How To Budget For a Home: An Interactive Workbook for Teens

It’s especially important for educators to work with children on their financial literacy because a whopping 69% of parents admit that discussing finances with their children makes them uncomfortable. However, kids want to learn, with over 50% citing money management as the high-school course that would benefit them most. However, young minds are also impatient […]

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Source: thesimpledollar.com

How to Avoid Filing for Bankruptcy

The post How to Avoid Filing for Bankruptcy appeared first on Penny Pinchin' Mom.

The biggest obstacle to someone with a crushing debt burden is a lack of knowledge of how to get their arms entirely around the problem, and know how to go about making it right.

They do not understand what options are available to them, and if they do, they are unsure as to what the right first step for them is.  While many think bankruptcy is the answer, some alternatives may work better.

I can relate to the soul-crushing feeling of debt. I declared bankruptcy in 2010.  While it wasn’t my finest moment, I was able to learn from my mistakes and now live the financial life I want.  But, it wasn’t easy.  I had issues with my credit for years, and it followed me everywhere I went.

Had I known about some of these bankruptcy alternatives, I could have saved myself a lot of headaches.  Take the time to research your options before you pick up the phone to call an attorney.

 

HOW TO AVOID FILING FOR BANKRUPTCY

Debt Management Programs

Debt management programs, also called debt consolidation programs or credit counseling, is a way for people to pay off their unsecured debt using a third party debt relief company. A debt management program (DMP) works like this:

  • Customer enrolls in a DMP with a debt relief company providing them with information regarding the accounts to include in the program.
  • The debt relief provider negotiates a monthly payment and reduced interest rate with the creditor that results in the elimination of the debt in 3-5 years.
  • The customer makes a single payment to the debt relief provider, including a monthly administration fee based upon the amount of debt enrolled in the program. This fee usually ranges between $10 and $50 per month. The debt relief provider then disperses the agreed upon payment amounts to each creditor.
  • In exchange for a fixed monthly payment and reduced interest rate, creditors close the accounts so that you do not accumulate additional debt. While the act of enrolling in a debt management program does not affect your credit score, the closing of accounts will affect your debt to income ratio, as well as your credit history likely causing your credit score to dip in the beginning. However, by making consistent payments to the DMP, as well as to other financial commitments, a customer’s credit score usually rebounds quickly.

DMPs generally work well for people who are current with their payments but cannot make any progress on the balances due to high interest rates. By closing the accounts to avoid future debt, and having negotiated monthly payment and lowered interest rate, DMP customers can repay their unsecured debt within 3-5 years.

 

Debt Settlement Programs

A Debt Settlement Program (DSP) involves legal representation and for people who have a dier financial situation, but who still would like to try to avoid bankruptcy. People who enroll in a DSP go through the following process:

  • Customers stop paying the creditors enrolled in the program
  • Customers make monthly payments to the debt relief provider to fund an escrow account.
  • Over time, the customer’s accounts become severely delinquent. The lawyer assigned to the account will then reach out to creditors to negotiate a settlement of the account for less than the full amount.
  • The agreed-upon settlement is paid from the escrow account.

Debt settlement will have an adverse effect on a customer’s credit score since payments to the creditors are halted. Customers may also begin to receive collection calls from the creditor, at which time they are to inform the caller of the legal representation now handling the account. By law, this should stop the phone calls. There may also be tax implications for the amount of debt forgiven through a DSP.

DSPs are generally used by people who cannot meet all their monthly financial commitments and need to lower their monthly payments but want to avoid bankruptcy. By having the debt relief provider negotiate a settlement of less than the amount owed, customers can make progress on getting creditors off their backs in 3-5 years and then focus on rebuilding their financial future.

 

Negotiate directly with your creditors

Your creditor would much rather work with you than deal with bankruptcy.  If you have assets you can liquidate and use to pay down the debt, they may be willing to accept a lower amount.  Reach out and talk to your creditors to negotiate rates or even the balances to a more manageable amount.

If your creditors are harassing you, that is illegal and you can stop it.  Read more about how to stop collectors from calling you.

 

Just Keep Trying

If you are getting by and your budget works, there may not be a reason to give bankruptcy much thought.  Instead, work to create a debt repayment plan you can follow.  It may mean getting a second job or selling items, but there are many ways you can come up with more money to throw at your debt

The worst thing that will happen is your credit score will drop.  But, if you aren’t trying to get new credit for any reason, I would not stress about it in the short term.  Once your debt is paid down, you can do many things to increase your score quickly.

