debt relief

A Few Simple Steps to Repair Your Own Credit

February 16, 2016 by illinois

There are plenty of professionals who would jump at the chance to help repair your credit after a financial rough patch. However, you can actually save money by repairing your own credit, as long as you have a little perseverance and follow these simple steps.

[Read: Limitations of Free Credit Scores: Know What You’re Getting]

Once you have recovered from your financial troubles, there is one final, important part of the process: credit repair. It probably seems like an impossible task to repair your own credit, but it is often safer and less expensive than using a professional. Many credit repair professionals make false promises they cannot possibly keep, and will ultimately be a waste of your time and money. Instead, use the steps listed below to take your credit into your own hands.

Step 1: Get a Free Credit Report

Entitled to one free credit report annually
Need to see what you are trying to repair

The first step in the process of repairing your own credit is of course, seeing what you need to repair. There are three major credit reporting agencies in the United States. Everyone is entitled to one free score from each agency every year. Check out annualcreditreport.com to get your free credit score today. According to the Federal Trade Commission (FTC) there are also a few other circumstances which may entitle you to additional free credit reports. These situations include:

If you are denied a credit card, a loan, any kind of insurance, or a job based on your credit score. In this case you must request a score within sixty days.
If you are offered unfavorable rates on loans, you also have sixty days to request a free score.
If you are currently not working, and intend to begin a job search in the next sixty days.
If you are a recipient to welfare benefits.
If you are a victim of identity theft, or any kind of fraud that could affect your credit profile.

If any of these situations apply to you, request a free score immediately. Additionally, certain credit card companies, such as Discovercard and USAA, are beginning to provide their clients with a free credit score with their monthly statement.

So what should you do now that you have your free score in hand? In order to begin repairing your own credit, you need to see what pars of your credit profile need fixing. Scrutinize your profile with a fine tooth comb. Look at any negative aspects closely and make sure they are accurate. Also check that negatives on your report are no more than seven to ten years old. By this point, they should have dropped off of your report and no longer affect your credit score.

2. Fix Any Inaccuracies

– Important to fix any and all inaccuracies

– Must file formal complaint

Now that you have gone over your credit report thoroughly, the next key step in repairing your own credit is fixing any errors you found on your report. There are two ways to file an error claim, either by mail or online. To file a report online you can use this website, or file on any one of the other major credit reporting companies. Once you file a claim with one agency, they will take care of reporting the others. To file a report by mail, you must send the agency your name, address, the error(s), any evidence you have of the errors, and a formal request to resolve the issue. Make sure when you are sending documentation of the errors, only send copies. You should keep all the originals. Also, be sure to clearly mark the errors and any pertinent information on the copies. The agency is required to investigate your claim within thirty days of receiving it, and inform you of the decision. If the decision is not in your favor, you are entitled to ask that a note of your argument is added to your report. After fixing the inaccuracies on your report, you are well on your way to repairing your own credit.

[Read: Damaging Your Credit Unintentionally]

3. Goodwill Adjustments

– Request removal of negative aspects on credit report

What happens if you have looked over your credit report, and you have only accurate negatives? Don’t lose hope. Every negative will drop off in time, up to ten years, there is a way to remove these even sooner. Try writing to your creditors and politely request that they remove the information immediately. If they agree, and remove the information, it is known as a “goodwill adjustment”. When requesting a goodwill adjustment, keep in mind that creditors are not required to remove accurate information, and are free to deny your request. Still, any effort to repair your own credit is worth a try. Check out this video that includes even more tips to repair your own credit.

Why Do You Desire Financial Success?

December 6, 2015 by illinois

A Step-By-Step Guide to Money Management

If you have the desire to achieve your goal when it comes to managing your money, then you need to understand what I call my big question: Why is it that you care about managing your money to begin with?

Many people just mosey through their lives without any real knowledge of where their money goes after their bills have been paid. So, why is it that you want to be the one who takes the next step when it comes to managing your budget to achieve financial success? Why are you so motivated to be more responsible when it comes to your finances?

[Read: Ways to Solve Your Debt Problems]

The Reason to Manage Your Money

I have spent many years giving speeches and writing about how to obtain financial success. I have also talked to hundreds of people about their finances and I have taken note of some very consistent similarities. I have found that people are more motivated to achieve financial success by the type of lives they will lead and the opportunities they will encounter than they are worried about the amount of money they have in their bank accounts. What I’m saying is that people don’t want to achieve financial success just to have the money. They desire financial success because they really want to leave their monotonous nine-to-five, Monday thru Friday lifestyles behind.

