debt http://www.wisebread.com/taxonomy/term/805/all en-US 5-Minute Finance: Create Financial Goals http://www.wisebread.com/5-minute-finance-create-financial-goals <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-minute-finance-create-financial-goals" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_on_target.jpg" alt="Money on Target" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're currently stressed about money, you are certainly not alone. However, you don't have to stay stuck in a state of financial stress. By setting smart money goals and sticking to them, you can better prepare yourself for the future, lower your debts, boost your savings, establish a college fund for your kids, and have way fewer sleepless nights. All it takes is five minutes to get started.</p> <h2>What are financial goals?</h2> <p>In short, financial goals are monetary targets that you establish for yourself and your family. Most of the time, they are based upon specific needs both in the present and the future. Typical financial goals include establishing a savings account, building a college fund for the kids, paying down debt, saving for a down payment on a home, or investing.</p> <p>Financial goals are also commitments that should become habits. Whether it's having money automatically taken from your salary to put into your retirement fund, or paying off your credit card in full every month, they become routine ways to manage your money and take control of your current and future finances.</p> <h2>Why you should have financial goals</h2> <p>By setting financial goals, you are being responsible with your money and setting yourself up for a more secure future. Without financial goals, you are leaving yourself wide open for all kinds of money problems.</p> <p>Having no monthly budget can quickly lead to overspending on reckless purchases. When you have no idea where your money is going, it's hard to make smarter choices about it. Without a savings account, one emergency can drastically upset your current finances. You may be forced to take out a high-interest loan or turn to credit cards, both of which can takes decades to pay off. And a retirement fund is critical. With no retirement savings, you put your future self at great financial risk. To be blunt, without any goals for your money, you're asking for trouble.</p> <h2>How to create financial goals</h2> <p>It is relatively easy to create financial goals, although sticking to them can be a little more tricky. Get a pen and paper, or use your computer or smartphone, and write down every financial goal you have. These can include things such as being debt-free, having six months' worth of salary in a savings account, or hitting the max contribution limit for a retirement account. Make a complete list of every target you want to hit.</p> <p>Next, stack these goals in order of importance; which one is a burning issue, and which one can wait? For example, if one of your goals is to save for retirement, the sooner you start putting money away, the faster it will grow.</p> <p>After you have stacked the list, establish reasons why each goal is important to you and why you need to stick to the goal. Motivation is key. Then, display your list prominently in the kitchen or hallway. You have just created your financial goals.</p> <h2>Next steps</h2> <p>How are you going to achieve those goals? Start by taking an audit of your current finances. Look at every cent you have coming in each month, and every cent that goes out. Where is your money going?</p> <p>Identify the bills you have to pay (mortgage, car, credit cards) and the flexible, unnecessary expenses you can cut (dining out, entertainment, clothing). When you free up money from your budget, put it toward your financial goals based on their importance. If paying down credit card debt is Number One on the list, for example, you can use the <a href="http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball?ref=internal" target="_blank">snowball method</a> in which you tackle smallest balances first. The act of paying off a debt in full, even a small one, is a mega boost to your motivation to keep going toward the next money goal.</p> <p>In order to make your financial goals really effortless, automate them. Having money automatically withdrawn from a paycheck to pay off a credit card or fund a retirement account means you won't have to rely on memory and willpower to make it work.</p> <h2>Additional resources</h2> <ul> <li> <p><a href="http://www.wisebread.com/reach-your-money-goals-faster-with-a-simple-naming-trick?ref=seealso" target="_blank">Reach Your Money Goals Faster With a Simple Naming Trick</a></p> </li> </ul> <ul> <li> <p><a href="http://www.wisebread.com/10-money-goals-all-30-somethings-should-have?ref=seealso" target="_blank">10 Money Goals All 30-Somethings Should Have</a></p> </li> <li> <p><a href="http://www.wisebread.com/how-to-create-a-financial-5-year-plan?ref=seealso" target="_blank">How to Create a Financial 5 Year Plan</a></p> </li> </ul> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/5-minute-finance-create-financial-goals">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/10-financial-resolutions-you-can-conquer-before-new-years">10 Financial Resolutions You Can Conquer Before New Year&#039;s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-how-late-starters-can-save-for-their-kids-education">Here&#039;s How Late Starters Can Save for Their Kids&#039; Education</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-reasons-why-financial-planning-isnt-just-for-the-wealthy">6 Reasons Why Financial Planning Isn&#039;t Just for the Wealthy</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-signs-youre-financially-ready-to-start-a-family">7 Signs You&#039;re Financially Ready to Start a Family</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-money-conversations-parents-should-have-with-their-adult-kids">7 Money Conversations Parents Should Have With Their Adult Kids</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 5 minute finance budgeting debt financial goals retirement saving money setting goals Tue, 17 Apr 2018 09:00:07 +0000 Paul Michael 2128154 at http://www.wisebread.com 8 Ways to Build Your Financial Self Esteem http://www.wisebread.com/8-ways-to-build-your-financial-self-esteem <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-ways-to-build-your-financial-self-esteem" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/we_have_managed_our_budget_so_well_this_month.jpg" alt="We have managed our budget so well this month" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're struggling to make ends meet, or are crushed by debt, it's not a great feeling. It's easy to feel despondent when you can't seem to get ahead financially. But don't get discouraged! If you make the right choices, things will come together for you and your money. There are many small things you can do to make yourself feel better about your financial situation.</p> <p>Try a few of these ways to give your financial self esteem a boost. Positive things will snowball from there.</p> <h2>1. Pay off one credit card</h2> <p>You may be battling a giant monster of debt from credit cards, student loans, auto loans, and more. And you probably feel pretty cruddy about it all. But you can give yourself a little psychological boost by targeting <em>one </em>credit card and working to get that balance down to zero.</p> <p>Even if you pay off a credit card with a relatively low balance, it will make that debt pile seem a little less overwhelming. From a money-saving standpoint, it makes more sense to pay off the credit cards with the highest interest rates first. But those cards may have higher balances and take longer to pay down. Prioritizing paying off small-balance cards in full, otherwise known as the snowball method, gives you valuable momentum that encourages you to keep chipping away at other debts.</p> <p>Once you pay off that first credit card, stick it in a drawer and say, &quot;I'm done with you!&quot; You'll feel great and will be eager to tackle the next one. (See also: <a href="http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball?ref=seealso" target="_blank">6 Secrets to Mastering the Debt Snowball</a>)</p> <h2>2. Buy some shares of stock and wait a few months</h2> <p>This one won't give you an immediate self esteem boost, but it will make you feel awesome if you are patient. Select a popular stock or common index fund and buy a few shares. The size of the investment does not matter here. A few hundred dollars invested will suffice. Leave the investments alone for about three months and check the price. In most cases, you will find that the investments have risen in value since you bought them. Congratulations! You just made money as an investor and you hardly had to do anything.</p> <p>Of course, this strategy can backfire if the market takes a dive, but if that happens, just hang in there and wait a few more months. You will be rewarded for your patience and will feel a lot better about your finances. And who knows? You may fall in love with investing and start on the path to making a ton of money in the markets. (See also: <a href="http://www.wisebread.com/9-ways-to-tell-if-a-stock-is-worth-buying?ref=seealso" target="_blank">9 Ways to Tell If a Stock is Worth Buying</a>)</p> <h2>3. Recognize that everyone has money troubles</h2> <p>I am not a big fan of schadenfreude &mdash; that is, the act of getting joy from the suffering of others &mdash; but you can feel a little bit better about your own financial problems when you realize that few people are free of money stress. Household debt is practically ubiquitous. Student loan debt is common. And no one feels like they have enough saved for retirement.</p> <p>I'm not suggesting you should feel comfortable with your bad finances, but there's no reason to beat yourself up too hard. If you have a plan to reduce debt, build your credit score, and boost your net worth over time, keep plugging away. You'll get there, and are probably doing better than you think. (See also: <a href="http://www.wisebread.com/4-money-lessons-you-can-learn-from-the-joneses?ref=seealso" target="_blank">4 Money Lessons You Can Learn From the Joneses</a>)</p> <h2>4. Score some extra income</h2> <p>You may be stuck in a job that doesn't pay great and you feel like you are struggling to make ends meet. You've cut expenses, but things still don't add up. This is where you need to find creative ways to make extra money.</p> <p>There are a variety of ways to make a few extra bucks on the side that can help add to your bottom line while also potentially opening up new opportunities. It may be a freelance writing project, some homemade jewelry to sell on Etsy, or even just an occasional pet sitting gig. Even a small extra paycheck &mdash; especially if it's from work you enjoy doing &mdash; can lift your spirits and make you feel a little more in control of your financial situation. (See also: <a href="http://www.wisebread.com/14-best-side-jobs-for-fast-cash?ref=seealso" target="_blank">14 Best Side Jobs For Fast Cash</a>)</p> <h2>5. Walk right past your temptations</h2> <p>When I used to work in the city, I would pass a coffee shop on the way to my office. And I would frequently stop in for an overpriced Americano. I knew it was a waste of money &mdash; we had free coffee at my office! &mdash; but it was a habit. One day, I decided to challenge myself to keep on walking. I looked straight into the window of the coffee shop, but did not go in. I missed the caffeine pick-me-up, but also knew that I just saved myself $3.50. Over time, that $3.50 a day turned into hundreds of dollars saved. And I got an ego boost from staring temptation in the face and walking on.</p> <p>Successfully resisting temptation is hard, but it can feel so good over time, especially when you know you're giving yourself a financial boost. (See also: <a href="http://www.wisebread.com/7-effortless-ways-to-prevent-budget-busting-impulse-buys?ref=seealso" target="_blank">7 Effortless Ways to Prevent Budget-Busting Impulse Buys</a>)</p> <h2>6. Give some money away</h2> <p>This may seem counterintuitive. How can you give away money if you are struggling financially yourself? But donating money to a cause will make you feel better about yourself in general. It's also likely that the amount you give will make a big difference to the recipient and won't ultimately impact your own finances too much in the long run.</p> <p>This is not to say you should give away money carelessly, or constantly bail out friends or relatives. You still need to take care of you. But an occasional small donation can be great for the world and give you a little charge of self esteem. (See also: <a href="http://www.wisebread.com/5-ways-giving-to-charity-is-good-for-you?ref=seealso" target="_blank">5 Ways Giving to Charity Is Good for You</a>)</p> <h2>7. Get a better deal</h2> <p>Searching for bargains can be exhausting, but it can feel rewarding when you score a big one. It's a nice feeling to get $200 knocked off the price of a new refrigerator. You feel awesome when you find a gallon of milk for $1.19. And buy one, get two free on boxes of cereal? Score!</p> <p>If you can find a way to make searching for sales fun, you'll feel great when you succeed, and will feel even better knowing that your finances benefit as a result. There is one word of caution though, which is to remember that you're not really saving money if you're spending it on items you wouldn't otherwise be buying. So focus your bargain hunting on things you need. (See also: <a href="http://www.wisebread.com/these-apps-and-extensions-find-online-deals-for-you-automatically?ref=seealso" target="_blank">These Apps and Extensions Find Online Deals for You &mdash; Automatically</a>)</p> <h2>8. Improve your credit score, even a little</h2> <p>Your credit score has an enormous impact on your finances, as it dictates how much you can borrow and at what interest rate. If you have a bad credit rating, you may feel like you're in a terrible spiral. Your credit rating is bad because of your finances, but you're having trouble improving your finances because of your credit rating.</p> <p>If you can stay focused on improving that credit rating, it will pay off. Focus hard on paying bills on time, every time. Reduce your overall debt load and don't use too much of your available credit. It will take time, but eventually you will see your credit rating creep up. Start by celebrating a 10-point increase. Throw a party when you get up above 600, and again when you're at 700. Every increase in credit rating should lift your spirits and motivate you to keep going. (See also: <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?ref=seealso" target="_blank">7 Ways to Increase Your Credit Score Quickly</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-ways-to-build-your-financial-self-esteem&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Ways%2520to%2520Build%2520Your%2520Financial%2520Self%2520Esteem.jpg&amp;description=8%20Ways%20to%20Build%20Your%20Financial%20Self%20Esteem"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Ways%20to%20Build%20Your%20Financial%20Self%20Esteem.jpg" alt="8 Ways to Build Your Financial Self Esteem" width="250" height="374" /></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/8-ways-to-build-your-financial-self-esteem">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-financial-perks-of-being-in-your-20s">The Financial Perks of Being in Your 20s</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</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-liabilities-that-will-ruin-your-net-worth">7 Liabilities That Will Ruin Your Net Worth</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/9-online-forums-thatll-help-you-reach-your-financial-goals">9 Online Forums That&#039;ll Help You Reach Your Financial Goals</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/are-your-emotions-costing-you-money-take-this-quiz">Are Your Emotions Costing You Money? Take This Quiz</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance confidence credit score debt financial literacy investing saving money self esteem spending Mon, 09 Apr 2018 08:00:07 +0000 Tim Lemke 2124240 at http://www.wisebread.com 6 Ways to Get Financially Fit for Homebuying Season http://www.wisebread.com/6-ways-to-get-financially-fit-for-homebuying-season <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-ways-to-get-financially-fit-for-homebuying-season" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_woman_holding_keys_to_her_new_house_1.jpg" alt="Happy woman holding keys to her new house" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The housing market is a competitive one right now. The National Association of Realtors reported that there were 1.52 million existing homes for sale at the end of January 2018. That might sound like a lot, but that figure is 9.5 percent lower than it stood a year ago, when 1.68 million homes were for sale.