Tag: Debt

 

What to Do If the Stock Market Crashes

If you’ve seen the recent headlines, it seems that the next stock market crash could be around the corner. The housing market has stalled and, in December 2018, the Dow had the worst December performance since the Great Depression. All of these signs can be disconcerting, especially when you’re considering the impact to your own finances.

While this doom and gloom may make you feel as uneasy as the recession of 2008, there are some ways you can prepare yourself for a worst case scenario. Check out this guide to help you out if the stock market crashes.

Don’t panic

First things first: Do not panic. While you may freak out and consider taking all of your money out of your bank and hiding it under your mattress, this likely isn’t the wisest idea. Likewise, neither is immediately selling off your investments to avoid the volatility of the market. Why? Because if the market can crash, it can go up again.

According CNBC, if you invested in 2008 — instead of panicking — you’d be doing fairly well right now. The CNBC article states:

“In the 10 years since the crisis got rolling, the Standard & Poor’s 500 index has returned 7.8 percent, annualized, including dividends. That’s not far below the very long-term average yearly return of just under 10 percent. So a very unlucky investor who climbed into equities as they were about to careen off a cliff hasn’t been hurt too badly. A standard portfolio mix of stocks and bonds, as reflected in the Vanguard Balanced Index Fund, has returned a decent 6.8 percent over the same span, with roughly half the downside volatility experienced by the S&P 500. Clearly, the passage of time in the markets can help make up for bad timing.”

Cut back on spending

How much do you really need to live off of?

Look at your budget and evaluate areas where you can cut back. You can figure out where you can do this by looking at your bare-bones budget.

Why do this? Because if the stock market crashes, you may need to be a bit more frugal while you wait for a rebound. So, try not going out for coffee every day, but maybe only splurge for those lattes once a week. And, here’s a pro tip: Figure out how much money you need in order to pay all your bills. Once you have your budget set (rent/mortgage, food, transportation, etc.), you can look at the areas that aren’t essential and start to cut back. From there, you can figure out how much you’ve got to spend and how much you can save.

Boost your savings rate

A stock market crash can have a ripple effect on other areas of your life. For example, you may get laid off from your job, have limited access to credit or have a tough time getting clients for your side hustle. For these reasons and more, it’s important to be prepared and have cash saved up.

Experts recommend saving three to six months of expenses in an emergency fund, but you might want to boost that up to 12 months. While this may take some time, there’s no harm in starting to save more as soon as you can.

With beefed up savings, this will help you weather a storm if the stock market should crash.

Assess your risk tolerance

Investing is never a risk-free endeavor. When you’re just starting out, it’s important to determine your risk tolerance, as well as a strategy to grow your money over time.

What’s risk tolerance? Risk tolerance is how much risk you’re willing to deal with when investing. So, ask yourself this question: Are you an aggressive or conservative investor?

You may also want to consider any lifestyle changes that may affect the amount of risk you can take on. For example, are you preparing to have a baby, get married, go back to school or  going through a divorce? Perhaps you’re dealing with a layoff or you switched jobs and took a pay cut?

Your risk tolerance, as well as these lifestyle factors, should be considered and you can adjust your investing strategy accordingly. For example, perhaps you can move away from a stock-heavy portfolio if having too many stocks makes you skittish. Or, perhaps you can put more of your money into savings. The key is to be diversified in a way that makes sense for you – given your risk tolerance, lifestyles and goals.

Buy and hold

A good strategy in an uncertain market is to buy and hold.

So what exactly is that? Buy and hold is when you buy stocks and just hold onto them. You don’t try to play games or get into a situation you’re not well-equipped to deal with – such as trying to time the stock market.

The ultimate goal with investing is to build wealth, and this takes time. Think of your investments as a long-term play and this way you won’t be so stressed about the possible day-to-day volatility.

Think of it as a sale

Scarcity mindset, or a survival mindset — where you think resources are scarce — can be set off with a stock market crash. You might feel scared about your money, like there will never be enough.

Instead of living in fear and holding onto your money so tightly, you may benefit from a perspective shift. Consider a market crash as a ‘sale’ and invest more. If you feel comfortable, you can use this time to invest on the cheap and reap the benefits in the long term.

Keep your options open if the worst should happen

You’ll want to have a contingency plan if the sh*&^ hits the fan.

So, think about the skills you have in case you have to take a different type of job or start a new side hustle to earn extra income.

Here are some other tips: Check into whether your loans have better payment options available. For example, federal student loan borrowers can pay zero dollars on an income-driven repayment plan if your income is at a very low level.

Final word

The financial headlines can be scary. Yet, you can take steps now to be proactive if the stock market crashes. If it does take a tumble, remember not to panic and think long-term. This way your can stay the course and keep your finances in order during the short-term.

 

9 Ways to Pay off Your Debt in 30 Days

Paying off large debts usually requires a long-term game plan. But just a couple of easy steps can help you pay off your smaller debts in a short time frame. Want to buckle down and eliminate debt quickly? Here are nine ways to pay off your debt in 30 days or less.

