Debt Reduction

Begging On The Side Of The Road

May 6, 2019 By Guest Writer 12 Comments

By Brad H.

Have you ever seen those guys on the side of the road at freeway off-ramps or busy cross streets holding up a sign that reads something like “No Job. Hungry. Will work for food or money” and wondered who they were? At least some of them are like me because I was there once.

It was a few years ago when I had gone through a acrimonious divorce and lost my job at the same time. The combined result was that I found myself both homeless and penniless and wondering how I was going to survive.

I made the decision to stand on the side of the road with a sign asking for help. It wasn’t a proud moment, but sometimes you have to do what you have to do. At the time, it was one of the few ways that I could earn money to advance myself to a better place.

Begging on the Side of the Road Isn’t Easy

When I began, I assumed that I would work for the food or money, but it soon became apparent that I would earn most of the money from people generous enough to give me a few dollars. Most days nobody would offer me actual work even though I offered with each donation given. It also became apparent that you could earn a decent amount doing this. I usually left with over $100 in my wallet after a day holding a sign.

I would get work offers from time to time and I always took these when offered them. The work varied, but usually was manual in some way. I always worked for what the person offered and most times this was fair.

Earning money this way came at a price. It doesn’t take long to realize that standing on the side of the road asking for help makes most people really uncomfortable. It may not seem like a big deal, but it takes a lot of energy and stamina to keep going when you know that most people would rather that you not be there and disrupt their drive.

I did not waste the money that people gave to me. I was able to save enough to get an apartment, get a job and get myself back on my feet.

I’m not sure I could have gotten out of debt without the help of others. I ended up doing something that I never imagined I would need to do, but sometimes when life throws curve balls you need to make tough decisions. I would never encourage someone to stand by the road if they didn’t need to, but I would also not discourage someone from doing so if that is what they need to get back on their feet.

Do you have a story about saving money or earning money that you’d like to share? We’d love to hear about it.

Photo credit: Steven DePolo

You Need A Credit Card Strategy for Rising Interest Rates

July 10, 2018 By Tamila McDonald Leave a Comment

credit card strategy

Over the past year, the federal funds rate rose by approximately 0.75 percent, hitting the 1.75 – 2.00 percent level in June 2018. The Federal Reserve hinted that another rate increase might be on the horizon, and that could spell trouble for borrowers.Rate increases help keep inflation in check but also make it more expensive for everyone to borrow. Plus, if you have a variable interest rate on your credit card, your rates may increase on your existing debt. What borrowers need is a credit card strategy.

Get A Great Credit Card Strategy

One estimate suggests that 92 million Americans will feel the sting of higher payments. Having a credit card strategy that combats rising interest rates is wise, especially in today’s climates. Ultimately, you have a few options for managing the change, though you can also combine some techniques to get a better effect.

Pay Down Your Credit Card Debt

If you have variable APRs on your credit cards, paying down your debt can help you save money. Companies calculate interest according to the amount that you owe. If you owe less in debt, then you’ll lower your liability.

This approach can be beneficial if you have a card with a good rate but want to avoid paying more monthly and in interest. If you have extra money in savings that isn’t part of an emergency fund or earning more in interest than your card is costing you, consider directing it to your highest interest card.

Make a Phone Call

In some cases, you can actually negotiate a lower interest rate with your credit card issuer. However, this does mean you’ll need to call them and see if they’ll play ball.

Usually, this approach will only work if you have been a reliable customer and a credit score that supports your request. For example, if your credit score is higher today than when you originally got the card, this works in your favor. If the reverse is true, it might not work.

However, it typically doesn’t hurt to try unless you are in a substantially worse financial position today than when your rate was set. In those cases, alerting your issuer that you’re a bigger credit risk could lead to a negative outcome.

For instance, a significant drop in your credit score could trigger an interest rate increase for new purchases. Based on the Card Act, you would have 45 days to either accept the terms or close your account. It’s important to note that this does not apply to increases when the prime rate goes up, impacting variable APRs. Those are allowable at all times.

Consider a Balance Transfer

When it comes to credit card strategies, this one is generally the riskiest. It involves opening a new card with a better rate (at least for balance transfers) and shifting what you owe on one card to the new account.

