical 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/the-freedom-of-a-debt-free-life">The Freedom of a Debt-Free Life</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bills debt-free expenses lifestyle owing money spending Mon, 27 Apr 2015 15:00:08 +0000 Kentin Waits 1397818 at http://www.wisebread.com 8 Ways to Get Student Loan Debt Forgiveness http://www.wisebread.com/8-ways-to-get-student-loan-debt-forgiveness <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-ways-to-get-student-loan-debt-forgiveness" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/new_grads_000037875416.jpg" alt="New graduates considering ways to get student loan debt forgiveness" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The cost of higher education keeps climbing. Since 2004-2005, <a href="http://trends.collegeboard.org/college-pricing/figures-tables/average-net-price-time-full-time-students-public-four-year-institutions">average college tuition</a> in the U.S. has grown by over 35% to a total of $9,500 in the 2014-2015 school year. While there are many opportunities to receive grants, scholarships, and relatively affordable loans to finance a college education, there are also a number of loan forgiveness programs that can help to erase debt after you've graduated. Here are some of the best loan forgiveness options available.</p> <h2>1. Teachers</h2> <p>Many areas of the country need high quality teachers, particularly schools with students who fall into low income brackets. If you teach at one of these schools or at educational service agencies for five consecutive years, you may be eligible for up to $17,500 worth of complete <a href="https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/teacher">forgiveness on Federal Stafford Loans</a>. PLUS loans are not eligible for forgiveness under this program.</p> <h2>2. Educators</h2> <p>While the forgiveness of Federal Stafford Loans is limited to teachers, the <a href="https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts?_ga=1.108876742.595209384.1427678197#perkins-loan-cancellation">forgiveness of Federal Perkins Loans</a> is more expansive, and broadly includes educators. Perkins Loans can be 100% forgiven if you elect to become a school librarian, an employee at a child or family-centered agency, a staff member at a Head Start program, pre-kindergarten, or childcare program, or a school speech pathologist, special education teacher, or full-time teacher. Most of these programs require you to work in a low-income school, remain a teacher for a certain number of years, and some also carry specific education requirements, such as a master's degree.</p> <h2>3. Armed Forces</h2> <p>If you are considering joining the military, there are loan forgiveness opportunities for you. Should you serve in a hostile fire or imminent danger area, you may be eligible for forgiveness of your Federal Perkins Loans. If your active service ended on or before August 14, 2008, you can receive up to 50% loan forgiveness. If your service began after or includes August 14, 2008, you may receive up to 100% loan forgiveness.</p> <h2>4. Firefighters or Law Enforcement Officers</h2> <p>Should you feel called to protect your city by becoming a firefighter, law enforcement officer, or corrections officer, you may be able to receive up to 100% forgiveness of your Federal Perkins Loans.</p> <h2>5. Nurses or Medical Technicians</h2> <p>Nurses and medical technicians across the country are in short supply. In less than 10 years, the nursing field is expected to <a href="http://www.aacn.nche.edu/media-relations/fact-sheets/nursing-shortage">increase job openings</a> by 19%. Full-time nurses and medical technicians can be awarded up to 100% loan forgiveness of their Federal Perkins Loans.</p> <h2>6. AmeriCorps VISTA or Peace Corps Volunteers</h2> <p>Many young college graduates feel a compelling call to serve in a volunteer capacity in the U.S. or overseas. If you fall into that category, there are two programs that would help you to gain up to 70% loan forgiveness of your Federal Perkins Loans: <a href="http://www.nationalservice.gov/programs/americorps/americorps-vista">AmeriCorps VISTA</a> is a volunteer program for students who want to serve in vulnerable areas in the U.S. The <a href="http://www.peacecorps.gov/">Peace Corps</a> is a storied program that pairs American volunteers with sites abroad in developing nations.</p> <h2>7. Early Intervention Services of the Disabled</h2> <p>There are many nonprofit and government organizations that seek to provide critical and early intervention services for the disabled. If you work for one of these organizations, you may be eligible to receive up to 100% forgiveness on your Federal Perkins Loans.</p> <h2>8. Full-Time Faculty at a Tribal College or University</h2> <p>The U.S. Department of Education has designated certain colleges and universities as <a href="http://www.ed.gov/edblogs/whiaiane/tribes-tcus/tribal-colleges-and-universities/">tribal colleges</a>. This means that these colleges and universities are primarily focused on educating U.S. citizens who are American Indians and Alaskan Natives. Full-time faculty members at these schools can receive up to 100% forgiveness of Perkins Loans.</p> <p>Receiving a college education today is now an expensive proposition for just about everyone. Luckily, these loan forgiveness programs provide options to finance your education while also helping you to make a meaningful and lasting impact in a community that needs your skills and talents.</p> <p><em>Have you participated in one of these loan forgiveness programs? If so, please share your experience in the comments section. </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/christa-avampato">Christa Avampato</a> of <a href="http://www.wisebread.com/8-ways-to-get-student-loan-debt-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-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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most">Which Student Loan Repayment Plan Saves You the Most?</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/student-loans-how-to-make-post-college-decisions">Student Loans: How to Make Post-College Decisions</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/share-your-thoughts-consolidating-student-loans">Share Your Thoughts: Consolidating 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/college/college-resources">40+ College Resources for Parents and Students</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training college education federal perkins loans federal stafford loans loan forgiveness student loans Mon, 20 Apr 2015 09:00:08 +0000 Christa Avampato 1390886 at http://www.wisebread.com Back in Debt? Here's How to Pay it Off for Good http://www.wisebread.com/back-in-debt-heres-how-to-pay-it-off-for-good <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/back-in-debt-heres-how-to-pay-it-off-for-good" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_doing_taxes_000020148166.jpg" alt="Couple back in debt and learning how to pay it off" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Finding yourself back in debt after having paid it off before is a horrible feeling. I know, because I've been there. In 2012, I spent 14 months aggressively paying off <a href="http://www.huffingtonpost.com/carrie-smith/getting-out-of-debt-_b_1581507.html">$14,000 of consumer debt</a> and worked hard to become debt free for the first time in life.