Credit & Debt

Here’s the Problem with Having a Low Credit Score

Written by adminJune 20, 2019

Your credit score can impact a lot more than you realize it does. We’re talking about its ability to keep you from making major life decisions, taking care of yourself during an emergency, or even the ability to save money. Low credit scores can also be blamed for causing issues in relationships and putting a person in turnoff territory.

Low credit scores can cause higher interest rates, expensive insurance, and so much more. Sometimes, a bad score isn’t the person’s fault. Perhaps they had a medical emergency and are now trying to pay back a lot of debt. A divorce and big spending by a spouse can lead to it as well. Either way, low credit scores make life difficult.

The new middle class is essentially a person who is making a decent amount, but are unable to save. A lot of them don’t have health insurance, which costs them big time in the end. There’s new information coming by Elevate, a company that looks at data from non prime Americans. To be considered non prime, you must have a credit score below 700.

Those with a low credit score are finding out they have a harder time financially than those with a good credit score. This might seem obvious, but it happens in ways you might not expect. Their incomes are less steady. They’re paying a lot more for things that someone with good credit is paying less for.

Credit Scores and Dating

42% of people who were surveyed said the person’s credit score played some role in their interest in another person. This is an interesting statistic found by Bankrate and Princeton Survey Research Associates International. A good credit score says someone is responsible with their finances and money issues cause problems in relationships.

Women are rightfully more judgmental about credit scores than men. The survey looked at 1,000 adults and found about half of the women said they wouldn’t date someone with a bad credit score. Men care less about it, with only 35% saying the same. Older millennials are the group that seems to care the most about the subject.

There are very good reasons for this. Low credit scores can make it nearly impossible to buy a house, get an auto loan, get any type of loan if one is needed, and so much more. Even if they’re able to find that one company out there willing to give them, let’s say, a mortgage, they’d pay nearly $50,000 more than people with good credit.

This is ultimately what makes life more difficult for people with a lower credit score. They’re shelling out a lot more money and it’s catching up to them. They make higher monthly payments and can’t seem to get ahead in their finances. This is why it’s essential to focus on improving your credit score and saving money any way you can.

Written by adminJune 18, 2019

Credit & Debt , Saving

You may be among the 25 million HSA account owners, here are some things you might not know about them.

Health savings accounts (HSAs) are becoming an increasingly common feature in benefit packages. Usually offered together with a high-deduction health plan (HDHP), they are tax-exempt and set up to pay for certain medical expenses that owners may incur.

Contributions used to pay for medical expenses that meet requirements are not taxed, and the funds that grow in the HSA remain tax-free.

Some owners may not realize that contributions made via payroll do circumvent the Federal Insurance Contributions Act (FICA) tax, which makes HSAs as tax-perfect as they can get.

Call Now 844-332-2079

HSAs are Underutilized

HSAs are rising in popularity but are not optimally utilized. According to a survey conducted by Mercer, more than 53% of large employers offer HSA-eligible health plans but only 24% of covered employees have opted into one.

The HSA enrollment process is actually quite easy. Here are the requirements according to the IRS:

You must be covered under a high-deductible health plan.
You cannot have any other health insurance coverage, including Medicare.
You must not be claimed as a dependent on someone else’s tax return

For 2019, if you only have personal HDHP coverage, you can contribute up to $3,500 towards your HSA. If you have HDHP coverage for your whole family, the contribution amount increases to $7,000.

Avoid Spending on Current Medical Expenses

The HSA is designed to cover health care expenses in retirement. But many HSA account holders use their accounts to pay for current medical expenses which defeats the purpose of having a HSA in the first place.

Rob Foregger, co-founder of NextCapital says that in certain situations, HSA account holders have no other funds to pay for their current medical expenses. If they plan to use their HSA in retirement, Foregger suggests investing in mutual funds, and that most HSA providers now offer these long-term investment options.

No Need for Required Minimum Distribution

After signing up for a HSA, you are under no contractual obligation to spend it on current and/or future medical expenses. You can also use it as a savings account, or to pay for personal costs at a 10% penalty.

There is no required minimum distribution (RMD)with a HSA as compared to a standard IRA. After age 70, most IRAs are required to take an annual minimum amount from their accounts. However, HSA owners can leave their money in their accounts for longer and let it grow tax-free.