The reason this is risky is twofold. First, most balance transfers have fees which can wipe out an interest you may save depending on the amount. If there is a 3 percent fee, and you transfer $10,000 in debt, that transfer costs $300. Some cards will waive these fees on new accounts, but you need to read the fine print to find out if that applies.

Second, a balance transfer special interest rate is usually short-term. It may give you relief for only six months or a year. Additionally, if you miss or are late on a payment, your teaser rate may vanish early. Again, reading the fine print is essential, particularly if the interest rate after the transfer is higher than your existing card.

It’s also important to note that opening a new card can harm your credit. A hard inquiry has an impact on your score and new accounts change the average age of your accounts. How much your score will shift depends on your unique situation, but losing some ground isn’t uncommon.

If you have poor or fair credit, or are a low-income household, there’s also no guarantee that you’ll be able to open a card with a balance transfer teaser rate. Additionally, you may not receive enough credit to transfer your entire debt, even if you get the card.

Pay Off Your Cards with a Loan

Funds from personal loans and home equity loans or lines of credit can be used to pay off your credit cards. This works similarly to a balance transfer in that you still owe the money, but hopefully at a lower rate.

One benefit of this approach as personal and home equity loans tend to have fixed interest rates. This means, even if the Federal Reserves increase their rates again, your interest rate won’t change.

Home equity products typically have lower interest rates than personal loans, but you do have to put your property up as collateral. Personal loans might not require collateral, allowing some to function as unsecured debts.

Before using this approach, you need to determine if your credit score will help you get a lower rate and if you can borrow enough to pay off the card. Otherwise, this approach may not be beneficial.

When developing a credit card strategy for rising interest rates, it’s important to realize that not all techniques will work for all people. In the end, don’t count on a new card or loan as a solution unless you have the credit score and history to make you an attractive borrower.

Do you have a credit card strategy to combat rising interest rates? Tell us about it in the comments below.

Looking for more great articles about credit? Here are a few to get you started:

If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

5 Best Cell Phone Plans for Singles and Couples

June 27, 2018 By Tamila McDonald Leave a Comment

Most cell phone plans target families. Carriers advertise low costs but, if you are single or simply part of a couple, those prices don’t apply to you. Typically, to get the lowest price, you need to have at least four lines of service. If you only need one or two, you pay a premium that almost feels like a punishment.

Luckily, not every cell phone plan treats singles and couples like pariahs. You can find a good deal, as long as you know where to look. Below are 5 of the best cell phone plans for singles and couples.

1. Xfinity Mobile

For Comcast/Xfinity subscribers, Xfinity Mobile can help you save a bundle on your wireless service. You don’t have to sacrifice quality either, as the cable company piggybacks on Verizon’s network and supplements it with Xfinity Wi-Fi hotspots.

The plan choices are incredibly simple. You can either select an unlimited data plan or pay for what you use. All of the options provide unlimited nationwide talk and text.

On the cheaper end of the scale, a single line will run you $12 a month before taxes and fees. This gives you 1 GB of data. If you go over 1 GB, it isn’t an issue either. You’ll just owe an additional $12 for each additional GB. Since you have access all of the Xfinity Wi-Fi hotspots, managing your data is fairly easy. If you don’t use a lot of data, these prices are nearly impossible to beat.

However, if you use more than 3 GB per month, then the unlimited plan is a better option. It costs $45 a month before taxes and fees. Originally, Comcast said that it could cost between $45 and $65 a month depending on your internet and cable package, but the higher end price hasn’t been seen yet.

You can also switch between the plans at any time without a penalty, allowing you to shift according to your needs and keep your total costs low.

2. Sprint Unlimited 55+

If you’re 55 or older and prefer to have a postpaid plan, then Sprint’s Unlimited 55+ is right up your alley. You’ll receive unlimited talk, text, and data, ensuring you can always use your device in whatever fashion you deem necessary. Plus, you can use your smartphone as a hotspot without worrying about overages. This means you can connect more devices without accruing additional costs.

