Guest Post by Katheryn Rivas
It may be a little early in the year to be talking about income taxes and, no doubt, it's the last thing any of us want to think about at this point, but thinking ahead about these things is the first step in strong financial management. As tax return season slowly approaches, we have visions of wonderful ways to spend that money for our financial betterment. Some of us think about tucking that cash away under our mattress for a rainy day or putting it in the stock market to hopefully make a quick buck. While of these are both options, they are probably not the wisest ones. More of us dream of shopping sprees and home improvements with our tax refunds. However, there are many other ways you can utilize your tax refund that will be smarter and more productive for your financial health. Consider these four options this year.
Add to Your Life Insurance
For many of us, putting our tax return towards our life insurance is the last thing we consider. However, adding to your life insurance from this money can be a very wise plan for certain people. If you own a home or have children, your life insurance coverage should be about eight to ten times your annual income. While this may sound extreme, it is an important thing to consider. Try using your tax return towards gaining the right amount of life insurance. This is a good way to invest in the important things like your family and loved ones.
Lighten Your Debt
Obviously, using your tax return toward your debt is a smart option. If you are able to make it through the year without that chunk of money, you can probably put it toward something more productive than your spending account. Rather than continually paying the minimum amount on your credit card bill, try putting your tax return money toward that bill to pay a larger chunk of it off. Paying the minimum can cause big problems if you have a high interest rate. Those interest rates can sneak up on you and eventually cost you more money than you expect.
Get an Energy Audit
A home energy audit can help you pinpoint where it is you are losing money in your home. This audit can be an expensive thing to get done, but it can end up saving you a significant amount in the long run. Put your tax refund money towards lowering your regular energy bills and improving your home's livability and resale value.
Invest in Your Self in the Right Way
While many of us use our tax refunds to invest in ourselves in one way or another (new clothes, new furnishings, etc.), there are better ways to improve ourselves using that money. Try investing in your career by spending that money one furthering your education. You can take classes to get a higher degree or to obtain a specific certification that can put you in a new pay level at work. By investing in your education and career, you have the potential to earn more money later in your life and you will make yourself more valuable.
Author Bio:
Katheryn Rivas writes for online universities blog. She welcomes your comments at her email Id: katherynrivas87@gmail.com.
Monday
Paying Medical Bills with Credit Cards, is it a Smart Choice?
Guest Post by Eliza Morgan
Those who really fear credit card debt are usually cautious when it comes to making future purchases. For example, if a couple knows they want a new TV for the living room, they'll usually save for a few months and then pay for a new TV with cash. But not everything can be so calculated, especially when it comes to your health.
Sometimes you get sick out of nowhere, and even if you're insured, getting billed for medical expenses is one of the easiest ways for someone to get into debt (or deeper debt). Think about it: one single trip to the emergency room can set you back $200 for someone with insurance. If this was an unexpected expense and you don’t have enough money in your account, what will you do? Charge it on your credit card. Depending on how quickly you can pay it back will determine how much interest you will accumulate. In fact, according to the most recent statistics, nearly 21 million Americans accrued credit card debt in 2008 due to using their cards to pay for medical bills. While health is important and unpredictable, there are some things you should consider first before using your credit card to seek temporary relief.
1. Negotiate with your Doctor/Hospital. First things first, it's always important that you speak up front that you may not be able to afford whatever procedure or test that the physician says you need. If it's an emergency situation the physician will go ahead and do the procedure, but they will be more willing to give you a discounted rate or work out some sort of payment plan (some charge interest; others do not). Either case, you are not obligated to pay any sort of out-of-pocket expenses up front so don’t be too tempted to put it on your credit card immediately. But if you discuss your financial situation from the beginning, the physician may be able to reduce your bill in some area, whether it's with the anesthesiologist if you've had surgery or with your medications.