How to Get Started

If you want to manage your money the right way, first you should think about what that means to you. Try to think of some goals that you want to achieve. For right now, just let the thoughts flow and don’t hold yourself back, because you will do that later. Write down everything that you can think of, no matter how ridiculous it may seem. Some examples include: donating to a charity, buying those expensive shoes you love, purchasing a new vehicle, or taking that nice family vacation.

Short, Medium, and Long Term Goals

Once you’ve finished writing down all of your goals down on a sheet of paper, separate them into three separate categories:

Short Term Goals are goals that can be achieved in a year or less such as purchasing an expensive gift or going on an extravagant night out.
Medium Term Goals are goals that can be achieved within the next five years such as taking a vacation to another country or purchasing a new vehicle.
Long Term Goals are goals that will take more than five years to accomplish such as retiring or making your final mortgage payment.

Calculating the Cost

Now that you’ve written down all of your goals, write down how much each of them will cost. Taking that trip to another country may cost $3,000. Purchasing a new vehicle may cost $20,000. You need to go through every goal you’ve written down and put a dollar amount next to it.

Separate this dollar amount by the number amount of months that are between now and when you believe you will achieve that goal. You may not know when you will purchase a new vehicle, but if you think it’ll be within the next five years then write four years for your estimation (which is exactly 48 months from today). Now, for example, it will cost you about $20,000 to purchase a new vehicle, so you would divide that by 48. The answer is 416.70, so if you want to save up to buy a new car, you will need to save $416.70 dollars a month for the next four years.

Cutting Out Some of Your Goals

Now that you’ve arrived at this step, you’ve most likely realized that the amount of money you’d need to save each month is a very large sum. If we’re being completely honest, the amount of money you’d need to save is probably significantly higher than the amount that you save now. In fact, it could be more than you actually earn. In order to achieve financial success, you need to cut out those goals that you consider to be less important than the others.

If you’re putting this much thought into your goals then you’ll discover that some of them aren’t as important as others (like those new pair of shoes) while some are at the top of your list of priorities (like saving for your son to go to college).

[Read: Essential Financial Habits That Make Life Easy]

My step-by-step guide will help you understand the big question that drives you to attain your goals and achieve financial success. If you wish to investigate this topic further, then I suggest this article. The most important piece of information you’ll need is how much money to save each month in order to achieve financial success.

For even more information about this subject, check out this YouTube video:

Ready for your Start Over, Financially?

November 20, 2015 by illinois

It is common for people to make some financial errors throughout their life. After all, those who are new to managing their own finances may find that they put themselves into a lot of debt, and there are others who simply do not have much information on how financial decisions affect their life. For those who are ready to start over, financially they have several options that is going to help them out in the future. Starting over is not hard, but it will require commitment in order to see this work for the individual.

[Read: Start Saving Money By Following These Simple Steps]

Look at your Financial Snapshot

To start over, financially you need to know what you are dealing with. This means looking at what your financial look like. The information that you need:

Your income statements
Your banking information
Any debt that you have
Reoccurring bills such as mortgage and the like

Through this information you can get a better idea of what you are spending, and what you need to start doing in order to get a better grips on your finances.

Look at Savings and Credit Scores

One of the most vital aspects to start over, financially, is to look at your savings and credit scores. The better you credit scores, the better you will find yourself able to get a line of credit for bigger purchases and the like. You will also find that the more savings have, the more you are going to feel as though you are financially prepared to handle what comes your way. Keep these tips in mind:

Start establishing savings, even if it is only a few dollar per month
The goal for savings is to have 6 months of your net income in savings to live off of
Start paying down debt to help lower credit scores
Check your credit report regularly to ensure there is not something that you are missing or someone has not attacked your credit

Start Slow and Continue to Build

When people are looking to start over, financially, they often start to feel fear and anxiety due to all that needs to be done in order to get their financial portfolio to look good. However, this is why it is easier if you start slow, with small goals in mind. For example:

Start with the goal of paying down one debt at a time
Progress your goals to get more complex which will be easier once you start to see your smaller goals being realized
Even if you reach your goals, make new goals so that you are always growing financially

Stay Organized

In order to reach any goals that you have financially, you must ensure that you are staying organized. This may mean:

Sitting down with your statements once a month
Analyzing your bank account once a week or month, depending upon what you are comfortable with
This is also dealing with your home life. The more cluttered this is, the more likely you are going to stress over financials and goals that you have set.