 

Debt consolidation

Check with your lender to see if there is a way you can consolidate your debts into a more manageable payment.  You usually need to provide collateral, such as your vehicle.  Alternatively, you might be able to tap into the equity in your home by getting a new mortgage for the balance owed PLUS the equity (where you can use the equity to pay off your loans).

If you’ve tried everything, but can’t see any other way but bankruptcy, make sure you know what you are getting into before you file.  It affects you and your family.

 

bankruptcy alternatives

 

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Source: pennypinchinmom.com

Late Payments, Credit Scores and Credit Reports

A missed credit card or loan payment can have a seriously detrimental effect on your credit report. The golden rule of using a credit card is to make your payments on time every time, building a respectable payment history, avoiding debt, and keeping your creditor happy.

But what happens when you fall behind with your monthly payments; what happens when you miss a single loan or credit card payment as a result of a mistake, an oversight or a lack of funds? How will your creditor react, how quickly will the credit reporting agencies find out, and what options do you have for getting back on your feet?

How Late Payments Affect Your Credit Score

A late payment can reduce your credit score significantly and remain on your report for 7 years. It won’t impact your score throughout that time and the longer you leave it, the less of an impact it will have. However, the impact could be significant for individuals with good credit and bad credit.

As an example, if you have a credit score of 750 to 800, which is towards the upper end, a late payment could knock up to 710 points from your score. More importantly, it will remain on your payment history for years to come and reduce your chances of getting everything from a student loan to a credit card and mortgage.

How Soon do Late Payments Show on Credit Reports

You won’t be hit with a derogatory mark as soon as you miss a credit card payment. The credit card issuer may charge you a fee, but by law, they are not allowed to market it as a missed payment until it is 30 days due. And this doesn’t just apply to credit card debt, it’s true for loans as well.

Providing you cover the payment within 30-days, you can avoid a missed payment mark appearing on your credit report. But as soon as that period passes, your lender will inform the major credit bureaus and your score will take a hit.

Some lenders wait even longer before reporting, so you may have as long as 60 days to make that payment. Check with your creditor to see when they start reporting missed payments.

What About Partial Payments?

Many lenders treat a partial payment the same as a missed payment, especially where credit cards are concerned. If you’re struggling to meet your payment obligations, contact your creditor in advance, tell them how desperate your situation is and inform them that you can meet part of the payment.

They may offer you some reprieve, they may not, but you won’t know if you don’t ask. However, it’s worth noting that this will only impact your score if you don’t cover the remaining credit card payment before the 30-day period is up.

To avoid confusion, we should also mention that this only applies to the minimum payment. Some credit card users get confused with the difference between a balance and a minimum payment.

Simply put, the balance is what you clear at the end of the month to avoid accumulating debt and paying interest. If you fail to pay that balance on time, your debt will simply roll over to the next month, after which you will be required to meet a minimum payment on your debt. If, however, you miss that minimum payment, then you’re at risk of your credit report taking a hit.

Reporting agencies don’t record the difference between a rolling balance and a debt. If you spend $3,000 on your card every month but pay it off without fail and without delay, you won’t accumulate interest and technically, you won’t have debt. However, at the end of the month, the reporting agencies will show that you owe $3,000 on that card, just as they would show if you had accumulated a balance of $1,000 a month for three months and let it rollover.

How Long Does a Late Payment Stay?

A late payment will remain on your credit report for 7 years. But herein lies another confusion. Just because it reduces your score by 100 points and remains for 7 years doesn’t mean you will suffer a reduction of 100 points for those 7 years. 

It generally stops having a major impact on your score after a couple of years and while it will still have an impact in that 7-year period, it will be infinitesimal by the time you reach the end.

How Many Late Payments Can You Make Before it Reduces Your Score?

One late credit card payment is all it takes to reduce your score, providing that late payment was delayed by at least 30-days. However, that doesn’t mean you can forget about it once the 30-day period has passed and it definitely doesn’t mean that all the possible damage has been done.

It can and will get worse if you continue to avoid that payment. Your credit report will show how late the payment is in 30-day installments. When it reached 180 days, your account will enter default and may be charged-off, which will reduce your score and your chances of acquiring future credit even more.

Your creditor may sell your account to a collection agency. If this happens, the agency will chase you for repayment, seeking to establish a repayment plan or to request a settlement. Accounts are often in this stage when a consumer goes through debt settlement, as creditors and debt collectors are typically more susceptible to accepting reduced settlements because the debt has all but been written off.