2. Know who is more likely to Report to Credit Bureaus. If you put your medical bills on your credit card and then can't find a way to pay off your credit card bill, you will undoubtedly be contacted by a bill collector. From there, the appropriate crediting bureaus will be notified as well and your discrepancy will negatively be placed on your credit report and affect your credit score. While you do in fact want to pay off your medical bills at sometime, it's important to know that rarely do physicians and hospitals actually report to collection agencies (as opposed to credit card companies that do it almost immediately). In fact, various sources say that only.07% of medical businesses actually report their patients to bureaus. Most just write off any losses.
3. Get a Health Savings Account. Lastly, a great way to be better prepared for these kinds of unexpected medical expenses to acquire a health savings account (HSA). Most health insurance companies require a high deductible (about $1,500 for a single) to establish one through your plan but they can really be a life saver and help you be debt free. How it works: a portion of your paycheck (prior to taxes) is put into your HSA each month. You can build the money in your account tax free as well. You are then issued a debit card and can use that card strictly for paying for medical expenses, such as when paying off co-pays, medications, and remaining balances you may have on a surgery. It takes out the temptation of using a small portion of your savings for something other than medical uses. Your balance moves from year to year and works as an IRA after 65, so it can be invested.
Author Bio:
Eliza Morgan is a full time blogger. She specializes in writing about business credit cards. You can reach her at: elizamorgan856 at gmail dot com.
Those who really fear credit card debt are usually cautious when it comes to making future purchases. For example, if a couple knows they want a new TV for the living room, they'll usually save for a few months and then pay for a new TV with cash. But not everything can be so calculated, especially when it comes to your health.
Sometimes you get sick out of nowhere, and even if you're insured, getting billed for medical expenses is one of the easiest ways for someone to get into debt (or deeper debt). Think about it: one single trip to the emergency room can set you back $200 for someone with insurance. If this was an unexpected expense and you don’t have enough money in your account, what will you do? Charge it on your credit card. Depending on how quickly you can pay it back will determine how much interest you will accumulate. In fact, according to the most recent statistics, nearly 21 million Americans accrued credit card debt in 2008 due to using their cards to pay for medical bills. While health is important and unpredictable, there are some things you should consider first before using your credit card to seek temporary relief.
1. Negotiate with your Doctor/Hospital. First things first, it's always important that you speak up front that you may not be able to afford whatever procedure or test that the physician says you need. If it's an emergency situation the physician will go ahead and do the procedure, but they will be more willing to give you a discounted rate or work out some sort of payment plan (some charge interest; others do not). Either case, you are not obligated to pay any sort of out-of-pocket expenses up front so don’t be too tempted to put it on your credit card immediately. But if you discuss your financial situation from the beginning, the physician may be able to reduce your bill in some area, whether it's with the anesthesiologist if you've had surgery or with your medications.
2. Know who is more likely to Report to Credit Bureaus. If you put your medical bills on your credit card and then can't find a way to pay off your credit card bill, you will undoubtedly be contacted by a bill collector. From there, the appropriate crediting bureaus will be notified as well and your discrepancy will negatively be placed on your credit report and affect your credit score. While you do in fact want to pay off your medical bills at sometime, it's important to know that rarely do physicians and hospitals actually report to collection agencies (as opposed to credit card companies that do it almost immediately). In fact, various sources say that only.07% of medical businesses actually report their patients to bureaus. Most just write off any losses.
3. Get a Health Savings Account. Lastly, a great way to be better prepared for these kinds of unexpected medical expenses to acquire a health savings account (HSA). Most health insurance companies require a high deductible (about $1,500 for a single) to establish one through your plan but they can really be a life saver and help you be debt free. How it works: a portion of your paycheck (prior to taxes) is put into your HSA each month. You can build the money in your account tax free as well. You are then issued a debit card and can use that card strictly for paying for medical expenses, such as when paying off co-pays, medications, and remaining balances you may have on a surgery. It takes out the temptation of using a small portion of your savings for something other than medical uses. Your balance moves from year to year and works as an IRA after 65, so it can be invested.
Author Bio:
Eliza Morgan is a full time blogger. She specializes in writing about business credit cards. You can reach her at: elizamorgan856 at gmail dot com.