You may want to get help in the area of getting organized. There are many self-help books out there that are dedicated to this, and can help you to start over, financially.

Ensure you are Maximizing your Paycheck

One of the best ways to start over, financially is to have more money coming in, as this can help to pay off debt faster, as well as build up savings. However, this cannot be done overnight. You have to have the expertise to go along with this higher paycheck. You can always ask for a raise if your skills match this price increase. Otherwise, you may want to utilize these tips to help maximize your paycheck:

Start to live more frugally to help with savings
Utilize money saving coupons to make your dollar go further
Only buy what you need
Stop using credit so that the vicious debt cycle can end

List your Goals

One of the best ways to ensure that you are meeting your goals is to make a list. Your list can include all the information that you hope to achieve in order to gain the financial independence that you may desire. Your list can include:

Getting out of debt
Buying a house or a new car
Setting up a savings account
Eliminate the use of credit cards completely

[Read: 4 Ways You Can Pay Off Your Debt With A Low Income]

You can utilize any types of financial goals that you may desire, and you can add to these at any time. However, people have found that when they are wanting to start over, having a list of goals is one of the best ways to ensure that they have a plan and that they stick to this. To start over, financially, it can be difficult, but it is not impossible. With these tips, a person can start the process of getting their life back into the financial shape that they always envisioned.

Pay off Debt or Invest – 3 Reasons Why You Should Do Both

October 18, 2015 by illinois

When you are in debt, choosing between paying off debt or investing can truly seem like a catch 22. If you concentrate on paying off your debt, you miss out on investment opportunities. On the other hand, focusing solely on investing means that your debt will hang over your head for even longer. So, which is the right path to take? Although it truly depends on what is right for you and your situation, consider doing both at the same time.

[Read: Why It’s So Hard to Pay Off Debt – And What You Can Do About It]

You’re Being Offered Free Money

Would you turn down free money? You would have to be crazy to do so, right? Well, if your employer offers a match program for your retirement account, you may be passing up free money by underfunding your accounts. That’s why when it comes to the choice to pay off debt or invest; experts fully support doing both, especially if your company offers a match. Begin by finding out if your employer will match your contributions to your 401(k) or retirement account. If they do and you are not taking full advantage of it, you are passing up free money. Although it may feel like you are earning less in each paycheck, the reality is that you will be saving for your future twice. You will fund your retirement account and your employer will do the same! Since you never see the money in your account, you are forced into saving, which many of us need as an extra push to plan for our futures. Use whatever extra remains to pay down your debt. This allows you to eliminate the chose of pay off debt or invest, as you can do both!

Start with Small Investments

A common misconception in the choice to pay off debt or invest is that you need a lot of money to make an investment. Forbes busts this misconception wide open. After all, how do you think others have the money to invest in the first place? Often times, it is with funds from prior investments. Start small, with as little as $500 or less, so that you still have room to pay off your debt. Some online brokers even allow investments as small as a few hundred dollars without an account opening fee or requirement. If you are, like many, thinking you still have to decide between paying off debt or investing, consider this: even if you do not have a few hundred dollars to begin with, you can save up to that. Follow this extremely simple set of guidelines and you will reach your goals in no time:

Begin by saving as little as $25 to $50 a month – choose an amount that feels manageable for your situation
Save until you have the minimum amount needed to open an account
Invest all of those savings immediately so that you are not tempted to spend them unwisely
Manage your investment and continue to repeat the first three steps so that you can add additional funds to your account

Create a Debt Plan and Stick To It

For many of us who feel overwhelmed by debt, creating a plan to pay it off can be the most daunting part. However, this is actually the most important reason why you should not limit yourself to just paying off debt or investing. This will help you establish discipline that will transfer to other areas of your life. In addition, you will begin meetings your savings goals and lessen the stress and worry that comes with financial uncertainty. Although it may seem like once you pay off debt you will still have time to invest, you do not want to continually put off your financial goals. If you want to break the cycle of debt, you need to begin now and stop looking at it as a choice between paying off debt or investing. That way, once you do free yourself of debt, you are already ahead of your financial plan! Think about your situation and how you can tackle your debt the best, all while saving for your future.

[Read: Is It Possible To Save While Paying Off Debts?]

Although it is not easy to decide not to choose between paying off debt or investing, it is the wisest choice for your future. Take this challenge head on instead of shying away from it. After all, if you still have debt and no investments for the future, your current plan of attack is not working and needs to be altered. Seize the moment and create a simple, straightforward plan that will allow you to work towards achieving two goals at once: paying back your debt and saving simultaneously.

