debt http://www.wisebread.com/taxonomy/term/805/all en-US How a Credit Card Cash Advance Costs You More Than a Purchase http://www.wisebread.com/how-a-credit-card-cash-advance-costs-you-more-than-a-purchase <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-a-credit-card-cash-advance-costs-you-more-than-a-purchase" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-625782024.jpg" alt="Learning how a credit card cash advance costs more" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Credit cards are all about convenience. With one swipe, anything we want or need is right at our fingertips; and that includes cash. That convenience comes at a steep price, however &mdash; quite literally.</p> <p>Credit cards call it a &quot;cash advance&quot; when you use them to take cash out at an ATM, or use one of their convenience checks to pay for purchases (for example, when the vendor doesn't take credit cards, but will take a check).</p> <p>Here is what you need to know before even considering a cash advance, and some alternative solutions for when you need funds fast.</p> <h2>What is a credit card cash advance?</h2> <p>Taking a cash advance is done much the same way as making a withdrawal with your debit card. Instead of taking your own money out of your bank account, however, you borrow directly from your credit card. You may also receive checks in the mail from your card issuer that allow you to make credit card purchases via check payments. Again, this is not your money &mdash; the checks will pull funds from your credit card account.</p> <h2>What happens when you take a cash advance</h2> <p>Most credit card issuers impose entirely different terms on cash advance transactions. First, you will be charged a transaction fee, which will either be a flat rate or a percentage of the cash advance you're withdrawing (typically between 2 percent and 5 percent). Additional ATM fees and foreign transaction fees if you're out of the country may apply as well.</p> <p>In addition to fees, you'll likely be hit with a much higher interest rate. In some cases, the APR can be double the percentage for regular purchases. This catches many people off guard, since they're unaware different terms apply for cash advances. The longer it takes you to pay off this amount, the more that hefty interest will pile up.</p> <p>There is no grace period for cash advances, either. Typically, you have a month or so to pay off a credit card purchase in full before accruing any interest charges. This doesn't happen with a cash advance &mdash; you pay interest starting the day you make the transaction.</p> <p>Credit card companies also typically impose a separate limit on the amount of money you can take in a cash advance. This will often be much lower than your actual credit card limit.</p> <h2>How much will this actually cost you?</h2> <p>Let's say you are going out for dinner with friends, and you need to get a quick $40 from an ATM using your credit card. First, you will be hit with the cash advance fee. Next, you will start incurring interest on that withdrawal immediately (possibly around 30%). Furthermore, the operator of the ATM may also impose its own fees, which can be anywhere between $3&ndash;$5 per transaction. You could be looking at anywhere from $10&ndash;$15 in fees for taking out $40 (and that's assuming you pay it off by the next billing cycle). As you can see, that $40 dinner could wind up costing you $15 extra. Now imagine if you were borrowing $1,000 or more!</p> <h2>Alternatives to credit card cash advances</h2> <p>Simply put, you should always use a debit card to access cash instead of a credit card. Most major banks offer debit cards that can be used at in-network ATMs for no additional fees. In addition, many banks and credit unions are part of a larger ATM network that allows transactions for no additional fees.</p> <p>If the issue is that you're simply short on money, or stuck living paycheck-to-paycheck, a cash advance is not the solution. Instead, consider ways you can bring in extra income. Perhaps you can take up a part-time or side gig, sell a few items on eBay, or throw a big garage sale. (See also: <a href="http://www.wisebread.com/how-to-come-up-with-1000-in-the-next-30-days?ref=seealso" target="_blank">How to Come Up With $1,000 in the Next 30 Days</a>)</p> <h2>When is it Ok to take a cash advance?</h2> <p>A cash advance isn't the best option, but if it's your <em>only</em> option in an emergency, take it. Be sure to understand that there will be fees involved and that you need to repay the money you borrowed as soon as possible.</p> <p>Cash advances should never be used for everyday expenses, &quot;fun&quot; money (shopping or gambling, for example), or even to make ends meet until your next paycheck. It can be all too easy to fall into a cycle of cash advances, which will ultimately lead to credit card debt. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">Fastest Way to Pay Off $10K in Credit Card Debt</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/how-a-credit-card-cash-advance-costs-you-more-than-a-purchase">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal">Is a Balance Transfer Offer a Good Deal?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-dont-love-capital-one-how-to-get-a-lower-apr-or-possibly-not">How to Get a Lower APR, or Possibly Not</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-interest-rates-are-about-to-go-up">Your Interest Rates Are About to Go Up</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-scary-facts-about-credit-card-debt">6 Scary Facts About Credit Card Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards APR borrowing money cash advance debt emergencies fees interest rates limits transactions Fri, 14 Apr 2017 08:30:14 +0000 Jason Steele 1925859 at http://www.wisebread.com 6 Important Credit Card Lessons Your Parents Didn't Teach You http://www.wisebread.com/6-important-credit-card-lessons-your-parents-didnt-teach-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-important-credit-card-lessons-your-parents-didnt-teach-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-594938216.jpg" alt="Learning credit card lessons parents didn&#039;t teach you" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Our parents taught us many of life's important lessons, but did they adequately prepare us for smart credit card use? Maybe not. Here are six credit card lessons your parents might not have taught you.</p> <h2>1. Credit cards offer more fraud protection than debit cards</h2> <p>Credit cards offer a much greater level of protection against fraud than debit cards. Many credit companies come with $0 fraud liability, meaning you aren't responsible for any reported fraudulent spending. In most of these cases, the creditor will credit your account immediately. However, with debit card purchases, it can take the bank up to two weeks to refund your money, and even then you might still be held responsible for a certain percentage of the charges. (See also: <a href="http://www.wisebread.com/4-reasons-credit-is-safer-than-debit?ref=seealso" target="_blank">4 Reasons Credit Is Safer Than Debit</a>)</p> <h2>2. You must be proactive to build your credit</h2> <p>A common myth is that an open credit card account is all you need to build your credit. Credit scores reflect an individual's relationship with debt management. Lenders and creditors want to see how you interact with finances, especially if you are going to take on more debt. This doesn't mean you need to be in debt to have a good credit score. Instead, a credit score is established through paying your bills on time, whether that be your credit card bill or your mortgage.</p> <p>One of the <a href="http://www.wisebread.com/the-5-things-with-the-biggest-impact-on-your-credit-score" target="_blank">biggest factors in determining your credit score</a> is your credit utilization ratio. Lenders want to see how much debt you have versus how much credit you have access to.</p> <p>Build your credit by using and paying off your credit card, making payments on time, and asking for credit line increases. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>3. Keep your credit utilization ratio as low as possible</h2> <p>Generally, it is important to have a credit utilization ratio of 30 percent or less. For example, someone with $500 of debt on a $1,000 total credit line will look worse to creditors than someone who has $5,000 debt with a total credit line of $30,000.</p> <p>Calculate your credit utilization ratio by dividing your debt total by your credit line total. For example, $500 of debt divided by a $1,000 credit line would equal a 50 percent credit utilization ratio, whereas $5,000 of debt divided by a $30,000 credit line is just over 16 percent. Remember, your credit line total is the combination of all lines of credit you have open.</p> <h2>4. Interest payments can make debt hard to pay off</h2> <p>A few thousand dollars of debt can feel like an impossible hurdle if you try to pay it off in minimum payments only. You will feel like you are making zero progress on your debt when you have to pay interest. Interest makes anything you purchased with a credit card more expensive. Did you really mean to pay double for that clearance shirt? (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">Fastest Way to Pay Off $10K in Credit Card Debt</a>)</p> <h2>5. Differences in interest rates do matter</h2> <p>Perhaps your parents didn't make a big deal about the difference between an A and A-, but when it comes to interest rates, the difference is noticeable. Even a half of a percent can make a big difference when it comes to your monthly payments on a loan. Getting a $20,000 car loan for three years at 4 percent doesn't seem much different from the same car loan at 3.25 percent, but it is. The difference is $6 a month, or $216 in the lifetime of the loan. Wouldn't you rather that money go to something necessary or fun instead of an interest payment? The same is true of paying interest on a credit card. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>6. Rewards don't negate debt</h2> <p>We know your mom always told you to look at the bright side of things, but credit card rewards are not the bright side. If you are constantly running up credit card debt to benefit from rewards points, then you will be sorely disappointed by their rate of return. There is no credit card on the market with a reward program that makes going into debt worth it.</p> <p>Pay off your monthly credit card bill to ensure you benefit from the rewards, but aren't being burned by the interest rate. (See also: <a href="http://www.wisebread.com/7-credit-card-reward-tips-many-people-dont-follow?ref=seealso" target="_blank">7 Credit Card Reward Tips Many People Don't Follow</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/6-important-credit-card-lessons-your-parents-didnt-teach-you">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/reduce-your-credit-limits-to-manage-your-spending">Reduce Your Credit Limits to Manage Your Spending</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/whats-the-best-way-to-get-out-of-debt">What&#039;s the Best Way to Get out of 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/the-5-best-credit-cards-with-annual-fees">The 5 Best Credit Cards With Annual Fees</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-tricks-to-save-money-with-credit-cards">10 Tricks to Save Money with 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/7-ways-to-save-loads-of-money-using-credit-cards">7 Ways to Save Loads of Money Using Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards credit debt fraud protection interest payments money lessons parents rewards Wed, 12 Apr 2017 08:30:15 +0000 Ashley Eneriz 1925376 at http://www.wisebread.com 5 Steps to Getting Excellent Credit http://www.wisebread.com/5-steps-to-getting-excellent-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-steps-to-getting-excellent-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_happy_tablet_618935990.jpg" alt="Woman taking steps to get excellent credit" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Having an excellent credit score is not as elusive as it seems. You simply must trade in your bad financial habits, no matter how innocent they seem, for these five healthy habits. (See also: <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=seealso">5 Best Credit Cards for People With Excellent Credit</a>)</p> <h2>1. Always pay your bills on time</h2> <p>One late payment can send your credit score spiraling. Even if you <a href="http://www.wisebread.com/5-simple-ways-to-never-make-a-late-credit-card-payment?ref=internal">forget to pay a credit card</a> with a minuscule balance leftover, it will still negatively impact your credit score. About two years before my husband and I bought our first home, I forgot I had a Victoria's Secret credit card. The balance owed on the card was very little &mdash; less than $20. But since I forgot I owed money on it, I didn't pay the card for three months.</p> <p>Fast forward two years, and the ding from the unpaid Victoria's Secret card was keeping my credit score a few points away from being excellent. We ended up putting the home loan under just my husband's name to ensure we got the best rate. All that hassle for a forgotten credit card bill two years prior. (See also: <a href="http://www.wisebread.com/prioritize-these-5-bills-when-youre-short-on-cash?ref=seealso">Prioritize These Bills When You Are Short on Cash</a>)</p> <h2>2. Don't use all of your available credit</h2> <p>Those with excellent credit scores use less than 30 percent of their available credit. One factor considered when calculating your score is your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal">credit utilization ratio</a>. Your credit utilization ratio compares your balance to your total credit limit. If this ratio is too high, your credit score begins to suffer. For example, $2,000 of debt on a card that has a $10,000 limit looks much better to creditors that $250 of debt on a card with a limit of $500. Even though the first example owes more money, the utilization is only 20 percent, whereas the latter example is at 50 percent.