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10 Questions to Ask Yourself Before You Ask for a Raise

Paul Michael — Mon, 22 Oct 2018 08:00:12 +0000

When was the last time you got a big raise? We're not talking about the 3 percent raise you should get every year to keep your salary in line with inflation — we're talking about a noticeable pay bump to reward you for all your hard work. Has it been a while?

You may feel like you're long overdue for that financial reward, but asking for a raise without first recognizing if the timing is right can set yourself up for a disappointing answer. So before you ask for a raise, ask yourself the following questions first.

1. Is my current salary where it should be for my position?

Salaries for identical roles vary from company-to-company, state-to-state, and country-to-country. You may not have had a significant raise in many years, but that doesn't mean you should automatically get one. Take a look at a website like Salary.com and search for your current role, your location, and your years of experience. Don't forget to add in any benefits and bonuses you may get. Now, where do you fall on the chart?

If you're right at the top of the bell curve, congratulations; you're getting what the majority of people in your position are getting. If you're to the right of that peak, you're actually earning more than average. It's only if you fall significantly left of center that you should feel a large raise is appropriate. (See also: 5 Times You Should Demand a Raise)

2. When did I last get a raise?

Again, this is going to vary depending on your profession and the current state of your industry. But usually raises are given out annually, so if you had one 10 months ago, you shouldn't expect to get a warm reception when you ask for more money. If it has been many years since you had any kind of raise beyond the meager 2 to 3 percent, and you have an excellent work history, you are definitely right to approach your supervisor and talk about money.

3. When did I start this job?

That could be read one of two ways; either your start date with the company, or the date of your last promotion. Either way, you should really tread carefully if you start asking for more money without a year of experience in that role under your belt.

Now, you could find that certain promises were not kept with regards to commissions, bonuses, benefits, or other ways you were told you'd be compensated. If that's the case, make the reasoning watertight. You took the job based on income you're not receiving, so you would like a bump in pay to make it right.

4. Do I really deserve the hike in salary?

Of course you do, right? Well, maybe not. A fat raise usually accompanies a promotion, more responsibility, or the kind of performance that makes you indispensable. Look at what you've done since the last time you got a raise. Have you been good at everything, or have you been outstanding? Did your performance meet the expectations set by your manager, or did it exceed them? Did you hit deadlines and budgets on the head, or did you come in under budget and ahead of schedule?

Sadly, "good" is just not good enough for most companies these days. They expect a dazzling performance month after month before a raise is on the table. (See also: 9 Ways an Annual Self Review Can Boost Your Career)

5. Do I really want more money, or more job satisfaction?

Money makes the world go 'round, but sometimes we find ourselves wanting more money because the job isn't giving us any other reason to show up. The role may have become stale, or the tasks uninspiring. We're not fulfilling our potential, and to compensate, we want more money in exchange for the torment we endure.

If your motivation for a raise is that the job just plain sucks, do you really want more money to stay in a role that you don't like? Is there a better solution? How about a move to a different department, or asking for more challenging opportunities that will help you grow your career? Money isn't always the answer. (See also: 5 Reasons a Big Paycheck Is Not Worth Staying in a Job You Hate)

6. How's my company doing?

Unless you've been hiding your head in the sand, you should have a good idea of how the company has been doing for the last six months to a year. Is it in a good place, a great place, or have there been troubles?

For a start, any kind of financial issues are going to make your request for money come off as tone deaf. Layoffs, cutbacks, and salary cuts spell trouble for sure, and asking for a raise when everyone is struggling is not going to go over well. Even if you believe you're being underpaid or really deserve the extra money (for example, if someone was laid off and you're doing twice the work), you must be careful how you broach the subject. Before going to the boss, put feelers out with human resources or someone in finance. (See also: The Absolute Worst Ways to Ask for a Raise)

7. Can I justify a pay raise?

"Because I deserve one" is not a good answer to the question, "Why should we give you a raise right now?" In fact, you shouldn't even let your boss get to that question. Instead, make a case for your raise right out of the gate. Start the conversation with something like, "I've been doing a lot of thinking, and I believe I deserve a pay raise for these reasons." Then, clearly and confidently explain those reasons. Don't be pushy, arrogant, or entitled.

Use specifics in your argument. "I've been doing a great job" is way too broad. Instead, list performance figures, additional hours worked, weekend work, increased sales, increased customer satisfaction, or whatever else counts as a big plus in your role. If you're having trouble thinking of any specifics right now, it's probably not the time to ask for a raise. (See also: How to Negotiate a Raise Out of the Blue)

8. How much do I ask for, and how much will I be happy with?

The two numbers are not the same. In fact, the second will probably dictate the first, because in the negotiation game, it's always better if you set the "anchor" point rather than the boss.

Let's say you want no less than a $5,000 raise. You shouldn't ask for $5,000, because it's way too easy for the boss to talk you down from that price point (they sure won't be going up from it unless they're worried you're about to quit).

When you're asked how much of a raise you'd like, go higher than your bare minimum. Maybe you ask for $10,000. If he or she says yes, great! If not, you can start negotiating back down. When it gets down to $5,000, you can accept and be happy. The boss will also be happy that the figure is lower than what you said you wanted. (See also: This Simple Negotiating Trick Puts Money in Your Pocket)

9. Will I accept other benefits instead of money?

Again, is money what you really want, or would you consider other offers that aren't directly tied to salary? For example, what if you're given an additional five vacation days per year? That has real value, especially nowadays when we all seem to be working harder than ever. If not that, would you take an offer that lets you work from home one day per week? Or how about getting additional benefits you may not be getting now, like a higher match for your 401(k), or paid conferences out-of-state (or even out of the country)? Consider everything that you could be offered instead of money, and have them in your back pocket if your request is flat-out refused. (See also: Didn't Get the Raise? Ask for This, Instead)

10. What's my plan if I'm turned down?

Be prepared for the boss to say no. You shouldn't expect to get a raise, or the amount you believe you deserve, even if you think it's overdue. If you walk into the room thinking it's in the bag, and don't have a plan for rejection, things could go badly. You don't want to get upset, angry, or walk out and slam the door.

Instead, thank your superior for his or her time, and ask when a good time would be to revisit the issue. This leaves the possibility of a raise still in the air, and allows you to try again at the appropriate period. Then, go back to doing what you do without holding a grudge or lowering your performance. Work hard, work smart, and that raise will hopefully come soon enough.

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Questions to Ask on a College Tour

Emily Guy Birken — Tue, 22 May 2018 08:30:41 +0000

For three years as an undergraduate, I worked as a campus tour guide for prospective students interested in attending my college. It was one of my favorite jobs during my college career because it gave me a chance to show off what I loved about my school and field questions about the school itself and the college experience in general.

However, it often seemed as if prospective college students and their parents didn't know what questions to ask. They would ask about what they could expect from financial aid or the possibility of landing a job post-graduation — but they often missed out on truly understanding how the school would fit with their college and career plans because they didn't think to ask follow-up questions.

When you go on a campus visit, make sure you follow up on the typical questions with further ones that really dig deep into what costs, value, and experiences you can expect from any particular school.

The typical question: What is the employment rate post-graduation?

This common question is certainly a reasonable metric. You want to know if the school and its programs prepare a student for the working world after college. But this question assumes that everyone is going to school just to get a job.

What if you are interested in majoring in music, or philosophy, or fine arts, or history, or — horror of horrors — English? Asking about the employment rate post-graduation for these sorts of programs is never going to sound as promising as the rates for nursing, engineering, and accounting programs.

The follow up: What is the student loan default rate?

The answer to this question can be far more illuminating than the employment rate question, because it can help you to see if the school is truly preparing you for a life of economic security. For instance, the Maryland Institute College of Art (MICA) boasts an incredibly low 2.2 percent default rate for undergraduates — whereas the national average default rate for student loan borrowers is 11.3 percent.

There's a good reason why MICA brags about this rate. It tells prospective students that though they will be studying fine arts — which is a major that's not known for its high employment rates — they will learn plenty of applicable skills that will help them to land a job, even if it's in a different field.

Many liberal arts schools like to say that they are teaching their students how to think critically, research, and write, which will be useful in any field post-graduation. Asking about the default rate can give you a better sense of whether or not the school in question really follows through on those promises. (See also: What Really Happens When You Don't Pay Your Student Loans)

The typical question: How many students receive financial aid?

Prospective students want to know that there may be aid available to them if they choose a particular school. Many schools will tout just how large a percentage of students receive financial aid, which can help to alleviate fears that a particular school might be economically out of reach.

But not all financial aid is created equal, and knowing that 70 percent of students at a particular school receive aid does not tell you everything you need to know.

The follow up: What is the ratio of outright aid to loans?

When you ask how many students receive financial aid, the school representative will tell you a number that includes any students who are taking loans from the school. What students and parents really need to know is how much financial aid is made up of scholarships and grants as compared to loans.

If the ratio is tilted toward loans over outright aid, that can help you make a better financial comparison of the costs of different schools. The answer to this question can also help you to know which schools are truly committed to (and put money behind) the idea of helping students afford their education. (See also: How to Pay for College When You Didn't Get a Scholarship)

The typical question: What is the average student loan debt of graduating students?

After hearing all of the horror stories of graduates with six-figure student loans, it's natural that prospective students would want to learn the average debt load of graduates from each school. This figure can help you to determine if the school appears to be within your financial reach. However, it doesn't necessarily tell the whole story.