At its launch, the Unlimited 55+ plan from sprint cost $70 for two lines before taxes and fees, making this great for couples who meet the age requirement. If you only need one line, that will run $50, which is a reasonable price for unlimited use.

3. Cricket 5 GB Plan

If you don’t need more than 5 GB of high-speed data each month, Cricket Wireless offers a low-cost prepaid plan to meet your needs. One line costs $40 a month while two lines are only $70 total. If you sign up for autopay, one line is only $35 per month. Unlimited talk and text is part of the plan too, so you don’t have to sacrifice there to get a good deal.

For those who don’t use much data, there’s also a 2 GB plan for $30, but it isn’t eligible for autopay discounts.

A nice thing about Cricket is your taxes and fees are in the base price, so you don’t need to wonder what you’ll pay after signing up.

4. Sprint Unlimited Freedom

Another lower cost option from a major carrier is Sprint’s Unlimited Freedom. Not only do you get unlimited talk, text, and data, but you also get a Hulu limited commercials plan for each eligible Sprint account.

You also aren’t restricted when it comes to playing 1080p HD videos, so throttling isn’t an issue. Plus, the price is reasonable. One line is $60, and two lines will cost $100 before taxes and fees.

5. Freedom Pop

Freedom Pop is one of the new favorites out their. How about a plan that starts at $0/per month. At this price point you get 200 minutes, 500 texts and 500MB of data. For the single person or couple that uses their phone every now and then, this is the ideal plan. They also offer other plans, with a price range starting at $13.99 per month with free talk, text, and 500 MB of data up to $34.99 per month with free talk, text, and 4GB of data.

There are also hotspot options, so this is a cell phone service that deserves your attention.

If you’re working to save money, take a look at all of the options above. Ultimately, these plans are great for singles and couples (and can work for families too), especially in comparison to some of the typical prices you’ll see. Plus, moving your number to a different company is easy, and you might even be able to use your current phone.

Have you found a great cell phone plan for singles or couples? Tell us about it in the comments below.

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If you enjoy reading our blog posts and would like to try your hand at blogging, we have good news for you; you can do exactly that on Saving Advice. Just click here to get started.

5 Radical Ways to Reduce Debt

October 9, 2017 By Jacob Sensiba Leave a Comment

We all know debt, by in large, sucks. Unfortunately, debt can help establish and increase your credit score. Most of us need to borrow money to buy a home or something to drive. Some of us, however, use debt to the extreme. For example, people who buy things they don’t need with credit cards. After months or even years of piling purchases onto a credit card, they find themselves in a deep hole and don’t know how to get out. Luckily, there are some adventurous ways of getting out of debt.

Bankruptcy – This word usually has a bad stigma surrounding it, but can be a very effective way of getting out of debt. Not without penalty, however. Filing for bankruptcy does a number on your credit score, so it is usually used as a last resort. Declaring Bankruptcy, essentially, eradicates your debt. You go in front of a judge and a trustee, and they examine your liabilities and assets to see if you are eligible.
Sell your stuff – If you have accumulated debt and you are having trouble paying it off, it’s probably time for a garage sale. Go through your home and find anything you don’t need. Set up a garage sale and use that money to chip away at your debt. Also, if you are currently making car payments, sell your car and use the money you receive from it to pay off the loan and buy a cheaper one. (See How to Make Money on Craiglist and eBay.)
Cut your spending – Track your spending for a month and see where all of your money is going. If you eat out 4 times a week, eat at home. If you have cable, cut the cord. If you have Netflix or Hulu, cancel your subscriptions. Also, if you have any subscription boxes, cancel those as well. There is no need to eat out that often, and use your local library to read books or rent movies and TV shows.
Redeem your insurance policy – If you bought a whole life insurance policy, you may have some cash value you can use to pay off some of your debt. Check with your particular policy to see if there are any restrictions or penalties associated with withdrawing your cash value.
Take a loan from your 401(k) – With a loan from your retirement plan, you may be able to pay off some debt. With a 401(k) loan, you are eligible for 50% of your account balance or $50,000, whichever is less. There could be some fees associated with this type of loan, but they vary by plan. Typically, the loan is due back within 5 years of taking it. It needs to be paid back in installments, principal plus interest. Keep in mind, if you are let go from your job you owe the entire loan within 60 days.

