Financial Issues in a Marriage: How to Overcome Them

Financial Issues in a Marriage

L, is for the way you look at me. O, is for overcoming financial issues in a marriage.

Making a marriage last can take effort even if both spouses are millionaires. Add in money problems, and things can get difficult fast. We’ve talked before about how one spouse’s credit could lead to problems, but that’s just one way finances can throw a wrench into a relationship.

That’s why it’s important to be aware of the kind of problems that can arise, and the methods you can use, as a couple, to overcome them. We spoke to the experts to find out why couples fight over finances, the kind of struggles that come up, and how you can beat them and make sure that love prevails in the end with these money and marriage tips.


Values, in all senses of the word.

It’s important to understand where financial struggles in marriage come from so you can try and head them off before they ever come up, or at least have a head start on addressing them.

“Most financial issues in marriage come down to one main factor: both partners have different core values about money,” certified counselor and creator of The Popular Man (@The_Popular_Man) Jonathan Bennett explained. “And, many of these financial values developed very early and are difficult to change. For example, one partner might have been raised to value saving and investing. The other partner might have been taught to indulge his or her whims even if it means living paycheck to paycheck.

“It’s very difficult for partners who view money, saving, and spending in fundamentally conflicting ways to manage household finances successfully as a team.”

Writer and speaker Frederick Towles (@mrtowles) agreed about this foundational concern: “Financial issues can most certainly affect a marriage negatively. One of the biggest financial issues that can negatively impact a marriage is how each spouse handles and views money.  Each spouse may have different views of money, one spouse may primarily seek to save money for a rainy day and another could have a spending fetish. This type of conflict will typically raise trust issues in the relationship. The difference in philosophies in money can spill over into other areas of the relationship if both spouses aren’t careful.”

Couples may even have differing ideas about who the money they have belongs to. “Some spouses freely pool their money and treat it as a joint asset,” Steven Yoda, a partner with the divorce firm Walzer Melcher (@LAfamlaw), told us. “Other spouses, rightly or wrongly, consider their earnings ‘their’ money and split expenses down the middle. Some spouses are comfortable with debt, while others are averse to it.

“Oftentimes, these issues are not fully discussed before marriage or even after marriage. This can lead to years of misunderstanding, which reach a boiling point during a divorce. It is easy to see how, in the absence of communication, one spouse may believe that the marital finances are perfectly fine, while the other may be stewing in resentment.”

Taking credit (into account).

As we mentioned above, credit can also be a source of strife. But we’ll let Yoda explain it thoroughly:

“A very practical and important issue to probe is credit. Ideally, this issue should be discussed before marriage. It can be an awkward subject to raise, but it is valuable information. First, knowing your partner’s credit score provides some insight into your partner’s past financial decisions. As indicated, money is a common source of stress in a marriage, so it is helpful to know how your partner has handled money in the past.

“Second, and perhaps more importantly, although your partner’s credit score will not affect your personal credit score per se, it still may affect access to credit after marriage. If your credit score is great but your spouse’s credit score is poor, the act of marriage will have no impact on them.

“If, however, after marriage, you two jointly apply for a credit card or a loan to purchase a house or car, the lender will consider both credit scores and, chances are, the poor credit score will result in higher interest rates and fees than if both credit scores were high. This is a tangible, real-world expense that may come as a shock to the spouse with good credit. It is easy to see how resentment might build. The best approach is to openly discuss these issues upfront so everyone knows what to expect.”

So how can you reconcile these financial issues in your marriage?

Skip the blame game.

Pride can often cause trouble in relationships. When money is involved, “losing” an argument feels like a blow to your wallet as well as your pride.

“Many partners, rather than working together, start to place blame on the other person,” warned Bennett. “This creates discord and resentment in the relationship. But, even if both partners try to work together, financial strain can create additional stress. Worries over bill payments, collectors, and repossessions/evictions overshadow positive aspects of a married life together.”

Avoiding the blame game won’t instantly fix all of your problems, but it’ll be impossible to fix anything if you’re at each other’s throats.

Start early… way early.

As Yoda made clear, the best way to deal with financial issues is to try and head them off before they even come up. And he isn’t the only one who told us that.

“While counseling and compromise can certainly help couples solve existing money problems, the best solution is to focus more on money matters before marriage,” advised Bennett. “Financial compatibility is rarely discussed before a couple makes a long-term commitment. However, given the statistics about money issues in a marriage and divorce, determining financial compatibility should play a much more important role, perhaps even in premarital counseling and preparation.”

But what if you’re already married?

Communication, communication … communication.

Communication is one of the most important parts of any relationship and communication about money is one of the most important kinds of communication, even if it might be one of the most awkward.

“Yes, absolutely money issues add stress to your marriage,” Maggie Reyes, marriage mentor and life coach at ModernMarried.com (@ModernMarried), told us. “To minimize and prevent those issues from becoming bigger problems in your relationship it is important to start with the simple act of having conversations about money. Understanding each other’s priorities and how and why you spend before major expenses are made can help you plan for them as a team instead of being on opposing sides of a money argument.”

Reyes offered us a list of good questions to ask, both when you want to break the ice on a conversation about finances, and when you’re getting down to business:

“If money is already a stressful topic in your relationship, it is sometimes easier to start with the fun side of money, here are some conversation starters you can use:

  • If I could do anything with my money, I would….
  • If money were no object I would…..
  • If I could use money to do something fabulous for my partner, I would…
  • If I could splurge on one thing, I would…
  • My biggest dream is….

“Once you have identified some money wishes, you can take a look at your current money reality – what is happening right now?

“And ask questions such as;

  • Am I keeping track of my money? Do I know how much I have in my wallet right now? In my bank account?
  • Do I know how much I owe? The total, for real of anything outstanding (house, credit card, car?)
  • Do I know how our joint funds are handled? Why or why not?
  • Do I know our bank account numbers and have access to all of our accounts?
  • What do I need to know today to be able to fully manage my money?
  • If I could change one thing about the way I handle money,  it would be….

“Having regular conversations about money and making plans on how to use it and manage it helps you avoid having big arguments about money by allowing you to bring up ideas and plans before they are critical. Understanding that you and your partner are likely to have different ideas on how to approach anything, including money, and then making that okay before an argument arises, takes the emotional punch out of the disagreement.”

Cherie Lowe (@Thequeenoffree), author of Slaying the Debt Dragon and blogger at Queen of Free, also emphasized the importance of good communication: “The short answer is that money problems rank among the top reasons why married couples call it quits. In particular, we’ve focused in on how financial issues in a marriage lead to problems with intimacy in our next book. Ever have a hot steamy night of passion after your last money fight with your spouse? Um, no. The problems feed each other and eventually cause a lack of togetherness and paralyze relationships.

“To overcome or prevent financial fights couples need to focus in on effective communication when it comes to money, shared vision for goals, a well-delineated division of labor within in the home, and keeping their finances well organized.”

Many couples find it difficult to talk about money, but if you don’t, there’ll only be more troubles down the line. Better to speak early and often, and enjoy the priceless treasure that is your marriage.

How have you and your spouse handled financial issues in your marriage? We want to hear your stories! You can email us or you can find us on Facebook and Twitter

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN


Contributors
JBJonathan Bennett (@The_Popular_Man) is an internationally recognized dating, relationship, and life coach based out of the Columbus, Ohio metro area, where he consults, speaks, and offers classes. With a background in counseling and education, his coaching method emphasizes scientifically backed skills to take charge of your life to find personal freedom and success in all relationships. He is the author of 7 books and is frequently quoted in print and other media.
C_LoweCherie Lowe is a personal finance blogger at Queen of Free (@Thequeenoffree) and author of the book Slaying the Debt Dragon, her story of paying off over $127K in debt. She loves nothing more than helping people find freedom in their finances, save money, and live life to its fullest. Her and her husband Brian are finishing the final round of edits on our their book: Your Money, Your Marriage: The Secrets to Smart Finance, Spicy Romance, and their Intimate Connection due out September 2018 from Zondervan (Harper Collins Christian).
Maggie Reyes picMaggie Reyes is A Life Coach, Writer and the feisty voice behind ModernMarried.com (@ModernMarried).
Fred's Pic (1)Frederick Towles (@mrtowles) is an entrepreneur, author and professional coach on personal finance, recognizing, seizing and leveraging opportunities of all kinds. Frederick founded The Towles Group Inc. to address issues that relate to small businesses and individuals – accounting, taxation, asset protection, financial compliance, wealth creation, debt management and business management. He also founded Unlimited Expectations Inc. which provides tools for individuals to assist them in the areas of opportunity recognition, leadership, and personal finance. Through the tools and services offered by these companies, people are positioned to operate their lives and their businesses at optimal capacity.
S_YodaSteven Yoda is a partner with the Los Angeles divorce law firm Walzer Melcher (@LAfamlaw).

 

Time to Fix Your Credit Score? Here are 12 Expert Answers to Get You Started 

opploans-how-long-rebuild-credit

Learn more about your credit score, credit report, and the best ways to improve your creditworthiness.

For a being such a dinky little three-digit number, your credit score sure has the power to shape your life. It determines how much your loans and credit cards are going to cost you, not to mention it can decide whether you have access to (traditional) credit at all!

We know you’ve got questions about how it all works—especially when it comes to raising your credit score. But before you fix your score, you’ve got to learn a bit more about what makes it tick. And, in particular, you’ve got to learn more about your credit report. Without it, you wouldn’t have any credit scores at all!

That’s why we reached out Rod Griffin, Director of Public Education for Experian (@Experian), one of the three major credit bureaus. He gave us some great pieces of expert insight into how credit scores and credit reports work and how you can use that knowledge to improve your credit.

You’ve got questions? He’s got answers.


1. Is your credit score part of your credit report?

“There are two things to keep in mind about credit scores, says Griffin, “there isn’t just one credit score and it is not part of your credit report.”

Are you surprised?

Credit scores use the information kept on credit reports to determine your creditworthiness, but the score isn’t actually a part of the report itself. Information can vary between the three major credit bureaus—Experian, TransUnion and Equifax—so you have different scores depending on which credit report is used.

And that’s not all.

“In fact,” adds Griffin, “there are many different credit scores used by lenders to meet their particular risk management needs. Each scoring model weighs credit indicators differently.”

Figuring out your credit score might be a little harder than you originally thought—but that doesn’t mean there aren’t common “best practices” you can follow to keep all your scores healthy.

2. What are the most important factors in a person’s score?

Griffin says that “Missed/late payments are the most important factor in credit scores.” And that makes sense, as your payment history makes up 35 percent of your score, more than any other single factor.

According to Griffin, those late or missed payments “may appear as negative information on your credit report for seven years, but their impact on a person’s credit score will decline over time.”

But he adds that “depending on the severity of the delinquency, they can affect scores for as long as they remain on the report.”

3. How long do new credit inquiries stay on your report?

Whenever you apply for a loan or a credit card from a traditional lender, they’re going to run a “hard” credit check. These get recorded on your report as “new credit inquiries.” Basically, lenders want to know any time you’re searching for more credit than you already have.

“While inquiries remain on a credit report for two years, their impact on credit scores is minimal and diminishes relatively quickly, says Griffin. “Typically, any significant impact from inquiries diminishes after two or three months, by which time a new account will appear in the report, or not.”

“The new account – or lack thereof – represents the risk and the inquiry becomes much less significant. FICO excludes entirely any inquiries more than 12 months old from their score calculations. Inquiries for car loans or mortgage loans are counted as only one inquiry by most credit scoring models and may be not counted at all in the newest systems from FICO and VantageScore.”

He adds that “Inquiries will always be the least important factor in credit scores.”

4. How do debts sent to collections affect your score?

If you fail to make a payment on one of your credit accounts, it’s going to get sent to collections—which oftentimes means that your lender (or “creditor”) sells the debt to a new company for a fraction of what you actually owe. That company, a debt collection agency, then tries to recoup the debt, while the collection account gets recorded on your report

According to Griffin, “The collection account will remain on your credit report for seven years from the date the original creditor first reported the debt as delinquent to the credit-reporting agency. That’s true even if the collection account has been transferred from the original creditor to one or more collection agencies.”

“Although collection accounts stay on the credit report for seven years, the longer ago they were paid off, the less of an effect they will have on your credit scores.”

“A collection account that has been paid in full is often viewed more favorably by lenders than if left unpaid, especially after some time has passed. In fact, some newer scoring models no longer include paid collections when calculating scores, so paying off a collection could benefit credit scores even sooner,” he says.

A collection account is one of the ways that no credit check loans like payday loans or title loans can get recorded on your report. Even if the lender doesn’t report your loan to the credit bureaus, a debt collector will report their collection account. In cases like these, bad credit loans will only hurt your score, not help it.

5. How long does a bankruptcy remain on your report?

“There are two main forms of bankruptcy, chapter 7 and chapter 13,” says Griffin. “Chapter 7 bankruptcy remains on your credit report for 10 years after the date filed. Chapter 13 bankruptcy remains on your credit report for 7 years after the date filed.”

“Bankruptcy is the most serious negative factor in a credit report. The exact point impact depends on the individual’s unique credit history and the credit scoring system used to calculate the score. Regardless of those issues, a bankruptcy will have very serious negative implications for credit scores while it remains on the credit report.”