How to Remove Late Payments from Your Credit Report

Although rare, it is possible to remove late payments from your credit report. There are also numerous ways you can reverse late payment fees, and we recommend trying these whenever you can as it will save you a few bucks.

Here are a few options to remove late payments and late payment fees:

Use Your Respectable History

The quickest way to get what you want is to ask for it. If you have a clean credit history and have made your payments on time in the past, you can request that the fee/mark be removed. 

Write them a letter requesting forgiveness, explain that it was an oversight or a temporary issue and point to your record as proof that this will likely not happen again. Creditors may seem like heartless corporations, but real humans make their decisions for them and, like all companies, they have to put their customers first.

Request Automatic Payments

Lenders have been known to remove late payment fees if the debtor signs up for automatic payments. It makes their job easier as it prevents issues in the future and ensures they get what they are owed, so it’s something they actively promote.

They may make this offer themselves, but if not, contact them and ask them if there is anything you can do to remove the late payment. They should bring this up; if they don’t, you can. It doesn’t hurt to ask and the worse they can do is say no.

Claim Difficulties

If you claim financial difficulties or hardships and make it clear that a late payment will make those difficulties much worse, the lender may be willing to help. Contrary to what you might think, their goal is not to make life difficult for you and to destroy you financially. 

It’s important to see things from their perspective. If you borrow $15,000 and your balance climbs to $20,000 with interest, their main goal is to get that $15,000 back, after which everything else is profit. If you pay $10,000 and start slipping-up, the risk of default will increase. The worse your financial situation becomes, the higher that risk will be. 

If they eventually sell the account to a debt collector, that remaining $10,000 could earn them just a couple of hundred dollars, which means they will lose a substantial sum of money. They are generally willing to help any way they can if doing so will increase their profits.

How to Avoid Late Payments

A late payment can do some serious damage to your payment history so the best thing to do is to prevent it from occurring in the first place. It’s a no-brainer, but this is a common issue and it’s one that countless consumers have every single year. So, keep your credit card and loan payments stable with these tips.

Set Automatic Payments

Occasionally, consumers forget to pay. Life is hectic, they have a lot of responsibilities to juggle, and it’s easy for them to overlook a single payment. If this happens, it should be caught and fixed before the 30-day period ends and the credit bureaus find out. But even then, fees can accumulate, and problems escalate.

To avoid this, set up automatic payments so your minimum payment is paid in full every month. You can do this for all debt, including student loan payments. Just make sure you have the money in your account to meet this minimum charge, otherwise, you could be paying for debt on one account by accumulating it on another.

Set a Budget

A credit card is designed to encourage you to spend money you don’t have. You’re buying things you can’t afford now in the hope or expectation that you will cover them later, only to realize that you’re struggling so much you can’t even cover the minimum payment.

If you ever find yourself in a situation like this, it’s time to analyze your finances and create a sensible budget. You may feel like you have a good idea of what you’re spending each month and how this compares to your gross income, but the vast majority of consumers seriously underestimate their expenses.

Improve Your Credit by Fixing Your Debt-to-Income Ratio

Calculate your debt to income ratio by comparing your total debt (credit card payments, student loans) to your gross income. The higher this is, the harder you need to work, and the less you need to spend on your credit card. 

Your debt to income ratio should be your central focus when seeking to improve your credit score, because while it’s not considered for loan and credit card applications, it does play a role in mortgage applications and is important for calculating affordability.

Conclusion: It’s Not the End of the World

A late payment can strike a disastrous blow to your credit report, but it’s not the end of the world and you do have a few options at your disposal. Not only do you have up to 30 (and sometimes 60) days to make the payment and prevent a derogatory market, but you can file a claim to have it removed in the event that it does appear.

And if none of that works, a little credit repair can get you back on track. Just keep making those payments every month, talk with your lender when you find yourself in trouble, and remember that nothing is unfixable where credit is concerned.

Late Payments, Credit Scores and Credit Reports is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How Does a Line of Credit Work?

How Does a Line of Credit Work?

When it comes to borrowing money, you have a few options like loans and credit cards. With a loan, you receive a lump sum all at once. You then have to repay that amount, plus interest over time. You also have the option of taking out a line of credit from a bank or credit union. A line of credit is more similar to a credit card than to a loan. Let’s take a look a how a line of credit works exactly.