Shop Smart

It is idealistic to think that people with high-deductible plans will allocate their money wisely for their medical expenses. But if people spent more time comparing prices they can avoid paying for overpriced plans.

There are procedures like MRIs that can be overpriced, draining HSA accounts. HSA owners should get quotes from different vendors for such services to avoid long-term impact to their HSA’s future value.

If you would like to discuss the merits of enrolling in a HSA, or if you require any other financial advice, feel free to reach out to the Financial Helpers. We are only a phone call away.

Call Now 844-332-2079

Written by adminMay 25, 2019

Credit & Debt

Back in December, CreditCards.com did a survey asking 1,000 Americans about their debt and their thoughts surrounding it. What the survey revealed was quite shocking. It found that as much as 25% of the population believes their debt is so great, they’ll never pay it off. In fact, they expect to die with a large amount of debt left to be dealt with.

41% of those surveyed say they have no clue when they’ll be able to pay their debt off. They’re working on it, but apparently don’t have it budgeted out. 65% say they’re not sure when or even if they’ll ever. These are terrible statistics that are making life difficult for everyone. Having significant amounts of debt hurt the economy as a whole.

An analyst for CreditCards.com, Ted Rossman, described these stats as “depressing” and one that everyone should try to avoid.

“You’ve got to do whatever you can — whether it’s a balance transfer, taking on a second job, cutting expenses, or whatever you have to do,” he added. “Credit card debt has a much greater impact on your finances than something like a mortgage, an auto loan, or a student loan, because those products are all in the 4, 5, 6% range. Credit card rates are so much higher.”

Growing Credit Card Rates

Credit card interest rates are currently higher than any type of loan out there. These rates recently came into focus after both Bernie Sanders and Alexandria Ocasio-Cortez came out in favor of legislation to se the rate at 15%. They hope lowering the interest rates will help all Americans, but especially the working class.

“There is no reason a person should pay more than 15% interest in the United States,” the freshman representative wrote on Twitter. “It’s a debt trap for working people + it has to end.”

“Practically speaking, I don’t think that’ll become law any time soon,” Rossman said of the proposal, “but I still think it’s an important discussion to have because credit card rates are really high.”

“We know … that about 40% of cardholders are already paying their bills in full each and every month, so that’s great,” Rossman said. “Those are the kinds of people that are great candidates for rewards. But, the 60% who are carrying debt really need to prioritize their interest rate over all else. Unfortunately, a lot of people aren’t doing that.”

The reality is, overall household debt has been creeping up in recent years. Despite a robust economy, people are leaning more on debt than ever before. Perhaps they believe they can afford it with the extra cash in their pockets, but it’s still only 40% of people who pay their credit card debt in full.

“We feel like most people are being responsible,” Rossman said. “Most people who have credit card debt didn’t get there because of a vacation. They didn’t get there because of a shopping spree. They got there because something happened with their health, their car, their home, or they’re just having trouble making ends meet.”

“That’s a tough situation to be in,” Rossman added. “I think it brings up some of the fundamentals of personal finance about doing whatever you can to budget, live within your means.”

Written by adminMay 13, 2019

Credit & Debt

We often talk a lot about student debt and share solutions we think might work. We constantly throw out the numbers. 44 million Americans owe around $1.53 trillion in student loans. Many 2020 candidates are already standing on the platform demanding debt reform for students who are drowning.

The one thing we always ask ourselves in the standard of fairness: does forgiving student debt make sense? Is it the right move? Of course, if you have student debt, you’re more inclined to receive the help. Many others, including President Trump, don’t think that taxpayers should be on the hook if you decide to go to college.

We can look at both sides of the political aisle and see which ideas makes the most sense of all Americans. It’s the data that makes the final determination. According to research from the National Bureau of Economic Research, it does make sense to forgive student debt. They looked at a number of different criteria.

Forgiving Student Debt

There is a lot of great data out there from the past several years. We’ve seen a number of these big schools go down, as well as lawsuits from students to get their loans wiped away. Many of these students feel they were defrauded during the Great Recession and should have their loans forgiven. Many of them won their cases.

