How to avoid getting buried in holiday debt

The holiday season is in full swing, which means that it’s time to start thinking about buying gifts and booking holidays. As exciting as that may be, you cannot go overboard; otherwise, you’ll end up spending too much, and once the holidays are over, you’ll regret all the debt you’ve taken on. No holiday is worth that kind of stress, so it’s important to avoid getting buried in holiday debt no matter how difficult the Christmas cheer makes it to control your spendings. But don’t worry – it’s possible to have fun holidays and be charitable this winter even when you’re on a budget. You just need a good plan.

Can you avoid getting buried in holiday debt and still enjoy winter festivities?

Winter holidays can be tough on anyone’s budget. Even when you factor in end-of-the-year bonuses, the expenses are sure to set you back a bit. First, you’ll need to buy gifts for friends and family. Next, you should get the Christmas tree or other decorations to deck your home in the holiday spirit. Then, you may want to go on vacation, even if it’s just to visit family. Even if you shop creatively to save some money, the bill will have sent your head spinning by the time you get to treating yourself.

The hard truth is that you’ll need to give up some things when you’re looking to celebrate on a budget. But that doesn’t mean you can’t enjoy yourself! The key is finding cheap or free holiday fun. Go out and play in the snow, use last year’s decorations, or throw a party at your own home instead of going out. Just spending time with friends and family and making memories can be a great way to spend the holidays without spending a lot of money.

Tips on how to avoid getting buried in holiday debt

Holiday debt is typically accumulated on credit cards, making it one of the worst types of debt. It’s easy to fall into without really noticing and hard to get out of. So it’s best to avoid it by following some wise spending habits during the winter season.

Set a budget and stick to it

The simplest way to avoid debt is to decide in advance how much you can spend and then stick to the plan. By now, you should be used to creating a household budget; creating a holiday budget is not too different from that. Start by taking a look at your finances. See how much you can afford to spend. It’s important to be realistic at this stage. If you set your budget too high, you’ll go into debt even if you stick to it. Instead, it’s better to set your budget too low; then, you can spend whatever’s left on an extra treat.

Start holiday shopping early

There’s nothing worse than doing all your Christmas shopping two days before the holiday. Not only is it stressful but also expensive. By then, all the sales have passed, and you can only buy the things nobody else wanted (often the most expensive things). Instead, it’s better to start ticking the boxes on your holiday shopping list already in November. That way, you can take advantage of Black Friday sales and early bird offers.

Learn to prioritize your expenses

You probably want to get a gift for every family member and friend you have. But if you are a large family living on a budget, that’s not always possible. It’s a tough choice, but you’ll need to count someone out. Focus on those most important to you – your spouse, your children, your parents, your best friend. You can always send cards to those who don’t make the cut. If it comes down to it, you can forgo those too. The truth is that some expenses (mortgages, groceries, gas) come before gifts and cards. So prioritize those, even if it means not giving any presents this year.

Cut costs elsewhere to pad your budget

The holidays are not the only thing you’ll be spending money on at the end of the year. You’ll still have all your regular expenses. In fact, you may have some extra costs too – perhaps you’ll need some new winter clothes, or you’ll need to equip your car for icy roads. Many people choose to move at this time of year because it’s cheaper than relocating in the summer. If you’re one of them, the moving experts behind advise looking for ways to save money on your relocation. As long as you still know where your priorities lie, this can be a great way to avoid holiday debt. If you save money on other things, you’ll have more to spend on holiday cheer.

Remember that not all gifts are material

Everyone likes getting gifts. But that’s not all that the holidays are about. More than anything, they’re about spending time with your family and having fun with your friends. And you don’t need to spend money to do that. So think about gifts that aren’t material. Visit a nearby town, skate on a frozen lake, bake gingerbread cookies with your children. You may still need to invest a bit in experiences, but it won’t be as much as you usually spend during the holidays.