How Lines of Credit Work

A line of credit works like a credit card. You receive a set credit limit and your borrow money as you need. You can get a line of credit in a wide range of amounts, whether you need $1,000 or $100,000 or more. This is different from a loan, where you receive a lump sum all at once and pay it back over time. With a line of credit, you get to spread out your usage over days, months or even years. You only have to repay what you’ve actively borrowed.

For example, say you need some extra money to make some home repairs. A loan would give you $10,000 upfront (if you qualify). You almost always have to start repaying that immediately. On the other hand, you can get a line of credit for $10,000 if you think you’ll need that much. You can borrow whenever you need, say for a new roof one month and then a new kitchen the next. You don’t even have to borrow the entire $10,000 if you need. This can help you borrow in smaller amounts which makes it much easier to pay back.

Just like credit cards, lines of credit also carry interest rates. Your credit report will determine the rate and the amount of the credit line. This rate determines how much your debt grows over time. However, the rate only applies once you’ve actually borrowed and spent the money. Simply having a line of credit won’t accrue interest if you haven’t spent any of it.

To access your line of credit, you can write a special check, on the institution’s website, over the phone or in person at an institution’s branch. This is during your “draw period.” You’ll then pay back the money you borrowed, plus interest, during the “repayment period.”

How to Get a Line of Credit

How Does a Line of Credit Work?

Just like with any credit application, you’ll need to provide the lender with your personal and financial information. This includes your Social Security number, date of birth, home address, employment information, income and more. Often, it’s not enough to list the information. You’ll need to provide proof this information like pay stubs.

Lenders will also look at your credit score and credit report. They want to ensure you’re safe enough to lend to. If you have a history of making late payments or going into debt, you probably won’t qualify for a line of credit. This is especially true since lenders never know when you will actually borrow from the line of credit.

Managing Your Line of Credit

The beauty of a line of credit is that you have it there when you need it. But if you don’t borrow from it, you don’t have to pay a penny of interest. It can be used for home or car repairs, a wedding, college expenses and more.

As with any other type of credit, you should only borrow what you absolutely need. It’s equally as important to pay it back as agreed. Review your bill each month and, if you can, make more than just the minimum payment. If any extra money shows up in your budget, like a raise or a bonus, put that money toward the loan. To stay on top of your payments and avoid accruing too much interest, you might want to automate your payments directly from another bank account.

Should I Get a Line of Credit?

How Does a Line of Credit Work?

Lines of credit are good for upcoming big purchases where the total cost isn’t entirely known. Home repairs are a good example since unexpected costs do tend to spring up. You may also open a line of credit associated with your checking account if you anticipate running into overdraft fees and costs.

You’ll also want to review the fees and rates that may come with a line of credit. Fees can often includes late fees, fees for accessing your account and application fees. There may also be closing costs when you close the deal. Plus, interest rates tend to be higher for lines of credit. They’ll go even higher if your credit isn’t up to par. This will vary from institution to institution so be sure to check the paperwork or ask a representative.

Finally, it’s important to only ever borrow money when you can afford to pay it back. This means not only what you borrow, but any fees and interest you may accrue. Excessive borrowing can get you into serious trouble and debt.

Bottom Line

Lines of credit can really come in handy when you have a big purchase in the future, but you don’t know the exact cost. They allow for much more flexibility in borrowing and repaying the amounts. Plus, if you’re responsible about it, you’ll end up borrowing and repaying much less than you would with a regular loan. Just always remain aware about any fees, rates and due dates so you can stay on top of your finances and debts.

Tips for Staying out of Debt

  • The key to staying out of debt is simply to spend and borrow what you can afford. That way, it will be easier to pay back on time and in full so you don’t incur any late fees or accrue any interest.
  • If you feel yourself about to fall under a pile of credit card debt, you have the option of transferring that credit card balance to a balance transfer credit card. That will give you some time to pay back that amount at no interest. You’ll have to do so quickly, though, before the promotional period ends.

Photo credit: Â©iStock.com/andresr, Â©iStock.com/vm, Â©iStock.com/bill oxford

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From Bankruptcy to Paying $22,000 Cash for a Car

The post From Bankruptcy to Paying $22,000 Cash for a Car appeared first on Penny Pinchin' Mom.

rebounding from bankruptcy

I was recently a guest on the Masters of Money podcast.  One of the statements Phil made was “Wait a minute.  How does one go from declaring bankruptcy to paying $22,000 cash for a car?”

I had never really looked at my journey in that way.  But, when I thought about it, I realized –  “Dang!  That really is pretty awesome.”  And, what is even more interesting is how my bankruptcy was the catalyst for bringing me to the place I am today.