</p> <p>What does that mean for you? It means that if you're planning on buying a home this year, you need to be financially fit and ready to act fast. Here are the steps you can take to get ready for homebuying season.</p> <h2>1. Check your credit reports</h2> <p>When you apply for a mortgage to finance the purchase of a home, your lender will check your credit reports. You have three of them, one each maintained by Experian, Equifax, and TransUnion. These reports list your loans and credit card accounts. It also lists any financial missteps you might have taken, such as missed payments, late payments, bankruptcy declarations, and foreclosures.</p> <p>You can get one free copy every year of each of your three reports from AnnualCreditReport.com. Once you get your reports, look them over carefully. You want to know what lenders will see. If you spot any mistakes &mdash; such as a late auto payment that you know you paid on time &mdash; correct the mistake with the offending credit bureau, either by phone or email. Finding and correcting incorrect information can provide an immediate boost to your credit score, which will set you off on the right foot for buying a home. (See also: <a href="http://www.wisebread.com/how-to-read-a-credit-report?ref=seealso" target="_blank">How to Read a Credit Report</a>)</p> <h2>2. Check your credit score</h2> <p>Your credit score is a key number when you're ready to buy a home. Your lenders will study your credit score to determine how likely you are to pay your mortgage on time each month. Most lenders consider credit scores of 740 or higher to be strong ones, while scores under 640 make them nervous. If your score is too low, you probably won't qualify for a loan. If you do, you'll be charged higher interest rates.</p> <p>It's important to know your credit score before you apply for a mortgage. You can pay to receive your score from any of the three credit bureaus, which will cost you between $10 and $15. Your credit card provider or bank might provide you with a credit score for free, but be careful: This free score might not be an official FICO score, and might not be the same one that lenders see when you apply for a loan.</p> <p>Once you know your credit score, you can determine if you need to take steps to improve it. If your score is too low, it might make more sense to wait until it rises before you start hunting for a new home. (See also: <a href="http://www.wisebread.com/7-ways-to-increase-your-credit-score-quickly?ref=seealso" target="_blank">7 Ways to Increase Your Credit Score Quickly</a>)</p> <h2>3. Start a new history of paying all your bills on time</h2> <p>The best way to build a strong credit score is to pay all your bills on time every month. If you pay certain bills late &mdash; credit cards, mortgage, auto loan, student loan, and other forms of installment loans &mdash; your credit score could drop by 100 points or more. A bill is considered officially late and reported to the credit bureaus if you haven't paid it by 30 days or more past its due date.</p> <p>Rebuilding your credit this way takes time. Depending on how weak your score is, it could take months or more than a year of on-time payments to increase it to a level that will qualify you for lower interest rates. The work, though, will pay off in the form of lower monthly mortgage payments. (See also: <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil?ref=seealso" target="_blank">All the Ways Minimum Payments Are Evil</a>)</p> <h2>4. Pay down your credit card debt</h2> <p>Another way to boost your credit score and gain approval for a mortgage loan is to pay off as much credit card debt as possible. You'll know you're ready to take on the homebuying process when your credit card balances take up no more than 30 percent of your available credit.</p> <p>Paying down your debt is important, too, after you buy a home. Your mortgage payment is a big financial responsibility. Having as little additional debt as possible will ensure that these new payments are not an overwhelming burden. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <h2>5. Build up your savings</h2> <p>Buying a home is expensive. You'll have to come up with a down payment, of course. But you'll also have to pay for closing costs on your mortgage loan, and don't forget the added expenses of paying for movers, new furniture, and any repairs that your new home might need.</p> <p>Build up your savings <em>before </em>you start searching for a home. This will also help you when it's time to apply for a mortgage. Lenders usually want to see that you have enough in your savings accounts to pay for two to three months' worth of mortgage payments. That way, you can still make your mortgage payments if you hit a financial crisis.</p> <h2>6. Get preapproved for a mortgage</h2> <p>Looking for homes is fun. Getting a mortgage loan is not. But before you start searching for new homes, make sure to get preapproved for a mortgage.</p> <p>To do this, you'll meet with a mortgage lender. This lender will run your credit. You'll also have to provide this lender with copies of your last two months of paycheck stubs, last two years of W2 forms, last two years of income tax returns, and last two months of bank account statements. Lenders will study these forms to determine how much of a monthly loan payment you can afford.</p> <p>Once it analyzes your financials, your lender will provide you with a preapproval letter stating how much of a loan it is willing to give you. You won't have to waste your time searching for homes that are outside this limit. You'll also be a more attractive buyer. Sellers prefer working with buyers who already have qualified for mortgages. Deals with such buyers are less likely to fall apart because of mortgage issues.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-ways-to-get-financially-fit-for-homebuying-season&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Ways%2520to%2520Get%2520Financially%2520Fit%2520for%2520Homebuying%2520Season.jpg&amp;description=6%20Ways%20to%20Get%20Financially%20Fit%20for%20Homebuying%20Season"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Ways%20to%20Get%20Financially%20Fit%20for%20Homebuying%20Season.jpg" alt="6 Ways to Get Financially Fit for Homebuying Season" width="250" height="374" /></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/6-ways-to-get-financially-fit-for-homebuying-season">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/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-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-times-you-shouldnt-rush-to-pay-off-your-mortgage">5 Times You Shouldn&#039;t Rush to Pay Off Your Mortgage</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/everything-a-first-time-home-buyer-needs-to-buy-a-house">Everything a First-Time Home Buyer Needs to Buy a 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-money-moves-that-will-ruin-your-mortgage-application">5 Money Moves That Will Ruin Your Mortgage Application</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-reasons-you-shouldnt-buy-a-house-yet">5 Reasons You Shouldn&#039;t Buy a House (Yet)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing credit report credit score debt financial readiness home buying mortgages on time payments preapproval savings Mon, 02 Apr 2018 09:00:06 +0000 Dan Rafter 2118490 at http://www.wisebread.com 7 Liabilities That Will Ruin Your Net Worth http://www.wisebread.com/7-liabilities-that-will-ruin-your-net-worth <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-liabilities-that-will-ruin-your-net-worth" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/businessman_standing_upset_and_column_diagram_with_a_dollar_sign.jpg" alt="Businessman standing upset and column diagram with a dollar sign" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're passionate about personal finance, you know about the importance of building net worth. This means accumulating things that will grow in value, while reducing your liabilities. A person with no debt, a home that they own free and clear, and a sizable retirement account likely has a high net worth. A person with thousands of dollars in credit card debt, a burdensome mortgage, and no cash savings has a low or even negative net worth.</p> <p>Building net worth is about accumulating money and assets, but it's also about reducing liabilities. In short, it's about making sure debt isn't hurting your ability to achieve your financial goals. Here are some big liabilities that can hurt your chances to build a high net worth. (See also: <a href="http://www.wisebread.com/6-money-moves-to-make-if-your-net-worth-is-negative?ref=seealso" target="_blank">6 Money Moves to Make If Your Net Worth Is Negative</a>)</p> <h2>1. Credit card debt</h2> <p>Credit cards can be poison to those looking to generate wealth. Interest rates on credit cards are so high that it rarely makes sense to carry a heavy balance on them. The average household with credit card debt owes more than $15,000 on their cards. It's no wonder Americans are, in general, fairly lousy at building net worth.</p> <p>Having a lot of credit card debt can hurt your credit score, thus making it more expensive to borrow for mortgages and auto loans. This leads to a nasty spiral that virtually guarantees your liabilities will be larger than your assets. If you have credit card debt, start paying it off as soon as possible. Aggressively reduce your expenses, learn to invest rather than spend, and get out from under the pressure of those crippling cards. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a>)</p> <h2>2. Car loans</h2> <p>Many people live with car payments as a permanent part of their lives. Financing the purchase of a vehicle is a common practice, but is also an easy way to add to your liabilities while adding very little to your net worth (cars almost always decline in value).</p> <p>Vehicles aren't cheap, but if you can avoid making car payments over the course of several years, you'll be better off financially. Work to save toward the purchase of a vehicle so payments are minimal or nonexistent. Resist the urge to purchase a new car until the one you have is no longer viable. Avoiding several hundred dollars a month in car payments will free up cash to invest and accumulate assets rather than see your net worth stagnate. (See also: <a href="http://www.wisebread.com/cutting-your-car-payment-is-easier-than-you-think?ref=seealso" target="_blank">Cutting Your Car Payment Is Easier Than You Think</a>)</p> <h2>3. Unpaid taxes</h2> <p>Yeah, taxes are a pain. No one really feels like paying them. But if you don't pay them, they turn into liabilities that can grow as a result of penalties and fines. Failure-to-file penalties only add to your tax bill, and keep increasing the longer you avoid paying.</p> <p>If you are employed, most of your taxes are taken from your paycheck, but you still may find that you owe some money on your tax return. Self-employed people must be extra diligent to ensure they are paying taxes on any income they receive. It's also important to make sure you are paying proper real estate taxes on your home, as well as taxes for income gained from your investments. (See also: <a href="http://www.wisebread.com/8-tax-return-mistakes-even-smart-people-make?ref=seealso" target="_blank">8 Tax Return Mistakes Even Smart People Make</a>)</p> <h2>4. Medical bills</h2> <p>There will come a time when you or a family member gets hurt or injured. The expense of hospital stays, surgeries, or ongoing care can be devastating. It's driven many families into bankruptcy and can crush any attempts to boost your net worth.</p> <p>It may not be possible to avoid medical emergencies, but you can protect yourself by being properly insured. If your employer subsidizes the cost of health insurance, take advantage. If you are self-employed, seek to find a reasonably priced plan through a state or federal health exchange. Insurance isn't always cheap, but it will prevent you from taking on costly medical bills that destroy your financial well-being. (See also: <a href="http://www.wisebread.com/how-to-handle-a-massive-medical-bill?ref=seealso" target="_blank">How to Handle a Massive Medical Bill</a>)</p> <h2>5. Student loan debt</h2> <p>We often view student loans as investments in our financial future because an education can help us earn more in our career. But until they are paid off, student loans are only liabilities. If you are still in school, you have some time before you have to start making payments; but once you graduate, those loans can become awfully burdensome. Heavy student loans can force you to take on additional debt just to make ends meet, in turn sinking your net worth even further.</p> <p>To avoid this, it's important for you and your family to save as much money for college as possible in advance. Take cost and value into consideration when making your college choice, and think about getting a job while in school to help pay for tuition. This may require some tough choices, but avoiding student loan debt will help you get on track for building your net worth much sooner. (See also: <a href="http://www.wisebread.com/6-questions-to-ask-before-taking-out-student-loans?ref=seealso" target="_blank">6 Questions to Ask Before Taking Out Student Loans</a>)</p> <h2>6. Your mortgage</h2> <p>Owning a home can be a great way to build your net worth, but that may not be the case if you have a bad mortgage. If your payments are so high that you are unable to save money and invest, it's preventing you from boosting your net worth in other ways.</p> <p>Borrowing money to buy a home is perfectly normal and has helped countless people get on the path to financial freedom. But it's important to have a mortgage that helps you more than hurts you. Put as much money down as you can so the loan itself is not too large. Get a loan with a low, fixed interest rate with a relatively short term (30-year mortgages are OK, 15-year mortgages are even better).</p> <p>When you begin paying off your mortgage, you may not be paying off much of the principal of the loan at first. But soon, you'll be making a good dent and building real equity. And that's the path to building net worth. (See also: <a href="http://www.wisebread.com/8-signs-youre-paying-too-much-for-your-mortgage?ref=seealso" target="_blank">8 Signs You're Paying Too Much for Your Mortgage</a>)</p> <h2>7. Home equity loans</h2> <p>It's not uncommon for people to borrow money from the equity of their home to pay for major expenses. There are a variety of reasons why this may make sense. But it's important to be careful when doing this. When you are borrowing from your home equity, you are essentially turning an asset &mdash; the equity of your home &mdash; into a liability. In essence, you are taking away something that adds to your net worth.