We agree. While bankruptcy is sometimes a person’s only solution, the effect on your credit score is … well, it’s not going to be pretty. We can promise you that much.

6. How long does it take for on-time payments to positively affect your score?

“Everyone’s credit history is unique, and there are many different scoring systems, so there’s really no one-size-fits-all answer,” says Griffin.

“Payment history is the number one factor in determining credit scores. Therefore, consistent on-time payments for one year or even three years will positively impact a person’s score because it shows you are responsible. The longer the history of on-time payments, the more positive the impact.”

But making on-time payments won’t fix your score all by itself.

“For example,” offers Griffin, “credit usage is the second biggest factor in credit scoring models. If someone is making consistent on-time payments, but their credit card balances are creeping closer and closer to their limit each month, the higher balances could offset the impact of the positive payments on their score.”

And if you’re looking for instant results from an on-time payment, you’re going to be disappointed. According to Griffin, “Credit scores also require a minimum of three months, and more typically six months of payment history before they can be included in the credit score calculation.”

7. Is there a certain credit utilization ratio at which a person will see their score jump?

Your credit utilization ratio sounds complicated, but it’s actually pretty simple. It measures how much of your available credit you’re using.

Say you have a credit card with a $1,000 limit on which you’re carrying a $500 balance. Your credit utilization ratio would be 50 percent, as you are currently using half of the credit that’s  available to you.

“A general rule of thumb is to always keep your utilization rate below 30 percent,” says Griffin, adding that “Ideally, you should pay your balances in full each month.”

He stresses that “The 30 percent ratio is a maximum, not a goal.” So if your ratio is currently above 30 percent, it certainly makes a good milestone to shoot for. Just make sure you don’t stop paying down your balances once you’ve achieved it.

“Credit scores consider both your overall balance-to-limit ratio, or utilization rate, and your utilization rate on individual accounts. The credit limit of an account is important because it is part of what determines your utilization ratio—the amount of credit you’re currently using vs. the amount that is available to you.”

This is one of the reasons why closing down an old credit card can actually hurt your credit. It lowers the amount of credit you have available to you, which in turn hurts your ratio. Instead of closing that account, you should consider keeping it open—so long as you aren’t tempted to use it.

To learn more about your credit utilization ratio, check out our blog post, Know Your Credit Score: Amounts Owed.

8. Do people’s scores get penalized for using zero percent APR balance transfers to help with debt repayment?

“Opening a new credit account often means taking on new debt, or at least increasing your potential to incur debt,” says Griffin. “For this reason, you may see a slight dip in scores when you first apply for and open a new account.  The action of opening the new account would not cause you to be penalized for using a zero percent APR balance transfer to help with debt repayment.”

“However,” he adds, “there are other pitfalls that may affect your credit score.”

  • “For instance, a high transfer fee could outweigh the benefits you might get from a lowered or zero percent APR.”
  • “Another downside is that if you fail to pay off the entire transfer amount by the end of the promotional period, your APR will reset to a higher rate – one that could potentially be higher than you were paying before making the transfer.”
  • “And lastly, if you continue to use the paid-off card, you could accrue even more debt. It’s important to avoid adding more debt – either on the old card you’ve paid off or on the new card with lower or zero percent APR.”

To learn more about balance transfers, Griffin recommends that you check out this article from Experian.

9. How does the length of your credit history affect a person’s creditworthiness?

“The length of credit history helps lenders evaluate your creditworthiness,” says Griffin. “Credit history gives lenders a better insight into your credit behaviors, thus, determining lending risk and not really a fuller picture of how you manage your debts.”

“In general, the longer your accounts have been opened, the better it can be for your credit history, as long as you manage them well. “

“Though, in terms of creditworthiness having a line of credit for one to three years is only positive if the account is managed well. It’s quite possible for a person with a credit history that is only a few years old to have very good credit scores,” he says.

10. Is it easier to go from bad to fair credit than it is from fair to good credit?

According to Griffin, “Moving your credit score up the scale regardless of where you start requires the same behaviors. You have to catch up on any late payments, reduce your credit card balances and always pay your bills on time”.

“Just how fast any individual’s scores will improve depends on their unique credit history. The more severe the issues, the longer it will take.”

“For example,” he says, “a person who is just beginning to build their credit history but has all positive, on-time payments may increase their score faster that a person whose scores have been dragged down by bankruptcy. The bankruptcy filing will seriously hinder scores for as much as 10 years, especially if coupled with other late payments, charged-off accounts or collections. It also depends on the scoring system and how it weighs the individual items.”

The bottom line for Griffin is that “everyone has a unique credit history with a different mix of factors that will determine how fast their credit scores may increase.”

11. If someone is committed to raising their credit score, what is the best course of action for them take?

According to Griffin, there are two things that a person should do if they want to raise their score:

1. “If you have late payments, catch up and then make all your payments on time, every time.”

2. “Reduce your credit card balances. Payment history and revolving account utilization are the two most important factors in credit scores.”

“Beyond those two things,” he says, “every credit history is different, and the things that each person should do differ as well.”

“To find out what you need to do, get a copy of your credit report and purchase a credit score. When you purchase your credit score you will receive a list with the risk factors that go with that score. The risk factors tell you what, from your personal credit history, are most affecting your credit score. Address those risk factors and all your scores should get better.”

“The numbers can be different from one scoring system to another, but the risk factors are very consistent,” says Griffin.”

12. How can I get a copy of my credit report and score?

Here’s some great news: Did you know that you are entitled to one free copy of your report from Experian, TransUnion, and Equifax ever year? Well, you do! It’s the law! All you have to do is request them by going to www.annualcreditreport.com.

As for your credit scores, the FICO score is the most commonly used type of score, but there’s also the VantageScore, which was created by the three bureaus.

“You can purchase a VantageScore from Experian when you request your free annual credit report,” says Griffin. “You also can get a free credit report and free FICO credit score at www.freecreditscore.com.”

“In both cases,” says Griffin, “you get the number, an explanation of what it means in terms of risk and the list of risk factors that most affected the score. The risk factors are empowering because they tell you what you can do to make your scores better.”

What questions do you have about your credit scores and your credit report? We want to know! You can email us or you can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN


Contributors
Rod Griffin is Director of Public Education for Experian (@Experian). Rod oversees the company’s financial literacy grant program, which awarded more than $850,000 in 2015 to non-profit programs that help people achieve financial success. He works with consumer advocates, financial educators and others to help consumers increase their ability to understand and manage personal finances and protect themselves from fraud and identity theft. He works to help all consumers be better prepared to get the credit they need, at the time they need it, and at rates and terms that are favorable to them.”

7 Bad Money Habits That Lead to Bad Credit

Bad Money Habits

If you want a healthy credit score, you need to save more, spend less, and be patient.

Having bad credit can sometimes feel like a curse, like it’s something entirely beyond your control, something that’s utterly impossible to fix.

But even though it can feel that way. We all know that’s not the case.

While there are certainly many instances where bad luck or misfortune—incidents that are entirely beyond your control—can contribute to financial woes and send your credit score down the tubes, there are just as many times where bad money habits are the real culprit.

Even when it comes to instances of bad luck, there are good money practices that can leave you much better prepared to deal with them. Having a real, sizable emergency fund, for instance, means that you don’t have to turn to personal loans in a time of financial need.

If you want to fix your bad credit, you need to fix the bad money habits that cause it. Here are seven bad credit habits to fix today!


1. Making only the minimum payment on your credit card.

While paying your bills on time represents a big portion of your FICO credit score, another big factor in your credit score is your amounts owed, and your credit utilization plays a big part in that,” says Stephen Slaybaugh, a consumer analyst with DealNews (@DealNews).

“If you’re only making the minimum payment, your credit utilization will be higher and it will take longer to pay off your debt. Try to pay as much of your balance off as possible each month.”

This is great advice, and it bears repeating. Credit experts generally say that you should keep your credit utilization ratio at 30 percent of your total credit limit or below. Paying off your entire balance month to month means that you are maintaining a ratio of zero percent.

Carrying a balance from month to month on your card also means that you are paying interest on that balance, which is cutting in your budget and costing you more money in the long run.

Even if you can’t pay off your entire balance every month, avoid paying only the minimum.

2.    Not having an emergency fund. 

Carla Dearing is the CEO of Sum180 (@mysum180), an online financial wellness service. She says that “The single worst money mistake you can make is to fail to maintain a cash cushion for emergencies.”

“Eventually, an event like a job layoff or a medical emergency will happen to most of us. Without an emergency fund, this can trigger debt that gradually spirals out of control. Give yourself the security that comes from knowing unexpected expenses will not derail you.”

Being saddled with debt like that is going to be very bad for your credit score. Here are two steps that Dearing suggests you take to build up an emergency fund:

  • “Increase your monthly savings and deposit as much of that as possible into an easily accessible savings account until it reaches about six months’ worth of expenses.”
  • “After that, build up another 18-24 months of cushion to weather more serious emergencies.”

Unsure where you can find money to save? Dearing has a wonderful suggestion for that, too:

“If you’re not sure where or how to cut back on expenses in order to increase your savings, try this exercise: take a “No Spend Month.” Eliminate all non-essential spending for a month. The simple act of sorting your expenses into “wants” vs. “needs” for one month can be eye-opening and liberating.”

“You’ll find it easier to sacrifice luxuries like expensive dinners or a vacation when you understand what you stand to gain: security and peace of mind.”

Krista Neeley, Managing Vice President of Appreciation Financial (AppreciationFin), a retirement services company, has some great insight into why some people have difficulty with saving.

“Most savings habits are difficult for people because they perceive it as a loss, rather than a replacement. We have too many of us who seek instant gratification rather than long-term longevity benefits,” she says.

“When we think of savings as someone or something taking away from us rather than a gift we are giving to ourselves, it can make it harder to save. We have so many bills to pay or financial responsibilities to meet, sometimes we forget to get ourselves onto that list!”

3. Being Too Casual About Saving.

If you don’t have an emergency fund or retirement savings, it means that you aren’t putting any thought towards saving money. You’re just living your life, swiping your card, and hoping that things will take care of themselves.

But saving money isn’t something that just happens. It requires making a plan and then sticking to it—which is a lot harder than it sounds. It definitely won’t “take care of itself.”

“Saving is a habit, and the same way it took us multiple attempts over time to learn how to correctly, then effectively, then quickly tie our shoes, the same principles apply when seeking how to improve or build habits of financial abundance and stability,” says Neeley.

“Starting young means building a healthier relationship with money and a high expectation of the goals and life money can create should you choose to create it. Money can be one of the most empowering tools and one of the most frustrating, but it’s determined 100% by us! Saving for long-term goals while you are young is also vital when remembering interest and accounts build up over time which is only on your side before age 40. After that, long-term savings (like retirement) become increasingly expensive!”

In order to build up your savings, you need to be deliberate. You need to make a plan and then stick to it—which can be harder than it sounds.

With that in mind, here are some great savings tips from Ashley Feinstein Gerstley, money coach and founder of The Fiscal Femme (@TheFiscalFemme):

  • Automate. I love making our financial lives as easy as possible, and automating is a great way to do that. It also ensures that it will happen. When we set our savings up to transfer automatically we treat our saving like an expense. It’s not about what’s left over or what we’d like to save, it’s about paying ourselves first and making it a priority.”
  • Separate. It’s very hard to save money in a savings account that’s with the same bank as our checking account. We see it every time we check our balance and it just feels available to us to use. We end up transferring money over bit by bit to our checking and then there’s no money left in our savings. When we open up a separate savings account, the money feels less available to us. Out of sight and out of mind. We also can earn some interest. Online savings accounts get about 1 percent interest vs. our brick-and-mortar banks that give about 0.01 percent.”

Neeley has some spot-on advice as well:

“You can use a third-party app like Digit to help you save each month also. This is a great tool when saving for a trip or something fun that’s a few months out, you will surprise yourself with how much you can save in small increments.”

[Oh, and speaking of apps to help improve your financial life, why not check out our Finance App Directory? There, we review money apps for everyday needs like savings, budgeting, transferring money and more.]

“You can still go out to dinner and enjoy life, maybe just remind yourself that the $10 movie popcorn or $8 dessert when at dinner would feel better in your bank account instead of in your belly. Instead of giving into that $7 Starbucks run, take the cash and put it into savings for your future goals (maybe that’s a future Starbucks run).”

No matter how you decide to do it, you need to get serious about saving. Lacking an emergency fund is how you end up putting emergency expenses on your credit card or turning to bad credit loans and no credit check loans to get cash in a hurry.

And behavior like that is how you end up hurting your credit score in the long run.

4. Living Without a Budget.

Fixing this bad habit can fix a lot of other spending woes.

Going without a budget means that you aren’t tracking your spending, and you’re not making the hard choices on where to cut back. It means you’re probably racking up too much credit card debt and making only your minimum payments.

Living without a budget means living without awareness of where your money is going. And your credit score is going to pay the price.

“It’s important to have a budget and stick to it, says Slaybaugh. The best way to do that is to examine your spending habits. That means writing it all down.”