One big instance was National Collegiate. This company held over 800,000 private loans that totaled over $12 billion. The National Bureau of Economic research also looked at credit reports. In conclusion, they found the same, that there are “benefits of intervening in the student loan market to reduce the consequences of debt overhang problems by forgiving student debts.”

There are four key benefits that ultimately improved the quality of life for the borrower. The first was the person was able to increase their overall consumption. This means they had more money in their pocket to buy stuff. That’s great for the economy when you consider the 44 million people in debt and how much that is currently hindering economic growth.

Forgiving their student debt also lowered their overall debt by 26% and didn’t default on other loans as a result. They even found they were freer to find greater job opportunities. They didn’t feel forced to take the first job that came alone in order to keep up on their student debt. They had the time to find the right career path for them.

Psychological Benefits to Debt Forgiveness

“The thing that was interesting about this study is that the people that got the forgiveness weren’t paying anyway, so it actually did not change their monthly loan payments at all,” Ben Miller, the senior director for post-secondary education at the Center for American Progress, told Yahoo Finance. So “it suggests there might be some sort of psychological benefit to this relief that goes beyond the household balance sheet. That to me is really interesting because it suggests that there may be external benefits to debt relief that you don’t otherwise see.”

In a lot of ways, debt is a part of life. The vast majority of us cannot afford to walk onto a car lot and throw down cash to buy whatever car we want outright. No, we take out an auto loan. Same goes with buying a house. We either choose to rent or take out a mortgage which can take 30 years to pay off.

“We find that consistently across all debt categories, and both with and without county-month fixed effects, the treated borrowers are significantly more likely to reduce the number of accounts,” the researchers wrote. “Overall, these findings suggest that treated individuals are significantly more likely to reduce their leverage after the debt is discharged.”

Written by adminMay 10, 2019

Car Insurance , Credit & Debt

Back in 2008, Americans hit what has become the worst economic disaster in our country’s history. It was worse than the Great Depression of the 30s. For nearly an entire decade, it threw Americans into panic. It fueled the $1.53 trillion student loan debt crisis. What started the Great Recession was known as a ‘housing bubble’.

Just before the recession hit, property values were going through the roof. As the value of something expands, it creates what experts call a bubble. It’s called a bubble, because eventually, it pops. When the value of a home became three times what people were even making, suddenly they had a difficult time paying their bills.

Debt starts increasing and it nearly chokes an entire market. That throws the entire economy for a loop and drastic measures have to be taken. Right now, there are signs that the same thing is happening in the auto industry. Back in 2018, nearly 7 million people were extremely late on their auto loan payments.

That number is significant. It’s a record for auto loans. Even during the recession when money was scarcer, the number only approached one million. These are people who are more than three months late with their payments. This is at a time when the economy is smoking hot. That’s a 75% increase in the last decade.

What’s Causing People to Not Pay their Auto Loans?

More people than ever before are defaulting on their auto loans. What is the real cause of this? Right now, a lot of it has to do with the lenders themselves. They’re more open to giving auto loans to people who have riskier subprime credit. That means their score is under 670. Cars are a necessity to many, so they’re willing to pay whatever the asking price is.

The lender won’t say no, so they often fleece the customer. They even know a lot of these people won’t be able to repay their loan. And now that these subprime borrowers can’t pay back their loans, many millions are now in default. That hurts their credit score and is leading us towards a new recession.

In fact, the way the auto bubble is growing looks very similar to the housing bubble that started the Great Recession. Of course, predicting when recessions hit is just as steady as knowing what the weather will be like a few months out. Sometimes, you know a storm is brewing in the distance, but knowing when and where it will hit is unknown.

The Brewing Recession

The massive housing market crashed when it grew too large and people were defaulting on their loans. The same is happening with auto loans. They’re growing so large and it’s forcing many Americans to default. Eventually, the auto loan market will crash. Will it take the whole economy with it? Three-fourths of Americans believe that buying a new vehicle is unaffordable.

The average U.S. household can only afford half of their car’s value. This scenario is scaring plenty of experts. They do see dark recession clouds forming in the horizon. Experts like Howard Dvorkin, the chairman of Debt.com.

“This tells me the auto bubble will become a problem if it isn’t already one,” Dvorkin says. “After all, if the average American can afford just over half of the average new vehicle, the logical conclusion is that auto loans are going to continue to skyrocket.