4 Ways You Can Pay Off Your Debt With A Low Income

October 4, 2015 by illinois

Paying off your debt can be very challenging, especially when it’s high interest rate consumer debt. Owing debt that has built up year after year and left alone to accrue interest that doubles in price may be driving you off the edge. It is evident that having a low income makes it increasingly challenging to finally clean out all of your debt, and start your life anew. Low income results from a variety of a reasons and each reason holding a unique challenge in paying off that debt. Reasons spanning from job loss, low pay, and copious amount of other reasons. Some may beg to differ, but low income does not entirely inhibit your ability for being successful in life. Here are four ways you can pay off your debt despite having a low income.

[Read: Pay Off Your Debt By Growing Your Own Food!]

Account For And Document Every Dollar Spent

Having success at paying off debt with a low income requires budgeting, tracking your spending, and managing your money. To pay off your debt with a low income, these factors are very important. You must be aware and account for where each dollar is spent. You also should find options to lower any of your current costs at home and everywhere you are spending money.

Consider all options, whether they are big or small to the equation. The only way to pay off you debt with a low income is to consider all factors and cut costs from each. You can look at things like:

Your housing costs – are you able to save by downsizing, renting or sharing an apartment?
Transportation – can you take public transportation to save cash on gas or carpool?
Your energy usage- can you use a less expensive service or cut down on your usage costs?

Some options may be extreme, but this is necessary to pay off your debt with a low income. All options must be assessed and used since there is not disposable income available to spend. All savings must come from what you are paying for now in order to be effective and reach optimal resources. This will help to pay off your debt with a low income and bust the cyclic debt cycle.

Make Your Efforts Cost Effective

If you want to eliminate debt completely, you must find the epicenter of the problem and eradicate it. This becomes pretty challenging with a lower income – but it can be accomplished by lowering the interest rate you are currently paying.

Drowning in numerous credit cards with outstanding balances? Check to see if you are able to transfer the balances to a lower rate card. You can even take out a low rate loan to pay them off. Stuck with student loans? Seek to consolidate them into a lower rate. Finally, just speak with your creditors to see if they can work with you to lower your interest rate. In most cases, they are willing to work with customers to settle debt.

Decrease Food Waste

Your grocery bill can be taking up a big chunk of your monthly spending especially with a low income. You have to be cognizant of each penny that you are spending on food. If you are wasting food, this is money down the drain. The average family spends between $146 and $289 per week on groceries. If you are wasting food, this means you may be buying too much, or purchasing items that you don’t need. So, eliminate the waste and put those savings in your pocket.

Here are a few ways to decrease your food spending:

Prep and cook your meals for the week
Take lunch to work
Eliminate eating out as much as possible

These small tips may end up saving you loads on your food bill, especially when one meal while eating out may cost up to $15. Paying off debt with a low income can be challenging at times, but with small easy steps like this, it could really increase your ability to pay off debt.

Switch Your Perspective

Paying off debt with a low income is a challenge and requires cutting spending, but this can only take you so far before you run out of places to save. Another option is to discover ways to increase your income. Adding more money to the equation is especially powerful in allocating enough money to eliminating debt.

Making money may seem unpromising, especially in a situation where you have a low income, but it is possible. Whether the amount is big or small, it will help you no matter what. Having a positive perspective and believing that it can happen will lighten the situation. Look for part time work, overtimes opportunities, and even odd jobs to bring in strings of cash to help supplement your income.

Do you have a skill you can monetize? If so, that skill can earn you some extra cash. If not, there are many side hustle jobs that require little to no skill, like babysitting, walking dogs or cleaning houses. Find what works for you and utilize the extra money to pay off your debt despite your low income.

[Read: Pay off Debt or Invest – 3 Reasons Why You Should Do Both]

Paying off debt with a low income can be a challenge, but with the right attitude and commitment anything is possible.

3 Unconventional Money Moves That Will Lead to Money Saving Habits

September 16, 2015 by illinois

As time goes on, financial habits solidified in your early 20s will have a tremendous impact on your credit score and savings balance in your 30s, 40s, and beyond. Plagued by student loans, mortgages or other large financial commitments, people can understably be deterred from thinking about their long-term financial future. If you’re prepared to think ahead and build a solid financial foundation despite the apparent complexities, take into account these three unconventional money moves that you can make right now that will accelerate and strengthen positive money saving habits.