What to do if you fail to avoid getting buried in holiday debt

If it’s too late to avoid getting buried in holiday debt, you’ll need to figure out how to deal with it instead. Obviously, you’ll need to pay off your credit cards. You should get on this as soon as possible. The longer you wait, the more the interest grows and the higher the amount you have to pay back. So have your fun during the holidays. But once they’re over, start saving everywhere you can. Give up the luxuries of eating out and driving everywhere; make the most of the clothes you have so you don’t have to replace them; cut out any expenses that are not strictly necessary. You want to pay off your holiday debt quickly, and that will require some sacrifice.

Dorothy Carter


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Building Your Nest: How to Create Financial Security

When you are starting a family and trying to save money to build a nest egg, it can feel like an uphill battle. Monthly expenses can be steep, and unexpected bills such as car and household repairs can sabotage the budget. When times are tough, it may seem as though saving money is impossible. For young people who are navigating the expenses of raising a family, setting aside money for a home and retirement may seem impossible.

However, wise financial planning starts with a solid understanding of your incoming and outgoing funds. Here are some tips to get started.

Understand Your Spending Habits

Prior to developing a budget, it is important to recognize your spending patterns so you can create a plan that works. List all your expenses, from utility bills to subscriptions and medications. It is crucial that you list even the smallest of outgoing funds, as these add up over the course of a year. To get the most accurate findings, use an average from six months of billing cycles. An easy way to access this information is to visit your banking website for a full listing of outgoing funds for each month.

Most people have spending habits that could use improvement. Identifying your necessary changes can help you make financial goals that will stick. Do you notice a trend of over-spending in certain areas? Sometimes online shopping apps and impulse purchases are spending pitfalls that need adjustment. Committing to better fiscal habits will get you closer to financial security.

Building Your Budget Plan

As you begin your budget process, make sure you and your partner are on the same page and working toward the same goal. Developing unified savings goals can help families direct their money in coordinated ways and can reduce financial conflict. Examine your spending habits and where your money has been going for the past six months.

Look for spending categories that could be pared down or even eliminated. If you have a gym membership that you never use, consider opting out to save that monthly expense. Unused subscriptions can be cancelled, and entertainment budgets can often be scaled back. Be sure to allot money in your budget for fun and look for ways to make the most of your finances.

While you may eventually want to invest in marketing consultants, for now it pays to take advantage of free resources. For instance, you can save a bundle on marketing simply by doing most of your advertising over social media, as well as using a free logo design tool to connect with your customers. Likewise, you can save money on accounting simply by using Google for spreadsheets, word processing, and file-sharing.

As you create your budget, look at it as orchestrating your funds toward their best purpose. Add a savings category into your plan that is off-limits for withdrawals for at least one full year. Setting a boundary for yourself in this way can prevent impulse spending or withdrawing the funds for reasons that do not align with your ultimate long-term goals. Often a compelling goal for couples is home ownership. Create a line in the budget for a down payment on a home as well as other specific goals.

Saving Money for Your Goals

Many young couples wish to save money for a home. Often mortgage companies will ask for a percentage of your loan request (often 5%) as a down payment. Banks offer better interest rates to people with a good down payment, which can result in lower monthly payments over the course of the loan. Make sure you research varying loan types prior to agreeing to a particular plan, since there are pros and cons to each type of mortgage.

Setting aside funds for your child’s college education is another great financial goal. You can invest in plans that are specific to college savings, and these can yield better results over time than traditional savings accounts. As your child grows, teach them the value of establishing a budget, creating financial goals, and saving money.

Retirement savings is a crucial requirement for a budget line, and a financial planner can easily help you strategize for this type of long-term savings. However, this isn’t something you should put off until you’re older. Tap into your company’s 401(k) match right away if you haven’t already, and consider opening other retirement accounts. If you’re already a part of your employer’s 401(k) plan, look into maxing out your contributions for the year.

Generate Extra Income

Finally, depending on your circumstances, you may be in the perfect position to start a side business to help generate passive income that you can put toward savings. Ideally, this is something you can comfortably handle while still maintaining your regular job, though there’s always a chance that your business will take off.