</p> <p>Then, in 2013 I decided to quit my job to pursue my own freelance business. This is when my financial situation became much more volatile and resulted in taking on a bit of business debt to keep things going. So when I say that it's a horrible feeling to be debt free only to find yourself back in debt, I mean it. It's not fun!</p> <p>If you find yourself in a similar place, here's the strategy I'm using to pay it off again &mdash; and keep myself out of debt <em>for good</em>.</p> <h2>Identify the Problem</h2> <p>Before you can begin to pay off debt and get back on track, it's vital that you understand <em>why </em>and <em>how </em>you're back in the situation. Creating a permanently debt-free life is much more difficult than working towards becoming free of debt for the first time.</p> <p>The mindset and lifestyle changes are vastly different. This is something I miscalculated when I first got out of debt, as I obviously didn't change my mindset or spending habits sufficiently. I'd stopped using credit cards as part of my debt payoff plan, but after about a year I thought I could handle using them again. Wrong!</p> <p>I also thought that <a href="http://www.wisebread.com/basic-tips-for-investing-in-a-business-1">investing in a new business</a> was a smart idea as it would pay off in the long run. That's all well and good, but you have to draw the line as <em>how much</em> you're going to invest in business ventures and <em>how often</em> you use credit cards as an extension of your income.</p> <p>The need to depend on personal loans or credit cards for additional cash flow proved that my new business wasn't bringing in enough income to survive on its own. Doing a thorough inventory of my spending habits to elucidate why I was back in debt again showed that I needed to not only change my mindset, but also find ways to bring in more money.</p> <h2>Try a New Plan of Action</h2> <p>Obviously, if you've gotten out of debt once you can do it again, but in order for this time to really stick, you have to change your approach and try something new. As Albert Einstein put it, &quot;Insanity: doing the same thing over and over again and expecting different results.&quot; So don't expect to follow the same plan and have it work better this time.</p> <p>My mistake was that I viewed getting out of debt as the end goal. But getting out of debt is merely step one, and <em>staying out of debt</em> while changing your mindset and spending habits is a very long-term step two.</p> <p>My new plan of action includes:</p> <ul> <li>Finding ways to level out my inconsistent income<br /> &nbsp;</li> <li>Bringing in multiple streams of income to have more of a cushion<br /> &nbsp;</li> <li>Stopping the use of credit cards and loans as an extension of income<br /> &nbsp;</li> <li>Working with an accountability partner to stay on track<br /> &nbsp;</li> <li>Living well below my means and doing monthly budget check-in<br /> &nbsp;</li> <li>Performing a cash budget challenge (or other spending challenge) on a quarterly basis</li> </ul> <h2>Decide How You Want to Live</h2> <p>There are two key parts to being debt free: staying out of debt, and living a life without using debt as a tool to get what you want. For me, that second part has been the most difficult. Your <a href="http://www.wisebread.com/13-things-you-dont-know-about-your-credit-report-but-should">credit history and score</a> is basically determined by how much debt you leverage and pay off over time.</p> <p>So if you don't want to use debt to buy things, you will have to face that fact that it won't be easy. Most banks and lenders will not understand your reasoning for paying. And there will be instances where you simply cannot buy something without using debt, so you and your family will have to come to grips with this limitation.</p> <p>As long as you define a new set of priorities and have a renewed plan of attack, you'll be able to move forward and pay off debt for good. Take comfort in knowing that you don't have to stay here, and that since you've been debt free once, you can do it again. But now you'll have more experience and lessons to fall back on!</p> <p><em>Have you ever fallen back into debt? How did you climb back out again?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-smith">Carrie Smith</a> of <a href="http://www.wisebread.com/back-in-debt-heres-how-to-pay-it-off-for-good">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/10-things-people-without-debt-do">10 Things People Without Debt Do</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-ways-to-stop-your-spouse-from-overspending">4 Ways to Stop Your Spouse From Overspending</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/6-times-when-its-okay-to-take-a-loan">6 Times When It&#039;s Okay to Take 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/5-ways-to-live-better-without-spending-more">5 Ways to Live Better Without Spending More</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/account-in-collections-heres-how-to-fix-it">Account in Collections? Here&#039;s How to Fix It</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management credit history finances owing money paying back spending habits Thu, 16 Apr 2015 11:00:09 +0000 Carrie Smith 1386121 at http://www.wisebread.com Account in Collections? Here's How to Fix It http://www.wisebread.com/account-in-collections-heres-how-to-fix-it <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/account-in-collections-heres-how-to-fix-it" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_thinking_000019659642.jpg" alt="Man dealing with past due account in collections" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Earlier this year, my husband received a letter stating that he had a debt in collections. We were warned that if we didn't send money soon, they'd start legal action.</p> <p>Naturally, our breathing quickened and our hearts nearly jumped out of our chests. But then I made us take deep breaths. With my background as an accountant, I knew we had options. Here's how to successfully deal with a past due account in collections.