</p> <p>In the long run, borrowing from home equity can help build wealth if you make the right financial choices. For example, you could use money from the equity of your home to make repairs or expand the home, thus boosting its value. And when interest rates are low and market returns are high, it may make sense to borrow for major purchases and use your available cash to invest instead. Just be sure to weigh the risks and rewards before borrowing heavily against the equity in your home. (See also: <a href="http://www.wisebread.com/4-smartest-ways-to-use-a-home-equity-loan?ref=seealso" target="_blank">4 Smartest Ways to Use a Home-Equity Loan</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-liabilities-that-will-ruin-your-net-worth&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Liabilities%2520That%2520Will%2520Ruin%2520Your%2520Net%2520Worth.jpg&amp;description=7%20Liabilities%20That%20Will%20Ruin%20Your%20Net%20Worth"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Liabilities%20That%20Will%20Ruin%20Your%20Net%20Worth.jpg" alt="7 Liabilities That Will Ruin Your Net Worth" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/7-liabilities-that-will-ruin-your-net-worth">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/does-your-net-worth-even-matter">Does Your Net Worth Even Matter?</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-biggest-ways-procrastination-hurts-your-finances">7 Biggest Ways Procrastination Hurts 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/8-ways-to-build-your-financial-self-esteem">8 Ways to Build Your Financial Self Esteem</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/why-saving-money-is-harder-today">Why Saving Money Is Harder Today</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-easy-ways-to-build-an-emergency-fund-from-0">7 Easy Ways to Build an Emergency Fund From $0</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets bills borrowing debt income investing liabilities loans net worth saving money taxes Thu, 15 Mar 2018 09:30:17 +0000 Tim Lemke 2114611 at http://www.wisebread.com 5 Things Every Single Person Needs to Do With Their Money http://www.wisebread.com/5-things-every-single-person-needs-to-do-with-their-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-things-every-single-person-needs-to-do-with-their-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/portrait_of_mature_woman_in_back_yard_garden.jpg" alt="Portrait Of Mature Woman In Back Yard Garden" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The number of Americans who wait to get married &mdash; or never get hitched &mdash; is growing. In fact, for the first time in history, the number of unmarried Americans almost equals those who are married. The U.S. Census Bureau reports that there were 110 million unmarried adults (age 18 and older) in 2016, which is 45 percent of all U.S. residents over the age of 18.</p> <p>Living a <em>Sex in the City</em> lifestyle may be alluring, but it also comes with hidden financial pitfalls. This is especially true for singles who have never been married. While divorcees and widows have distinct challenges, there are resources and services out there to assist them through their transition. However, if you are someone who has never been married, you're pretty much on your own.</p> <p>With that in mind, we've compiled a list of the top things that every single person should do with their finances.</p> <h2>1. Make saving money your top priority</h2> <p>As a single person, you only have one income. You have to pay for living expenses and handle any emergency that arises on your own, so having a true <a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund?ref=internal" target="_blank">emergency fund</a> is paramount.</p> <p>Financial experts advise that singles have as much as a year's worth of living expenses put away in lieu of the traditional three to six months' worth. A larger emergency fund will help sustain you for longer during lean times or a job loss. Married couples have the benefit of sharing expenses and may have a second income to help them through difficult times. As a single person, you don't have that luxury.</p> <p>It is also highly advisable that you begin saving for retirement <em>now</em>. Look for ways to maximize your contributions. Take advantage of things like a company match, and contribute 10 to 15 percent of your pay to your employer's 401(k) or an IRA. Educate yourself on the <a href="http://www.wisebread.com/bookmark-this-a-step-by-step-guide-to-choosing-401k-investments?ref=internal" target="_blank">different types of investments</a> and pay particular attention to <a href="http://www.wisebread.com/3-steps-to-getting-started-in-the-stock-market-with-index-funds?ref=internal" target="_blank">index funds</a>, which usually have low fees. (See also: <a href="http://www.wisebread.com/5-actions-women-can-take-right-now-to-get-their-retirement-on-track?ref=seealso" target="_blank">5 Actions Women Can Take Right Now to Get Their Retirement On Track</a>)</p> <h2>2. Stick to a zero-based budget</h2> <p>As a single, your budget is your financial guide and road map. It undergirds your financial success.</p> <p>It's a good idea to use a zero-based budget as your cash flow plan. A zero-based budget makes you account for every single dollar you spend before you spend it. It makes you accountable for how you choose to allocate your funds and makes you cognizant of where all your money is going. If you earn $3,000 per month, your monthly budget &mdash; including every cent you spend, save, or invest &mdash; should be accounted for and should total $3,000.</p> <p>It's also a good idea to institute a routine system to <a href="http://www.wisebread.com/10-sites-and-apps-to-help-you-track-your-spending-and-stick-to-your-budget?ref=internal" target="_blank">track your expenses</a>. Every few months, keep an extra keen eye on the dollars that go in and out. This will help you gauge and adjust how much you are spending on things like gas, eating out, groceries, and clothes. It will also show you where you can cut back during lean times or if you want to build a fund for a specific purpose such as a vacation or a new vehicle.</p> <h2>3. Protect your credit and avoid debt</h2> <p>Protecting your credit is very important no matter who you are. When it comes to using credit, make sure you use it responsibly. If you use credit cards, keep your balances low enough that you can pay them in full at the end of each month. You should also strive to keep your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a> below the recommended 30 percent threshold. (See also: <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=seealso" target="_blank">The Fastest Method to Eliminate Credit Card Debt</a>)</p> <p>If you do have debt &mdash; including the dreaded student loans &mdash; prioritize paying it off as soon as possible. And once you've gotten rid of it, only use additional financing for large purchases such as a home or a car.</p> <p>Another part of protecting your credit is routinely reviewing and correcting any mistakes on your credit report. You're allowed one free copy of your credit report every 12 months from each of the three nationwide credit bureaus: Equifax, Experian, and TransUnion. You can obtain these reports from <a href="https://www.annualcreditreport.com/" target="_blank">AnnualCreditReport.com</a>. You can also use free resources such as Credit Karma to check your credit score and monitor your information to ensure it's accurate and that your identity hasn't been stolen or misused. (See also: <a href="http://www.wisebread.com/how-to-read-a-credit-report?Ref=seealso" target="_blank">How to Read a Credit Report</a>)</p> <h2>4. Get disability insurance</h2> <p>Disability insurance is critical for all singles, but especially for single women. A 2012 study from the American College showed that women were more likely than men to have a disability that prevents them from working.</p> <p>The study also found that women were more vulnerable to experiencing tremendous financial distress if they became unable to work due to a disability. Nearly 50 percent of the women surveyed categorized experiencing a disability as &quot;somewhat devastating&quot; in regards to their family's finances. And 22 percent believed that their savings would last less than a month if they were unable to work.</p> <p>Regardless of your gender, if you are single and employed, your entire source of income could be in jeopardy if you suddenly become disabled. It is imperative that you have adequate disability insurance (especially if you are a single parent).</p> <p>If your employer offers both short- and long-term disability, take both. Choosing to forgo disability insurance to save a few dollars a month isn't a gamble worth taking. Sure, you are healthy today, but what if &hellip;? Insurance helps you plan for and protect against life's what-ifs. (See also: <a href="http://www.wisebread.com/4-things-you-need-to-know-about-disability-insurance?ref=seealso" target="_blank">4 Things You Need to Know About Disability Insurance</a>)</p> <h2>5. Get an accountability buddy</h2> <p>Discipline is easier when you use the buddy system and when you are required to account for your actions and decisions. Married couples often rely on each other for this, but you can rely on the advice and motivation of a trusted friend or family member. Making good financial decisions is tough. Having someone to help you weigh your options will save you time, energy, and money.</p> <p>When choosing a <a href="http://www.wisebread.com/this-trick-could-help-you-finally-pay-off-your-debt?ref=internal" target="_blank">financial accountability buddy</a>, choose someone who is financially astute, knows you well, is frugal, and has your best interests at heart. Get someone you know will be brutally honest with you and will make you talk through financial decisions. It should be someone with whom you are comfortable sharing financial intimacy.</p> <p>This may not be your best friend or the one you go to when your heart is broken. This person should be practical, pragmatic, and analytical. He or she should make decisions from the head, not the heart.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F5-things-every-single-person-needs-to-do-with-their-money&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Things%2520Every%2520Single%2520Person%2520Needs%2520to%2520Do%2520With%2520Their%2520Money.jpg&amp;description=5%20Things%20Every%20Single%20Person%20Needs%20to%20Do%20With%20Their%20Money"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Things%20Every%20Single%20Person%20Needs%20to%20Do%20With%20Their%20Money.jpg" alt="5 Things Every Single Person Needs to Do With Their Money" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/5-things-every-single-person-needs-to-do-with-their-money">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-signs-youre-making-all-the-right-money-moves">6 Signs You&#039;re Making All the Right Money Moves</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-signs-youre-financially-ready-to-start-a-family">7 Signs You&#039;re Financially Ready to Start a Family</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-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-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-that-ll-protect-you-during-the-next-recession">7 Money Moves That’ll Protect You During the Next Recession</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-money-resolutions-anyone-can-conquer">4 Money Resolutions Anyone Can Conquer</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance accountability debt disability insurance emergency funds retirement planning saving money single income women zero-based budget Mon, 12 Mar 2018 10:00:06 +0000 Denise Hill 2114258 at http://www.wisebread.com What You Need to Know About Divorce and Credit http://www.wisebread.com/what-you-need-to-know-about-divorce-and-credit <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-you-need-to-know-about-divorce-and-credit" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/divorce_decree_and_wooden_gavel.jpg" alt="Divorce decree and wooden gavel" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Breaking up a marriage isn't cheap. According to Bankrate, the average divorce costs $15,000, but a contentious divorce can run up to $100,000. Beyond the legal fees, former spouses also frequently must face new financial strains after ending a relationship. One spouse, for instance, might now have to rent an apartment or pay a new mortgage while also paying big dollars in child support or alimony.</p> <p>Divorce can be tough on your credit score, too. Just because you're divorcing doesn't mean that your former spouse can't still hurt your credit. If your ex doesn't pay a credit card bill on time, your credit score could tumble &mdash; by as much as 100 points &mdash; if that particular card is still in both of your names.</p> <p>Fortunately, it is possible to rebuild your credit score after a divorce causes a blow. Doing so requires the same basic financial habits that helped you build a solid score in the first place.</p> <h2>Divorce and your credit</h2> <p>When you divorce, you'll likely work with an attorney to divide the assets and debts that you and your spouse shared. This can be a complicated process, even for a professional. In the best case scenario, you and your ex will reach an agreement about who will pay which debts. If that doesn't work, the court may decide this for you.</p> <p>Once your divorce is finalized, the court will provide you with a divorce decree. This document is filled with information, including a list of who will pay what debts now that your marriage is over. Here's the problem, though: A divorce decree won't protect you should your ex not make payments on accounts that you and your former spouse jointly owned.</p> <p>Say you and your ex took out a credit card account together. Your divorce decree might state that your ex is responsible for paying down this debt. But if your ex stops paying on the card, and the card remains in your name, too, your credit score will take a hit. That's because your creditors still view the debt on this account as the responsibility of both your former spouse and you, no matter what your divorce decree says. Creditors don't &quot;care&quot; what your divorce decree says. They will only look at what's in your credit agreement.</p> <p>Missed payments on mortgage loans, auto loans, and other joint accounts can also wreck your credit score. (See also: <a href="http://www.wisebread.com/spouses-and-debt-whos-really-on-the-hook-for-those-bills?ref=seealso" target="_blank">Spouses and Debt: Who's Really on the Hook for Those Bills?</a>)</p> <h2>Get rid of joint accounts</h2> <p>One of the best ways to repair any damage to your credit score following a divorce is to eliminate any joint accounts you shared with your spouse. They should now be in your name, or your spouse's name, only. That way, if your former spouse misses a payment, it won't hurt your credit score.</p> <p>Doing this can be tricky. If you and your ex have a joint credit card account, your best bet is to pay down that account off as quickly as possible and close it. Closing a credit card account can inflict a minor blow to your credit score, but in the case of a divorce, closing a joint account is usually worth the hit.</p> <p>If you and your former spouse share an auto loan, you might be able to refinance into a new loan that is solely under the name of you or your spouse. The same holds true for a mortgage.</p> <p>Refinancing, though, isn't always possible. If the new loan is to be under your former spouse's name only, your lender can only count that person's income when refinancing. If your ex's income isn't high enough to qualify for a new loan, a refinance might be rejected.</p> <p>In this case, you might have to sell the car or home in both your names. You can use the funds from these sales to pay off any other joint loans, and eliminate the possibility that a missed payment by your ex will slow your efforts to rebuild your credit score. (See also: <a href="http://www.wisebread.com/how-to-protect-yourself-financially-during-a-divorce-or-separation?ref=seealso" target="_blank">How to Protect Yourself Financially During a Divorce or Separation</a>)</p> <h2>Rebuilding after the damage</h2> <p>There are no quick fixes for a credit score that has taken a dive. The fixes that <em>are</em> available take time and discipline.