1. Set a realistic goal

Most people can’t reasonably expect to quickly pay off a mortgage or new car loan. To eliminate a debt in 30 days, you’ll need to pick one you can realistically pay off. Look for a small credit card balance or a loan that’s approaching a zero balance.

2. Use the ‘snowball method’

With the snowball method of debt repayment, you focus on paying off your smallest loans first, working in order of smallest to largest. You make minimum payments on your other debts, and make larger payments on the smallest debt until it’s paid off. Successfully paying off a smaller debt will provide you with a psychological boost and free up a little extra monthly cash to put toward the next smallest debt.

Another strategy is to focus on debts with the highest interest rates first, as that will save you more money in the long run — though this strategy is a longer-term debt repayment method.

3. Go on a 30 day spending diet

Just like extreme food diets, spending diets are tough to maintain for a long time. But slashing your spending for 30 days is achievable, and you’ll free up extra cash to put toward your debt.

Analyze your current budget and spending habits, and look for every opportunity to cut expenses. You could cook all your meals at home instead of dining out, watch Netflix instead of going to the movies or take public transportation instead of driving or hailing cabs. At the end of the 30 day period, all the money you saved should be put toward your debt.

4. Stop using your credit card

If you’re trying to pay off a credit card balance in 30 days, it’s common sense to temporarily stop using it. But you should avoid making too many purchases on any other credit cards you own, or you’ll end up with a different credit card balance to pay down. This philosophy applies to other debts, too.

Once your credit card is paid off, you may be tempted to close it. But unless you can’t trust yourself to responsibly manage your credit card, you’re better off leaving it open to boost your credit score. (Here are 7 other credit myths, debunked.)

Remember, the best way to use a credit card is to only make purchases you can afford to pay off in full each month.

5. Find extra sources of income

Finding an extra source of income for at least 30 days can help you earn cash for debt repayment. You could teach music lessons, tutor kids, mow lawns or drive for Uber. All the extra income you earn should go directly to your debt.

Looking for some extra income ideas? Check out our list of side hustles that cost nothing to start.

6. Redeem your cash back

If you have a stack of points or cash back rewards in your credit card account, now could be the right time to redeem them. You may be able to put your rewards directly toward your credit card balance, or cash out the rewards and use the funds for debt repayment.

7. Make extra payments

This may sound obvious, but you should consider making extra payments throughout the 30 day time period as cash flow allows. Saving up your extra cash for 30 days for a one-time payment leaves you at risk of spending it elsewhere. Instead, make payments as soon as extra cash comes in.

8. Get a debt consolidation loan

Debt consolidation loans can help you roll multiple debts into a single, manageable loan with a potentially lower interest rate. It’s a good strategy if you have trouble keeping track of your payments, or have several high-interest debts. This may not help you pay off your debt in 30 days, but you could get a lower interest rate and zero out your balance with your current creditors.

9. Open a balance transfer card

If your current credit card’s interest rate is making it difficult to pay off, you may want to consider a balance transfer card. Balance transfer cards will let you transfer your existing credit card balances to a new card with a lower interest rate – many cards offer 0% APR for introductory periods of 12 months or more. This strategy also might not allow you to pay off your debt quickly, but you will eliminate the balance on your high-interest cards.

Want more ways to save up to pay off those debts? Here’s 25 ways you can start saving right now.


This article originally appeared on Policygenius.com.

 

Chime’s Ultimate Guide to Building Credit

Your financial health is like a puzzle, with different pieces that fit together to create a complete picture.

One of the most important pieces is your credit history and of course, your credit score. (That’s the three-digit number lenders use to determine how likely you are to repay your debts.) FICO scores, the most widely used credit scoring model in the U.S., range from 300 to 850. The average FICO score recently hit an all-time high of 704.

This in-depth guide breaks down everything you need to know about engineering a better credit rating.

Where credit scores come from

Before you can have a credit score, you first need to have a credit report. This is a collection of information about your credit accounts, including who you owe money to, how much you owe, your minimum payments and how long you’ve been using credit.

FICO scores focus on five specific factors to calculate your credit score:

  • 35% of your score is based on payment history
  • 30% is based on your amounts owed
  • 15% is based on the length of your credit history
  • 10% is based on inquiries for new credit
  • 10% is based on the types of credit you’re using (i.e. loans and credit cards)

Knowing what affects your score can help you adopt the habits that you’ll need to build good credit. But what if you’re one of the 62 million Americans with a thin credit file?

“A thin credit file just means that you don’t have an established credit history,” says personal finance expert and Money Crashers contributor David Bakke.

“Maybe you’re younger and just have never had a need for credit, or possibly in general you’ve never signed up for credit cards or taken out a car loan or a home mortgage,” says Bakke.

With a thin credit file, you may not have enough credit history to generate a credit score. Fortunately, that’s a situation you can remedy. Opening a bank account is a good first step. You can use your account to get a handle on your spending, keep track of bills and start growing your savings. Once you begin using credit, you’ll already be in the habit of keeping your spending in check and paying your bills on time. Both of these positive habits can help your score.