</p> <h2>Research the Creditor's Information</h2> <p>Don't stress or freak out when your receive that dreaded &quot;account in collections/payment due&quot; letter. The worst thing you can do is overreact and succumb to false information from scammers trying to get your credit information. This happens more often than you may realize.</p> <p>Before taking any action based on what the letter says, you want to <a href="http://www.wisebread.com/how-to-deal-with-collection-agencies">verify the information is correct</a>, and research the company contacting you. It's often hard to tell the difference between the legitimate letters and the fakes, as many will include bits of personal information and your account numbers. But don't let this sway you.</p> <p>A good place to start is with the <a href="http://www.bbb.org/bbb-locator/">Better Business Bureau</a>. Simply enter the company's name in the search box on their site. If the debt collector's name and information comes up in the BBB system, they're legit; but if it doesn't, you'll want to proceed with caution.</p> <p>Or consider investigating the legitimacy of a debt collections company by doing a quick online search. You'll often come across other people's stories or experiences with companies and can verify whether or not the information you've received is for real.</p> <p>Finally, consider checking your collections letter against an official account of any debts on your credit report. <a href="https://www.annualcreditreport.com/">AnnualCreditReport.com</a> is a website authorized by the federal government to give you access to your entire credit report, once a year, for free. By checking your report, you'll be able to verify whether the debt actually belongs to you, and if the right debt collection company's name is on the account.</p> <p>Make sure you save your credit report for later reference. If you notice errors, suspicious activity, or inaccuracies, you'll want to contact one of the three credit bureaus to get it solved.</p> <h2>Reach Out to the Credit Agency</h2> <p>If the debt agency's information is legit, and you've verified that you do indeed owe this amount, the next step is to contact the debt collection company directly. Call the number on the letter you received and start asking questions. Who did they purchase the debt from? What was the original balance? The balance on your statement is probably highly inflated because of late fees or other charges.</p> <p>They will likely push you into making a payment right then, but don't let them pressure you. Surprisingly, you have the upper hand in this situation because the debt collection agency paid pennies on the dollar for your debt. They will feel lucky to get any amount you're able to pay, so don't feel rushed.</p> <p>Ask them to send you this information in writing, so you can keep it for your records:</p> <ul> <li>The name of the original account holder,</li> <li>Your previous account number,</li> <li>The balance due now.</li> </ul> <p>Once you receive this information in the mail, you can negotiate a proper payment plan. You don't want this to go too long without being solved, but don't feel like you have to rush to make a payment. That's when you'll overpay. And remember that collections agencies will often accept less than the full amount owed, so don't necessarily agree to their first offer.</p> <h2>Report Them for Unethical or Illegal Behavior</h2> <p>As you go through this process, remember that you have all the control. Debt collection agencies tend to use less-than-stellar methods for getting consumers to make exorbitant payments towards outstanding debts. (See also: <a href="http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them?ref=seealso">4 Things Bill Collectors Can't Do</a>)</p> <p>If they start <a href="http://www.wisebread.com/dealing-with-nasty-debt-collectors">calling you nonstop</a>, verbally abusing you over the phone or with letters, or harassing family members, be sure to report them.</p> <p>If you need added protection, check out the <a href="http://www.acainternational.org/">American Collectors Agency</a>, or reach out to an attorney and a consumer-protection agency for help. You don't need to endure this process alone, and having an expert by your side will help alleviate the stress.</p> <p><em>Have you ever had to deal with a debt in collections? What other tips and tricks do you suggest?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-smith">Carrie Smith</a> of <a href="http://www.wisebread.com/account-in-collections-heres-how-to-fix-it">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-10"> <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/10-things-people-without-debt-do">10 Things People Without Debt Do</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-deal-with-collection-agencies">How to Deal With Collection Agencies</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/surprising-things-that-can-kill-your-credit">Surprising Things That Can Kill Your Credit</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-to-erase-your-medical-debt">How to Erase Your Medical 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/dealing-with-nasty-debt-collectors">Dealing with Nasty Debt Collectors</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Debt Management better business bureau collections agency credit agencies owing money past due Mon, 13 Apr 2015 09:00:03 +0000 Carrie Smith 1378041 at http://www.wisebread.com Which Student Loan Repayment Plan Saves You the Most? http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/which-student-loan-repayment-plan-saves-you-the-most" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/college_student_000013097599.jpg" alt="Female college student thinking about paying student loans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>In recent years, the U.S. Department of Education implemented a flexible solution to help borrowers with financial difficulty repay their federal student loan debt, also known as <a href="https://studentaid.ed.gov/repay-loans/understand/plans/income-driven">income-driven repayment plans</a>. These plans calibrate monthly payments based on the individual's income. Most applicants will qualify for at least one of the three types of repayment plans. However, selecting a plan type is entirely up to the borrower, which makes it critical to understand the differences before entering into a binding agreement.</p> <h2>PAYE vs. IBR</h2> <p>The two most popular repayment plans are Pay As You Earn (PAYE) and Income-Based Repayment (IBR), because in most cases, the monthly payment will be lower than the Income-Contingent Repayment (ICR) plan. Under PAYE, borrowers make payments of 10% of their monthly income, and any remaining debt is forgiven after 20 years. Meanwhile, IBR sets payments at 15% of monthly income and forgives remaining debt after 25 years. During years when you're unemployed (or beneath the poverty threshold), your monthly payments are zero.