When mulling your options, keep in mind there are plenty of opportunities out there for a business you can run in your spare time. Whether it’s dog walking, reselling items on eBay, tutoring, affiliate marketing or even becoming a blogger. What’s important is to tap into skills you have or to provide a service that fills a growing need. The last thing you want is to launch a business that puts you into debt.

Surrounding yourself with financial security takes time, patience, and dedication. But if you follow these tips, before long you’ll build a nest that can weather any storm!

Danielle Porter

IAPDA, or International Association of Professional Debt Arbitrators, establishes a level of comfort with consumers, creditors/collectors and legislators. IAPDA Accredited Service Centers have all committed to having their sales, customer service and debt negotiation staff members obtain and maintain current IAPDA certification. Contact us today!

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How to Save Money on a Long-Distance Move

Let’s not kid ourselves – relocations are costly, and the costs only increase with the distance. How much you’ll actually spend depends not only on the milage but on a couple of additional factors, as well. These include the weight of the cargo, the number of people handling it, etc. But despite the price being hard to anticipate, it is still possible to save money on a long-distance move. It’s just a matter of how, which we are just about to show you!

Ways to Save Money on a Long-Distance Move

If you are a member of a large family, but even if you aren’t, chances are you are looking to cut costs wherever possible. Thankfully, a long-distance relocation is one of the instances in which doing so is actually feasible. To make your life a bit easier during these trying times, we’ve devoted ourselves to compiling certain relocation money-saving tips. Now, we believe you’ll make good use of them!

Plan Your Finances

The essence of being able to save money, in the long run, lies in planning your finances early on. The sooner you do it, the better. It’s also important not to go about it fast, but rather take your time. That will help minimize errors. Take into account how much you have available in funds. Then, figure out the sum you are sure you can dedicate towards moving costs. Once you are aware of your budget, you’ll have an easier time deciding whether you’ll be moving on your own or with the help of professional movers.

Devise a Concise Budget

Now that you’ve come up with a budget or a rough sum of how much you are willing to spend, it’s time you became a bit more specific. Remember to include the following expenses, all while deciding how much should be enough to cover them.

Costs of moving with a moving company (only applicable if you hire movers);

Costs of moving by yourself (only applicable if you tackle the relocation process alone);

Car-transportation expenses – in case your personal vehicle needs to make the trip, too

A variety of post-relocation expenses

Of course, like everything else in life, relocations can be pretty unpredictable. That’s why setting aside a bit of money for emergencies is recommended. And if we are talking percentiles, about 20% of your budget should be dedicated towards unforeseen expenses.

Pick the Right Time to Move

If the goal is to save money on a long-distance move, you definitely don’t want to move during the hottest season. The “hot season” is considered the time between May and September when moving companies have their hands full, and getting in touch with one proves more difficult. It’s also when their services are more expensive. Since you wish to cut costs, it’s only natural you’d choose to move off-season. Anytime between October and April should work in your favor. The movers will have less work and try to appeal to more customers by decreasing the prices. Depending on the company, they might even be willing to offer additional discounts.

Hire a Trustworthy Moving Company

You have the option to move on your own or move with professional help. The first is still true, but there comes a question of how capable you are of handling something as tedious as a moving process. In truth, there’s so much that could go wrong, and you, having no prior relocation experience, could find yourself unable to solve the problems. Your relocation can, thus, quickly turn out to be more expensive because you’ll have problem-solving to deal with, damages to fix, and more.

On the other hand, while initially costing more, moving with long-distance movers can ultimately turn out cheaper. When we consider that they are professionals you can completely rely on, there’s really only so much for you to do. With them, you can fully relax. You can achieve peace of mind, which, you might agree, is worth splurging on.

Don’t Forget to Declutter

As was said at the very beginning, the weight of the things being transported directly plays into how expensive your relocation will be. To save money on a long-distance move, you’ll have to minimize the number of your possessions. Saying goodbye to your belongings is never easy, but if we are being honest, we all have a lot of those lying around that we absolutely no longer need. It’s essential to differentiate the things you use from the ones you don’t. Once you’ve done that, it’s time you took action and began ridding yourself of them.

