What are the Different Types of Consumer Debt

As the name implies, consumer debt refers to the entire amount of debt carried by consumers, as opposed to governments or enterprises. It includes all debits that exist as a result of purchasing items for personal or household consumption. Credit card debt, payday loans, student loans, and other consumer financing are the most frequent types of consumer debt. All these types of loans and debts have different payment schedules, tax ramifications, and credit score effects. In the rest of this article, we’ll go over the different types of consumer debt and the implications they can have on your finances. 

Credit Card Debt

Out of all different types of consumer debt, credit card debt is probably the worst. First, credit cards are widely available to anyone, making credit card debt the most common type of debt in America. They also have relatively high interest rates compared to other debts. And finally, most credit cards carry compounding interest. That means you’ll be paying interest on the interest you’ve previously paid. This can quickly snowball into a difficult-to-exit debt spiral, which is why it’s critical to pay off credit cards in full and on time each month. Moreover, if you are planning to buy a house, you should definitely pay off your credit card debt before applying for a mortgage. Otherwise, your mortgage might not be approved.

Mortgage Debt

If you want to buy a house in America, you will most likely have to take out a mortgage. That’s probably why mortgage debt makes up the most significant percentage of all consumer debt. They are installment loans, which means you pay them back over a certain period in a set number of installments. They are also secured loans, which means the house you acquired with the loan serves as security for the debt. If you stop paying, the lender can start the foreclosure process. That usually involves seizing and selling the property to recoup its losses.

However, it is widely considered that mortgages provide the most financial benefits to consumers. Paying off your mortgage loans every month can help you gradually create equity in your home, and the asset may eventually be worth far more than what you paid for it. Moreover, a mortgage can frequently enhance your credit score if you make your payments on time. That way, you demonstrate that you are a responsible borrower. 

Downsizing Your Home to Reduce Debt

Homeowners who are swimming in debt often opt for downsizing as a means to reduce their debt. If you are having financial troubles, maybe you should see if downsizing is an option for you. Downsizing a property entails exchanging your current house for a more affordable one. You could either swap your home for a one with smaller square footage and, therefore, cheaper bills and maintenance costs. Or, you could relocate to a different, more affordable neighborhood. When done right, this could save you a ton of money or significantly reduce your debts.

Student Loan Debt

Student loan debt is another type of debt with potential financial benefits. Currently, student loan debt has the fastest-growing share of all consumer debt in America. It’s more flexible than other types of loans, but their interest rates can vary.

Because student loans are frequently among the first debts taken on by borrowers, they can be a crucial part of establishing a solid credit history. Paying your student loans on time each month can significantly improve your credit scores, just like with other types of consumer debt.

If you’re just stepping into the world of higher education, there are still ways you can minimize your student debt at the start. By taking time to research and apply for different types of scholarships, you can save yourself a lot of money in the future.

Auto Loan Debt

Auto loans, as the name suggests, can be used to buy new or secondhand vehicles. Along with credit card loans, these types of consumer debt fall into the “bad debt” category. An auto loan, like a mortgage, is a secured installment loan. It is paid in a predetermined number of installments over a predetermined period. If you don’t make your payments, the lender can take your car and sell it to recoup its losses.

Many people think buying a new car is impossible, especially if they’re trying to get out of debt. That’s why they opt for buying a secondhand car. While it may seem like a good idea at first glance, this can have harmful financial consequences for the borrower. If it’s not thought out and done correctly, a borrower can find himself in a difficult situation. For example, a lot of the time, borrowers who purchase older used cars often end up owing more on their loan than the vehicle is worth. To avoid this problem, be careful not to take out a loan with an extended repayment period. 

Payday Loans

Payday loans should be avoided at all costs. This sort of loan is frequently the most harmful since it entices those who are already in a lot of debt and are vulnerable. Payday loans are a sort of short-term credit available to people who need money quickly. In most cases, these loans are for tiny sums of money and don’t require credit checks. However, they come at a high price for the buyer because they have substantial interest rates. Moreover, many payday lenders also charge late fees or additional fees to roll over the loan for another month.

Final Thoughts

If you’re thinking of applying for a loan, make sure you do your research. With consumer debt at an all-time high, it’s more vital than ever to analyze all the different types of consumer debt you can choose from. Think about your overall financial goals and consider varying tax implications and interest rates of all debt types. However, the most important thing when it comes to debt is to keep up with your monthly payments. By never missing a payment, you will avoid debt collectors while significantly improving your credit scores.

Dorothy Carter

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Is debt settlement a good option? What are its pitfalls and alternatives?

Debt settlement is a viable option when you are struggling to repay huge balances on your credit cards and personal loans. It can help solve your debt problems fast. However, you need to be aware of certain pitfalls before resorting to this option.

Here’s how debt settlement works, its pitfalls, and the alternatives to this debt relief option.

Debt settlement – How it works

Debt settlement or debt negotiation is a debt relief option through which you get rid of your dues by paying less than what you owe to your creditors. You can opt for professional help or a DIY settlement option.

If you opt to settle your debts yourself, you will have to negotiate with your creditors to reduce the outstanding debt amount.

If you use a debt settlement company, professional debt negotiators will try to convince your creditors to reduce the outstanding balance as much as possible. They will also analyze your financial situation and ask you to make an affordable payment to the settlement company every month. Once you accumulate a substantial amount, the company will use the saved amount to pay a lump sum to a creditor, and you will get rid of that debt. Likewise, you repay debt one after another. However, when using professional help, hiring a good debt settlement company is essential.