Planning for Retirement

One of the most unconventional money moves you can make while young is planning for your retirement. Swept up in tuition payments and other forms of debt, it may just seem a bit too foresighted to consider saving money for forty or fifty years in the future. Nevertheless, planning for retirement is not all about allotting a portion of your funds to an untouchable account or utilizing money you don’t have. Though it’s often overlooked, the most important element of planning for retirement is deciding what, exactly, your ideal retirement looks like.

Do you envision your retirement spent on the sunny beaches of Florida, soaking up the sunshine and retreating to your air-conditioned condo? Or does your it entail more movement — travelling and exploring your favorite cities and countries? Many people save without actually having a concrete vision of their retirement in mind. Of course, plans change and it’s important to be prepared, but a general outline of how you’d like your retirement to play out is essential. Not only will it inspire you to save for something that seems more tangible, it will also leave you with a general notion of how much to save and how often you need to in order to achieve your financial goal.

Tracking and Budgeting

If you don’t have a concrete understanding of where your money is going each month, it’s quite easy to slip into the habit of living paycheck to paycheck. Tracking your income, expenses, and personal spending can leave you with an idea of where your money is being wasted and where it should be spent instead — leading ultimately to great money saving habits. There are several apps to help you keep track of your finances, making it easier to navigate days of thoughtless splurging (ie: brunch with friends followed by shopping and two trips to Starbucks).

Once you’ve tracked your monthly allocation of funds and can see how much you actually waste on pints at the bar or trips to the mall, budgeting becomes much more feasible. After setting aside bills, loan payments, and all other monthly expenses, you should have a small surplus. Now is the time to set priorities:

How much do you want to save for retirement?
How much do you want to save for unexpected costs like car repairs or trips to the doctor?
If there are certain activities you enjoy doing, such as travelling, how much should you allocate to those?
What about personal spending? How much do you value having a monthly buffer for spontaneous spending?
Are you saving for any other big investment, such as a house or a new car?

Once you’ve established your priorities, you’ll be able to see what you have to sacrifice in order to make intelligent financial decisions.

Financial Independence

An especially unconventional money move for students or recent graduates, refusing a monetary safety net from family, a significant other, or other benefactors in exchange for financial independence can daunting. However, establishing positive money saving habits is only possible while in the midst of supporting yourself; making long-term financial calculations suddenly becomes important and real once you’re directly dealing with your own future.

However tempting it is to accept the financial support of others — especially when the concept of a stable and significant income is laughable — it is much more empowering to experience supporting yourself. Saving for emergencies becomes vastly more important, and gradually these money saving habits will lead to peace of mind when it comes to knowing you’ve taken the proper steps to ensure your present and future is secure.

[Read: It’s Vacation Time: Vacation Saving Tips!]

Wondering Where to Start?

Although you may not be making vast amounts of money right now, learning to save, budget, and spend in moderation while you’re young will lead to the development of great financial habits. With nothing to lose and everything to gain, these unconventional money moves may just provide you with a real sense a financial security. Even by thinking of your long-term financial future you’re providing yourself with a great start. You can also seek help from your bank; they can assist you in establishing a savings plan and determining what investments are right for you.

Credit Card Fees and Ways to Avoid Them

September 11, 2015 by illinois

The credit card industry is to say the least a humongous industry. In 2012, according to statista.com, Visa alone accounted for 3.2 trillion U.S. Dollars in volume, that is trillion with a “T.” And it is fair to say that much of that is due to credit card fees. Here are some ways to avoid them and end lining their pockets with your hard earned money. It is next to impossible to find a card without any fees at all, but they do exist and are out there but why rack your brain to trying and find one; you should just figure out how to avoid them, or reduce them tremendously instead, on the cards that you already have.

Overdraft Fees
Statement Fees
Pay Over the Phone Fees
Replacement Card Fees

Are only a few of the several fees that are in most credit card contracts. And in reality, they are non negotiable. But they are avoidable or can be reduced dramatically.

Having a good credit score is a good way to avoid fees in general, but not altogether. And making your payments on time and above the minimum, may get you some future fees waived if you have a hiccup down the road. But there are other ways to avoid credit card fees that you can do.

Credit unions are a fantastic place to start, especially if you have good credit. According to bankrate.com, interest rates are close to 20 percent lower than bank cards. If you think you have to be special to join a credit union you would be wrong, most if not all of us can find a credit union to join, but of course some are limited to a specific trade or industry, but others are out there where anyone can join.