</p> <p>First, once your divorce is final, make sure to pay all your monthly bills on time. If you're a few days late on a credit card payment, don't panic. Payments aren't counted as officially late and reported to the national credit bureaus until they are 30 days past due. If you've missed your payment by a week, send it in before you hit that 30-day mark.</p> <p>Secondly, immediately start paying down as much of your credit card debt as you can. The lower the debt on your credit cards, the more your credit score will rise.</p> <p>Be careful, too, how you manage your credit cards moving forward. Never charge more than you can afford to pay off in full every month. And once cards are paid off, keep the accounts open, even if you don't plan on using the card. Keeping your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=internal" target="_blank">credit utilization ratio</a> low (the amount of credit you are using out of your total available balance) will also be a huge help to you. Your credit score will be higher if you are using less of your available credit &mdash; say, under 30 percent &mdash; and you can achieve this sooner by leaving your paid-off credit accounts open.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fwhat-you-need-to-know-about-divorce-and-credit&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FWhat%2520You%2520Need%2520to%2520Know%2520About%2520Divorce%2520and%2520Credit.jpg&amp;description=What%20You%20Need%20to%20Know%20About%20Divorce%20and%20Credit"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/What%20You%20Need%20to%20Know%20About%20Divorce%20and%20Credit.jpg" alt="What You Need to Know About Divorce and Credit" width="250" height="374" /></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/what-you-need-to-know-about-divorce-and-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-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/bad-credit-it-might-cost-you-your-marriage">Bad Credit? It Might Cost You Your Marriage</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-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-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea">3 Reasons Taking a Loan For Your Wedding Is a Bad Idea</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-myths-about-divorce-and-money-debunked">4 Myths About Divorce and Money, Debunked</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/11-secrets-you-need-to-tell-your-financial-adviser">11 Secrets You Need to Tell Your Financial Adviser</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance credit score debt divorce ex spouse joint accounts marriage rebuilding credit refinancing Wed, 07 Mar 2018 09:00:09 +0000 Dan Rafter 2111738 at http://www.wisebread.com 8 Factors That Could Keep You Broke Forever http://www.wisebread.com/8-factors-that-could-keep-you-broke-forever <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-factors-that-could-keep-you-broke-forever" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sad_woman_showing_her_wallet_with_money.jpg" alt="Sad woman showing her wallet with money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you are perpetually penniless, you may feel that's just the hand you've been dealt when it comes to money.</p> <p>The truth is, no one has to live their life permanently broke. And many people don't simply end up in the red due to poor luck. If you want to reach true financial security, you'll need to take a good, hard look at your money habits and identify the culprits of your struggling finances.</p> <p>Here are some reasons you could stay broke forever.</p> <h2>1. You would rather look rich than be rich</h2> <p>One thing that keeps many people broke is spending money &mdash; and even taking on debt &mdash; to look like they are doing well. You want to drive a nice car and live in a nice house so that everyone will think you're successful, even though maintaining appearances is keeping you broke. It's an easy trap to fall into, and it's a vicious cycle to try and break free from.</p> <p>Instead of spending your time worrying what your neighbors and friends on Facebook think, focus your energy on getting back on your feet. If you stop spending money to look rich, you can actually be rich someday. (See also: <a href="http://www.wisebread.com/4-money-lessons-you-can-learn-from-the-joneses?ref=seealso" target="_blank">4 Money Lessons You Can Learn From the Joneses</a>)</p> <h2>2. You are not keeping track</h2> <p>You may feel that since you don't have any money, there's no point in keeping track of it. The reality is, no matter how much money you make, you need a budget. Operating without one can keep you in the red. If you don't have a way to oversee and manage your spending so that you have more money coming in than going out, you will be broke forever.</p> <p>Start a budget today so you can understand how much money you have to work with and what you're spending it on. Use your findings to make more mindful choices about your expenses and spending habits. While you're at it, be sure to add a column for &quot;savings,&quot; too. (See also: <a href="http://www.wisebread.com/stop-using-these-5-excuses-not-to-budget?ref=seealso" target="_blank">Stop Using These 5 Excuses Not to Budget</a>)</p> <h2>3. You wait to start investing</h2> <p>When you are broke, you don't feel you have any &quot;extra&quot; money to send to nonessential things like investing. But investing <em>is</em> an essential. Instead of waiting until your finances get better to take a dip into the markets, you should really be making an effort ASAP. The longer you wait to invest, the longer it will take you to build wealth and reach financial independence.</p> <p>You don't need to be wealthy to start. Invest now with whatever money you can come up with. Even a few dollars per day can make a huge difference. (See also: <a href="http://www.wisebread.com/how-just-5-a-day-can-improve-your-financial-future?ref=seealso" target="_blank">How Just $5 a Day Can Improve Your Financial Future</a>)</p> <h2>4. You don't have a plan for getting ahead</h2> <p>If you are broke, something needs to change to make you un-broke. Making a real change requires more than simply <em>hoping</em> that things will change. You need to form a plan, followed by action to execute your plan and meet your goals. If you don't have a plan to improve your financial situation, you will never get ahead.</p> <p>There's no reason to overwhelm yourself. Start small; plan on paying off your smallest credit card using the <a href="http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball?ref=internal" target="_blank">debt snowball</a> method, and take steps to make it happen. You'd be surprised how great it will feel to achieve even a small financial goal, and you'll be inspired to tackle the next one.</p> <h2>5. You have given up</h2> <p>When your financial outlook is bleak, it's easy to get discouraged. But if you accept the state of being broke as your permanent reality and stop working to change things, you will probably stay broke.</p> <p>Find inspiration from people who have managed to pull themselves out of bad financial situations. Read blogs, subscribe to newsletters, and listen to podcasts about debt repayment. Hearing about other people's success will inspire you to achieve your own financial freedom. (See also: <a href="http://www.wisebread.com/how-one-inspiring-couple-paid-off-48000-in-25-years?ref=seealso" target="_blank">How One Inspiring Couple Paid Off $48,000 in 2.5 Years</a>)</p> <h2>6. You are addicted to debt</h2> <p>No money? No problem! You can still get almost anything you want just by swiping your card and signing your name on the dotted line. Does this sound familiar? If so, those credit card payments may be keeping you broke. If you continue using credit instead of money you actually have to buy things, interest payments will bury you. You will never get ahead financially.</p> <p>Change your focus from accumulating things to accumulating wealth. Start by paying down your credit card accounts and resolving to make new purchases with cash. (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>7. Lifestyle inflation is eating up your raises</h2> <p>Your annual raise can easily evaporate due to lifestyle inflation. Those extra dollars in your paycheck disappear from your account only to go toward more TV channels, a bigger house or apartment, a nicer car, a lavish vacation, and better food. The problem here is that once you upgrade your lifestyle, you don't want to go back. Your newer, &quot;nicer&quot; things become your new normal. But if your expenses keep ratcheting up as fast (or faster) than your income, you'll stay broke forever.</p> <p>The key to battling lifestyle inflation is to recognize what is happening and prevent those little upgrades from sneaking in. If you get a pay raise, don't automatically set off on an online shopping spree; instead, send the extra dollars into an emergency fund, retirement account, or toward debt repayment. You'll be glad you did. (See also: <a href="http://www.wisebread.com/how-one-nice-thing-can-ruin-your-whole-budget?ref=seealso" target="_blank">How One Nice Thing Can Ruin Your Whole Budget</a>)</p> <h2>8. You are piling up deferred expenses</h2> <p>I once lived in an old farmhouse that I was fixing up. I had a long list of upgrades and repairs that I needed to do as soon as I got some money. Eventually, I realized that those deferred expenses were keeping me broke &mdash; so I sold the farm. Your list of deferred expenses may look different from mine &mdash; maybe it's never-ending home improvement projects, or things you are waiting to buy for your hobby &mdash; but they are keeping your money tied up nonetheless.</p> <p>Take a hard look at the deferred expenses that are standing in line waiting to take your money. Can you eliminate the root cause of these expenses and free up future dollars? Doing so just may be your ticket to financial freedom. (See also: <a href="http://www.wisebread.com/the-10-commandments-of-reaching-financial-freedom?ref=seealso" target="_blank">The 10 Commandments of Reaching Financial Freedom</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F8-factors-that-could-keep-you-broke-forever&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F8%2520Factors%2520That%2520Could%2520Keep%2520You%2520Broke%2520Forever.jpg&amp;description=8%20Factors%20That%20Could%20Keep%20You%20Broke%20Forever"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/8%20Factors%20That%20Could%20Keep%20You%20Broke%20Forever.jpg" alt="8 Factors That Could Keep You Broke Forever" width="250" height="374" /></p> <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/8-factors-that-could-keep-you-broke-forever">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/15-smart-things-you-can-do-with-your-finances-even-if-youre-broke">15 Smart Things You Can Do With Your Finances, Even if You&#039;re Broke</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/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</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-types-of-overspenders-which-one-are-you">5 Types of Overspenders — Which One Are You?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-online-forums-thatll-help-you-reach-your-financial-goals">9 Online Forums That&#039;ll Help You Reach Your Financial Goals</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-to-build-your-financial-self-esteem">8 Ways to Build Your Financial Self Esteem</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bad habits broke budgeting circles debt investing keeping up with the joneses lifestyle inflation paycheck to paycheck Tue, 06 Mar 2018 09:00:07 +0000 Dr Penny Pincher 2111220 at http://www.wisebread.com How to Keep Student Loans From Wrecking Your Retirement http://www.wisebread.com/how-to-keep-student-loans-from-wrecking-your-retirement <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-keep-student-loans-from-wrecking-your-retirement" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/empty_nester.jpg" alt="Empty Nester" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Student loans are not just a burden to young college grads, but to those nearing retirement age as well. Many Americans who have to choose between saving for retirement and paying for a child's college education opt for the latter.</p> <p>That can be a problem. The Consumer Financial Protection Bureau reports that in 2015, $66.7 billion of student loan debt belonged to borrowers age 60 and older. Among them, 40 percent of borrowers over the age of 65 were in default. The vast majority of older Americans with student loan debt &mdash; 73 percent &mdash; borrowed to help fund a child's or grandchild's education.</p> <p>The statistics don't lie; the latest obstacle threatening a comfortable retirement for Americans may very well be student loan debt. (See also: <a href="http://www.wisebread.com/are-you-ruining-your-retirement-by-spoiling-your-kids?ref=seealso" target="_blank">Are You Ruining Your Retirement by Spoiling Your Kids?</a>)</p> <h2>Understanding what's on the line</h2> <p>Understanding just how much a student loan can disrupt your retirement will help you evaluate the decision before signing on the dotted line. The average college student graduates with over $37,000 in student loan debt. Given that tuition costs continue to rise at twice the rate of inflation, loan balances are likely to grow for future classes.</p> <p>Before taking out a student loan for a child or grandchild, consider whether you can realistically repay the loan before entering retirement. Even if you can, understand that you may be sending hundreds of dollars every month toward that debt instead of toward your retirement account. How much will that hurt you in the long run?</p> <p>Whether you co-sign for a student loan or borrow directly for your child, you will be responsible for the entire balance of the loan. If you can't afford to make those payments, and you know you will still be repaying the loan well into retirement, the best decision is not to take out a loan at all. You'd be putting yourself in a position of great financial risk by doing so.</p> <p>If you default on a student loan, things can get even worse. Student loan creditors can garnish your wages, including Social Security benefits. Tax refunds can also be seized to satisfy unpaid balances. Even bankruptcy won't be a good option, as student loans can generally not be discharged. If you find yourself in a position where you're over your head and unable to pay, your outstanding student loan debt can be devastating to your financial wellbeing.</p> <h2>Alternatives to student loan debt</h2> <p>If savings, scholarships, and grant opportunities have all been exhausted, there are still ways to bring down the cost of college for your child and avoid having student loans impact your retirement savings plan. (See also: <a href="http://www.wisebread.com/the-encouraging-truth-about-how-americans-are-covering-the-cost-of-college?ref=seealso" target="_blank">The Encouraging Truth About How Americans Are Covering the Cost of College</a>)</p> <h3>1. Your child can choose cheaper schools</h3> <p>While your child may have their heart set on particular school, they also need to be realistic about how much it will cost to attend. Price should be as much of a deciding factor as the school itself. If your child attends an in-state school or community college, you can greatly minimize or even eliminate the need for student loans altogether.</p> <h3>2. Your child can earn college credit in high school</h3> <p>Advanced Placement (AP) is a program that allows high school students to earn college credits through specialized courses. There may be certain prerequisites to signing up for these advanced classes, and you'll have to pay a $94 fee for the exam. Additional costs may also apply for certain study materials.</p> <p>If your child scores well on their AP exams, it could save them from having to take certain introductory courses in college &mdash; which in turn could slash thousands from their tuition bill. AP exams are scored on a scale of 1&ndash;5. Different colleges have their own criteria for assessing how many credits your child's test score is worth (or if they'll accept the AP credits at all).