WHERE IT ALL BEGAN

When I was in my 20s, I was in a relationship. To be totally honest, it was destined to fail.  We were just really too different and so it was never going to work out.  However, being young, naive and in love, I was doing all I could to make it work.

For me, that meant buying things to make him happy.  But, truth be told, I was really spending money to make myself happy.  I loved money because it made me feel good.  I adored all it offered to me.

Sadly (and like so many others), it lead me down the path of financial ruin.  Well, not the money itself.  My attitude did.

I had such an adoration of money, and what I thought it was doing for me, that I misused it. I allowed it to take control of my life to try to fill some of the emptiness I was experiencing.

In December 2001, that relationship came to an end.  When it happened, I was devastated. It was a mix of sadness because it was over but honestly, more fear of me being able to support myself alone financially.

I had built up a lot of debt with him. While it was joint debt, we were not married. We both knew that we could not make ends meet alone and that we also needed to find a way to put this all behind us.  So, bankruptcy it was.

That following August, we met in Wichita, Kansas before the bankruptcy judge and it became official. I was bankrupt.

 

REBOUNDING FROM BANKRUPTCY

Fortunately for me, a few months after that relationship ended, I had moved to a new city and met the man I would eventually marry.  In fact, he proposed to me just a week after I declared bankruptcy.  Talk about a keeper!  😉

When I met my husband, I learned a lot about myself and what real love was like. I began to understand that it wasn’t in the things I gave him or he to me, but in the moments we shared. For the first time in my life, I experienced true love and joy.

He was the change I needed.

We married in June 2003 and knew that we wanted to start our family as soon as possible.  One thing we both agreed upon was that we wanted for me to quit my job and stay home with our children.  It was important for both of us that one of us was there to raise them.  We knew it would be a financial challenge, but one we felt we could overcome together.

In September 2004, our first daughter was born.  That was the same day I officially quit my job.

 

HERE COMES THE DEBT (AGAIN)

Once I was staying home with our little girl, our finances changed.  They had to. We could not spend as much money dining out and in other ways as we once did.  We both knew that.   However, we also had purchased a new home and there were things we needed wanted.

A few months before she was born, my husband purchased a pickup.  One month after Emma arrived, we went out and bought a brand new minivan.

Between the vehicles and a home equity loan to buy things for our house, we had accumulated quite a bit of debt.  We just kept juggling the bills and trying to balance it all – and not very successfully.

I started working part-time from home a few hours a week. That meant I was able to be here to take care of my baby, and was also able to bring in a little bit of cash.  It was difficult to do, but I knew we needed the money, so I kept at it.

Our son followed in March 2007.  There was no way I could still try to work the hours they needed for me to, and raise two kids. My kids mattered more.

So, I quit.

We continued getting by.  There were times when we robbed Peter to pay Paul.  We were making it, but not in the way we wanted to.

Then, one evening, my husband told me to go out to dinner with my friends.  Little did I know what would happen next.

 

THE DINNER THAT CHANGED IT ALL

After an evening of dinner and drinks with my girl friends, it was time to pay.  Most of us pulled out a credit or debit card to pay.  However, my son’s Godmother, Kathy, reached into her purse and pulled out an envelope.

I asked her what that was about, as I’d never seen such a thing before.  She explained how they were using cash for everything instead of plastic because they were trying to get out of debt.

That intrigued me, so I asked her more questions.  She told me how she and her husband had recently started to follow Dave Ramsey.  They were able to create a budget and a plan that was helping dig them out of debt.  She filled us in on some of the program and what they were doing.  That left me wanting to learn more.

When I walked through the door that evening, I sat down and started sharing all of this with my husband.  We knew that our friends did not make much more than we did, so we thought “if they can do it – so can we.”

I grabbed my computer and we started researching this Dave Ramsey.  We had no clue who he was or what he taught. The more we read, the more we were inspired to follow his plan.  We pulled out the debit card and made our purchase.  Nope.  We didn’t even sleep on it.

 

HOW WE CREATED OUR DEBT FREE PLAN

Once the Dave Ramsey books and materials arrived in the mail, we were like two kids on Christmas morning. We tore open the box and could not wait until our kids were in bed that night…..so we could read!!!

Within the week, we had started our plan.  Luckily, we had around $2,000 in the bank, so our emergency fund was already taken care of. We created a budget and a debt snowball plan and were ready to attack.

I was looking at the numbers and our plan and it hit me. I was in debt again.  However, this time, I felt as if I had brought my husband along with me.  I felt horrible that I was back in this situation.