“While many experts might see an auto loan crisis as remote; I’m reminded that very few of us predicted the housing bubble. Those who saw it coming (as I did) didn’t realize just how deep it would go.”

Why Are People Taking on More Auto Loans?

The first thing to look at is why people are taking on more auto loans than they can afford. Then you’ll start to see why the value is increasing. Infinity Research did the job looking at this and came to a startling conclusion:

“Cars are no longer seen just as a means of transport; rather they are now a status symbol. This explains how frequently the cars are being bought and sold. Five years back, the ownership cycle of a car was around 7 years. Today the ownership cycle has come down to 4 years, and market analysts believe that by 2021 the period might come down to 3 years.”

That’s right, it’s impatience and pride. Owning a car for more than a few years is seen as becoming taboo. People see the latest and greatest thing on the market. That leads them to give on the vehicle they’re currently paying off to take out yet another mortgage for something even newer. They do this without even making enough money to do it.

People who are in major debt and don’t even have a decent credit score are trading up. But there’s more to the story. There’s a number of great used vehicles out there right now. You can get a much better value looking at used than brand new. Yet, that’s not the path people are taking. They still want new and it’s throwing them into major debt.

The Infiniti Research study suggests, “Decreasing ownership cycle also means that quality of used cars is rather good, and buying it is a total value for money.”

How to Protect Yourself from an Impending Bubble?

You need to be ready for when the bubble hits and threatens to burst. In order to do that, you have to lower your overall debts. If you’re one of the people helping to cause this problem, consider stopping. Realize you don’t need a new vehicle every few years. Get something you can pay off in a few years and then get out of the debt cycle!

By having a car you already paid off, it will keep you from constantly spending. Imagine having those payments in your pocket because you no longer have to make expensive payments? That allows you to save money, which is what you really need to survive a recession. Those who are able to save are more apt to get through any phase of the economy.

Finally, don’t get caught up paying on something you can’t afford. You might think you need that brand-new car, but if your credit isn’t perfect, you will be paying through the nose for it. You simply can’t afford it, and the interest that will accumulate over that time. Build yourself a safety net and the rest should be fine.

Written by adminMay 7, 2019

Credit & Debt , Credit & Debt Settlement

When you think of student loan debt, the image that comes to mind is someone 25-30. They have their whole life ahead of them. We sort of shrug off the student loan debt problem until we see the consequences of it firsthand. Yet, it’s not just a problem for younger generations. It’s also plaguing senior citizens in their 60s and 70s.

Of the 44 million Americans struggling to pay back student loans, about 3 million of them are 60 and older. They still hold as much as $86 billion towards the $1.53 trillion that’s owed. This data was made public by the Consumer Financial Protection Bureau. Just two years ago, that number was significantly smaller (but still large) at $66.7 billion.

That goes to show that the population ages, there will be many people who hit retirement age still unable to pay off their debt. They carry it with them throughout their lives and it’s a devastating burden. Because they have no choice but to pay it off, many seniors are using their Social Security payments to keep up. That should never happen in this country!

Older Americans Going to College

A lot of the student loan debt isn’t so new. It’s not unheard of for someone in their 40s and 50s to decide to get a degree. They don’t realize the burden they’re putting themselves under by doing so. The debt problem wasn’t as pronounced back when they were younger and probably expected to be able to take care of it. They thought wrong.

One such person is Seraphina Galante. She’s a 76-year-old woman who still owes $40,000 in student loans. She decided nearly twenty years ago that she would go back to school to get her master’s degree. She didn’t think she’d have any problem, with a master’s, paying back any of the student loan debt. She was wrong.

“I was very confident that … I would pay it back, you know, in due time,” Galante said. “We grow older and then we get more senior. That’s reality of life. I don’t see the justice or even the logic. It’s not gonna reduce, ever. And the emotional part of it that it’s there. That it’s always gonna be there,” Galante said.

Just a few years from 80, Galante is forced to work. She helps out as a caregiver consultant, only able to work part-time. She has no choice but to make the $176 per month payment she doesn’t believe will ever get paid off. That’s because the government will definitely seize Social Security benefits to pay off student loan debt. It’s driving older Americans into poverty.