The follow up: What kinds of financial literacy support are available to alumni?

Some schools have an unofficial, "Here's your diploma, now get outta here" vibe when it comes to helping their young alumni get on their feet. At these schools, all you can really expect in terms of financial literacy support is the federally-mandated student loan exit interview.

However, many schools offer a great deal of support for recent graduates — particularly schools that know they are a little more expensive and do not have the endowment necessary to offer more outright aid.

If the school you have your heart set on has a high average student loan debt amount, it is possible that the alumni office works extra hard to help new grads learn how to navigate their finances. Even if the school does not have a high average debt burden, it's worth asking about what kinds of financial literacy support a graduate can expect from the alumni office. It's important to remember that your relationship with the school does not end when you walk across the stage. (See also: The Financial Basics Every New Grad Should Know)

The typical question: Do I make too much to receive financial aid?

A common concern among families is the possibility that their income will disqualify their prospective student from need-based financial aid. It's a reasonable concern, and asking this question can help you to better understand the income requirements for financial aid eligibility — since income is the largest factor in receiving financial aid. However, income is not the only consideration for financial aid eligibility, and just asking this question might not give you all the answers you need.

The follow up: What other factors do you consider for financial aid eligibility?

It's important to remember that schools also consider a number of other factors, in addition to income, when determining who is eligible for need-based financial aid. These factors can include family size, whether or not other members of the family are also in school, number of assets, and even the parents' ages. Asking this question can help you figure out if there may be some financial aid available, even if your family income is relatively high. (See also: 12 Surprising Ways to Get More College Financial Aid)

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Little Things to Do Before a Job Interview That Can Make a Big Impact

Paul Michael — Thu, 17 May 2018 09:00:27 +0000

You have an interview coming up. You've taken care of the big things. You have picked out your clothes, studied the company, reached out to contacts for information, and you updated your resume. But what small things can you do the day, or even a few minutes, before you walk into that all-important meeting to have a huge positive impact?

1. Talk yourself up

Even the most confident people get doubts before walking into an interview room. It's only natural; you're about to be grilled for 30 minutes and the outcome could have a massive impact on your life. But it's easy to let those doubts get out of hand, to the point that you couldn't imagine why you'd ever get the job.

Stop that kind of thinking in its tracks. Make a small but potent list of the reasons you are the ideal candidate. Keep it on a Post-it note, or on the home screen of your phone, and look at it before you walk into the room. Concentrate on those positives. This is the kind pep talk you are going to need to step into that room with confidence. Eliminate doubt, and remember: You are here because they want to talk to you. (See also: Use "Cognitive Crafting" to Ace Your Next Job Interview)

2. Check your appearance

You've taken care of the clothing, the shoes, the watch, and the overall presentation. But, little things can happen that can become a big distraction.

Find a quick moment to go to the bathroom and look at your appearance carefully. Is there anything stuck in your teeth? Is there a stain on your shirt? Is there a stray hair waving around, or an eyebrow hair descending into your view? How about your nails? Are they as clean as they can be (any kind of dirt under your nails is going to come across as unprofessional in most jobs you apply for). Make every effort to take care of the smallest details before you walk into the room.

3. Check your breath

Your breath can have an awfully big impact on a first impression. Even if it's due to something like a few too many cups of coffee or eating something that went heavy on the garlic at lunchtime, it can be off-putting and make you memorable for the wrong reasons.

Ideally, you will want to brush your teeth before you get into the interview room. Bring a small toothbrush and travel-sized toothpaste, or better yet, a small disposable toothbrush that comes with its own built-in toothpaste. If that's not an option, mints or gum are a good alternative, but make sure neither of those are in your mouth when you're invited into the room.

4. Practice good posture and confident body language

All those times your teachers and parents said, "Don't slouch" are about to come in handy. You don't want to be so relaxed that you look sloppy, but you also don't want to be as stiff as a board. Sit up nice and straight, elevate your chin a little, and look your hiring manager in the eye.

Although folding your arms does not necessarily mean that you're closed off, many interviewers still think that it does; so, put your hands in your lap, and don't fidget. Don't have a cellphone at hand, as that is a distraction. And don't switch positions constantly through the interview. Your posture should ooze confidence without being noticeable. Plus, a good posture can also boost your own self esteem. (See also: 5 Things Never to Bring Up in a Job Interview)

5. Be aware of the latest news

You most likely have a smartphone, so use it. While you're in the waiting room, scan the news headlines. What's going on in the world? Is there anything that could have an impact on the company you're about to interview with?

Even if there isn't, being informed on the latest news shows that you're on top of things. The interviewer may well start off the interview with some chit chat about something that happened that day, or the night before, and if you're clueless about it, things can get awkward. You don't need to be an expert, just in the know.

6. Read through your resume one more time

You should know your resume like the back of your hand, but that shouldn't stop you from giving it another quick glance before you step into the interview room. Go over the details once again. Pick out the parts that you are most proud of, and concentrate on those in the interview. If possible, have extra copies of your resume printed out and ready to hand over to both the interviewer, and any other people he or she may have invited to sit in on the meeting. (See also: This Is What Your Resume Should Include in 2018)

7. Get a good night's rest

A good eight hours of rest the night before can do wonders for your mental state, and you should do whatever you can to make this happen.

Turn off any unnecessary lights or electronic devices, as the darker the room the better you'll rest. Turn down the heat, or turn up the A/C. Scientists recommend a temperature as low as 60 degrees for optimal sleep, but between 60 and 67 degrees is the given range. And make sure you have closed all windows and other possible means of distraction; a barking dog at 3 a.m. will not be welcomed. Also, don't use alcohol or medication to help you drift off. They may help you get to sleep, but they do not help you stay asleep.

8. Give yourself plenty of time to get there

Plan your route, and plan alternate routes just in case something happens. Most GPS systems will give you detour options if you hit a sudden jam, but even they can be a nightmare to negotiate, especially if it is miles to the nearest exit.

So, consider how long it usually takes to get from point A to point B, and leave early to make sure you are there on time. You don't want to be rushing, or frantic to the point of panic. It will show when you arrive, and you'll be known as the sweaty, flustered candidate that cannot get organized. It's better to be 20 minutes early than five minutes late. (See also: 10 Things You Should Never Do During a Job Interview)

9. Read over the job posting

Why bother? You already applied, your application was accepted, and you're about to step into an interview room. Well, the last thing you want to do is look unprepared. It may have been weeks, or even months, since you last read the job description and you don't want any questions to take you by surprise. In particular, look at the skills or duties required in the role to which you applied. Pick out the ones that align closest with your own skill set and be sure to bring them up in the interview.

10. Have questions ready to ask the interviewer

Remember, you're not just there to answer questions, but to ask them as well. In fact, some hiring managers place more emphasis on the questions you ask than how you answer the ones they shoot at you.

Your questions, if they're smart and probing, show the interviewer that you've done your homework, care about the role, and want to be as informed as possible when making your decision. This, in turn, says a lot about you as a candidate. Almost every interviewer will ask you if you have questions at some point, and if you look lost or mumble and stutter, you may well take yourself out of the running right then and there. (See also: 15 Questions You Should Always Ask at the End of a Job Interview)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

What You Should Ask Your Financial Adviser at Your Annual Meeting

Matt Bell — Tue, 17 Apr 2018 08:30:09 +0000

The decision to work with a financial adviser is not a one-and-done type of deal. You need to stay engaged and informed. While you probably covered most of your key financial questions in your first meeting or two, you should continue to meet at least on an annual basis. Here are some important questions to explore when you do.

Is my investment mix still appropriate?

When your adviser first put your financial plan together, he or she probably had you fill out a risk tolerance questionnaire or asked you questions directly. That information, coupled with your investment time frame, helped determine your portfolio's optimal asset allocation — the mix of stocks and bonds that's generally best for someone in your situation.

But your situation is ever changing. You're getting older, which could spell the need to make your portfolio a bit more conservative. Or changing market conditions might reveal something about your risk tolerance that the questionnaire couldn't catch. There's nothing like a real market downturn to find out just how risk-tolerant you really are.

So, one key question to keep on the table is whether your portfolio is allocated appropriately. (See also: The Basics of Asset Allocation)

How will you help me navigate the next bear market?

This question could just as easily be, "How will you help me navigate the next bull market?" It depends on where we are in the market cycle. At the moment, we're still in the midst of a very long-running bull. But just as surely as night follows day, bear markets follow bull markets. President Kennedy once said, "The time to repair the roof is when the sun is shining." Right now is a good time to talk about your adviser's plan for the bear market to come.

When the market changes direction, are you expected to grit your teeth and ride out the storm? Or does your adviser plan to make changes to your investment holdings? If so, what changes will be made and what will trigger the need to make them? If your adviser plans to make adjustments, hopefully he or she will base them on clear, objective criteria. Make sure you understand them.

This is all about expectations management. The better you prepare yourself for challenging market conditions and the actions your adviser may take to steer your investments through those conditions, the better you'll be able to sleep at night when they appear. (See also: 6 Investment Truths to Remember When the Stock Market Is Down)

What if a bear market hits at the start of my retirement?