Ways to Avoid Credit Card Debt this Holiday Season
Guest Post by Amanda Tradwick
Some of us can spend thousands of dollars on gifts during the holiday season. Many of us turn to the convenience of our credit cards to finance these giving (shopping) sprees, causing us to impulse purchase and spend much more in the long run by paying high interest rates. Even more modest holiday shopping budgets can spiral out of control when they are compounded by excessive interest rates over the year, or more, they take to pay off. Here are a few tips to help you avoid using your credit cards this holiday season and accumulating more debt:
Make a List
Start out by making a list of everyone for whom you want to buy a gift. Include family, friends, work associates, church members and anyone else you can think of who you want to give a gift. If you find that the list has become too long, you can go back through and remove some people. Creating a complete picture of your gift list will help you budget better.
Set a Budget (and Stick to It!)
Now that you know who you want to buy for, start setting a price limit for each person to come up with an overall budget. This is easier than setting an overall budget and then dividing by the number of recipients because you aren't likely to want to spend the same amount on your officemate as you are on your mother. If you find that your overall budget ends up being too high once you've set individual limits, you can go back and make a few adjustments. Setting an overall budget -- and a per-person budget -- will help you to better select gifts once you begin.
Hit the Sales
Once you have your budget, maximize its potential by shopping sales and online promotions. There are a few times a year when many retailers are known to mark down their items, most notably the day after Thanksgiving and the Monday after Thanksgiving. Shopping during this time can save you a significant amount. The period after Thanksgiving and before Christmas is also a generally good time to shop.
Don't limit yourself to these sales times! Look for sales throughout the year -- even those right after Christmas if you're able to plan that far out for the next year. Also, take advantage of online sales and specials. Many retailers offer lower prices through their online stores, as well as free shipping and gifts with purchase. Check out all your options to get the lowest prices that you can.
Leave Your Credit Cards at Home
If you don't have your credit cards with you when you shop, you won't be tempted to use them to spend more than your budget, to purchase impulse items for which you had not planned, or to get "just a little something extra." Take cash with you, or use a debit card that is tied directly to your checking account and does not have a protective credit line. Once you're out of cash, you're done buying.
Make Gifts
The easiest way to save money on your gifts and to save yourself the burden of credit card debt is to make some of your gifts. Many friends and family would prefer to receive a gift that was made with a sincere spirit or that has some sentimental value. Framed photos, favorite baked goods or even heartfelt letters all make great gifts. Be creative and make it specific to the recipient.
Saving early, making a plan and doing some smart shopping can all help you to save money this holiday season and to avoid the burden of extra credit card debt. The earlier you plan (and save), the better off you will be and the brighter your holidays!
Author Bio:
Amanda Tradwick is a grant researcher and writer for CollegeGrants.org. She has a Bachelor's degrees from the University of Delaware, and has recently finished research on grants for married college students and student grants in north carolina.
Some of us can spend thousands of dollars on gifts during the holiday season. Many of us turn to the convenience of our credit cards to finance these giving (shopping) sprees, causing us to impulse purchase and spend much more in the long run by paying high interest rates. Even more modest holiday shopping budgets can spiral out of control when they are compounded by excessive interest rates over the year, or more, they take to pay off. Here are a few tips to help you avoid using your credit cards this holiday season and accumulating more debt:
Make a List
Start out by making a list of everyone for whom you want to buy a gift. Include family, friends, work associates, church members and anyone else you can think of who you want to give a gift. If you find that the list has become too long, you can go back through and remove some people. Creating a complete picture of your gift list will help you budget better.
Set a Budget (and Stick to It!)
Now that you know who you want to buy for, start setting a price limit for each person to come up with an overall budget. This is easier than setting an overall budget and then dividing by the number of recipients because you aren't likely to want to spend the same amount on your officemate as you are on your mother. If you find that your overall budget ends up being too high once you've set individual limits, you can go back and make a few adjustments. Setting an overall budget -- and a per-person budget -- will help you to better select gifts once you begin.
Hit the Sales
Once you have your budget, maximize its potential by shopping sales and online promotions. There are a few times a year when many retailers are known to mark down their items, most notably the day after Thanksgiving and the Monday after Thanksgiving. Shopping during this time can save you a significant amount. The period after Thanksgiving and before Christmas is also a generally good time to shop.