</p> <h3>3. Have your child commute from home</h3> <p>Room and board is a large portion of the overall college experience and expense. And while your kid may be eager to set out on their own, again, they need to be realistic about what's affordable, and so do you. Sabotaging your retirement savings to pay for your child's room and board is simply not a smart financial move.</p> <p>Attending a college close to home, or even finding a school that offers some of its courses online, will allow your child to continue living at home and to commute to class. This way, they (and you) can better focus on paying tuition.</p> <p>If they have their heart set on living on campus, taking a Resident Assistant position can allow your child to live in the dorms for free. They will have added responsibility as an RA, but the benefits can be worth it.</p> <h3>4. Your child can find a job</h3> <p>Just because your child is attending school doesn't mean they can't find a part-job to help cover education costs. While it may be a burden to hold down a job while pursuing a degree, make sure your child understands how much more of a burden it will be for either of you to carry student loan debt decades into the future. Companies like UPS and Starbucks offer tuition assistance benefits that can help defer college costs. (See also: <a href="http://www.wisebread.com/these-17-companies-will-help-you-repay-your-student-loan?ref=seealso" target="_blank">These 17 Companies Will Help You Repay Your Student Loan</a>)</p> <p>Even a full-time position is not out of the question. Students working full-time may take longer to complete a degree, but a few more years of study can be a worthwhile trade-off for your child to graduate debt-free.</p> <h2>Dealing with student loans in retirement</h2> <p>For those still repaying student loans into or nearing retirement, the burden can be tremendous. But you do have options.</p> <p>Federal student loans offer <a href="https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven" target="_blank">income-based repayment programs</a>. A deferment or forbearance can be requested to conserve cash if you're experiencing a temporary financial hurdle. Consolidating loans can also help you adjust interest rates or convert your loan into one that offers more repayment assistance options. Visit the <a href="https://studentaid.ed.gov/sa/repay-loans" target="_blank">Federal Student Aid</a> website to find more information about the repayment programs that are available to you. (See also: <a href="http://www.wisebread.com/4-things-you-need-to-know-about-deferring-student-loans?ref=seealso" target="_blank">4 Things You Need to Know About Deferring Student Loans</a>)</p> <p>Private student loans are a different matter. Very few private student lenders offer any form of repayment plan. If you are struggling to make payments, your best bet is to contact your lender directly and discuss what options may be available to you. If you have co-signed a private student loan, you may be able to request to be removed if the primary borrower has a good payment history and solid credit. By passing the baton to your adult child, you can return your focus to your retirement.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-keep-student-loans-from-wrecking-your-retirement&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Keep%2520Student%2520Loans%2520From%2520Wrecking%2520Your%2520Retirement.jpg&amp;description=How%20to%20Keep%20Student%20Loans%20From%20Wrecking%20Your%20Retirement"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Keep%20Student%20Loans%20From%20Wrecking%20Your%20Retirement.jpg" alt="How to Keep Student Loans From Wrecking Your Retirement" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/toni-husbands">Toni Husbands</a> of <a href="http://www.wisebread.com/how-to-keep-student-loans-from-wrecking-your-retirement">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-encouraging-truth-about-how-americans-are-covering-the-cost-of-college">The Encouraging Truth About How Americans Are Covering the Cost of College</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-of-the-fastest-ways-to-go-broke-in-retirement">4 of the Fastest Ways to Go Broke in Retirement</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-things-financial-aid-might-not-cover">6 Things Financial Aid Might Not Cover</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/what-really-happens-when-you-dont-pay-your-student-loans">What Really Happens When You Don&#039;t Pay Your Student Loans</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-pay-off-your-student-debt-faster">5 Ways to Pay Off Your Student Debt Faster</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Education & Training Retirement adult children borrowing money co-signer college costs debt retirement savings room and board student loans tuition Fri, 23 Feb 2018 10:00:06 +0000 Toni Husbands 2106618 at http://www.wisebread.com 7 Warning Signs You're In Debt Denial http://www.wisebread.com/7-warning-signs-youre-in-debt-denial <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-warning-signs-youre-in-debt-denial" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/young_couple_in_bad_financial_situation_0.jpg" alt="Young couple in bad financial situation" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Many people are in denial about the debt that they owe. When faced with the ugly truth, it's sometimes easier to or minimize the importance of it or flat-out reject the extent that we're in debt. The longer you stay in denial, the bigger the debt grows. Learn to know the warning signs before denial kicks your finances where it hurts.</p> <h2>1. Taking on debt to pay down other debts</h2> <p>This kind of strategy will dig you into a deep debt hole in the blink of an eye. If you get a credit card to pay off another credit card, your money woes can quickly multiply. Interest will keep on accruing. And eventually, the balance still needs to be paid.</p> <p>There can be certain exceptions to this. A low-interest loan to pay off high-interest debt can be a smart way to minimize interest payments, so long as it is paid back quickly. A classic example is using a <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards" target="_blank">balance transfer credit card with a promotional 0% APR</a>, or consolidating debt through a home-equity loan or a refinance.</p> <p>However, even with these strategies, you must be very careful. Balance transfer credit cards should be paid off in full before the promotional 0% APR window closes and normal interest rates kick in. And your home is not a bottomless piggy bank, as many people found out in the 2008 housing crash. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso" target="_blank">When to Do a Balance Transfer to Pay Off Credit Card Debt</a>)</p> <h2>2. Not having any kind of monthly budget</h2> <p>One of the best ways to address your debts is to get a complete picture of your finances. You should know your monthly incomings and outgoings, and create a budget based on that information. If you ignore budgeting and just try and wing it month to month, you could be in serious debt denial. This is a shaky foundation for your financial future.</p> <p>It's important that you keep a record of every penny you spend, every penny you earn and save, and every cent you have in debt. That way, you can create a monthly budget to ensure that the bills all get paid on time, you spend only what you need to on food, entertainment, and clothing, and you have enough left over to start paying down your debts. (See also: <a href="http://www.wisebread.com/stop-using-these-5-excuses-not-to-budget?ref=seealso" target="_blank">Stop Using These 5 Excuses Not to Budget</a>)</p> <h2>3. There are stacks of unopened bills laying around</h2> <p>A big red flag that signals debt denial is refusing to even acknowledge what you owe, and how soon you owe it. By letting your bills pile up on the kitchen counter unopened, you are merely putting off the inevitable. Sooner or later, the bills have to get paid. If they don't, you can be cut off (which requires additional fees to reinstate service), you could have your car repossessed, and you could even lose the roof over your head.</p> <p>Attack that pile of unopened bills as soon as you can. If they are too big to handle, call your service or loan providers and see if they'll work out a payment plan with you. You never know until you ask. Oh, and if you are scared of looking at your bank or credit cards statements, that's another warning sign of debt denial. Bite the bullet and face the truth. (See also: <a href="http://www.wisebread.com/pay-these-6-bills-first-when-money-is-tight?ref=seealso" target="_blank">Pay These 6 Bills First When Money Is Tight</a>)</p> <h2>4. Making the minimum payments on everything</h2> <p>Financial institutions love people who only make minimum payments. There are two broad terms used for credit card customers &mdash; &quot;transactors&quot; and &quot;revolvers&quot; &mdash; and the latter are adored because they never pay off their balances.</p> <p>Transactors pay off their credit card bill in full at the end of each month, taking advantage of points and rewards without having to pay interest. Revolvers, on the other hand, regularly run balances. For those who only make minimum payments, interest makes it almost impossible to get a foothold on the original balance. (See also: <a href="http://www.wisebread.com/all-the-ways-minimum-payments-are-evil?ref=seealso" target="_blank">All the Ways Minimum Payments Are Evil</a>)</p> <p>If you find yourself making only minimum payments on everything, consider a debt snowball approach. Find the debt with the lowest balance, send as much money as you can to it, and continue making minimum payments on your other accounts. When that small debt is paid off, apply the extra amount you were paying to the next largest debt, and so on, until it all snowballs and your debts are paid in full.</p> <p>Paying off small debts first may cause you to pay more interest in the long run, but the psychological satisfaction of checking off a debt can be powerful motivation to keep going. (See also: <a href="http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball?ref=seealso" target="_blank">6 Secrets to Mastering the Debt Snowball</a>)</p> <h2>5. Maxing out every card and loan you have</h2> <p>When you get a new credit card, it comes with a spending limit. When you combine the credit limits of all your cards, and compare that number to the amount you have borrowed, you'll get a figure called a credit utilization ratio.</p> <p>Let's say you have $10,000 of available credit, and you currently owe $2,000 spread out across your combined credit cards. You have a 20 percent credit utilization ratio, and lenders like to see that. It means you're being careful with your money and not running up balances. Most experts recommend you try to keep this ratio below 30 percent. Even better if you can keep it below 10 percent. (See also: <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?ref=seealso" target="_blank">This One Ratio Is the Key to a Good Credit Score</a>)</p> <p>If you're maxing out all of your credit cards, and you're hitting 80 to 90 percent of the credit you can borrow against, your credit utilization ratio is too high (especially if it's a six-figure credit limit). This tells any potential lender that you're a risk, and you likely won't be approved for any new lines of credit. If you are, it will come with sky-high interest rates.</p> <h2>6. Buying things you don't need while debts go unpaid</h2> <p>You should really be paying down the credit cards, or that electricity bill that's a few months overdue. But the jacket you've been eyeing is on sale right now, and you won't get another shot at a bargain like this. You put the bills off a little longer, and go for the jacket.</p> <p>This kind of mentality traps us all at some point, especially if we're feeling down and would rather spend the money on ourselves than give it to the bank or the utility company. Once again, the brutal truth has to be addressed. Spending money on stuff you don't need and cannot afford, while letting interest pile up on your debts, is a one-way ticket to bankruptcy.</p> <h2>7. Counting on a stroke of good fortune to solve your problems</h2> <p>We all do it. There's no harm in dreaming about winning the lottery, or finding a valuable piece of jewelry or artwork in the attic. But there's a big difference between dreaming of a windfall, and depending on one to get you out of debt.</p> <p>It can be dangerous to think this way when you have money woes. That last $20 in your pocket goes to Powerball tickets or scratch cards, rather than buying food or paying a bill. The odds are not in your favor, and you may as well throw the $20 in the trash. And yet, the fantasy of winning thousands, or even millions, is hard to ignore. For a while, you feel like you might get lucky &mdash; but when the dust settles, you now have $20 less to your name.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-warning-signs-youre-in-debt-denial&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Warning%2520Signs%2520You%2527re%2520In%2520Debt%2520Denial.jpg&amp;description=7%20Warning%20Signs%20You're%20In%20Debt%20Denial"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Warning%20Signs%20You%27re%20In%20Debt%20Denial.jpg" alt="7 Warning Signs You're In Debt Denial" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/7-warning-signs-youre-in-debt-denial">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-get-back-on-track-when-youre-behind-on-your-bills">How to Get Back on Track When You&#039;re Behind on Your Bills</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/why-retiring-with-debt-isnt-the-end-of-the-world">Why Retiring With Debt Isn&#039;t the End of the World</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/best-of-personal-finance-credit-where-credit-is-due-edition">Best of Personal Finance: Credit Where Credit Is Due Edition</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debunking-8-common-credit-score-myths">Debunking 8 Common Credit Score Myths</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt">The Fastest Method to Eliminate Credit Card Debt</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management bills budgeting credit utilization ratio debt denial ignoring interest rates loans minimum balances owing money Fri, 16 Feb 2018 10:00:06 +0000 Paul Michael 2104315 at http://www.wisebread.com What You Need to Know About Canceled Debt and Taxes http://www.wisebread.com/what-you-need-to-know-about-canceled-debt-and-taxes <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-you-need-to-know-about-canceled-debt-and-taxes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_checking_her_computer_and_holding_coffee_cup.jpg" alt="Woman checking her computer and holding coffee cup" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Imagine having years of punishing credit card debt canceled and gaining the clean slate you've always wanted. Then, out of nowhere, you receive a form in the mail that says you actually owe money for having that debt wiped away.</p> <p>That situation happens all the time to consumers who have had part or all of a debt forgiven. The reality is, canceled debt may help you regain control of your finances, but the IRS still wants its share of what it sees as income you received. (See also: <a href="http://www.wisebread.com/12-things-you-should-know-about-the-new-tax-law?ref=seealso" target="_blank">12 Things You Should Know About the New Tax Law</a>)</p> <h2>How debt is canceled</h2> <p>To understand the tax ramifications of canceled debt, it helps to know how this phenomenon works in the first place. How does someone get their debt canceled?