If you're within 10 years of retirement, it's not too early to ask this question. For the unprepared, a bear market that hits right at the start of retirement can be devastating. This is why some advisers recommend taking a "bucket approach." One bucket contains cash, or very conservatively invested money. It should contain enough to cover three to five years' worth of the living expenses that your adviser predicts you'll have once you've spent your monthly payouts from Social Security or other guaranteed income sources. The other bucket is more traditionally invested.

When the market is in decline, you use the first bucket to draw money for living expenses. That way, you can avoid selling more volatile investments while they're falling or recovering. When the market is growing again, you draw from that bucket and also use it to replenish your cash bucket.

What's your adviser's perspective on this approach? What else does he or she recommend if the start of your retirement coincides with a market downturn?

What's my Social Security contingency plan?

Your financial plan surely includes an assumption about the age when you plan to take Social Security. If you intend to wait at least until your full retirement age (67 for anyone born in 1960 or later), what contingency plan does your adviser recommend in case you're not able to wait that long?

Many of today's retirees left the workforce earlier than they expected due to medical problems, the need to care for a loved one, or a corporate downsizing. Your plan should include a contingency in case something similar happens to you. (See also: How to Plan for a Forced Early Retirement)

Should I consider an annuity at some point?

An immediate annuity purchased upon retirement or shortly thereafter could provide some invaluable peace of mind, especially if it covers much or all of your essential living expenses. Generally, what does your adviser think of immediate annuities? And how does he or she recommended sorting through the myriad decisions related to annuities, such as: whether to base benefits on your life only or your spouse's as well, whether to include an inflation rider, whether to include a "period certain" provision whereby benefits would continue being paid to your spouse or heirs even after your death.

What annuity companies does your adviser recommend and will he or she earn a commission from the sale of an annuity provided by one of those companies? Are there other annuities available to you that may offer better terms but no commission to your adviser?

Also, what does your adviser think of longevity annuities? This type of annuity helps protect against the financial risk of a long life. You might purchase it for a lump sum when you are 65 or 70, with benefits not kicking in until you are 80 or 85. Should you plan to purchase one?

Just because you're working with a financial adviser doesn't mean you can think of yourself as having outsourced your financial life. Stay involved, see it as a partnership, and keep asking informed questions.

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This article is from Matt Bell of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Tough Questions About Debt, Answered

Denise Hill — Wed, 11 Apr 2018 08:30:09 +0000

We've all heard the tales of financial woe that befall people who fail to pay their debt, die without a will, or go through a nasty divorce. But what is the truth? Is there a such thing as credit jail? Can filing bankruptcy give you a clean financial slate? Are you responsible for an ex spouse's debts?

We're answering some of your most pressing debt questions. As always, it's important that you do your own research — each situation is different and laws and regulations change on a case-by-case basis. This is your jumping off point. Now, let's get started.

1. Is failing to pay debts ever a jailable offense?

The quick answer to this question is no. And to take it one step further, according to the Federal Trade Commission (FTC), it is against the law for debt collectors to threaten you with incarceration.

You can be sued for the debt, your wages can be garnished, your bank accounts frozen, your assets seized, and a whole slew of other nasty things can befall you for failing to pay, but going to jail isn't among the list of possible consequences.

The caveat and exception to this rule is if you owe child support or taxes. The IRS usually doesn't impose jail time for nonpayment. Incarceration is reserved for those who lie, cheat, and try to defraud the system. In both cases — tax evasion and failure to pay child support (technically contempt of court) — you have options. You can, in most cases, maintain your freedom while you catch up — but you have to be proactive and compliant. (See also: Here's What Happens If You Don't Pay Your Taxes)

2. Should I borrow from retirement to pay off debt?

This is a tricky question and the answer can vary based on your situation. In most cases, the answer is no.

Most financial advisers will tell you there are a plethora of options you should explore before tapping your retirement accounts. You should seek to exhaust these options before borrowing against your 401(k) or raiding your IRA. You may be hit with early withdrawal fees and you could seriously derail your future earnings.

Borrowing from your retirement is usually a quick solution to a deeper issue. You will treat the symptom, but fail to fix the problem. And, if you do it once, chances are you'll do it again. Don't use tomorrow's resources to pay for today's mistakes. Find another way. If you feel that this is the only option, please consult a financial adviser before you do. (See also: 6 Foolish Ways to Pay Down Debt)

3. If I divorce my spouse, am I responsible for their bills?

The answer to this question is a firm, "It depends." Here's where you have to do some research and may need to seek legal advice.

Your level of responsibility as it pertains to an ex-spouse's debt depends on a few key factors. Your state's laws and whether or not you signed the credit contract are the top two issues. In most cases, if your John Hancock is on the contract, you are liable.

During the divorce process, couples should agree on who owes what and who will pay, and have it outlined in their divorce decree. The important thing to note here is that the decree establishes who should pay — however, from a legal standpoint, if you signed a credit contract, you are liable if your ex-partner fails to make payments. (See also: How to Protect Yourself Financially During a Divorce or Separation)

4. Is there a statute of limitation on debt?

Every state establishes its own statute of limitations for debt. Each type of debt has its own time-frame. It can be as few as three years, or as many as six. You need to research the laws for your state and for your particular debt to determine the expiration period.

That said, the fact that time has expired doesn't erase the debt. The statute of limitation limits the creditor's ability to sue you and to gain a court order for repayment. The creditor can still pursue repayment of the debt past its expiration as long as it adheres to the Fair Debt Collection Practices Act. The only way to eliminate or erase a debt is to pay it, have it canceled by the lender, or have it discharged in bankruptcy. (See also: What to Do When a Creditor Sues)

5. I have defaulted on a payday loan. What happens now?

You already know this, but I must state it for the record: Payday loans are bad news. They are expensive, and defaulting is going to cause you massive amounts of financial heartache.

Payday lenders aggressively go after borrowers who don't pay. And if you are sued, it's not just the debt you are on the hook for — you can also be held responsible for the legal fees and additional interest that accrues during the process. It's a web that could take you a lifetime to untangle.

If you do have a payday loan, you've got to attack it. You should prioritize it over all your other debt. Time is your enemy, so you must rush to get rid of it as quickly as possible. Work with the lender to keep the debt in good standing. Get a second job, cut all unnecessary spending, and save every single dollar to pay it off. (See also: How to Protect Yourself From Predatory Lending)

6. Does filing for bankruptcy absolve all debt?

No. There are two common types of bankruptcies most people file:

A chapter 7 bankruptcy liquidates all of your nonexempt assets to pay off creditors. It's the advisable option if you have massive amounts of unsecured debt, such as credit cards and medical bills, and very little or no income.
A chapter 13 bankruptcy adjusts your debt using a repayment plan. This option is advisable if you have stable income and secured debt such as a home or car loan, but are so far behind on payments that you are facing legal action (foreclosure or repossession of valuable items).

Making your debt magically disappear may seem like a great idea, but bankruptcy has a dark side. It doesn't (except in rare cases) get rid of mortgages, student loans, taxes, alimony, or child support. And the court could order that some of your property be sold to help pay off the debt. Declaring bankruptcy also wreaks havoc on you credit score for years to come. Once you file, chapter 7 remains on your credit report for 10 years and chapter 13 stays for seven.

Before plunging into bankruptcy, you should consult a CPA or other certified financial fiduciary, and an attorney. Ensure you fully understand and consider the long-term impact bankruptcy will have on your financial life. (See also: 11 Steps to Take When Bankruptcy Is Your Only Option)

7. If a family member dies, am I responsible for their debt?

The short answer is no. According to the FTC, family members of the deceased are not obligated to pay the debts of a deceased relative. The deceased's estate owes the debt, not you. This means before the estate is liquidated and divvied up according to your relative's will, all debts must be paid.

If the estate isn't sufficient to cover the debts, the debts go unpaid. Family members are not obligated to pay. However, for every rule, there is an exception. You could have to pay the debt if you co-signed the debt, live in a community property state such as California, or were married to the deceased. It should also be noted that if you are the executor of the estate, you must make sure all of your loved one's debts are satisfied before you liquidate it. If not, you could be held responsible for the debt. (See also: Who Pays When Loved Ones Leave Debt Behind?)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

11 Basic Questions About Retirement Saving Everyone Should Ask

Damian Davila — Tue, 13 Mar 2018 10:00:06 +0000

Saving for retirement is critically important — we all know that. But sometimes, the confusing details can throw us off course or prevent us from doing all we can to properly grow our nest egg.

Education is the best tool when it comes to most matters of personal finance. And for retirement planning, there are some facts everyone should know. It's time to ask yourself these questions and brush up on the basics of retirement savings.

1. When can I start contributing to a retirement account?

With a traditional or Roth IRA, you can generally start contributing funds as soon as the account has been set up. However, rules can vary for employer-sponsored 401(k) plans. Some 401(k) plans may have a waiting period ranging from six to 12 months to make your first contribution, while others may allow you to contribute immediately. It's a good practice to check all applicable rules for your workplace retirement plan at the time of sign-up and again during every open enrollment period. (See also: 8 Critical 401(k) Questions You Need to Ask Your Employer)

2. How much can I save in each type of account?

You can sock away the most money per year in a 401(k). In 2018, you can contribute up to $18,500 to a 401(k), and an additional $6,000 in catch-up contributions if you're over age 50. By comparison, you can only contribute up to $5,550 to an IRA ($6,500 if over age 50). Due to its higher contribution limits, a 401(k) is a very beneficial account for those trying to make up for low savings in previous years or those close to retirement age. However, if possible, having both types of accounts is the even better option. (See also: 401(k) or IRA? You Need Both)

3. Am I taking advantage of the company match?

If you're offered a company match, you must take advantage of it. And since 94 percent of Vanguard 401(k) plans provide employer contributions, chances are that you have access to a workplace savings plan with a matching formula.