Don't limit yourself to these sales times! Look for sales throughout the year -- even those right after Christmas if you're able to plan that far out for the next year. Also, take advantage of online sales and specials. Many retailers offer lower prices through their online stores, as well as free shipping and gifts with purchase. Check out all your options to get the lowest prices that you can.
Leave Your Credit Cards at Home
If you don't have your credit cards with you when you shop, you won't be tempted to use them to spend more than your budget, to purchase impulse items for which you had not planned, or to get "just a little something extra." Take cash with you, or use a debit card that is tied directly to your checking account and does not have a protective credit line. Once you're out of cash, you're done buying.
Make Gifts
The easiest way to save money on your gifts and to save yourself the burden of credit card debt is to make some of your gifts. Many friends and family would prefer to receive a gift that was made with a sincere spirit or that has some sentimental value. Framed photos, favorite baked goods or even heartfelt letters all make great gifts. Be creative and make it specific to the recipient.
Saving early, making a plan and doing some smart shopping can all help you to save money this holiday season and to avoid the burden of extra credit card debt. The earlier you plan (and save), the better off you will be and the brighter your holidays!
Author Bio:
Amanda Tradwick is a grant researcher and writer for CollegeGrants.org. She has a Bachelor's degrees from the University of Delaware, and has recently finished research on grants for married college students and student grants in north carolina.
Saturday
Lacey’s Credit Card Debt Story
Guest Post by Lacey Cook
Hello all. My name is Lacey Cook, and this is my personal credit card debt story. I was always taught to spend my money wisely. From the age of eight, I started to save for my first car. By the time I turned 18, I had saved enough to buy a six year old car at about $8,000. I paid in full with a check, and I’d never felt so great.
After that, I went off to college, where I had some trouble keeping my finances afloat, but I made it through with the help of my parents. After graduation, I got married and started a new chapter of my life. That’s where everything started to go south. I had no student loans or credit card debt, and we’d just got a few thousand dollars for our wedding, but that wasn’t enough. He was about $40,000 in debt from student loans and credit cards, and we had no way of paying our bills. We struggled to find jobs, and we ended up having to use my credit cards to make ends meet for the first few months of our marriage.
Finally, we found jobs and started to slowly dig our way out of the hole. Everything was great, but we still wanted something more, so we decided to get a dog. We went to the pound to adopt one, and found the most adorable little puppy I’d ever seen. She was fun, yet still wanted to cuddle, and I knew she would be the perfect addition to our new little family. We spent our weekly budget for groceries on her and decided to eat bologna and mac and cheese to tide us over.
The second day after we got her, she started to look lethargic, and I wanted to make sure she wasn’t sick so I took her to the vet. Turns out, she had a very draining virus that could have killed her if we hadn’t caught it in time, and even with the treatment, she still only had about a 50% chance of survival. I handed over my credit card. Two days and nearly $2,000 later, we finally got to take her back home to nurse her back to health.
We knew, at that point, that we had to make some drastic changes in our spending to get us back out of debt. We sat down, made a list of all of our monthly expenses, and created a budget to suit our life. I started clipping coupons and stopped buying name brand items to cut down our grocery bill. We discontinued our cable bill as well and used digital rabbit ears instead. We cut down our budget so much that we were able to start paying way more than the minimum payment on our debts each month, which I know is important when you are trying to save your credit score.
We’re not out of the woods yet, but we’re getting there as fast as we can. In fact, we’ve been so successful, that we’re also able to put away a little money each month to start a retirement fund. I know you may be thinking that we shouldn’t have to worry about such things yet because we’re young and have plenty of time, but I have realized that I definitely don’t want to have to work until I’m too old to stand. The sooner a person starts to save for retirement, the sooner they can actually retire. I am determined and motivated to get out of this debt and live my life to the fullest.
Author Bio:
Lacey Cook is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about getting their first credit card.