Student Loan Debt a Campaign Issue

Student loan debt is becoming such a major problem that it’s on the radar for many 2020 Democratic candidates. One clear example is Elizabeth Warren who wants to cancel up to $50,000 worth of debt for millions of Americans. She knows this will help them get on track with their lives and not live in fear of missing a payment.

“We got into this crisis because state governments and the federal government decided that … they’d rather cut taxes for billionaires and giant corporations and offload the cost of higher education onto students and their families,” Warren wrote in a blog post last month, adding, “It’s time to end that experiment.”

77% of likely Democrat voters said they were in support of Warren’s plan. 57% of all Americans do as well, according to a poll from INSIDER. 21% are in opposition to it, as that cancelation would mean the government is out that money, wasting over a trillion dollars’ worth of taxpayer funds.

Written by adminMay 7, 2019

Credit & Debt , Credit & Debt Settlement

These days, there are way too many people who graduate high school and college who have never sat down and learned how to balance a checkbook. Most schools use home economics as an elective, which is easily passed up by the guys especially.

The problem with this is, once those students become adults, they find their finances are way too complicated. It’s nothing but a big ball of stress, which leads to procrastination, then late fees. And don’t get me started on the burden that is tax time! (thank goodness for H&R Block, right?)

Many of these same people often spending hundreds or even thousands of dollars per year on overdraft fees or battle their paychecks week-to-week because they can’t get a grasp on what they’re doing financially. It becomes a vicious cycle that’s easily fixable by taking the time to learn how to budget.

By taking a few simple steps, not only can you reduce the stress forces you to procrastinate in getting your budget in order, but it can save you A LOT of money in the long run.

Here are several tips to making the process easier:

1) Get Realistic about Your Budget

Only you know the state of your finances, so you should sit down and make realistic goals about changes you need to get things in order. It’s not going to be an easy process at first, but once you get there, you won’t regret it!

Write out a plan of action. Gather all your financial paperwork. Have folders for each bill with receipts. This will make life so much easier for tax time. Plan out your expenses. Once you have a plan of action, the rest will fall into place.

2) Too Many Accounts?

If you’re like a lot of Americans, you have more than one account opened. Perhaps you have several investments, more than one bank account, or even retirement accounts from jobs you no longer work at. Of course, these accounts were opened for a good reason at the time, but what about now? How many accounts do you have open that you don’t need anymore?

A good step in simplifying your financial lifestyle is consolidating accounts and closing the ones you don’t need anymore. Each one you leave open is just more paperwork to keep track of and fees you’re paying flying out the window. There are aspects to this you should be watchful of.

For example, if you bank with the same place who holds your mortgage, you should have a free checking account with them. If you were recently married and the both of you have separate accounts, consider the benefits of merging into one bank account to save on fees and making budgeting easier.

3) Don’t Get Complacent with Your Insurance

One big mistake people make is choosing an insurance company and sticking with them. If they consistently offer the lowest rates and highest level of customer service, it’s completely understandable. But a lot of people don’t even bother to look around for cheaper rates after a year or more.

The truth is, a lot of people are paying a premium price for crappy insurance. As time goes on, it’s simpler to renew coverage with the same company rather than researching for better deals. Your expectations will change, and so should your insurance. If you rent, then it’s a smart idea to get renters insurance.

Rather than buying renters insurance with a different company, you can save money by bundling with your car insurance. After you have a decent record of paying your bills on time, you remain accident free, and even improve your credit score, the rate you have to pay may fall. But don’t leave it to your current insurer to lower your payments though.

If you want to save money and get the best rates, take the time to reevaluate your needs and shop around for the best coverage. It’s not an easy process, as you’ll have to get quotes from a variety of different insurance companies, but it can save you hundreds of dollars per month.

4) Take a Good Look at Your Credit Cards

Just like most people have multiple accounts open, they also have more than one credit card. Maybe you fell victim to the credit card booth when you were in college (the promise of free credit too hard to pass up), but you didn’t do that much research on what you were getting into. This can destroy your credit in the long run.

In fact, I know people today who got bit in college and are STILL paying back those debts now that they’re in their 40s. That’s why you need to pay special attention to your credit cards. Study each other, their reward programs, and determine their value in your life.

