The Money Advice You Always Needed: May 2015

Sunday, May 31, 2015

5 Ways to Cut the Cost of Moving

It may be obvious that buying a house will be a very large — and expensive — decision. Even if you calculate your monthly mortgage payments, evaluate the overall price tag, factor in future maintenance and repairs, and consider any commute and renovation costs, you may forget a few things that can add up to more than a few (hundred) dollars. From closing costs to movers, you can end up spending more than you expected to in your first year of homeownership. Check out some tips below to help you keep those relocation costs down.

1. Plan Ahead

Getting organized before crunch time can help you save. Change your address with all of your creditors and the post office ahead of time so nothing important will slip through the cracks. A missed or late payment can do serious damage to your credit scores and will end up costing you in the form of higher interest payments down the line. (You can check your credit scores for free on Credit.com.)

It’s also a good idea to create a budget for all moving expenses so you can evaluate what other aspects of your lifestyle you can cut back on that month to help fund your relocation. It usually adds up faster than you think — so try not to leave anything (from truck rental and mileage charges to gas and electric setup) off your list. You may want to consider investing in movers insurance to protect your belongings. In addition, it’s important to secure all important documents in a safe place so they do not get lost during the commotion and you will have them whenever you need them.

2. Time It Right

The price of moving can vary greatly based on when you move and whom you hire. It’s a good idea to do some comparison shopping. Research a few options and get multiple quotes before you choose a moving company or truck rental. If possible, avoid moving in the summer, when it is most popular. Rates are lower between September and May when these companies are less busy. Similarly, you may find lower prices on weekdays as opposed to weekends and further from the beginning of the month when many rental leases change hands.

3. Mix DIY & Professional Help

Moving on your own is almost always the cheapest option. This requires more time and sweat, while calling in the professionals can make it easier. Of course, there are some options that combine the two. You can pack boxes yourself or even prep the furniture and just pay the movers to physically move your belongings between homes. You can move all the smaller items and boxes and hire movers for only the heaviest objects, like your couch, bed and dresser.

4. Come Prepared

When the movers or moving day comes along, it’s important to be ready. If not, you can end up paying the movers to watch you organize your things. Collect packing materials, like tape, boxes and bubble wrap as soon as you know about the move. See if there are old boxes available at work or your grocery store. Ask friends or neighbors if they can pitch in with the packing. By starting early, you can take your time and possibly even choose some things to sell or give away before the move. This way you de-clutter and don’t pay to move things you don’t want anymore. You may need parking permits or, if you live in an apartment building, insurance permits. It’s a good idea to get those ahead of time.

5. Get (Financial) Help

Track all your moving expenses so you can get some of the money you shell out back. If you are moving for work, ask your employer to cover some of the costs. Even if your employer will not pay for the expenses, you can deduct some of the costs on your income tax return. It can be a good idea to consult a tax adviser before the move and through your filing process to be sure you do this properly.

Related Articles

This article originally appeared on Credit.com.

This article by AJ Smith was distributed by the Personal Finance Syndication Network.

Should I Use My House to Finance a New Car?

Q. I need a car loan, and I’m thinking of using my home equity instead of taking a loan with the dealer. How can I decide which is a better deal?

A. There are pros and cons to every borrowing situation — including the strategy of using the equity in your home to buy a car.

People who use home equity lines of credit (HELOC) often make the choice because of the potential tax savings.

“The interest rates on home equity loans are often tax-deductible while the interest on a car loan is not,” said Kim Viscuso, a certified financial planner with Stonegate Wealth Management in Oakland, N.J. “This tax advantage is only beneficial to those taxpayers that itemize their deductions, and there may be limits if you exceed $100,000 on the loan.”

A HELOC functions like a credit card, Viscuso said. It makes a certain amount of credit available on an as-needed basis for a limited term then follows with a repayment period.

The interest rate on a home equity loan is probably going to be lower than that of a traditional car loan, but it will be variable after some period of time, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge, N.J. Although we have been in a period of very low interest rates for a long time, you need to consider the likelihood that the HELOC rate will probably increase over its lifetime, she said.

The potential for rising interest rates isn’t something to ignore.

What You’ll Need to Consider

A higher move for rates could force you to be make larger payments for the car down the road, Viscuso said. Also, if you decide to make interest-only or smaller payments on the amount borrowed, the repayment period could last longer than the life of the asset itself.

Choosing to borrow through a home equity loan can also be a cash-flow decision.

Mott said the option to repay on the interest might enable you to have a new car with lower payments, but you will still need to be in a position to pay off the loan when the term ends.

“Keep in mind that the value of the car will continue to depreciate from the moment you drive it off the dealer’s lot and may have no salable value when it comes time to pay off the HELOC obligation,” she said. “If cash flow is an issue and the ability to make a balloon payment is going to be a problem, you may need to rethink the idea of a new car entirely.”

Another potential negative is that you will have to pay closing costs for the home loan, Mott said, so make sure you run the numbers so you understand the cost of borrowing for all your lending options.

Another disadvantage to using funds from the HELOC to purchase a car is that the borrowed funds are no longer available for other uses, Viscuso said.

“Many people use their HELOC for emergency situations,” she said. “If you eat up the funds by paying for a car, they may no longer be available for unforeseen future emergency situations.”

And finally, Mott said, if it turns out that the auto loan is a better option for you, make sure you shop around because the dealership’s offerings may not be the most attractive.

“If you have good credit and meet the qualifications, using a local bank, credit union or an online loan provider may get you a better rate and hence savings over the long term,” she said.

(You can check your credit scores for free on Credit.com to see where you stand.)

Related Articles

This article originally appeared on Credit.com.

This article by Karin Price Mueller was distributed by the Personal Finance Syndication Network.

How Your Fitbit Can Earn You Lower Rates

old people exercising

Your life insurance premium and health go hand in hand, but few companies offer you monetary incentives for improving your health. One company is rethinking life insurance and even going so far as to help policyholders track their daily health and fitness goals to help them reduce annual premiums.