Yes, this time around the spending was not for the same reasons as before, but it had happened. Were we going to get out of debt and just do this all over again in a few years? Why would it be different this time? Did I really learn from my past mistakes?

I started giving this a lot of thought and realized that even though the bankruptcy was behind me, my money attitude was still the same.

 

MY (MUCH NEEDED) ATTITUDE CHANGE

When I looked at the money we had spent, I realized that it was because I enjoyed spending it.  It wasn’t because I was trying to replace an emptiness in my life. Heck! I was happier than I had been my entire life.  But yet, here I was, still building debt, buying things I did not really need.

I had to do a lot of self-analysis. It began with me asking myself one simple question:

“What do you feel when you think about money?”

For me, it was simple. I loved it. I loved how I could use it to get things I wanted.  And, not having had much money growing up, I thought I worked hard for this, so I will spend it as see fit.

When I said that out loud to myself, I knew it was not healthy. Money is not here just to get the things I want.  Sure, it is fun to buy items, but those things were never making me happy.  My husband and children were doing that for me.

I took another look at the debt and knew that the money had purchased things.  Those things were replaceable and if I lost them all tomorrow, I’d be OK.  However, my family wasn’t.  There was nothing in this world that could or would ever replace them.  Ever.

In that moment I made the decision that I was no longer going to love money.  I was going to love my family – and myself – more.

For me, it meant changing my entire attitude.  Once that happened, it all started to fall into place.

 

THE PLAN WE USED – THAT WORKED!

As I mentioned above, we read the Dave Ramsey plan.  While we followed most of what he said, we also had to do some of our own research and come up with our own ways to do things.

For my husband, it meant selling some of the guns he owns (he is an avid hunter).  I sold furniture and other items that were taking up space in the basement.  We had garage sales.  Any money we made from these ventures went to our debt.

I started researching and finding ways to save more money at the grocery store.  And, as a result of my findings, some of my on-line friends encouraged me to start a blog.  (And, we all know where that lead now, don’t we.  😉 ).

Through it all, we did it.

On February 10, 2010, we made the final payment on our mini van.  We had done it.  We had become debt free.

 

THE CASH CAR

Once we were out of debt, we were able to start saving money.  It felt amazing to be able to keep more of what we earned and not have to hand it over to everyone else.

My husband and I knew that we would eventually need to replace our mini van. We started paying ourselves monthly payments – instead of a car company.  We built up that savings for many, many years.

When we had enough built up to pay cash for a car, we did not do it.  Even though we had the money to pay for it, we did not really need a new car.  That was a want.

So, we saved even more and researched and waited until the right car came along.  And, it did.  More than 2 years after we had enough money to pay for the car we wanted, we made the purchase.

There is nothing like sitting down at the dealership and writing a check for a vehicle.  There is no worry about how to fit the payment into our budget. The car is ours.  We were able to drive it home and just enjoy it.

The hard work had paid off.

 

YOU CAN TO IT TOO – I PROMISE

During our journey, I found my calling.  It was to help others, just like you, do the same thing we did.  This blog is how I do that.

I have shared many stories, tips and ideas to help you and your family save money over the years. I know some of you have been able to follow my articles and get started on your own debt free journey.

However, reading a few articles here and there can be difficult to follow. My husband and I did that ourselves.  Yes, it worked for us, but we both kept wishing we could follow a plan that would not just give us a few tools on how to do things, but really be there.

Someone who would hold our hand when we were scared. That we would have others to lean for advice.  We wished that we could celebrate our victories with others who really understood and can relate.

That led me to where I am today.  This blog.  This chance to really help others.  And, in those continuing efforts, The Financial Reboot Course was born.

 

CHANGE YOUR ATTITUDE – CHANGE YOUR LIFE

For me, the one change I needed to make was my money attitude.  I did not do that the first time around and I ended up making some of the same mistakes. History was repeating itself.

Once you can do the same thing, and really understand the root of how you feel about money, then – and only then – can you start to overhaul your finances.  If you don’t change the way you handle money, you will be destined to make the same mistakes over and over again.

I want to guide you on your own financial journey. I want you to be successful. I want you to be able to shout it from the rooftops — I’M DEBT FREE!!!!

Let me help you make the change you need at this moment in your life.  Kick start your own Financial Reboot, and leave the past in the past.