Getting a Best Buy credit card for the ‘extra points’ isn’t worth the extra interest. It really offers no value to you. A lot of cards have fancy names, but are either duds or are a drain to the consumer if they don’t know how to use the card correctly. Before you know it, you’ve racked up thousands in debt.

That’s why it’s important to know exactly what you need and cut out the rest. Yeah, maybe you like the idea of having 3 or more credit cards, but what’s the real advantage?

The idea is to simplify your life. There came a time when I sat down to budget everything out that I realized I wasted $100/month on subscriptions I barely use. Why pay for Hulu when I only use it once or twice? Write everything you spend down, create a budget, consolidate accounts, and check your insurance rates regularly.

It won’t be easy, but once you figure it out the first time and can better manage things, you’ll save time and money in the long run.

Written by adminMay 7, 2019

Credit & Debt , Saving

As we roar through May, the summer months are only a few weeks away! Soon, the kids will be off for their summer vacation. Maybe you’ve already planned your vacation and have everything saved up. That’s great! There are still ways you can save some extra money, especially if you’re a procrastinator.

If you have a lot of debt or are trying to save money, enjoying a cheap summer vacation isn’t a bad idea. You don’t have to waste a lot of money on frivolous stuff. For the most part, getting away from the office and spending time with your loved ones doesn’t have to be expensive. It’s the quality time that matters, not the amount of money you spent.

At the end of the day, saving money will better protect your family. That’s why we’ve written this blog. Here are 5 ways to save money on your summer vacation:

1) Do Your Best to Plan Ahead

Airlines like to sell seats the same way stores sell merchandise. Money savers know this trick well. You don’t buy swimsuits in the spring or during the summer months. You buy them off-season when they’re the cheapest. Stores are eager to get rid of extra merchandise, especially as the new season comes in. It’s like buying your Christmas decorations on December 27^th when they’re half off.

Airlines do the same. There are slow times of the year when not as many people are flying. There are peak times during the holidays and summer months. People are reserving flights, booking hotels, and renting cars if they’re not doing the drive themselves. So, the best thing to do in order to save money is plan ahead!

Right during the slow season, you can get some amazing deals. If you want until things start heating up again, you will be paying through the nose.

2) Avoid Popular Destinations

Just like airlines have off-seasons, so do popular destinations. Booking certain weeks of the year will be a difficult task if you want to save money. When everyone is trying to get down to Florida, tickets and rooms will be much more expensive than during the off-season. Same for anywhere else really.

3) Use Your Rewards

If you’re looking to save more money, don’t forget about any reward packages you might be subscribed to. Your customer loyalty points and credit card rewards might be helpful enough to bring down the cost for your summer vacation. If you don’t have a rewards credit card, then perhaps you should get one to save you money down the road.

4) Eat Basic Meals

Eating while on vacation can get expensive. Of course, you’re on vacation and don’t want to cook, either. But rather than chowing down on expensive seafood just because you’re in a tropical paradise, cooking yourself meals will save a ton of money in the long run. A lot of hotels have in-room kitchens. Many others have free breakfast.

Another trick for saving money is order your food to go! Don’t have it delivered and don’t dine-in. By going to pick up your food, you avoid tipping drivers or waitresses and that’s extra money that definitely adds up during a week-long vacation. Grab your meal and take it back to the hotel or just eat in the car!

5) Don’t Go on Summer Vacation Alone

When you were younger, you might’ve had roommates. Or, maybe you have roommates right now! Either way, you know it’s cheaper for a bunch of people to rent a place together. The same can apply to your vacation! Why not join with a relative or friends and rent a house together? By doing that you skip the overpriced and overcrowded hotels and can stay in a comfortable home with loved ones.

Your summer vacation doesn’t have to be expensive. Remember, it’s about the memories! Find cheaper places to spend quality time with loved ones. They’ll cherish the memories and forget everything else. Enjoy your summer without spending the rest of the year kicking yourself as you work to pay off the debt.

Written by adminMay 3, 2019

Credit & Debt , Credit & Debt Settlement

It seems so easy for someone who wants to go to college to take out student loans. All they have to do is sign the dotted line and the money they want is right there. But if you ask anyone currently paying off their student loan debt, you’d hear a lot of stories of struggle. 44 million Americans currently owe $1.53 trillion towards their loans.