John Hancock has partnered with Vitality to integrate wellness programs with life insurance policies to encourage customers to live better, more active lifestyles. The insurance company provides personalized health goals and free Fitbits to new policyholders. Customers who reach health milestones can earn discounts on their annual premiums, in addition to other rewards. Health insurance companies have been using incentives to encourage participants to develop healthy habits for years, but John Hancock is taking a new, more-involved approach.

Discounts for Healthy Living

Establishing Fitness Goals

After completing the insurance policy application process, John Hancock customers can complete an online assessment from Vitality Health Review to determine their Vitality Age. Your calculated age helps you gauge your overall health. This number might be higher or lower than your actual age. The average American, in fact, has a Vitality Age five years older than their actual age, according to a 2013 analysis by The Vitality Institute.

The Vitality Health Review takes your age, gender and body characteristics into account. You will also be asked to identify exercise patterns, eating habits and overall mental well-being. Your responses are calculated to produce a set of personalized health goals. With your Fitbit, you can then track your progress and report results to John Hancock.

Earning Vitality Points

A Fitbit is a wristband-like device that tracks your daily activity, food intake, weight and sleep patterns. Your personal fitness information can be tracked online to earn you “Vitality Points.” During the course of a year, the points you accumulate are calculated to determine your program status level. The healthier your lifestyle, the greater your status level and its associated discounts and rewards. You can earn additional Vitality Points in other ways, such as by:

Quitting smoking
Getting an annual health screening
Getting a flu shot

Rewards for Healthy Policyholders

As you accumulate Vitality Points, you can apply them to earn rewards and discounts from travel, shopping and entertainment partners. You can also shave up to 15 percent off you annual premium, depending on your policy.

Consider a 45-year-old couple of average health purchasing Protection UL with Vitality life insurance policies of $500,000. By establishing and maintaining healthy lifestyle habits, this couple can cut costs by more than $25,000 on their premiums by the time they turn 85 years old, if they achieve a certain status each year. The savings grow as they live longer.

Health Matters in Life Insurance

John Hancock’s life insurance program offers an innovative approach to getting people excited about healthy living. Traditionally speaking, the life insurance industry doesn’t have a reputation of being terribly interesting to the average customer. Insurance has one of the worst overall industry reputations out there. Only 36 percent of customers view the industry in a positive manner, according to a 2015 Reputational Quotient survey from Harris Interactive.

By incentivizing customers to live healthier lives, John Hancock can help lower payouts. A customer can benefit with rewards, discounts and a healthier lifestyle.

Americans are Unhealthy

Many American adults struggle to live healthy, active lifestyles. Approximately 60 percent of adults are either overweight or obese, according to a 2013 survey released by the Centers for Disease Control and Prevention (CDC). Another CDC survey of 77,000 adults found that:

1 in 2 Americans do not meet federal recommendations for aerobic activity and muscle strengthening exercise.
2 out of 3 Americans regularly drink alcohol.
1 in 5 Americans smoke.

The incentives offered by John Hancock and Vitality might be able to help policyholders lead healthier lives. With opportunities to save money and benefit from discounts, customers can see the fruits of their labor, even when they might not be looking in the mirror.

This article originally appeared on GOBankingRates.com: How Your Fitbit Can Earn You Lower Rates

This article by Laura Woods first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

7 Benefits of Opening a Credit Union Credit Card

credit card

You probably enjoy the convenience of having a credit card, but do you also enjoy the high interest rates and fees charged by many credit card companies and banks? Probably not. While you might expect to pay a price for the convenience of not needing to carry large amounts of cash in your wallet or purse, your credit card rates and fees shouldn’t be draining your finances.

If your credit card is costing you too much money, there is a cost-effective alternative for you that you might enjoy more than a big bank. It’s called a credit union, and these institutions have been growing in popularity over the years. According to the Credit Union National Association, membership reached 100 million in June 2014, with about 2 percent increase each year.

Why You Should Consider a Credit Union Credit Card

Like banks, credit unions offer a variety of credit cards, including secured credit cards, travel cards, cash back card and rewards credit cards. But when you get a credit union credit card, you’re not only getting the card — you’re getting the numerous perks that come with belonging to a credit union. Below are seven ways you can benefit from a credit card with your local credit union.

1. You’re a Member-Owner

When you join a credit union, you become a member-owner, not a customer. Whereas banks typically have the goal to make profits, a credit union works with the interests of its members in mind. Also, you can vote for board of director members and other elected officials. Whether you have an account of $100,000 or $1, you have these privileges as a member-owner.

2. Fewer Fees

Along with lower interest rates, credit unions tend to offer lower fees in general — including credit card fees. Sure, an annual fee might be worth the expense for some credit cards, but who really wants to pay balance transfer, foreign transaction and cash advance fees? Alliant Credit Union’s Platinum and Platinum Rewards credit cards do not charge balance transfer fees, and PenFed’s Travel Rewards American Express Card does not charge a cash advance fee or a foreign transaction fee

3. Lower Interest Rates

Compared with large banks that offer credit cards, credit unions generally have lower interest rates. For example, Los Angeles Federal Credit Union’s Cash Back Visa credit card offers a 0% introductory APR for the first 12 months. After that, the card boasts variable interest rates as low as 8.99% APR. Capital One’s Quicksilver Rewards credit card has a 0% introductory APR as well; however, the variable APR ranges between 12.90% and 22.90% after the period is over.

4. Emergency Cash Availability

Emergencies happen to everyone, and many credit unions offer members credit cards that can help them when they’re in a financial bind. Erin Lowry of DailyFinance wrote she got a PenFed Promise Visa Card — which boasts no annual, balance transfer, cash advance, late or over-credit-limit fee, as well as no penalty APR — in case of emergencies. “Credit cards are not the ideal way to manage your debt,” she wrote. “But sometimes you need to make a payment quickly and don’t have time to shop around for the cheapest alternative.”

Read: 5 Ways to Build an Emergency Fund in 5 Months

5. Extensive Surcharge-Free ATM Network

Credit unions might have had difficulty competing against the large number of bank ATMs, but there are now tens of thousands of ATMs in the CO-OP network. Many of these ATMs are surcharge-free, and the credit unions often offer to reimburse any fees you might incur when you use other institutions’ ATMs.