Hello all. My name is Lacey Cook, and this is my personal credit card debt story. I was always taught to spend my money wisely. From the age of eight, I started to save for my first car. By the time I turned 18, I had saved enough to buy a six year old car at about $8,000. I paid in full with a check, and I’d never felt so great.
After that, I went off to college, where I had some trouble keeping my finances afloat, but I made it through with the help of my parents. After graduation, I got married and started a new chapter of my life. That’s where everything started to go south. I had no student loans or credit card debt, and we’d just got a few thousand dollars for our wedding, but that wasn’t enough. He was about $40,000 in debt from student loans and credit cards, and we had no way of paying our bills. We struggled to find jobs, and we ended up having to use my credit cards to make ends meet for the first few months of our marriage.
Finally, we found jobs and started to slowly dig our way out of the hole. Everything was great, but we still wanted something more, so we decided to get a dog. We went to the pound to adopt one, and found the most adorable little puppy I’d ever seen. She was fun, yet still wanted to cuddle, and I knew she would be the perfect addition to our new little family. We spent our weekly budget for groceries on her and decided to eat bologna and mac and cheese to tide us over.
The second day after we got her, she started to look lethargic, and I wanted to make sure she wasn’t sick so I took her to the vet. Turns out, she had a very draining virus that could have killed her if we hadn’t caught it in time, and even with the treatment, she still only had about a 50% chance of survival. I handed over my credit card. Two days and nearly $2,000 later, we finally got to take her back home to nurse her back to health.
We knew, at that point, that we had to make some drastic changes in our spending to get us back out of debt. We sat down, made a list of all of our monthly expenses, and created a budget to suit our life. I started clipping coupons and stopped buying name brand items to cut down our grocery bill. We discontinued our cable bill as well and used digital rabbit ears instead. We cut down our budget so much that we were able to start paying way more than the minimum payment on our debts each month, which I know is important when you are trying to save your credit score.
We’re not out of the woods yet, but we’re getting there as fast as we can. In fact, we’ve been so successful, that we’re also able to put away a little money each month to start a retirement fund. I know you may be thinking that we shouldn’t have to worry about such things yet because we’re young and have plenty of time, but I have realized that I definitely don’t want to have to work until I’m too old to stand. The sooner a person starts to save for retirement, the sooner they can actually retire. I am determined and motivated to get out of this debt and live my life to the fullest.
Author Bio:
Lacey Cook is an author who writes guest posts on the topics of business, marketing, credit cards, and personal finance. Additionally, she works for a website that focuses on educating readers about getting their first credit card.
Friday
3 Steps to Building a Superhuman Credit Score
Guest Post by Jacelyn Thomas
With the economy still weak from the recent recession (though at least recovering), it is harder to impress credit lenders than it was ten years ago. What would have passed for an above-average credit score in 2001 (680) is now considered on the lower side of average. The reason for this new, higher definition of credit-worthiness is primarily that banks are still hesitant to loan money for fear of not making that money back. They want as few liabilities as possible, so they are more stringent in their credit score requirements.
In light of the shifted credit score curve, it might be time to examine your own credit score, as well as your spending and credit usage practices, to ensure that you aren’t unfairly denied a loan for your next car, house, or business venture. There isn’t much you can do to improve the economy, or lender’s expectations, but there are steps you can take to improve your credit score, so that you will impress even the shrewdest of banks and always get the best rates.
Step 1: Know Thyself (Or At Least Thy Credit Report)
There are a number of factors that influence your final credit score: Payment history, bankruptcy, credit card debt, length of credit history, type and number of credit cards, and hard inquiries that are made when you apply for loans and lines of credit.
At any point, it is possible that one or more of the three bureaus that track your credit usage or any involved party (banks, collection agencies, etc.) could make a mistake that might negatively affect your score.
To avoid this, check your credit report every 12 months for errors. You can obtain a free copy of your credit report (though your score isn’t on free reports) from AnnualCreditReport.com; if you find any errors you can dispute them to have them resolved. But be aware: it can take up to six months to fix an error on your report, so do it early, and be patient.