What are the risks of debt settlement?

There are certain risks associated with debt settlement. You need to be aware of these before resorting to this debt help option.

Debt amount can increase

A debt settlement company can ask you to stop making payments to your creditors for the time being. However, while doing so, you can incur additional charges and penalties that will increase your outstanding debt balance. It may add up to hundreds or thousands of dollars to the balance.

Credit score can reduce

When you can’t repay your credit card debt and the outstanding balance on your personal loans, you already become delinquent on your accounts. You will also stop making payments to your creditors and offer a lump sum once you save the required amount. The delinquent accounts and settled accounts will remain on your credit reports for seven years. As a result, it will affect your credit score negatively. However, its effect will reduce with time once you start adding positive items to your credit reports.

Forgiven debt can be taxable

You save a significant amount by opting for debt settlement. However, you may have to pay tax on the forgiven debt amount. This is because the IRS (Internal Revenue Service) considers forgiven debt as the debtor’s income. You should consult a tax professional to inquire about additional tax obligations, if any.

Professional fee

You will have to pay a fee to the settlement company, along with paying back the debt balance. However, make sure that you don’t pay any upfront fee before they negotiate with your creditors. A debt settlement company may charge about 25% of the eliminated debt amount. You could save this amount if you settle yourself. But, again, a settlement company can negotiate with your creditors in a better way.

You can avoid certain pitfalls by opting for other debt relief measures beforehand.

What are the alternatives to debt settlement?

You can opt for these options as an alternative to debt settlement.

Consolidate debts through professional help

If handling multiple debts is your primary concern, then you can enroll in a consolidation program. By doing so, you can make single monthly payments towards paying off your multiple bills. Therefore, it becomes easier to manage your debts. A consolidation company can negotiate with your creditors to reduce the interest rates on your accounts. You have to pay an agreed-upon monthly amount to the consolidation company, who will distribute the payments to your creditors on your behalf.

Opt for a balance transfer

This option makes it easier since you don’t have to make interest payments for a few months if you can take out a 0% balance transfer card. Even if not a 0% card, a card with much lower interest can also help you repay debts faster. You can shift your debt to such a card and repay the balance within the introductory period of the balance transfer card. Usually, the interest-free period lasts for as long as 18 months.

Take out a consolidation loan

A consolidation loan is like a personal loan you can use to repay your existing balances. Then, you will make monthly payments to repay your new loan. The interest rate on a personal loan is relatively lower than that of credit cards. If your credit score is good, you may be able to take out a consolidation loan at reasonable terms and conditions.

File for bankruptcy

Though it is considered the last resort to get rid of debts, it can help give you a fresh start. Most of your unsecured debts will be discharged through bankruptcy. Depending on whether you file Chapter 7 or Chapter 13 bankruptcy, it will take four months to five years to get discharged from debts.

It depends on you whether you can reduce the adverse effects of debt settlement and choose this option to get rid of your debts. However, while opting for debt settlement, make sure you hire a reliable and experienced debt settlement company. Also, while opting for settlement, make sure you manage your finances such that you can make the payments on time and get rid of debts quickly.

About the Author: Lyle Solomon has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in California.

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Benefits of electronic bill pay

Electronic bill payment is a very useful online payment option. Online businesses significantly improved over time, and most websites offer e-payments today. There are many benefits of electronic bill pay, so let’s see why you should prefer this payment option over any other. 

Save time with electronic bill pay

Paying bills online does not require a trip to the bank or the post office. There is no need to wait in line, which we all know can often be tedious. You can do everything from your comfy chair at home.

Have a full insight into your spending history

Electronic bill pay does not only include e-pay forms on websites. You can also use a banking application to pay all of your utility bills and manage finances.

If you wish to get your credit card debt under control or simply have an insight into what you are spending, the e-pay app is just what you need. It provides the complete history of all of your purchases and changes to your bank account.

Electronic bill payment is secure

Nowadays, inline payments have a high level of security. Financial institutions use strict security protocols to make sure your money is protected at all times. Besides the regular user name and password, there are a couple of levels of encryption that keep your personal information safe.

Keep in mind that risks still exist, but they are greatly reduced with the evolution of online banking technology.

Save money using electronic bill payment

If you want to pay your bills at the bank or the post office without using electronic bill payment, you have to fill in a paper check. Banks charge a small commission because those checks cost money.

On the other hand, electronic bill payment is completely free. Another considerable benefit of e-pay apps is that you can exchange money if needed without paying the currency exchange rate. You can also send money to other accounts without paying extra fees.

A lot of retailers even offer special discounts and better offers in case you are paying electronically. That also helps them cut business costs.

All of this is very useful not only for families but also for singles trying to save some money. Why not use the benefits of e-pay when they are so rewarding?

Electronic bill paying is very convenient

Let’s create a hypothetical situation from real life. You are selling your home and planning a relocation to a different city. First, you need to hire a real estate agent to take care of the selling process. You also need to hire movers to help you plan the relocation. Furthermore, you need to look for a new place to live, possibly remodel it before moving, take care of your utility bills and transfer them to your new address, and do many other tasks.

You will be very busy. Now consider that you still have to go to work 5 days a week, and try to organize all of that. You won’t have time to run to the bank to make payments. And you will have a lot of expenses until everything is complete. You will have to:

  • pay the agency;
  • take care of all the costs of selling and buying a home;
  • pay all of the bills before you change the address;
  • pay your movers;

Electronic bill payment is very convenient in this situation. You can take care of all of the payments directly from your home.