</p> <p>You can lower your credit utilization ratio in two easy ways. First, calculate how much credit card debt you need to pay off in order to get your utilization ratio under 30 percent, and start making payments to get there. Second, call your credit card company and ask for a limit increase, which will in turn lower your credit utilization ratio. Most creditors would be happy to raise your spending limit, especially if you are in good standing with them. Just be sure not to increase your spending, too. (See also: <a href="http://www.wisebread.com/4-questions-to-ask-before-getting-a-credit-increase?ref=seealso">4 Questions to Ask Before Getting a Credit Limit Increase</a>)</p> <h2>3. Hang on to old credit card accounts</h2> <p>Another factor considered in calculating your credit score is the age of your overall credit history. Being a card holder with one company for over a decade will look better on your account than having several new cards opened or closed within the span of several years.</p> <p>Building up a longer credit history takes time. Figure out which card or account is your oldest, and use the card periodically. For example, say you have an old card that doesn't offer you many benefits, so you rarely use it. Don't just close this old account. Instead, call them and ask if you can get an upgrade to a card that earns better rewards. This way, you can use the card periodically, earn better rewards, and still benefit from a longer account history. (See also: <a href="http://www.wisebread.com/how-to-ditch-a-credit-card-without-dinging-your-credit-score?ref=seealso">How to Close a Credit Card Without Dinging Your Credit Score</a>)</p> <h2>4. Monitor your score</h2> <p>If you are not already monitoring your score, then start today. You need to know where your credit score stands at least quarterly. This will help you catch any mistakes or fraud quickly. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=seealso">Best Credit Cards That Offer Free Credit Scores</a>)</p> <p>Back in college, my husband never thought to check his credit score. Every time he would apply for a credit card, he would instantly be rejected. When he finally checked his credit history, he discovered the bureau mixed up his name with his father's. His history showed that he already had a bankruptcy and foreclosure at the ripe old age of 19.</p> <p>Along with knowing your score, you also want to prevent people from running your credit unnecessarily. Car dealerships are notorious for this. Instead, get preapproved for a loan from your local credit union and refuse the dealership's request to run your credit.</p> <h2>5. Live within your means</h2> <p>The only way to live a financially responsible life, which is reflected in your credit score, is to live within your means. Pay off <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=internal">outstanding credit card debts</a> and other high interest loans, and then commit to only charging what you can pay for in full. Build up a reliable emergency fund, contribute to a retirement plan, and invest. There are no tricks to getting excellent credit. It all comes down to being consistent with good financial habits. (See also: <a href="http://www.wisebread.com/7-habits-of-the-financially-successful?ref=seealso">7 Habits of the Financially Successful</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/5-steps-to-getting-excellent-credit">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-bad-credit-isnt-the-end-of-the-world">Your Bad Credit Isn&#039;t the End of the World</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-to-expect-when-youre-expecting-a-huge-credit-card-bill">What to Expect When You&#039;re Expecting a Huge Credit Card Bill</a></span> </div> </li> <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/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides 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/heres-why-you-shouldnt-freak-out-if-you-miss-a-payment-due-date">Here&#039;s Why You Shouldn&#039;t Freak Out If You Miss a Payment Due Date</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bill payments credit history credit reports credit score debt good habits high interest Thu, 06 Apr 2017 08:30:16 +0000 Ashley Eneriz 1922592 at http://www.wisebread.com It's Never Too Late to Fix These 5 Money Mistakes From Your Past http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-637362030.jpg" alt="Fixing money mistakes from his past" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Making mistakes is part of life, and this is particularly true when it comes to finance. Since money is such a taboo topic in our culture, we often have to learn good money behavior through trial and error.</p> <p>The problem is that our culture also considers errors as something to regret, rather than opportunities to learn. This can land us in a shame-filled cycle of inaction.</p> <p>Forgiving yourself for financial mistakes is not the same as condoning or ignoring them. It's simply giving yourself the opportunity to move on from the past. Stop beating yourself up over these common youthful money mistakes and take action to fix them instead.</p> <h2>1. Taking on too much student debt</h2> <p>Taking out a student loan has become the default method for the majority of college students to pay for their education. According to a 2016 Market Watch report, &quot;about <a href="http://www.marketwatch.com/story/americas-growing-student-loan-debt-crisis-2016-01-15" target="_blank">40 million Americans</a> hold student loans and about 70 percent of bachelor's degree recipients graduate with debt.&quot;</p> <p>With the near ubiquity of student loans, however, comes the problem of students taking on more debt than they need or can comfortably pay off once they graduate. Student loans can feel like an easy way to pay for more school than you can afford, or even a way to fund things you don't <em>really </em>need, like your own apartment or spring break vacations.</p> <p>This can be exacerbated by the fact that college students and their parents don't always completely understand the differences between types of student loans, which can leave them all the more susceptible to overwhelming debt.</p> <h3>How to fix it</h3> <p>If you are kicking yourself for running up a student loan tab that you can't afford, start your journey to self-forgiveness by investigating your repayment options. The first step is to call your lender and explain the situation. If you have federal student loans, you may be eligible for a <a href="http://www.wisebread.com/which-student-loan-repayment-plan-saves-you-the-most?ref=internal" target="_blank">modification of your repayment plan</a> based on your income. Even if you have private loans, talking with your lender can let you know what <a href="http://www.wisebread.com/3-things-you-must-know-about-repaying-your-private-student-loans?ref=internal" target="_blank">options are available</a> that will give you more breathing room.</p> <p>Once you have made whatever changes you can to your repayment plan, then take the time to write down everything you got for the money you borrowed. For instance, in addition to your education, you might list the friends and connections you made at college, the experiences you had, the insights you gained about yourself and your area of study, and the way the loans allowed you to focus on college instead of tuition.</p> <p>This exercise will give you a chance to feel gratitude for the loans. You are now the beneficiary of your younger self's choices &mdash; both the good and the bad. Recognizing all of the benefits you got from your student loans will help you move from being angry at yourself, to looking at your current loan payments as a gift to your younger self.</p> <h2>2. Not budgeting or building an emergency fund</h2> <p>I don't know a single person who did not immediately begin spending money hand over fist after landing their first well-paid job. That means anything from immediately purchasing an expensive car to relying on restaurants for meals rather than cooking. Even people who carefully budget their money when working for low salaries have a tendency to start making it rain as soon as their paychecks get bigger.</p> <p>This can cause problems in two ways. Sometimes, the good salary doesn't last forever because of a layoff or other change in your financial circumstances. And sometimes, you keep making good money, but your lifestyle continues to inflate &mdash; which means you can never seem to get ahead.</p> <p>In either case, the lack of a budget and an <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=internal" target="_blank">emergency fund</a> means that a financial blow can turn into a crisis, leaving you cursing yourself for every unnecessary purchase you made when the money was good.</p> <h3>How to fix it</h3> <p>Budgeting may be the last thing on your mind when the lack of money hits the fan, but <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=internal" target="_blank">creating a budget</a> is exactly what you need to do in an emergency. Don't waste your time beating yourself up for the spending choices you made before the financial crisis &mdash; just sit down with your bank statements, credit card accounts, and bills, and figure out your income and outflow. Learning to budget in the middle of a crisis might be painful, but it will ultimately help you feel in control of your money.</p> <p>Once you have a budget system in place, it's time to start looking back on your spending habits. What did you buy that you now regret? Why do you regret it? Do you feel regret now only because an emergency came up and you didn't have the funds, or do you actually feel the purchase itself added nothing to your life? If you truly regret the purchase, why did you make it?</p> <p>It can hurt to ask yourself these questions, which is why it is important to regard your past purchases with curiosity and compassion, rather than guilt or anger at yourself. But once you have answered these questions, you will have a better understanding of why you made those unnecessary purchases &mdash; which will help you avoid the same spending traps in the future. Understanding the reasons behind your bad money habits can help you develop financial mindfulness to make better choices going forward.</p> <h2>3. Not saving for retirement</h2> <p>Most people don't think to start <a href="http://www.wisebread.com/10-signs-you-arent-saving-enough-for-retirement?ref=internal" target="_blank">putting money aside for retirement</a> when they are young. In your 20s and 30s, not only does retirement seem too far away to worry about, but you've got plenty of competing needs that seem more important.</p> <p>Of course, if you read <em>any </em>advice on retirement, it's clear that saving as much money as you can when you are young is the best route to a secure retirement. Unfortunately, this advice can feel like it's meant to shame anyone who didn't start funding their 401(k) on the day they started their first job. That's not helpful to late funders.</p> <h3>How to fix it</h3> <p>When it comes to retirement, we should all save early and save often. Unfortunately, financial advice tends to beat the &quot;save early&quot; drum so much that it's easy to believe that there is such a thing as &quot;too old to start saving for retirement.&quot; But as long as you are bringing in an income, you can save for your retirement. Write down your future goals and your vision of retirement, so you can get excited about saving. Then you can let go of the anger at your younger self, and start putting money in your retirement accounts today, tomorrow, and beyond. (See also: <a href="http://www.wisebread.com/7-retirement-planning-steps-late-starters-must-make?ref=seealso" target="_blank">7 Retirement Planning Steps Late Starters Must Make</a>)</p> <h2>4. Racking up credit card debt</h2> <p>I got my first credit card in college. Though I tried to pay off the bill every month, it got away from me pretty quickly. Sometime in my senior year of college, when I realized that there was no way I could pay off my bill, I made the decision to just let the debt rack up, since I'd have a good-paying job after graduation and could take care of it then.</p> <p>Of course, after I graduated, I was unable to find a job for about three months, and the first job I did land was working retail for $8.25 an hour. My credit card debt crept up even more.</p> <p>My youthful problems with credit card debt are incredibly common. When you get your first sweet taste of credit, it's pretty hard to stop using the plastic even when your budget can't handle your charges. The fact that you're not required to pay off the cringe-inducing full amount allows you to assume the problem will take care of itself, as I did.</p> <p>Then, one day, you realize that you are in debt up to your eyeballs with nothing to show for it, and you are kicking yourself for your youthful credit card spending.</p> <h3>How to fix it</h3> <p>Start by recognizing the fact that humans are not wired to be able to handle the combination of instant gratification plus delayed payment. Young adults are particularly susceptible to this, which is the very reason why credit card companies have been banned from college campuses.