6. You Get Second Chances

According to CreditCards.com, credit unions tend to be more willing to give second chances to their members. So if you apply for a credit card or loan and get denied, a committee of employees and members might review your application again to see why you got turned down.

Keep reading: How to Get a Credit Card After Being Rejected

7. You Can Enjoy the Credit Union’s Other Services

If you become a member at a credit union by getting a credit card, there’s a good chance you might be able to qualify for its other services and products. With lower rates on loan and higher rates on savings, you might be interested in getting an auto loan or savings account with the credit union in the future. If so, you could end up saving (and earning) a lot of money during your time with the credit union.

Is a Credit Union Right for You?

Although credit unions provide a variety of perks, there are a couple of factors you’ll want to consider before becoming a member and applying for a credit card. For example, a small credit union might have less credit card options when compared with a national bank, like Bank of America or Wells Fargo. Also, if you’re the type of person who prefers visiting brick-and-mortar branches, you might have a hard time finding a credit union branch when you’re traveling out of town.

Choosing a credit card can be a hard decision. As important as fees and rates are, you also want to be able to trust your financial institution. Before deciding on a credit card, make sure you check out what your local credit union has to offer.

This article originally appeared on GOBankingRates.com: 7 Benefits of Opening a Credit Union Credit Card

This article by Bill Pirraglia first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

What Is a Home Equity Line of Credit?

home equity line of credit

Home equity lines of credit are convenient ways for homeowners to finance spending or consolidate debt. They offer significantly larger credit limits than regular credit cards, which can give borrowers greater flexibility and spending power. However, a HELOC may not be the right way to borrow against your home. Read more about HELOCs and home equity loans to learn which option is best for your needs.

Below is a breakdown of what a home equity line of credit is, how you can qualify for one and what typical terms look like.

What Is a HELOC?

A home equity line of credit is similar to a second mortgage, in that the homeowner borrows against his existing mortgage. The equity in the home is used as collateral for the new line of credit, and the borrower can borrow from it for the life of the loan or any other predetermined term.

The line of credit is used like a credit card, with a determined credit limit based on the amount of equity in the home, and a variable interest rate that may fluctuate with the market or with the outstanding balance. When you borrow from your line of credit, you are required to make payments based on the loan agreement. As you repay what you borrowed, your available credit revolves, and you can continue to borrow.

A HELOC is different from a home equity loan, which has set terms, a fixed interest rate, and a consistent payment each month. The lump sum is paid off over the term of the home equity loan, and the amount you can borrow is capped at the loan amount, i.e. the credit does not revolve. A HELOC offers much more flexibility than a home equity loan but may also cost more in interest if rates fluctuate.

How to Qualify for a HELOC

Why you are borrowing is a determining factor when choosing between a HELOC and a home equity loan. A home equity line of credit is best for homeowners who know they will need to continually borrow, such as make tuition payments or funding a long-term remodel.

To qualify, you’ll need to meet the specifications set by the bank, credit union or other lender. Typically, lenders are looking for candidates with a low debt-to-income ratio, consistent employment history and other proof of financial stability. Here are some things you’ll need to make it through the approval process:

Substantial Equity

Most lenders will look for borrowers who have at least 80 percent loan-to-value on their home, meaning that at least 20 percent of the mortgage has been paid off or the home value has increased 20 percent since the home was purchased. The credit limit will be based on the amount of equity in the property. Homeowners might be able to borrow up to the 85 percent of the home’s value.

Read: 4 Creative Uses for a Home Equity Line of Credit

Low Debt-to-Income Ratio

Debt-to-income is the ratio between recurring monthly debt payments and monthly income. If the ratio is appropriately low, lenders are confident in the borrower’s ability to afford the HELOC payments. Expenses that will be factored include mortgage payment, potential HELOC payment, loan interest, property taxes, homeowner’s insurance, and mortgage interest, plus other living expenses and financial obligations like alimony and child support, student and car loan payments, and credit card payments. The overall total of expenses should not be higher than 36% of your pre-tax income.

A Good Credit Score

Your credit score is an indication of your payment history and general credibility as a borrower. The higher your credit score, the more trustworthy you are to lenders. The credit score helps lenders determine how much of a risk they are taking by lending to you, and the lower the risk, the more likely you are to benefit from the lowest interest rates and best terms.

Consistent Employment History

Proving a steady employment history will help assure lenders that you will be able to afford payments on the HELOC. You’ll be asked to provide W-2’s and at least one pay stub. If you’ve been employed less than two years with your current employer, you may be asked to provide additional information.

Restrictions, Requirements and Downsides

It’s not as easy as it looks. Depending on your terms, there may be different restrictions, requirements and downsides in acquiring a HELOC. You’ll likely pay a pretty penny to secure a HELOC, including appraisal costs, an application fee, closing costs and other fees. Other stipulations:

You might not be allowed to rent your property as long as the HELOC is open.
You might have to withdraw within a certain amount of time or meet minimum withdrawal requirements.
While it’s easy and convenient to access the funds, it can also be easy to borrow too much at once, leaving you with a hefty bill to pay all at once.
The lender may freeze, reduce or demand full payment of the loan amount.
Your line of credit may expire with the loan term, which means if you had a large outstanding balance, you may have to pay it.

Not all lenders and loans have the same terms, so be sure to ask questions and compare your options to be sure you’re getting the conditions that work best with your lifestyle and budget.

This article originally appeared on GOBankingRates.com: What Is a Home Equity Line of Credit?

This article by Tess Frame first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

Saturday, May 30, 2015

4 Housing Costs That Could Go Up

One of the nice things about living in the same place year after year is the consistency: You know the best routes home from work, how to prepare the place for seasonal weather changes, where everything belongs and how much it costs to maintain everything.