A common formula for matching is $0.50 per dollar that you contribute up to 6 percent of your annual pay. This means that a worker making $50,000 per year could receive an extra $3,000 in employer matching contributions by contributing $6,000 of their annual salary into a 401(k). Some might say there's no such thing as a free lunch, but an employer match on your 401(k) truly is a freebie. (See also: 7 Things You Should Know About Your 401(k) Match)

4. What happens if I change jobs?

From the date that you separate from your employer, you should aim to decide what to do with your 401(k) balance within 60 days. The reason for 60 days is that this is the deadline to complete an indirect rollover into a new retirement account (if your employer were to cash out your entire balance and hand you a check) and pay back any outstanding loans on your 401(k) (if not paid, they become taxable income and may even trigger penalties).

Under most scenarios, you have six rollover options for your total vested account balance:

Keep your account.
Rollover account into a new or existing IRA.
Rollover account into a new or existing qualified plan.
Do an indirect rollover.
Request a full cash-out of your account.
Do a mix of the above five options.

5. Is it better to contribute after-tax or pretax dollars?

There is no right or wrong answer here, as either way offers a benefit. Contributing with pretax dollars (traditional IRA, 401(k)) allows you to reduce your taxable income by deferring income taxes until retirement, at which point you're more likely to be in a lower tax bracket. So, if you're expecting to be making more money now than you will be in retirement, you should contribute pretax money. This is the majority of American workers.

Workers just beginning their careers, workers in professions with a high upside income potential, and individuals expecting a large windfall, such as a family trust or inheritance, can greatly benefit from contributing after-tax dollars to a Roth IRA or Roth 401(k).

6. Can I withdraw money early from my accounts?

Early distribution rules vary per type of plan.

401(k)

Generally, you can only take money from a 401(k) plan early due to a hardship or extreme situation, such as avoiding a foreclosure, making a first-time home purchase, or an unexpected medical expense. However, rules vary per plan: Some plans may only offer you the option to take out a loan, while other plans won't allow you to withdraw money early at all. If you take a distribution from a 401(k) before age 59 ½, you become liable for applicable income taxes and penalties.

Traditional IRA

There are several instances in which you can take an early distribution from a traditional IRA without incurring a penalty. This includes unreimbursed medical expenses, health insurance premiums during unemployment, the purchase of a first home, higher education expenses, and others. (See also: 7 Penalty-Free Ways to Withdraw Money From Your Retirement Account)

Roth IRA

Early withdrawals on contributions from a Roth IRA can be made at any time without incurring taxes and penalties, since you have already paid taxes on the money. Withdrawing any amount that exceeds your contributions counts as earnings, and is therefore subject to tax and penalties. In order to avoid those taxes and penalties, your Roth IRA must be at least five years old and withdrawals must be used for a qualified expense, such as the purchase of a new home or a disability. Higher education costs are also exempt from penalties, but you must pay income tax on the withdrawals.

7. What are required minimum distributions?

Eventually, the IRS wants its money in the form of taxes on your retirement distributions. When you reach age 70 ½, you must begin taking required minimum distributions (RMDs) from your retirement plans. These rules apply to traditional and Roth 401(k) plans, as well as 403(b) plans, 457(b) plans, and traditional IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs. If you fail to take your RMD, the IRS will take 50 percent of the amount you should have withdrawn as a penalty.

The exception to the RMD rule is the Roth IRA, which is funded with post-tax dollars. (See also: Which of These 9 Retirement Accounts Is Right for You?)

8. Are there any tax credits for retirement contributions?

Come tax time, eligible workers can claim the Retirement Savings Contributions Credit, better known as the Saver's Credit. Depending on your adjusted gross income (AGI), you can claim 50, 20, or 10 percent of your retirement plan contributions, up to $2,000 for single filers and $4,000 for married filing jointly. For example, a married couple with an AGI between $41,001 and $63,000 can claim 10 percent of their eligible contributions for the Saver's Credit in 2018. (See also: Dumb 401(k) Mistakes Smart People Make)

9. What is the recommended 401(k) portfolio allocation?

Here's some advice from one of the most successful investors of all time, Warren Buffett: Put 90 percent of your 401(k) balance in a very low-cost S&P 500 index fund, and the remaining 10 percent in short-term government bonds. Keeping true to his word, he has included this very same advice in his will. (See also: Bookmark This: A Step-by-Step Guide to Choosing 401(k) Investments)

10. What is an HSA?

Those with a high deductible health plan (HDHP) are eligible for a health savings account (HSA), which is a way to make pretax contributions to save for medical expenses. Many HSA providers offer the option to put money in an investment account with several fund options, including mutual funds and low-cost index funds.

The main benefit of saving for medical expenses using an HSA is that you won't have to pay any income taxes on withdrawals used for qualifying medical expenses (even before retirement age). And when you do hit age 65, your HSA will basically become a traditional IRA. You can withdraw funds for any reason penalty-free, only paying income tax on the distributions. (See also: How an HSA Could Help Your Retirement)

11. Does my plan offer financial advice services?

More and more plans are jumping on the bandwagon of offering a robo-adviser (an automated service suggesting or performing certain types of transactions on your behalf). The range of trades that a robo-adviser can perform ranges from periodically rebalancing your portfolio to selling securities.

Fees can range, too: Some robo-advisers charge about 0.15 percent of your account balance or a flat monthly fee. Some plans may also offer you a-la-carte paid options to add a standard robo-adviser service. (See also: 9 Questions You Should Ask Before Hiring a Robo-Adviser)

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This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Questions to Ask Contractors Before Hiring One

Dan Rafter — Wed, 28 Feb 2018 09:00:06 +0000

Hiring a contractor to waterproof your home's leaky basement, add that dream master bedroom, or renovate your kitchen is a big decision. These projects can cost thousands of dollars. You might have even tapped your home's equity in the form of a home-equity loan or line of credit to fund the renovations.

You want to be certain that you're hiring the right people for the job. And you can do that by interviewing several contractors and asking the right questions.

1. Do you have a contracting license?

Contractors require different licenses depending on the state or county in which they do business. You want to make sure that whatever contractor you hire has the proper licenses to work on your project. Otherwise, if local government officials discover that you are working with an unlicensed contractor, they could shut down your project, leaving you with a half-finished bathroom remodel or kitchen renovation.

Licensing requirements vary widely by state, so make sure you do your research before hiring. For instance, in Florida, contractors can hold one of two license types: certified and registered. A certified contractor can work anywhere in the state, while a registered one can only work in a specific community.

In Iowa, contractors who earn more than $2,000 for the year must be licensed with the Iowa Division of Labor, while in Indiana, the state only licenses plumbers. All other contractors are licensed at the local level, having to earn licenses from the individual municipalities in which they work.

Because states and individual counties and municipalities vary so widely in licensing requirements, it's best to call your local government before hiring anyone.

2. What kind of insurance do you have?

Any contractor you hire should have three types of insurance: personal liability, workers' compensation, and property damage. And don't just ask contractors if they have these policies. Ask to see the actual certificates of insurance.

If your contractor doesn't have these forms of insurance, you could end up paying big for any injuries or property damage that occurs during your home-improvement project.

3. How long have you been in business?

It's not always true that the most experienced contractors are the best. It's equally untrue that contractors newer to the business will cause you grief. But in general, more experienced contractors know how to stick to schedules and budgets. They've also experienced the common problems that can come up on a construction site and are more likely to know how to resolve them. (See also: 9 Home Improvements You Should Always Negotiate)

4. Can I contact past customers?

Before hiring any contractor, it's important to speak with their previous customers. These past clients can tell you how well the contractors stuck to schedules, if the budget on their project steadily swelled, or how well they cleaned up after themselves on a job site. They can also tell you whether the work the contractors did was high quality and worth the cost.

If a contractor can't or won't provide you with references? Hire someone else.

5. Will you use subcontractors on this job?

Many contractors rely on subcontractors to complete a renovation project. Your general contractor, for instance, might hire an electrician or plumber to help finish your job.

There's nothing wrong with this. But you want to make sure the subcontractors are reliable and that they also carry the right amount of insurance. If they aren't reliable, they could slow down your project. And if they don't have enough insurance coverage, you could again be responsible for paying for damages or injuries on your job site.

6. Will I need a permit?

It varies by local municipality, but your construction job, even if it seems like a small one, might require a government permit. Even something as small as installing a backyard fence might require one. Ask your contractor about this. Contractors who work in your area should know whether a permit is necessary for your job and what steps you must take to qualify for one.