You have three options. You can either sell the items you don’t need, give them away, or toss them out. By going with the first option, for example, you’ll be able to recoup some money spent, which, then, you could put into your savings account. If you are feeling a bit more charitable, donating items of no use could be an excellent choice. Throwing away should, ideally, be your last resort and should only be reserved for the damaged belongings.

Put Yourself in Charge of Packing

One of the best money-saving practices out there as far as relocations are concerned is taking care of the packing on your own. Yes, there are moving companies that provide packing services, but utilizing them isn’t mandatory. Before you take up the project on your own, though, it’s essential to be aware that it is anything but simple. It will take a lot of time and effort from your side, so tackling it weeks ahead is advisable. Don’t be afraid to seek assistance from your loved ones and friends, and consult the Internet when in doubt about how to pack something safely.

How do you feel about being able to save money on a long-distance move now that you’ve been presented with the ways of doing so? Confident, we sure hope so! Now, the rest is up to you. Just put the moving plan in motion, apply what you’ve learned, and you should be good to go!


Dorothy Carter

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Get Your Business Out of Debt With These Simple Ideas

Getting a business out of debt can be a long and stressful process, but there is some good news for small business owners who need to manage their finances. There are several things you can do to pull your company up and boost your money wellness over time, from revising your budget to taking a class to become a certified debt specialist. IAPDA Certification offers online courses for the latter to allow you or your employees to learn more about debt laws and legislation. You can also take steps to better understand the types of debt your business has accrued and look for ways to improve things come tax season so your business won’t owe as much.

Form an LLC

A limited liability company will provide tax benefits for your business, meaning you’ll be able to save money whether you file quarterly or annually. An LLC also means less paperwork than a corporation and offers protection for your personal finances, giving you peace of mind throughout the year. Every state has its own rules and steps for filing as well as its own fees, so look up the LLC California cost to find out how much you can expect to pay. If you want to ensure that nothing gets overlooked during filing, consider hiring a formation service and save yourself an attorney’s fee while you’re at it.

Revise your budget

Another way to save money is to go over your budget every six months or so. Even if you feel it’s working for your business, there may be something that could be added or changed that will make a big difference in the coming months. Look at your financial reports over the past several months to get an idea of what sort of trends your business is seeing, both in income and expenses. If your company has multiple streams of income, separate these within your budget so you can see which ones are the most profitable and which ones could use a little work. This is a great way to figure out where your marketing needs lie.

Work with an accountant

When you’re creating a new budget and looking at numbers every day, it’s a good idea to have a backup plan to ensure nothing important gets overlooked. Consider hiring an accountant who can go over your books and check for mistakes or possible tax advantages; this will give you peace of mind throughout the year and prevent nasty surprises during tax time. You can also utilize an app to help you keep track of things on a daily basis so nothing slips through the cracks. An accountant may also be able to help you start the process of consolidating your debt.

Boost your income

Even with a well-planned budget and help from a pro, it’s a good idea to increase your revenue as much as possible in order to pad your savings, pay off debt, and/or create an emergency fund for your business. You might boost your sales by expanding online marketing or offer a discount to customers who pay their invoices on time so you can avoid the costly process of chasing down payments. If you need a way to increase your income from existing customers, consider using add-ons or upgrades to your products and services. Get out into your community and look into teaming up with local businesses as an easy way to get new customers into your store.

Getting rid of debt within your business takes a little time, but there are many ways to go about it these days. By working with your budget and looking for ways to boost revenue throughout the year, you can create financial wellness for your company and build upon it for years to come.

Interested in learning more about the certified debt specialist training that IAPDA Certification offers? Get in touch via the contact form at the bottom of their home page.

Danielle Porter

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The Pros and Cons of Paying Off Your Mortgage Early

Buying property is one of the most significant financial investments a person can make in their life. In order to fulfill their American dream of being a homeowner, many people take out loans. However, paying off those loans fast is not always a good idea for everyone. Sometimes, paying off your mortgage early comes with its disadvantages. To help you make the right decision, we’ll go over all the pros and cons of paying off your mortgage early in the rest of this article.