Student loan debt is forcing young Americans to put off major life goals. They simply can’t afford to do them with this weight on their shoulders. Many can’t even afford the minimum monthly payments. And again, when you see how much tuition is, it’s easy to resort to loans. The solution is to save loans as the last possible resort or it can hamper your life later.

In many cases, parents have tried to save for their kid’s education. Yet, even they weren’t prepared for the major cost, especially if they have multiple teens in their home ready for that next stage of life. Fidelity conducted a survey that found parents were overwhelming underprepared for their child’s college education costs. That leads them to resort to student loans.

Before you take out a mortgage just to pay for your education, you should look at these other options. By doing them all, it’s possible to pay for school on your own. Even if you still have to take out some student loans, at least the burden will be lessened.

1) Scholarships Are Available

Listen, there are scholarships for everyone out there. Regardless of your child’s major, interests, skin color, race, culture, there’s someone out there who has put up a scholarship. The problem is, it takes a lot of diligence to go out of your way to research all the different types. Then you have to sit down and apply for each one you’re eligible for.

Don’t just apply for the big scholarships either. Every little bit will help bring down your student debt balance by the time you’re finished with your degree. Sallie Mae reports that scholarships can cover as much as 28% of tuition on average. That’s a major chunk taken out of your student loans if you can take the time to apply.

2) You Don’t Need to Go to an Expensive School

At the end of the day, a degree is a degree. You may thing there’s some prestigious mentality to going to a big four-year school, but really, there’s not. There’s no shame in getting your Associate’s degree at a community college, which would save you a ton of money in the long run. In a lot of cases, lower-income people can escape community college debt free.

Many states like Kentucky, Ohio, Tennessee, West Virginia, and Virginia have free tuition to smaller colleges for students. More states are starting to institute programs like this to give young adults a good head start. By going to a smaller school and then getting their Bachelor’s at the school of their choice, will pay only a fraction of the student loans. Saving money is about making better decisions.

3) There’s Federal Aid Available

Last year, high school graduates left behind $2.3 billion in unclaimed federal financial aid. They chose instead to take out student loans. Many students qualify for financial aid through the government. It combines grants, loan offers, and scholarships in a program called FAFSA. It’s free to fill out an application.

Many students don’t run towards the FAFSA because they feel it’s time consuming to fill out. The problem is, by doing it, they can save $3,583 per year. That can go a long way towards paying for books, putting a dent in tuition, and other housing costs. Again, every little bit helps to bring down your total debt.

4) Get a Job

Yes, we get it. The last thing you want to do when studying for classes is to have to worry about a job. But many people have to do it in order to survive. It will be hard work, but you’d be thankful in the end if you do. Between scholarships, aid, any savings you had before, getting a job can take care of the rest. It certainly beats paying student loans for the next 10-20 years.

There are plenty of side-hustles and jobs you can do in your spare time. Driving for Uber is one. Do whatever you can to pay off as much of your room, board, and tuition while you’re in school. You will thank yourself later on! You can even do a work-study program through the university or college. They are needed jobs that need to get done around the campus.

5) Have Your Job Pay for College

Another great thing about working while in college are the various job programs out there. Companies like Starbucks, Walmart, Publix, and Wells Fargo all help workers pay for their tuition. If you work 20 hours a week at Starbucks, then you qualify for their Starbucks College Achievement Plan.

You have to work at Publix for about six months before their plan kicks in. If you average around 10 hours a week at least, they can help pay up to $12,800 of your tuition. Wells Fargo will straight-up reimburse tuition for their workers up to $5,000 each year. Their children can even apply for certain scholarships worth up to $3,000.

Many other companies offer some tuition assistance and will help pay off your student loans. Even after you graduate, many large companies offer a program that works like your 401(k) that will pay off student debt. It’s worth the check to see if your work offers any kind of assistance.

At the end of the day, any little bit you can knock off your tuition will be worth it in the end. No one will care where you got your degree from. There’s no shame in spending less and going to a community college. Taking the time to apply for aid and assistance is worth it considering the thousands in extra interest you’d have to pay on that later. And working a job won’t be too difficult. Many thousands of college students make it work.

If you still end up needing more money, at least taking out student loans won’t be too much of a burden and your total is reduced by thousands of dollars.