Overdraft Fees

Overdraft fees are by far the most common fees that a person will run into. When you max out your card, your fees will mount in an incredible fashion, and they range between $27 and $38 per month based on the current law and your account history. The current law that applies is the C.A.R.D. Act from 2009. You should take a look at the Act, which is beyond our discussion here.

Credit Card Statement Fees

Not exactly what you think, but when you need an old statement for some reason, you will get charged a fee for that service depending on how old the statement is and what the purpose is for, you can avoid this by signing up for an online account with your company, and each month downloading your statement and saving it to your hard drive and archives (if you do not have a hard drive and archive system, shame on you) but saving all your statements electronically can save you money down the line. Some card companies will waive fees if you receive online statements and eliminate paper statements altogether, and ask if they will waive transaction fees too, if you do everything electronically.

Over the Phone Fees

You betcha, you think you are doing the company a favor by calling in a payment think again, most have a fee for that, and not a small one either, they are ten to fifteen dollars. Avoid that by setting up an automatic payment coming out of your account, you will never be late, and you can kill two birds with one stone, the pay by phone and late fee charges. Win win. And if you do everything electronically your will be ahead of the game too, and can transact business from anywhere, such as your smart phone.

Replacement Card Fees

Yes you probably have these too, now you may not be able to avoid it, if your card is stolen, lost or otherwise destroyed. But if you are constantly leaving your card or are a forgetful person, these fees can add up over time. According to mybanktracker.com the range is between $1.75. to $16.33.

[Read: Getting a Credit Card with No Annual Fees]

These are a few ways you can avoid credit card fees and reduce the amount that you pay over the life of your card. There are other fees out there too, such as stop payment fees, expedited card shipment fees, foreign transaction fees and yearly account maintenance fees. Most of us do not even blink when our credit card company adds these fees to our account, if we see them there at all, because most of us really do not read the statement closely, we look at the balance, and the minimum amount to pay, and that is it. But look closely, and if in doubt call and ask what the fee is for, and ask that it be waived, sometimes if you ask you will get the fee waived, but you have to ask, they will not offer it. Be proative and you too can avoid credit card fees.

Middle-Aged Mortgages: Getting a Mortgage in Your 50s

March 29, 2015 by illinois

Times have changed. Decades ago, it was a common assumption that every working American (with a few exceptions) would be retired by age 65. However, now about three quarters of working Americans say that they plan to work well into the age formerly associated with retirement. Many 50 year olds have many working years ahead of them, which means there’s plenty of time to put income towards a home. That’s right! Your fifties are not too late to consider buying a home, and we’ll weigh in on some of the more complex points of getting a mortgage in your 50s.

There’s still no reason to totally neglect your age as a consideration. Just because you’re far from retirement doesn’t mean you’re still a 20-something. At this age, financial decisions have some more fine points that need attention but other decisions are very streamlined compared to earlier in your life. If you think getting a mortgage in your 50s is smart for you, read on and make these considerations.

Realistic Size

If you’re in your fifties and looking at home-buying options, make careful consideration of whether the trade is an improvement. While we all dream of our perfect house, even if you can afford it you need to consider the sensibility of this investment. A considerable aspect of this is the size of your home. At this age, your kids are likely gone (or leaving very soon) so getting a mortgage in your 50s for an enormous amount for an enormous house will most likely be a regrettable decision financially. Also think about the expenses associated with a larger house:

Heating
Cleaning
Decorating
Cooling
Maintenance
Property tax

All of these will cost more with a larger house, and will make getting a mortgage in your 50s harder. This still varies—if you had kids late or expect grandkids to move in with you, a larger house might be the right move. Still, you won’t work forever, and you need to be positive that you retirement funds will be more than enough to fund the tail end of your mortgage.

Mortgage Types

For most new homeowners looking for a mortgage, their age makes a 30-year mortgage the most sensible option. For these demographics, the consideration of anything else is limited (if not eliminated) because of the payment amount as well as future financial resources. However, getting a mortgage in your 50s is much different. No one wants to be making house payments late into retirement (can you imagining receiving monthly bills into your 80s?) so a shorter, higher-payment option may be better for you. For this, 15-year mortgages are popular, to try to pay off the entirety of the mortgage before retirement, avoiding dipping into 401(k) s, IRAs, and other retirement funds. This is especially important if you plan to live in this home for a good deal of time after retirement.