7. How long will my job last?

Anyone who has worked with contractors knows that construction schedules can, and usually do, change during a job. But you will want at least a rough estimate of how long your home-improvement project will take. (See also: 10 Home Renovations That Almost Pay for Themselves)

8. How will payments be handled?

Ideally, you'll want to pay for your construction project throughout the process, making payments after your contractor reaches certain milestones. This will give you more financial protection than if you pay upfront. And if contractors are falling behind schedule, they might be more inspired to catch up if they won't receive their money until after they hit a goal.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Questions All Rookie Investors Should Ask

Matt Bell — Tue, 06 Feb 2018 09:30:08 +0000

The first time you got behind the wheel of a car, you were probably a little intimidated. The same can be true if you're just getting started with investing. Here are some questions that may be on your mind, along with answers designed to help you begin your investing journey with the knowledge you need to succeed.

1. Why should I invest?

Especially if you're young, investing might not seem very urgent. Investment goals, such as retirement, may seem distant and vague.

The financial services industry has tried everything to get people to recognize the importance of investing for retirement, even using photo-enhancing software to show young people what they may look like when they're 65 or 70. A 2012 Merrill Edge study actually found the tactic somewhat effective in motivating people to save more for their later years.

Assuming you don't have access to such technology, maybe the best way to find the motivation to invest is to consider the cost of waiting. Crunching the numbers just may be the wake-up call you need.

2. What's the harm in holding off a little while?

The sooner you start investing, the less you'll have to invest each month in order to meet your goals.

Let's say you're 25 years old, plan to retire at age 70, and want to accumulate $1 million by then. Assuming a 7 percent average annual return, you would need to invest about $275 per month. Even waiting just five years will significantly increase that amount. Starting at age 30, you would need to invest about $361 per month in order to accumulate $1 million by age 70.

Here's another way to think about it. If you invested $200 per month from age 25 until age 70 and generated an average annual return of 7 percent, you'd end up with about $733,804. Wait until age 30 to start investing $200 per month, and you'll end up with $512,663.

That's amazing, isn't it? By investing for just five fewer years, you will invest just $12,000 less than if you had started at age 25. And yet, because of the power of compounding — more accurately, because of missing out on five years' worth of the power of compounding — you'll end up with about $221,000 less. That's a huge penalty for waiting. (See also: 11 Investing Tips You Wish You Could Tell Your Younger Self)

3. How much should I invest?

To get a general sense about how much to invest each month, use the Fidelity Retirement Score calculator. Once you run some initial numbers, you'll be able to see how changing some of your variables, such as how much to invest and when to retire, will impact your how much money you end up with.

4. Should I use my company's 401(k) plan or an IRA?

The key to answering this question is whether your employer offers a match on some of the money you would contribute to its 401(k) plan. If so, start there.

In a typical arrangement, an employer will match your contributions up to 6 percent of your salary. If yours will contribute a dollar for every dollar you put in, that's a guaranteed 100 percent return on your money. If it will match 50 cents for every dollar you contribute, that's a guaranteed 50 percent return on your money. Don't miss out.

If your employer doesn't offer a match, the decision depends on the investment options it offers. There are still some employers whose plans contain a strange mix of mutual funds with high fees (you should not be limited to funds with "expense ratios" higher than 1 percent). If that's the case with your employer's plan, you may be better off using an IRA. However, even with a solid 401(k) plan at your disposal, don't think an IRA isn't for you. Contributing to both plans can give you a further leg up in your retirement savings strategy. (See also: 401(k) or IRA? You Need Both)

5. What should I invest in?

It used to be a lot more complicated and intimidating to figure out what investments to make. Today, target-date funds have simplified the process. By choosing a single mutual fund that has the year of your intended retirement date as part of its name, such as the Fidelity Freedom 2040 Fund, you'll gain a portfolio that's diversified across stocks, bonds, and other asset classes in a way that's appropriate for someone your age. As you get older, the fund will automatically adjust its investment mix, becoming more conservative as you near your target retirement date. (See also: What You Need to Know About the Easiest Way to Save for Retirement)

6. What can I expect from my investments?

In short, you can expect that the ride will not always be smooth. Last year, the S&P 500 generated a nearly 22 percent return, but in 2008 it fell 37 percent.

Investing always comes with risk, and there's no way to predict how each year will turn out. A solid approach is to build a diversified portfolio, perhaps through a target-date fund, and commit to staying with it in good years and bad.

The longer you stay invested, the better your odds of success. As Morningstar documented in its 2017 Fundamentals for Investors report, from 1926 through 2016, 74 percent of one-year returns from the U.S. stock market were positive, 86 percent of five-year returns were positive, and 100 percent of 15-year returns were positive.

As with so many things, the best way to learn about investing is to get started. Taking the steps described above should get you moving in the right direction.

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This article is from Matt Bell of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Questions to Ask When Buying a Used Car

Emily Guy Birken — Thu, 01 Feb 2018 09:30:14 +0000

Buying a used car can feel a little like a crap shoot. Is the car you have your eye on really worth the thousands you're going to spend on it? Or will you find it's held together with Band-Aids and twine after driving it off the dealer's lot?

But buying a used car doesn't have to be nerve-wracking or expensive. You just need to know what you should be asking throughout the process. These eight questions can help you to find an affordable used car that will keep you on the road for years to come. (See also: Could You Put Away a Million Dollars by Driving a Used Car?)

Questions to ask yourself

Before you even start debating the relative merits of a sedan versus an SUV, you need to ask yourself some important questions. These are going to be the basis of your used car purchasing decision, so don't think you can skip over them to get to the part where you're salivating over pictures of cars online.

1. How much work am I willing to do to get a deal?

When you buy a used car, you can spend money and save time by making a purchase from a reputable local dealer — or you can spend time and save money by buying direct from a local private seller. And whether you purchase from a dealer or a private seller, you can often find better deals if you broaden your search to include nearby cities.

This is why it's a good idea for you to recognize whether you have more time or more money at your disposal. If you know that you are not willing or able to devote a great deal of time to your search, you might not find the best price possible. And if you don't have a great deal of money to spend, your search might take longer while you try to find the right price.

2. What is my budget?

Whether you plan to pay cash for your used car or you expect to take on an auto loan, you need to start with a good look at how much car you can afford. According to the 2017 Edmunds Used Vehicle Market Report, the average price of a used car was a whopping $19,189 in 2016.

If you don't have the full cost of your new-to-you car saved up, make sure you have calculated the monthly cost of financing the vehicle. For instance, let's say you have $4,000 set aside to put down on a $19,000 car. A 48-month loan of $15,000 at 3.24 percent interest will cost you $334 per month.

Of course, your monthly car payment is not the only cost associated with buying a car. You will also need to calculate your insurance costs, since different vehicle models can have different insurance premiums. In addition, different vehicles can require varying levels of maintenance and the cost of parts, labor, and repairs can be higher or lower depending on which car you choose.

Taking the time to figure out your car shopping budget, as well as your insurance and maintenance budget, can help you zero in on the right make and model for your finances, even before you start looking for the specific car you want to buy.

3. How will I finance this purchase?

If you are planning to take on an auto loan, don't wait until after you've found the car you want to get your financing in place. Whether you are purchasing a car from a dealer or a private seller, having your financing secured ahead of time gives you an important bargaining chip. You will be empowered to negotiate with the seller in the same way that a cash buyer could. You will not be stuck with the terms offered by the dealer's financing options, and you will make it clear to a private seller that you are a motivated buyer.

To find the right loan, you can shop around among banks and credit unions for the best rates and terms. Doing this ahead of time will also allow you to make rational decisions that aren't motivated by lust for a particular vehicle that is calling your name.

Question to ask the internet

Now we get to the fun part. You've figured out your budget, so you can start looking online at local (or not-so-local, if you're willing to travel for a deal) used cars for sale. But rather than just make a list of possibilities in your price range, don't forget to do a little research on the particular makes and models that you are planning to test drive.

4. What are common problems with this make and model?

Automotive engineers and manufacturers are not perfect, which means there can be common problems with certain models that are predictable if you know a little about the brand. For instance, Honda Accord V6s released between 1999 and 2004 have a widespread transmission problem that often requires an expensive transmission replacement. While not all common problems are as costly as this one, it is always a good idea to know as much as possible about the known complaints about your potential purchase before you even go for a test drive.

If Google is not coming up with answers, consider finding a car enthusiast forum for the particular make and model you're looking to buy. Ask these friendly folks for some insight.

Questions to ask the seller over the phone

At this point, it's tempting to just go test drive the cars on your finalist list. But before you do this, you should pick up the phone and have a conversation with the dealer or seller. Here are some questions you can ask to help you narrow down your search before committing to a test drive:

5. Can you tell me about any recent maintenance or repair?

A used car has a history, which means there must have been some maintenance, and possibly some repair. You want to find a seller who is able to tell you what kinds of maintenance and repairs were recently done. If the seller claims that the 10-year-old vehicle you're interested in has needed nothing but oil changes, that could be a red flag, particularly if you know what common problems crop up on that make and model.

You should also consider pulling the car's history report from Carfax or Autocheck. That way, you can double check that the maintenance and repairs the seller claims to have done match up with those documented on the vehicle history report. (See also: How to Buy a Used Car Without Getting Ripped Off)

6. Can my mechanic look at the vehicle before I make my final decision?

If the answer is anything other than yes, hang up the phone and move on.