Step 2: Hold Steady
Especially if you’re planning to buy a new home or car in the near future (three to six months), don’t open any new lines of credit if you can help it. Ultimately your credit score shows lenders your risk level, and will directly affect your interest rate — and applying for loans and credit cards temporarily lowers your score, so you might not get the best rate possible if you have any recent hard inquiries into your credit report.
Instead of opening new accounts or transferring balances, make the best use of the credit you have. The best way to prove to banks and other lenders that you will be a reliable borrower is to have a great revolving credit history.
Step 3: Be a Payment Superhero (Or At Least Pay Your Bills On Time)
Credit history accounts for 30% of your credit score, so it is imperative that you aren’t delinquent on any accounts you have. The fastest way to delinquency is missing payments or due dates, so make your credit card payments with superhuman punctuality, and you’ll be on your way to a superhuman score.
But not missing payments isn’t really enough. Ideally, you should be paying your entire balance in full (or at least more than the minimum amount due) every month, and should never exceed 30% of your total available credit.
You won’t be bulletproof or be able to leap over tall buildings in a single bound, but if you follow these steps, your credit score will leap up, and will be as close enough to bulletproof that lenders will trust you with their lives (or at least their money, which is all that really matters).
Author Bio:
Jacelyn writes about identity theft for IdentityTheft.net. She can be reached at: jacelyn.thomas @ gmail.com.
With the economy still weak from the recent recession (though at least recovering), it is harder to impress credit lenders than it was ten years ago. What would have passed for an above-average credit score in 2001 (680) is now considered on the lower side of average. The reason for this new, higher definition of credit-worthiness is primarily that banks are still hesitant to loan money for fear of not making that money back. They want as few liabilities as possible, so they are more stringent in their credit score requirements.
In light of the shifted credit score curve, it might be time to examine your own credit score, as well as your spending and credit usage practices, to ensure that you aren’t unfairly denied a loan for your next car, house, or business venture. There isn’t much you can do to improve the economy, or lender’s expectations, but there are steps you can take to improve your credit score, so that you will impress even the shrewdest of banks and always get the best rates.
Step 1: Know Thyself (Or At Least Thy Credit Report)
There are a number of factors that influence your final credit score: Payment history, bankruptcy, credit card debt, length of credit history, type and number of credit cards, and hard inquiries that are made when you apply for loans and lines of credit.
At any point, it is possible that one or more of the three bureaus that track your credit usage or any involved party (banks, collection agencies, etc.) could make a mistake that might negatively affect your score.
To avoid this, check your credit report every 12 months for errors. You can obtain a free copy of your credit report (though your score isn’t on free reports) from AnnualCreditReport.com; if you find any errors you can dispute them to have them resolved. But be aware: it can take up to six months to fix an error on your report, so do it early, and be patient.
Step 2: Hold Steady
Especially if you’re planning to buy a new home or car in the near future (three to six months), don’t open any new lines of credit if you can help it. Ultimately your credit score shows lenders your risk level, and will directly affect your interest rate — and applying for loans and credit cards temporarily lowers your score, so you might not get the best rate possible if you have any recent hard inquiries into your credit report.
Instead of opening new accounts or transferring balances, make the best use of the credit you have. The best way to prove to banks and other lenders that you will be a reliable borrower is to have a great revolving credit history.
Step 3: Be a Payment Superhero (Or At Least Pay Your Bills On Time)
Credit history accounts for 30% of your credit score, so it is imperative that you aren’t delinquent on any accounts you have. The fastest way to delinquency is missing payments or due dates, so make your credit card payments with superhuman punctuality, and you’ll be on your way to a superhuman score.
But not missing payments isn’t really enough. Ideally, you should be paying your entire balance in full (or at least more than the minimum amount due) every month, and should never exceed 30% of your total available credit.
You won’t be bulletproof or be able to leap over tall buildings in a single bound, but if you follow these steps, your credit score will leap up, and will be as close enough to bulletproof that lenders will trust you with their lives (or at least their money, which is all that really matters).
Author Bio:
Jacelyn writes about identity theft for IdentityTheft.net. She can be reached at: jacelyn.thomas @ gmail.com.
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