At the same time, the comfort of familiarity isn’t immune to change, and there are plenty of things about your housing situation that can change, even if you keep the same address. To avoid the shock of a sudden increase in housing expenses, anticipate these common shifts and re-evaluate your budget on a regular, frequent basis. If you’re planning to buy a home soon, this calculator can help you figure out how much house you can afford to help you budget from there.

1. Rent or Mortgage Payment

Your rent is subject to change as the landlord or property manager sees fit, depending on the terms of your lease and the tenancy laws in your state. Even if the rent has been consistent for a few years, don’t be surprised if it goes up, because it happens often. When you find out the rent will increase, do your research: First, check your lease and local laws to make sure the increase is legal, and if it is, consider negotiating. If you’re a good tenant who always pays on time and requires little attention from the property manager, you may be able to minimize the increase.

Mortgage payments can go up too, if you have an adjustable-rate mortgage. The interest rate will be fixed for a period of time (depending on the type), after which the rate will reset periodically — for example, some types adjust as frequently as every month — and affect your payment.

2. Property Taxes

Homeowners may see their property taxes increase for a variety of reasons, often because of government budget shortfalls where they live. These taxes are based on your property value, so as the assessed value of your home changes, either because of market shifts or improvements you’ve made to your home, your tax liability will also change.

3. Utilities

Depending on what part of the country you live in, you may be all too familiar with fluctuations in utility costs. Climate has a lot to do with it, whether you’re constantly changing your temperature control as the four seasons come and go or if you only get a few months of the year when you’re not blasting the air conditioning in your home in the desert.

On top of meteorologic changes, you have to anticipate economic ones. For example, the price of heating oil soared in late 2013 and early 2014, significantly increasing the heating bills of homeowners in the Northeast, where the largest concentration of oil-heated homes in the U.S. reside.

You also have to think about any special discounts you may have had that are expiring. Oftentimes, when you set up a new Internet package, you get a promotional monthly payment for the first year of service, and when that’s over, you have to pay the “normal” rate.

4. Insurance

Any significant value changes you make to your home or the possessions inside it could affect how much insurance coverage you need and, as a result, your insurance premium. Don’t forget to update your insurance, either, because if you’ve fitted your place out with a bunch of fancy new gadgets that weren’t included in your initial insurance estimate, you may not have what you need to replace them if something happens.

Re-evaluating even the most consistent expenses in your budget is an important exercise in maintaining overall financial stability. When you’re not prepared for your living expenses to increase, you strain your resources and may possibly go into debt to make everything work. Racking up debt and damaging your credit score will just make the frustration of surprise expenses worse, so prioritize preparedness. You can see how your debts are affecting your credit by checking your credit scores periodically — which you can do for free on Credit.com.

Related Articles

This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.

How to Make the Most of a Job Loss

Whether you want to call it being let go, terminated, canned, sacked or flat out fired, losing your job rarely feels good. But instead of getting lost in emotions of frustration and depression, it’s a good idea to try to take control and spin this into a positive situation. It’s important to give yourself time to accept your situation as you prepare to move on.

1. Talk It Out

Allow others to help. Seek a friend, business associate, family member or even career coach to be your point person as you move from one phase to the next. They can be a mentor or just a sounding board, but should help you stay motivated.

2. Develop a Search Plan

It’s probably not a good idea to wait around for the next job offer to magically appear. Instead, be proactive, develop a plan and start searching. You may want to increase your networking online and in person while searching for jobs. It’s important to have realistic expectations about what the next job might be and what type of position will make you happy. This can be the chance to find a boss or company that better fits your needs and professional style.

3. Get Yourself Prepared

Beyond getting in touch with old employers or co-workers to help you on the search, it’s a good idea to get your paperwork prepared. Update your resume and portfolio, making yourself a more attractive potential employee. Write personalized cover letters and follow up with thank-you notes after interviews. It’s a good idea to also check in on your finances, check up on your insurance, think about adjusting your retirement payments and apply for government benefits if you qualify. You can create a budget for the time you are unemployed where you are really prioritizing your spending carefully.

Some employers do credit checks as part of the application process (they’ll always notify you before the do so), so take a look at your free annual credit reports to see if there are any negative marks you may need to be prepared to explain. You can also get a free credit report summary every month at Credit.com.

4. Stay Active

It can be a good idea to create a regular exercise plan during this time of unemployment. This can provide some structure in your day so you can get to those to-do and to-apply lists. Exercise is also a natural depression fighter and can get you out of the house and feeling accomplished. Eating healthy will further encourage a positive attitude and high energy level.

5. Explore Alternative Options

If you aren’t exactly excited about getting back into the work force, there are other options. You can look for part-time or consulting work and give yourself time to try some passion projects or focus on a hobby. This could also be a good opportunity to try something new — from traveling or launching a business to investing in further education or trying out a major career switch.

While an unexpected job loss can be devastating at first, there are ways to turn it around and get a fresh start you may not have even realized you wanted or needed.

Related Articles

This article originally appeared on Credit.com.

This article by AJ Smith was distributed by the Personal Finance Syndication Network.

20 Perks of Direct Deposit

online banking

With emails, eStatements, online banking and mobile apps, paper paychecks can seem oddly out of place. Nearly 75 percent of American workers choose to receive paychecks by direct deposit, according to NACHA, the Electronic Payments Association. With the conveniences of direct deposit and certain incentives offered by banks, it’s no wonder customers are moving away from paper checks. See how direct deposit can make managing your day-to-day finances easier.

Read: The First Thing You Should Do With Every Paycheck

20 Reasons to Choose Direct Deposit

1. No Monthly Maintenance Fees

Because direct deposit eliminates the cost of check handling and increases cash flow for the bank, you can avoid certain banking fees. Set up your paycheck to be deposited directly and your bank might waive its monthly maintenance and minimum balance fee for you. You might even qualify for better interest rates.

2. Extra Rewards Points

Some banks entice customers to add direct deposit to their checking accounts by offering extra rewards points. Citibank’s Thank You Rewards is one example.

3. Your Money Is Available Sooner

With direct deposit, your paycheck clears immediately and goes straight into your bank account. You might even have your money payday morning, regardless of the time your employer normally hands out paychecks.