Questions to ask your mechanic

Once you've narrowed down the options, it's time to let your trusted mechanic give it a once-over. Since your mechanic may not feel comfortable just giving you a thumbs up or thumbs down, here are two questions to ask to help you decide if the car is right for you:

7. Did the owner do a good job of maintaining this vehicle?

A well-made car that was poorly maintained may be a worse bet than a mediocre car that was lovingly maintained. Your mechanic will be able to tell you if the previous owner stayed on top of necessary regular and irregular maintenance.

8. Did the previous owner use cheap parts or good parts?

Not all car parts are created equal. A previous owner who did repairs with low-quality, cheap parts may have done a disservice to the car (and the next owner). Other than taking the car completely apart, there will be no way to know if all replacement parts were high-quality — but asking if the easy-to-check parts are good quality can be a decent indicator that the previous owner took good care of the vehicle.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Questions Retirees Should Ask Before Starting a Small Business

Denise Hill — Wed, 17 Jan 2018 09:30:08 +0000

Retirement is a time to kick back, slow down, and do all of the things you didn't have time to do during your "clock-punching" years. But for an increasing number of retirees, becoming an entrepreneur is the new thing to do after leaving the workforce.

In fact, the Bureau of Labor Statistics reported in 2015 that the self-employment rate among retirement-aged workers (65 and older) was the highest of any age group, at just over 15 percent.

However, before diving headfirst into the pool of startups, here are a few questions you need to ask yourself before starting a small business in retirement.

1. What do you have to lose?

Unfortunately, in business, failure is a very real option. According to the Bureau of Labor Statistics, 50 percent of new businesses don't survive past five years. And if your business fails, you need to be able to survive. You must count the costs before you begin.

Answering the question, "What do I have to lose?" will help you assess and determine your risk tolerance and accurately scale your business. It will help you develop a business model that works for your lifestyle, interests, financial status, and physical health.

If you retired and are looking forward to leaving the world of nine-to-five, it makes no sense to start a business that operates primarily during these hours. If your health is beginning to deteriorate, doing work that is physically demanding with lots of heavy lifting or repetitive motions may not be the way to go. Be sure you keep your needs and limitations in mind before you begin. (See also: 8 Common Myths About Starting a Small Business)

2. How will you finance the business?

The adage, "It takes money to make money" is the truth when it comes to starting a business. You must understand that you may have to shell out — depending on the industry — large sums of money up front. Taking on huge amounts of debt, or any debt for that matter, during retirement is a tremendous risk and should be avoided if possible.

If your business requires a large amount of upfront capital, you need a plan for getting your hands on funds. Dipping into your retirement stash to pay business expenses is not recommended by most financial advisers. You may need to scale back your business plan, take on a partner, or allow others to become investors. You may even need to delay starting the business for a year or two and reduce your living expenses to help set aside funds to get the business going.

Another financial surprise that comes with new ventures is the hidden costs associated with starting a business. Again, these costs are contingent on the business type, size, and the area in which you live. Things like insurance, professional fees, permits, licenses, attorneys — and everyone's worse nightmare, taxes — can derail the business before it gets off the ground, and significantly impact your retirement nest egg. Do your homework to see which fees apply to your business in your area and plan accordingly.

3. How much time and energy will it take?

Nurturing a business in its infancy requires, time, energy, and a ton of diligence. Starting a single proprietorship with no staff, no outside financing, no products, and no facility will take a couple of months. If you factor in hiring staff, securing a bank loan, and purchasing product, the time it takes for your business to be up and running could be six months or more. And while you do have more time now that you are retired, you must understand that time affects your bottom line.

Counting the cost of becoming an entrepreneur doesn't just mean finances, it also includes sweat equity. Retirement is a different season of life and, depending on your particular circumstances and the industry you enter, you could be making a bigger time commitment than you expected.

Be sure you understand the marketplace and all of the "small" jobs that go into running a business — especially if you are doing it alone or with minimal staff. What will you do if your computer crashes or your printer breaks down right before an important meeting? Figure out what can you afford to outsource and what you can you do yourself. And most importantly, be sure you can commit the time and energy it takes to make your business successful.

4. What can you do before you retire?

If starting a business is something you know you want to do before you retire, you should do as much ground work as possible before giving up your income. It's even advisable to launch the business before you retire.

Starting a business while working a full-time job is tough (speaking from experience here), but it does have its advantages. It makes you budget your time and start small. You have to go at a slower pace, which is a good thing. You are able to learn the intricacies of the business, establish relationships, and make mistakes within a controlled environment.

If starting a business while working your regular gig is too much, see if you can shadow, intern, volunteer, or work part-time for a similar business. You can also establish your small business framework — write your business plan, become an LLC, and get any necessary licenses, permits, or certifications — so you are ready to go as soon as you retire. It is also advisable that you save, save, save to help offset startup costs, minimize debt, and to keep from disturbing your retirement funds. (See also: 6 Ways You Can Cut Costs Right Before You Retire)

5. What am I giving up?

Becoming an entrepreneur in retirement is a great way to indulge in your passion, spend your time and energy meaningfully, and earn some extra cash. But being your own boss comes at a cost. The biggest expense that comes with starting a business in your sunset years is opportunity cost.

Opportunity cost is the cost of what you're giving up while choosing to do something else. Things like spending time with the grandkids, taking tropical vacations, or even establishing a college fund for the grands or giving your kids the down payment on their dream home are all things you may have to forgo, at least for a time. (See also: How to Find Your New Identity After Retirement)

Before you make your decision, be sure you thoroughly count all of the costs. Pay a visit to your financial adviser, and discuss your options and sketch out a solid financial plan. Hold yourself accountable, know when to scale back, and know when to walk away.

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Questions Your Financial Adviser Should Ask You

Emily Guy Birken — Wed, 20 Dec 2017 10:00:06 +0000

When you're looking for the right financial planner, you are essentially interviewing someone to work for you. Any hiring manager will tell you that a prospective hire who has no questions about the job during the interview is not well prepared to become an employee. The same is true for your prospective financial adviser. If the entire meeting is only about them answering your questions, you don’t have the full story on whether or not this will be a good fit.

That’s why you should expect to hear the following questions from an adviser before you decide to entrust your financial future with them.

1. What are your financial goals and objectives?

If you don’t know where you’re going, it will be tough to know how to get there. A financial adviser who asks you this question will not only help you better understand and articulate your goals, but they’ll also be in a much better position to help you achieve them.

This is also a good way to help you and your adviser understand your values, needs, and reasonable expectations. If you simply say you want to prepare for retirement and save a little for your kids’ college funds, your adviser should dig a little deeper to help you put specifics and numbers to your goals, so that you don’t find yourself saving for a goal you don’t really want. (See also: 5 Details Your Financial Adviser May Be Ignoring)

2. What are your biggest financial concerns right now?

We all carry some sort of financial stress, and an important part of your adviser’s job is to help you arrange your finances to minimize that stress. Letting your adviser know that you are regularly losing sleep over your debt will help them recognize that getting that debt paid off is an important goal. Even if it might make better sense on paper to focus on investing while paying off debt slowly, tackling the debt more aggressively will be more beneficial to your mental wellbeing.

While many advisers will ask you to fill out some sort of risk assessment questionnaire to help determine what kind of investor you are, it’s important for them to also understand the more day-to-day type of financial thinker you are. The goal of financial planning is helping you live well on the money you have, both today and in the future, and the best financial planners recognize that they can help you by addressing your most pressing concerns.

3. What are your biggest nonfinancial concerns right now?

It’s important to remember that money does not exist in a vacuum. The nonfinancial issues that are causing you stress will also affect your financial life, so it’s important to talk through those issues, as well. That could include your concerns about your child’s education or your parents’ declining health, or your concerns that you don’t spend enough time with your family. Your financial adviser can help you figure out what aspects of your life could improve and how financial planning can help. (See also: 11 Secrets You Need to Tell Your Financial Adviser)

4. Where do you expect to be in five years?

This is a common job interview question, and it’s also a good question to hear from your financial adviser. So often, we think of financial planning as being solely about retirement and estate planning, but there are any number of important life milestones long before you reach the end of your career. Knowing where you’d like to be in the near future — and what upcoming potential issues you may be facing — can help you to determine what goals to set for yourself and with your financial adviser.

5. What do you expect to get out of this relationship?

Unmet expectations are the root of bad feelings and resentment. If you expect your financial adviser to be there for your debt payoff journey, tax questions, retirement planning, estate planning, and college savings, you’ll be sorely disappointed if your adviser is only planning on chatting with you once a year about how your retirement investments are doing. Similarly, if your adviser is usually very hands-on while you are happy to DIY anything that you can do on your own, you might find them too invasive when they make recommendations you don’t feel you need.

Laying out the expectations on both sides for how the relationship will work can help you determine if the adviser you’re meeting with will take care of your needs. (See also: 3 Reasons to Be Picky When Hiring a Financial Planner)

What to do if you don’t hear these questions

While many good financial advisers will ask you these sorts of questions during your initial interview, it’s not necessarily a given that every good financial adviser will think to ask them. That means you risk turning away a financial adviser who would be a good fit just because they didn’t ask these questions.