</p> <p>Each plan determines your monthly payment based on your family's size and household income. To qualify, your adjusted payment amount must be less than it would be under the <a href="https://studentaid.ed.gov/repay-loans/understand/plans/standard">standard repayment plan</a> based on a 10-year repayment period.</p> <p>So, given that PAYE seems like the more generous option, why would anyone choose IBR?</p> <p>Simple: The Pay As You Earn plan stipulates that only &quot;new borrowers&quot; qualify. You are considered a new borrower if your loans were disbursed on or after October 1, 2011, or if you had no outstanding loan balances on or after October 1, 2007.</p> <p>The Income-Contingent plan is also open to any borrower with federal loans. There is no income requirement. But, payments will be slightly higher than Pay As You Earn and IBR plans. In some cases (such as years in which you make a high income), your monthly payment could be higher than it would be under the standard repayment plan, because they are calculated based on your annual income.</p> <p>Their key differences are:</p> <ul> <li>Any borrower with eligible federal loans qualifies for the ICR plan.</li> <li>Monthly payments for Pay As You Earn and IBR plans are lower.</li> <li>Borrowers must meet additional requirements to qualify for Pay As You Earn.</li> </ul> <p>Wise Bread's <a href="http://www.wisebread.com/the-definitive-guide-to-pay-as-you-earn-a-great-student-loan-repayment-plan?ref=seealso">The Definitive Guide to Pay As You Earn</a> has detailed information about the PAYE repayment option. <a href="http://www.wisebread.com/what-recent-grads-must-know-to-repay-federal-student-loans?ref=seealso">What Recent Grads Must Know to Repay Federal Student Loans</a> and <a href="http://www.wisebread.com/new-income-based-federal-student-loans-repayment-plan-can-you-benefit?ref=seealso">New Income Based Federal Student Loans Repayment Plan - Can You Benefit?</a> are also useful resources.</p> <h2>Federal Student Loan Forgiveness, Discharge, or Cancellation</h2> <p>We all know that student loan debt is one of the few types of debt that is rarely forgiven. It is excluded from bankruptcy filings and can be garnished from your wages if you default. However, there are several circumstances in which the federal government will grant borrowers <a href="https://studentaid.ed.gov/repay-loans/forgiveness-cancellation">forgiveness, discharge, or cancellation</a> of their federal student loans.</p> <p>Most borrowers who are interested in learning about the <a href="http://www.finaid.org/loans/forgiveness.phtml">loan forgiveness</a> program, whereby all or a portion of federal student loan debt is forgiven if you volunteer time, serve in the military or certain <a href="http://www.finaid.org/loans/publicservice.phtml">public service positions</a>, practice medicine, teach in low-income communities, or responsibly make payments for at least 20 or 25 years under one of the aforementioned income-driven repayment plans (and are still unable to repay the balance of your loans). Such circumstances include:</p> <ul> <li>Public interest loan forgiveness: Under IBR and PAYE, borrowers who make regular monthly payments and work in the non-profit or public sector for 10 years can have the balance of their student loans after that time forgiven.<br /> &nbsp;</li> <li>Everyone else's loan balances are forgiven after 20 years of consecutive monthly payments under PAYE, and 25 under IBR.<br /> &nbsp;</li> <li>Be forewarned that PAYE is facing changes, including the likelihood that only $57,500 of debt can be forgiven, so understand what you're likely to owe at the end of your repayment term. This change only applies to new PAYE borrowers, so act before December of 2015 to get grandfathered into the more generous current version of the plan, if you qualify.</li> </ul> <p>Repaying student loans can be burdensome. Make repayment less onerous by selecting the right plan for you.</p> <p><em>How are you repaying your student loans?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most">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-11"> <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-ways-to-get-student-loan-debt-forgiveness">8 Ways to Get Student Loan Debt Forgiveness</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/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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/share-your-thoughts-consolidating-student-loans">Share Your Thoughts: Consolidating Student Loans</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/student-loans-how-to-make-post-college-decisions">Student Loans: How to Make Post-College Decisions</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-paying-off-student-loans-early-can-boost-your-finances">7 Ways Paying Off Student Loans Early Can Boost Your Finances</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Education & Training income-based loan forgiveness loan repayment pay as you earn student loans Thu, 09 Apr 2015 09:00:08 +0000 Qiana Chavaia 1370264 at http://www.wisebread.com Oops — I Maxed Out My Credit Cards. Now What? http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/oops-i-maxed-out-my-credit-cards-now-what" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/credit_cards_000026097372.jpg" alt="Woman concerned and looking at her credit card statements" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Credit cards are simple and convenient, but they can also get you into trouble. Admittedly, I am a former victim. But as we increasingly go paperless in many aspects of life, many of us rely on debit and credit cards when buying everything from <a href="http://www.wisebread.com/5-best-gas-rewards-credit-cards">gas</a> to <a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries">groceries</a>. Plus, credit cards can also help <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score">build your credit history</a>. However, if you're using credit cards on a regular basis and not paying off your bill in full every month, your balance can grow and you might max out your accounts. Then what?</p> <p>Maxed-out credit cards often indicate a spending problem or financial strain, so it's no surprise a high balance can <a href="http://www.wisebread.com/10-surprising-ways-to-negatively-affect-your-credit-score">lower your credit score</a>. Fortunately, if you immediately address the issue and adjust your spending, you can knock down those balances and <a href="http://www.wisebread.com/how-to-rebuild-your-credit-in-8-simple-steps">improve your credit rating</a>. Here are a few tips to get back on track when you max out a card.