4. Payments Can Post Before Holiday Weekends

Since direct deposit is processed early — normally the day before you’re paid — you can get your paycheck early if a holiday falls on payday. Direct deposit can even help you avoid making time to visit the bank during holidays or the weekend, when lines can be at their longest.

5. Save Better Each Pay Period

Direct deposit can have a positive effect on how you manage your money. By setting up your direct deposit to drop money into different accounts, like your savings and an emergency fund, you can automatically transfer funds to savings so that you don’t forget.

6. Improve Budgeting Skills

If you’re saving up for a vacation or car, direct deposit can help you better budget for the expense. By limiting funds for a vacation to one account, for example, you know precisely how much you can afford to spend while on your trip.

Read: How to Save Money for Vacation From 11 Travel Experts

7. Pay Bills on Time Automatically

Some customers fear automatic bill pay can cause them to overdraft. To ensure you have money in your account when bills are paid, set up automatic payments to occur a few days after each pay period. You can work with credit card companies and other businesses to move your payment due dates to more convenient days of the month to help you avoid overdraft fees.

8. Reduce the Temptation to Spend Money

With a physical paycheck out of the equation, you’re less likely to waste it frivolously on things you don’t need. Depositing checks in person can tempt you to take out a bit of cash to carry in your pocket. Avoid the temptation altogether by dodging the ATM.

9. Setting Up Direct Deposit Is Easy

Making the switch from paper checks to direct deposit is easier than you might think. To sign up, request a direct deposit form from your employer. You will need to provide your bank name and branch, plus your account and routing numbers.

Before you sign up, consider how much money you can afford to put into savings or other accounts. You can easily allocate a certain percentage of your paychecks to other accounts.

10. Direct Deposit Is Free

Your pay is not reduced for using direct deposit. You won’t encounter fees or other charges that dock your paycheck. In fact, you can save time and money by eliminating regular trips to the bank.

11. Cut Paper and Ink Use

Direct deposit reduces your environmental impact by decreasing the amount of paper and ink you use. You can double your efforts by signing up for paperless statements for other accounts.

12. Save Your Employer Time and Money

Direct deposit simplifies the payment and bookkeeping process for your boss. Writing, folding and handing out checks is labor intensive and leaves more room for errors. Your employer will also spend less on paper, ink and other materials needed for paper paychecks.

These savings multiply as more employees switch to direct deposit. By reducing the workload for your HR department and boss, you can free up their time and budget to focus more on providing employee services.

13. Eliminate the Fear of a Lost Check

If your employer traditionally mails out checks, direct deposit can spare you the worry of a lost check. Mail can be delayed or you might be out of town on payday. A direct deposit ensures you always receive your money on time.

14. Increase Your Productivity

Direct deposit reduces employee absenteeism by eliminating your need to visit the bank on break. You can spend time on break focusing on relaxing or gearing up for the next item on your to-do list.

15. Leave Work on Time

Some employers pass out paychecks at the end of the day or lunchtime to avoid distracting employees. Passing out checks at these hours can frustrate employees who are tied to their desks waiting for their paychecks.

16. Switch Banks With Ease

Switching banks is a simple process with direct deposit. When you’re ready to move banks, simply fill out a new direct deposit form with your employer to reroute paychecks into your new account. Remember to rework automatic bill pay accounts to withdraw from your new account.

17. Increase Safety and Security

Because you don’t have to carry around a physical check, there’s no chance of it being lost or stolen. By eliminating any chance you have of losing your paycheck, you don’t have to worry about the delay or embarrassment involved in getting a check reissued by your employer.

18. Direct Deposit Is Flexible

Direct deposit isn’t just for your paycheck. You can sign up for direct deposit to receive expense reimbursements from your employer and travel and cash advances. You can also use direct deposit to build your retirement fund and receive income tax returns and unemployment benefits.

19. Get Easy Access to Financial Information

Online and mobile banking makes it easier for people to review pay stubs and other financial information. You won’t need to worry about keeping a drawer full of pay stubs to keep tabs on your payroll history.

20. Direct Deposit Is Confidential

Since direct deposit moves your funds discreetly from your employer to you, nobody can sneak a peek at your financial information. Your personal finances get the privacy they deserve.

Direct deposit offers a variety of benefits for your finances. Streamline bills and savings with automatic transfers. Find new ways to manage your money to help you save and spend smarter.

This article originally appeared on GOBankingRates.com: 20 Perks of Direct Deposit

This article by Paul Sisolak first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

How to Save for Retirement on a Single Income

saving for retirement old couple

Whether by choice or circumstance, many American households today are making ends meet on a single income. Once-married parents separate, breaking up a finances that were previously. A single parents might have never had a dual income and find themselves handing all the costs of a household, single-handed. Some individuals may find themselves widowed or living with a disabled partner. In other cases, couples make a conscious choice to have one working member of the household, perhaps to rear children or because of lifestyle preferences.

While every circumstance is different, the need to save (and save enough) for retirement does not change. In fact, a third of middle-class Americans today believe they will need to continue working into their 80s in order to achieve their level of comfort in retirement, found a survey conducted by Wells Fargo.

Today most Americans depend on a combination of government programs, employer programs and their own intuition to save the necessary funds to retire comfortably, and those looking to save on a single income might need to get even more creative. Here’s a look at five ways how you can best save for retirement on a single income.

Read: 10 Ways to Take Charge of Your Financial Future in Your 30s and 40s

1. Calculate Your Retirement Income Needs

The first step to determining how to save for retirement is to figure out how much money you need for retirement. Figuring out this number can be intimidating, but online calculators can help. These tools, such as those offered by AARP, CNN Money and Bloomberg Business, can take many variables into consideration including your age, current and potential income level, desired lifestyle at retirement, as well as the rate of inflation in the years to come. Using these tools will allow you to better gauge how much you need to save for retirement.