 

The post From Bankruptcy to Paying $22,000 Cash for a Car appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

How to Financially Prepare for Post-Pandemic Life

As the dust slowly begins to settle and we observe businesses putting their action plans in place to recover, we all sit and wonder what this may look like for us. How will I recover from this? How am I going to cover these unexpected expenses? How will I increase my earning potential? Whether you’re navigating the muddy waters of being unemployed, furloughed, return to office plans or continue working remotely – we have many things to consider as time continues to quickly progress. How should we handle debt? Are there any more relief programs or funding? How can we pick up the pieces and properly recuperate what may have been lost? Use the tips below to jumpstart your journey of reclaiming your finances.

Identify your financial focuses

Over the course of this year, many financial goals that were initially set needed to be tweaked or came to a screeching halt altogether. While it would be nice if we could rectify the many financial aspirations we have for ourselves and our families all at once, it’s simply not realistic. To alleviate the impounding pressure many have had to experience for a good chunk of time this year, it’s best to identify two to three key areas of focus. Not only does narrowing your focus help direct where your efforts should lie, it removes unnecessary stress so that a plan of attack can be created and executed upon. For example, if you would like to begin rebuilding your emergency fund, savings or simply get caught up on bills and other overhead expenses – make sure the actionable steps you take align with the overarching goal. This helps create tunnel vision to execute on the goal while quieting the noise of things that can be tackled at a later time. You owe it to yourself and your finances to see these goals through to the finish line.

Revisit your budget and make adjustments as necessary

Many think of budgeting like that pesky chore you put off every single week. It’s that ‘thing’ you know needs to be done, but you always find something else to do instead. However, once it’s done – you’re always glad that you did it. Even if you have to have an adult temper tantrum, pull out the pen and paper (once again) to compare your income with expenses. Has your income increased or decreased? Are there expenses that are no longer on the list? Are there certain wants or luxuries that can be temporarily put on hold until things settle down? Take all of these factors into consideration when recalibrating your budget. Since there’s an increased amount of time indoors, are there any spending habits you’ve noticed that have been on the rise? If these questions are not easily answered, commit to reviewing the last few months of your bank statements. Do you notice more to-go food orders? An increased amount of emotional or impulsive purchases? Be honest with yourself and your habits so that you can address and make changes to healthily rebuild your finances.

Adjust debt payoff plan

If you haven’t taken the opportunity to contact your creditors – consider this as a reminder! It’s imperative you maintain an open line of communication with all lenders. These conversations can potentially lead to various options being available to assist you in your debt payoff process. Remember to keep in mind that you are not the only person experiencing financial hardship, so let pride become a thing of the past and be candid. Are there relief options during the pandemic? Are interest rates being lowered because of the current climate? If I were to miss a payment, what are the consequences? Are negative remarks being reported to the credit bureaus? Be very clear in your delivery. There are thousands and thousands of people attempting to pick up the pieces on their money journey. Take some time to check all creditor accounts for the most recent balances. From there, create (or readjust) your plan based on your personal circumstances. If it’s easier to tackle the smallest debt, shift your attention to those accounts. If catching up and restoring good standing with utilities and other overhead expenses need to be addressed first, do that. There is no right or wrong way to approach your plan; just don’t adopt the spirit of avoidance.

Monitor your credit score regularly

There’s been a huge surge in personal data being compromised due to the pandemic. To protect yourself and your credit score, be sure to obtain a copy of your credit report from at least one of the bureaus (Experian, TransUnion and Equifax) and review regularly. Normally, you are allotted one free credit report every year – however, because of the pandemic you can now request your report weekly at no cost to you until April 2021. We all know there’s a lot on all of our plates, but this can be incorporated in your weekly routine to make sure information stays accurate. During your review if there’s anything that’s false, submit a dispute and be sure to have any supporting documentation that can serve as evidence to support your claim.

Even though we don’t like to admit it, life can present a lot of challenges that we may not be fully prepared for in our ever-changing adulthood journey. This pandemic has shined a light on the areas in our lives that can use some more time, intention and attention. Instead of beating ourselves up about the lack of preparedness, let’s be sure to make adjustments now so no matter what happens with the economy or the state of this country it does not have such a huge, negative impact to our financial goals. Let’s face it – even in the midst of tragedy, this year equipped us with a different level of endurance and resilience. It reminded us what really matters and where our energy should really be dedicated to. Start where you are and do what you can. Refrain from comparing your personal money story to someone else’s. We all have unique situations and obligations that influence our saving and spending plans. Dust yourself off, grant yourself grace and begin a new chapter in your financial journey.

 

The post How to Financially Prepare for Post-Pandemic Life appeared first on MintLife Blog.