It can often be up to the client to take the bull by the horns. If your prospective adviser hasn’t asked deep getting-to-know-you questions, let them know that you would like to discuss these issues. Come right out and explain your financial goals and objectives, your concerns, and your expectations. This will prompt a productive discussion with a good planner who just hasn’t thought to ask these questions, and will be dismissed or minimized by a planner who isn’t actually interested in helping you.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Critical 401(k) Questions You Need to Ask Your Employer

Damian Davila — Tue, 12 Dec 2017 09:30:15 +0000

The 401(k) plan is one of the most popular ways for workers to build up their nest eggs for retirement. As of June 2017, 55 million Americans held an estimated $5.1 trillion in assets in 401(k) plans. Whether you're already enrolled or planning to enroll in your employer-sponsored retirement plan, there are several details that you should find out to make the most of it. Let's review some key 401(k) questions you need to ask your employer. (See also: 5 Dumb 401(k) Mistakes Smart People Make)

1. When am I eligible to make contributions?

Different plans have different rules. You shouldn't assume that the same rules from your previous workplace retirement savings plan will apply to that of your current job. Some plans may require you to wait at least six to 12 months before you can contribute to your account, while others may allow you to do so right away. In a review of 4.4 million 401(k) plans in 2016, Vanguard found 67 percent of plans offered immediate eligibility for employee contributions.

2. Do you offer a company match?

America is experiencing very low unemployment levels. In October 2017, the Bureau of Labor Statistics reported the national unemployment rate stood at 4.1 percent, with some states reaching even lower rates (North Dakota and Colorado recorded 2.5 percent and 2.7 percent, respectively, that same month). Looking to retain and attract talent, more and more employers match employee contributions to their retirement accounts. In Vanguard's How America Saves 2017 report, 94 percent of employers offered matching 401(k) contributions in 2016, up from 91 percent in 2013. After you find out how much of a match your workplace offers, be sure to contribute at least up to that amount. If you don't, you'll be leaving free money on the table.

3. What type of formula do you use for matching contributions?

In 2016, there were over 200 different ways in which employers matched their employee contributions, according to Vanguard. By far the most common formula (70 percent of plans) is 50 cents for every dollar up to 6 percent of your pay. Assuming that you make $50,000, this would mean that your employer would contribute up to $1,500 if you were to contribute $3,000 to your 401(k).

Here are the next two most common types of matching formulas found in the study:

$1.00 per dollar on first 3 percent of pay, then $0.50 per dollar on next 2 percent of pay (22 percent of plans).
A dollar cap, often set at $2,000 (5 percent of plans).

It's important to find out the matching formula used by your employer so that you know how much you need to contribute to your plan to maximize that match. In 2016, 44 percent of surveyed plans required a 6 to 6.99 percent employee contribution for a maximum employer match.

4. When do employer contributions become fully vested?

While all of your 401(k) contributions become fully vested immediately, funds contributed by your employer may take longer to actually become yours. Knowing the applicable vesting schedule is essential to know how much of your 401(k) you'd keep if you were to separate from your employer at any point in time.

Depending on your employer, matching contributions may be immediately yours (cliff vesting) or gradually over a period of time (graded vesting). In the Vanguard study, 47 percent of plans granted immediate ownership of employer contributions, 30 percent of plans gradually granted ownership over a five- to six-year period, and 10 percent had a three-year cliff vesting waiting period. (See also: How to Tell if Your 401(k) Is a Good or a Bad One)

5. Can I take hardship withdrawals?

In a perfect world, you would leave your 401(k) funds alone until retirement. However, life happens and it may throw you a curve ball leaving you in a major cash crunch. Some plans offer holders the ability to withdraw money early without the 10 percent IRS penalty due to hardship exemptions, such as certain medical expenses, avoiding foreclosure, and funeral and burial expenses.

Some plans may even allow you to take hardship withdrawals for less gloomy situations, such as buying your first home and paying for college expenses for yourself, your spouse, or your children. Eighty-four percent of plans offered hardship withdrawals in the Vanguard study.

6. What are my investment options?

In 2016, 96 percent of surveyed 401(k) plans designated a target-date fund as the default investment option. There are many reasons, including high expense ratios and variable return rates, why you should look beyond target-date funds and consider all funds available in your 401(k).

On average, 401(k) plans offered 17.9 funds to plan holders in 2016. Over recent years, more and more plans are offering a suite of low-cost index funds covering domestic equities, foreign equities, U.S. taxable bonds, and cash. In 2016, 57 percent of plans offered such an index "core" of funds covering at least these four asset types. Take a good look at what your 401(k) has to offer so that you can select the best funds for your unique financial goals. (See also: Bookmark This: A Step-by-Step Guide to Choosing 401(k) Investments)

7. Do you offer financial advice?

Plans may offer a wide variety of financial advice, ranging from access to a financial adviser a few times out of the year to fully-fledged management of your investments. These perks often come at a cost ranging from 0.25 to 1 percent of your account balance. Still, depending on your financial situation, getting professional advice may be worth every penny to maximize your nest egg or handle tricky tax scenarios.

Besides checking for a human financial adviser, inquire about whether or not your plan offers you robo-advisers. Often charging much lower fees than human advisers, robo-advisers can offer valuable services, including automatic portfolio rebalancing and tax-loss harvesting (selling securities that have experienced a loss to offset taxes on both gains and income). (See also: 9 Questions You Should Ask Before Hiring a Robo-Adviser)

8. Can I make Roth contributions?

If you are just starting your career, have a large upside income potential, or are expecting a big salary bump in the next few years, having the ability to make after-tax contributions to your nest egg is important. Under these scenarios, taking the tax hit early in your retirement account would make sense because you would be at a much lower tax rate now than in the future. This is why 65 percent of Vanguard 401(k) plans offered Roth 401(k) contributions in 2016. For some plan holders, a Roth 401(k) is a great way to grow contributions tax-free forever.

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This article is from Damian Davila of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Three of the Toughest Decisions You'll Face in Retirement

Matt Bell — Wed, 27 Sep 2017 08:00:06 +0000

After spending a lifetime saving for retirement, you might think (or hope) the tough financial work is over. But in reality, retirement will bring several new financial challenges. Here are three of the key questions you'll need to address along with some recommendations.

1. When should I take Social Security?

There are many options here, especially when coordinating benefits with a spouse. Understanding the rules around three important age milestones can help you think through the best choice. (See also: 5 Questions to Ask Before You Start Claiming Your Social Security Benefits)

Age 62

This is when you first become eligible to receive Social Security benefits. If you opt to take them this early, you'll get the smallest monthly benefit. While it's true that you may end up collecting benefits for the longest period of time by starting at age 62, if you can afford to do so, it's generally best to wait at least until your full retirement age (FRA). At that point, your monthly benefit will increase by 30 percent.

If you're planning to continue working to some degree in your early to mid 60s, this may be another reason to wait. Claiming Social Security benefits before your FRA will trigger an "earnings test." After you earn a certain amount (about $17,000 in 2017), for every two dollars of income, your Social Security benefits will be reduced by one dollar.

You can learn more about the earnings test on the Social Security Administration's website.

Full retirement age

If you were born in 1960 or later, your full retirement age is 67. That's the age at which you become eligible to receive what the Social Security Administration deems to be your "full" benefit.

An important consideration related to your FRA has to do with spousal benefits. If you earned significantly more than your spouse over your careers, his or her spousal benefit (half your full retirement age benefit) may be larger than his or her own benefit. While your spouse could file for spousal benefits as early as age 62, he or she will get the maximum amount only if you both wait until your full retirement ages before claiming benefits.

Age 70

While it may sound as if full retirement age is when you'll qualify for your maximum benefit, waiting until age 70 will actually give you more. When I checked my benefits on the Social Security Administration website, I found that waiting until age 70 would boost my monthly benefit amount by nearly 28 percent versus claiming it at my FRA of 67.

In addition to qualifying for this higher monthly benefit, another important reason to consider waiting this long has to do with the potential impact on your spouse. Let's say you're the husband and have been the higher earner. When you pass away, your wife will be able to trade her benefit for your larger benefit, which she will receive for the rest of her life. (See also: 6 Smart Ways to Boost Your Social Security Payout Before Retirement)

2. How much of my nest egg can I withdraw?

A long-standing rule of thumb is that you can safely withdraw 4 percent of your nest egg each year, bumping that amount up by the rate of inflation each year, without having to worry about depleting your savings before you die.

However, there are many moving parts to this equation. Your cost of living will probably vary throughout retirement, and so will the stock market's performance.

So, instead of adhering to a fixed formula, rerun the numbers each year using what some planners call a dynamic withdrawal strategy: Determine how much to withdraw based on the performance of your portfolio and your spending needs.

3. Which nest egg funds should I tap first?

If you have money in various accounts, such as a taxable account, a tax-deferred account (traditional IRA/401(k)), and a tax-free account (Roth IRA/401(k)), here's a recommended path for greatest tax efficiency.

Generally, it's best to use money in your taxable accounts first, which allows funds in tax-advantaged accounts to continue growing on a tax-deferred or tax-free basis.

Next, use money from your traditional IRA or 401(k) accounts. In fact, you have to start taking money from these accounts beginning at age 70½. That's when required minimum distribution (RMD) rules kick in. If you don't withdraw at least a specific minimum amount, you'll owe stiff penalties to the IRS.

One factor to keep in mind is that if you have substantial balances in traditional IRA or 401(k) accounts, waiting to tap any of this money until age 70½ may make your RMDs so large that they'll push you into a higher tax bracket. If that's the case, you may want to start taking some withdrawals from these accounts earlier than age 70½.