</p> <p>According to Steven J. Weil, president of RMS Accounting in Fort Lauderdale, Florida, debt can be forgiven on credit card balances, mortgages, auto loans, or nearly any other type of loan. This debt can become canceled in a variety of ways. One way is when consumers use a debt settlement company to negotiate a payment of less than they owe. (See also: <a href="http://www.wisebread.com/4-ways-to-negotiate-credit-card-debt?ref=seealso" target="_blank">4 Ways to Negotiate Credit Card Debt</a>)</p> <p>Another example is when consumers who owe more than their homes are worth get their mortgage company to forgive the remaining balance during what is called a &quot;short sale.&quot; A short sale is when the net proceeds from selling the property fall short of the debts secured by liens against the property. All the lien holders must agree to accept less than the amount owed on the debt in order for a short sale to go through.</p> <p>Forgiven debt doesn't just go away, says Weil. &quot;Whether it's consumer debt, auto debt, or any other type of debt, it becomes income to the consumer when they don't pay off their debt. The government rectifies this situation by charging taxes on forgiven amounts.&quot;</p> <p>Unfortunately, consumers don't always know they are required to pay income taxes on forgiven debt. So, imagine their surprise when they receive a 1099-C in the mail that could lead to a larger tax bill.</p> <h2>What the tax law says</h2> <p>Creditors and debt collectors that accept at least $600 less than the amount you owe them are required by law to file 1099-C forms and send consumers a copy to use when they file their taxes.</p> <p>As Weil notes, the form should clearly list the amount of debt you had forgiven &mdash; not the amount of debt you once owed.</p> <p>Weil uses the following example to explain how forgiven debt is figured. Imagine you ran up your Visa card with a $10,000 balance (including principal, interest, and late fees) and cannot keep up with the monthly payments. After the debt is sent to collections, you work with a debt settlement company to reach a settlement that says you'll pay $3,000 to have the entire debt forgiven. In this case, the $7,000 in forgiven debt would end up on the 1099-C, says Weil. This form is then sent by the creditor that accepted the settlement to the consumer.</p> <p>At least that's the way it <em>should </em>work. In some cases, consumers don't receive the 1099-C for whatever reason. But not receiving the form doesn't remove your liability, says Weil.</p> <p>When your debt is forgiven, it becomes income to you &mdash; even if the creditor you work with fails to send a 1099-C. &quot;If you don't get the form, you need to call the creditor and ask for it,&quot; says Weil.</p> <p>Weil also says that, when somebody tells you they will forgive your debt, you need to get documentation of the event in writing. An official letter from the creditor acknowledging your forgiven debt amount will suffice when you're filing your taxes in the absence of a 1099-C, he says. Further, getting the agreement in writing will also protect you down the line if the details of your forgiven debt get jumbled somehow between your creditor and the IRS. (See also: <a href="http://www.wisebread.com/heres-what-happens-if-you-dont-pay-your-taxes?ref=seealso" target="_blank">What Happens If You Don't Pay Your Taxes</a>)</p> <h2>Exceptions to the rule</h2> <p>Weil notes that the IRS offers several exceptions that let consumers in certain financial situations avoid paying taxes on forgiven debts. Those exceptions include insolvency. If after your debt is forgiven you have no cash or assets to sell to pay taxes on your debt, you won't have to pay income taxes.</p> <p>But note that the exclusion applies only to the amount by which you were insolvent. So if you had $10,000 of credit card debts canceled at a time when you had $2,000 in assets, the insolvency amount is $8,000. You'll report $2,000 ($10,000 minus the $8,000 insolvency amount) as income on your tax return.</p> <p>Also, if debt forgiveness makes you solvent, then it's taxable, notes Weil.</p> <p>Other exceptions that let you avoid paying taxes include debt discharged in bankruptcy, debt given as a gift by a friend or family member, and certain business real estate and farm exclusions, he says.</p> <p>If you're curious whether you'll qualify for an exclusion, Weil says it's best to speak with a tax professional who can look at the details of your unique tax situation.</p> <h2>When consumers aren't informed</h2> <p>If you're a consumer who has been hit with this surprise tax in the past, you may be wondering why you weren't informed of your tax liability. According to Weil, it's up to consumers to educate themselves on the best ways to handle their debts, including forgiven debt. Ideally, the different companies we work with will warn us about taxes we might owe, but you should never count on it.</p> <p>Weil says debt settlement companies in particular should really be doing their part to educate consumers on their tax liability. These companies, which may be for-profit or nonprofit, usually tell consumers to stop paying their bills and save money for debt settlement in a joint escrow account instead. This way, when (or if) the debt settlement company strikes a deal to settle your debts, you'll have the cash on hand to pay the agreed-upon settlement amount.</p> <p>Considering the fact that debt settlement companies can charge high fees and are<em> supposed</em> to be on the side of consumers, one would think these companies would lay out all the details for those they help. But they don't always.</p> <p>&quot;There's a lot of nondisclosure,&quot; says Weil. Because of this, &quot;consumers should be very careful of debt consolidation and settlement agencies, particularly those that are for-profit.&quot;</p> <p>The bottom line: You may owe taxes on forgiven debts, and you may receive a 1099-C in the mail from your creditor. If you don't receive the form, the onus is on you to figure out your tax liability.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/holly-johnson">Holly Johnson</a> of <a href="http://www.wisebread.com/what-you-need-to-know-about-canceled-debt-and-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-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/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/how-to-erase-your-medical-debt">How to Erase Your Medical 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-fastest-method-to-eliminate-credit-card-debt">The Fastest Method to Eliminate Credit Card 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/5-strategies-to-wipe-out-your-credit-card-balance">5 Strategies To Wipe Out Your Credit Card Balance</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-steps-to-take-when-you-have-more-bills-than-income">6 Steps to Take When You Have More Bills Than Income</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management Taxes canceled debt debt debt collections debt tips doing your taxes tax time tax tips Thu, 15 Feb 2018 09:30:09 +0000 Holly Johnson 2103698 at http://www.wisebread.com 6 Reasons Why Financial Planning Isn't Just for the Wealthy http://www.wisebread.com/6-reasons-why-financial-planning-isnt-just-for-the-wealthy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-reasons-why-financial-planning-isnt-just-for-the-wealthy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_putting_money_in_a_piggy_bank.jpg" alt="Woman putting money in a piggy bank" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's an unfortunate divide when it comes to financial planning. The lower your income, the less likely you are to have a financial plan. But it doesn't have to be that way.</p> <p>A 2016 Financial Engines report found that only 37 percent of American workers with yearly incomes between $35,000 and $100,000 have a comprehensive financial plan to grow their wealth. Meanwhile, 48 percent of workers with an annual salary of more than $100,000 <em>do </em>have a plan. What's more, wealthier Americans tend to have more comprehensive financial plans than those followed by middle-income earners.</p> <p>The problem with this is obvious: Financial planning can help <em>everyone</em>, not just people with higher salaries. But too many lower- and middle-income earners think that they don't make enough money to warrant having a financial plan. This is dangerous thinking, as lacking a financial plan can scuttle your efforts to save for retirement, help pay for your children's college education, or even buy a home.</p> <p>Here are six reasons why you need a financial plan, even if you don't make over $100,000 per year.</p> <h2>1. Without a plan, it's harder to set or meet financial goals</h2> <p>How much money do you need to save for a healthy and happy retirement? Without a financial plan, you probably have no idea. And how do you accumulate these savings? Again, if you don't follow a financial plan, the odds are likely that you won't meet your retirement goals.</p> <p>According to the Financial Engines study, people with financial plans save about 10 percent of their salaries toward retirement, while those without save only 6 percent. This can make a big difference. The study uses the example of a person starting out with $50,000 in retirement savings. If that person earns $100,000 each year, and saves 10 percent of that salary for 25 years, they will have amassed as much as $1.13 million in retirement savings. Meanwhile, someone saving 6 percent of that income for 25 years will only have saved around $890,000. (See also: <a href="http://www.wisebread.com/heres-how-far-1-million-will-actually-go-in-retirement?ref=seealso" target="_blank">Here's How Far $1 Million Will Actually Go in Retirement</a>)</p> <h2>2. A financial plan can help you rein in your spending</h2> <p>When you get to the end of every month, is your bank account nearly drained? Do you know where your money has gone? If not, a financial plan can help.</p> <p>A basic pillar of creating a financial plan involves tracking where your money goes each month. It's all about creating a household budget that lists the average dollars you spend on everything from utilities and rent, to transportation, groceries, dining out, and entertainment. Once you have these figures in front of you, and once you compare them with how much income you bring in, you can adjust your spending so that you aren't constantly running out of money each month. Without a financial plan, you'll just keep overspending. (See also: <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=seealso" target="_blank">Build Your First Budget in 5 Easy Steps</a>)</p> <h2>3. It will help you reach big financial goals</h2> <p>Do you want to buy a house? Or maybe you dream of helping your children pay for their college education. Attaining big financial goals such as these is a far more challenging task if you don't have a financial plan to guide you.</p> <p>A financial plan will spell out how much money you'll need to reach life's big financial goals &mdash; everything from saving enough for a down payment on a home, to buying your first car, to saving enough money to help your children graduate from college without mountains of student loan debt.</p> <p>Unfortunately, a majority of Americans earning lower or middle-class incomes don't plan for attaining these big goals. The Financial Engines study found that only 41 percent of middle-income workers have financial plans for saving for a child's college education. A far higher number &mdash; 61 percent &mdash; of wealthier Americans have financial plans that address this challenge. (See also: <a href="http://www.wisebread.com/why-saving-too-much-money-for-a-college-fund-is-a-bad-idea?ref=seealso" target="_blank">Why Saving Too Much Money for a College Fund Is a Bad Idea</a>)</p> <h2>4. It will help you protect your loved ones</h2> <p>If you died unexpectedly, what financial ills would fall on your children or partner? If you invest in life insurance, you can help protect these loved ones in case you do die.</p> <p>The problem is, Americans who don't have financial plans are far less likely to take out enough life insurance or disability insurance to properly protect their families. The Financial Engines study found that 67 percent of middle-income earners have purchased life or disability insurance, while 83 percent of upper-income earners have these policies in place. (See also: <a href="http://www.wisebread.com/why-your-group-life-insurance-is-not-enough?ref=seealso" target="_blank">Why Your Group Life Insurance Is Not Enough</a>)</p> <h2>5. With a financial plan, you're likely to have less credit card debt</h2> <p>The <em>2013 Household Financial Planning Survey and Index</em>, completed by the Consumer Federation of America and the CFP Board of Standards, found that those with financial plans tend to have less credit card debt and, when they do, are more likely to have a plan for paying it off.</p> <p>According to the survey, 38 percent of adults without a financial plan have significant credit card debt, and only 47 percent of these people have plans to reduce it. Meanwhile, even a little bit of financial planning seems to help people rely less on credit cards. Among adults who fall into the &quot;limited planners&quot; category &mdash; meaning they have a financial plan, though not an especially detailed one &mdash; are less likely to have such debt. The survey found that 61 percent of these limited planners have no credit card debt at all. And only one in five people with comprehensive financial plans have significant credit card debt that needs to be paid down, with 92 percent having a plan to do so. (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. You'll be better prepared for a financial emergency</h2> <p>What happens if your car's transmission goes on the fritz? What if your home's furnace conks out in the middle of a chilly night? If you don't have an emergency fund built up, you might have to pay for those repairs with a credit card.</p> <p>Even worse &mdash; what if you suddenly lost your job? This is why that cushion is so important. Financial experts recommend that you have at least six months' to a year's worth of daily living expenses saved in an easy-to-access fund, like a savings account.</p> <p>Building an emergency fund takes time, but if you have a financial plan, you're far more likely to set aside the money you need each month &mdash; even if your salary isn't particularly high. Just $200 or $300 a month can add up over time. And if you have a financial plan that shows you how to save that money every month &mdash; perhaps by cutting down on unnecessary expenses &mdash; you're far more likely to build an emergency fund. (See also: <a href="http://www.wisebread.com/7-easy-ways-to-build-an-emergency-fund-from-0?ref=seealso" target="_blank">7 Easy Ways to Build an Emergency Fund From $0</a>)</p> <h2>Creating a plan</h2> <p>Now that you know why a financial plan is so important, it's time to create one. The good news is that while a financial planner can help, you don't necessarily have to work with one if doing so is too costly.</p> <p>Start by creating a household budget that shows how much you spend each month, including estimates for discretionary expenses, and how much you earn. Then, determine how much money you need to save for retirement, college tuition, and building an emergency fund. If you can't save a lot, start by saving whatever you can each month. From there, you might be able to boost those savings by reducing some of your less important expenses.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F6-reasons-why-financial-planning-isnt-just-for-the-wealthy&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F6%2520Reasons%2520Why%2520Financial%2520Planning%2520Isn%2527t%2520Just%2520for%2520the%2520Wealthy.jpg&amp;description=6%20Reasons%20Why%20Financial%20Planning%20Isn't%20Just%20for%20the%20Wealthy"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/6%20Reasons%20Why%20Financial%20Planning%20Isn%27t%20Just%20for%20the%20Wealthy.jpg" alt="6 Reasons Why Financial Planning Isn't Just for the Wealthy" width="250" height="374" /></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/6-reasons-why-financial-planning-isnt-just-for-the-wealthy">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/are-you-putting-off-these-9-adult-money-moves">Are You Putting Off These 9 Adult Money Moves?