He says that “the simplest way to get started is by using an app like Mint or Level, which connect to your bank account(s) to see what you make and what you spend. These apps can build budgets for you based on your existing spending patterns, and keep you on track by letting you know when you’re going over budget and when bills are due.”

Gerstley notes that the rising popularity of mobile payment makes it even easier for us to ignore our finances:

“We have a tendency to avoid paying attention to where our money is going, and technology has made this that much easier. We can hop in and out of Ubers without paying and we can buy things with a click of a button or swipe of a credit card.”

“I have each and every one of my clients manually track their spending via an actual notebook or notes on their phone,” she says.

“It’s a new practice so it will take time to get the hang of it. It’s important that we are kind with ourselves as we build the new habit. And the more we don’t want to do this, the more we have to gain from doing it!”

5. Spending Outside of Your Means.

There are two main planks to the “out of control credit card spending” platform.

The first is using your cards to pay for emergency expenses because you lack a savings account. It’s using credit cards to buy consumer goods that you want but can’t you couldn’t otherwise afford!

This doesn’t mean that you can’t afford to go out to a nice dinner once in awhile, or buy that new PS4, or paint those sweet jet flames on the side of your Honda Civic.

It just means that you can’t do all of those things at the same time. And it means saving up the money to pay for them up front.

“If your spending is higher than your income, it’s time to rethink things,” says Slaybaugh. Look at your spending numbers and figure out where you could cut back.” Do you need that pricey cable package? Could you skip a few nights out every month?”

“Sometimes even relatively small changes, like carrying your lunch or not picking up coffee on the way to work every day, can add up over the month to make your budget work. Keep tweaking your budget numbers until what you’re spending is less than what you’re making.”

Another option is taking on a side gig. That way, you can earn extra money to pay for all that great stuff. (We’d be remiss if we didn’t tell that at least some of that should go towards your savings.)

To learn more about picking the perfect side hustle, check out our list of 10 great side hustles that are perfect for quick cash.

5. Ignoring Your Credit Score.

Failing to pay attention to your credit score and then wondering why it’s so low is like failing to pay attention to your dog and then wondering why it misbehaves.

And while your credit score won’t eat your couch or poop in your shoes, ignoring it can have incredibly dire consequences for your life overall.

“Figure out where you stand with your credit score,” says Gerstley.  “The first step to increasing your credit score is to figure out where you stand. How will you get where you want to be if you don’t even know where you’re starting from?”

Here are her three tips for keeping on top of your score, as well as your larger credit history:

  • Pull your credit report for free each year at AnnualCreditReport.com. Your credit report is the source of information for your credit score. In the report, you should find all of your credit accounts, including credit cards and loans as well as your limits, balances and payment history.”
  • Review this information each year to make sure it’s all correct. The quickest way to increase your score is to remedy errors from your credit report. A delinquent loan on your report that isn’t yours would be weighing your score down incorrectly. Having that removed will move you up immediately!”
  • Your credit score can range from 350-850, 850 being perfect. The most widely used credit score is the FICO score and many credit cards are now reporting that score on monthly statements. You can also pull your FICO score from MyFICO.com. For a fee, you can see a breakdown of your score along with action steps to improve it.”

By federal law, the three major credit reporting agencies—Experian, TransUnion, and Equifax—all have to make one free copy of your credit report available to you per year. In order to really keep track of your finances—not to mention your identity—we recommend that you request one report every four months.

6.  Skipping out on insurance.

Another way to deal with unforeseen expenses, especially medical costs and home or car repairs, is to have insurance cover the majority of the tab.

Even if insurance premiums mean that your budget is a little tighter than normal, it beats resorting to costly payday loans or title loans during an emergency.

When it comes to the benefits  insurance coverage, Dearing is chock full of good advice:

“When we think about our taking care of our ‘finances,’ we often think of growing our savings, retirement or investment accounts. But the truth is, your money is so much more than your savings or your investments.”

“Protect your assets and your future from liability by getting property, casualty, and perhaps umbrella insurance coverage, as well as health insurance, disability, and other specialized coverage you may need to have due to your circumstances.”

Identity theft has become increasingly common recently, so you may want to consider this as well. For a small premium ($25-$60 per year) you can purchase credit monitoring and reimbursement for the costs associated with repairing your credit history if you become a victim.”

“If you are a homeowner, be sure to update your coverage yearly. Have you had an addition built onto your home in the past year? Did you completely renovate your kitchen or install a full-feature home theater? Reviewing and adjust your coverage to reflect the current value of your home will save you a lot of money in case the unexpected happens.

7.  Not daring to hope.

No, wait. Here us out.

One of the worst things you can do when you’re financially struggling is to give up hope. That kind of mindset leads to self-destructive choices, which then make you feel even more hopeless.

If you have bad credit already, it’s going to take a while to pull your score up out of the gutter. But that doesn’t mean it’s impossible.

(Read more about this in our blog post: Want to Raise Your Credit Score by 50 Points? Here Are 4 Great Tips.)

Granted, it’s going to take some planning, some discipline, and a whole lot of patience. (A little luck doesn’t hurt, either.) But it is the farthest thing from impossible

On the other hand: giving up? That’ll guarantee your score stays bad. Heck, it will probably make it get even worse.

Dearing has some fantastic insight on this topic:

“Three out of four Americans live paycheck to paycheck, says Dearing.  In this situation, it takes a leap of faith to imagine that a better financial situation for yourself and your family might be possible. But hope is an essential ingredient to building a better financial picture. You don’t have to know how to get there; that can come later. For now, just allow for the possibility of making things work. “

“Then, tune in. Instead of avoiding the things that stress you out – credit cards debts, student loans, etc. – confront them. If you need it, get help from a good financial planner. You may be surprised to discover that things aren’t as bad as you imagine.”

“Set aside time to deal with your money on a regular basis, so you can deal thoughtfully with questions that come up and address problems before they become crises. If dealing with money has been stressful for you in the past, creating a schedule to handle money questions regularly can defuse the anxiety. Eventually, it will just be another part of your routine.”

Think about your finances the same you’d think about your health. If you don’t take care of it every day, your finances will end up getting sick. Really, really sick.

“Our financial health and strength are just as important as our mental, emotional, and physical health and strength,” says Neeley. “Taking time to better understand and empower yourself financially can be the backbone to creating the freedom, flexibility, and peace of mind your desire for your future. Having a strong, stable foundation for your finances is the easiest way to create a bright future in all other areas of your life.”

How have you conquered your bad money habits? We want to know! You can email usor you can find us on Twitter at @OppLoans.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN


Contributors
CarlaDearing-2_2015-1Carla Dearing is CEO of SUM180, an online financial wellness service designed to be simple and affordable. She is also CEO and Managing Director of IMC, a marketing services agency. Previously, Carla held senior executive positions with at the University of Louisville, Community Foundations of America and Investors Capital Services. Earlier, she worked at Morgan Stanley and American National Bank & Trust Company. She holds an MBA from The University of Chicago Booth School of Business and a BA from the University of Michigan, Phi Beta Kappa.
J_BisestoAshley Feinstein Gerstley (@TheFiscalFemme) is a money coach and founder of the Fiscal Femme where she demystifies the world of personal finance and money in a fun and accessible way so her clients achieve their financial goals.
KristaNeelyKrista Neeley is the proud mother of three amazing girls, passionate about finances and helping others, and is blissfully married to her sweetheart. She’s been in financial services for 5 years and enjoys supporting people in achieving financial liberty. She enjoys traveling, photography, reading, and Disneyland trips during her free time.
stephenslaybaugh2Stephen Slaybaugh has been writing for such national and regional publications as The Village Voice, Paste, The Agit Reader, and The Big Takeover for 20 years, and has been covering consumer electronics and technology for DealNews since 2013. Stephen lives in New York, and is a native of Ohio.

How to Pay for College: A Student Loans and Scholarships Primer

How to Pay for College

Because a college education is as super important as it is stupid expensive.

For high school seniors, the leaves changing colors take on a different meaning than it has before. it used to mean stuff like homecoming, Halloween dances, and football season, now it means that college application season is underway. And as your kids start making their final decisions this fall on which schools they want to apply to, the price tag for that education will become a major, looming factor.

If you have the money to pay for your kid’s entire education out-of-pocket, then bully for you. Seriously. But for most people, that’s just not the case. For them, paying for college means taking out student loans. It won’t be just a few thousand dollars in student loans either. According to a recent study by the Consumer Financial Protection Bureau (CFPB), the number of students with $20,000 in student debt has doubled since 2002. Yowzers!

These days, the decision on how to finance their college education is one of the largest financial decisions that a young adult can make. And, in many, cases it’s also the first major financial decision they’ll make. Not a great combination, right?

Well, that’s why we’ve put together this handy-dandy primer on college costs and financing to show you how to pay for college.


How much will college really cost?

Back in the day, a person might have been able to work a job on the side or over the summer that would pay for their education, But that is no longer the case—by a long shot. In fact, over the last 20 years, the average cost of in-state tuition and fees for public universities has risen 237 percent according to U.S. News and World Report.

“It is no longer possible to work your way through college, except possibly at a community college,” says Mark Kantrowitz, Publisher and VP of Strategy for Cappex.com and a leading expert on college planning. “Students who work a full-time job are half as likely to graduate as students who work 12 hours or less per week.”

When you’re trying to figure out how much a given school is going to cost you, remember that costs aren’t just about tuition. Unless you plan on crashing on a friend’s couch, eating out of dumpsters, and reading books over your classmates’ shoulders for four whole years, you’re going to encounter additional costs.

“Use the net price when comparing college costs, says Kantrowtiz. “The net price is the difference between total college costs (tuition, fees, room, board, books, supplies, equipment, transportation and miscellaneous/personal expenses) and just the gift aid (grants, scholarships and other money that does not need to be repaid).

“Think of it as a discounted sticker price. The net price is the amount of money you will have to pay from savings, income, and loans to cover college costs.”

This is a good reminder that you won’t be able to figure out the true cost of a given school until after you’ve been accepted and have received their financial aid offer. Sure, that small liberal arts school might have a much higher tuition than the local state school, but if they are offering you more aid, the net price might be much lower.

“Don’t forget about education tax benefits, such as the American Opportunity Tax Credit (AOTC). The AOTC provides a partially refundable tax credit of up to $2,500 based on amounts you pay for tuition and textbooks,” says Kantrowtiz.

Costs will also vary, depending on your specific situation. For instance, if you are able to go to school while still living at home, that can be a great way to save. Sure, living with your parents is about as far from the “classic dorm experience” as you can get—unless your folks are super rad—but, hey, not incurring a crippling amount of debt is pretty rad as well.

Once you’ve figured out how much a school is really going to cost, then you can start figuring out how to pay for it.

Federal vs. private student loans

If you’re lucky, talented, or both, then you’re likely going to qualify for some combination of federal or state grants, work-study funds, and scholarships to pay for your college education. But, in all likelihood, it won’t be enough to cover everything. And paying for the rest is probably going to mean taking out debt.

If that’s the case, then taking out a loan from the federal government is the best way to do it.

Kantrowitz agrees. He says that “Students should borrow federal first because federal student loans are cheaper, more available and have better repayment terms than private student loans.”

How much cheaper are federal loans? Well, CNBC reported in July 2017 that the average interest rate for a private student loan was 7.81 percent for a loan with a variable rate and 9.66 percent for a fixed rate. The average rate for federal student loans? 4.45 percent.

That might not seem like much of a difference, but it is. Student loans are structured as installment loans, which means they’re paid back in a series of small, regular payments over many years. Given how long a student loan takes to pay off (usually anywhere between and 10 and 25 years says the CFPB), a few extra percentage points in annual interest can save you tens of thousands of dollars by the time your loans are fully paid back.

Additionally, subsidized federal loans come with periods during which the loan doesn’t earn interest and/or where you don’t have to make payments. Generally, if you’re enrolled in school more than half-time, you don’t have to make any payments on your federal loans.

And while the terms of private loans will vary from lender from lender, they’re usually not so great about deferring payment. Their loan terms are more like the terms you’ll find on standard personal loans. That means paying the loan back while you’re still in school!

Now, granted, federal student loans are far from perfect. You’ll still have thousands upon thousands in debt that will take you years (probably decades) to pay off. And the CFPB is currently suing Navient, the nation’s largest servicer of both federal and private student loans for “systematically and illegally failing borrowers at every stage of repayment.”

Okay, so maybe “not perfect” is a bit of an understatement.

Still, federal student loans are far preferable to private loans. They’re cheaper; they come with more flexible payment terms; and did we mention that they’re cheaper?

Types of federal student loans

There are tons of different kinds of federal student loans, most of which are for incredibly specific fields of study. But there are four types of loans that are commonly available. Odds are good that they’re the ones you (or your kid) will be dealing with.