</p> <p>Once you recognize this, it becomes much easier to start digging yourself out of the hole. You can much more easily leave your credit cards at home and remove them from your favorite e-tailer sites when you realize the cost of their convenience. Sending extra money to your credit card each month also starts feeling like steps toward freedom. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>5. Buying too much car</h2> <p>Buying a new car for yourself can be one of the most satisfying moments in young adulthood. You can finally choose the car <em>you</em> want to drive, rather than making do with a beater or your parents' minivan. So it's very easy to go hog-wild when you're in a position to buy a new car. You can get the horsepower, or the luxury, or the bells-and-whistles you've always dreamed of having.</p> <p>But the monthly payments end up being a bigger deal than they seemed when you were in the showroom, and your high-end car keeps needing expensive maintenance and insurance. When you realize how much you could have saved if you opted for that reliable low-key sedan instead, you want to kick your younger, flashy self.</p> <h3>How to fix it</h3> <p>Once you have forgiven yourself for putting too much emphasis (and money) on your car, you can start thinking more rationally about your transportation needs. If your vehicle is just a means to get from point A to point B, then what do you really need from it? What's the minimum that would be acceptable for your transportation?</p> <p>Going through this thought exercise allows you to think about what you really need, and will help you do the research necessary to find the right car for your life. Then you can trade in your too-much car for something more appropriate, or drive something that meets your barest of needs until you have paid off the mistake of buying too much car.</p> <p>And don't forget &mdash; you can always put some racing stripes on &ldquo;Old Reliable&rdquo; if you want it to represent you. Loving your car doesn't have to be expensive.</p> <h2>Let it go</h2> <p>Feeling shame over things you did in the past is a way of letting your mistakes continue to hurt you. Yes, you may have screwed up when you were younger and it might be hurting your bottom line right now. But you give that old mistake far more power over your future if you continue to beat yourself up for it instead of simply accepting it and doing what you can to bounce back from it. Step out of regret and into action today.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">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/5-money-moves-to-make-before-moving-out-on-your-own">5 Money Moves to Make Before Moving Out on Your Own</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-new-year-budget-resolutions-you-should-make-now">4 New Year Budget Resolutions You Should Make Now</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-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting debt emergency funds forgiveness missteps money mistakes retirement savings student loans young youth Fri, 31 Mar 2017 09:00:15 +0000 Emily Guy Birken 1918286 at http://www.wisebread.com 11 Secrets You Need to Tell Your Financial Adviser http://www.wisebread.com/11-secrets-you-need-to-tell-your-financial-adviser <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-secrets-you-need-to-tell-your-financial-adviser" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-165869622.jpg" alt="Couple sharing secrets they need to tell their financial adviser" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So you've made an appointment to sit down with a financial adviser and formulate a plan for your future. Are you prepared to talk about your full money situation? In order to truly help you, your financial adviser needs to look at the big picture. That means there can be no major money secrets.</p> <p>Financial advisers will often begin each session by asking a lot of questions that may seem personal. But they'd be negligent if they didn't. In fact, it's their fiduciary duty to learn as much about you as they can in order to advise you properly.</p> <p>Here's a list of secrets you'll need to share with your financial planner if you want the best advice.</p> <h2>1. All of your debt</h2> <p>When you're being crushed under a mountain of debt, you may not want to talk about it. But a financial adviser is perhaps the best person to discuss it with. Your adviser can't craft a sound financial plan for you if they're unaware that a good chunk of your income is going to pay off debt. If you let them know about your full debt situation, however, they may be able to assist you in climbing out of the hole and onto the path toward financial freedom.</p> <h2>2. Any job loss</h2> <p>It's not always easy to admit you are out of work. But a financial adviser can't help you properly if you don't provide a full picture of your income situation. If you're out of work now, let your adviser know. If you were out of work for a long stretch in the past, let them know that as well. Financial advisers can also help you navigate what to do when your income has been cut, as well as advise you on what to do with old 401(k) accounts and pension money. (See also: <a href="http://www.wisebread.com/if-youre-lucky-enough-to-receive-a-pension-here-are-6-things-you-need-to-do?ref=seealso" target="_blank">If You're Lucky Enough to Receive a Pension, Here Are 6 Things You Need to Do</a>)</p> <h2>3. Family members you support</h2> <p>Do you pay child support? Do you regularly send money to your brother up in Buffalo? Do you have an elderly parent living with you? Your financial adviser will want to know about any money you spend to support other people, even if it's only occasionally or informally. These are expenses that have an impact on your overall financial picture, and are not the kinds of costs that you can easily eliminate.</p> <h2>4. Sizable gifts</h2> <p>You're fortunate enough to be given $25,000 from your generous Uncle Steve, but you feel like it's really not something you want people to know about. After all, who might come knocking on your door now that you have this extra cash on hand? That's understandable, but it's important to tell your financial adviser, because they can offer advice on what to do with the new funds. An unexpected influx of cash, even if it's just a one-time gift, can have a ripple effect on your overall saving strategy.</p> <h2>5. Tax troubles</h2> <p>Have you been diligent about paying your taxes? If not, this is something you'll want to tell your adviser. This goes for late taxes, tax liens on properties, and past audits. The longer you wait to take care of tax problems, the more you may end up paying in penalties and fees. Your financial adviser can help you clean up your tax issues, and will be in a better position to help you plan your future.</p> <h2>6. The status of your marriage</h2> <p>If you're meeting with an adviser, it helps to let them know if you're about to get married, or if your marriage is about to end. Marriage and divorce have all kinds of financial implications on everything from income to taxes to planning for retirement.</p> <h2>7. Your vices</h2> <p>Gambling. Alcoholism. A shopping addiction. We all have our bad habits, but it's important to be aware of those vices that impact your finances. Are you at risk of incurring debt due to a major gambling binge? Is alcohol preventing you from landing steady work? Your financial adviser can't accurately assess your finances if they don't know the situation.</p> <p>According to Doug Amis, a CFP with Cardinal Retirement Planning in Cary, NC, even casual marijuana use is something clients should disclose to planners, because many life insurance companies still test for it.</p> <h2>8. Anything that your kids need to know</h2> <p>Hans Scheil, CEO and owner of Cardinal Retirement Planning, says that his most challenging clients are those who have kept important information from family members. This secrecy can create difficulty in later years, when facing important estate decisions.</p> <p>&quot;What happens with people now is that they develop dementia, or some sort of chronic illness, and they end up needing care,&quot; Scheil said. &quot;This is when all of the family scandals come out.&quot;</p> <p>Scheil says it's important to anticipate what your children and grandchildren may need to know about your estate to avoid strife down the road.</p> <h2>9. Charitable giving</h2> <p>It may seem odd to think of this as something you'd hide, but financial advisers say they've met with clients who have quietly been giving to a cause that their spouse or other loved ones might not agree with. Your donations to charity may not seem like anyone's business, but they can impact your overall savings if you give a substantial amount. A financial adviser can also walk you through getting tax deductions for your charitable donations.</p> <h2>10. Your own lack of financial knowledge</h2> <p>Are you the type who doesn't know an IRA from an IPA? Are you mystified by mutual funds and baffled by bonds? It's OK, your financial adviser is not there to judge you and will likely be more annoyed by any attempt to bluff your way through a meeting. Financial advisers can help you understand the ins and outs of investing and estate planning, so it's useless to pretend to know more than you do.</p> <h2>11. All of your side hustles</h2> <p>When your financial adviser asks you about your income, they want to hear about everything. Not just your day job, but your side work giving piano lessons, your freelance writing, your pottery sales, and even your gambling winnings. You may be hiding this income because you don't want to pay taxes. But your adviser needs to know about this extra income, or else any financial plan they create will be flawed. Moreover, your financial adviser can often give you advice on how to turn a quiet side hustle into a legitimate, profitable business.</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/11-secrets-you-need-to-tell-your-financial-adviser">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/how-to-manage-your-money-during-a-spousal-separation">How to Manage Your Money During a Spousal Separation</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/could-a-divorce-improve-your-finances">Could a Divorce Improve Your Finances?</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-money-conversations-every-couple-should-have">5 Money Conversations Every Couple Should Have</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-every-woman-can-take-control-of-her-finances">How Every Woman Can Take Control of Her Finances</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/does-divorce-affect-your-student-loans">Does Divorce Affect Your Student Loans?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt divorce financial advisers financial planning gambling honesty job loss marriage Secrets taxes Tue, 28 Mar 2017 10:01:05 +0000 Tim Lemke 1915280 at http://www.wisebread.com How Are People Retiring in Their 30s?! http://www.wisebread.com/how-are-people-retiring-in-their-30s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-are-people-retiring-in-their-30s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-508191870.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you think about retirement, it's generally a time later in life after you've put many working years into a career. But today, some people are retiring in their 40s, 30s, and even in their 20s! What is the secret to retiring so early?</p> <p>I reached out to several bloggers who either retired or reached financial independence by the time they reached their 30s to learn just how they did it.</p> <p>Even if you are not aiming to retire at a very young age, these strategies can still help you accelerate your retirement.</p> <h2>Secret 1: Pay down debt ASAP</h2> <p>The first step toward early retirement is to get rid of debt as soon as possible. Making payments on debt limits your ability to build your investments and grow enough assets to retire. This is how Michelle Schroeder-Gardner of Making Sense of Cents got started on the path to financial independence in her early 20s. &quot;In the beginning,&quot; she said, &quot;I worked many, many hours a week so that I could pay off my debt in seven months, but it was well worth it.&quot;</p> <p>See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso2" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a></p> <h2>Secret 2: Take advantage of compound interest</h2> <p>The key to reaching early retirement is to save a large portion of your income &mdash; for example, 50 percent or more &mdash; and let that money compound over time. How can you put away that much on a modest income? You need to live very frugally so you can apply a large percentage of your income toward investments.</p> <p>Jeremy Jacobson, who runs Go Curry Cracker with his wife Winnie, reached financial independence in his 30s. He explained, &quot;We just used our income to buy our freedom rather than things and experiences that we would have quickly forgotten. Ironically, thanks to compound interest we can now have things, experiences, and freedom.&quot;</p> <h2>Secret 3: Multiple sources of income</h2> <p>Many of these bloggers who retired early had a traditional career for a time, and gradually built up &quot;side hustles&quot; to generate multiple streams of income. The extra cash helps get debt paid off faster and starts building your investment accounts sooner. Writing, owning income properties, selling items on eBay or Amazon, and consulting are some ideas to bring in &quot;extra&quot; money.