You can then take that figure and break down it down into what you will need to save year-by-year to make achieving your goals easier (some calculators can help with this step as well). This will give you a starting point to figure out how to fit retirement savings into your everyday budget. Don’t be surprised if that amount is a large portion of your earnings — retirement saving on a single income will require a higher savings rate, especially if the one income has to cover retirement costs for a couple.

2. Live Below Your Means

Once you have a rough figure of how much money you will need to retire, consider ways to cut your cost of living now. Every little bit can help. Try to live off less than you earn, instead of spending every dollar. While the expense that can be cut might vary from person to person, options include using coupons to shop for groceries, eliminating cable TV bills, changing utility providers to incur lower monthly fees and buying secondhand clothing. Any action you take to reduce today’s costs of living will free up additional capital to put toward your retirement savings. When it comes to retirement saving (as you probably noticed with the calculators), time is your best friend. The more years you live below your means and save, the more time your retirement nest egg will have to grow.

3. Open and Fund Retirement Accounts for Each Partner

While some retirement plans are only available through an employer, such as a 401(k) or pension, there are many other options available to working and non-working individuals alike. Single individuals should contribute to a retirement plan through their employer, such as a 401(k), and also open and contribute to an IRA on their own if they want to put away savings past the 401(k) contribution limits

For couples that have only one earner, this can be tricky as many retirement savings products like IRAs require that the account holder have an earned income. For couples that file jointly, however, the non-earning partner can open a personal, spousal IRA that can be funded with whatever money is available within a household. Talk to a qualified financial advisor about additional options that may be available to you and your spouse.

4. Delay or Stagger Social Security Distributions

Many individuals might have once had a full-time income and contributed to Social Security, even if they are currently not earning incomes. If you’re in that boat, you might be eligible to receive benefits upon reaching retirement age even if you were not working every year of your adult life. It requires at least 10 years of earning an income to earn the minimum 40 credits required to qualify for Social Security benefits, but the good news is any annual income of $1,220 or more will earn you credits towards Social Security requirements.

Social Security benefits can be claimed as early as age 62, but waiting to retire will help them avoid a penalty against Social Security earnings up to full retirement age at 66, and earn them a bonus to Social Security income up to age 70. Single earners can consult with a financial planner to determine the best time to begin accepting Social Security retirement benefits, since delaying could give them a big advantage. Likewise, couples might be able to delay claims, stagger their claims or otherwise arrange their Social Security benefits to maximize their incomes with the help of a financial planner.

5. “Insure” a Stable Retirement

When it comes to retirement planning, the idea of stowing away money is often foremost. However, there are also some insurance considerations to keep in mind that can help make sure your retirement happens and that both partners in a household are financially secure.

For instance, income earners can apply for disability insurance. This will provide an income to the household should the sole working adult become injured or incapacitated.

Similarly, life insurance can be purchased for both earning and non-earning adults. Life insurance will provide financial security upon the death of either adult in the household.

Lastly, long-term care insurance is another consideration for older adults as they near retirement. This insurance can help cover a stay in a nursing home, and will allow you to avoid tapping into your precious retirement savings to pay for special care.

This article originally appeared on GOBankingRates.com: How to Save for Retirement on a Single Income

This article by Holly Hammersmith first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

Here’s Why Used Car Loan Rates Are Higher

buying a car

If you’re considering buying a used car, you’re not alone. Nearly 36 million certified preowned vehicles were sold in 2014, according to Edmunds.com. As you shop around for a car, however, you might encounter an unpleasant reality: Interest rates tend be higher for used cars. A higher interest rate can cost you over the life of your loan. Here are four reasons why used cars typically come with higher interest rates.

4 Reasons Used Car Loan Rates are Higher

1. Used Car Values are Harder to Estimate.

While new cars lose value quickly, their depreciation is relatively straightforward. In contrast, a used car’s value can be harder to calculate, as there is a greater chance the car has mechanical problems and unreported accidents, or other issues. For a lender who might need to repossess your car someday, not knowing your car’s value can make for a risky investment.

Lenders also have to account for the fact that cars they repossess might be underwater. With a higher interest rate, your lender mitigates risk by profiting from the loan up front.

2. Manufacturers Incentivize New Car Purchases.

Many major auto manufacturers are in the business of financing new cars. While auto manufacturers’ financing companies might offer discounts and other deals to boost new car sales, these companies typically do not finance or offer incentives for used cars.

Dealerships, meanwhile, can profit from new car sales through dealer holdbacks. A holdback is money a manufacturer pays a dealer for selling a new car. Holdbacks incentivize dealerships to focus on new car sales.

3. Used Car Borrowers Default More Often.

Used car buyers tend to have poor credit scores, according to Experian. Lenders make up for the inherent risk in lending to subprime borrowers by charging higher interest rates. By charging a higher rate, a lender can mitigate the cost of a defaulted loan.

4. Used Cars Require Prep Work for Resale.

When a dealership acquires a used car, they have to invest time and money into the vehicle to prepare it for resale. Whether the car needs a quick repair or minor maintenance, dealerships will try to recoup expenses with higher rates.

Should You Buy New or Used?

While rates for used cars tend to run higher, you might save more on the total cost of a used car. On average, a new car loses 11 percent of its value the moment you drive off the lot, according to Edmunds.com. As the car ages, it depreciates more slowly.

Used cars can be purchased for less, too. So while you might pay a higher rate on a used car, because your vehicle does not depreciate as quickly as a new car, you lose less money over time on your investment.

As you consider vehicles in San Jose, review maintenance records and ask about any previous accidents. If you are in touch with the previous owner of the vehicle, inquire about any problems they encountered. Finding a used car in good mechanical condition can help you save money, so take time to research.

This article originally appeared on GOBankingRates.com: Here’s Why Used Car Loan Rates Are Higher

This article by Kristy Welsh first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

Friday, May 29, 2015

Former House Speaker J. Dennis Hastert Caught Paying Millions Under the Table

dennis hastert

Dennis Hastert, former Speaker of the House and the Republican to hold the office the longest in U.S. history, was charged on Thursday for two alleged felonies. The Intercept reports that the first charge is for “withdrawing cash from his bank accounts in amounts and patterns designed to hide the payments;” the second charge is “lying to the FBI about the purpose of those withdraws once they detected them and then inquired with him.”