They are…

  • Direct Subsidized Loans: Also known as “Stafford Loans,” these loans are available for undergraduate students that display a financial need for assistance. Your school determines how much you can borrow. The current interest rate for these loans is 4.45 percent. With a Subsidized Loan, the government pays the interest on the loan while you’re enrolled in school at least half-time, during the first six months after you graduate, or while you’re in a “deferment” period.
  • Direct Unsubsidized Loans: These loans are available for undergraduate, graduate, and professional degree students. (They are also called Stafford Loans.) A financial need is not required for an Unsubsidized Loan, but your school still decides how much you can borrow. The interest rate for undergraduates is 4.45 percent; the rate for graduate and professional degree students is six percent. With an unsubsidized loan, there are no periods where the government pays the interest.
  • Direct PLUS Loans: These loans are available for undergraduate, graduate, and professional degree students, as well as the parents of a financially dependent student. Whereas Stafford Loans don’t require a credit check, the borrower for a Direct PLUS Loan must not (to use the Department of Education’s phrasing) have an “adverse” credit history. The current interest rate is seven percent.
  • Federal Perkins Loans: These loans are for undergraduate, graduate, and professional degree students who demonstrate an “exceptional” financial need. The interest rate for these loans is five percent. Although Perkins Loans are federally funded, they are also issued by your school. Not all schools participate in the program, and eligibility can hinge on how much Perkins funding your school has available.

The government also offers debt consolidation loans that allow you to combine all your other federal student debt into a single loan. Consolidation loans usually come with longer repayment terms, which means a lower monthly payment; but it also means that you will pay more money over time. The interest rates for these consolidation loans are determined by a weighted average of the rates on the loans being consolidated.

(This information has been gathered from www.StudentAid.ed.gov.)

Applying for federal loans

Another point in favor of federal student loans is that the application process is a bit easier than for private student loans. All you have to do is fill out the Free Application for Federal Student Aid (FAFSA). You can access the form at www.fafsa.ed.gov.

The FAFSA is still kind of a pain though. Ask any parent or student who’s had to fill one out before. The involuntary shudder at the mere mention of the FAFSA will give an idea of what’s in store.

One of the great things about the FAFSA is that it’s used by your state and the school itself to determine what kind of aid you qualify for. And it’s not just loans either! You’ll also be applying for grants, work-study funds, and, sometimes, individual scholarships from the school itself.

Federal aid is administered through the school that the student is attending. So once you’ve filled out and submitted the FAFSA, you’ll hear back from the school to tell you how much in federal aid you’ve qualified for.

The rest will be done through the school’s financial aid office. Before you receive the money, you’ll have to take an entrance counseling course and sign a Master Promissory Note (MPN).

Kantrowitz says that parents and students should “File the FAFSA every year, even if you got nothing other than student loans last year. Subtle changes, such as the number of children enrolled in college at the same time, can have a big impact on eligibility for need-based financial aid.”

On a more general note, Kantrowitz also advises that “Students and parents have a tendency to overestimate eligibility for merit-based aid and underestimate eligibility for need-based aid.” So don’t be surprised if you qualify for more in federal funding than you originally thought!

No matter what you think about your current financial status, you should be filling out the FAFSA. There’s no argument to be had.

The problem with private loans

Private student loans should only be taken out as a last resort to finance your education. You should look to scholarships, grants, work study, federal loans, and paying costs out of pocket before you turn to a student loan from a private lender.

As we discussed earlier, the average interest rates for federal loans are much lower than the average rates for private loans. Plus, some private loans come with variable interest rates. This means that the rate can go up, increasing the amount of interest you’re accruing and the amount of money you ultimately have to repay.

The payment terms for private loans are much less flexible (and far less generous) than the payment terms for subsidized federal loans. With a private loan, you probably aren’t going to see a period where the lender is paying your interest for you—even when you’re currently enrolled in school.

And whereas you don’t have to pay back a federal loan until six months after you’ve graduated, left school, or changed to half-time status, you’ll likely have to make payments on your private loans while you (or your child) is still in school.

While federal loans are administered through your school using the FAFSA, private loans usually have to be applied for directly with the lender. (Some lenders will use your FAFSA application.) These loans might require a credit check and, in many cases, will also require a cosigner.

So if you’re the parent of a kid applying for college, your credit score could affect their chances of securing a private loan. (If the majority of the loans you take out are bad credit loans or no credit check loans, this will certainly be an issue.) Furthermore, by co-signing the loan, you are promising to pay it back if for some reason your kid isn’t able to.

Lastly, there are various ways in which federal student loans can be forgiven, i.e. the rest of your balance is written off. Private loans? Not so much.

(Read more about student loan forgiveness on the OppLoans blog.)

Any kind of loan comes with a lot of risks, but the private student loans might be a bit too risky to, well, risk it.

How much student debt is too much?

There’s a reason why student loans are considered to be “good” debt. By getting a college education, you are increasing your future earning power, which means increasing your overall wealth. Even though you’re taking on lots of debt to pay for college, what you’re really doing is making an investment in your future.

This doesn’t change the fact that this “investment” is getting paid for with debt. And, with any kind of debt, there comes a point at which you’ve taken out too much of it. An increase in your future earning power won’t seem so great if you’re filing for bankruptcy by the time you’re 30.

So how much is too much?

As with most things in life, the answer will vary. However, Kantrowitz has some great “best practices” to follow when assessing your student debt load:

“Aim to have total student loan debt at graduation less than your annual starting salary, and, ideally, a lot less. If total student loan debt is less than annual income, you should be able to repay your student loans in ten years or less.”

“Otherwise,” says Kantrowitz, “you’ll struggle to make the loan payments and will need an alternate repayment plan, like extended or income-driven repayment. These repayment plans reduce the monthly payment by stretching out the term of the loan to 20, 25 or even 30 years.

“That means you’ll still be repaying your own student loans when your children enroll in college.”

The amount of debt that’s reasonable to take on is going to depend on your future career path. There’s a reason that medical and law students are comfortable accruing a lot more debt to get their graduate degrees (even though that doesn’t always work out).

And there’s also a reason why the A.R.T. Institute at Harvard got in trouble with the federal government and has halted admissions for the next three years: An average student debt load of $78,000 for a degree in theatre arts is not at all reasonable.

Even here, Kantrowitz’s advice rings true. Higher paying careers might be worth the greater debt load, but keeping that load below your annual starting salary will leave you in good shape moving forward.

Scholarships: Get them early and often

This the best way to pay for college. Hands down.

Why? Well, the great thing about scholarships is that they are not a loan. It’s money that’s just given to you. No worries about deferment periods, variable rates, and decades-long repayment terms. You get the money, you pay for your education, and you’re done.

(Lots of scholarships are dependent on you maintaining a certain GPA average. So, you know, make sure you do that as well.)

Kantrowitz is a big fan of scholarships, and he has a bunch of great tips for how to find them, how to apply for them, and how to manage your expectations:

  • “Start searching for scholarships immediately. There are scholarships you can win in younger grades, not just during your senior year in high school or after you are enrolled in college. The sooner you start searching, the fewer deadlines you’ll miss.”
  • “When using a free scholarship matching service, answer the optional questions in addition to the required question. Students who answer the optional questions tend to match about twice as many scholarships, on average, as students who answer just the required questions. The optional questions trigger the inclusion of specific awards.”
  • “Apply to every scholarship for which you are eligible. Winning a scholarship is a matter of luck, not just skill, so the more applications you submit, the greater your chances are of winning a scholarship.”
  • “Winning scholarships is part of your plan for paying for college, not the entire plan. Only about one in eight college students has won private scholarships and the average amount is about $4,000.”

And if you’re looking to apply for a scholarship right now, you should definitely check out the OppU Achievers Scholarship.

Every year, we award $2,500 to four different students who transform opportunity into results. That’s a total of $10,000 in scholarships given out annually! To learn more—and to apply—just visit our scholarship page.

Financing your college education isn’t easy, and we hope this post was useful. Let us know what questions you still have, and we’ll get you the answers you need!

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN


Contributors
M_KantrowitzMark Kantrowitz is Publisher and VP of Strategy for Cappex.com, a free web site that helps students achieve their college dreams by connecting them with colleges and scholarships. Mark is a nationally-recognized expert on student financial aid, scholarships and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make smarter, more informed decisions about planning and paying for college. Mark is the author of four bestselling books about scholarships and financial aid and holds seven patents. He also writes extensively on student aid policy and has testified before Congress and federal/state agencies on several occasions. Mark serves on the editorial board of the Journal of Student Financial Aid, the editorial advisory board of Bottom Line/Personal, and is a member of the board of trustees of the Center for Excellence in Education.

Can Consolidating Debt Help Your Credit Score?

opploans-debt-consolidation

Consolidating your loans and credit cards can definitely improve your credit rating—but you have to be careful.

You know you need to be careful about taking on too many loans but it already happened and now you’re not sure what to do. You’re wondering if there’s anything you can do to fix your debt problems and improve your credit score. You don’t want to start missing payments and end up with bad credit or turning to payday loans and no credit check loans.

You might have heard of debt consolidation, and you’re wondering if consolidating your loans and credit cards helps your credit score. You might even have found this article while searching online for an answer to that very question!

Well, we’re here to provide those answers, as well as explain what loan consolidation means in general. Read on, and consolidate your knowledge.

What is “debt consolidation” anyway?

On a basic level, debt consolidation means taking multiple loans and turning them all into one loan. (It can also work with credit cards.) There are multiple reasons you might consider debt consolidation, but on a basic level, you hope that paying off one big loan will be cheaper and more manageable than paying off all of the smaller ones.

To learn more about debt consolidation, check out our three-part blog series, Debt Consolidation 101.

So that’s the idea. But does it work out that way? And how does it impact your credit? Let’s find out!

Credit where credit is due.

One of the most common ways to turn many loans into one loan is to take out a new loan big enough to pay off all the other ones entirely. Then you’ll just be paying off that new loan. And it can be a good move for your credit.

“If you take out a personal loan from your bank to pay off your credit cards, you can see your score go up as the cards get paid down,” nationally recognized credit expert Jeanne Kelly (@creditscoop) told us. “This can help you pay the credit cards faster since the interest rate is lower, but you have to be careful not to rack up more debt on those cards now that the balances are low again or paid off.”

Katie Ross, Education and Development Manager for American Consumer Credit Counseling (@TalkCentsBlog), also explained how debt consolidation loans can impact your credit:

“Consolidation can help improve your debt and credit situation. One way to consolidate credit is through a personal loan. This way you will pay off balances on multiple accounts, likely see lower interest rates, lower monthly payments, and a shorter payoff time.

“In turn, by consolidating with a personal loan, you will see a significant reduction in your credit utilization ratio, which accounts for 30 percent of your credit score. Credit utilization is the amount you owe on your credit cards versus the total amount of credit available.”

All right, so loan consolidation sounds like a great plan. Time to find the first loan consolidation place you can and get all your loans consolidated. Right?

But tread carefully.

Not so fast! Like with any kind of loan transaction, you’re going to want to do your research before getting your loan consolidated.

Jeanne Kelly stresses the dangers you have to watch out for: “If you sign up for a debt consolidation program, you do have to read the fine print as many do damage your credit if the accounts with your creditors get paid late and get noted as making partial payments. I see this often and most times the client never knew this would report as such. Again, be careful what you sign up for as you signed an agreement with the credit card company to pay on time.”

Natasha Rachel Smith, a personal finance expert at TopCashback.com (@TopCashBackUSA), gave an extensive overview of the cautious approach to loan consolidation:

“If you’re in debt, only four things – simultaneously – will help you avoid greater debt: changing your attitude towards money, putting the brakes on spending, throwing more cash towards outstanding debts, and getting the interest rates of your borrowing as low as possible. It’s essential to put all four points into action to avoid greater debt; not only one, two, or three.

“Regardless of how badly you are in debt, always make the minimum repayments on your credit cards and loans. This will preserve your credit score as best as possible. If you’re not able to meet even just your minimum repayments, you are spending more than you should and have to address that immediately. Write down a budget, pause any non-essential spending, and investigate getting a second job; that’s how serious not being able to cover your minimum repayments is.

Is debt consolidation a good option for you?

Smith continues:

“When it comes to getting the interest rate of your debt as low as possible, if your credit score has been affected because you haven’t been able to keep up with your minimum repayments in the past, you won’t be eligible to move balances to new credit cards that offer dirt-cheap introductory interest rates. Therefore, your call to action is to try to negotiate with your current lenders. See if they will lower their interest rates. If they won’t, look into how much the interest rate of a balance or money transfer and its fee would be with your existing cards to switch debt around.

“If that avenue doesn’t prove fruitful, possibly because you don’t have enough credit available or your providers aren’t offering you a lower interest rate for balance or money transfers, consolidating your borrowing to be with one provider might be something worth considering. Before you commit to the idea, call each of your existing lenders and write down the interest rate you’re paying for each debt. If you have personal loans, find out if there’s an early repayment charge attached to your agreements.

“If the interest rate is five percent or less, put that debt to one side and continue chipping away at it. If the loan has an early repayment charge, put that debt to one side and continue to repay it.

“For all debts that are charged more than five percent in interest costs, as a last resort for those with a very poor credit score, it could be worth considering combining them to be paid off with a reputable loan provider. It’s vital to find a loan provider that will lend to you with a poor credit score but that also doesn’t charge an extortionate rate of interest or makes you agree to a lengthy term or unfair penalties if you accidentally miss a repayment. Read customer reviews online to guide your decision.