Conclusion

There are several radical ways to help reduce your debt. You can cut your expenses, file for bankruptcy, and even find cash from unlikely sources to get you out of debt. Each method listed above comes with its disadvantages. If you find yourself in a position where you are looking for additional ways to get out of debt, do your due diligence and way the positives and the negatives. There are various organizations that help people with their debt, including www.debt.org. Please consult a financial professional for advice on your particular situation.

Photo: openDemocracy

Plan Your Financial Future with WeVest

August 2, 2017 By Mary Newton Leave a Comment

Financial planning apps are everywhere, and each has something different to offer. WeVest is a fairly new financial planning app that offers a new perspective on saving money and growing your net worth. The app promises a straightforward and inexpensive solution to you financial planning needs. But how well does it keep those promises?

How WeVest Works

When you create a WeVest account, you have to answer a few questions. In order to get your full financial picture, WeVest asks you basic questions about your assets, debt, income, age, and more. These questions allow their algorithm to create separate accounts on your dashboard for each item, as well as categorize you with peer groups who use the app. Then, WeVest asks about your saving goals. Their primary options are saving for retirement, building a college fund, and paying off credit card debt.

WeVest% and Your Financial Plan

The primary goal of WeVest is “to optimize the growth of your net worth in a way that achieves your goals.” Using your answers, WeVest algorithms formulate a financial plan specific to you, using the money you are willing to invest in yourself. Your WeVest% is the percentage of your income that you want to put towards growing your net worth. Your WeVest% is divided according to your goals – savings, retirement, college debt, etc. – in the most efficient way possible.

While this seems a lot like putting your money in someone else’s hands, fear not: WeVest also allows you to compare several recommended plans and pick the one you prefer. You have total control over your financial plan, supported by WeVest’s professional advice. In addition, you have constant access to that financial plan whenever you need it.

Once all your information is in and you have decided which financial plan you prefer,. Your dashboard shows how much money is going to which “bucket” – savings, debt repayment, retirement, etc. – for that month. You are given a graph that will measure and predict the growth of your net worth and savings, as well as whichever other buckets you prioritize. Finally, you can also see your exact current net worth with assets and liabilities, your financial plan, and a savings comparison between you and other users in your peer group.

WeVest Pricing

WeVest is not a free service. Their plans consist of a $4/month plan or a $35/year plan. Both plans have identical benefits, with the exception of the $35/year plan offering a 27% discount from the monthly plan. When you sign up, you have to select a plan and input your card information. However, you have a 45-day free trial before WeVest takes money from your account. You may also cancel your account at any time. This way, if you think you may use the app regularly, you can still sign up for the yearly plan knowing you have time before fully committing. This app boasts the low cost of its services in comparison to face-to-face professional financial planners.

WeVest Drawbacks

WeVest offers some fantastic insights into your financial planning, but it does have its drawbacks. Its primary drawback is its accompanying app. Rather than having an app which allows you to log in and view your information on your phone, WeVest’s mobile app is a simple calculator. It is free, and allows you to calculate simple savings projections for a large purchase, your child’s college tuition, or retirement. While these are useful, they are also pointless if you have an account with WeVest. Furthermore, toggling the “See The Full App” option within the mobile app simply opens the WeVest page in your mobile browser.

WeVest also caters more toward adults starting in their mid to late twenties with a stable, full-time job. College saving plans are geared towards planning and saving for your child’s future tuition rather than your own. Each financial plan prioritizes retirement funds. If you are a college student with a part-time job looking to get ahead in the financial planning game, or you are retired but still looking for a place to manage your finances, WeVest is not that place.

WeVest also requires a separate account for each individual item. For example, you need a separate account for student loans, a separate account for your retirement fund, a separate account for your savings, etc. Having this many accounts seems impractical, and having to input this many different accounts gets confusing on the website.

Is WeVest Worth It?

WeVest is perfect for the right people. If you are looking to keep track of your retirement fund, flesh out your savings, or invest in a home, WeVest has exactly what you need. If not, you may be better off looking elsewhere. WeVest is an incredibly thorough financial planning app that is truly a bargain for all it offers. If you want to invest in your financial future through financial planning, look no further than WeVest.