Written by adminMay 2, 2019

Credit & Debt , Credit & Debt Settlement

Your credit score is incredibly important. Having a good score can help you in a lot of ways. It can even save you during an emergency. If you needed to take out a loan, for any reason, having good credit is helpful. It can save you thousands of dollars when making large purchases with credit and on interest.

Sadly, a lot of people take their credit for granted. They don’t protect it. It’s there as a plaything. If you want to buy something you can’t afford, they’ll just pull out the plastic. They’ll keep doing that until suddenly they can’t even afford minimum monthly payments. That’s when the real trouble begins.

From a young age people should be taking care of their credit. And if it’s in bad shape right now, be more active! You can repair your credit. It will take some time, but don’t just sit on your hands and let it deteriorate. By putting the ball in your court, you can actually save yourself grief in the future. Here are 6 reasons why you should actively repair your credit.

1) Your Credit Report Might Have an Error

Here’s a statistic that might hit close to home: 1-in-4 reports have an error. That’s no joke! The Federal Trade Commission did a study and found that 1-in-4 credit reports have an error on them. That can directly harm your credit score! One-in-twenty reports had a major enough of an error that it dragged their score down 20 or more points.

You also have a 1-in-4 chance of being defrauded by a credit card scammer. These are real numbers. If you’re not careful, it can certainly happen to you. Millions of Americans each year become victims to credit card fraud. By keeping up with your credit and repairing when necessary, you can catch these problems early.

2) You Can Refinance Your Loans

There may be a time when your debt overwhelms you. Rather than just sitting back and letting it pile up with more interest, act! If you have a good credit score, you can combine all your debts into one, smaller monthly payment. Having a better score means better rates and less interest paid overall.

Your credit score will determine the rates when money is lent. As the economy dips or improves, this can change over time. The Feds change the overall interest rate. But if you have a great score, the lower your rate will be overall. Having lower payments can surely improve the quality of your life and make your debt more manageable.

3) It’s Easier to Get Approved for Financing

If you have a major need for financing, it can be a stressful process. Mostly you don’t know if you’d get approved. If you don’t have a strong credit score or a good record of spending, this will cost you. To wait around to find out if you got approved, only to be denied, is even more frustrating.

That’s where having a good credit score makes life easier. There’s much less of a chance of being denied. There are to major factors in getting financing approved. The first is your credit score. The second is the amount if income-to-debt you have. By repairing and maintaining your credit, it’ll be much easier to get approved.

4) You’ll Be Mortgage-Ready

One constant in life is that things are always changing. You might find yourself in a good spot right now, but what if you or your partner become pregnant? What circumstances would you need to upgrade your living situation and do it quickly? Renting isn’t always a good option these days. The price of rent continues to shoot for the moon.

Even if you’re not expanding your family, but just think it’s time to buy a home, you need to be ready. Your credit score is going to be a huge factor in determining whether you get approved. It can even save you down the line with a lower interest rate on that mortgage. Even a half percentage point can mean thousands of extra dollars if you’re not careful.

5) You Can Buy Things as Advertised

Don’t you hate car commercials that go on and on about discounts and low monthly payments? Well, you’ll be frustrated if you go into a dealer and ask for those prices. Those prices aren’t for you, my friend. They’re for the person who has spotless, perfect credit. They’ll advertise all the incentives in the world to get you in the door, only to shut you down.

No interest for several years, the no-money-down deal, yep, hands off! That doesn’t mean you’ll be completely denied an auto loan, but your credit makes an impact. If you spent time repairing your credit before buying a vehicle, those incentives can save you A LOT. We’re talking thousands of dollars over the life of your loan.

6) Discounted Car Insurance

A good credit score isn’t just good for lower auto loan rates. It can also save you with insurance, too. Most companies choose the rates based on your score. What your credit score has to do with driving, no one knows. It’s just an excuse for them to jack up your rates if you don’t have your affairs in order.

Overall, taking the time to repair your credit score is completely worth it. There are many discounts and incentives you will receive. Life will be much easier when you can get better rates, lower payments, and quick approvals. On the flip side, bad scores can really hurt you massively. Repair your credit while you can.

Recent Posts

Recent Comments

Categories

Become a member

Popular Posts