An eco-friendly payment option

Besides the personal benefits, there is also an ecological aspect to the e-payment option. Because the process is virtual, it substantially reduces paper waste all around the world. Banks and post offices usually receive large amounts of paper checks and envelopes. By switching to the electronic bill payment, you are also helping them to cut postage and shipping costs.

Organize your payments easier

A considerable downside of paying bills with paper checks is that you have to keep all of the receipts stored in your home. You probably won’t need them, but in case you do, it’s best you know where they are.

Now imagine having to stack utility bills for a few years in the future. You will need a closet just for that. At one point, you will start throwing them away.

If you switch to electronic bill pay, all of your paid bills are automatically stored within the system. You can print any receipt whenever you want. And, you don’t need any drawer or a designated place to keep the receipts. E-payments are much more organized than regular paper check payments.

Easily track any payment

Since the banking app for online payments has all of the payments stored inside, you can track any transaction whenever you want. Just use the filter section to set the date range or even the sum of money you wish to look for. You will have the results in just a couple of seconds.

An additional benefit is that you can track all of your payments and figure out where the money is going the most. If there is a worst-case scenario where someone is using your money without your knowledge, you can even quickly notice a suspicious transaction you know you never made. This is yet another example of how tracking electronic payments can help in protecting your account.

Enjoy these benefits of electronic bill pay, and don’t lose sleep about it!

We hope that you see the full potential of using online payments. There are so many benefits of electronic bill pay that the only obvious solution is to start using it today. If you are not that tech-savvy, it might take some time for you to adjust to this new system. However, once you figure it out, you will never want to switch back. Banking technology advances over time, so we can expect even more benefits and better payment options in the future!

Dorothy Carter

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10 Money-Saving Tips for Singles

 It’s never a bad time to start saving money. However, single people need to manage their budget on only one income. Since there is no one else to rely on, every saved dollar counts. Here are 10 money-saving tips for singles:

  1. Start paying off debt

Large amounts of debt can put you in a financial stranglehold. Sure, everyone would like to be free from debt, but just wishing it away won’t make your loans disappear. You need to actively work on paying off your debt, and here is how to make it happen. Create payment goals and stick to them. Figure out which debts are the smallest and which you can pay off the fastest. Focus on getting rid of those debts first. You’ll feel a sense of liberation once you start getting rid of your debts one by one.

2. Plan your monthly expenses

You’ve undoubtedly heard the phrase “stick to a budget”. However, to do that, you first need to do some math. Make two columns and put your income on one side. Put rent, utilities, food, and all the other expenses on the other side. Realistically, for most people, rent is usually the most significant expense. You can consider moving to reduce your monthly costs. It’s pretty easy to find a cheap city to live in – there are many affordable West Coast cities. Now you need to monitor and keep track of how much you are spending. If you were to ask your friends to break down their weekly budget, they probably couldn’t give you an accurate answer.

Take your phone and write down every single expense, even for leisure activities, drinks, brunches and coffees. If you aren’t sure, just make a note every time you spend money and add it up at the end of the month to get a realistic picture. Without knowing exactly how much you are spending, it will be easy to go over budget.

3. Realize what your biggest luxuries are

This will probably be a hard pill to swallow, but everyone has more unnecessary splurges than they think. Most singles’ biggest drain on the income is nights on the town, followed by buying clothes and tech (phones, laptops, and other gadgets).

If you are looking for money-saving tips for singles, luxuries are the place you can save the most. You shouldn’t starve yourself with ramen while spending a small fortune on cocktails. Don’t take this the wrong way because it’s alright to treat yourself every now and then. You just need to find a balance.

4. Don’t drive yourself insane

We just mentioned giving up some luxuries and wanting to save money is great. However, you need to give yourself some space to vent. If you budget too hard and give everything up, you won’t be able to last too long. Restricting yourself from everything can cause unplanned splurges and lead to a yo-yo effect. Be moderate in everything, even in moderation. Have treat days where you buy something fun. Only you know what you can give up and what is essential to your well-being at the end of the day.

5. Learn to cook

Many singles don’t bother to cook for just one person and instead choose to live on take out. Cooking actually isn’t a complex skill to pick up. What’s best is that once you learn how to prepare food, it will be helpful for your whole life. Home-cooked meals are healthier and cheaper than fast food alternatives. You can also grow your own ingredients if you have a yard or even a balcony for spices. Going green is great for the environment and your budget as well.

6. Not all entertainment options need to be expensive

People often use the movie theater evaluation as a baseline for spending on fun. This is how it works: How much does an evening at the movies cost you per hour of entertainment? Then use that to calculate if alternatives for entertainment are more or less expensive.

What most forget is that there are cheap and free options that everyone can take part in. Go for walks, hikes, or picnics – alone or with friends. Entertain guests at home and play charades or board games. Revisit your stack of unread books or your online gaming library before you pick up anything new.

7. Don’t give in to peer pressure

Comparing yourself to others and feeling the need to match their spending can quickly leave you broke. Fear of missing out on activities with friends can cause people a lot of anxiety. You need to realize that there will always be something going on, and you can’t be everywhere. Don’t be pressured to spend money when you are on a budget – that’s one of the most important money-saving tips for singles I wish I could give my younger self. Once you have set your goals, nothing should impact your planned spending habits. You don’t even need to share your goals with others. Just politely decline and move on.