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-12-month-get-richer-plan">The 12-Month Get-Richer Plan</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-financial-basics-every-new-grad-should-know">The Financial Basics Every New Grad Should Know</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/why-saving-money-is-harder-today">Why Saving Money Is Harder Today</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/9-family-money-matters-your-kids-dont-need-to-know">9 Family Money Matters Your Kids Don&#039;t Need to Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance budgeting debt expenses financial advice financial planning income life insurance middle class retirement savings Wed, 14 Feb 2018 10:00:06 +0000 Dan Rafter 2090384 at http://www.wisebread.com 3 Reasons Taking a Loan For Your Wedding Is a Bad Idea http://www.wisebread.com/3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/marriage_and_finances.jpg" alt="Marriage and finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Imagine standing at the altar on your wedding day. Staring deep into your beloved's eyes, suddenly, you are struck by the thought that this one &quot;priceless&quot; moment is costing you over $30,000. And that doesn't include the five-day, four-night honeymoon in Cancun. <em>What have you done?</em></p> <p>According to The Knot, the national average for the cost of a wedding in 2016 was a whopping $35,329. And since most couples don't have that kind of cash upfront, many turn to loans to finance all or some portion of it.</p> <p>Technically speaking, there's no such thing as a &quot;wedding loan.&quot; A wedding loan is just an unsecured personal loan where the interest rate is based on the creditworthiness of one or both potential spouses. But kicking your marriage off with debt is a recipe for unnecessary stress and hardship. It can set you back financially before you even gain any momentum in what should be a new, exciting chapter of life.</p> <p>If you are contemplating using a wedding loan to help you pay for your big day, here are three key things you should consider.</p> <h2>1. You squander your money's opportunity cost</h2> <p>Every dollar comes with an opportunity cost &mdash; meaning there are infinite ways that one dollar can be spent. Once you spend the dollar, you lose all of the other potential things you could have purchased with it.</p> <p>Taking out a loan for a wedding is financial double jeopardy. Not only do you lose the opportunity cost for each dollar you've spent, but you also limit what you could have strategically used your credit for &mdash; such as purchasing a home or starting a business.</p> <p>There are so many ways to spend money, and shelling out copious amounts of cash to pay for a one-day event is a bad investment. Starting your life together with a huge amount of unnecessary debt adds more stress to a naturally stressful endeavor. Marriage is tough. In lieu of investing in a single day that won't appreciate in value, take that money and invest in your life with your partner.</p> <h2>2. You drastically increase the cost of your wedding</h2> <p>We've already established that having an expensive wedding is a bad investment, but taking out a loan to pay for a wedding is asinine. Let's say you take out a $20,000 personal loan for your wedding at an annual percentage rate (APR) of 10 percent. And because you and your fiancé both have student loans, car payments, several thousand dollars in credit card debt, and are looking to purchase your first home, you opt for a 10-year repayment period.</p> <p>Your minimum monthly payment is going to be $264.30 per month for 10 years. During that time, you will pay over $11,000 in interest. Your $20,000 wedding just skyrocketed to $32,000. Think about that for a second. Ten years of your life and $32,000 spent paying for a five-hour event. That money could have been a down payment for a home.</p> <p>What's more, according to the U.S. Census Bureau, first marriages that end in divorce do so within an average of eight years. That means if happily-ever-after comes to an end before your loan is paid off, you'll be paying for your wedding and your divorce <em>simultaneously</em>. (See also: <a href="http://www.wisebread.com/how-to-save-big-on-everything-for-your-wedding?ref=seealso" target="_blank">How to Save Big on Everything for Your Wedding</a>)</p> <h2>3. Spending big leads to more big spending</h2> <p>Spending big on an extravagant wedding establishes spending expectations. This big spending attitude can quickly seep into all financial decisions and an attitude of entitlement can emerge &mdash; because you deserve &quot;the best,&quot; which is usually defined by people with extravagant tastes. Now the honeymoon has to be lavish with no expense spared. Your home has to be opulent and in the fanciest neighborhood. Your kids have to wear the trendiest clothes, attend the most prestigious private schools, and belong to all of the &quot;it&quot; clubs. The cycle can consume your marriage.</p> <p>If you and your spouse-to-be can find a way to be creative and have a wedding that is meaningful, intimate, and budget-friendly, you will establish a better foundation. You will be setting a tone of living within your means and valuing quality over size and quantity.</p> <p>The essence of marriage is appreciating the little things and making the daily grind adventurous. When you pressure yourself and your spouse to continuously &quot;go big,&quot; you add a mountain of undue stress &mdash; both emotionally and financially &mdash; on your marriage. (See also: <a href="http://www.wisebread.com/people-are-still-spending-too-much-on-their-weddings?ref=seealso" target="_blank">People Are Still Spending Too Much on Their Weddings</a>)</p> <h2>A $40 wedding story</h2> <p>I recently celebrated my 22nd wedding anniversary. As I look back and recall my wedding, a smile slowly creeps across my face. We spent $40 on the ceremony and had our reception at Applebee's. Our best friends were there and we had the time of our lives.</p> <p>Over these past 22 years, I've never looked back and wished we had done things differently. In fact, we have renewed our vows twice since then (we do it every 10 years) and each time it's been a quiet ceremony in our pastor's office. The only people who attend are the pastor and my husband and me. It's intimate, private, and special.</p> <p>I am not saying you should forgo a large wedding. You have found and are marrying the love of your life. That level of commitment should be honored. But before you pull out all the stops and plan the wedding of the century, pause and assess how you are spending that money. Do you really need to spend $2,000 on flowers? If something isn't important to you and your fiance, don't borrow money to pay for it.</p> <p>Marriage is a marathon, not a 100-yard dash. Try shifting your focus from having the perfect wedding day to building your life together. Chose to invest in <em>you</em>.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F3%2520Reasons%2520Taking%2520a%2520Loan%2520For%2520Your%2520Wedding%2520Is%2520a%2520Bad%2520Idea.jpg&amp;description=3%20Reasons%20Taking%20a%20Loan%20For%20Your%20Wedding%20Is%20a%20Bad%20Idea"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/3%20Reasons%20Taking%20a%20Loan%20For%20Your%20Wedding%20Is%20a%20Bad%20Idea.jpg" alt="3 Reasons Taking a Loan For Your Wedding Is a Bad Idea" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/3-reasons-taking-a-loan-for-your-wedding-is-a-bad-idea">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/8-things-i-learned-about-money-after-getting-married">8 Things I Learned About Money After Getting Married</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/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</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-money-conversations-every-couple-should-have">5 Money Conversations Every Couple Should Have</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-reasons-average-people-should-consider-a-prenup">6 Reasons Average People Should Consider a Prenup</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle couples debt divorce interest rates loans marriage Opportunity Cost spouses weddings Wed, 14 Feb 2018 09:01:05 +0000 Denise Hill 2098585 at http://www.wisebread.com 4 Behaviors That Risk Your Financial Security http://www.wisebread.com/4-behaviors-that-risk-your-financial-security <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-behaviors-that-risk-your-financial-security" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_having_financial_problems_0.jpg" alt="Woman having financial problems" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you consistently spend more than you make? Do you go on shopping sprees to celebrate a raise or to soothe your disappointment at not getting a promotion? Maybe you're constantly charging gadgets or shoes you don't need to your credit card, telling yourself that you'll start whacking away at debt <em>tomorrow</em>.</p> <p>These are all dangerous behaviors that can damage your financial health. And what's worse, many times we don't even realize how much damage these bad habits are inflicting on our bank accounts.</p> <p>We all have bad habits. But the key lies in preventing them from turning into missed credit card payments, huge mounds of debt, and low credit scores. Here are four behaviors that could be damaging your financial health.</p> <h2>You're impulsive</h2> <p>Do you give into temptation whenever you see a dessert, even though you've sworn off sweets? Do you immediately purchase that trinket that catches your eye in the check-out lane? You might be a bit impulsive. Impulsive people struggle with discipline, and that can be a real challenge when it comes to building healthy finances.</p> <p>Here's another example: Instead of waiting a few months to save up enough money to pay for a new laptop, you run out to the store to buy it with your credit card. Now you've added hundreds of dollars to your credit card debt. And this new debt comes with high interest. If you can't pay off your credit card balances in full each month, you'll end up paying much more for that laptop than you would have if you'd simply saved the money first.</p> <p>How can you beat impulsive spending behavior? Create a monthly household budget. Look carefully at how much money you have left over to spend on extras. If the purchase you're dying to make doesn't fit into the money you have to spend, hold off on purchasing it. And if you do dip into that slush pile, know that you won't be able to spend as much the rest of the month. (See also: <a href="http://www.wisebread.com/5-mental-biases-that-are-keeping-you-poor?ref=seealso" target="_blank">5 Mental Biases That Are Keeping You Poor</a>)</p> <h2>You celebrate, or commiserate, by spending</h2> <p>Did you earn a promotion at work? Did you get passed over for one? It might not matter. You might mark either occasion by spending a big chunk of money.</p> <p>Some of us spend as a way to soothe our feelings when we're upset, to celebrate when we're glad, or both. This can become a big financial problem when these spending bouts bust your budget.</p> <p>Learn to recognize what feelings trigger your spending urges. Find some other way to celebrate or soothe your emotions. This could mean calling a friend, exercising, or journaling. If you just want to escape, try watching a fun TV series or reading a good book. Don't let shopping be the only way you deal with emotional swings. (See also: <a href="http://www.wisebread.com/7-effortless-ways-to-prevent-budget-busting-impulse-buys?ref=seealso" target="_blank">7 Effortless Ways to Prevent Budget-Busting Impulse Buys</a>)</p> <h2>You let your spending swell as your economic situation improves</h2> <p>What should you do if you get a raise at work? The best financial answer is to take that extra money and use it to boost your savings or pay down high-interest credit card debt. Unfortunately, many of us instead start spending more.</p> <p>We get a raise and we automatically raise our lifestyle to fit our new paycheck. Maybe we buy a more expensive car. We might start eating out more often. We might upgrade to a fancier TV or a top-of-the-line laptop. But don't start spending loads more just because you've gotten a raise. You'll never build your savings or improve your financial stability if you fall into this pattern.</p> <p>When you do get a raise, it's OK to loosen your belt a little with a few small luxuries that you budget for. But most of your new income should go to increasing the money you devote to savings or paying off credit card debt. (See also: <a href="http://www.wisebread.com/9-signs-youre-suffering-from-lifestyle-inflation?ref=seealso" target="_blank">9 Signs You're Suffering From Lifestyle Inflation</a>)</p> <h2>You put things off</h2> <p>Are you a procrastinator? This can be a challenging habit when you're trying to improve your finances. For example, you might decide to start paying extra toward your credit card debt but not until the next month starts. In the meantime, because you plan to make improvements the following month, you figure it doesn't matter what you do this month.</p> <p>The problem is, the extra money you give yourself permission to spend this month only makes your financial health that much worse. And for some people, next month never comes. They don't actually ever start making those extra payments.</p> <p>If you have a financial goal, <em>don't put it off</em>. Write it down in a location where you can see it every day. And don't give yourself permission to hold off on tackling it. If you keep procrastinating, you'll simply build up more debt that you'll have to tackle anyway. Why not get to it today? (See also: <a href="http://www.wisebread.com/7-biggest-ways-procrastination-hurts-your-finances?ref=seealso" target="_blank">7 Biggest Ways Procrastination Hurts Your Finances</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-behaviors-that-risk-your-financial-security&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Behaviors%2520That%2520Risk%2520Your%2520Financial%2520Security.jpg&amp;description=4%20Behaviors%20That%20Risk%20Your%20Financial%20Security"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Behaviors%20That%20Risk%20Your%20Financial%20Security.jpg" alt="4 Behaviors That Risk Your Financial Security" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/4-behaviors-that-risk-your-financial-security">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/11-money-habits-that-make-you-look-financially-immature">11 Money Habits That Make You Look Financially Immature</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-money-goals-you-should-set-for-the-holidays">10 Money Goals You Should Set for the Holidays</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-factors-that-could-keep-you-broke-forever">8 Factors That Could Keep You Broke Forever</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-reasons-youre-bad-at-money-and-how-to-fix-it-asap">8 Reasons You&#039;re Bad at Money — And How to Fix It ASAP</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-budget-when-youre-no-longer-broke">How to Budget When You&#039;re No Longer Broke</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bad habits behaviors debt impulse buys lifestyle creep procrastinating shopping Spending Money Thu, 08 Feb 2018 09:30:05 +0000 Dan Rafter 2096589 at http://www.wisebread.com 7 Signs You're Financially Ready to Start a Family http://www.wisebread.com/7-signs-youre-financially-ready-to-start-a-family <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-signs-youre-financially-ready-to-start-a-family" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/happy_mother_and_baby_playing_at_home.jpg" alt="Happy mother and baby playing at home" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There are no two ways about it; having kids is expensive. The USDA estimates the cost of raising a child from birth through age 17 to be an astounding $233,610. This figure includes food, housing, transportation, health care, clothing, child care and education, and miscellaneous costs. And anyone with children knows that they remain an expense far past the age of 17.