“Sadly, it’s likely that the interest rate will cost much more than your existing interest rates, but it’s important to get to a point where you’re able to afford your minimum repayments again; for the benefit of trying to rebuild your credit score to aid your future financial worthiness. Check whether you can pay more than the set repayment amount each month without a penalty. Only take this consolidation route if you are confident you can remain disciplined and change your spending habits once you’ve combined the applicable debts.

“Never, ever switch debt simply to have it with one lender because you think it makes it more manageable; that’s a falsehood and will cost you so much more in the long-run. That attitude will lead you into accruing further debt, snowballing additional borrowing on top of the debt you’ve already consolidated, bringing you back to square one.”

If you already have not-so-great credit—and have taken out the bad credit loans to match—then you are going to want to think long and hard before pursuing debt consolidation. Lower credit scores mean higher interest rates, which means that finding a consolidation loan with a lower rate (and qualifying for it) might just not be in the cards.

But don’t let that get you discouraged. Follow all of this advice, and you should be able to figure out if loan consolidation is a good option for you.

What have your experiences been with debt consolidation? We want to know! You can email us or you can find us on Twitter at @OppLoans.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN

Contributors

J_BisestoJeanne Kelly (@creditscoop) After being turned down for a mortgage 15 years ago, Jeanne Kelly realized she needed to get her credit in order. Not only was she able to fix her bad credit, but she took the skills and knowledge she gained and decided to share it with the world. Now she’s a nationally regarded credit coach and expert, with multiple books and television appearances. She’s also been kind enough to share her insights with us on many different occasions. Follow her on Twitter and check out her site to get the credit help you need!
R_FaidaNatasha Rachel Smith (@topcashbackusa) is head of global communications at TopCashback.com. Natasha’s background is in retail, banking, personal finance and consumer empowerment; ranging from sales to journalism, marketing, public relations and spokesperson work during a 17-year career period. She’s originally from London, UK, but moved to Montclair, New Jersey, USA, several years ago to launch and run the American arm of the British-owned TopCashback brand; a global consumer empowerment and money-saving portal company.
PIGKatie Ross joined the American Consumer Credit Counseling (@talkcentsblog) management team in 2002 and is currently responsible for organizing and implementing high-performance development initiatives designed to increase consumer financial awareness. Ms. Ross’s main focus is to conceptualize the creative strategic programming for ACCC’s client base and national base to ensure a maximum level of educational programs that support and cultivate ACCC’s organization. Ms. Ross is certified by the Center for Financial Certifications as a Certified Personal Finance Counselor.

The OppLoans #MasterYourMoney Giveaway

oppU-Sweepstake

Here at OppLoans, we’re committed to giving our customers (and everyone else, for that matter) the resources they need to take control of their money. That’s why we created OppU, a free online curriculum that teaches financial literacy. For a lot of people, healthy money habits come later in life than they might like. But this is through no fault of their own—only 17 states require personal finance classes for their K-12 students. When did you learn about finance outside of school? Tell us what age it was and enter in our #MasterYourMoney #Sweepstakes.

OppU features 11 short, fun videos with tips on how to save, improve your credit, and get out of debt. The lessons are aligned to national standards and perfect for a range of ages, including adults. If you ever wanted to know how your credit score is calculated, or what happens if you miss a payment on a credit card, OppU has the answer for you in a way that’s easy to understand and put to use.

To celebrate the launch of OppU, we’re giving away $100 on Twitter and Facebook. To enter the contest, follow the instructions below and let us know at what age you learned to master your money. If you’re selected, the $100 is yours with no strings attached. But hey, after watching a few OppU videos, an emergency fund just might make a lot more sense than a shopping spree. 

Enter the #MasterYourMoney #Sweepstakes! Follow @OppUniversity and tell us what age you learned to #MasterYourMoney!


How does it work?

Enter once on Facebook and once on Twitter!

Click here to enter on Facebook

Click here to enter on Twitter

Sweepstakes Guide

The sweepstakes begins Wednesday, September 13th at 12:00 pm CST, and you must enter by Friday, September, 22nd at 12:00 pm CST. The lucky winners will be announced by 5 pm CST on Friday, September, 22nd.

  • Winner chosen at random
  • Begins Wednesday 9/13 at 12:00pm cst
  • Must enter by Friday 9/22 at 12:00pm cst
  • Prize: $100
  • One entry per person, per platform
  • Must be 18 to participate
  • Must be US resident

Rules/Guidelines:

OFFICIAL RULES

NO PURCHASE NECESSARY TO ENTER OR WIN. A PURCHASE WILL NOT INCREASE YOUR CHANCES OF WINNING. ODDS OF WINNING WILL DEPEND ON THE TOTAL NUMBER OF ELIGIBLE ENTRIES RECEIVED FOR THE APPLICABLE SWEEPSTAKES. VOID WHERE PROHIBITED BY LAW. ALL DISPUTES WILL BE RESOLVED SOLELY BY BINDING ARBITRATION AND ENTRANTS WAIVE THE ABILITY TO BRING CLAIMS IN A CLASS ACTION FORMAT.

By participating in the Sweepstakes (as defined below) promoted by OppLoans, the OppLoans Facebook Page (http://www.facebook.com/opploans) hereafter, “Official Facebook Page”) and the @OppLoans Twitter Account (the “Official Twitter Account”) you agree to these Official Rules, which are a contract, so read them carefully before participating. Without limitation, this contract includes indemnities to the release parties (defined below) from you and a limitation of your rights and remedies. The details and requirements for entry or participation in the Sweepstakes shall be provided by the Official Twitter Account and/or the Official Facebook Page from time to time, in the discretion of Opportunity Financial, LLC (“Sponsor”). You must follow the directions provided by the Official Twitter Account and/or the Official Facebook Page and otherwise be bound by and follow these Official Rules to be eligible to receive a prize in connection with any Sweepstakes.

The OppLoans #MoneyWise Sweepstakes (the “Sweepstakes”) begins at 12:00 PM Central Daylight Time (“CDT”) on September 13th, 2017 and ends at 12:00 PM on September 22nd, 2017 (the “Sweepstakes Entry Period”).

ELIGIBILITY: The Sweepstakes is open only to legal residents of the United States including its territories and possessions (collectively referred to herein as “states”) who are eighteen (18) years of age or older (except in the case of legal residents of certain states/territories where the legal age of majority is greater than eighteen (18) years of age, such legal age of majority) at the time of entry. Employees, officers, and directors (including immediate family members (spouse, parent, child, sibling and their respective spouses, regardless of where they reside) and members of the same household, whether or not related) of Sponsor and each of their respective parents, affiliated companies, subsidiaries, licensees, distributors, dealers, retailers, printers, advertising and promotion agencies, and any and all other companies associated with the Sweepstakes are not eligible to participate or win a Prize (defined below). The Sweepstakes is subject to all applicable federal, state and local laws, rules and regulations. Void where prohibited.

HOW TO ENTER: Share your favorite tip about making additional money and submit your entry during the Sweepstakes Entry Period via the following platforms:

Twitter: To enter any Sweepstakes via Twitter, you must have a valid, public (i.e. not protected) Twitter account and follow the applicable Official Twitter Account (@OppLoans). If you do not have a Twitter account, please visit www.twitter.com and register in accordance with the enrollment instructions for a free Twitter account. To enter the Sweepstakes via Twitter, follow the instructions provided by the Official Twitter Account in the manner set forth by the Official Twitter Account during in the Sweepstakes Entry Period window to receive one (1) entry in the Sweepstakes (“Twitter Entry”). All information submitted via Twitter must be submitted pursuant to and is subject to (a) Content Restrictions (as set forth in the Content Restrictions section below), and (b) Twitter’s Terms of Service (www.twitter.com/tos ) and Privacy Policy (www.twitter.com/privacy). Further, all information submitted via Twitter and shared with, or otherwise made available to Sponsor per your Twitter account settings will be subject to, and treated in a manner consistent with, Sponsor’s Privacy Policy accessible at: https://www.opploans.com/licenses/privacy-policy/. Failure to follow any instructions provided by the Official Twitter Account or to submit your entry within the Sweepstakes Entry Period or in compliance with the Content Restrictions or otherwise with these Official Rules may result in disqualification. The time of receipt of any valid Twitter entry shall be the time such valid entry becomes available to Sponsor on Twitter.com.

Facebook: To enter on Facebook, visit https://www.facebook.com/opploans (“Official Facebook Page”) during the Promotion Dates. Following the links and instructions, follow the entry instructions provided on the Official Facebook Page during the Sweepstakes Entry Period window to receive one (1) entry in the Sweepstakes (“Facebook Entry”). You must have a valid Facebook account in order to enter. If you do not already have one, you may open a Facebook account for free at http://www.facebook.com. Use of Facebook as a means of entry will be subject to Facebook’s privacy policy (https://www.facebook.com/policy.php) and terms of service (https://www.facebook.com/terms). Further, all information submitted via Facebook and shared with, or otherwise made available to Sponsor per your Facebook account settings will be subject to, and treated in a manner consistent with, Sponsor’s Privacy Policy accessible at: https://www.opploans.com/licenses/privacy-policy/. Failure to follow any instructions provided by the Official Facebook Page or to submit your entry within the applicable Sweepstakes Entry Period or in compliance with the Content Restrictions or otherwise with these Official Rules may result in disqualification. The time of receipt of any valid Facebook entry shall be the time such valid entry becomes available to Sponsor on Facebook.com.

“Entry” shall mean and refer to each Twitter Entry or Facebook Entry. Additional entries beyond the specified limit will be void. Side Hustle Tips are included for entertainment purposes only. Entries will not be judged. Limit one (1) Entry per person, per platform regardless of method of entry. Sponsor’s computer shall be the official clock of the Sweepstakes.

RANDOM DRAWINGS: Promptly following the end of the applicable Sweepstakes Entry Period, the two (2) potential winner(s) of the applicable Sweepstakes will be selected by random drawing from among all eligible entries received for the applicable Sweepstakes. One winner shall be selected from the applicable Facebook Entries and the other winner shall be selected from the applicable Twitter Entries. Subject to verification of eligibility and compliance with the terms of these Official Rules, the potential winner(s) will be declared the official winner(s) of the applicable Sweepstakes (each, a “Winner” and collectively, the “Winners”). The decisions of Sponsor are final and binding on all matters relating to this Sweepstakes. Odds of winning depend on the total number of eligible entries received for the applicable Sweepstakes. Limit one (1) Prize per person, family or household per Sweepstakes.

PRIZES: There are two $100 cash prizes offered in this Sweepstakes (each, a “Prize” and collectively, the “Prizes”). The approximate retail value of each Prize shall be $100. Exact Prize details shall be determined in the sole and absolute discretion of Sponsor. Prizes are non-transferable and non-assignable. Sponsor reserves the right to substitute any Prize (or any portion thereof) with a prize of comparable or greater value at its sole and absolute discretion. Each Winner is fully responsible for any and all applicable federal, state, and local taxes (including income and withholding taxes).

PUBLICATION, LICENSE AND RELEASE: By entering any Sweepstakes and submitting an entry, each entrant (a) agrees that his/her entry is an original work of authorship and that he/she owns all right, title and interest in the entry as of the date of submission or has all necessary rights and authorizations to submit it and the express permission of all individuals, content and materials embodied in the entry to submit it for possible use as provided herein; (b) agrees that his/her entry does not infringe upon the copyrights, trademarks, rights of privacy, publicity or other intellectual property or other rights of any person or entity; (c) grants to Sponsor and each of their respective designees the perpetual and unlimited right and license to use, license, edit, modify, duplicate and/or create derivative works from his/her entry throughout the world and in perpetuity, including, but not limited to, the right for Sponsor, as applicable, to publish, display, broadcast, distribute, reproduce, perform, create derivative works from and otherwise use and exploit the entry via the Internet or any other interactive media, on television, in print and/or any other media currently existing and hereafter developed and without limitation and without payment of any compensation to the entrant or his/her heirs and successors, (i) on its own or as part of any audiovisual or other production; (ii) to advertise any products or services of the Sponsor or for any other advertising, marketing, publicizing and promotional purposes and in any materials related thereto; and/or (iii) for any other purpose whatsoever; and (d) release in perpetuity the Released Parties from any claims, demands, losses and liabilities of any nature arising out of or in any way connected with the entry, and the use thereof as permitted hereunder, including, but not limited to, claims of false endorsement or infringement of rights of publicity or privacy. Nothing herein will obligate the Sponsor to make any use of any of the rights set forth herein.