8. Make additional income

Working a side job can give you extra cash and provide breathing room when times are tough. However, balancing two or more jobs is not something that everyone can pull off, especially for prolonged periods of time. Try to find a temporary gig or something you can balance in the long run. Extra money is always welcome, but don’t burn yourself out.

9. Have an emergency fund

A rainy day budget will take a load off your shoulders. Promise yourself to put a bit of money aside every month. It can be just a few bucks here and there, don’t worry – it will grow over time. You might be tempted to dip into it, but you know better. Use that money only for emergencies and not to order fast food.

10. Work towards your retirement

It’s never too soon to start thinking of your retirement. Give yourself options by saving up early. Invest in stocks and passive income. Inquire with your company about their 401(k) and discuss options with a financial planner.

Rounding up

We hope you enjoyed our list of top 10 money-saving tips for singles and that you learned something that will help you budget. It’s perfectly fine to take a few small steps on the road to fiscal responsibility. What’s important is that you start the journey!

Dorothy Carter

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Downsizing Your Home to Reduce Debt

Dealing with personal debt and drowning in credit cards is a tricky business no one wants to experience. One of the solutions for this kind of problem can be an aggressive debt payoff method or an elaborate debt management plan. However, if you own a home, there is one more option you might be overlooking – downsizing. Downsizing is something many homeowners opt for when it comes to reducing debt nowadays. It’s a more straightforward solution to financial problems, but it’s something you should get familiar with before committing to the process. So, if you’re thinking about downsizing your home to reduce debt, keep reading for some helpful information regarding the topic!

If you’re thinking of ways to reduce your debt, downsizing might be your solution.

What does downsizing require?

Downsizing a house is a process that implies swapping your current home for a smaller or more affordable one. For example, you can downsize to a condo or townhouse, or relocate to a house similar to yours in a less expensive part of the city. If done smartly, downsizing your home to reduce debt can be a huge success. So, what will you need to do to make this plan work?

You’ll have to put your current home on the market and come up with enough funds to buy another, more affordable one. To make this two-step transaction easier, you’ll have to have a strong credit score and a low mortgage rate. This will help you get another mortgage for the new house and will ultimately lead to getting rid of debt altogether.

If you want to qualify for a mortgage loan, it’s preferable to have a credit score over 700. Additionally, if you have mortgage obligations for your current home and want to pay it off quickly, you’ll need a sufficient amount of home equity to cover all the expenses. They include selling your property, covering the down payment for the new house, and paying off your debt in full.

Obstacles to look out for when downsizing your home to reduce debt

Selling your current home and then buying a smaller property may seem simple, but it isn’t. It can be challenging to obtain a mortgage for a new property while your present mortgage is still active. You’ll need a good credit score and sufficient funds to convince the lender that you can undertake a second mortgage.

If you can’t meet these financial necessities, don’t despair! There is another solution to downsize your home and still reduce debt. You can always sell your current home first and then use that money for the down payment for the new one. Of course, don’t do this on your own; consult your financial advisor and real estate agent first! With their professional advice and the use of today’s technology, you can improve your finances and decrease debt.

However, you must prepare yourself for another common challenge. Many homeowners overprice their homes because they’re not aware of their actual value. You may need to downsize to a condo rather than a house if you want to reduce debt. So, before getting your hopes up, get a professional opinion about this and then start planning and budgeting.

When it comes to downsizing, you’ll either have to have a great credit score or a low mortgage.

Is smaller space always more affordable? 

Not every kind of downsizing will reduce debt. You need to think smart, create a budget, and follow up on it to succeed. For example, if you do downsize to a smaller house but move to a neighborhood with a more expensive lifestyle and higher monthly utilities, you’re back to square one. That’s why you need to think about all these things before you actually move to a new place.

The fact is, if you downsize to a smaller place in an affordable neighborhood, your mortgage will probably be lower, you won’t have a massive bill for heating the house in the winter, and you won’t have as much maintenance. These are all perks of living in a smaller space. It’s cozier, and it brings families closer. As a plus, the fact you reduced your debt by downsizing will make you feel comfortable in your small home even more! You’ll be thankful for it, and so will be your bank account.

How much does downsizing cost?

Even though people are downsizing their homes to reduce debt, the sole process of downsizing is not cheap. That’s why you need to involve experts and take their advice regarding your finances and real estate.

Some of the main costs you can’t forget are taxes, legal fees, moving expenses, and remodeling. That’s why you have to find out the actual value of your current home, close the sale and then look for a smaller place that can fit into your new budget. Of course, if you paid off the majority of your current mortgage, you can focus more of your budget on reducing your debt. The important thing is to be aware of your finances at all times and not fall into the trap of adding more to your debt.

Don’t think downsizing won’t cost you a few bucks; it definitely will.

It’s time to make a plan for downsizing your home to reduce debt!

As you can see, downsizing can be quite good for your bank account, if not profitable. However, it’s not an easy process you can do on your own. That’s why you need a plan. So, here are some crucial points you have to consider when downsizing your home to reduce debt:

  • Calculate all the numbers: before taking the first step, you have to know whether downsizing will be profitable and if you will be able to pay off your debt or not.
  • Hire a professional financial advisor and real estate agent: in order to get an accurate picture of your financial situation and the value of your current home and the new one, you’ll have to consult experts; this way, you’ll know at the beginning what your opportunities are.
  • Make your current home desirable for potential buyers: since you want to have the highest possible home equity, make sure to maximize its pros and minimize its cons.