How to build credit from scratch

If you’re starting from square one with building credit, there are a few different routes you can take. Here’s a look at some of the most common ways you can build credit as a beginner:

Secured credit cards

Opening a secured credit card can be a great option to build credit for someone who’s new to credit or has a thin credit file, says Steven Millstein, a certified credit counselor and editor of CreditRepairExpert.

“Unlike other credit cards, a secured credit card requires that you make a cash deposit upfront. This deposit will usually be your credit card limit, which serves as collateral if you fail to make payments,” Millstein says.

The major pro of a secured credit card is that your payment history and spending can help to establish your credit history. That’s because many secured card issuers report your activity to the credit reporting bureaus. With a card limit of only a few hundred dollars, this can keep you from racking up debt.

Credit builder and savings secured loans

Credit builder and savings secured loans offer a slightly different take on building credit.

“These are basically small installment loans where the loan is secured by a certificate of deposit or a savings account,” says Jeff Smith, vice president of marketing for Self Lender, which offers credit builder loans.

“As the person repays the loan, the payments are reported to the credit bureaus so they can impact the credit history. At the end of the term, the CD or savings are unlocked and returned to the account-holder.”

Essentially, you’re repaying a loan to build credit, but you don’t get the proceeds of the loan until it’s paid in full. That’s a reversal from how loans usually work, where you get the money upfront.

There are also other drawbacks to credit builder loans. For example, you may not get immediate funds to make a purchase. On the other hand, this may not matter if your main objective is to build credit.

Become an authorized user

Instead of getting a credit card in your name, you can ask a friend or family member to add you to one of their cards as an authorized user.

“The implication is that their (the main card holders) good credit practices will start to build your credit,” Millstein says.

According to Equifax, being an authorized user allows you to make purchases with the card and have the account’s activity show up on your credit report. Yet, you’re not the one liable for the card’s balance. If the primary card holder practices good credit habits, those habits would be reflected in your credit report and score.

There’s a catch, however. If the primary card holder falls behind on payments or maxes the card out, this can hurt your credit.

Ask someone to co-sign a loan with you

Co-signing on a personal, student or auto loan is another way to build credit. Unlike being an authorized user, however, you share responsibility for the debt with your co-signer.

Asking someone to co-sign can help you qualify for a loan that you may not be able to obtain on your own. Once you’re approved, you can work on repaying the loan and building credit history.

But there is some risk involved. If you default on the loan, both your credit history and that of your co-signer can be damaged. And, this can potentially ruin your relationship, Millstein says.

How long will does it take to build credit?

“Building good credit is probably not going to happen overnight and getting a solid credit score as well isn’t going to happen immediately,” Bakke says.

So, just how soon can you expect to see results?

According to Experian, it can take between three and six months of activity to get enough history on your credit report to calculate a credit score. Millstein says it can take about 12 months to grow a fair credit score, which is in the 580 to 669 range for FICO scores. He says working towards a perfect 850 score, on the other hand, can take several years.

Bottom line? You’ll need to be patient and give your good credit habits time to pay off.

Check in with your credit regularly

If you’re hard at work on building credit, don’t forget to track your progress. You can get your credit report three times a year for free through AnnualCreditReport.com. Free credit monitoring services help you track your score month to month.

In the meantime, set up alerts for your bills and schedule automatic payments through your mobile banking app so you never miss a due date. When you make payments on time and keep your balances low, your credit will eventually improve!

 

22% of This Age Group Thinks It’s Impossible to Get out of Debt

Debt can easily turn into a massive money problem — a problem millions of Americans struggle with. More than 80% of Americans consumers consider debt a financial priority. Debt can affect anyone, but there’s one age group that faces the biggest debt burden.

survey by LightStream found Gen Xers — those born between 1965 and 1979 — have accumulated the most debt. And as they head into what should be their highest earning years, they’re not feeling very optimistic of their ability to rid themselves of debt: 22% say they don’t see a way out.

While eliminating debt takes effort, patience and sometimes years of dedication, it certainly shouldn’t be viewed as impossible, say experts. Here are some quick tips to turn your debt around.

1. Take action

A person can wander into debt, but they can’t simply wander out, said financial author Dave Ramsey. You must become fed up enough with your situation that you decide to change.

Ramsey describes personal finance as “80% behavior and 20% head knowledge.” He said you need to start by getting to a point where you are mad enough to take action.

2. Cut back on credit cards

Break the credit card habit. If you want to get out of debt, you should work to stop accumulating more. Credit cards are only a convenience, says Michael Gerstman, CEO of Gerstman Financial Group.

“If you must use a credit card, then it needs to be treated like a debit card with all new purchases paid off weekly,” said Gerstman.

But the best way to cut out credit is by ditching it altogether. Here are some easy tips on going cash-only.

3. Track your expenses

At the beginning of each month, take five minutes to write down everything you are earning and spending, said Ramsey. In addition, go through all your credit card and bank statements to weed out unnecessary spending.