CONTENT RESTRICTIONS: Entrants must not include any of the following content (the “Content Restrictions”) in any entry: (a) pornography, adult-oriented content or any other sexually-explicit material; (b) materials relating to lotteries or gambling; (c) explicit language or content, images of violence, or promotion of illegal activities; (d) content in violation of intellectual property rights or laws; (e) libelous, defamatory, disparaging, tortious or slanderous materials; (f) content that denigrates, disparages or reflects negatively on OppLoans, their owners and employees; (g) tobacco, alcohol or drugs; (h) dangerous stunts; (i) real weapons of any kind including, but not limited to, guns, knives or projectiles; (j) material that promotes bigotry, racism, hatred or harm against any group or individual or promotes discrimination based on race, sex, religion, nationality, disability, sexual orientation, age or any other basis protected by federal, state, territory, provincial or local law, ordinance, or regulation; (k) individuals under legal age of majority without providing a signed release from parent or legal guardian; (l) audio and/or visual content owned by any third party (e.g., recorded music; pre-produced video, etc.); and (m) material that is unlawful, or otherwise in violation of or contrary to the laws or regulations in any state/territory where the entry is created. Any entry that does not comply with the foregoing, in the sole discretion of Sponsor, will be disqualified.

WAIVER OF LIABILITY/PUBLICITY RELEASE: By participating in the Sweepstakes and submitting an entry, each entrant agrees to (i) be bound by these Official Rules, including all entry requirements, and (ii) waive any and all claims against OppLoans, Twitter, and Facebook and each of their respective parents, affiliated companies, subsidiaries, officers, directors, employees, agents, licensees, distributors, dealers, retailers, printers, representatives and advertising and promotion agencies, and any and all other companies associated with the applicable Sweepstakes, and all of their respective officers, directors, employees, agents and representatives (collectively, “Released Parties”) for any injury, damage or loss that may occur, directly or indirectly, in whole or in part, from the participation in the applicable Sweepstakes or from the receipt or use of any Prize (or any portion thereof). By entering any Sweepstakes, each entrant gives his/her express permission to be contacted by Sponsor by telephone, email and/or postal mail for Sweepstakes purposes. Each Winner, by acceptance of the Prize, grants to Sponsor and its respective designees the right to publicize such Winner’s name, address (city and state/territory of residence), photograph, voice, statements and/or other likeness and prize information for advertising, promotional, trade and/or any other purpose in any media or format now known or hereafter devised, throughout the world, in perpetuity, without limitation and without further compensation, consideration, permission or notification, unless prohibited by law.

GENERAL CONDITIONS: Released Parties are not responsible for stolen, late, incomplete, illegible, inaccurate, misdirected, lost, misrouted, scrambled, damaged, delayed, undelivered or garbled entries, transmissions, email or mail; or for lost, interrupted or unavailable network, cable, satellite, server, Internet Service Provider (ISP), wireless network, website, or other connections including those through and/or by any website, availability or accessibility or miscommunications or failed computer, satellite, telephone, cable or wireless transmissions, lines, or technical failure or jumbled, scrambled, delayed, or misdirected transmissions or computer hardware or software malfunctions, failures or difficulties; wireless service congestion; failures or malfunctions of phones, phone lines or telephone systems, wireless towers or cellular tower equipment; any error, omission, interruption, defect or delay in wireless or other transmission, processing, or communication; non-delivery; misdirected, blocked, or delayed email notifications; printing, typographical or other errors appearing within these Official Rules, in any Sweepstakes-related advertisements or other materials; or any other errors, problems or difficulties of any kind whether human, mechanical, electronic, network, computer, telephone, wireless service, mail, typographical, printing or otherwise relating to or in connection with the Sweepstakes, including, without limitation, errors or difficulties which may occur in connection with the administration of the Sweepstakes, the processing of entries, the announcement of the Prize(s) or in any Sweepstakes-related materials. Released Parties are also not responsible for any incorrect or inaccurate information, whether caused by website users, tampering, hacking, or by any equipment or programming associated with or utilized in the Sweepstakes. Released Parties are not responsible for injury or damage to entrants or to any other person’s computer and/or wireless device related to or resulting from participating in this Sweepstakes or downloading materials from or use of the website. Persons who tamper with or abuse any aspect of the Sweepstakes or website or attempt to undermine the legitimate operation of the Sweepstakes by cheating, deception or other unfair playing practices, or intend to annoy, abuse, threaten or harass any other entrant or any representative of Sponsor or who are in violation of these Official Rules, as solely determined by Sponsor, will be disqualified and all associated entries will be void. Any attempt to deliberately damage the content or operation of any Sweepstakes is unlawful and subject to legal action by Sponsor and/or its agents. Sponsor shall have the sole right to disqualify any entrant for violation of these Official Rules or any applicable laws relating to the Sweepstakes, and to resolve all disputes in its sole discretion. Released Parties (a) make no warranty, guaranty or representation of any kind concerning any Prize (or any portion thereof), and (b) disclaim any implied warranty. Sponsor’s failure to enforce any term of these Official Rules shall not constitute a waiver of that provision.

Sponsor reserves the right, in its sole discretion, to cancel or suspend any Sweepstakes (or any portion thereof) should virus, bugs, unauthorized human intervention, or other causes corrupt administration, security, fairness, integrity or proper operation of the Sweepstakes (or any portion thereof). In the event of cancellation, Sponsor may elect to identify the Winner(s) and award the Prize(s) by way of random drawing from among all non-suspect, eligible entries received up to the time of such cancellation. Sponsor reserves the right, in its sole discretion, to modify these Official Rules for clarification purposes without materially affecting the terms and conditions of the Sweepstakes or discontinue any Sweepstakes at any time without notice.

CAUTION: ANY ATTEMPT TO DELIBERATELY DAMAGE ANY WEBSITE ASSOCIATED WITH THE SWEEPSTAKES OR UNDERMINE THE CONTENT OR LEGITIMATE OPERATION OF ANY SWEEPSTAKES MAY BE A VIOLATION OF CRIMINAL AND CIVIL LAWS AND SHOULD SUCH AN ATTEMPT BE MADE, SPONSOR WILL DISQUALIFY ANY ENTRANT RESPONSIBLE FOR THE ATTEMPT, AND SPONSOR AND/OR ITS AGENTS RESERVE THE RIGHT TO SEEK DAMAGES (INCLUDING ATTORNEYS’ FEES) AND OTHER REMEDIES FROM ANY PERSON OR PERSONS RESPONSIBLE FOR THE ATTEMPT TO THE FULLEST EXTENT PERMITTED BY LAW.

Entries generated by a script, macro or other mechanical or automated means will be disqualified. In the event of dispute as to the identity or eligibility of any potential winner based on an email address, the winning entry will be declared made by the Authorized Email Account Holder of the email address submitted via the Online Entry Form at the time of entry provided he/she is eligible according to these Official Rules. For entries via the Online Entry Form, the “Authorized Email Account Holder” is defined as the natural person to whom the applicable Internet service provider or other organization (such as a business or educational institution) has assigned the email address for the domain associated with the submitted email address. In the event of dispute as to the identity or eligibility of any potential winner based on a Twitter account, the winning entry will be declared made by the Authorized Twitter Account Holder of the Twitter account used to enter the applicable Sweepstakes provided he/she is eligible according to these Official Rules. For entries via Twitter, the “Authorized Twitter Account Holder” is defined as the natural person who is assigned to a Twitter account by www.twitter.com.

As a condition of entering any Sweepstakes, each entrant agrees that (a) any and all disputes, claims, controversies or causes of action arising out of or relating to any Sweepstakes, or any prizes awarded (each, a “Claim”), shall be (i) arbitrated on an individual basis only, and shall not be consolidated or joined with or in any arbitration or other proceeding involving a Claim of any other party, and (ii) settled by binding arbitration in Chicago, Illinois before a single arbitrator appointed by the American Arbitration Association in accordance with its then governing rules and procedures, and judgment on the award rendered by the arbitrator may be entered by any court having jurisdiction thereof; and (b) under no circumstance will entrant be permitted to obtain awards for, and entrant hereby waives all rights to claim, punitive, incidental, consequential or any other damages, other than for actual out-of-pocket expenses. These Official Rules shall be governed by and construed and interpreted in accordance with the laws of the Cook County, State of Illinois, U.S.A., applicable to contracts entered into and performed exclusively in that State.

All entry data provided online is provided to Sponsor and not to Facebook or Twitter. Each Sweepstakes is in no way sponsored, endorsed or administered by, or associated with Facebook or Twitter.

SPONSOR: The Sponsor of this Sweepstakes is Opportunity Financial LLC, 130 East Randolph, St. 3400, Chicago, IL 60603.

The OppLoans trademarks, service marks, and copyrights are proprietary to the Sponsor. All rights reserved.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN

Meet Our Latest OppU Achiever: Nicole Bratcher-Bouyer!

giveaway2

Nicole

Name: Nicole Bratcher-Bouyer

College: Howard University

Expected Major/Concentration: Media, Journalism, and Film Communications

Expected Degree: Bachelor of Arts

Expected Graduation Date: 2018

We’re thrilled to announce the latest recipient of the OppU Achievers Scholarship, Nicole Bratcher-Bouyer! She blew us away with an introspective, searingly honest essay that detailed her path to financial literacy.


In some ways, Nicole’s story is a familiar one—hard-learned lessons about the need for money management. However, in many ways, it’s not. When she was in the 10th grade, her mom suffered a debilitating stroke, and Nicole became her sole caregiver. She faced daunting financial and personal hardship, including periods of homelessness, but overcame it all to gain admission to one of the nation’s leading historically black colleges.

Now entering her senior year at Howard University (@HowardU), Nicole is a budding community advocate who co-founded an organization that helps her classmates pay down their student loan debt. She also led an initiative to deliver water to homeless persons during a late-summer heat wave, volunteered as a tutor for middle schoolers, travelled to New Orleans to alleviate a food desert in the 9th Ward, and ran a job training program for homeless persons that provided work clothes, resume workshops, hot meals, and access to personal records needed for applications. Whew!

And Nicole has big plans for the future. A communications major, she hopes to create a television network that promotes positive images of under-represented persons. Not stopping there, she wants to use her profits to fund homeless shelters, initiatives for children with disabled parents, and safe homes for orphaned kids.

The OppU Achievers Scholarship is awarded four times a year through OppU (@OppUniversity), our online financial literacy program. (If you ever wanted a little help creating a budget or figuring out ways to save, the interactive video lessons are a great way to get it. They’re free and available to all, so check them out!) Scholarship applicants submit an essay, and if they’re selected, they receive $2,500 for education costs.

We wish you the best, Nicole! With all of your hard work, tenacity, and heart, we know you’ll make your dreams come true!

You can read her winning essay below.


How Not to Ruin Your Credit In College: From A Bad Credit Expert

There are many things I was not prepared to do in “adulting,” and managing my money correctly is definitely number one on the list. When I applied for college, all I cared about was getting into my top-choice school. As teachers and counselors drilled us on the cost of tuition, loans, and interest, I daydreamed about my first days on the yard. It’s too late to go back and pay attention to those lessons now, so instead I’m starting a journey of financial literacy. Without financial literacy, college students are heading into adulthood at 100 miles an hour with a tank near “E” and no brake pedals. We’re just in for a disaster!

As a senior in college, I am coming to realize that I will be in the “real world” in less than a year. I will be expected to take full responsibility for my taxes, loan repayments, bills, and credit. Although all of the wonders of “Adultland” sound fun, I know it’s going to be tough if I don’t understand how all of these things work. I have had a repeated history of ignoring financial literacy tips—skating by with poor financial management learned from watching adults around me poorly manage their money too.

My freshman year of college, I received my first job within a week of being on campus. It was a canvassing gig making $50 a day and I was averaging six work days a week. So bi-weekly I was making $600, which isn’t bad for an 18-year-old. Guess how much of that money ever touched a savings account though? $0. I had no understanding of the importance of saving money at the time, and even though I knew that the job was only for election season, I just assumed the money would always be there because I was too financially illiterate and naive.

After Election Day in November, I began running out of money. Credit accounts that I started while I had the job were becoming too expensive and I began paying bills later and later until I eventually didn’t pay them at all. I made it down to my last dime and soon my account was empty. Bills kept coming in and with no money to pay, my account was in the negative and my credit was eventually destroyed. I had to constantly borrow money from family and friends which landed me in more debt. Too bad none of that taught me my lesson the first time. Stressing over wanting to get out of debt quick, I looked into getting loans to pay off my debt and my new tuition bill. Thankfully, my credit was so terrible that I wasn’t allowed to accumulate any more unnecessary debt.

Lacking financial literacy influenced me to make too many financial decisions out of ignorance and desperation. Feeling so unsure in my financial literacy I buried the burden of my financial debt to the bottom of my priority list for the past three years and continued my bad money management habits. However, with graduation coming in nine months, I’ve realized that it’s time for me to take full responsibility for my financial health.

I have been doing more research on how to pay off debt, how to save, and monthly budgeting. I drafted a long-term financial goals plan that has been broken into short-term weekly and monthly financial goals. As well, I have been purging credit and auto-pay accounts that no longer serve me personally or financially. Reducing my weekly spending has allowed me to take better control of my finances already. And sharing this knowledge with my friends has been even more enjoyable in my journey to financial freedom because I want them to be able to control their financial health as well.

Lack of financial literacy and the lack of interest in financial education is stifling to college students. We see life as something we can always get together “later.” However, showing college students the importance of sowing the seeds of financial freedom now so they may reap the harvest of healthy savings accounts and credit scores later should be a top priority in higher education.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN

Cheapest Ways to Travel, Part One: The Journey

opploans-cheaper-travel-part-1

The shortest route between two points is always a straight line. But is it always the cheapest?