Now that you learned everything about downsizing your home to reduce debt and you have a plan of action, it’s time to act. Finally! So, get a hold of your bank statements, contact the experts and start the process. Good luck!

Dorothy Carter

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Money-Saving Tips for Renters

Not owning your own home is expensive – monthly rent will put quite a dent in your budget. And yet, it is only one of many necessary expenses you have to plan for. With all the costs piling up, how will you save money for buying your own home down the line? The answer lies in these money-saving tips for renters. From getting a better deal on rent to making small changes in your everyday life, here’s what you can do to increase your budget while renting.

The best money-saving tips for renters looking to lower housing expenses

If you’re trying to save money while still getting out of debt, the best thing you can do is to cut down on the biggest expenses. Your rent is chief among them. So if you can find ways to pay less for rent, you’ll surely be able to save some money.

Pick the right location

Location is everything when it comes to housing. The better and more sought-after the location, the higher the price of the property will be. Renting downtown, near the city center, in safe and newly built neighborhoods, or in areas that have excellent traffic will be expensive. So try looking in neighborhoods that aren’t that popular. You might not be as comfortable there, but it can save you a lot of money.

Look for properties within your budget

It’s tough saying no to your dream home. So if you find the perfect place to rent, you might convince yourself to take it even if it is a bit on the expensive side. Don’t do this! Stick to the 30% rule – your rent should not exceed 25-30% of your monthly income after tax, and don’t even look at places more expensive than that. That way, you can be reasonably confident you’ll be able to afford rent every month, and you won’t fall in love with a property you can’t pay for. If the house or apartment isn’t exactly what you’re looking for, you can always personalize it on a budget; it’ll cost you less than renting outside of your means.

Opt for a longer lease

This may sound counterintuitive, but longer leases are better for you. It’s true that they are a commitment and that you’re spending more money when you rent for a longer time, but you need to be realistic. What are the odds that you’ll buy your own home within the next few months? If you can’t achieve that, you’ll need to look for another place to rent. So sign a long lease – you’ll get a better deal. Most landlords offer lower rents for long-term contracts.

Get a roommate

Every burden is lighter when you share it; rent is no exception. If you split the rent with someone, you’ll both have a much easier time paying it. You may even be able to afford a better place. Of course, you’ll have to share your space with someone else. This means you might need to get rid of some of your things or put them in storage. Because of the risks associated with cheap units (such as poor conditions and a lack of security), storage is something you shouldn’t save on. But with the money you save on rent, you’ll be able to afford it.

The best money-saving tips for renters looking to lower overall expenses

In addition to cutting down your rent, you may be able to save on other everyday expenses. This will help pad your budget a little and make it easier for you to save money.

Plan your budget in advance

One of the best habits to get into when you’re trying to avoid debt is planning a household budget. Start by calculating your income and your expenses. Track how much you’re spending and on what. Where can you cut costs? What are some things you simply must pay every month? How much can you set aside for emergencies? Put it all on paper to make it clearer. Then, set aside a certain amount of money for each category of expenses – housing, transportation, groceries, hobbies, savings. Finally and most importantly, stick to your budget! That way, you’ll avoid sudden, unexpected, and unplanned impulse spendings.

Walk, bike, or take public transport instead of driving

Owning a car is a great perk, but it’s not cheap. If you live in a rural or suburban area, you might not really have a choice. But if you can do it, giving up your car can be the best financial decision you’ve ever made. You’ll save thousands of dollars on insurance and gas alone. So if you can walk or bike to work or live in a city with well-developed public transport, consider those alternatives.

Prepare meals at home

Food is something you obviously can’t give up. But you can make it cheaper to eat. First, stop eating out and ordering in (or at least, cut down on it drastically) – this is the biggest money-drainer when it comes to food. Then, get into meal prep. You’ll be able to buy tons of groceries in bulk, which usually means taking advantage of deals. Next, take one day to prepare food for the week to both save time and use up all the groceries instead of wasting food when it goes bad. This is a great tip for both singles, couples, and large families on a budget; although it can take time to prepare all the food at once, it will drastically cut down your food costs and can even make you healthier.

Other money-saving tips for renters to consider

These are the money-saving tips for renters that will make the biggest impact on your budget. But if they’re not quite enough and you find yourself struggling with your finances still, consider also:

  • saving on utilities by being more careful with water and energy consumption;
  • shopping second-hand for furniture and clothes;
  • using your powers of negotiation to lower rent or argue for a raise at work;
  • changing your mindset and focus more on experiences rather than material things;
  • asking for help from family and friends – it’s better to owe them than go into debt.

Implementing all of these practices might be hard in the beginning, especially when it comes to big changes like living with a roommate, giving up your car, or cooking at home. But it’ll be worth it in the end because you’ll save tons of money!

Dorothy Carter


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4 Ways to Minimize Your Student Loan Debt

Higher education is, for most people, a stepping stone to better career and financial success. That said, the steep tuition fees prevent many Americans from obtaining their degrees, or lead to them taking on large student debts. In fact, CNBC estimated that the average debt load of student loan borrowers of all ages is a staggering $39,351.

Erasing student loans is another discussion altogether, but there are ways you yourself can minimize your debt before you even step into the hallowed halls of academia. Here are our top four tips:

Apply for Scholarships and Grants

If there are scholarship and grant programs available, every student should, needless to say, take their chances. There is no harm in applying for one even if you weren’t able to maintain a 4.0 GPA in high school.