“This may sound difficult, but many people don’t realize how much they’re spending on things like cable television, landline phones, and coffee drinks,” says Marc Diana, CEO on MoneyTips.

Staying on top of your tracking will put you in control of how much you have left. Keeping a tight budget can help you pull in spending and understand where your money is going.

Here’s an easy budgeting spreadsheet to get you started.

4. Adopt a positive mindset

The human mind can be a very powerful thing, said Tiffany Welka, the vice president of VFG Associates. Having the positive mindset that you can tackle your debt often translates to real-life financial success.

“Cultivating a growth mindset will improve your ability to succeed in all areas of your life, not just your financial world,” she said.

Looking for more ways to get out of debt? Here are 9 ways to pay it off in 30 days (or less).


This article originally appeared on Policygenius.com.

 

Good Credit Scores vs. Bad Credit Scores

Your credit score is a huge indication of your financial health. In fact, your credit is so important that lenders refer to it when you apply for a line of credit, a home mortgage, a car loan or even a new credit card.

But, in order to be approved for loans and credit cards you often need a “good” credit score. That begs the next question: What makes a good score vs. a bad score? Before we jump in, let’s go over the basics.

What is Credit and How is Your Score Calculated

Your credit score is a three digit number that helps lenders determine how credit worthy you really are. In other words, it’s a tool lenders use to determine if you are a good borrower and thus most likely to pay off your loans.

The three major credit bureaus – Equifax, Experian and TransUnion – collect information on you to help determine your credit score. For instance, whenever you open a new account via a loan or line of credit, this information gets reported to the three bureaus.

The bureaus then use a credit scoring model to determine what your score is. The two most popular credit scoring models are FICO and Vantage. FICO is used widely by lenders, but you’ll want to aim for a high credit score no matter which scoring model is being used.

What Makes a Good Credit Score?

There are a few important factors that help contribute to your credit score. These factors include your payment history, amounts owed, length of credit history, credit mix (how many different types of account you have,) and new credit.

Credit scores range from 300 to 850. Good credit scores fall in the 670 to 850 range. Anything below 670 is either considered a fair or bad credit score, according to FICO.

If you want to raise your credit score, it’s important to prove that you’re a responsible borrower and not a risk to the lender. Why? Lenders don’t want to give money to people who won’t pay them back. This is why the most crucial things you can to do improve your credit are:

 

  • Pay your bills on time
  • Keep credit card balances low

To help you do this, you can create a detailed budget and set up reminders or automatic withdrawals to ensure you pay bills on time. The longer you keep up with this habit, the better your score will get. For example, say you have a student loan with a 10-year term. You’ve made on time payments for about eight years so far. Good for you! This will improve your credit and show lenders that you can be trusted to pay back a sum of money over time.

Here’s another pro tip: When it comes to credit cards, never spend more than 30% of your credit limit. Remember, credit is a tool, and it will not help your score if you max out your credit cards. So, if your limit is $2,000, only spend 30% of that limit, or $600. Then, pay the bill on time. If you continue this habit, your credit score should improve.

What Makes a Bad Credit Score

There are a few things you can do that will result in a bad credit score. They include:

  • Not paying your bills and loan payments on time
  • Not paying your loans at all
  • Keeping a high balance on your credit card
  • Applying for multiple credit accounts regularly

For example, let’s take a look at your bills. If you don’t pay your bills on time, companies can report you to the major credit bureaus and this will result in a negative mark on your credit report. Keep in mind that this can happen for medical bills, utility bills, and even your phone bill. If you just stop paying altogether, this is even worse. Your account will become delinquent and it will reflect poorly on your credit reports.

Keeping a high balance on your credit cards is another common mistake that indicates you may not be able to pay back what you borrowed. The takeaway: Borrow only what you can afford to repay in a timely manner.

Ways to Improve Your Credit

If you want to improve your credit, focus on improving your standing with each of the five factors that impact your credit score. Here’s a breakdown of those factors and how much each one contributes to your score:

Payment history: 35%

Amounts owed: 30%

Length of credit history: 15%

New credit: 10%

Credit mix: 10%

Ideally, you’ll want to focus on improving your finances in the two areas that hold the most weight. This means you should pay bills on time and keep your balances around 30% (or lower) of your overall limit.

You should also avoid applying for new credit too often. Each time you apply for credit, it adds an inquiry to your report. Too many inquiries can hurt your score.

Over time, your credit history length will increase as long as you keep accounts open. If you close an account, your credit history will die with it. This is why it’s better to keep credit card accounts open even if you aren’t using them regularly.

Here are some other tips: If you have existing debt, you can boost your credit by paying it off. You can also establish positive borrowing history by getting a secured credit card and paying off the balance in full each month. With this type of credit card, you have to put money down first to establish your credit limit. Then, you borrow against it and repay it responsibly.

Lastly, consider establishing a no-fee bank account and emergency fund so you won’t be tempted to use credit to help you cover unexpected expenses that you can’t afford.

Know the Difference and Protect Your Score

In order to improve your credit history, you’ve got to start somewhere. A good place to begin is to know what makes a good credit score and a bad credit score. Ultimately, improving your credit score boils down to your spending and money management habits.

Are you ready to develop better money habits? Follow this guide and over time you will watch your credit score move into the “good” range.

 

Should You Donate to Charity If You Are in Credit Card Debt?

Donating to charities and nonprofits is one of the most fulfilling uses of your money, but should you hand over your hard earned dollars to a nonprofit if you have big debt? Probably not. Let’s take a look at why, how you can have a greater long-term impact, and other ways to contribute outside of your checkbook so you can put your finances first.

Why credit card debt should keep you from donating

Finance experts often argue about whether or not any type of debt could be considered “good debt,” but there is a nearly universal agreement that credit card debt is bad for consumers. If you have credit card debt, you’re likely paying upwards of 20% APR on your balance.

If you have an $8,000 credit card balance with a 20% interest rate, that means you will pay around $1,600 per year in credit card interest. When you have to pay hundreds or thousands of dollars per year in high-interest payments, you should not be giving generously to a religious organization or anywhere else.

If someone from your church pressures you to give up to 10% of your income when you can’t afford it, they don’t really have your best interest in mind. They have their own interests at heart. While writing a check to your church may give you a warm fuzzy feeling, it just puts you in more debt!

Turning around debt so you can make regular donations

If you don’t have any debt and want to donate to a favorite cause, that’s wonderful! If you do have debt, you should focus on getting out of debt so you can confidently contribute to a meaningful cause.

When you have credit card debt, you generally have to make big interest payments in addition to your efforts to pay off your balance. If you give $100 per month to charity, that is $100 per month you could use for your debt freedom efforts. Each month, that $100 could get you closer and closer to a debt-free lifestyle.

Once you have your debt paid off, you may find you have enough to easily donate to your comfort level without the struggles you had before. After all, you no longer have any interest or principal payments due. That credit card payment of hundreds of dollars per month can turn into a combination of savings and charitable contributions that better align with your long-term financial goals.

Giving is good, but be careful

Bill Gates and Warren Buffett started a movement of more than a dozen billionaires who have pledged to give away at least half of their wealth. These philanthropists are great inspiration for all of us non-billionaires, but we need to take a more pragmatic approach to giving.

I personally give to a few causes, including religious ones, but I have never had any credit card debt. In the days I had student loans and car loans, I was not in the habit of donating to any nonprofits or charities. These days, however, I only have a mortgage. That allows me to give to my favorite organizations without adding extra financial strain to my family.

Tithing is a common practice at churches around the world. The worth tithing comes from the same root as a tenth, or 10%, of your income. If you have credit card debt, donating 10% of your income is very irresponsible.

When you board a commercial flight, the flight attendants remind you that “you should always put your oxygen mask on yourself before helping others.” If you are unconscious, you can’t help anyone else let alone yourself. With your money, it works the exact same way. Credit card debt is the same thing as a depressurized cabin. If you can’t afford to pay off your debt, you can’t afford to take care of anyone else.

With the right financial discipline, you can turn around financial struggles and get your donations underway. But always be sure to pay off your high-interest debt before giving away money to others.


This article originally appeared on Due.com

 

6 Steps to Enjoying a Debt-Free Holiday Season

The holidays can be an exciting time. ‘Tis the season to enjoy family get-togethers, time off from work, meaningful gift exchanges and more.

Yet, the holiday season can cost money – a lot of money. Indeed, you’re not alone if you worry about overspending. The average American racks up more than $1,000 in holiday debt each year.

Luckily, there are 6 steps you can take to enjoy a debt-free holiday season. Take a look:

1. Develop a Realistic Spending Plan

Your first step should be to develop a spending plan for the holidays, also known as a budget. By knowing how much you can spend, you can then set realistic expectations.

To start, list out all of the expenses you’ll incur over the next few weeks, and figure out how much you’re likely to spend on your holiday gifts. Once you know your limit, it’s time to start saving automatically. I’ll share some of the most creative budgeting methods below.

2. Shop Around for Deals

When doing your holiday shopping, be sure to compare stores and prices to find the best deals. Shopping on Black Friday or Cyber Monday can help you save so long as you don’t go overboard.

You can also use coupons and look for BOGO deals. And, don’t forget to take advantage of stores that offer price matching. Give yourself enough time to comparison shop by starting early. This way, you won’t feel rushed to buy the first thing you see.

If you see items you want to buy but don’t have enough cash, find out if the store offers a layaway service, This way you can pay as you get paid instead of charging your purchases immediately. Pro tip: If you set up direct deposit with Chime, you can get paid earlier, freeing up more immediate cash for you.

3. Pay for Everything with Cash

Forget about credit card reward points or cash back, particularly if you’re afraid you’ll get into holiday debt. In some cases, it’s just not worth it.

Instead of using a credit card for your holiday purchases, use the cash you set aside according to your budget. When you pay for all your holiday expenses in cash, it’s basically impossible to overspend and get into debt.

You can even try using the cash envelope budgeting method by assigning each category in your budget an envelope that you’ll fill with a designated amount of cash. Once an envelope is empty, that’s it. You’ll need to stop spending in that area. This budget does come with some drawbacks as you won’t be able to shop online and you’ll need to be organized so that you don’t misplace your envelopes filled with cash.

In the long-run, however, the envelope budget forces you to slow down when shopping and spend more mindfully.

4. DIY Hidden Costs

It’s easy to overspend on seemingly hidden things like decorations, greeting cards, white elephant gifts and party food. Instead of spending cashola, go the DIY route.

For starters, you can make your own holiday decor with craft supplies or dollar store items. I went to my local dollar store the other day and found everything from wreaths, ornaments, table decor, holiday lights, and more  – all for a buck each.

When it comes to making your own greeting cards, you can design them online using a free program called Canva. Rather than buying baked goods, you can also bake some of your favorite treats for cheap. Lastly, if you’re doing a gift exchange, you can always DIY gifts – whether it involves making homemade candles and bath bombs, or creating custom artwork.

5. Earn Extra Money

Once you’ve created a budget and have limited your holiday spending as much as possible, it may be time to start earning some extra money.

If finances are tight around this time of year, you can find more wiggle room by starting a side hustle or seeing if your can work overtime at your job. If you’re looking for something easy that pays quickly, you can drive for Uber or Lyft, deliver groceries with Instacart, babysit or pet sit, shovel snow, rent a room out in your home, design logos on Fiverr, or clean homes. These are just a few ideas to get your creative juices flowing.

The key is to look for opportunities that you can start ASAP. This way you’ll be more apt to earn enough money to meet your holiday spending needs.

6. Focus on Experiences

The holiday season is not just about having and spending money. It’s also about showing gratitude, spending time with loved ones, and having positive experiences.

When you focus on experiences over money, you’ll be more likely to avoid overspending and going into debt during this time of year. And here’s the best part: Experiences can be free. For example, you can trade in a day of shopping for a day of binge-watching holiday movies while eating Christmas cookies and sipping hot cocoa. Or, you can drive around your neighborhood to look at Christmas lights, go sledding in the snow, or find a free local event to attend.

The Holidays Don’t Have to Be a Debt Sentence

Don’t sentence yourself to debt over the holidays. It’s not worth it and you have plenty of inexpensive ways to have fun, give gifts and enjoy the season. If you need inspiration, just turn to these 6 steps to a debt-free holiday season.

 

Make These 3 Money Moves to Protect Your Family in 2019

With a new year comes new goals. A new year is also an ideal time to reevaluate your financial situation. Whether you are looking to pay off debt, increase your savings, or create a new budget, there are plenty of ways to improve your financial situation in 2019.

But here’s an often overlooked financial consideration that you should take into account: insurance. Security is absolutely priceless, and you never know when tragedy can strike. Are you and your family prepared?

As we move toward 2019, take the time to research insurance options to protect you and your family, To get started, here are three essential money moves to position yourself for potential emergencies and life challenges.

1. Get term life insurance

No matter who you are or what your financial situation is, life insurance is important.

According to the Life Happens 2018 Barometer survey, over 35 percent of households would feel financial impact within one month if the primary wage earner passed away. But, according to the same survey, only three in five people have their own life insurance policy or a policy through their job.

And that’s not all. According to the Life Insurance and Market Research Association, it appears that even those who do have life insurance feel insecure with their overall coverage level. Nearly 40 percent of Americans state that they wish their spouse or significant other had more life insurance coverage. In addition, more than half of married millennials would like more life insurance coverage for their spouses or partners, according to the same survey.

Where to start? Think about purchasing term life insurance. This type of insurance is relatively inexpensive for most families. It’s also easy to understand. In a nutshell, term life insurance provides coverage for an agreed-upon period – or term – of time. For example, if you should pass away during your policy period, your insurance company pays out the benefit to your designated beneficiaries. With term life insurance, you choose how long you want your policy to last. Common term lengths are 10, 20, or 30 years. Also important to note: Once the term is over, the policy expires. Yet, for an affordable price, term life insurance provides peace of mind and a financial security blanket for your family.

TIP: Check out Ladder

If you don’t currently have term life insurance, there many ways to purchase it, including through life insurance companies and insurance comparison sites. One option is the term life insurance company Ladder. Ladder makes life insurance easy because you can apply for it directly online without having to deal with insurance brokers. Ladder offers life insurance at affordable rates with a price lock guarantee. And, best of all, it only takes five minutes to apply to get insured!

2. Purchase renters or homeowners insurance

Tragedy can strike home at any time. Are you prepared?

You never know when a pipe could unexpectedly break, or your neighbor sets off the sprinkler system in your apartment building, ruining everything. Be prepared and protect yourself and your loved ones by getting homeowners or renters insurance today.

TIP: Check out Lemonade

For starters, check out Lemonade, a new type of renters and homeowners insurance that prides itself on transparent payment options and quick payment of claims. Renters insurance rates start at just $5 per month, and $25 a month for homeowners insurance. Plus, any money that you pay that doesn’t get funneled into claims will be donated to a charity of your choice. Pretty sweet (no lemonade pun intended!)

Lemonade currently offers renters, condo, and homeowners insurance in New York, California, Illinois, New Jersey, Nevada, Georgia, Pennsylvania, Maryland, Arizona, Michigan, Connecticut, and Washington D.C. They offer renters and condo insurance in Texas and Rhode Island, and renters insurance only  in Iowa, Wisconsin, New Mexico, Ohio, Oregon, and Arkansas. Additional states and coverages are rolling out every year.

3. Don’t forget auto insurance

Bad things happen to car owners all of the time – and it can cost you an arm and a leg, even if you are not at fault. Even one small accident, like getting rear-ended, can cost you thousands of dollars if you don’t have the appropriate insurance.

Fortunately, car insurance can put your mind at ease during or after an accident. It can also be expensive. In fact, the average annual cost of car insurance paid in the United States was more than $941 in 2018, according to a study by ValuePenguin. And, depending on where you live, your state could be one of the more costly ones. Louisiana takes the medal for the state with the highest car insurance rate, costing insured residents an average of $152 a month. That’s $1,824 a year – ouch!

TIP: Check out Root

Luckily, insurance companies like Root are on a mission to make car insurance more cost-effective. Instead of just basing your rate on your driving record, Root uses an app to track your driving. Your real-time driving habits then determine your rate. If you are a responsible driver, you’ll receive a better quote. Because of this, you can save as much as 52 percent on car insurance with Root.

Give yourself the gift of security

You certainly can’t put a price-tag on security. You also shouldn’t have to spend a ton of dough to feel financially stable. So, this year, save money and protect yourself and your loved ones by making sure you have insurance.

 

Money Manners: Should you Stage a Money Intervention for Your Family?

Talking about money with trusted pals and your boo may be hard enough. But, envisioning a holiday sit-down for a mature pow-wow with your family over finances? Well, that may feel like a far-fetched, unicorn scenario.

But, what should you do if you have a relative who is royally screwing up his finances, especially if you know this mess may have a ripple effect on other loved ones? You may need to step in and intervene.

Take a look at our tips for determining whether you should stage a money intervention with the fam bam during the holidays, and our shortlist on how to proceed.

Assess the Gravity of the Situation

Communicating about money matters is well, extremely complicated. Add to the mix deep-rooted resentment, history and family dynamics, and you may feel like you’re precariously tip-toeing over landmines.

To gauge whether you should set up a money intervention, figure out exactly how serious the matter is. Is someone committing an act of financial infidelity, such as running up credit card debt, hiding bank accounts, or keeping a huge sum of student loan debt under wraps from a significant other? Or, maybe you have a teenage cousin who has no idea how to manage her finances and constantly spends everything she has. This can turn ugly once she hits college.

If it’s a serious matter, think about what would happen if nobody stepped in to intervene. If doing nothing can lead to debilitating, long-term consequences, a money intervention may be in order.

Figure Out If It’s Appropriate to Stage an Intervention

On the flipside, let’s say your sister has been complaining about how her money habits don’t align with her boyfriend’s. Perhaps she’s a saver and he never puts enough in a savings account. This would perhaps be considered a minor “flare-ups” and may be better handled between the two of them. While you feel inclined—or may have even been asked —to have a “little talk” with the couple, it may heighten feelings of tension and cause resentment.

Don’t be afraid to set boundaries around the types of money matters you’re comfortable discussing with your relatives. And, perhaps you can simply suggest resources such as a money management app or a mobile wallet that can help them with some of the issues they’re facing. Maybe this is all that’s needed to point your family members in the right direction.

Determine If You’re the Right Person

Let’s say that you’ve looked at the facts at hand, and determined that a money intervention is appropriate. If that’s a given, it’s time to decide whether you are the right person to facilitate this type of discussion.

Ideally, the facilitator should be an unbiased person who can remain calm throughout the intervention. Maybe a family friend who knows both parties would better suited. Or, you may want to bring in an experienced, trained professional, such as a financial therapist. Someone like this has no emotional ties to your family and may be the best person for the job.

If you’re the one handling the intervention, here are a few dos and don’ts to get started:

Don’t: Make Assumptions

Most of the time you only know one side of the story. For example, you may only hear from your Uncle Bill about how his wife Jane neglects to pay the bills on time. But to be fair, you may not have gotten wind from your Aunt Jane that Bill is no money saint, either.

It’s tough to do, but leave your assumptions at the door. Go into the situation with an open mind, and get the facts and details from everyone involved. If you take an unbiased, balanced perspective, you can then stage a more effective intervention.

Do: Time It Well

Just like it’s a major faux paus to ask for a loan during someone’s birthday party (yes, I’ve been guilty of this), a holiday gathering is not be the best time to stage a money intervention.

Instead, choose a time that works for everyone involved, and pick a private space so you can discreetly discuss touchy matters.

While the holidays are one of the few times during the year when all your family members may be in the same place, avoid discussing money matters over the dinner table. If you must have an intervention the day of a holiday gathering, schedule it before or after the festivities in a separate location.

Don’t: Go for the Jugular

While you may know what the main issue is, consider starting out by having a general conversation about money. This can lead into deep-seated matters, such as financial infidelity, debts that have remained long unpaid, issues with gambling or bouts of overspending.

The key here is to harbor healthy and respectful communication. Otherwise, it can escalate into a shouting match and reflexive rounds of pointing and blaming.

Do: Defer to a Professional If Necessary

As I mentioned above, it may be easier to bring in a pro, such as a licensed therapist or maybe even a money coach who works with couples or groups.

A money intervention can cause tension, and dredge up deep-seated, bad feelings. Without proper training, a well-intended conversation can quickly go south.

Handle the Situation Gently

When trying to decide whether staging a money intervention is appropriate and necessary, just keep this in mind: For every action, there is a reaction.

Do your best to create a safe space before bringing out the elephant in the room. And whatever you do, tread with care. If executed properly, facilitating a family financial intervention can shift your family’s money situation in a positive direction. It can also foster deeper communication and trust.

 

Tips to Curb Overspending on Black Friday and Cyber Monday

The deals. The doorbusters. The catchy television commercials and ads that land in your email.

Yup, Black Friday and Cyber Monday are among the biggest shopping events of the year. According to a Coinstar survey released last year, at least 30% of Americans plan to shop on Black Friday or take advantage of holiday deals and 70% expect to go over budget.

So, how can you avoid getting lured in by all these offers? Take a look at our top 5 ways to avoid overspending on these two major spending holidays:

Stick to Your List

Holiday wish lists aren’t just meant for kids to tell Santa what they want. The whole family should be making these lists as this will help you control who you are buying for and how much you’ll spend.

You can also refer to your list when scanning ads for Black Friday and Cyber Monday deals as this will help you resist the urge to make extra impulse purchases. If you stick to your list and plan your shopping trips carefully, you’ll be more likely to spend less overall.

Keep Up with Your Transactions

If you’re using a debit card to shop, it’s a good idea to track your transactions as this will help hold you accountable. It’s easier to blow your budget when you spend freely and don’t really keep up with where your money is going.

If you’ve ever had a busy and expensive weekend, you can probably relate. Say you went out of town and splurged a little. If you didn’t check your bank account to review your transactions, you had zero accountability for your mini spending spree. The same thing can happen with holiday spending. It’s easy to make one too many purchases on Black Friday or Cyber Money.

Here’s a pro tip: Instead of manually logging into your account to check your balance and review your transaction history, Chime can send you instant transaction alerts whenever you use your Chime debit card – attached to your free bank account. This way, you can stay motivated and stick to your spending plan.

In addition, if you have mobile banking with Chime, you can easily see your account balance simply by using the Chime app.

Only Choose One Day to Shop

Is it just me, or does Black Friday and Cyber Monday seem to last for several days? Originally, these events took place on one day. Now, Cyber Monday has turned into Cyber Week and Black Friday often starts the night of Thanksgiving and carries into the weekend.

I’ve seen some retailers offer special deals each day of the week to entice customers to come back and keep shopping. This is a marketing trick and if you play along, you’ll give yourself more opportunities to overspend.

Instead, choose only one day to do the bulk of your Black Friday and Cyber Monday shopping. Get what you need, then put your money away. When you’re done shopping, unsubscribe from email lists, skip commercials, and avoid all the buzz for the remainder of day (or week).

Compare Deals

Retailer loyalty may or may not be the most important thing when shopping on Black Friday and Cyber Monday. Many stores offer the same products – possibly even from the same brand.

This means you should compare pricing to make sure you get the best deal. As an example, when I bought a PlayStation 4 for my son on Black Friday last year, I saw the same exact item at three different stores. I chose to purchase it at the retailer with the lowest price. If I didn’t shop around first, I would have spent money unnecessarily.

Some stores even price match in an attempt to beat out competitors’ deals. So, make sure you check to see if the store you prefer has a price matching policy.

Aside from prioritizing the best price offer, you can also consider other aspects of the deal that may save you money. For example, some purchases comes with a mail-in rebate, whereas some stores offer gift cards with certain purchases.

Don’t Buy Something Just Because It’s On Sale

It can feel great to score a deal, but you only truly win if you need the item or were specifically looking to buy something in particular. There’s no point in buying something just because it’s on sale.

It’s tempting when you come across deals that seem like they’re unbeatable, but try to shop and spend mindfully while sticking to your values.

Take a page from my book: When you come across a great deal for something not on your list, ask yourself how you’ll feel about that item in 30 to 90 days. Would it end up stuffed in the corner of your house somewhere? In other words, do you really need to spend the money on that item?

If you truly feel like purchasing something, see if you can swap it out with something else on your list so you’re not overspending.

You Can Still Get Great Deals Without Going Over Budget

Holiday spending can be great as long as you have full control over your spending habits. Even with all the Black Friday and Cyber Monday deals, it’s important to get clear on what you want and spend wisely. With this in mind, you won’t move into the new year with added debt – or guilt.

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