</p> <p>One of these side projects that you enjoy could grow into enough income to one day replace your primary job. (See also: <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job?ref=seealso" target="_blank">15 Ways to Make Money Outside Your Day Job</a>)</p> <h2>Secret 4: Commit to living differently</h2> <p>One thing I noticed is that these people are quite different from their peers. They are not concerned about fitting in and even celebrate living much differently than others their age.</p> <p>Travis Hornsby, blogger at Millennial Moola, was able to retire in his mid 20s. How did he manage it? &quot;I lived in a semifinished basement for several months because it included utilities and allowed me to supercharge my savings rate,&quot; he explained.</p> <p>Justin McCurry at Root of Good retired in 2013 at age 33 by redefining what qualified as a sacrifice. &quot;Unlike our peers, we never upgraded our starter home to a McMansion, nor did we trade in our Honda sedans for luxury cars,&quot; he said. &quot;Is that a sacrifice?&quot;</p> <p>Kristy Shen, one half of Millennial Revolution and retiree by age 31, resisted the pressure to buy a large home and settle into a traditional lifestyle. &quot;We stuck to our guns because we knew the math didn't make sense,&quot; she said.</p> <h2>Secret 5: Know when to stop</h2> <p>Many of those who retire at an early age plan to maintain a low spending rate after they retire, allowing them to leave the workforce early. But how much is enough? There are many opinions about this, but many subscribe to the 4 percent safe withdrawal rate as a rule of thumb. Simulations have shown that under a range of economic scenarios, you can withdraw up to 4 percent per year from your investment portfolio with a very low probability of running out of money during retirement.</p> <p>If your desire is to retire as soon as possible, it is important to have a specific goal for how much you need to accumulate so you don't end up spending extra years in the cubicle. For example, if you can live on withdrawing $40,000 per year from your account, then $1 million is the minimum amount you would need to fully retire under the 4 percent safe withdrawal rate. If you will have income after you retire, then you will need to withdraw less, so the balance you need to accumulate is less &mdash; and you can retire earlier.</p> <h2>Secret 6: Income after &quot;retirement&quot;</h2> <p>Many of these people who &quot;retire&quot; very early are actually still working at least part-time. Financial independence may be a better description than retirement for this lifestyle. Financial independence means that although you are still working, you don't need to do it purely for the money anymore.</p> <p>Michelle of Making Sense of Cents started her blog in graduate school a few years ago to help pay off student loans faster. As a dramatic example of income after reaching financial independence, she now makes nearly $1 million per year from her blog!</p> <h2>Secret 7: Invest for growth</h2> <p>Saving the money is the first step, but you have to invest it so it will grow. Parking your savings in a bank account at less than 1 percent interest is not going to get you to retirement very fast.</p> <p>Kristy of Millennial Revolution regrets her initial hesitation to dive into investments. &quot;I think we spent a lot more time waffling on whether we should do the investing-route or the housing-route than we should have, and that caused some missed opportunities along the way,&quot; she said. &quot;As a result, we stayed out of the market when the S&amp;P 500 bounced off the floor in early 2009 because we were still deciding whether to buy a house. As a result, we missed a 40 percent rally from 2009&ndash;2010 just sitting in cash! Fortunately by the time we decided in early 2012, there turned out to be plenty more gains to go in this bull market.&quot;</p> <h2>Secret 8: Don't sink money into a house</h2> <p>This one comes as a bit of a surprise to me since I have gone the route of investing in a home. But several folks who have reached early retirement recommend avoiding homeownership in order to reach financial independence sooner.</p> <p>Kristy and her husband Bryce felt scrutiny at their decision to forgo homeownership and continue to rent. &quot;Going against the grain is tough, but it's even tougher to do for such a long period of time while everyone around you is pointing and saying 'What an idiot. They're renting and throwing money away.'&quot; she explained.</p> <p>The advice not to buy a house makes sense if your goal really is to minimize costs. Owning a home not only commits you to a mortgage payment, but also to additional expenses such as insurance, taxes, repairs, and maintenance. Plus, if you own a home, you are more likely to spend money on furniture, landscaping, and home improvement projects. In some cases, you may be better off minimizing your expenses by renting instead of buying a place to live during your run up to early retirement. (See also: <a href="http://www.wisebread.com/rent-your-home-or-buy-heres-how-to-decide?ref=seealso" target="_blank">Rent Your Home or Buy? How to Decide</a>)</p> <h2>Secret 9: Enjoy now</h2> <p>In my experience, most people in their 20s are not focused much on retirement at all. But if you want to retire in your 30s, you will need to start working toward that goal very early in life. The earlier you want to retire, the more aggressively you will need to save money. But it is possible to focus too much on making and saving money. As you look forward to some great experiences after retirement, you don't want to miss out on unique opportunities to enjoy life along the way.</p> <p>Joe Udo of Retire by 40 emphasizes this point: &quot;If you're working toward early retirement,&quot; he said, &quot;don't forget about the present. Being miserable every day will screw up your mental health.&quot;</p> <h2>How early should you retire?</h2> <p>Very early retirement is not for everyone. Retiring early clearly requires some significant sacrifices and lifestyle adjustments. You'll have to decide if this cost is worth the reward of reaching financial freedom years (or possibly even decades) earlier.</p> <p>If you'd like to learn more and read about the journey of the bloggers mentioned in this article, check the table below.</p> <table> <tbody> <tr> <td> <p>Blogger</p> </td> <td> <p>Blog</p> <p>(link to their best early retirement advice post)</p> </td> <td> <p>Age at Retirement / Financial Independence</p> </td> </tr> <tr> <td> <p>Justin</p> </td> <td> <p><a href="http://rootofgood.com/zero-to-millionaire-ten-years/" target="_blank">Root of Good</a></p> </td> <td> <p>33</p> </td> </tr> <tr> <td> <p>Joe</p> </td> <td> <p><a href="http://retireby40.org/3-easy-steps-retire-40/" target="_blank">Retire by 40</a></p> </td> <td> <p>38</p> </td> </tr> <tr> <td> <p>Jeremy &amp; Winnie</p> </td> <td> <p><a href="http://www.gocurrycracker.com/how-we-saved-multi-millions/" target="_blank">Go Curry Cracker </a></p> </td> <td> <p>38, 33</p> </td> </tr> <tr> <td> <p>Michelle</p> </td> <td> <p><a href="http://www.makingsenseofcents.com/2016/01/early-retirement-myths-busted.html" target="_blank">Making Sense of Cents</a></p> </td> <td> <p>20s</p> </td> </tr> <tr> <td> <p>Kristy &amp; Bryce</p> </td> <td> <p><a href="http://www.millennial-revolution.com/freedom/how-i-built-a-seven-figure-portfolio-and-retired-at-31/" target="_blank">Millennial Revolution</a></p> </td> <td> <p>31, 33</p> </td> </tr> <tr> <td> <p>Travis</p> </td> <td> <p><a href="https://millennialmoola.com/2015/06/22/how-to-retire-in-your-20s/" target="_blank">Millennial Moola</a></p> </td> <td> <p>25</p> </td> </tr> </tbody> </table> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dr-penny-pincher">Dr Penny Pincher</a> of <a href="http://www.wisebread.com/how-are-people-retiring-in-their-30s">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/8-steps-to-starting-a-retirement-plan-in-your-30s">8 Steps to Starting a Retirement Plan in Your 30s</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/7-occasions-when-you-should-definitely-hire-a-financial-advisor">7 Occasions When You Should Definitely Hire a Financial Advisor</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/these-5-expenses-will-probably-cost-you-a-lot-less-in-retirement">These 5 Expenses Will Probably Cost You a Lot Less in Retirement</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-false-allure-of-compound-interest">The False Allure of Compound Interest</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/5-questions-couples-must-ask-before-retirement">5 Questions Couples Must Ask Before Retirement</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment Retirement 20s 30s compound interest debt early retirement expenses income streams lifestyle retiring young saving money Mon, 27 Mar 2017 09:00:11 +0000 Dr Penny Pincher 1913293 at http://www.wisebread.com 5 Money Moves to Make Before Moving Out on Your Own http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-to-make-before-moving-out-on-your-own" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-640229364.jpg" alt="Making money moves before moving out on her own" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Today, it's not uncommon for young adults to continue living with their parents well into their 30s. A report released in 2015 by the Pew Research Center said that 32.1% of adults from the ages of 18 to 34 were living in their parents' home in 2014, the most common type of living arrangement for people in this age range.</p> <p>But there does come a day when it's finally time to leave the nest. And before you do that, you need to be financially healthy enough to make it on your own.</p> <p>Here are five money moves you need to make before you leave your parents' home.</p> <h2>1. Practice Paying Bills</h2> <p>Paying a mortgage or rent is an important financial responsibility, but it's not the only bill that adults face when moving out on their own. There are groceries to buy, car loans to pay off, utilities to cover, and transportation fees that eat into monthly budgets.</p> <p>To prepare for the rigors of paying these bills, you should practice being financially responsible before moving out of your parents' home. This might mean paying monthly rent to your parents while you continue to live in their home. You should also ask if you can contribute financially in other ways, perhaps by paying part of the monthly utility or garbage pickup bills.</p> <p>By paying at least some of the bills that your parents face each month, you'll get a much more accurate taste of what it's like to live on your own.</p> <h2>2. Create a Budget</h2> <p>No one enjoys making a household budget. But a budget serves as a blueprint that tells you how much you can spend each month. Without one, it's easy to run up debts as you spend more dollars than you can afford.</p> <p>Before you leave your parents' home, you need to <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=internal" target="_blank">make a budget</a> of your own. This budget should include all the money you expect to make each month, along with a list of regular monthly expenses and bills, such as rent, utilities, transportation, phone bills, student loan payments, and car payments.</p> <p>A budget should also include guidelines for costs that vary each month. This includes everything from groceries to dining out to going to the movies.</p> <h2>3. Create an Emergency Fund</h2> <p>Financial experts say that all adults should have six months' to a year's worth of daily living expenses saved in an emergency fund. You can then tap this fund if a financial crisis, such as a job loss, hits. An emergency fund can also be used to cover unexpected major expenses, such as the cost of replacing a car's transmission or a blown water heater.</p> <p><a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=internal" target="_blank">Starting an emergency fund</a> doesn't have to be painful. Simply set aside $100, $200, or more each month to slowly build that fund. Smart savers will have at least some money stashed in an emergency fund before they move out on their own.</p> <h2>4. Pay Off Those Debts</h2> <p>Moving out with loads of <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=internal" target="_blank">credit card debt</a>? That's not the smartest financial move. It can be hard to pay off this high-interest debt when you're saddled for the first time with monthly rent or mortgage payments. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <p>The smart move is to set aside as much extra money as you can to pay down your credit cards before moving. That way, you can start your independent life with a clean financial slate.</p> <h2>5. Build a Solid Credit Score</h2> <p>FICO credit scores matter today. Lenders use them to determine who qualifies for auto loans, mortgages, and other loans. Most lenders today consider a FICO credit score of 740 or higher to be a top-tier score. Scores under 640 give lenders pause.</p> <p>Before you head out, you should take steps to <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?ref=internal" target="_blank">build your credit score</a>. The best way to do this is to pay all your bills on time every month and to pay off as much of your credit card debt as possible. By making on-time payments on credit cards or auto loans, you'll steadily build your credit score. Then, when it's time to move, you'll be doing so with a healthy credit score attached to your name. This will help you whether you're looking for a place to rent or even getting a job. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/5-money-moves-to-make-before-moving-out-on-your-own">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/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</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-ways-you-disrespect-your-money">10 Ways You Disrespect Your 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/7-smart-money-moves-for-empty-nesters">7 Smart Money Moves for Empty Nesters</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/8-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/your-bad-credit-isnt-the-end-of-the-world">Your Bad Credit Isn&#039;t the End of the World</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills budgeting credit score debt emergency funds living with parents millennials money lessons moving out young adults Fri, 10 Mar 2017 10:30:40 +0000 Dan Rafter 1902840 at http://www.wisebread.com Here's What Happens If You Don't Pay Your Taxes http://www.wisebread.com/heres-what-happens-if-you-dont-pay-your-taxes <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/heres-what-happens-if-you-dont-pay-your-taxes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-153832691.jpg" alt="Woman learning what happens if she doesn&#039;t pay taxes" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>As Tax Day looms, you may wonder how high the tax man should rank on your list of creditors. Is it better to postpone paying taxes in order to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">pay off credit card debt</a>, or to keep the electricity running?</p> <p>Here's what happens if you're not able to pay everything you owe to the IRS, as soon as you owe it.</p> <h2>1. You'll Pay a Penalty</h2> <p>Assuming that you filed your tax return on time but didn't pay your full tax bill, the IRS will charge you <a href="https://www.irs.gov/taxtopics/tc653.html" target="_blank">0.5% of what you owe</a>, every month until you pay, up to 25% of the debt. So if you still owed $1,000 when you filed your return on April 18, you'll owe an additional $5 a month.</p> <p>It's a very good idea to file your return on time, or file an extension, even if you won't be able to pay right away &mdash; fees increase if you haven't filed a return by Tax Day. Also, filing on time might get you a break: The IRS says that if you file for an extension or file your return, you may <a href="https://www.irs.gov/uac/things-you-should-know-about-filing-late-and-paying-penalties" target="_blank">not have to pay the penalty</a> if you've paid 90% of what you owe by Tax Day.</p> <h2>2. You'll Pay Interest</h2> <p>The IRS isn't going to lend you that money interest-free. The rate on money you owe to the IRS is <a href="https://www.irs.gov/pub/irs-news/ir-16-159.pdf" target="_blank">currently 4%</a>.</p> <h2>3. You'll Get a Bill</h2> <p>If you haven't filed your tax return at all, the government will kindly figure out how much you owe for you and send a bill. Actually, not so kindly, because the way they'll calculate your taxes, you'll end up owing more than you would have if you'd done them yourself. The government doesn't have access to all your financial records, so they may not give you <a href="https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns" target="_blank">credit for your deductions</a>.</p> <p>Even if you file your return, if you owe money, eventually you'll start getting mail about it from the IRS.</p> <h2>4. You Could Get a Lien on Your Home</h2> <p>If you don't pay those bills (or show the IRS they're wrong and you don't owe), the next step is putting a lien on your property &mdash; usually your house, if you own one. This tends to happen if you owe $10,000 or more and haven't worked out a plan with the IRS to pay it off.</p> <p>A <a href="https://www.irs.gov/businesses/small-businesses-self-employed/understanding-a-federal-tax-lien" target="_blank">federal tax lien</a> is a legal document that says if you sell your property, the proceeds will go toward your debt before you see a dime. This could make it tough or impossible to take out a mortgage on your home, and <a href="http://info.courthousedirect.com/blog/bid/309664/How-Do-Liens-Affect-Real-Estate-Sales" target="_blank">complicate the deal</a> if you try to sell your home.</p> <p>The tax lien will be reported on your credit report and will <a href="http://www.experian.com/blogs/ask-experian/tax-liens-in-your-credit-report/" target="_blank">stay there for seven years</a>, even after you pay the debt. This can make it impossible to get approval for new credit cards or other loans.</p> <h2>5. You Could Lose Your Passport</h2> <p>Thanks to a new law, the State Department can now revoke your passport (or refuse to issue you one) if you owe the IRS <a href="http://transportation.house.gov/uploadedfiles/joint_explanatory_statement.pdf" target="_blank">$50,000 or more in delinquent debt</a>. So if your plan was to skip out on your debt, you won't get far.</p> <h2>6. The Government Could Seize Your Property</h2> <p>It's called a levy, and it means the <a href="https://www.irs.gov/businesses/small-businesses-self-employed/levy" target="_blank">IRS can take your Chevy</a>. Or your Ford, or your RV, or boat, or house. They can even garnish your wages or take what you owe right out of your checking account. If you think owing the mob is bad, try owing the federal government.</p> <p>In the IRS' defense, it doesn't start seizing citizens' property out of the blue. You'll get lots of mail warning that you're in default, telling you that you have the right to a hearing, and explaining that next, they're coming for your stuff. Don't ignore that mail.</p> <h2>7. You Could Pay Larger Penalties</h2> <p>If the IRS determines that your failure to pay in full was due to negligence or fraud, the penalties could <a href="https://www.law.cornell.edu/uscode/text/26/6662" target="_blank">climb to 20%</a> or <a href="https://www.irs.gov/irm/part25/irm_25-001-006.html" target="_blank">even 75%</a>.</p> <h2>8. You Could End Up in Court</h2> <p>The IRS would rather work with you to get the money. But if you're recalcitrant or showed intent to defraud them, they can charge you with one or more felonies. In 2008, they <a href="http://www.nytimes.com/2008/01/14/business/14tax.html?ref=business" target="_blank">charged actor Wesley Snipes</a> with conspiracy to defraud the government for refusing to pay taxes on $38 million in earnings. Snipes had joined a movement of tax deniers who interpret various laws to mean that paying taxes is not required.</p> <h2>9. You Could Go to Prison</h2> <p>Most people who owe the IRS don't do time. But Snipes did. He was convicted of three misdemeanors related to his failure to file tax returns and <a href="http://www.forbes.com/sites/robertwood/2015/04/10/10-notorious-tax-cheats-wesley-snipes-hired-tax-professionals-but-still-was-jailed/#4edc682341e2" target="_blank">served three years</a>. It could have been worse: Snipes was acquitted for the felonies he had been charged with.</p> <h2>10. Maybe Nothing Will Happen</h2> <p>If the government doesn't have record of your earnings &mdash; for instance, if you work for cash and don't get dividends on investments &mdash; the IRS may never notice if you don't file a tax return and don't pay a dime. But flaking on filing is definitely a bad idea: Not only will you live in fear of all the consequences mentioned above, but if your earnings are modest, you could be missing out on the <a href="https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit" target="_blank">earned income tax credit</a> and other benefits of being on record as a wage earner, like the ability to get a mortgage loan.</p> <p>It's a good idea to keep in touch with the IRS if you owe them money. In fact, if you file your tax return, pay what you can, and then call them up, they may <a href="https://www.irs.gov/individuals/online-payment-agreement-application" target="_blank">work out a payment plan</a> with you, or even settle for <a href="https://www.irs.gov/individuals/offer-in-compromise-1" target="_blank">less than the full amount</a> you owe.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-kirby">Carrie Kirby</a> of <a href="http://www.wisebread.com/heres-what-happens-if-you-dont-pay-your-taxes">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/what-to-do-when-your-tax-preparer-makes-a-mistake">What to Do When Your Tax Preparer Makes a Mistake</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/7-lessons-from-tax-day-to-remember-for-next-year">7 Lessons From Tax Day to Remember for Next Year</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/what-to-do-if-you-have-a-tax-lien-on-your-house">What to Do If You Have a Tax Lien On Your House</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-important-tax-changes-for-2016">5 Important Tax Changes for 2016</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/why-tax-day-is-april-15-and-other-weird-financial-deadlines">Why Tax Day Is April 15 and Other Weird Financial Deadlines</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes court debt fees IRS jail late payments liens owing money passports payment plans penalties seize property tax day tax returns Fri, 03 Mar 2017 11:00:14 +0000 Carrie Kirby 1898661 at http://www.wisebread.com 8 Most Common Mistakes When Doing a Balance Transfer to Eliminate Debt http://www.wisebread.com/8-most-common-mistakes-when-doing-a-balance-transfer-to-eliminate-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-most-common-mistakes-when-doing-a-balance-transfer-to-eliminate-debt" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-497316392.jpg" alt="Learning common mistakes when doing a balance transfer" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Many credit cards offer 0% APR promotional financing on balance transfers, allowing you to <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=internal" target="_blank">move debt from high-interest cards</a> onto one that offers zero interest for an introductory promotional period. These promo periods are nothing to sneeze at. They can last as long 21 months.</p> <p>So what's the catch? The truth is that <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">balance transfer offers</a> can be incredibly valuable, but only when you use them properly and avoid making some common mistakes.</p> <h2>1. Assuming You'll Get the Best Balance Transfer Deal<strong> </strong></h2> <p>You might not always be approved for the balance transfer card you want. For example, the best 0% APR deals are only given to those with <a href="http://www.wisebread.com/5-best-credit-cards-for-people-with-excellent-credit?ref=internal" target="_blank">excellent credit</a>. While you may have had excellent credit in the past, having a large balance for a long time might have caused your credit score to slip. (See also: <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=seealso" target="_blank">One Ratio Is Key to a Good Credit Score</a>)</p> <p>Even if you are approved for the card, it may come with a credit line that's substantially lower than you need. If that's the case, you may want to consider applying for a second balance transfer card.</p> <h2>2. Trying to Transfer a Balance From the Wrong Card</h2> <p>Consumers sometimes don't realize that you can't transfer a balance between two cards issued by the same bank. So if you have an outstanding balance on your <a href="http://www.wisebread.com/get-cash-back-for-every-purchase-chase-freedom-unlimited-review?ref=internal" target="_blank">Chase Freedom Unlimited card</a>, you can't open up a new <a href="http://www.wisebread.com/chase-slate-visa-review?ref=internal" target="_blank">Chase Slate card</a> and expect to transfer your balance to it.</p> <p>Keep this in mind before you apply for a balance transfer card. Every time you apply for a credit card your credit score takes a little hit. It can usually recover fairly quickly, but there's no need to ding it unnecessarily for a card that doesn't even serve your needs. (See also: <a href="http://www.wisebread.com/which-balance-transfer-credit-card-is-the-best-for-you?ref=seealso" target="_blank">How to Choose a Balance Transfer Card</a>)</p> <h2>3. Overlooking Balance Transfer Fees</h2> <p>Almost all credit cards charge a fee when you make a transfer, except for a few notable cards that <a href="http://www.wisebread.com/5-best-credit-cards-with-no-balance-transfer-fees?ref=internal" target="_blank">don't charge balance transfer fees</a>. Typically the fee is 3% of the transfer amount, but it could be as high as 5%. If your balance is small enough that you can pay it off within a few months, you're probably better off not transferring it to a new card.</p> <h2>4. Delaying Your Balance Transfer</h2> <p>You'll usually have 60 or 90 days to transfer your balance to the new card. After that the deal expires. Transfer the balance as soon as you can to get the most use of the promotional 0% period and cut down on the number of days your balance is accruing interest on your old card. Transferring your balance early will also ensure you don't forget about the deal and miss it altogether.</p> <h2>5. Misunderstanding How New Purchases Are Treated</h2> <p>If you make a new purchase on a balance transfer card, it will be subject to the card's regular interest rate unless the card specifically offers <a href="http://www.wisebread.com/5-best-credit-cards-with-0-apr-for-purchases?ref=internal" target="_blank">0% interest on purchases</a>, too. That means you've got two balances on the card: the interest-free transferred balance and the new purchase balance.</p> <p>By law, credit card issuers must apply any payments above the minimum to the balance with the highest interest rate first. But they can apply your <em>minimum payment</em> to whichever balance they choose, which of course will be the one with no interest charges. As a result, you'll still incur interest on your new purchases.