Hastert, 73, reportedly agreed to pay $3.5 million to an unnamed individual to “cover up past misconduct,” according to the indictment.

Read: Hillary Clinton and Other Infamous Celebrity Tax Scandals

Why Did Dennis Hastert Get Indicted?

According to the indictment, an unidentified individual and Hastert met in 2010 and made a payment arrangement to cover up past misconduct — in other words, “to keep something quiet,” as The Washington Post described. It is unclear what the “past misconduct” was, but the Los Angeles Times reported Friday that two federal law enforcement officials said Hastert was trying to conceal sexual misconduct. Although the individual in question has not been identified, the person has been a resident of Yorkville, III., and has known Hastert most of his or her life.

After an investigation launched by the FBI in 2013, Hastert was charged by a federal grand jury in Chicago for withdrawing approximately $1.7 million in cash from various banks between 2010 and 2014. He allegedly had been planning to pay a total of $3.5 million to the unnamed individual.

Hastert started out by paying $50,000 in cash to the person in question every six weeks for 15 exchanges, reports the New York Times. In 2012, bank officials questioned him because cash withdrawals in excess of $10,000 need to be reported. Following the questioning, Hastert allegedly changed the payment amounts to less than $10,000 and continued making payments to the individual.

In December 2014, Hastert faced the FBI in a series of questions and said, “I kept the cash. That’s what I’m doing,” according to The Times.

Hastert Faces 10 Years in Prison and $500,000 in Fines

According to NPR, the maximum sentence for each count is approximately five years. Additionally, he faces up to $500,000 in fines.

His current and former colleagues have expressed extreme surprise over the indictment. For example, Rick Santorum told CNN, “It doesn’t make any sense to me. It certainly seems very much out of character.”

Hastert served more than 20 years in Congress, eight of which he served as House Speaker. He represented a suburban Chicago district and was also a former high school teacher and wrestling coach, according to NPR. He entered Congress in 1987, and The Washington Post reports back then he had a net worth of less than $270,000. Hastert reportedly resigned with a net worth between $4 million and $17 million.

Photo credit: Angela Farley/Shutterstock.com

This article originally appeared on GOBankingRates.com: Former House Speaker J. Dennis Hastert Caught Paying Millions Under the Table

This article by Misha Euceph first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

NBA Finals 2015: LeBron James, Stephen Curry and Other Pay-Day Powerhouses

NBA finals

When LeBron James and company take to the court against the Golden State Warriors and high-flying “Splash Brothers” in Game 1 (Thursday, June 4 at 9 p.m. EST), it will be his fifth consecutive appearance in the NBA Finals, a feat not accomplished in the league since the 1960s. He has been crowned champion in two of his previous four finals appearances, all with Miami. It is no surprise then that James is currently the highest-valued player on and off the court.

Cleveland Cavaliers and Golden State Warriors Players’ Salaries

Athletes, in general, are some of the most highly compensated professionals in the United States. Among the highest-earning players on the Warriors and Cavaliers are James (CLE), Kevin Love (CLE), David Lee (GS) and Stephen Curry (GS).

And while rising stars like Klay Thompson (GS) and Kyrie Irving (CLE) don’t bring in yearly salaries even close to the likes of James’, both are guaranteed more than $70 million throughout the remainder of their respective contracts — that’s more than twice the dollar amount of any other guarantee on either team.

2014-2015 NBA Finals Players’ Salaries

The total amount of yearly salaries in this year’s NBA Finals totals to a hefty sum of $154,453,182, and James’ $20,644,400 paycheck makes up around 13 percent of all salaries in the finals. Love comes in a not-so-close second with his $15,719,062 salary for the 2014-2015 season, an amount high enough to account for about 10 percent of all salaries in the finals. Pair James and Love with high-earning, Golden State power forward Lee, and you’ll notice that just three players of the 30 rostered make up for more than one-third of all salaries in the finals.

Considering the caliber of the 30 players listed on the Cleveland Cavaliers and Golden State Warriors rosters for this season, that is quite the feat and a testament to their values on the court.

LeBron James’ Net Worth and Endorsement Earnings

But value off the court is the reason why James’ current net worth is a staggering $270 million, according to CelebrityNetWorth. His endorsement salary for this season totals $44 million, reports Forbes, and accounts for just under 70 percent of his overall yearly earnings ($64.6 million). If James felt so inclined, he could cover about 72 percent of his teammates’ salaries or about 61 percent of all the Golden State players’ salaries with his endorsement earnings from the current season.

“What I do on the floor shows my value,” said James in a 2013 interview. “At the end of the day, I don’t think my value on the floor can really be compensated for…”

Still, there is no denying he is just as much — if not more — of a force to be reckoned with off the court as he is on the court. James’ image and endorsements alone could possibly rake in hundreds of millions in sales for corporations like Nike and Coke, both of which are without a doubt looking forward to the additional media attention the basketball player will draw next Thursday during the NBA Finals.

Photo credit: Keith Allison | Keith Allison

This article originally appeared on GOBankingRates.com: NBA Finals 2015: LeBron James, Stephen Curry and Other Pay-Day Powerhouses

This article by Edward Stepanyants first appeared on GoBankingRates.com and was distributed by the Personal Finance Syndication Network.

The $265 Billion Wave That’s About to Crush Homeowners

Millions of consumers will have to absorb a major hit to their household budget in the coming months. About $265 billion in home equity lines of credit (HELOCs) will enter the repayment period in the next few years, according to a study from Experian, and consumers may see their monthly payments spike — in some cases, triple or quadruple what they previously paid.

HELOC originations soared from 2005 up until the start of the housing crisis, and because many HELOCs enter the repayment phase after 10 years, these billions of dollars in outstanding credit balances are just now coming due. This wave of HELOC resets is expected to significantly stress borrowers’ finances and the lending industry.