It's usually best to save your Roth IRA money for last since they are not subject to RMD rules. If you don't need the money, you can let it continue growing tax-free.

Stay in the game

While retirement may be a time when you want to step away from some of the many responsibilities you had during your working years, it's important that you stay proactive with regard to your finances. Making well thought out decisions in the three areas discussed above will go a long way toward helping you enjoy financial peace of mind in your later years.

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This article is from Matt Bell of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Mortgage Details You Should Know Before You Sign

Dan Rafter — Fri, 04 Aug 2017 08:00:06 +0000

Taking out a mortgage is a big financial commitment. Not only are mortgage loans expensive, they also represent the biggest monthly payment for most consumers' budgets.

That's why it's so important to ask the right questions before signing the documents that officially close your mortgage. Here are five key questions you need to ask your lender when looking over your mortgage documents.

1. What are my closing costs?

Taking out a mortgage isn't free. Your lender and several third-party service providers will charge you what are known as closing costs, the fees you'll have to pay for your mortgage loan. You can expect to pay from 2 percent to 5 percent of your home's purchase price in closing costs.

This means for a home costing $200,000, you can expect to pay between $4,000 and $10,000 in closing costs. That's a lot of money, and often consumers roll the amount into their final loan, which can slightly increase their monthly payment.

Fortunately, uncovering your closing costs is an easy process. Your lender must send you a form known as a loan estimate within three business days of receiving your loan application. This form includes a list of your estimated closing costs. At least three days before closing your loan, your lender will provide you with another form, the closing disclosure. This form lists your final closing costs.

It's important to study both of these forms to make sure your closing costs are what you expected them to be.

2. What is my interest rate?

When you pay a mortgage loan, a good chunk of your monthly payment will go toward interest. In fact, during the earliest years of your mortgage, a far larger percentage of your monthly payment will go toward interest than toward paying down your principal balance.

That's why getting the lowest possible interest rate makes such a difference in both the amount of interest you'll pay during the life of your loan, and how much you'll pay each month.

Here's an example: Say you take out a 30-year, fixed-rate mortgage loan for $200,000 at an interest rate of 3.76 percent. Your monthly payment — not including property taxes and homeowners insurance — would be about $927.

If on that same loan your interest rate was 4.76 percent, your monthly payment would shoot up to $1,044, not including taxes and insurance.

3. What is my monthly payment?

Your monthly payment doesn't just include the amount you pay in interest and principal. Most lenders require that you pay extra with each payment to cover the yearly cost of your homeowners insurance and property taxes.

Your lender will then take this extra money and deposit it into an escrow account. When your taxes and insurance come due each year, your lender will use this money to pay these bills on your behalf. This can add hundreds of dollars to your monthly payment, so knowing this ahead of time is important.

Don't be fooled into thinking that your mortgage payment only includes your mortgage loan. Your property taxes and insurance make a big difference in your monthly bill.

4. What type of loan do I have?

There are several types of mortgages out there. The most common are fixed loans, usually with terms of 30 or 15 years. With these loans, your interest rate remains the same until you pay off the loan, sell your home, or refinance it.

You might also opt for an adjustable-rate loan. With an adjustable-rate mortgage, the interest rate remains fixed for a set period — usually five to seven years — and then adjusts according to whatever economic indexes your loan is tied to. Your loan's interest rate could adjust every year or it could adjust every five years. It all depends on your loan's specifics.

Consumers choose adjustable-rate loans because their initial interest rates are usually lower than those you'd get with a fixed-rate loan. But adjustable-rate loans do come with more risk: When your loan adjusts, your new rate could be higher than the rate you would have had if you had gone with a fixed-rate loan.

5. Is there a penalty for paying early?

They're not as common as they once were, but some loans come with a prepayment penalty. This means that you'll have to pay a penalty — often about 2 percent of your loan's remaining balance — for paying off your mortgage before it's due. Often, lenders who charge prepayment penalties assess them if you pay off your loan in the first two to five years.

You might not worry about such a penalty. After all, you'll never pay off your mortgage loan in two to five years, right?

But a prepayment penalty may also kick in if you decide to refinance your loan or sell your home during the penalty phase. Because of this, it's best not to sign onto a loan with a prepayment penalty.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

20+ Questions to Ask During an Open House

Annie Mueller — Thu, 20 Jul 2017 08:30:14 +0000

Shopping for real estate can be daunting. It takes time and discernment to know which house is right for you. To avoid wasting time on open house visits, be prepared with these key questions. If you find a house that matches your wish list, chat with the listing agent to find out all the details you don't want to overlook.

Before you start asking questions

First things first: Pick up a copy of the property information. These are often on the kitchen counter or near the entry during open houses. Many people view the house, and then look over the information. But the disclosure statements often reveal things you'll want to see while on site; maybe there was water damage, or the carpets were recently replaced. Spend five minutes reviewing the property information so you can eyeball the improvements or issues as you move from room to room.

Some listing agents will wait near the information sheets, ready to talk to prospective buyers. If you're not ready to chat yet, say so; the agent should accommodate your desire to view the house and review the information before either of you starts asking questions.

General questions

Ask these questions to get an idea of the overall condition of the house and area.

What's the reason for the sale?

This may seem like a personal question, but it's a valid one. If the house is being sold because the owners are unhappy with its condition, need for repairs, the safety of the area, or the feel of the neighborhood, you want to know. Your goal is to understand if the reason for the sale is personal or due to an issue with the house or area.

Don't press for personal information about the owners, of course; the agent should protect their confidentiality while giving you a top-level answer. If the agent is very hesitant, or unable to provide even a generic or partial answer, note that. If you're interested in the house, you can have your own real estate agent follow up with the listing agent.

What are the biggest problems with the house?

If you ask, "Are there any major problems with the house?" then the agent may say, "No, it's in great shape." Phrasing matters. Every house has problems. This is the time to find out what those problems are. The listing agent wants to sell the property, of course, but they want the sale to be a satisfactory one.

In many states a seller's disclosure is required, and should be included with the property information. You can ask for more details on any issues disclosed:

Have there been any more water problems since the sump pump was replaced?
How extensive was the termite damage listed on the disclosure?
Have the owners done any further mold testing?

Asking for more information will help you determine if the issues have been resolved or would require additional repair or maintenance.

What are the average utility costs?

Older houses tend to be less energy efficient, and can come with heftier utility bills than you'd expect. On the other hand, the owners may have a installed top-of-the-line HVAC system, put in double-paned windows, and invested in other energy-saving upgrades. The listing agent will know, or be able to find out, the average monthly cost for utilities. It's a good idea to ask for a typical monthly cost in the winter and in the summer, so you can compare how much the energy use might fluctuate seasonally.

Has the price changed at all?

The listing agent will know the history of the house, if the listing price has dropped or increased, and the reasons for any change in price. A lower listing price can be great news for you, but multiple drops in price should be a red flag. Was the house listed much too high for the area? Or are there major issues that are keeping buyers away?

In your discussion on price, you can ask other questions to get an idea of the urgency of the sellers:

How long has the house been on the market?
Have there been other offers on the house?
Are the sellers eager to negotiate?
Are the sellers in a hurry to sell?

You may not get direct answers to all these questions, but they're still worth asking. If you are genuinely interested in the property, talking with the agent can give you insight on what matters most to the sellers. If they're in a hurry to move, for example, they might accept a lower offer with a rushed closing date.

Is this a good neighborhood for families?

Maybe you don't have a family; this is still a good question to ask, because "family-friendly" is often code for safe, clean, and welcoming. Are there community events nearby? Is there a neighborhood association? Ask the agent about the nearest places for shopping, entertainment, and dining out. If the nearest grocery store is 10 miles away but the nearest bar is just around the corner, it may not be so family-friendly, after all.

A discussion about the neighborhood is a good time to ask about area resources and attractions, as well as cost of living:

Are there any parks or natural attractions nearby?
What do people in this area like to do for fun?
What's the best restaurant nearby?
Do you know what the average income is for this area?
Where is the nearest hospital?

Room by room questions

Some questions are room-specific. Ask the agent to walk through the house with you and discuss as you go.

Kitchen

Which appliances are included? How old are they?
Have there been any major updates or renovations in the kitchen?
Are there any water issues in the kitchen?
Have there been any major repairs in the kitchen?

Basement

Are there any water issues in the basement?
Is there a sump pump installed?
Have there been any issues with mold?

Living rooms and bedrooms

How old is the carpet?
What's underneath the carpet?
Have the rooms been recently painted?
Are the window treatments included?
Have there been any renovations or updates done lately?

Bathrooms

Are there any water issues in the bathrooms?
How is the water pressure? (Ask if you can check it.)
How recently have the bathroom fixtures been updated?

Yard

Does the landscaping allow water to flow away from the house?
Are there any wet or soggy areas in the yard?
Have the owners done regular pest control?
Are there any issues with the yard or garden?

Open house etiquette

Open houses vary, but there are some common etiquette rules to follow. Don't forget to sign in; leave your name only if you prefer not to include your contact information. Be sure to greet the listing agent. Let the agent know you have questions, but don't keep them from being able to interact with other visitors. Discuss, don't dominate.

Expect to answer a few questions about yourself, such as "How long have you been looking?" A good listing agent will be trying to determine who's a serious buyer and who's there for the free mints.

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This article is from Annie Mueller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: