free debt management tips Archives - Page 4 of 10

Selling a Car on Craigslist? Here’s 5 Tips to Avoid Being Scammed

January 24, 2017 debtmanagement

Just in Chicago alone, nearly 100 people were recently scammed who sold cars through Craigslist. They ended up with no car and a rubber check.

Selling your car online is easy and convenient. However, it’s so easy that it’s become a great place for scammers. But if you take just a few precautions you can avoid getting ripped off.

Use eBayMotors

It’s easy to choose Craigslist to sell your car because it’s free and this is where most used car bargains are listed. However, it’s also where con artists do their best to pray on unsuspecting sellers. The giant eBayMotors.com also has used cars for sale or auction but it includes some purchase protection programs. They are designed to discourage almost all kinds of fraud.

In comparison, Craigslist tends to attract the undesirable types because of the “anonymity” it offers. While it does attract many positive people, it also gets scam artists that work a sting and then disappear back into the shadows.

Why sellers flock to Craigslist

We’ve all read about crimes that involved Craigslist, but sellers continue to flock to it because they see it as a way to maximize their used car’s value and to sell it quickly instead of trading it in to a dealer at a lower price. One auto enthusiast. who’s a content strategist for Edmonds.com, says he’s never been scammed. The main reason for this is that he responds only to ads that look professional, that have accurate information and include good photos.

Beyond this, here are five tips to help you keep from being scammed.

1. Check out the buyer.

How can you do this without being an FBI agent? First, talk to him or her on the telephone. Many scam artists hide behind fake email accounts that have no information about their location. Ask any potential buyer to provide their phone number and then schedule a time to talk. When you do this, the swindlers disappear very quickly.

It’s very typical these days to exchange text messages when selling a used car, but push for a quick phone call. When you talk with the potential buyer, pay close attention to your intuition. If the buyer says anything that makes you uncomfortable or makes some unusual requests, just hang up.

2. Watch for unusual financing requests

You’ve undoubtedly heard that old saying, “follow the money.” This is a case where it’s critical. Virtually all online scams include some unusual financing request. For example, in one popular scam the buyer sends you a check with an extra amount to ship the car somewhere. You pay the shipping, send the car, and then the check bounces.3. Keep your eagerness in check

The reason why a lot of scams work is because people are so anxious to close what they believe is a sweet deal. Keep in mind that genuine buyers will have questions about your car and will probably want to negotiate. If the buyer is someone out of your area, expect him or her to arrange for a mobile service to inspect the automobile.

4. Arrange to meet someplace safe

Many police departments have created “safe zones” where people can meet that are selling and buying cars. These zones usually have video surveillance, and are good places to meet prospective buyers. You should be the one that chooses where you’ll meet. You can remove a lot of the variables out of the sale by having ground rules like this. What can you do if your city has no safe zone? Arrange to meet some place that’s very well lit with a lot of people around. If you are suspicious for any reason, ask the buyer to show you a driver’s license before allowing her or him drive your car.

5. Avoid people that have too many stories

Many scam artists have stories that involve pleas for help or strange requests such as shipping the car out of the country. Some may even pose as members of the military to get you to feel sympathy and to generate patriotic feelings. Be sure that you avoid all these kinds of requests. Slow the process down, ask a lot of questions and don’t get emotionally involved in things. Keep in mind that selling a car is a business transaction and it’s important to treat the sale as if it you were a businessperson.

Four Tips for Giving Your Bills More Room to Breathe

January 9, 2017 debtmanagement

According to the site Careerbuilder.com some three fourths of us live from paycheck to paycheck. This actually includes some people who earn six figures a year.

It can be difficult to just pay your bills every month even if you earn enough money to cover your expenses.

The problem is that bills have this nasty tendency to just keep piling up. This leaves many of us close to “cash poor” for a period of time each month.

You can give your bills – and your budget – more room to breathe just by using the following four strategies.

Get different due dates

If you’re like a lot of us the biggest majority of your bills come due around the same day each month. This can take a big chunk out of your bank account so there’s not much money left to get through the rest of the month. The way to fix this is by calling your creditors and utility companies and asking for different due dates. Do this and you can spread out your bills so they will match when it is that you earn money. For example, if you’re paid twice a month you could arrange to have half your bills due in the fifteenth of the month and the rest of them at the end of the month. Or you can have them spaced out weekly – whatever best fits your budgeting.

Consolidate them

A second good strategy would be to consolidate your credit card debts and other unsecured debts (personal lines of credit, payday loans, department store cards, etc.) into one new loan with one monthly payment. This should make things much simpler and take much of the hassle out of bill paying.

Another way to achieve this is to transfer all of your high interest credit card debts to a new card with a better interest rate. If you have a decent credit score you might be able to qualify for a 0% balance transfer card so that you’d have anywhere from 6 to 21 months’ interest free and to repay the debt.

If a large part of your debts are not credit card debts and you have a decent credit rating, you should be able to get a debt consolidation loan online or from your bank or savings institution.

If you have private student loans you could pay them off with a debt consolidation loan. If they are federal student loan debts, you should check into a Direct Consolidation Loan. It will have a fixed monthly payment and a fixed interest rate, which will be based on the weighted average of the interest rates you’re consolidating, rounded up to the nearest 1/8 of 1%. It’s likely that this will be less than the average of the interest rates you’re currently paying on your federal student loans.

Get a consistent cash flow

Are you one of those people struggling to pay their bills because your weekly or monthly wages are unpredictable? This is often the case these days as so many people have minimum-wage jobs or are subject to unpredictable work schedules. If you can’t get your employer to provide you with a routine work schedule and a consistent paycheck it’s almost impossible to plan ahead and to know how much you’ll have to cover your bills – or whether you can cover them at all.

You can fix this without having to get a new employer with a new app called Even. It’s described by the New York Times as, “A device that “smooths the irregular, up-and-down incomes of hourly workers into the steady circulation of a substitute wage”. A simpler explanation is that the app will ensure that you always get at least your average pay. This will mean a consistent cash flow, which should make it much easier for you to manage your bills. Even is available for both Android and iOS devices.

Eliminate some of those “extras”

When you review your spending isn’t there some expenses you could eliminate? You’ll probably find things that don’t really add that much value to your life such as that $100 monthly cable bill, that $10 dog toy box of the month, the $40 health club membership you rarely use and so forth. When you add up all of these expenses you’ll probably see they’re taking a big bite out of your budget and causing you to stress out when the time comes to pay for the necessities of life such as your student loans, rent and auto loan payments.

Now, at the beginning of a new year, is the ideal time to review all of your spending and your cash flow and get rid of the expenses you’ve become used to paying but that you really can’t afford.

Do these four things and you should find it much easier to keep your bills current and wouldn’t that feel pretty good?

The 7 Rules of Personal Finance You Absolutely Need to Follow

December 26, 2016 debtmanagement

There are some parts of personal finance that can get pretty complicated – especially those that have to do with investing. There is an almost bewildering array of ways to invest money, all of which have their upsides and downsides. There are people who make literally hundreds of thousands of dollars by picking just the right stock at the right time. Then there are others who lost thousands of dollars picking the wrong stock at the wrong time. Then, in addition to investing in individual stocks there are mutual funds, index funds. bonds, bond funds. Options, a thing called FOREX, gold, silver, real estate – the list goes on and on.

However, there are some things about personal finance that are not at all complicated. In fact, there are rules that have been developed over the years that are pretty darn simple but that you should absolutely follow. And here are seven of them

Don’t think your salary is the same as your savings

A simple truth that many people fail to understand is that your net worth is a lot more important than your salary. Just because you have a big salary doesn’t mean that you’re automatically rich. And you’re not automatically poor if you have a low salary.

Investing is less important than saving

Our second important rule is to first pay yourself. This may sound like the height of simplicity but it’s absolutely essential. Maxing out your savings is the best investment decision you can make because that will give you a big margin of safety in your life. Many financial experts say that before you start investing you need to have the equivalent of six months of your net income tucked away in an emergency fund. This may sound like too ambitious a goal but if you start saving money out of every paycheck you should be able to accomplish it much quicker than you might imagine.

Avoid debt like Ebola

You should try your best to avoid all debt but the one type of debt to avoid like Ebola is credit card debt. This is because it’s just about the number one way to reduce your net worth. Credit card debt can have interest rates as high as 17% or even 19%. Here’s what these interest rates translate into. Say that you owe $5000 on a credit card at 17% interest and make just a minimum payment of $100 each month. Do this and it will take you 87 months to pay off the debt assuming you charge nothing more on that card.

Always get your employer’s 401(k) match

If your employer offers a 401(k) and will match the money you deposit each month up to a certain percentage then take advantage of this without fail. Money your employer contributes is basically free money. If you turn this down it’s like turning down a tax deferred part of your salary each year. While you should max out your retirement contributions if at all possible you should always – at the minimum – save enough to get the match.

Learn your spending habits

Do you understand your priorities? If not, you need to look at where you spend money every month. If you ever want to get your finances under control you have to learn your spending habits. Your goal should be to spend money on cut back on everything but the important things. If you cover your essential expenses and then pay yourself, you’ll never really have to think about budgeting. You can then just spend whatever is left over.

Automate everything you can

If you want to make your life easier, avoid late fees and save more money you need to automate all of your financial life. You should be able to automate your bill paying and saving through your bank. If you find that there are some bills you cannot automate through your bank, you should be able to do it by contacting those companies directly. Once you get everything automated it should take you no more than 60 to 70 minutes a month to keep track of everything.

Get your big purchases right

You can save money by brown bagging your lunches, by eliminating those drive-through lattes, and dining out less but none of these will save you a lot of money. The places where you can save big money is in your big purchases. When it comes time to buy a new vehicle you could spend $50,000 or $60,000 on one of those humongous SUVs or you could buy a nice four-door sedan for $25,000 – and save $25,000. Plus, you’d have much lower monthly payments, which should free up money you could tuck away in your savings account.

4 Things That Will Seriously Damage Your Credit Score and How to Fix Them

December 20, 2016 debtmanagement

Your credit score – a little three-digit number – rules your financial life whether you like it or not.

It’s vitally important because it tells potential lenders how creditworthy you are.

When you have a high score of 720 or above creditors see you as being a good risk. They will not only loan you money they will do it at very low interest rates.

Apartment managers and homeowners will be more likely to rent to you if you have a good credit score.

You’ll even pay less for your insurance.

How your credit score is calculated

It’s calculated using a complex series of algorithms but is based on five components. The most important of them is your credit history as it accounts for 35% of your score. Second in importance is your credit utilization ratio, which makes up 30% of your score.

4 things that will damage your score

1. You can probably guess the first of these as it’s late or missed payments. While just one will not seriously damage your score a history of missing payments will definitely cause it to suffer. This goes back to your credit history or that component that accounts for 35% of your score. Plus, your creditors are more than happy to charge you late fees or even increase your interest rate after you’ve missed a few payments. So, this ends up costing you two ways. There are those immediate fees for missing payments plus the increased interest rates you’ll be required to pay later on loans and credit lines.

2. The second thing that can damage your credit score is your credit utilization. This is usually expressed as a ratio and is derived by dividing your total amount of credit into the amount you’ve used. As an example of this, if you have $15,000 in credit available and have used $5000 of it your credit utilization would be 33%, which would be close to okay.

However, if you calculate your debt to credit ratio and it turns out to be 35% or higher, you need to get to work to fix this. There are two ways you could improve it. You could either pay off some of your debt or you could get new credit. For example, if you could get a $10,000 personal loan and use $5000 of it to pay off your current debts, your debt to credit ratio would be 20% and this should give your credit score a nice boost.

3. A third thing that will damage your credit is if you lose your job. This happens to almost all of us at one time or another. If you get unemployment benefits this will affect your credit score a bit, which is why you want on it to get those benefits for as short a period of time as you can. Credit bureaus don’t know you’re unemployed. But they will recognize that your income has gone down. This would likely change your ability to pay your debts in a timely manager and will cause your score to decrease.

4. If you make too many request for credit within a short period of time this, too, will hurt your credit score. It can be especially damaging if you apply for several lines of credit. For example, if you were to apply for a homeowner equity line of credit this month then next month a debt consolidation loan and then a car loan the following month, this would definitely cause your credit score to take a hit. In fact, it will probably plummet. While this may be only temporary it’s something to keep in mind especially if there is some reason why you’re beginning a “new chapter” in your life.

Why monitor your credit reports

There are two good reasons you need to monitor your credit reports on a regular basis. The first of these is because errors could creep in. The three credit bureaus process hundreds and hundreds of pieces of information a day and mistakes can be made. Serious errors will affect your credit score so if you find any you need to dispute them.

Second, you could be the victim of identity theft. A crook could have stolen your name Social Security number and used the information to open new accounts. If you’re not reviewing your credit reports on a regular basis you could totally miss this.

Federal law requires the three credit bureaus to provide your credit reports free once a year. You can also get yours free on the site www.annualcreditreport.com.

What some experts advise is to get your reports one at a time every four months. This is sort of a way to monitor them at no cost.

Watch your credit score too

You should also keep an eye on your credit score. You can get it free on sites such as CreditSesame, CreditKarma and Credit.com. It’s not necessary to get your score every couple of weeks but it might be a good idea to check it semi-monthly. That way, if you see it’s gone down dramatically, you could get to work, determine what caused it and possibly get it corrected.

5 Financial Mistakes to Avoid Like the Zika Virus

December 12, 2016 debtmanagement

If you’re typical you probably never had a class in personal finance either in high school or college. If you were lucky one of your parents sat you down and at least discussed the importance of budgeting your finances.

You could be merrily cruising along thinking you’re doing okay with your finances when you’re actually making some serious mistakes. You may not be guilty of all five of these mistakes but it’s likely that there are several areas where you can improve.

Failing to have a spending plan

There’s a great quote, “A goal without a plan is just a wish”.

You can have some really great goals but if you don’t have a spending plan they’re just wishes.

Is yours is a two-week vacation in one of our national parks or at the beach? Or maybe it’s to buy a house. If you don’t have a spending plan it’s impossible to prioritize the decisions, you must make financially or to be aware of where your money is going. In fact, if you don’t have a personal spending plan you may never achieve any of your goals.

There are a number of apps available designed to take the work out of creating a spending plan. Some of the most popular of these are You Need A Budget, Mint PocketGuard, GoodBudget and Mvelopes.

Sit down, check out several of these, choose one and get started. You’ll find that developing a spending plan is much easier than you might have ever imagined. And a spending plan is the only way to make sure that you’ll achieve your important goals.

Living from paycheck to paycheck

Are you able to save anything or are you just living from paycheck to paycheck?

According to the Federal Reserve 45% of all Americans don’t have enough money saved to cover a $400 emergency. And 63% of us don’t have enough in savings to cover a $500 emergency.

When you create your spending plan you need to budget so that 10% of your net earnings for an emergency fund. Ideally you should build a fund equivalent to at least three months of your living expenses. Don’t despair if you can’t put 10% of your earnings into an emergency fund right away. Start with whatever you can – even if it’s only $20 a pay period. Then try to increase that amount as you can.

Not matching your employer’s 401(k) contribution

Would you like some free money? We certainly don’t know anyone that would turn up their noses at this.

That’s what your employer’s contribution to your 401(k) is – free money.

US News.com has reported that an estimated $24 billion in unclaimed 401(k) matching funds go unused every year.

If your employer does offer to match your 401(k) contributions then for heaven sakes, take advantage of this and contribute at least up to the percentage of your salary your employer will match.

If you can’t afford to do the full match, contribute as much as you can. Choose a safe investment such as an index fund and let the power of compounding go to work to help you towards a good retirement.

Never reviewing your credit reports

Have you seen your credit reports recently? Or have you ever seen them?

It’s important to get and review your credit reports on a regular basis because they could include errors that are damaging your credit score.

A study by the Federal Trade Commission released in 2014 revealed that as many as 42 million of us have errors in our credit reports that could be causing us to pay higher interest rates or keeping us from getting loans.

It’s really important to review your credit reports from the three credit bureaus (TransUnion, Experian, Equifax) to make sure they do not include errors.

The most common ones to look for are identity errors, incorrect account details and fraudulent accounts.

If you find errors in any of your credit reports make sure to dispute them. All three of the credit bureaus have forms on their websites specifically for this purpose but the experts say you really need to write a letter to the appropriate bureau enclosing whatever documentation you have to prove your case.

Failing to understand the difference between good and bad debt

There are experts that preach all debt is bad debt.

However, most experts in personal finance now recognize the fact that there is such a thing as good debt. It’s defined as debt used to purchase items that will grow in value over the years. For example, a mortgage can be considered good debt because the value of the home will increase over the years. Paying for a college education can also be considered good debt because it should help you increase your earnings going forward.

On the other hand, bad debt is money you borrow to pay for stuff that you consume or use up quickly such as that aforementioned two-week vacation, clothing or electronic games.

Of course, the truth is that all debt is essentially bad debt. The biggest difference between good debt and bad debt is that bad debt can damage your finances a lot quicker.

The smartest thing to do is to avoid debt like the plague because the faster you can become debt free, the better.