Mortgage vs. Retirement Funds

This next consideration will require a fair amount of number-crunching and most likely aid from a financial adviser, accountant or other proficient help. Making the best possible contributions into your 401(k) or IRA have the potential to save you more money in the long run than paying off your mortgage as soon as you can. Investment markets are unpredictable so you should act conservative as possible, but never forget that you retirement contributions will be your chief living income after you end your employment. Social Security should not be relied on like one of these accounts! If getting a mortgage in your 50s, consider how it will weigh against the finances of your retirement accounts.

Location, Location, Location

It’s a core tenet of real estate that location is the biggest factor in land prices. However, most people underestimate the difference this will make. Consider Austin and San Francisco—both mid-size cities in warm areas, but San Francisco homes will run as much as 70% more expensive. Most choices won’t be as drastic, but large differences are seen even in single cities. Is that neighborhood really worth the increased payments? Convenience is also just as important as cost. Isolated areas are expectedly much less expensive, but the hassle of excessive travel for typical activities will become more and more considerable as you age.

Other Considerations

When considering getting a mortgage in your 50s, you need to think about how it will integrate with your future retired life. Declining health can cause enormous expense, and a mortgage can compromise your care. An oft-visiting extended family will mandate more bedrooms in your house, and that will add a good deal to your payments. As an alternative, look at the payments for their hotel rooms and see which is more expensive. And of course, just because you can doesn’t mean now is the time. There are plenty of totally reasonable situations where buying a house is not the right move.

As always, run any decision by a trusted financial adviser, and do your research. A mortgage in your 50s is much more feasible now than ever before, so considering buying a home is no longer an impossible dream for older people.

Unfair Debt Collection Practices: When Debt Collectors Go Too Far!

March 1, 2015 by illinois

As American debt in general has risen, so has the practice of unfair debt collection practices. This led to the Fair Debt Collection Practices Act, which was a breakthrough in giving aid to unfair creditors. However, the problem is far from solved, with over 300,000 complaints to the Federal Trade Commission between 2006 and 2011. Despite this huge influx of complaints, a mere 32 formal actions were taken against the agencies practicing unfair debt collection practices—in 10 years! To make up for this, consumers should learn now how to protect their rights and deal with unfair debt collection practices on their own.

Where Requests Become Harassment

An entire industry revolves around debt collection, and illegal or unfair debt collection practices are shockingly prevalent within it. The agents working for this industry are paid based off of the number of debts they collect, and many have quotas to meet. To meet these, they’ll resort to a number of threats that they are not allowed to make:

Seizing property or cutting pay: Agencies are almost never permitted to do these things, so collectors have no valid permission to make this threat.
Notifying people of your debt: Without your express permission, agencies have no right to tell employers, banks, or other institutions about the amount, nature, or even existence of your debt.
Initiation of criminal complaint: Fraud claims made by the collection agencies are false, and they are unable to initiate criminal complaints against you.
Self-misrepresentation: This particularly frequent method is to claim to be someone they are not, like an investigator for fraud cases or a lawyer. This is a trick to try to add legal fees to debt, or more often simply intimidate you. This is one of the most criminal unfair debt collection practices unfortunately seen today.
Police threats: Some collectors like to tell the debtor that a police officer is en route to their house at the moment to make an arrest, which is totally false. Debt cases are never handled via arrests—do not believe this!
Other harassment, oppression, and abuse: Searches through credit card bills and other financial records to find embarrassing purchases is a tactic used by some very dedicated debt collectors. Any controversial or arguable purchase will result in a threat to notify your employer or even your family. Other abuse can be excessively often calls or profane language, all of which are unfair debt collection practices.

Misrepresentations

Some debt collectors may claim to be someone that they are not to try to get you to pay. If you receive a call from any of these people, know that it’s fake.

Law Enforcement: Any claimed connections to government are fake, unless the collection involves unpaid child support or district attorney check diversion. Any government debt communication is made by mail first.
Amount Owed: Collectors may attempt to collect more debt than you actually owe, which is punishable under fraud charges.
Attorneys: Any claims to be from a law office are false, legal action will always be handled through a judge.
Action Warnings: Claims that you will be arrested or your possessions will be taken are false, unless the original creditor has found an extremely rare case that allows them to take this action—this is almost never the case, and more often an attempt at unfair debt collection practices.
Illegal Threats: Unintended or forbidden actions will not happen, regardless of how severely they are threatened. “Final Notices” demanding payment are not allowed. Threats to sell debt to a third party so you lose claims are also impossible measures to take in reality.
False Claims: They may accuse you of criminal charges or tell the state you are not disputing the debt, or even claim that they are employed by a credit bureau or bank rather than collection agency.
Falsifying court and legal documents, or using fake business names are also not uncommon.