</p> <p>Bottom line: It's best not make new charges on the balance transfer card unless it offers interest-free financing on new purchases as well.</p> <h2>6. Paying Late</h2> <p>It's always important to pay your bills on time, but it's even more so with promotional balance transfer offers. Pay late and you may find your 0% offer revoked, subjecting you to the card's regular higher interest rate way before you're ready for it. Add to that late fees the card may impose, and you've got an expensive mistake.</p> <h2>7. Stopping Payments on Your Old Card Too Soon</h2> <p>What some cardholders don't realize is that your balance transfer may not be completed immediately. It can take up to two weeks to process the transfer. Even if you've initiated a balance transfer, you will still need to make payments on your old card until you've confirmed that it's been paid off. Don't worry about overpaying &mdash; credit cards are very good about refunding you any overage you might have submitted during the transition.</p> <h2>8. Using a Balance Transfer Offer to Rack Up More Debt</h2> <p>Those 0% APR balance transfer offers are your chance to <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">get out of debt</a>, but unfortunately, many people squander that chance and continue to rack up debt. They can't resist the temptation of having an empty balance on their old card, so they keep making charges on it that they can't pay off right away.</p> <p>Instead, use balance transfer deals as part of a <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?ref=internal" target="_blank">comprehensive debt repayment plan</a>. You should view the end of these limited time offers as a deadline for paying off your entire balance, knowing that 100% of each payment you make during this time will go toward your principle.</p> <p>See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso" target="_blank">5 Ways to Pay Off High Interest Credit Card Debt</a></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/8-most-common-mistakes-when-doing-a-balance-transfer-to-eliminate-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-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/i-dont-love-capital-one-how-to-get-a-lower-apr-or-possibly-not">How to Get a Lower APR, or Possibly Not</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-a-credit-card-cash-advance-costs-you-more-than-a-purchase">How a Credit Card Cash Advance Costs You More Than a Purchase</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/your-interest-rates-are-about-to-go-up">Your Interest Rates Are About to Go Up</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-dirty-secrets-of-credit-cards">The Dirty Secrets of 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/5-ways-to-pay-off-high-interest-credit-card-debt">5 Ways to Pay Off High Interest Credit Card Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards APR balance transfer debt eliminate debt financing grace period promotional period Fri, 24 Feb 2017 10:30:36 +0000 Jason Steele 1896814 at http://www.wisebread.com 7 Smart Money Moves for Empty Nesters http://www.wisebread.com/7-smart-money-moves-for-empty-nesters <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-smart-money-moves-for-empty-nesters" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-108329619.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="142" /></a> </div> </div> </div> <p>Parents love their children &mdash; that's a given &mdash; but that won't stop you from breaking out the trumpet in glee when your offspring start footing the bill for themselves. Oh, happy day! Need ideas on what to do with your cash now that it's actually yours again, empty nester? Consider these seven smart money moves once your kids fly the coop.</p> <h2>1. Re-evaluate Spending<strong> </strong></h2> <p>With fewer people living in the house, you'll likely see a reduction in monthly expenses. Re-evaluate your budget and assess how much you were spending before, and then look for areas to cut back. If you have a minivan or SUV that was suited to your larger family, consider trading it in for a smaller vehicle. You could possibly save money on the monthly payment, as well as pay less for insurance and fuel.</p> <p>Or maybe you have the Cadillac of cable TV packages, which accommodated everyone's viewing needs. Look into downgrading to a cheaper cable package. If you don't watch much TV, get rid of cable altogether, and sign up for an <a href="http://www.wisebread.com/8-alternatives-to-cable-tv-that-will-keep-you-entertained?ref=internal">inexpensive streaming servic</a>e. Additionally, since there are fewer mouths to feed, come up with a plan to spend less on groceries. The more you save, the more cash you'll have available to reach more important financial goals &mdash; like finally making some headway toward your retirement fund.</p> <h2>2. Grow Your Retirement Account<strong> </strong></h2> <p>Many parents make big sacrifices to provide for their children, which can include establishing college funds and fully or partially supporting adult children as they complete their educations. As a result, maybe you haven't contributed as much as you would have liked toward retirement. With the kids out of the house, now's the time to play catch-up.</p> <p>Work with a financial adviser, review your finances, and develop a realistic plan that lets you contribute as much as possible toward growing a comfortable nest egg. You can contribute up to $5,500 a year to an individual retirement account ($6,500 if you're 50 or older), and up to $18,000 a year to a 401K (plus an additional $6,000 if you're 50 or older).</p> <h2>3. Increase Liquid Savings<strong> </strong></h2> <p>Then again, maybe your retirement account is on track but you lack liquid savings for emergencies like a car or home repair. Instead of spending extra money on vacations, shopping, or redecorating your home, take the cash you're saving each month from cutting expenses and contribute to an emergency fund.</p> <h2>4. Pay Off Debt<strong> </strong></h2> <p>As you inch closer to retirement, the less debt you have, the better. Come up with a plan to pay off debt, especially <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal" target="_blank">credit card debt</a>. This is not only costly debt &mdash; it also drags down your credit score.</p> <p>Gather all your credit card statements and write down the amounts you owe and the interest rates you're currently paying. Some people tackle the debt with the highest interest rate first, since this is the costliest, whereas others attack the debt with the <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0" target="_blank">lowest balance first</a> for a psychological boost. Whatever method you choose, pay more than your minimum every month, stop charging, and <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?ref=internal" target="_blank">negotiate your interest rates</a>.</p> <p>Additionally, consider making extra principal mortgage payments to pay off your home loan balance sooner. If you're able to pay off your mortgage before retiring, you can lower your expenses and stretch your retirement income.</p> <h2>5. Purchase Long-Term Care Insurance<strong> </strong></h2> <p>Long-term care is a type of insurance that many people don't think about, but it's important to shop around and explore options while you're young and still relatively healthy. Long-term care insurance &mdash; which isn't covered by Medicare &mdash; pays for future expenses like home care, adult day care, and nursing home care. Some people don't think about getting a plan until they are ready to retire, but premiums are cheaper the earlier you buy.</p> <h2>6. Downsize Your Living Situation<strong> </strong></h2> <p>More than likely, you don't need as much space as before. Rather than stay in a house that's too big for you and your spouse, or waste money heating and cooling rooms you never use, downsize to a smaller space. A smaller house payment and cheaper utilities can increase your monthly savings, freeing up cash for paying down debt or increasing your nest egg.</p> <h2>7. Convert a Term Life Policy to a Whole Life Policy<strong> </strong></h2> <p>Life insurance is a necessity whether you're young or old. The death benefit paid to your beneficiaries can pay for final expenses, such as your funeral and burial, medical bills, and other debt. Term life insurance is cheaper than whole life insurance, which makes these policies an attractive option. But term policies expire after a certain number of years. A whole life policy, on the other hand, is a permanent policy that never expires and accumulates a cash value.</p> <p>Talk to your insurance agent about converting your term policy to a whole life policy. If you make the conversion before the policy expires, you can possibly get the new policy without additional medical underwriting.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-smart-money-moves-for-empty-nesters">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/5-money-moves-to-make-before-moving-out-on-your-own">5 Money Moves to Make Before Moving Out on Your Own</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/7-money-moves-to-make-as-soon-as-the-kids-move-out">7 Money Moves to Make as Soon as the Kids Move Out</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/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</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-fun-games-that-teach-your-kids-about-money">6 Fun Games That Teach Your Kids About Money</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/4-reasons-to-add-your-teen-as-an-authorized-user-on-your-credit-card">4 Reasons to Add Your Teen as an Authorized User on Your Credit Card</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting children debt empty nesters kids kids moving out retirement contributions teens young adults Fri, 27 Jan 2017 10:00:08 +0000 Mikey Rox 1878109 at http://www.wisebread.com 4 Ways Pessimism Can Actually Improve Your Finances http://www.wisebread.com/4-ways-pessimism-can-actually-improve-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-ways-pessimism-can-actually-improve-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/man_rain_umbrella_498559502.jpg" alt="Man learning ways pessimism can improve finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>While I've never had bluebirds help me clean my house or anything, I tend to be a pretty optimistic person. I have faith that people are mostly kind, the world tends to be a good place, and life in general will get better.</p> <p>The one major exception to my optimism is my attitude toward finances. I always plan for the worst when it comes to money, and I proudly embrace my paranoia.</p> <p>As it turns out, my doom-and-gloom view of money is probably responsible for some of my healthiest financial choices. That's because optimism and positive thinking can lead you astray when it comes to your financial goals.</p> <h2>Why Optimism Can Backfire</h2> <p>According to a study by Heather Barry Kappes and Gabriele Oettingen, imagining a desired future actually makes you <a href="http://psych.nyu.edu/oettingen/Barry%20Kappes,%20H.,%20&amp;%20Oettingen,%20G.%20(2011).%20JESP.pdf" target="_blank">less likely to achieve it</a>. That's because your fantasy future wherein you have built up a multimillion-dollar empire is missing the obstacles, frustrations, setbacks, and effort that are necessary to make it happen in the real world. So you are more likely to give up upon reaching any of those obstacles.</p> <p>In addition, telling people about your major financial goals can also backfire. According to career coach Shana Montesol Johnson, &quot;when we tell someone that we are going to do something big &hellip; the <a href="http://developmentcrossroads.com/2010/12/enough-already-about-your-new-year%E2%80%99s-resolutions/" target="_blank">praise and positive reaction</a> we get from our audience gives us a part of the experience of having already accomplished these things &hellip; And so we are less motivated to actually work toward these goals.&quot;</p> <p>So quit it with the positive thinking about your money. Embrace your pessimism, since it can help your finances in many ways.</p> <h2>1. Financial Pessimism Prompts You to Save Money</h2> <p>When you live with the viewpoint that there is nothing but blue skies ahead, then it won't occur to you to save up for a rainy day. A pessimistic outlook about the likelihood that you may lose your job (or that your car may need an expensive repair, or that you may get sick) spurs you to save money so you can be prepared for such contingencies. Optimists are often caught flat-footed in those situations because they had been so focused on the pie in the sky.</p> <p>Thinking through the worst that could happen on your current path might seem like a good way to discourage yourself from taking that path. But taking the time to really think through what could happen if X, Y, or Z in your plan goes wrong gives you the necessary framework to deal with such problems. You'll have already put in the thinking time to come up with a solution when the problem crops up, so you'll be in a better position to fix it.</p> <h2>2. Financial Pessimists Recognize Their Own Money Weaknesses</h2> <p>A financial optimist isn't just optimistic about the lack of coming emergencies &mdash; they are also optimistic about their ability to handle a problem. This is a symptom of the cognitive bias known as the <em>restraint bias</em>. (A cognitive bias is an error in logical thinking that is very difficult for people to recognize in themselves.)