What You Need To Know About Mortgages

If you want to buy a property in America, you will almost certainly need a loan. That’s probably why mortgage debt accounts for the biggest share of all consumer debt in the USA. They’re paid in multiple installments over a certain period, usually over 15 to 30 years.

What is important to note about mortgages is that they are secure loans. This means the property you buy with the loan will serve as security for your debt. If you stop paying your monthly installments, the lender can seize and sell your house. On the other hand, paying off your mortgage too early can also have its disadvantages.

Cons Of Paying Off Your Mortgage Early

As we said, paying off your mortgage early comes with both pros and cons. There are some of the most significant downsides of making extra mortgage payments to consider:

You Won’t Be Paying Off More Expensive Debts First

Although your home mortgage is probably your most considerable debt, you may benefit more from paying off credit card or vehicle loans first. This is because these loans have much higher interest rates than mortgages. So, while your mortgage may appear to be enormous, the interest on your smaller loans and credit agreements would actually be far higher. So, if you didn’t pay off your credit card debt before applying for a mortgage as suggested, consider putting it as a first priority if you have extra cash laying around.

Early Repayment Fees

An early repayment charge is a fee charged by your lender if you pay off your mortgage early or pay it off more than the lender allows. This cost isn’t charged by all lenders, and if you’re paying off your mortgage in more than five years, you generally won’t have to worry about it. However, you should always check with your lender first. These repayment fees can sometimes reach thousands, so you should always be extra careful.

It Can Hurt Your Credit Score

Your credit score is determined by several factors, one of which is the mix of the kinds of credit you have. You may, for example, have a mortgage and a credit card, and car loans. Your credit score will drop if you altogether remove one sort of credit. This should be a minor change, but it’s worth noting.

Pros Of Paying Off Your Mortgage Early

While there are some cons to paying off your mortgage early, you can’t possibly deny all the pros that come with it too. Here are some of the biggest advantages of doing so:

No More Monthly Payments Means Your Money Can Go Towards Other Investments

Paying off your mortgage early gives you financial freedom. You’ll have the extra money in your bank account each month because you won’t have to make any monthly payments. This means you’ll be able to spend that money on whatever you want. Alternatively, you can put that money toward paying off other debts you might have acquired over the years.

Another thing you can do with those funds is use them to buy a second house. You can use it for vacations or as a source of profit. Buying a house, especially in a different state, can be an excellent investment if you plan on renting out. Of course, buying a home long distance can sometimes be challenging. However, choosing from afar doesn’t have to be complicated with the right real estate agent.

You Become Debt-Free Sooner

If your mortgage is your sole loan, paying it off is the most effective strategy to achieve debt-free status for the rest of your life. As we said before, there might be fees associated with paying off your mortgage early. So, even if you have enough money to pay it off in full, talk to a mortgage expert to be sure you can afford it.

Save Money On Interest

A portion of your mortgage payment goes toward interest each month, so the fewer payments you make, the less interest you’ll pay. You may save tens of thousands of dollars by paying off your mortgage early. Just make sure you discuss with your lender that any additional payments would only be applied to the principle, not interest.

You Own Your Home

When you buy a house with a mortgage, you don’t technically own the house until you pay off your loans. Suppose you have a rough financial patch and can’t afford your monthly mortgage payments. In that case, your house could be foreclosed upon. There is no risk of losing your home when you can own it outright.

Peace Of Mind

Lastly, you may simply enjoy the concept of not having a mortgage to worry about. The independence that comes with not having to pay a mortgage is an excellent motivator for many.

In Conclusion: Should You Pay Off Your Mortgage Early?

When deciding whether or not paying off your mortgage early is a good idea, consider how all the pros and cons would affect you personally. Decide what works best for you and what is most likely to help you achieve your financial goals. There’s not just one correct answer for everyone. For some people, owing money can feel very stressful. By paying off a mortgage early, they get a sense of relief that can’t be measured. However, if you want to save money by lowering your monthly payments, a mortgage payback isn’t the only option. Refinancing your mortgage might also help you save money by reducing your monthly payments.

Dorothy Carter

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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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