</p> <h2>1. Don't Apply for More Credit</h2> <p>Learning that your credit cards are maxed out doesn't mean you should apply for a new credit card. You must learn to use credit responsibly, or else you'll just dig a deeper hole for yourself. If you apply for a new credit card, there's a pretty good chance that you'll also max out the new account. You'll double your financial trouble and add more debt than you can possibly handle. Who needs that? Definitely not you.</p> <h2>2. Make Your Payments Every Month</h2> <p>Maxing out your credit cards can trigger higher minimum payments, and there's the risk of default if you can't afford the higher amount. Additionally, missing or sending late payments can damage your credit score and create problems with your creditors. The bank can charge late fees, raise your interest rate, or take legal action to collect what's owed. Make at least the minimum payment by the due date, and if you're going to be late, ask your creditor for an extension. (See also: <a href="http://www.wisebread.com/13-things-you-dont-know-about-your-credit-report-but-should?ref=seealso">13 Things You Don't Know About Your Credit Report &mdash; But Should</a>)</p> <h2>3. Stop Using the Credit Card</h2> <p>Some people have a cycle of maxing out their credit cards, making a small payment, and then continuing to use the card. It doesn't make sense to make a payment just so you can re-charge the same amount. This cycle keeps you stuck, and your debt won't go away anytime soon. You have to <a href="http://www.wisebread.com/7-bizarre-ways-to-stay-on-budget-that-actually-work">stop using the credit card</a> &mdash; bottom line. Cut it up or place it in a card shredder. Have fun destroying it beyond recognition. At least this way, you can make headway with each payment and eventually pay off the balance. (See also: <a href="http://www.wisebread.com/13-creative-ways-to-avoid-spending-money?ref=seealso">13 Simple Ways to Avoid Spending</a>)</p> <h2>4. Negotiate Your Interest Rate</h2> <p>If you have a good payment record, you might be able to negotiate a <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">lower interest rate</a>, despite the fact that you've maxed out the account. Getting a lower interest rate is one of the best ways to pay off a high credit card balance sooner. You'll pay less interest each month and have a lower minimum payment. The trick, however, is to make higher payments, so that more of your money goes toward reducing the principal balance and decreasing what you owe faster.</p> <h2>5. Transfer Your Balance to Another Credit Card</h2> <p>If your credit card company won't budge on the interest rate, see if you qualify for a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">credit card with a 0% introductory rate</a>. These cards typically offer zero interest on balance transfers and purchases for the first 12 to 18 months. You can transfer your existing balance and make higher payments during this period to pay off the card. However, this strategy can only work if you don't accumulate new debt. After transferring your balance to the new credit card, get rid of the old credit card to avoid any temptation. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">When to Do a Balance Transfer to Pay Off Credit Card Debt</a>)</p> <h2>6. Find Extra Money in Your Budget</h2> <p>Getting out of credit card debt is one of the toughest financial challenges many people face. Some people accumulate credit card debt because they didn't have enough income and they lived off plastic. Since paying off debt requires some amount of disposable income, you might need to put on your thinking cap and brainstorm ways to earn extra money. Where can you cut back? Cancel your gym membership, get rid of cable, only shop when necessary, don't eat out as much, look for a part-time job, or talk to your employer about overtime.</p> <p>There are plenty of ways to find extra money when you're in a bind, and I've detailed pretty much all of them over the past few years in previous posts on Wise Bread. A quick search of the site will yield plenty of practical results that you can institute today. (See also: <a href="http://www.wisebread.com/unusual-ideas-to-save-an-extra-100-a-month?ref=seealso">Unusual Ideas to Save an Extra $100 a Month</a>)</p> <p><em>Have you ever maxed out your credit cards? How did you get back on track? Let us know in 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/oops-i-maxed-out-my-credit-cards-now-what">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-12"> <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/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-3 views-row-odd"> <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-4 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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards">The Best Low Interest Rate Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards Debt Management credit scores interest rates owing money Fri, 03 Apr 2015 11:00:02 +0000 Mikey Rox 1367707 at http://www.wisebread.com 4 Annoying Things Bill Collectors Can't Do -- And How to Stop Them http://www.wisebread.com/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/lady_phone_bill_000020951752.jpg" alt="Lady on the phone with bill collector" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are some scary and crazy debt collectors stories out there. For example:</p> <ul> <li>A California debt collector threatened a woman by claiming that they'd <a href="http://www.kmov.com/news/local/Foul-Mouth-Debt-Collectors--107059238.html">dig up her daughter</a> if she didn't pay her debt to a funeral home.<br /> &nbsp;</li> <li>A man received several racially-charged and <a href="http://abcnews.go.com/Business/man-wins-15m-vulgar-debt-collection-calls/story?id=10795674">profane voicemail messages</a> from a Pennsylvania-based collections agency.<br /> &nbsp;</li> <li>A Texas-based debt collector used scare tactics, such as threatening to <a href="http://money.cnn.com/2013/02/06/pf/debt-collection/">take away children</a>.</li> </ul> <p>You don't have to tolerate abusive behavior from unscrupulous debt collectors. Here is how to stop four annoying things that bill collectors absolutely <em>can't</em> do.</p> <h2>1. Report Late Payments to Credit Bureaus Within 30 Days</h2> <p>Missing a payment deadline is something that can happen to even the most meticulous person. When this happens, some bill collectors may start calling to scare you into believing that if you don't make the payment right away, they'll notify the credit reporting bureaus.</p> <p>You've worked hard to <a href="http://www.wisebread.com/the-5-best-secured-credit-cards">build up your credit score</a>, so the mere thought of being reported for a late payment may send shivers down your spine. There's no need to panic. As long as you make your missed required minimum payment before the 30th day after your due date, you'll prevent any creditor from reporting delinquency to any of the credit bureaus.