</p> <p>Understanding that having children is a lifetime commitment both emotionally and financially is a great first step in the process of deciding when to start a family. But what comes next? How do you know that you are financially ready to handle the responsibility of starting a family?</p> <p>There is no definitive answer to this question because there is no magic income or savings number that can dictate when you are ready for a family. However, there are some benchmarks and indicators that can assist you in making this life-altering decision. Here are the signs that you are financially ready for kids. (See also: <a href="http://www.wisebread.com/15-unexpected-expenses-of-a-new-baby?ref=seealso" target="_blank">15 Unexpected Expenses of a New Baby</a>)</p> <h2>1. You have a clear financial plan</h2> <p>Having a clear vision of where you would like to be in the future is extremely important. And though things rarely go exactly as planned, it is still important to put a plan in place. Planning for your retirement, and setting clear investing and savings goals, is crucial.</p> <p>Your financial plan should include things like a college fund, sports, music lessons, and all of the other things you want to expose your kids to. Will one parent stay at home for a while? How many children are you planning to have? Do you have aging parents that you may have to assist in the future?</p> <p>You'll also want to set aside money specifically for &quot;kid stuff&quot; such as baby proofing the house, child care, tutoring, equipment for extracurricular activities, and the list goes on. The cost of having kids is never-ending, so that must be accounted for in your overall financial plan.</p> <h2>2. You stick to a budget</h2> <p>A financial plan establishes the ultimate destination, whereas a budget acts as a GPS and governs the day-to-day details. If you struggle with budgeting, you may want to hold off on starting a family until you master the habit. Kids can throw your finances completely out of whack, and if you don't live by a budget, you can quickly find yourself drowning in debt and unable to save for retirement or your children's future. (See also: <a href="http://www.wisebread.com/stop-using-these-5-excuses-not-to-budget?ref=seealso" target="_blank">Stop Using These 5 Excuses Not to Budget</a>)</p> <h2>3. You have decent health care</h2> <p>If you are considering starting a family, decent health care is a must. When you have a child, you become responsible for their health and wellbeing. And while health care is expensive, you have to value the physical and emotional wellbeing of your family over having nice things.</p> <p>Take a look at your current health care policy to see what adjustments you need to make. Your plan should change as your family changes. When your kids are babies, it's best to have a plan that is comprehensive to cover the &quot;what-ifs.&quot; New parents need to be able to take a baby to the doctor whenever they sense something isn't right. Some of those trips may result in the doctor simply reassuring them that the baby is fine, but that peace of mind is priceless. (See also: <a href="http://www.wisebread.com/the-one-question-you-need-to-answer-to-choose-the-best-health-care-plan?ref=seealso" target="_blank">The One Question You Need to Answer to Choose the Best Health Care Plan</a>)</p> <h2>4. Saving is one of your top financial priorities</h2> <p>In order to provide stability for your family and for your future, saving money has to be one of your top priorities. Savings &mdash; emergency, rainy day, retirement, and college funds &mdash; are your source of security when life gets unpredictable. At the very least, an emergency fund with six months' to a year's worth of living expenses can protect your family from an unexpected expense or job loss. Before you add kids to the mix, work toward saving at least that much. (See also: <a href="http://www.wisebread.com/how-to-find-the-savings-strategy-that-works-for-you?ref=seealso" target="_blank">How to Find the Savings Strategy That Works For You</a>)</p> <h2>5. You have little debt</h2> <p>If you have (and value having) little to no debt, this is a sign that you are financially ready to expand your family. Kids are expensive and full of hidden financial surprises. They grow faster than expected and come with gifts and talents that need nurturing. And nurturing comes with a hefty price tag.</p> <p>You should aggressively eliminate as much debt as possible before you grow your family. This means getting rid of student loans and <a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt?ref=internal" target="_blank">paying off credit card debt</a> as much as you are able to. It is impossible to anticipate every expense you will have with kids, but you'll want to free up as much money as possible so you can provide your family with appropriate health care, child care, and education options. (See also: <a href="http://www.wisebread.com/7-easy-first-steps-to-paying-off-debt?ref=seealso" target="_blank">7 Easy First Steps to Paying Off Debt</a>)</p> <h2>6. You know how to live frugally</h2> <p>Having a family is a sacrificial endeavor. Before you have children, you must come to grips with the fact that you can't have it all and do it all. The ability to stretch a dollar and pinch pennies in tight times is a necessity. You have to know when and how to cut costs to ensure you can provide for your family long-term.</p> <p>Start looking for ways to cut costs before your children come. Visit the dollar store, start thrifting, and embrace the DIY lifestyle. Figure out a system of meal prepping that will save you both time and money. What skills and abilities do you already have that can translate into savings? Can you cut your child's hair, alter their clothes, or tutor them yourself in math? Evaluate what you already have and figure out how to put it to use.</p> <h2>7. You view family as an investment</h2> <p>The last sign that you are ready for kids directly relates to your perception of family. As a parent, viewing your kids as an investment will help you make solid financial decisions that will yield high returns. It is imperative that you analyze your financial decisions and make each one count. Maybe in lieu of buying your kids the newest sneakers, you'll get them a tutor. Instead of purchasing the latest gaming system, you'll invest in music lessons or science camp.</p> <p>Investing in your kids sets them up to win in life. This means saying &quot;no&quot; to indulging their every whim. There's nothing wrong with buying your kids designer clothes, of course &mdash; but you must ask yourself, is that a good investment and is that the best use of those funds?</p> <p>Growing your family can be one of the most rewarding decisions you'll ever make. But it certainly comes at a cost. Going down a financial readiness &quot;checklist&quot; is a smart guideline that can help set you &mdash; and your future kids &mdash; up for a successful and financially stable life.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F7-signs-youre-financially-ready-to-start-a-family&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F7%2520Signs%2520You%2527re%2520Financially%2520Ready%2520to%2520Start%2520a%2520Family.jpg&amp;description=7%20Signs%20You're%20Financially%20Ready%20to%20Start%20a%20Family"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/7%20Signs%20You%27re%20Financially%20Ready%20to%20Start%20a%20Family.jpg" alt="7 Signs You're Financially Ready to Start a Family" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/denise-hill">Denise Hill</a> of <a href="http://www.wisebread.com/7-signs-youre-financially-ready-to-start-a-family">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/7-money-moves-that-ll-protect-you-during-the-next-recession">7 Money Moves That’ll Protect You During the Next Recession</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/why-saving-money-is-harder-today">Why Saving Money Is Harder Today</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-fast-ways-to-restock-an-emergency-fund-after-an-emergency">6 Fast Ways to Restock an Emergency Fund After an Emergency</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-manage-your-money-during-a-spousal-separation">How to Manage Your Money During a Spousal Separation</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Family babies budgeting debt emergency funds financial readiness having kids health care planning saving money Tue, 06 Feb 2018 10:00:06 +0000 Denise Hill 2097695 at http://www.wisebread.com 4 Money Lessons You Can Learn From the Joneses http://www.wisebread.com/4-money-lessons-you-can-learn-from-the-joneses <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-money-lessons-you-can-learn-from-the-joneses" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/fish_holiday_concept.jpg" alt="Fish holiday concept" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>We all know a family like the Joneses. Maybe they have a gorgeous 3,000 square foot house in a posh neighborhood, while you're stuck renting a 750 square foot two-bedroom apartment. Maybe they roll up to work in a brand-new BMW Z4, while you're still puttering along in your 2001 Honda Civic. Or perhaps they go on amazing trips to Tuscany and Machu Picchu, while you've had to make do with staycations for the past few years.</p> <p>No matter who your personal Joneses are, you may feel green with envy when you see the things they have that you can't afford. It can be enough to make you spend money you don't have just to keep up with them.</p> <p>But before you purchase something you can't afford, take the time to learn what's really happening behind closed doors with the Joneses or other families like them. They may have the material things that you want, but they are also paying some steep prices for them.</p> <p>Read on to learn what money lessons the mythical Joneses can teach you, before you start trying to keep up with them:</p> <h2>1. They pay for their lifestyle with debt</h2> <p>You might be wondering how the Joneses are able to afford all of the great stuff they own. Chances are, they're in debt. According to a 2017 CreditCards.com survey, 74 percent of Americans are in some kind of debt. And according to NerdWallet's <em>2017 American Household Credit Card Debt Study</em>, the average U.S. household that is carrying credit card debt owes a whopping $15,654 to credit card companies. For 41 percent of respondents, the reason given for getting into so much credit card debt is &quot;spending more than I can afford on unnecessary purchases.&quot;</p> <p>So before you are tempted to put a luxury vacation or cute $400 shoes on your credit card, remember that other people who are living it up in Bali in their Jimmy Choos may be coming home to a truly stressful credit card bill that will take years to pay off. (See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso" target="_blank">The Fastest Way to Pay Off $10,000 in Credit Card Debt</a>)</p> <h2>2. Keeping up with them means buying depreciating assets</h2> <p>If you think about it, nearly all of the material items that you wish you owned are things that lose value over time. Cars, clothes, furniture, electronics, and jewelry all depreciate, which means you are spending money on things that simply do not last.</p> <p>While it is perfectly acceptable to spend your money in ways that make you happy &mdash; even if that includes spending money on depreciating assets &mdash; it's foolhardy to spend a great deal of money on things you only care about because they impress other people. You are chasing the trappings of wealth while actually reducing your own net worth with depreciating assets. (See also: <a href="http://www.wisebread.com/4-purchases-with-financing-options-that-depreciate-fast?ref=seealso" target="_blank">4 Purchases With Financing Options That Depreciate Fast</a>)</p> <h2>3. They're not happier than you</h2> <p>We tend to view folks who have more wealth than us as being happier. After all, if you can buy anything your heart desires, you must be more contented in your life.</p> <p>There are two problems with this assumption. First, the majority of the Joneses aren't actually wealthier than their neighbors, they're just more indebted. This means they are actually more stressed, even though they may not show it to you.</p> <p>Secondly, studies have shown that money doesn't actually buy happiness above a certain level of income (about $75,000 per year) that guarantees some financial stability and comfort. Above that point, wealth can become more of a burden than a boon. For instance, wealthy individuals may worry about who they can trust and which of their friends love them for them, rather than for their stuff. This leads to a vicious cycle of always wanting to have the latest and greatest possessions to impress one's friends &mdash; but never being sure if the friends will be there unless there's a new round of latest and greatest purchases.</p> <h2>4. They have their own Joneses they're trying to keep up with</h2> <p>The world is full of Joneses. You might envy your next door neighbors with the boat, but they're jealous of the family two streets over who have a yacht. And, of course, that family wishes they could afford the 100-foot yacht that their friends own. No matter where you are financially, there will always be someone who has more than you do.</p> <p>The truth of the matter is that comparing your life to anyone else's is a fool's errand, because we all have things we envy in other people. Even if you were able to magically trade places with your own personal Joneses, you would not suddenly feel content, because there would be a new set of Joneses to envy.</p> <h2>Gratitude is the antidote to Jones envy</h2> <p>The best way to deal with an attack of jealousy toward the Joneses is to take the time to think about all of the abundance in your life. When you list everything you feel grateful to have, including your family, your friends, your warm and safe home, and even your favorite hobby, the things you don't have suddenly become much less important.</p> <p>The Joneses may seem to have the ideal life, but taking a minute to think through all of your own blessings can help you remember that yours is pretty great, too. (See also: <a href="http://www.wisebread.com/6-ways-envy-is-keeping-you-poor?ref=seealso" target="_blank">6 Ways Envy Is Keeping You Poor</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F4-money-lessons-you-can-learn-from-the-joneses&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F4%2520Money%2520Lessons%2520You%2520Can%2520Learn%2520From%2520the%2520Joneses.jpg&amp;description=4%20Money%20Lessons%20You%20Can%20Learn%20From%20the%20Joneses"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/4%20Money%20Lessons%20You%20Can%20Learn%20From%20the%20Joneses.jpg" alt="4 Money Lessons You Can Learn From the Joneses" width="250" height="374" /></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-money-lessons-you-can-learn-from-the-joneses">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/why-even-millionaires-arent-happy-about-their-finances">Why Even Millionaires Aren&#039;t Happy About Their Finances</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-money-habits-that-make-you-look-financially-immature">11 Money Habits That Make You Look Financially Immature</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-rise-above-financial-jealousy">How to Rise Above Financial Jealousy</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-are-more-than-your-credit-score">7 Reasons You Are More Than 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/8-factors-that-could-keep-you-broke-forever">8 Factors That Could Keep You Broke Forever</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle competition debt deprecation envy happiness jealousy keeping up with the joneses materialistic possessions value Tue, 30 Jan 2018 10:00:06 +0000 Emily Guy Birken 2087011 at http://www.wisebread.com