Ah, the open road, sky, and water. All different ways to travel, all of which can get pretty expensive. Everyone needs a vacation, but not everyone can afford it. That’s why it’s important to save money wherever you can.

We talked to the experts to find out what the cheapest ways to travel are and how you can cut down the cost of each method even further. In this post, we’ll be talking about the journey, or the cheapest ways to get where you’re going, and then we’ll have another post later this week about how you can save money once you get there.


Going public.

In general, the cheapest form of travel is walking. But if you’re planning to go anywhere beyond a mile or two, you should probably consider something more… efficient. And, when possible, public transportation is likely to be one of your most affordable choices.

“If you’re looking for the cheapest way to travel—short of sticking out your thumb on the side of the road—public transportation is the way to go,” Alex Reynolds of the Lost With Purpose (@lostwpurpose) travel blog told us.

“Which mode you choose depends on where you are; Amtrak operates some routes through California at subsidized rates, while Megabus rides are a budget traveler’s best friend in the eastern United States.”

But public transit may not be enough to get you where you need to go in every situation.

IIIIIIIIIIIIII just want to fly.

Flying is one of the most effective, and, unfortunately, expensive ways to travel. But there are a lot of ways you can cut down on costs.

Kathy James, who writes about her travels at Walkabout Wanderer (@KathyWanderer), wrote a whole article about how you can save on flights. One tip she offers? Be sneaky in your searches: “When I am researching flights I always clear my cookies. Ever wonder why the price of your flight has gone up on your second/third search for a particular route? Clear your cookies and reduce the risk of this. See how to click your cookies.” She suggests using your browser’s incognito mode if it has one.

James also recommends being “flexible” about when and where you decide to fly, and she’s not the only one!

Sean Potter, the writer behind My Money Wizard (@moneywizardblog), also stressed the importance of being flexible with your flight days: “Where possible, fly on the slower travel days. Tuesday through Thursday and Saturday are the cheapest days of the week to fly, and flying on these less busy days can save up to 50% on airfare compared to the usual Sunday/Monday/Friday choices.”

Your destination also matters. Brett Graff (@BrettGraff), writer at The Home Economist and author of Not Buying It: Stop Overspending and Start Raising Happier, Healthier, More Successful Kids, suggests going to a place when others aren’t: “The cheapest way to travel by far is by choosing locations at off-season times. Sure, Miami is known for its tropical weather in winter but that’s only one of the local offerings. You’ve never had Cuban food like this, plus the museums and bars are open year-round. And water sports are more available. Aspen peaks in winter and summer, but those hiking trails are gorgeous with fall foliage. Go against the grain and get great deals.”

Jessica Bisesto, senior editor for Travel Pirates (@TravelPiratesUS), also advised flying on less popular days: “Traveling over holiday weekends and during the summer months are much more expensive than vacationing other times of the year. Whenever possible, explore alternative dates to save money when planning your next trip. Often times, it’s cheapest to fly on a Tuesday or Wednesday, and staying at hotels is also less expensive during the week. If you normally work a Monday-Friday schedule, you can add a few days to your trip by incorporating the weekend—this also allows you to save two whole vacation days for your next trip!”

Although if you don’t need to fly there, Bisesto suggests looking into alternatives: “Depending on where you’re traveling, taking a 3-hour train ride may be cheaper than taking a 1-hour flight. Airports can be a hassle and are often times located outside of their respective cities. Trains, on the other hand, provide more space, different views of the city, and might even drop you in the heart of town.”

Expert tips for flying on a budget.

But perhaps you do need to fly wherever you’re going. Which means you might need a huge list of flying budget tips. Well then you’re in luck, because Grainne Kelly, inventor of the BubbleBum (@BubbleBumUSA) inflatable booster seat, gave us a whole lot of tips on how you can save on flights:

“Today’s travelers expect to score low-cost plane tickets whenever and wherever they fly. Budget carriers willingly offer more routes around the world with the lowest prices. We can also compare the prices of flights with the many different websites available to travelers. With a discounted flight, we assume there will be less perks and passenger services, and we’re typically fine with that for the reduced fare. But did you know that there are tons of hidden costs behind cheap plane tickets? Below are a few insider secrets and the hidden costs behind these discounted tickets:

  • Fly.com recommends booking flights on Tuesdays or Wednesdays, as those are the days of the week airlines release sale prices. Traveling on Tuesday, Wednesday or Saturday will also provide the best prices. As always, the longer out you book the flight, the better deal you will find. Don’t sit on a good deal if you find it. Take advantage of ‘too good to be true’ prices the airline might have made when posting flights.
  • Poise yourself for an upgrade by dressing in business casual. If your flight is oversold, you could potentially get upgraded to first-class, but your attire will play a part in the airline’s decision. If you’re on your honeymoon, show proof of your status and if there is space to upgrade, you might just get a boost into first-class seats. If you’re a doctor or medic, airlines like Lufthansa will offer upgrades. Late check-ins can also increase your chances of getting upgraded. Avoid asking for an upgrade at the ticket counter, as service staff are bombarded with upgrade requests and this might actually hurt your chances.
  • Print your boarding passes at home. Some airlines now charge to print boarding passes at the airport. Save yourself the fees and print them at home. Confirm every letter is correct and reconfirm the travel dates. Changing even the smallest item can result in an additional charge.
  • Confirm that the rate includes taxes. It’s never fun to realize the quoted online price does not include taxes until after you hit the purchase button. Taxes can tack on several hundred dollars, resulting in your ‘discounted’ ticket not being as discounted as you assumed.
  • Bring along snacks. Most discounted carriers no longer include meals in their flights and expect you to pay for them onboard. The standard soft drink and bag of pretzels will most likely not be included either. Plan ahead and pack yourself plenty of snacks and other food to tide you over until you reach your destination. Remember that you can’t bring liquids through security, so you’ll need to purchase them near your gate or onboard the flight.
  • Seat assignments not guaranteed. Not seeing a seat assignment on your ticket? Most discount carriers do not offer seat assignments, but rather operate on a first come, first serve basis. So plan to be at the gate early to queue up for a decent seat next to your family or travel companion.
  • Prepare for a long route. Many discounted flights include at least one layover, sometimes two (depending on the destination). So it will take longer to get to your end point and may include layovers that are lengthy. Many discounted flights are also offered at off-peak times, departing at a very early hour or late at night.
  • Always read the fine print. Always read the fine print for the terms and conditions for your carrier. There could be charges for baggage, carry-ons, dimensions/weight of your baggage, snacks/meals, and more. Be prepared ahead of time so you’re not hit with sticker shock at the airport. This is how the airlines make up for missing revenue. Try to just travel with a carry-on bag so you don’t have to pay for a checked bag.
  • Travel on the off-season, as you can get better deals for flights and hotels. Excursions and local sites also offer cheaper prices. Another perk is that you don’t have to fight as many tourists and can experience a private beach or more entertainment options.
  • When to book and fly: The best time to buy domestic airfare is on Tuesdays around lunchtime. The airline sales typically only last three days or less and tend to publish on Tuesdays. Also, the best days to travel are Tuesday, Wednesday, and Saturday. You’ll almost always pay less if you accept a connecting flight.
  • Try to get a bag checked for free. If you have a larger carry-on and later decide after you go through security that you would rather check it, try to get it checked for free at the gate. Wait until everyone else boards the flight with their carry-ons, as the plane will likely run out of room for bags and the attendant will then check your carry-on suitcase for free for you. Always ask at the gate if there is a room or if they should check your bag, as they are usually happy to check it. It makes it easier for them to ensure everything else fits in cabin storage.”

Finally, the experts at Priceline.com (@Priceline) offered us some secret tips to help you get the best flight deals:

  • “Thanksgiving travel is cheaper than Christmas travel based on average ticket price.”
  • “The cheapest day of the week to book holiday travel is Friday followed by Thursday, despite the majority of tickets being purchased on a Tuesday.”
  • “The initial descent in price begins around September and continues to decline as the holidays become closer.”
  • “Mobile has the cheapest prices by approximately $75 compared to desktop”

Let’s make a deal

No matter what form of travel you’re taking, it’s important to keep your eye out for deals. Sites like Priceline will offer deals on not just flights, but cruises and entire vacation packages. You can also check out Groupon (@Groupon) for “Getaway deals” deals that can include both travel and lodging, and sometimes even more. There’s also the aforementioned Travel Pirates, which lets you search and book travel deals using technology from Kayak and the Priceline Partners Network.

The deals can be worth waiting for, as Roni Faida, of RoniTheTravelGuru (@RoniTravelGuru), advises: “Wait for the travel deals before you book. There are always travel deals that can get you around the world or across the USA for extremely reasonable prices. Wait until the deals come out and base your plans on those destinations. This will help save money and still allow you to travel.”

But it’s not just about the journey. Now it’s time to start planning for your destination, so keep an eye out for our next “Cheapest Ways to Travel” post!

*Note: When you’re looking to travel, always start by saving! According to a LearnVest study, 74 percent of Americans borrow money to travel. Needless to say, this can be risky! If you are going to borrow money to travel, be certain to avoid dangerous bad credit loans and no credit check loans. Before you borrow money, check out the OppLoans Guide How to Protect Yourself from Payday Loans and Predatory Lenders for your financial safety tips!

Do you have any great tips for traveling on the cheap? We want to hear about them! You can email us by clicking here or you can find us on Twitter at @OppLoans.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN


Contributors
J_BisestoJessica Bisesto is a senior editor at the travel deals and inspiration hub TravelPirates.com (@TravelPiratesUS), where she hunts for the best travel deals available online and educates readers about how to see the world on a budget. She’s an avid traveler herself, and has recently backpacked through Southeast Asia, Central America, Iceland and Australia.
R_FaidaRoni Faida (@RoniTravelGuru): Some people travel. Roni  IS travel.  For over 25 years she has been traveling the world and now shares her unique travel lifestyle and insight with her worldwide audience on her blog, www.RoniTheTravelGuru.com . Whether you have never gotten on a plane or are a seasoned traveler, the expertise and insider knowledge she shares on her blog will help you see how to turn your vacations into a lifestyle.
PIGBrett Graff (@BrettGraffhas been seen writing and reporting on money and personal finance in The LA Times, Yahoo! Finance, Cosmopolitan, The New York Times and the Fiscal Policy Institute, to name a few. Brett also provides her insight in the column, The Home Economist, which is nationally syndicated and published in newspapers all over the country. Her book “NOT BUYING IT: Raising Happier, Healthier & More Successful Kids” is now available!
K_JamesLast year, Kathy James (@KathyWanderer) quit her job as a nurse to set off on a trip to discover more of the world as she hated ending her trips to go back home to work. She discovered her passion for writing and loves helping other people pursue their dreams of traveling. Her travel blog, Walkabout Wanderer, was born.
G_KellyTravel Expert Grainne Kelly is a Child Passenger Safety Technician and the founder of BubbleBum (@BubbleBumUSA), the world’s first inflatable booster seat. BubbleBum is a fantastic alternative to the bulky and inconvenient plastic booster seat and is perfect for everyday carpooling, school drop offs and pick-ups, road trips, fly in’s with car rentals, and taxi cabs. Weighing in at less than one pound, BubbleBum can deflate in minutes, making it simple to throw in a backpack or large purse when not in use.
Money_WizardSean Potter is the 20-something writer behind MyMoneyWizard.com (@moneywizardblog), a website where he shares his plans for reaching complete financial independence by his late 30s. His approach to saving over half of his income has been featured in several publications, including Forbes, Business Insider, and Yahoo Finance. When he’s not writing, Sean can be found cycling, skiing or traveling the country.
A_ReynoldsAlex Reynolds (@lostwpurpose) is an American travel writer, photographer, and full-time backpacker whose work has been featured on the likes of the BBC and Lonely Planet. She’s scrambled up dusty fortresses in Afghanistan, watched gods dance in South India, followed spirit dogs through the Caucasus mountains, and called fairies with a shaman in Pakistan. Her travel blog, Lost With Purpose, helps others do the same.

Teaching Your Children How to Use Credit and Debt Responsibly

Teaching Your Children How to Use Credit and Debt Responsibly

Teaching your kids how to handle money is one of the most important things you can do to prepare them for adult life and responsibilities. 

As a parent or guardian, you have the heavy responsibility of preparing your child for the big world outside the home. You have to show them the things they should put in their mouth and the far larger number of things they shouldn’t. It’s up to you to teach them the danger that strangers can present. And you’ll be the one to teach them about finance, especially about credit and debt.

There’s a decent chance they won’t learn about these topics in school, and it’s knowledge they’ll need for their adult life. Without it, they might themselves buried with payday loans, trapped in a never-ending cycle of high-interest debt. 

As Paul Vasey, founder of CashCrunch Games (@CashCrunchGames), told us: “Money habits are useful at any age and are basically the same whether you are 7, 17, or 70. Therefore, the earlier you learn something, the better you are at grasping your money and making smarter decisions.”

So how can you teach it to them? We’ve spoken to Vasey and other experts to learn exactly that. Read on, and educate yourself on how to best educate others.

(Oh, and by the way, if you’re looking for some financial education on the go, check out OppU—OppLoans’ free and easy online personal finance curriculum.)


Set your curriculum

Before you can start teaching your kids about finances, you have to know what you need to teach them. Other than “it’s good to have it,” what should you be teaching your kids about credit?

Katie Ross, Education and Development Manager for American Consumer Credit Counseling (@TalkCentsBlog), outlined some of the important lessons kids should learn about finance:

  • Identifying Needs vs Wants – It is important that children learn the difference between wants and needs. Children should be taught to think and identify if what they are looking to buy is a need or a want, and if the purchasing can be postponed for when the money is available. As part of this process, children can be encouraged to assess their financial goals to determine if they are realistic, achievable, and worthwhile.
  • Save and Plan – Children should learn how to keep track of their spending so they can plan their financial future. If your child has a job, explain the importance of putting a portion of the check into a savings account. Working age children should learn how to choose a bank and prepare for their financial future.
  • “The Value of the Dollar – It is important that children learn the core concepts about money and finances early on. Children should be introduced to the concept of money during preschool. Learning about money can be fun. Take advantage of casual trips to the grocery store as an opportunity to introduce new money concepts.
  • How to Budget – Budgeting is key. Children must know that they cannot buy everything when they want it. They must plan out how they can save the money to make the purchase without causing a financial disaster. Parents can introduce a budgeting worksheet that shows income and expenses so they can learn what money is being earned and spent.”

The basics of credit and debt

Natasha Rachel Smith, financial expert at TopCashBack (@TopCashBackUSA), told us what you should tell your kids about credit cards and debt:

Teach your kids while they are young that credit cards aren’t just magical pieces of plastic that pay for things. Credit cards have due dates and, if you misunderstand the rules, you can be penalized by having to pay more money.

“My parents also stressed the importance of good debt versus bad debt. It is OK to accrue debt when it is good debt. Investing into a mortgage – provided the property was purchased at a reasonable, affordable price – is good debt. Where you can account for precisely and exactly where the money was spent is usually good debt. Frivolous spending is bad debt. Do not buy things you simply want, focus on the things you need alongside sometimes treating yourself to the items you want.”

Personal finance expert and motivational speaker Debbi King (@DebbiKing) offered her own take on what you should teach kids when it comes to debt and credit: “The first thing to let them know is that if they make positive financial decisions, their credit report will reflect that. Your credit score is your financial reputation. It shows others how you handle money.

“Then you need to make sure they know the difference between debt and credit. You can build credit without ever going into debt. For example, you can have a credit card and no debt as long as you pay it in full every month. Debt is owing more than you have. And credit is a form of payment. The best possible thing you can ever do for your finances is to build credit without debt. I know people who take out auto loans even though they have the money in the bank. They use the bank’s money at, say, 4% instead of using their money at an investment rate of 10%. Just because they have an auto loan doesn’t mean they are in debt. They have the money to pay the bill at any time that they choose.

“I would also suggest teaching your kids what makes up their credit report and how their decisions affect their score. Use a free website such as Credit Karma to look at this information. It will not only give you a free credit score, it will break down each category and how you fare in each one. Knowledge is power. You can also use this site or www.annualcreditreport.com to look at your credit report to find errors which can be disputed and help your score.”

Teach by example

“I learned about credit the hard way,” Michael Doane (@medoane) writer and marketing expert with CadmiumCD (@cadmiumcd), told us. “After college, I ate ramen every night for a year so I could put every penny to pay off my student loans. I lived in a basement with a cement floor and drove a car that barely ran. To me, the money I was making wasn’t mine, it was my creditors.

“It took about 15 months, but I eventually paid off my loans. I kept at it, living in the same conditions, until I had a decent chunk of change saved up to buy a house. The thing is, I didn’t have a credit card during that time and eventually my credit score dropped off entirely. I didn’t realize it until my then-girlfriend (now-wife) and I went to purchase a home. They told me I couldn’t get the loan because I essentially couldn’t prove my worth as a debtor. All my tradelines had disappeared.

“So, I had to start from the bottom — someone who valued paying off their loans far ahead of schedule, someone who proved that they had what it took to take and pay off a loan. 5 years later I have great credit (780+) simply buying gas every month on a single card and paying it off. I have a home with a very small mortgage for what it’s worth, and a car that’s paid off.

“My case is pretty radical, but I watched my parents lose everything during the recession and I told myself I’d never go through that again. I’d never put other people that depend on me through that.

“The point is, good or bad, your kids will learn through the example you set. Might as well set a good example and teach them through experience rather than observation.”

April Lewis-Parks, Director of Education for Consolidated Credit (@ConsolidatedUS) also emphasized the importance of setting a good example:

It’s important to remember that no matter how old your children are that being a financial role model is an important part of parenting. Setting a good example can help kids be successful with their money.  Here are three tips I recommend:

  1. Don’t get swamped with credit card debt. Taking on too much credit card debt can lead to financial difficulty. You’ll be damaging your own finances and your children could be more likely to take on debt in the future because they saw their parents do it. To avoid credit card debt, make sure you practice the best credit card behavior – i.e. always paying on time – and teach the same things to your children.
  2. Allow your children to learn from your mistakes. While you may feel as though hiding your financial mistakes from your children is a good idea, it is better to let them learn from them so they don’t make the same mistakes when they are older, according to U.S. News & World Report. For example, if you find yourself falling short on some bills due to overspending, be sure to let your children know, as it could be useful information for them once they are in charge of their own finances.
  3. Sit down and talk with your child about money. Sometimes, a simple talk goes a long way in helping them. Many teenagers feel as though their parents don’t talk to them enough about budgeting and money, so don’t be afraid to sit your child down and have the talk. Be sure to touch on topics such as savings and long-term planning to help set your child up for a successful financial future.

Use real world experiences

At the end of the day, there’s nothing better than learning first-hand. You might have to toss your kids into the deep end of the financial pool so they can learn to swim.

(Editor’s note: DO NOT ACTUALLY TOSS KIDS WHO CAN’T SWIM INTO POOLS.)

“The reason I had strong financial discipline was because my mom let me fail with money at a young age,” explained Phil Risher, founder of the Young Adult Survival Guide (@yasurvivalguide).

“When I was 16 she gave me a debit card and would load $100 each month so I did not have to ask her for money. One day I was out to eat with my friends and my card was declined. Talk about embarrassing. I came home and complained that the card did not work. We looked up the balance, and I had overdrafted the account.

“This was a life lesson that I am glad I made in my teens when I did not have any real bills because I started to learn how to use self-control with money.”

“Part of financial education for kids is helping them understand the value of a dollar,” Ross told us. “The best way to do this is for them to earn their own money and learn money management skills through practice. Some parents choose to do this through allowance, while others have their children earn money outside of the house. You can also do a combination of both. Consider helping kids divide earnings into threes – one part for saving, one part for spending, and one part for a charity of their choice. This shows kids the valuable skill of saving and the importance of charity.”

Baby’s first credit history

Ross offers a guide for helping your kids build their own credit history:

Building a credit history is important. A consumer’s credit history can affect their insurance, ability to rent an apartment, get a job, or get a cell phone plan. Credit history is needed to get all types of loans, from mortgages to department store cards.”

“To start building a positive credit history, individuals should acquire and positively manage small lines of credit. The following are credit options for individuals who need to begin building a positive credit history:

  1. Make a child an authorized user on a parent’s card.
  2. Co-sign a credit card with your child. Co-signers on an account are equally responsible for the loan. Therefore, the loan is on their credit report as well, making a positive or negative impact depending on how the credit is managed.
  3. Have your children open a secured card. Secured cards and loans typically require a cash or collateral security deposit to ensure payment of the debt. The larger the security deposit or collateral, the higher the credit limit granted. The cash security deposit is returned when you close the account with the balance fully paid back
  4. Have your child establish a checking & savings account to build a good banking history.
  5. Make small purchases and pay off balances monthly (Do not apply for too many cards at once).”

If your kid is able to build a maintain a good credit history, this will mean steering clear of bad credit loans and lowers their chances of encountering a predatory lender. While it is definitely possible to fix a damaged credit history, avoiding one in the first place is always the better option.

Start small with household chores

As has been the case for a decade, chores can be something of a “starter job,” as Smith advised:

Start off simple with weekly chores. Pay your children based on chores they do around the house. Once they understand that money is earned, not given, you can start separating it into jars–one for saving and one for spending. It is important kids learn the fundamentals of saving vs. spending early on so understand saving is a normal thing to do.”

Vasey also suggests putting money into kids hands to practice with:

“If a parent buys them something, the child can work off their debt by doing extra chores and meeting certain expectations. For example keeping their room tidy, cutting the grass, washing the car etc. That, to them, would be working off debt.

“Parents can agree to ‘loan them money in advance’ if it is needed. This allows the child to understand that they have the money available to use if it is needed, but they need to be prepared to work the debt off. This can apply for nearly every trip to the shops, the latest product, or even as gas money for when they want to be driven around.”

Use everything in this guide and come up with your own tricks, and your kids will be financial whizzes before you know it. Teach them well enough, and maybe they’ll be supporting you down the line! You can also learn more about credit in our ebook Credit Workbook: The OppLoans Guide to Understanding Your Credit, Credit Report and Credit Score.

How have you taught your kids about money, credit, and debt? We want to know! You can email us by clicking here or you can find us on Twitter at @OppLoans.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN


Contributors
M-DoaneMichael Doane (@medoane) is an author and marketing strategist who learned how to manage money the hard way during his formative years in college at the University of Maryland. In his spare time he reads, hikes, and writes novels about ordinary people doing extraordinary things. He currently lives in Jarrettsville, MD, with his wife and 3 pets. Connect with him on LinkedIn or Twitter.
D-KingDebbi King (@DebbiKing) is a personal finance expert, motivational speaker, and the author of two award winning books, “The ABC’s of Personal Finance” and “26 Weeks to Wealth and Financial Freedom”. She is also the host of a weekly radio show, “The ABC’s of Personal Finance”. Debbi has been featured in numerous media outlets empowering others to win in the area of money. In addition to her work, she is the founder and President of Lovell Ministries and is happily married with a beautiful 19 year old daughter, 4 step children and 5 wonderful granddaughters.
AP-ParksApril Lewis Parks. Prior to joining Consolidated Credit (@ConsolidatedUS) Ms. Lewis-Parks was the public relations manager for a Boston based event firm and before that, she was employed by John Hancock Financial Services, Inc. where she counseled employees on 401K and IRA accounts. She holds a Bachelor of Science degree in Mass Communication from Emerson College in Boston, Massachusetts.
PIGPhil Risher is the founder of YoungAdultSurvivalGuide.com (@yasurvivalguide). Phil paid off $30,000 in student loans in 12 months making 48k. After, he saved up and bought his first place with cash at the age of 25. Phil now speaks with college students and young adults around the country about his 5-Step Guide to help them on their financial journey.
SammelKatie Ross joined the American Consumer Credit Counseling (@talkcentsblog) management team in ’02 and is currently responsible for organizing and implementing high-performance development initiatives designed to increase consumer financial awareness. Ms. Ross’s main focus is to conceptualize the creative strategic programming for ACCC’s client base and national base to ensure a maximum level of educational programs that support and cultivate ACCC’s organization.
RainbowNatasha Rachel Smith is a personal finance expert at TopCashback.com (@topcashbackusa). Natasha’s background is in retail, banking, personal finance and consumer empowerment; ranging from sales to journalism, marketing, public relations and spokesperson work during a 17-year career period. She’s originally from London, UK, but moved to Montclair, New Jersey, USA, several years ago to launch and run the American arm of the British-owned TopCashback brand; a global consumer empowerment and money-saving portal company.
P-VaseyPaul Vasey is the founder of CashCrunch Games (@CashCrunchGames). Originally from the UK, he taught Business Studies for 12 years, and holds a Business Education Degree from Nottingham Trent University.  Since deciding to leave the classroom and start walking the walk, Paul has dedicated his time and energy to teaching personal finance concepts to kids and teens through active, engaged gameplay. He currently lives in California and is affiliated with Centsai.com.

How to Finance a Medical Emergency

An OppLoans E-Book

Owl4


Top 10 Must-Know Facts About Medical Debt

  • One in four Americans are currently struggling with medical debt.33
  • 8.8 percent of Americans, or 28.2 million people, don’t have any medical insurance.34
  • On average, the United States spends more than $10,000 per person on health care costs every year, the most of any country in the world with a similar average life expectancy.35
  • 63 percent of insured Americans with mounting medical bills still report using up all or most of their savings paying off their medical debt.36
  • Medical debt has driven 7% of the Americans who carry it to file for bankruptcy.37
  • The Affordable Care Act (sometimes called Obamacare) rollout actually decreased the amount of medical bankruptcies in the United States.
  • Getting your medical debt sent to collections can result in a 50-100 point drop in your credit score.38
  • 43 million Americans with medical debt say it’s hurting their credit.39
  • The average monthly insurance premium for individuals is $321. For families it’s $833 per month.40
  • More than 74 million Americans are currently enrolled in Medicaid and CHIP.41

< previous next >