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Photos: WeVest

Car Free: Living In America Without A Car

March 27, 2017 By Alexa Mason 25 Comments

It comes as a shock to most people I meet, but I don’t own a car. Three years ago I was thousands of dollars in debt and something had to give. I decided that it would be my car.

When I made the decision my friends and family thought that I was crazy. Truth be told, I even thought I was crazy. Nobody that lives in the suburbs lives without a car. If you think about it, there isn’t anything more un-American than not owning a car. Yet that was exactly what I planned to do.

When I made the decision to be car free, I wasn’t even sure if it would be possible to live without one, but there wasn’t really any other choice. It was either that or continue to drown in debt. Three years later, I can’t imagine life with a car. It was by far the best financial move that I could have made and it has resulted in be being debt free with a fully funded emergency fund today.

The decision to sell my car was not an easy one. I am a single mother with a four-year-old child. She was one when I made the decision. As mentioned, not having a car in the suburbs is a concept that most people can’t even imagine. The nearest grocery store and shopping center is about 5 miles from my house, so going there by bike is not what most people would consider convenient. Today, even though I would have no problem affording a car, I choose to transport myself by bike.

Just because I don’t have a car doesn’t mean that there aren’t times when I need one. On days that it rains, I have a number of kind friends that will allow me to carpool with them into work. If I need to buy a large amount of groceries that my bike can’t handle, I will either have a friend drive or call a taxi to get this accomplished. There are times when I have to take a taxi or occasionally even rent a car, but I still come out far ahead financially doing this than if I owned my own car.

There is no doubt that not having a car poses some problems, but overall they are small to what I gain in return. I realize that not everyone can go car free, but I believe that a lot more people can than think it is possible. Here are some of the reasons that I ditched my car and continue to not want one:

I have no car payment

One of the reasons I originally needed to get rid of my car was that the $300 a month car payment was something I couldn’t afford. Instead of paying for the car I could use that $300 to put toward more important things. Originally, that was to pay down the debt I had, but now that I’m debt free, that payment will help my little girl go to college and build a retirement fund for myself.

I don’t have to pay for car insurance

An added benefit beyond not having a car payment is not having to pay for car insurance twice a year. For me, That adds up to nearly $1000 that goes toward savings instead of out the door.

There isn’t any pain to my pocket book when gas prices increase

While everybody else is worried about the price of gas and the rising costs of operating their cars, I don’t think about it at all. Since I don’t have to purchase gas, it has very little effect on my lifestyle and I don’t need to figure out how to squeeze higher gas prices into my monthly budget like I used to.

I don’t have any car repair bills

Before I made my car free move, I was living paycheck to paycheck. When I was doing this, a breakdown was not a mere inconvenience, it was a financial disaster. I would all of a sudden have a several hundred dollar car bill that needed to be paid right away in order to get me back on the road, but not the money to pay for it. I no longer worry about unexpected car repair bills. My bike needs to get a tuneup from time to time and may get a flat tire on a rare occasion, but any repairs or upkeep is far less expensive than anything a car would cost.

I’m healthier

I didn’t think I was lazy when I had a car, but I now realize how wrong I was then. Being car free gets me off my lazy butt and outdoors much more often than if I had one. Riding a bike for transportation has made he much healthier than I would be if I owned a car.

I got rid of my gym membership

It only took a month after I bought my bike and sold my car for me to realize I no longer needed my gym membership. Biking allows me to get plenty of exercise — far more than I ever got from workouts at the gym — on my own and there’s no need to pay $30 a month.

I have a much healthier bank account

The final result is that I have much healthier savings than I would ever have if I still owned a car. In fact, I’m sure that I would still be in debt living paycheck to paycheck. It took what seemed like a radical move to get me out of my debt cycle, but from my current perspective it wasn’t a radical move at all. It was a common sense financial move that allowed me to establish the financial foundation I needed.

Do you have a story about saving money or earning money that you’d like to share? We’d love to hear about it.

Photo: Fernando de Sousa