Students with exceptional transcripts and high standardized test scores do get priority in most universities and colleges. For instance, the Ohio State University-Columbus offers academic scholarships like the Eminence Fellows program, similar to Indiana University-Bloomington’s merit-based Wells scholarship. However, there are also scholarship opportunities for community service, like the Equitable Excellence Scholarship or the Prudential Spirit of Community Awards offered in various educational institutions. Finally, the Hispanic Scholarship Fund is available for STEM students with a Hispanic heritage, while incoming African American freshmen can apply for the Ron Brown Scholarship.

Explore Remote Learning Opportunities

Remote education has risen in popularity due to the COVID-19 pandemic, allowing a wide range of students to benefit from the flexibility and accessibility of online learning. Online schools have taken huge steps in creating collaborative learning environments for their students, so there’s no need to worry about the quality of education you’re receiving. Kristina Coleman, a student from Maryville University’s online business administration degree, pointed out that she’s able to have “great interactions” with her peers and support from the faculty, despite her program being completed remotely. This support network is crucial for online universities, and Maryville’s 96% success rate of graduates forging careers in their chosen field is proof of the value of remote education.

These degree programs are also more cost-effective compared to traditional schools because you can cut costs on school supplies, housing fees, and application fees. By obtaining your degree online, you can also keep a day job while having access to a wider range of courses. This allows you to invest in your education while you’re solidifying your financial security through work at the same time.

Consider Schools that Offer Various Financial Options

Though public universities are funded by taxes, many of them remain unaffordable for students who come from low-income families. If you’re facing the same dilemma, consider universities that offer more affordable and flexible options for students.

NPR promotes need-based programs offered by The University of North Carolina at Chapel Hill and the University of Wisconsin-Madison for students with great financial need. Aspiring students can apply for UNC’s Carolina Covenant, which offers grants, scholarships, and even work-study options! On the other hand, the University of Wisconsin-Madison offers the same benefits through the FASTrack program. Finally, do not overlook community colleges, which allow students to learn relevant skills and earn credits so that they can transfer to a university for a lower fee.

Create Strategies for Your Loans

Before you sign on the dotted line and make things final, consider how much you really need. Student loans can be avoidable, but you have to carefully calculate all the expenses first. Maybe there are cheaper housing options off-campus or second-hand bookstores that provide what you need. Or, maybe, there is a more affordable university offering the program you want. You can minimize your debt by only taking out the amount that you can pay off at the moment.

Afterwards, study and implement our 6 Steps to Ditching Your Debt. For example, you can utilize the snowball method by paying off the smallest to the largest amount, or the avalanche method where you pay off the debts with higher interest rates first. Furthermore, look into various repayment plans offered by your university or the Department of Education.

Your education is an important investment. Consider these various financial opportunities and learning options so that you can propel yourself forward and achieve success.

Article made only for iapda.org

By Jona Simmons

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5 Ways Large Families Can Cut Expenses

Fewer and fewer young people are dreaming about having large families, and one of the main reasons for it is financial – raising children is expensive, and most people fear they won’t be able to afford the expense. But what if you could make it more affordable? There are several highly effective ways large families can cut expenses that will help you live your dream without going into debt. So don’t give up: financial stability is not just for people who prioritize their jobs. You can both have a large family and save money if you’re smart about it.

The best ways large families can cut expenses

Large families come with significant expenses. So you’re probably looking for just about any way to spare a few dollars. But with so many money-saving tips online, how will you know which tactics work best? The answer is simple – these are the 5 most effective ways for your large family to cut living costs:

#1: Plan your budget (and stick to your plans)

When you have a large family, saving a couple of bucks every few weeks is simply not going to cut it. You need to be more systematic in your efforts – that’s the only way to cut costs consistently and considerably. This means that you need a plan, so your first step should be to create a household budget. Don’t be vague about it either; putting hard numbers on paper is the only way to honestly assess the situation. How much money are you (and your partner) bringing in every month? How much are you spending on necessary expenses like housing and utilities? What about groceries, clothes, hobbies?

It’s important to be realistic about your finances when planning a budget. If you’re not sure about the exact numbers, always estimate your earnings low and your expenses high – this prepares you for the absolute worst-case scenario. Finally, remember to set aside a bit of money for things you and your family enjoy doing. Denying yourself fun will only make it more tempting, and you’ll end up splurging on something eventually. Planning how you’ll spend every dollar in advance will prevent this.

#2: Change your mindset

Here’s something you already know: things cost money. New clothes, school supplies, birthday gifts – all of these things will inevitably put a dent in your budget. Some of them are unavoidable expenses, but some you can replace with something even better than material things – experiences and memories. There are tons of ways to have fun without spending much money. So next holiday season, skip buying gifts; plan a family hike in the local national park, or a visit to the grandparents’ house. You may still need to pay for something, but it’ll be less of an expense than buying expensive gifts, and the memories will last forever. Furthermore, focusing on experiences will teach your children an important lesson – that material belongings aren’t the most important thing in the world.

#3: Look for deals and discounts

It seems very obvious, but when it comes to unavoidable expenses, you should always try to get the best possible price. To achieve this, you may need to learn some creative ways to shop – shopping later in the day can get you discounts on baked goods, and bins for products close to expiration date can be a veritable treasure trove, for example. Other things you may want to consider are shopping in bulk, subscribing to store newsletters to learn about sales, thrifting, and couponing.