</p> <p>With the restraint bias, people tend to seriously overestimate their own impulse control. We all tend to believe that we will be able to show more restraint in the face of temptation than is realistic. The restraint bias is a hallmark of financial optimism. Such an optimist might think &quot;I'll spend less this month and bank the savings at the end of the month.&quot;</p> <p>But it's likely that the optimist will be paying for things with sofa-cushion change at the end of the month. The pessimist, on the other hand, set his savings aside at the beginning of the month, since he knows he is not to be trusted with money in his checking account.</p> <h2>3. Debt Relies on Optimism</h2> <p>Whenever you take on debt, there is a risk that you may not be able to pay it back. But feeling optimistic about your finances, your job, your health, and your family makes you less likely to recognize such a risk. Positive thinking about how well your life is going may put you in danger of over-relying on debt.</p> <p>Barbara Ehrenheich, author of <a href="http://amzn.to/2iJKYfo" target="_blank">Bright-Sided: How Positive Thinking Is Undermining America</a>, suggests that the Great Recession of 2008 may have some of its roots in positive thinking. In an interview with The Telegraph, she states, &quot;Many, many people got way <a href="http://www.telegraph.co.uk/news/worldnews/northamerica/usa/6952353/Positive-thinking-making-us-miserable-says-author.html" target="_blank">over their heads in debt</a> &mdash; ordinary people. And in what frame of mind do you assume large amounts of debt? Well, a positive frame of mind. You think that you're not going to get sick, your car's not going to break down, you're not going to lose your job and you're going to be able to pay it off.&quot;</p> <p>Pessimistic people are more likely to avoid debt because of the possible things that could go wrong &mdash; and that means they are less likely to get into financial trouble or waste money on interest.</p> <h2>4. Pessimists Are Less Likely to Fall for Scams</h2> <p>My first thought, whenever I hear someone offer me a solution to any kind of financial problem, is to wonder &quot;What's in it for them?&quot; Though I believe in the goodness of people, I am incredibly paranoid about sales pitches, &quot;free&quot; lunches, door-to-door solicitors, insurance agents, salespeople, Nigerian princes, or anyone else who wants me to take advantage of a &quot;once-in-a-lifetime&quot; offer. I don't trust anyone's motives when it comes to money.</p> <p>Scams tend to rely on people's greed, fear, and discomfort. Pessimists are no less likely than optimists to feel greedy, fearful, or uncomfortable, but their overriding distrust of people's motives tends to be stronger than any of the emotions scam artists play on.</p> <p>Distrusting people when it comes to money is generally not a bad thing. It forces you to do your own homework and become your own financial advocate, which is what everyone needs to do. Because even if you do have a trustworthy financial adviser/broker/bookie/insurance agent/Nigerian prince, it is ultimately your responsibility to understand what is happening with your money.</p> <h2>Embrace the Darkness</h2> <p>Instead of thinking and talking positively about your financial future, take a page from a pessimist's book and imagine some worst-case financial scenarios. You'll find that seeing the glass as half-empty (at least sometimes) will help ensure your financial future spilleth over.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/4-ways-pessimism-can-actually-improve-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-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/what-can-you-do-with-13-extra-a-week-0">What can you do with $13 extra a week?</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/do-we-really-need-help-in-getting-more-debt">Do we really need help with getting more 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/whats-the-best-way-to-get-out-of-debt">What&#039;s the Best Way to Get out of 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/10-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</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/when-to-use-savings-to-pay-off-debt">When to Use Savings to Pay Off Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Debt Management debt financial weakness optimism outlook pessimism saving money Wed, 11 Jan 2017 10:30:32 +0000 Emily Guy Birken 1870056 at http://www.wisebread.com 10 Golden Rules of Personal Finance Everyone Should Know http://www.wisebread.com/10-golden-rules-of-personal-finance-everyone-should-know <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-golden-rules-of-personal-finance-everyone-should-know" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/green_piggy_bank_508107746.jpg" alt="Learning golden rules of personal finance everyone should know" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We live in a world where information overload is part of daily life. But when it comes to personal financial information, maybe simpler is better. Embrace a moment of Zen. Tap into the simple truths that have served you well and the truths you can teach others. Here are the 10 golden rules of personal finance everyone should know.</p> <h2>1. Have a Goal</h2> <p>Without a clear set of goals, it's difficult to know what personal financial success looks like. Define your goals and then create a realistic step-by-step plan that moves you forward.</p> <h2>2. Distinguish Wants From Needs</h2> <p>Confusing wants with needs keeps people in a constant state of financial unrest. Understand that human needs are fairly simple &mdash; food, clothing, shelter, health care, reliable transportation, etc. Broadly speaking, everything else is a want. That doesn't mean we shouldn't indulge in wants from time-to-time (life would be bleak if we couldn't). It simply means we should choose our wants consciously and not let their constant pursuit jeopardize our financial security.</p> <h2>3. Live Within Your Means</h2> <p>Developing a solid budget and living within your means (that is, not spending more than you make) frees you from the maddening loop of working, overspending, servicing debt, and working some more. Learning to live within your means is an achievement in itself, but living <em>below</em> your means is even better. Spending less than you make leaves you with a surplus &mdash; the vital capital that funds your future.</p> <h2>4. Start Saving Early</h2> <p>When it comes to saving, time can be your best friend. Start saving in your early 20s and you'll not only have more time to accumulate significant wealth (even on a modest salary), but you'll have more time for compounding interest to work its magic.</p> <h2>5. Pay Yourself First</h2> <p>There are a lot of <a href="http://www.wisebread.com/7-reasons-you-really-need-to-pay-yourself-first-seriously">reasons to pay yourself first</a>. Perhaps most importantly, it removes the element of choice &mdash; even if only artificially &mdash; from the act of saving. Setting aside money in a savings account, IRA, or 401K plan via automatic payroll deductions helps reduce the temptation to spend first and save later.</p> <h2>6. Know the Difference Between Assets and Liabilities</h2> <p>Here's the easy-peasy definition: Assets are things you own that have value. Your car, home, savings account, and coin collection are all assets. Liabilities are what you owe. Credit card balances, student loans, and car notes are all liabilities. The not-so-secret secret to success is to accumulate assets and reduce liabilities.</p> <h2>7. Avoid Consumer Debt</h2> <p>Don't let savvy credit card marketers confuse you: Your credit limit is <em>not </em>your spending limit. Avoid consumer debt and the nearly usurious interest rates that go along with it. The slow bleed of interest payments, late fees, and other charges will kill your budget <em>and</em> your prospects of achieving personal financial security.</p> <h2>8. Pay Debts With the Highest Interest Rate First</h2> <p>If you're unable to avoid consumer debt, be strategic in the way you pay it off. Knocking out high-interest balances first exposes you to less interest charges over time. (See also: <a href="http://www.wisebread.com/5-ways-to-pay-off-high-interest-credit-card-debt?ref=seealso">5 Ways to Pay Off High Interest Credit Card Debt</a>)</p> <h2>9. Don't Invest in Anything You Don't Understand</h2> <p>Investment success takes clear thinking, discipline, and consistency over time. Taking shortcuts and investing in overly complex products you don't understand threatens your long-term gains and capital. Stick with what you know, strive to learn more every day, and don't be spooked by cyclical fluctuations in the market.</p> <h2>10. Prepare for the Unexpected</h2> <p>Sock away six to eight months' worth of net income in an emergency fund. It's a simple, but effective way to weather a job loss, unexpected health issue, surprise household expense, and other life events that could threaten your family's nest egg.</p> <p>Oh, and at the risk of wrapping things up on a melancholy note, remember that preparing for the unexpected also includes proper estate planning. Protecting your assets and providing for your loved ones is an often ignored golden rule of smart personal finance. If you haven't made a will yet, add it to your to-do list and to-do it!</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-golden-rules-of-personal-finance-everyone-should-know">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-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</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/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-you-really-need-to-pay-yourself-first-seriously">7 Reasons You Really Need to Pay Yourself First (Seriously)</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/reach-your-money-goals-faster-with-a-simple-naming-trick">Reach Your Money Goals Faster With a Simple Naming Trick</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt emergency funds golden rules money goals overspending pay yourself first saving money wants vs needs Wed, 04 Jan 2017 10:00:08 +0000 Kentin Waits 1865342 at http://www.wisebread.com 8 Personal Finance Resolutions Anyone Can Master http://www.wisebread.com/8-personal-finance-resolutions-anyone-can-master <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-personal-finance-resolutions-anyone-can-master" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_new_years_498059820.jpg" alt="Friends making personal finance resolutions they can master" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Working on your New Year's resolutions? Unfortunately, an incredible <a href="https://blog.bufferapp.com/the-science-of-new-years-resolutions-why-88-fail-and-how-to-make-them-work">88% of New Year's resolutions fail</a>. The big problem is that most people's resolutions aren't specific enough, or they're too ambitious.</p> <p>Ready to get 2017 off to a good money start? Try out these eight financial resolutions. They're simple enough so that anyone can accomplish them in the new year.</p> <h2>1. Build a Household Budget</h2> <p>We know it doesn't sound like fun, but crafting a household budget is the best financial move that you can make in 2017. Why? A budget tells you how much money you should be spending each month on everything from groceries to eating out to streaming movies on Amazon. Without a budget, your odds of overspending will soar. Fortunately, <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps">making a budget</a> isn't nearly as challenging as you might think.</p> <h2>2. Pay Down Your Credit Card Debt</h2> <p>Your credit card debt might look overwhelming, but paying down this expensive debt in 2017 is actually a fairly easy task &mdash; if you commit. There are several different ways you can <a href="http://www.wisebread.com/the-7-best-credit-card-debt-elimination-strategies">attack your credit card debt</a>, from paying off the cards with the lowest balance first to prioritizing those with the highest interest rates. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso">The Fastest Way to Pay Down $10,000 in Credit Card Debt</a>)</p> <h2>3. Build an Emergency Fund</h2> <p>What happens if your home furnace conks out? What if your car's transmission dies? Can you cover these unexpected expenses with cash? Or would you have to charge the repairs? If you have an emergency fund, you'll always have cash on hand to cover life's unexpected disasters. Financial experts say you should have at least six months' worth of daily living expenses saved in an emergency fund at all times. That might sound like a difficult goal, but you can <a href="http://www.wisebread.com/change-jars-and-8-other-clever-ways-to-build-an-emergency-fund">build this fund</a> as slowly as you'd like.</p> <h2>4. Cut Out One Unnecessary Expense</h2> <p>Vowing to cut your spending isn't the easiest New Year's resolution to keep; it's simply too vague. Instead, vow to <a href="http://www.wisebread.com/7-unnecessary-household-expenses-you-can-cut-today">cut one unnecessary expense</a> from your routine. For instance, you might vow to stop buying coffee on the way to work, and instead brew your own java at home.</p> <h2>5. Boost Your Life Insurance Coverage</h2> <p>If you were to unexpectedly die, would you have enough of a life insurance payout to provide financial protection for your loved ones? If not, it might be time to boost your <a href="http://www.wisebread.com/term-vs-whole-life-insurance-heres-how-to-choose">life insurance coverage</a>. Fortunately, this is an especially easy New Year's resolution to keep: Just call an insurance agent.</p> <h2>6. Protect Your Things</h2> <p>Whether you're a renter or a homeowner, you need to make sure that you have enough insurance to replace the items in your home, should they be stolen or destroyed. Resolve in 2017 to meet with an insurance agent to discuss either homeowners' or <a href="http://www.wisebread.com/5-reasons-you-definitely-need-renters-insurance">renters' insurance</a>.