Unfair Measures

Some actions are regarded by the government as unfair and even outrageous, and cannot happen, like these:

Add extra debt from interest or other charges that was not originally agreed upon or legal
Deposit postdated checks early, or solicit postdated checks with threats of prosecution
Cause unjust communications fees like collect calls or postage by obscuring or falsifying the true intent of the communication
Threaten to take over your ownings, when they have no right, reason, or intention
Communicate via postcards
Make any markings on an envelope that indicate it has anything to do with debt collection

Fred Williams is a journalist who did extensive study into collection agencies, and even took a leave of absence to work for one to get an inside look. Many of the examples above have been exposed by him, and happen to real people

Know your rights about debt collection, and be able to realize which accusations are baseless and which threats are empty. If harassment continues, talk to an attorney to see if you may have grounds for criminal charges against the agency. As always, do your research to avoid making a critical mistake.

Get Your Money Back: Collect a Bad Debt

February 19, 2015 by illinois

There’s nothing worse than loaning money to someone that doesn’t want to pay you back. When you do something out of the kindness of your own heart to help another one, it can be very upsetting when you see them throwing it all back in your face. Not only does it weigh on your finances, but you’ve also got to deal with the emotional consequences. Depending on the amount of money you’re owed, you might never want to help anyone out in the future. If you’re serious about trying to collect a bad debt, there are certainly things you can do to get the process underway. The world isn’t over once you try to collect a bad debt, but you might experience some difficulties along the way. Even still, you deserve compensation and you should get it back however you can manage it!

Try To Separate Your Personal Feelings

Whenever you get into a situation that involves money you’re owed, the person that owes you will do whatever they can to get out of paying it back. Whether they complain about losing a job or just not having it, they’ll try to do anything to make you feel guilty for asking for the money. They might even get bold enough to blame you! Whatever the case, don’t let it stop you from trying to collect a bad debt. In this case, it will be most important for you to keep any contact with them on a business level. Don’t engage in personal conversation that will make you upset. If you’re able to keep your feelings out of the equation, you’ll see how much more successful you can be. To let the borrower know how serious you are, you should be prepared to take any measures to get your money back: no matter if you have to tarnish their credit report or take them to a court of law.

Have Your Evidence Ready to Go

It’s important to get any kind of serious agreements down in writing but so long as you and the borrower had a thorough understanding that you would loan the money and they would pay back as soon as possible, you have a binding contract. If you don’t have an agreement that’s been cemented in writing, you can gather all of the information that was shared between you and the borrower regarding the money they owe you. Having all of the emails and letters you shared is a great idea and it will be all the better for proving your case. As long as these pieces of documentation detail when and at least how the borrower planned to pay you back, it should be easier to collect a bad debt.

Give the Borrower a Serious Warning

No matter if you’ve got the correct documentation or not, you should send the borrower a letter that’s been registered and demand that they pay you back. Your letter should touch upon the terms that you all agreed on. Remind them of the date you all came to this agreement, how much they should pay you back and when you expect the first payment to be made out to you. If they consented to paying interest charges, you should be sure to remind them of this information. It’s your responsibility to upfront and clear about what you want and when you expect to have it. By this point, the borrower had enough time to make good on their loan and they haven’t: you don’t owe them any further kindness.

Get Some Professional Help

If you don’t get a favorable response or payment within two weeks or less, it’s up to you to take further action. Don’t let your borrower get off easy without paying the price! Get a lawyer to have your back through the process. If your lawyer were to send a letter over to your borrower, you can bet that they would take it a lot seriously very quick. Hiring a lawyer will not be cheap in most instances but if you’re owed a lot of money, it definitely wouldn’t hurt to have the assistance of a talented lawyer on your side. The letter from your lawyer to your borrower is certain to send shock waves into their head. Your lawyer will most certainly be flowery and exact in their language and they’ll most likely remind your borrower of the trouble coming their way if they don’t cooperate. If you’re not totally confident in your ability to collect a bad debt on your own, your lawyer will be there to get you through the tough times with ease.

Do Whatever It Takes To Get It

If your borrower still seems unwilling to settle after all this, you’re more than ready to take your issues up with district, small claims or superior court. Small claims court is probably the best option since it’s the most inexpensive and a lawyer or attorney isn’t required.