</p> <p>While you may still be liable for a late payment fee (ranging from $25 to $35) and may be charged a penalty APR (as high as 29.99%), you can't be reported to a credit bureau before you're a full 30 days past due.</p> <h3>How to Stop It</h3> <p>If a bill collector threatens to report you to a credit bureau for anything earlier than a 30-day late payment, tell them that is a violation of federal law. The collector would be knowingly providing incorrect information. If you receive a late payment fee and penalty APR, and are in good terms with your credit card company, call its customer service line to check if they can remove both penalties.</p> <h2>2. No Harassing Phone Calls</h2> <p>While it may be funny to look up crazy calls from debt collectors on YouTube, it's definitely not fun to receive them. Debt collectors don't want you to know that you have the legal right to not answer their calls.</p> <p>Under the <a href="http://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text">Fair Debt Collection Practices Act</a>, debt collectors can't:</p> <ul> <li>Call you between 9:00 p.m. and 8:00 a.m. in your local time.</li> <li>Contact you at unusual or inconvenient places.</li> <li>Try to circumvent your lawyer, if one is representing you regarding the debt.</li> <li>Attempt to reach you at your place of employment if no incoming calls are allowed.</li> </ul> <h3>How to Stop It</h3> <p>Request in writing that they not call you, and keep a copy for your records. When you mail the letter, ask for a return receipt. If the collectors keep on calling you, you have ammunition to file a complaint with the Federal Trade Commision. The more FTC complaints a collection agency has, the more likely that the FTC will sue the agency or, in case of egregious violations, shut it down. (See also: <a href="http://www.wisebread.com/dealing-with-nasty-debt-collectors?ref=seealso">Dealing With Nasty Debt Collectors</a>)</p> <h2>3. No &quot;Taking It All&quot;</h2> <p>Bill collectors will say anything to get your attention. The reality is much different.</p> <ul> <li>The <a href="http://www.dol.gov/compliance/guide/garnish.htm#Penalites">Consumer Credit Protection Act</a> limits the amount that can be garnished from your paycheck to the lesser of 25% of disposable earnings or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage.<br /> &nbsp;</li> <li>In cases of economic hardship, creditors may not be allowed to garnish the full 25% of your disposable earning. Certain state wage garnishment laws may impose additional limits.<br /> &nbsp;</li> <li>Your state's collection laws and exemptions may provide additional protections. For example, my home state of Hawaii has a <a href="http://www.govcollect.org/files/Hawaii_Debt_Collection.pdf">collection exemption</a> of $2,575 on vehicles and up to $30,000 on real property.<br /> &nbsp;</li> <li>The <a href="http://www.dol.gov/compliance/laws/comp-erisa.htm">Employee Retirement Income Security Act</a> protects qualified retirement accounts, such as 401(k), deferred compensation, and profit sharing plans from most bill collectors.</li> </ul> <h3>How to Stop It</h3> <p>Know your rights and find out the relevant collections laws and exemptions for your state. In cases of abusive threats from debt collectors, file a complaint against them with the FTC.</p> <h2>4. No &quot;Doomsday&quot; Dates</h2> <p>Another common scare tactic from collection agencies is to anchor to a final deadline that would trigger lots of additional fees and legal problems if not met. Debt collectors know that the clock is working against them, so that's why they want to cash in as early as possible.</p> <ul> <li>Collection agents get commissions based on how big your first down payment is.<br /> &nbsp;</li> <li>Bill collectors buy debts at discounted prices, yet want to maximize their profit margins.<br /> &nbsp;</li> <li>Debts can become too old for a collector to sue. Depending on your state's <a href="https://www.consumer.ftc.gov/articles/0117-time-barred-debts">statute of limitations</a> for credit card debt, a creditor may be out of luck as early as three years.</li> </ul> <h3>How to Stop It</h3> <p>Always negotiate. You're not required to make a big down payment or forced to accept monthly repayment plan. When dealing with any debt collector, almost everything is negotiable, including payment schedules and deadlines.</p> <p>Bill collectors are great at playing hardball, but they know that it's in their best interest to negotiate a repayment plan that you can realistically stick to. Don't be caught off guard by malicious collection agents and keep them in check.</p> <p><em>What is your craziest story about bill collectors? Please share in the comments.</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/4-annoying-things-bill-collectors-cant-do-and-how-to-stop-them">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-13"> <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/how-to-deal-with-collection-agencies">How to Deal With Collection Agencies</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/surprising-things-that-can-kill-your-credit">Surprising Things That Can Kill 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/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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-erase-your-medical-debt">How to Erase Your Medical 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/dealing-with-nasty-debt-collectors">Dealing with Nasty Debt Collectors</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Debt Management bill collectors Collection Agencies credit score harassment Thu, 19 Mar 2015 13:00:12 +0000 Damian Davila 1347503 at http://www.wisebread.com 6 Smart Things to Do With Your Bonus http://www.wisebread.com/6-smart-things-to-do-with-your-bonus <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-smart-things-to-do-with-your-bonus" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_couple_financial_advisor_000020064711.jpg" alt="Young couple meeting with financial consultant" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>&quot;The windfall of great riches can, if mismanaged, make things worse, not better, for the recipients,&quot; said American author and professor Michael Mandelbaum.</p> <p>But you don't need a college degree to know that extra cash shouldn't be spent frivolously &mdash; that part is easy. The hard part is actually figuring out what exactly qualifies as a good way to use a small windfall. Here are six simple &mdash; and most importantly, <em>smart</em> &mdash; things to do with your bonus or commission check.