</p> <h2>7. Pay Your Bills on Time Every Month</h2> <p>Want a <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly">sky-high credit score</a>? Then pay your bills on time every month. Doing this will slowly, but steadily, cause your FICO credit score to rise. And a higher credit score will mean lower interest rates when you're borrowing money later.</p> <h2>8. Find a Better Savings Account</h2> <p>You might think savings accounts are a fairly boring place to stash your dollars. The truth, though, is that some savings accounts are better than others, and some provide far better interest. Make a resolution this year to <a href="http://www.wisebread.com/the-types-of-savings-accounts-which-is-right-for-you">find a savings account</a> that will help you build your savings at a faster clip.</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/8-personal-finance-resolutions-anyone-can-master">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/its-never-too-late-to-fix-these-5-money-mistakes-from-your-past">It&#039;s Never Too Late to Fix These 5 Money Mistakes From Your Past</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-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/reach-your-money-goals-faster-with-a-simple-naming-trick">Reach Your Money Goals Faster With a Simple Naming Trick</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/youve-been-saving-money-all-wrong-heres-why">You&#039;ve Been Saving Money All Wrong. Here&#039;s Why</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting debt emergency funds goals life insurance money resolutions new year's resolutions saving money savings accounts Wed, 28 Dec 2016 10:00:11 +0000 Dan Rafter 1863676 at http://www.wisebread.com How to Use Credit Cards Responsibly During the Holidays http://www.wisebread.com/how-to-use-credit-cards-responsibly-during-the-holidays <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-use-credit-cards-responsibly-during-the-holidays" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-525827989.jpg" alt="use credit cards responsibly during the holidays" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Americans enjoy Christmas so much, that they often get carried away. It's one thing to go all-out decorating a tree or preparing the ultimate Christmas dinner, but some take the holiday spirit too far when they charge so much to their credit cards that they begin the New Year under a mountain of debt. At the same time, credit cards are a very secure and convenient method of payment, and shoppers can earn valuable rewards for their holiday spending.</p> <p>Before you pull out the plastic this year, consider these tips for using your credit cards responsibly during the holidays</p> <h2>1. Set a Budget</h2> <p>If you had unlimited money, then you could simply buy everyone you know anything they want, and not worry about the cost. But the reality is that we all must live within our means, or face crippling debt and costly interest charges. Regardless of how much money you make, it's best to set a budget for your holiday spending and stick with it. Start with an overall figure for how much your household can afford to spend during the holidays, and then split that budget among your different expenses like gifts, decorations, parties, and travel.</p> <h2>2. Watch Your Credit Utilization Ratio</h2> <p>Your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization</a> ratio is the amount of total debt you have divided by the total amount of credit you've been extended. A rule of thumb is that you don't want to use up more than 30% of the credit that you've been extended on any one of your cards, or on all of your credit cards as a whole. The lower that percentage, the better. If you find yourself having to keep an eye on your credit limits, you can pay down your balances before you receive your statements. Also, you can apply for new credit cards or ask for credit limit increases on your existing cards. However, you want to have very low balances when you apply for new credit. As the old saying goes, banks only want to lend money to those who don't need it.</p> <h2>3. Use Your Credit Card Account's Alerts</h2> <p>It's because credit cards are so convenient to use that it's so easy to overspend. However, nearly all credit card issuers now offer ways to configure email and text alerts. You can set alerts to notify you when your payments are due, or when you've reached a certain spending threshold. Many card issuers also allow you to configure an alert that notifies you when one of your authorized users spends a certain amount. And best of all, you can use these alerts for free.</p> <h2>4. Look for Holiday Promotions</h2> <p>The credit card industry is intensely competitive, and each card issuer is trying to give you a reason to use its card over its competitors' cards. One of the ways it does this is to offer special promotions throughout the holiday season. Check if your credit card offers exclusive discounts for spending at certain stores. For example, some issuers have a shopping portal where if you click to a partner site through their portal, you will get a discount (or extra rewards) for your purchases. Others might have a Twitter feed that offers discount codes, or another program that requires you to sign in and sign up for offers. However, be careful not to make unnecessary purchases just to receive a discount.</p> <h2>5. Maximize the Value of Your Rewards</h2> <p>If you are using a <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=internal" target="_blank">rewards credit card</a>, then you may have many choices when it comes time to redeem your points, miles, or cash back. If you are paying interest on your holiday debt, then the best thing that you can do with your rewards is to redeem them for statement credits to pay down your debt. But if you are able to avoid interest charges by paying off all of your statement balances each month, then you might be able to redeem your points and miles for travel rewards that are worth more than the cash back offered. (See also: <a href="http://www.wisebread.com/9-ways-to-use-miles-and-points-for-holiday-gifts?ref=seealso" target="_blank">Best Ways to Use Your Points and Miles for Holiday Gifts</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/how-to-use-credit-cards-responsibly-during-the-holidays">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/6-important-credit-card-lessons-your-parents-didnt-teach-you">6 Important Credit Card Lessons Your Parents Didn&#039;t Teach You</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/reduce-your-credit-limits-to-manage-your-spending">Reduce Your Credit Limits to Manage Your Spending</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/whats-the-best-way-to-get-out-of-debt">What&#039;s the Best Way to Get out of 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/10-tricks-to-save-money-with-credit-cards">10 Tricks to Save Money with 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/how-a-solid-credit-score-saves-you-money">How a Solid Credit Score Saves You Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards budget Christmas credit debt Holidays shopping Fri, 16 Dec 2016 10:00:07 +0000 Jason Steele 1855411 at http://www.wisebread.com How Trump's Presidency Might Change Student Loans http://www.wisebread.com/how-trumps-presidency-might-change-student-loans <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-trumps-presidency-might-change-student-loans" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/saving_college_fund_544603158.jpg" alt="Learning how Trump&#039;s presidency might change student loans" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Whether you were a Trump supporter or not, the $1.3 billion student debt issue is one that needs to be tackled. Trump called student debt an 'albatross' around the necks of borrowers. While he didn&rsquo;t spend a lot of his election talking about student loans, he did offer several plans to solve the debt problem.</p> <p>All of the President-Elect&rsquo;s student loan plans are still just that &mdash; plans. However, here is how Trump&rsquo;s presidency might affect your current or future student loan (or your children&rsquo;s loans).</p> <h2>Cap on Maximum Repayment Amount</h2> <p>Trump addressed the ever-growing student loan debt dilemma in his rally in Columbus, Ohio, on October 13. One of his proposed solutions was to cap how much a borrower would have to repay. He said, &quot;We would cap repayment for an affordable portion of the borrower&rsquo;s income, 12.5%, we&rsquo;d cap it. That gives you a lot to play with and a lot to do.&quot;</p> <p>Currently, the Revised Pay As You Earn, or REPAYE, plan allows borrower&rsquo;s to cap their monthly payments at 10% of their discretionary income. However, this is only applicable for federal loans, and the plan requires borrowers to extend the length of their loan, meaning they will pay for their debt longer.</p> <p>Trump&rsquo;s plan to cap loan repayment at 12.5% might look higher initially, but depending on how he enforces the plan, it could save a lot of money for borrowers. If Trump allows the monthly cap to be applied to private loans, then this plan will benefit many borrowers.</p> <h2>Student Loan Forgiveness After 15 Years</h2> <p>Trump added to his speech in Columbus, Ohio, &quot;And if borrowers work hard and make their full payments for 15 years, we&rsquo;ll let them get on with their lives. They just go ahead and they get on with their lives.&quot;</p> <p>Currently loan forgiveness is available through special forgiveness programs, such as the public service loan forgiveness plan and the teacher loan forgiveness plan. The income-driven repayment plan will also forgive student loan debt after 20 or 25 years of payments, depending on which plan you qualify for.</p> <p>Trump&rsquo;s 15-year forgiveness plan would drastically cut the length of loan repayment and finally offer solutions for individuals weighed down with private loan debt. Trump did not give exact numbers to how much this plan would cost or save Americans, but it was said that it would be paid for through reduced federal spending overall. Also, it is believed that this plan would save the government money through fewer defaulted loans. (See also: <a href="http://www.wisebread.com/how-to-stop-student-loans-from-ruining-your-life?ref=seealso">How to Stop Student Loans From Ruining Your Life</a>)</p> <h2>Cut College Costs</h2> <p>Trump also addresses the root of the student loan dilemma &mdash; costs set by colleges. On his site, Trump wrote that he plans to, &quot;work with Congress on reforms to ensure universities are making a good-faith effort to reduce the cost of college and student debt in exchange for the federal tax breaks and tax dollars.&quot;</p> <p>Colleges have no incentives to lower costs, so why should they? If Trump were to offer significant tax breaks, then students might see lower tuition bills, too.</p> <h2>Aid for Non-Traditional Schools</h2> <p>Right now, federal aid is for students attending schools that are accredited through the Department of Education. This means that if a vocational school or nontraditional school program is not accredited, students cannot receive federal aid to help them attend. Trump said on his campaign website that he would help make it possible for any student to attend and complete whatever school or program they wanted.</p> <p>According to his website, he wants to &quot;ensure that the opportunity to attend a two- or four-year college, or to pursue a trade or a skill set through vocational and technical education, will be easier to access, pay for, and finish.&quot; (See also: <a href="http://www.wisebread.com/what-is-student-loan-forbearance-anyway?ref=seealso">What Is Student Loan Forbearance, Anyway?</a>)</p> <h2>So What Does Trump&rsquo;s Plans Mean for You?</h2> <p>If you are already paying student loan debt, then there is a possibility that the plans will not fully be developed and implemented for another year or two. Taking on something as big as student debt and bloated college costs is not an overnight job.</p> <p>However, if you are currently in college or are a parent with a child attending college in the next three years, then there is a possibility that Trump&rsquo;s plan will benefit you. For the rest of America, it is hard to determine just how much Trump&rsquo;s plans will cost.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/how-trumps-presidency-might-change-student-loans">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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-unique-ways-millennials-are-dealing-with-student-loan-debt">7 Unique Ways Millennials Are Dealing With Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-stop-student-loans-from-ruining-your-life">How to Stop Student Loans From Ruining Your Life</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/what-every-parent-should-know-about-the-new-college-financial-aid-rules">What Every Parent Should Know About the New College Financial Aid Rules</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/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-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-get-trapped-by-these-higher-education-scams">Don&#039;t Get Trapped by These Higher Education Scams</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training college debt donald trump federal aid loan forgiveness president trump REPAYE school student loans vocational school Fri, 02 Dec 2016 12:30:07 +0000 Ashley Eneriz 1844379 at http://www.wisebread.com