Source: mint.intuit.com

Can I Get a Car Loan If I Have No Credit?

buy a car with no credit

Yes, lenders have auto loans for people with no credit, but getting one is not guaranteed. It will depend on the lender’s flexibility, the down payment you can afford, and the kind of car you want to buy. It may even depend on how you ask.

Phil Reed, senior consumer advice editor for the consumer auto site Edmunds has some good advice on how to get a car loan with no credit. He says a surprising number of people simply walk into a dealership and say, “Hi, I have no credit, and I want to buy a car.” He doesn’t recommend this approach. Instead, he offers these five tips for people who need a no-credit car loan.

1. Get Pre-Approved

If you have no credit or a thin credit profile, you should try to get preapproved for a loan before heading to the dealership. This will let you compare rates with any loan the dealer may offer. It may also give you a bargaining chip when negotiating the final deal.

If you have a relationship with a bank or credit union, you should start looking for financing there. Reed recommends making an appointment to meet with your bank’s loan officer in person.

“Make a case for yourself,” he says. That means bringing your pay stubs and bank account records with you. You should also check your credit reports, if they exist, and credit scores. You want to know as much about your credit profile as a lender would. If you don’t know your credit score, don’t worry—you can check your credit score for free every month on Credit.com.

If you can’t get a loan from your financial institution, you may be able to find a no-credit auto loan online. Just make sure it’s from a reputable lender. Credit.com can also help you find auto loan offers from trustworthy lending institutions.

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2. Negotiate a Good Price

A dealership could beat the offer you get from your bank or credit union. However, if you know you’re already approved for a loan, you can focus on comparing rates and prices instead of worrying about financing.

Reed says that it’s important to be wary. You don’t want to feel so indebted to the dealer for “giving” you a loan that you fail to negotiate the price of the car. And if the dealer’s financing isn’t better than the bank’s, at least you still have an approval in your pocket.

Having a good down payment or trade-in can also help your case. A trade-in would reduce the amount you’ll need to borrow, and a larger down payment would show the lender some commitment on your part. Edmunds recommends putting at least 10% down on a used car, so start saving now.

3. Choose the Right Car

Be sure the car you’re buying is affordable for you, even if it’s not the car you’d choose if you had more money and better credit. “If you have no credit, it’s not the time to get your dream car,” Reed says. “You have to choose the right car and the right amount [to borrow].”

You want reliable transportation you can afford. Making regular, on-time payments won’t just pay down your load, it will also build your credit, so don’t get a loan that requires higher payments than you can comfortably make.

Sites like Kelley Blue Book, Cars.com, and Edmunds can help you find information on the cars that match your budget. When you’re at the car dealership, remember your budget and don’t spring for optional add-ons you don’t really need.

4. Don’t Let Interest Rates Scare You Off

Reed cautions that when you get a loan with no credit, the interest rates you’re offered may seem appallingly high, but that’s part of the cost of having no credit history.

When you don’t have a credit score, lenders can’t assess how big of a risk they’re taking by giving you a loan. To protect the money they’re lending, they will likely treat you as a high-risk borrower, which means the loan will have a higher interest rate.

As you make payments, you’ll establish a pattern of reliably paying back money. Over time, you can improve your interest rate by refinancing. Reed says that, according to a dealership employee, a customer once lowered his interest rate from 13% to 2% in two years’ time by improving his credit and refinancing.

5. Give Yourself Some Credit, Not a Cosigner

Reed advises against cosigning—a process that involves checking someone else’s credit and using that score to qualify for a loan. It might get you a lower rate and help you get approved, but Reed says that if you bite the bullet and pay a higher interest rate rather than get a cosigner, you’ll have the opportunity to build credit.

In addition, having a cosigner will tie that person’s credit to yours, and the way you repay your car loan will influence their credit. Reed says if you’re going to do it, do it only as a last resort, and make sure the cosigner is a relative.

Bottom line, though, as Reed explains, “It’s asking a lot.” It’s better to finance the car yourself, pay on time, and build your credit. That way, the next time you need a loan, you won’t have to worry about whether you’ll qualify.

Good credit doesn’t just help you get reliable transportation: good credit can make a huge difference in improving your financial security and the peace of mind that comes with it. Start tracking your credit for free today at Credit.com. Your new car will get you moving around town, but your new credit score will get you moving up in the world.

Image: iStock

The post Can I Get a Car Loan If I Have No Credit? appeared first on Credit.com.

Source: credit.com