</p> <h2>1. Build an Emergency Fund</h2> <p>One in four Americans has no emergency savings. If you're guilty as charged, then use your bonus check to set up your emergency fund <em>stat</em>. A good rule of thumb is that your emergency stash should cover six months of living expenses.</p> <p>When calculating your monthly expenses, go beyond just your mortgage or rent payment and include important recurring payments such as groceries, utilities, and minimum debt payments. If the final number shocks you, take that as a wake-up call about how important it is to have your emergency fund in place.</p> <h2>2. Pay Off High Interest Debt</h2> <p>By only paying the minimum on your maxed out credit cards, you're shelling out way more than you should.</p> <p>Let's assume that you have balance of about $2,461 on your credit card with an APR of 12.24%. If you make no additional charges, and each month you only pay the required minimum of $50, you will pay off the balance in &mdash; get this &mdash; 17 very long years! Even worse, you'll end up paying a total of $4,753, or nearly twice what you originally owed!</p> <p>Be smart and pay off those high interest credit cards <em>pronto</em>. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">When to Do a Balance Transfer to Pay Off Credit Card Debt</a>)</p> <h2>3. Max Out Contributions to Retirement Accounts</h2> <p>In 2014, workers and their employers averaged $9,670 in 401(k) contributions. While this number may seem impressive, keep in mind that the contribution limit in 2014 was $17,500.</p> <p>There is still a lot of room for improvement in our nest eggs. This year, there is even more. In 2015, the IRS bumped up the <a href="http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-401k-and-Profit-Sharing-Plan-Contribution-Limits">contribution limit</a> for 401(k) and profit-sharing plans to $18,000. For those age 50 and over, you are permitted to make an additional catch-up contribution of $6,000 to traditional and safe harbor 401(k) plans, and $3,000 to solo 401(k) plans. (See also: <a href="http://www.wisebread.com/5-dumb-401k-mistakes-smart-people-make?ref=seealso">5 Dumb 401(k) Mistakes Smart People Make</a>)</p> <p>Making out your contribution to your retirement accounts is also a great way to defer income taxes until retirement, when you're more likely to be in a lower tax bracket.</p> <h2>4. Start Saving for College</h2> <p>Data from the U.S. Department of Labor shows that workers with four-year college degrees have an hourly rate earning 98% higher than people without a degree. The same data shows that the gap is continuously increasing over time.</p> <p>This means that saving up for your, or your kids', college education is a smart thing to do with your commission check. A good way to save for college is via a <a href="http://www.savingforcollege.com/529_plan_details/">529 college-saving plan</a>, because in 34 states and the District of Columbia, you can receive a state income tax deduction for your contribution.</p> <p>To make sure that your higher education investment pays off, double check the market value of your or your child's college diploma. Some <a href="http://www.wisebread.com/5-college-degrees-not-worth-the-money">degrees aren't worth their cost</a>.</p> <h2>5. Get Better Banking Options</h2> <p>Your lucky windfall could unlock some better banking opportunities.</p> <ul> <li>By maintaining a larger account balance, you could qualify for a better interest rate. For example, my credit union currently offers an annual percentage yield of 0.20% for balances below $25,000, 0.25% for balances between $25,000 and $99,999, and 0.30% for balances over $100,000.<br /> &nbsp;</li> <li>Depending on your financial situation, you may not have access to free checking accounts. Make use of your bonus to pad your checking account and meet the minimum threshold for avoiding any fees.<br /> &nbsp;</li> <li>Determine if your bank can offer you a better deal with a larger account balance. If your bank can't provide you one, it's time to shop around for a better financial situation. (See also: <a href="http://www.wisebread.com/9-good-reasons-to-choose-a-credit-union-instead-of-a-bank?ref=seealso">9 Good Reasons to Choose a Credit Union Instead of a Bank</a>)</li> </ul> <h2>6. Prepare for Taxes Next Year</h2> <p>Last but not least, it can be wise to start preparing for next year's tax season<em> now</em>.</p> <ul> <li>Your year-end bonus may put you in a higher tax bracket this year. Ask your employer if he or she can defer your bonus (or at least a portion of it) in order to lower your tax bill this year.<br /> &nbsp;</li> <li>Keep in mind that most employers opt to slap a standard <a href="https://turbotax.intuit.com/tax-tools/tax-tips/General-Tax-Tips/What-is-the-Federal-Supplemental-Tax-Rate-/INF19305.html">25% withholding rate</a> (39.6% for amounts over $1 million) on bonuses and commissions. If your usual tax rate is far below that 25%, then you may already have paid enough in taxes this year. You'll need to adjust your W-4 form to decrease how much is withheld for taxes for the rest of 2015.<br /> &nbsp;</li> <li>Ask your human resources department which withholding option works best for you. Besides the standard withholding rate, the IRS allows employers to treat the bonus as regular compensation or take additional taxes only from the bonus check.</li> </ul> <p>Every year, 75% of U.S. taxpayers withhold too much tax. Don't become one of them and plan ahead. You want to enjoy as much as possible from that well-deserved bonus or commission check.</p> <p><em>What are you planning to do with your bonus or commission this year?</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/6-smart-things-to-do-with-your-bonus">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-14"> <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/is-your-personality-sabotaging-your-saving">Is Your Personality Sabotaging Your Saving?</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/9-ways-to-avoid-overdraft-charges">9 Ways to Avoid Overdraft Charges</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-inspiring-people-who-each-paid-off-over-100000-in-debt">5 Inspiring People Who Each Paid Off Over $100,000 in 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/credit-cards-vs-debit-cards-a-comprehensive-comparison">Credit Cards vs. Debit Cards: A Comprehensive Comparison</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/are-you-paying-these-6-unfair-banking-fees">Are You Paying These 6 Unfair Banking Fees?