#4: Give up on some luxuries

When you’re planning your budget, one of the things you should pay attention to are expenses that you can cut out entirely. You may be spending money on things that make your life easier, things you’re used to, and things you enjoy which are not strictly speaking necessary. Smoking, drinking, eating out, or getting food delivered ate good examples – you can give up bad habits and start preparing meals at home to cut down on your living costs.

There are other, seemingly more important expenses that fit this bill too. For example, if you own two cars, you can sell one or switch to public transportation entirely. If you were planning on repainting, redecorating, or remodeling an old home, ask yourself if that’s really necessary; adding a personal touch is not complicated, so you can personalize your home for free and postpone major changes until you have more solid finances. Even buying new clothes for yourself and your children is not always necessary – you can alter or sew instead to spare a bit more money.

#5: Focus on the largest expenses – housing, transportation, loans

If you’re serious about saving money, cutting down on minor expenses is secondary. While giving up Starbucks and not taking your kids to McDonald’s will add to your budget, it’s not as impactful as getting rid of the real money-drainers like housing costs or debt payments. So try to find ways to lower your biggest expenses. Consider downsizing to lower your rent or mortgage rate. Walk, bike, or take the metro instead of driving to save on transportation expenses. Finally, pay off your debts and loans so you’ll have more cash coming in.

Other easy ways large families can cut expenses

These five tactics will help any big family save quite a bit of money, but they’ll work even better if you supplement them with everyday habits for saving money:

  • always make a list before grocery shopping – you’ll avoid unexpected and unnecessary expenses
  • get the most out of everything you buy – don’t waste food, don’t throw away clothes just because they’re out of style, and use everything you own for as long and as much as you can
  • use cash, not card – it’ll be easier to keep track of your spending when it’s material
  • avoid loans and credit when possible – you’ll end up paying more in the long run

The benefits of finding ways large families can cut expenses

Some of the ways large families can cut expenses may feel like a downgrade. After all, you’ll need to invest time and effort for an often less convenient life than before. But remember: this doesn’t have to be forever. If you can save enough money for enough time, you’ll eventually have more to splurge on things you enjoy. Besides, you may find that some of these things are a lot easier than they seem. And who knows, maybe you’ll even get some enjoyment out of learning to sew or planning free activities for your kids. It’s really all about the attitude you approach the situation with.

Submitted By – Dorothy Carter – Arizona Moving Professionals


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The 3 Smartest Ways to Use Your Stimulus Money

More stimulus checks were sent out in early June: 2.3 million of them, some of which were “plus-up” payments to people who were due more money once their tax returns were processed. In July, Child Tax Credit payments for people with children are scheduled to begin and will continue monthly. Plus, there’s talk of a fourth stimulus check in Congress, though that’s still an iffy proposition.

We’re still feeling some of the fallout from the pandemic, and the stimulus checks have had an impact, both on our pocketbook and our stress levels: Between December and late April, rates of food insufficiency fell by 40%, financial instability was down by 45%, and depression and anxiety dipped by 20%.

How have people used their stimulus checks so far — and more importantly, how should you use yours? Here are some things you should consider.

So far…

It turns out, the three different stimulus checks have been used slightly differently.

  • Nearly three-quarters (74%) of the money dispersed during the first round, or CARES Act, was spent, while 14% of it was saved and 11% of it used mostly to pay off debt.
  • During the second round, more than half of recipients (51%) used most of their money to pay off debt, while 26% saved most of it, and 22% spent most of it.
  • That ratio held up pretty well for the third disbursement: 49% used it mostly to pay down debt, 32% mostly saved it, and 19% mostly spent it.

Check recipients were also grouped into three income categories: under $75,000, $75,000 to $150,000 a year, and $150,000 or more a year. For all three disbursements, those with higher incomes were more likely to save their money than those who made less.

Moving forward…

Of course, none of this means that’s how you should use your money if you happen to fall into a particular group. Your situation is unique to you, and your financial needs should help dictate what you do with the money. Here are three of the smartest ways to spend your stimulus money.

  • Pay Off Debt

A stimulus check is a lot like an IRS refund: It’s a one-time windfall that you can’t count on to come around again, regardless of what chatter you might hear in Congress.

That’s probably why so many people used it for the one-time purpose of paying down debt in the second and third go-rounds. It’s not a bad idea. If you’ve got your regular monthly expenses under control, but you have significant debt — especially debt with high interest rates — you can save a good deal of money by paying off a big chunk of it.

It’s possible that more people spent the first stimulus check because they needed it to cover immediate expenses like food and utilities. Then, as their financial situation improved (either because of the first check, because they got more income, or both), they were free to use more of the second and third checks to pay down debt.

  • Rebuild Your Credit

Did you take a big hit financially during the pandemic? Maybe your credit suffered; if so, it would be wise to pay any overdue or delinquent bills and clear your books of any problems that could affect your credit history. Then, check your credit report to find out where to go from here.

If your credit score has suffered, you can take steps to rebuild it by setting aside some money to open a secured credit card account. These types of credit cards require a deposit, making it easier for people with low or no credit to qualify. Otherwise, you use it like a regular credit card and make minimum (or larger) payments every month.

That will get your credit score headed in the right direction in case you want to apply for a mortgage, car loan, or personal loan down the road.

If, on the other hand, you have good credit and you’re able to handle all your bills without stimulus money, think about investing it or putting it away for retirement or some other future goal: a vacation, your kids’ education, etc. Or maybe invest it in your business or education to acquire more skills and increase your marketability.

  • Be Prepared

The pandemic blindsided most of us, but it also reminded us of how important it is to be prepared. Of course, we can’t be ready for everything, but we can do our best to head off the crises we can foresee.

Do an inventory of your health, car, and home insurance coverage and see whether it’s adequate for your situation. Consider risk factors, deductibles, what you can afford to pay monthly, and what costs you could absorb if the worst occurred.

Think about problems that could occur at home if your house were damaged by a severe storm, for example, or if your plumbing sprang a leak or your air conditioner stopped working in the middle of summer. Savings for emergencies such as these, and the kind of maintenance that can prevent some of them, is always a good idea.

Along those same lines, take care of vehicle maintenance you have been putting off. Changing your oil, replacing your tires, and getting new brake pads regularly will help your vehicle last longer and help you avoid more costly problems, saving you a lot of money in the long run. It’s also a good idea to invest in an emergency repair kit for your car, truck, SUV, or RV. Include things like a jack and tire iron, road flares, flashlight, jumper cables, a tire gauge, and any items you might need to deal with cold weather, like a foldable shovel, ice scraper, and extra antifreeze.

In the end, the smartest way to use your stimulus money depends a lot on your personal situation. So take stock of where you stand, see where it would be best put to use, and go from there.

Jessica Larson, SolopreneurJournal.com

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Creative Ways to Shop on a Budget

blue and brown tote bag

A survey by Gallup in 2019 found that only 32% of Americans maintain a household budget. Roughly half of Americans are living paycheck to paycheck, meaning many of us have to get creative in how we shop for things like groceries, clothes, and entertainment. 

Living on a shoestring budget can be stressful, but it is possible with some of these creative tips to shop and make the most of what you have.

Grocery shopping on a budget

Food tends to be one of the biggest spending categories in anyone’s budget. The USDA estimates that Americans spend an average of 6% of their budget on food; 5% of income also goes to dining out. How can you stretch that grocery shopping budget to go even further?

First, time your shopping trip to capitalize on sales and promos:

Wednesdays: The middle of the week is often when grocers release their weekly circular. “You’ll have first dibs on sale items for the week ahead and, if you’re lucky, the store may still honor price reductions on items you forgot to pick up from the previous week’s sale,” says one expert.

Avoid Tuesday and weekends: Weekends tend to be busier as people shop on non-workdays. Tuesdays can also be crowded as other shoppers try to take advantage of last week’s expiring deals, and therefore sale items go quickly. 

Shop late or early: The hour before closing is when some grocers reduce prices on bakery items or produce items that won’t last until the next day. Early in the morning is also when there is less competition for sale items. 

Next, before you head to the store, download an app. Not just any app, but one that gives you discounts: try Food on the Table, an app that lets you type in your food preferences and then generates a list of recipe options based on current promotions at your go-to grocery store. Or, try Ibotta, an app that lets you retroactively apply coupons to items you purchased by scanning your receipt and claiming deals.  Many grocery stores also have apps that deliver exclusive offers and digital coupons. 

Finally, put your dining out budget into your grocery shopping budget. A meal at a fast-food restaurant costs around $8; if you stop eating an $8 lunch every day during the workweek, you can save $40 a week ($160 a month!). 

How to budget for an apartment

Rent is a big budget item for most people, and there are lots of hidden costs in budgeting for an apartment. Whether you’re on the hunt for a new lease or looking to reduce your utility costs and other apartment expenses, there are a few key things to consider when budgeting for your apartment. 

First, if you’re looking to sign a new lease, try to find an apartment that’s close to public transportation. Longer-term leases (a year or more) tend to be cheaper, as the landlord doesn’t have to search for a new tenant or spend on renovations as often. If there are fixes that need to be made, offer to do them yourself in exchange for a discount on the security deposit. 

If you’re in an apartment and hoping to save on utility costs, go beyond basic steps like turning off lights and turning down the heat. Think about turning off the devices that consume energy in a passive way, like your microwave and water heater that you aren’t using constantly. Winterize your apartment to cut your cooling and heating bills (winterize is a bit of a misnomer, as many of these steps can also keep your apartment cool in the summer). And, avoid running your energy-intensive appliances – washing machine, dishwasher, or dryer – during “peak hours”. Electricity companies tend to discount rates during the night when fewer people are using their grid.

Thrifting and other shopping ideas

What about other expenses: clothes, gifts, and entertainment? There are creative ways to shop on a budget for these items too. 

Thrifting is an obvious choice for saving your clothing budget. Many shoppers also turn to fast-casual brands like H&M and Forever 21 – but be aware that those retailers may be more expensive in the long-term. Spending $10 on a t-shirt that lasts fewer than 10 wears is worse than spending $50 on a shirt you’ll own forever. “Unless it’s practically free, you’re better off buying clothing items from good brands with a reputation for well-made items,” wrote The Simple Dollar.

Look to see if clothes are well made by checking the seams and material. Seams on a good quality item will be perfectly straight, with no dangling strings; any patterns should match up well. The material should be higher-quality. Look for natural fibers and blends like wool, and avoid synthetics like polyester. 

For gifts, go for something thoughtful rather than expensive. Find gifts that are unique to the recipient and require time, rather than cash. For instance, give someone the gift of time by babysitting or hiring a house cleaner. Give your family member a recipe book of meals from your childhood. Or, start a new tradition – holiday cookie-baking, for instance – that leads to memories rather than things. 

Shopping on a budget isn’t always easy. Sometimes, what you really need is a little Lift to cover a shortfall or meet a financial emergency. 

This article is contributed by LiftRocket.

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