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Career and Income Banking Debt Management bonus check savings smart spendings windfall Wed, 18 Mar 2015 15:00:15 +0000 Damian Davila 1345313 at http://www.wisebread.com 6 Times When It's Okay to Take a Loan http://www.wisebread.com/6-times-when-its-okay-to-take-a-loan <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-times-when-its-okay-to-take-a-loan" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple-contract-financial-consultant-loan-iStock_000051526142_Large.jpg" alt="couple financial advisor" title="couple financial advisor" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Loans are a tricky subject in the financial world, because ideally, you'd never really need one. In the real world, however, plenty of responsible people find themselves needing loans for legitimate reasons. (See also: <a href="http://www.wisebread.com/6-times-you-should-never-take-a-loan?ref=seealso">6 Times You Should Never Take a Loan</a>)</p> <p>Whether it's an unplanned financial emergency or a necessary, major purchase, there are some situations when taking out a loan can't be avoided. Read on to understand when a new loan is actually okay.</p> <h2>1. When You Can Easily Afford the Payments</h2> <p>This might seem like a no-brainer, but when people are desperate they will sometimes assume loans with large payments they couldn't possibly afford. Before you take out any loan, create a realistic budget that includes the payment. If you can't afford it, you should probably reconsider the loan.</p> <p>Don't fall into the temptation of telling yourself that you will find <em>some way</em> to make ends meet. Instead, take care of securing any realistic extra income sources <em>before</em> you sign on the dotted line. Get a second job, line up freelance work, start selling stuff on eBay, or do whatever else you need in order to make loan repayment affordable. Just do it before you get the loan &mdash; otherwise, you're just creating more financial stress for yourself. And isn't that what the loan was supposed to solve?</p> <h2>2. When Your Purchase is Essential</h2> <p>Loans are never a good idea when you're using them to finance a lifestyle that is beyond your means. If, however, you find yourself in a place where you absolutely must have something <em>essential</em> (no, a remodeled kitchen or a tropical vacation are not essentials), and you can't afford it, a loan might be a good idea.</p> <p>Again, I'm talking basic essentials here. If you have to drive to work, you must have a functioning vehicle. If you live in a cold climate, you need a working furnace. Most of the time, these aren't purchases that can wait until you've saved the funds, and so a loan might be necessary.</p> <h2>3. When You Have Good Credit</h2> <p>If you have good credit (above a 720), you will most likely be eligible for lower interest rates on your loans. This means that you will pay less over the life of the loan and that your individual payments will be lower than they would be if your credit were poorer. And having good credit is, in itself, an indicator that you're probably capable of managing your debt effectively.</p> <p>Having good credit makes loans a lot more affordable. But once again, make sure you can make those payments! Otherwise, you'll ruin that solid credit score.</p> <h2>4. When Interest Payments Are Less Than Your Investment Returns</h2> <p>Many investors think that they should use money from their investments to make major purchases before considering a loan. While this is sometimes true, it's also possible that it'll be better financially to leave your investments untouched and get a loan to cover the purchase instead. As an example, if your portfolio generates 10% annual returns, but a loan's interest rate would be only 4%, then it doesn't make sense to lose that extra 6% in returns that your portfolio's funds are generating.</p> <p>If the rate on the loan is lower than your rate of return <em>and</em> you can make the loan payments, take the loan and keep your money invested. On the other hand, monies from your portfolio might be a smart source of cash for re-paying very high interest loans, such as credit cards. Never touch your emergency fund, though &mdash; that's the money you'll need for true emergencies, and unless you're facing bankruptcy or legal action, high interest debt isn't quite a <em>true</em> emergency that warrants depleting your safety net.</p> <h2>5. When You Can Pay it Off Early</h2> <p>Sometimes you know there's money coming in, but you just don't have it yet. If you need to make a major purchase before that money arrives, you can take out a loan and repay it as soon as the funds hit your bank account.</p> <p>But if you're taking this approach, be sure that your loan doesn't have any prepayment penalties. This strategy can work well for people who get large bonus or commission checks on a quarterly or yearly basis, so long as you don't overestimate your actual earnings.</p> <h2>6. When You Qualify for a &quot;Special&quot; Loan</h2> <p>There are a lot of &quot;special&quot; loans on the market, most offered by different government programs for things such as home-buying, education, or energy-efficiency retrofitting. These loans typically offer very favorable repayment terms which often make them worthwhile.</p> <p>For example, <a href="http://www.fha.com/fha_loan_requirements">FHA loans</a>, <a href="http://www.benefits.va.gov/homeloans/purchaseco_eligibility.asp">VA loans</a>, and even <a href="http://time.com/money/2929695/home-loan-usda-credit-rural-development/">USDA loans</a> can help people buy homes who might not have qualified otherwise. My husband and I bought our house last year using his VA loan, which saved us tons of money on the up-front costs. Without it, we'd have been hard-pressed to afford the house.</p> <p>Taking out a loan is something that a financially responsible person might never want to do. However, sometimes loans are necessary to meet our larger goals and, in the above cases, they may not be such a bad idea.</p> <p><em>What have you bought with money from a loan? Do you think that getting the loan was worth it?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/6-times-when-its-okay-to-take-a-loan">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-15"> <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-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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/co-signing-for-a-loan-4-things-to-consider-first">Co-Signing for a Loan: 4 Things to Consider 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/stop-is-that-loan-too-big-for-your-wallet">Stop! Is That Loan Too Big For Your Wallet?</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-loan-options-for-those-with-good-credit">5 Loan Options for Those With Good Credit</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/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Banking Debt Management big purchases borrowing finances loans Wed, 11 Mar 2015 13:00:09 +0000 Sarah Winfrey 1333072 at http://www.wisebread.com