“This analysis is critical as we want to not only help lenders prepare and understand the payment stress of their borrowers, but also give consumers an opportunity to understand what the impact may be to their financial status and how to be better prepared for it,” said Michele Raneri, Experian’s vice president of analytics and business development, in a statement about the study.

HELOCs are generally divided into two periods: draw and repayment. During the draw period, consumers can use the line of credit while making minimum, interest-only payments. Once the HELOC resets, consumers can no longer borrow from that line of credit, and they must restore the equity they haven’t yet repaid.

“Instead of using it like a line of credit, borrowing and then repaying the loan to restore the home equity that had been tapped into, most people simply took the maximum amount in cash and never tried to pay down the outstanding amount for the entire 10-year period,” said Charles Phelan, a debt-relief consultant who specializes in HELOC negotiation, in an email. He contributes content on the topic to Credit.com. “In effect, most existing HELOCs are therefore like a huge credit card debt that has been at the maximum limit for years, with only interest expense being paid each month to keep the balance the same and not reduce it.”

How much your payment increases depends on many things, like the interest rate and the length of the repayment period — a shorter repayment period generally translates into a larger increase in payment. Some HELOCs have no repayment period and require a lump-sum repayment when the draw period ends.

The HELOCs that are coming due were opened in very different economic times, under the impression that home values would continue to rise. Because that didn’t happen, borrowers may not be prepared to handle this significant change to their finances.

“A lucky few will be able to absorb the new high monthly payment without defaulting and thereby risking foreclosure, and some will have sufficient equity to obtain a traditional refinance to a new single mortgage,” Phelan wrote. “For a majority of homeowners with HELOCs, however, options are limited due to real estate prices having dropped to the point where the most HELOCs are not covered by equity. This blocks people from refinancing to a single new mortgage at a more reasonable payment level.”

Even if refinancing is an option, it requires the borrower to have great credit. Phelan said borrowers without the ability to refinance can look into government loan-modification programs, Chapter 13 bankruptcy or settling the second lien, but he expects HELOC defaults to skyrocket. No matter how you plan to address your HELOC reset, it’s crucial to have a grasp on your credit standing so you can better research your options for managing repayment and how those options will impact your credit. One way to get your credit scores for free is through Credit.com, where you’ll also get suggestions to help you improve your credit.

“With more than 10 million of these contracts having been issued during 2005-2008, a tsunami of defaults is likely and will be a downward drag on America’s housing recovery for years to come,” Phelan wrote.

If you took out a HELOC between 2005 and 2008 and you’re not sure what you’ll be facing when the HELOC resets, it’s time to look at your agreement and understand what you’re dealing with. Simply by calling your lender, you can get a handle on the situation and prepare to absorb this shock to your finances.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.

How to Save $100,000 By the Time You’re 30

You might have heard an absurd-sounding parable that often makes the rounds on personal finance blogs. This story is about two siblings who want to have a comfortable retirement — let’s make them sisters for this article’s purposes.

The first sister starts saving in her 20s and manages to save $100,000 by the time she turns 30, but then never puts another dollar towards her retirement. The second sister waits until she’s 30 in order to start saving for retirement and then puts away $10,000 every year until she turns 65.

The story is meant to showcase the power of compound interest and saving early for retirement.

It sounds pretty incredulous but the math works out. If you assume the sisters invest at a 7% rate of return, the younger sister is going to have $1,150,615.18 when she retires while the older sister will have $1,065,601.21.

It’s a nice story.

But nowadays with so many 20-somethings drowning in student loan debt and having a hard time finding a job, it might sound impossible to them to save $100,000 by the time they’re 30. That doesn’t mean the story doesn’t apply to them!

You don’t have to reach that magic number in retirement savings by your 30th birthday. After all, this parable is meant to inspire people to start saving as much as possible as early as possible.

So, let’s say you do want to try to save $20,000, or $50,000 or even $100,000 by your 30^th birthday? Here are some tips to do it.

1. Go to a Cheap School

Choosing a cheap college or the one that gives you the most money in scholarships is key. Unless you plan on going into a career that will pay you enough to quickly pay off your student loans and guarantee you a job as soon as you graduate, it doesn’t make a lot of sense to go deep into debt for college. There are a lot of ways to reduce the cost of college and ensure that you graduate with a low amount of student debt.

For example, there are financial planning techniques that you and your parents can use to ensure you qualify for more financial aid. You can also choose to start at a community college and transfer to a four-year university during your degree. Living at home while going to school could be an option for some and would save you a significant amount of money.

2. Avoid Credit Card Debt

While it might be impossible to completely avoid student loan debt, it is often possible to avoid credit card debt. Many people choose to live above their means and use credit cards in order to supplement that. This leads to a vicious cycle of high interest-finance charges that can lead you further into debt (this calculator can help you figure out how long it’ll take you to pay off that credit card debt). Those drinks that you bought two years ago and charged to your credit card will end up costing you a significant amount of interest by the time you actually pay them off. The ideal way to use your credit card is by putting purchases on your card that you’ve already budgeted for and then pay them off at the end of the month — this helps you build your credit while keeping you out of debt. If you want to see how your credit card debt affects you, you can get a free credit report summary from Credit.com, which explains all the factors that are having an impact on your credit.

3. Live Like a Student

I’ve seen a lot of my friends leave college and get a job only to significantly increase the amount that they spend. While they were adept at being thrifty to keep their costs down while they were in college, once they left they found themselves living paycheck to paycheck. Just because you leave college doesn’t mean you should stop living like you’re in college. Get a roommate, take public transit if possible and live frugally. Commit yourself to saving as much of your income as possible every month and put any pay increases towards your savings.

4. Take Advantage of Retirement Matches

A retirement match is like getting free money. Sure, you have to invest some of your own money into your retirement account in order to get it but many employers will match your contributions up to a certain percentage of your annual income. This is an absolute no-brainer. Make signing up for your company’s 401(k) or IRA matching program a priority on your first day at any new job.

5. Get a Second Job or Side Hustle

If it’s okay with your employer, find a way to make a little extra money on the side to supplement your savings. I’ve done things like take on freelance writing jobs, tutor, or help companies develop engagement strategies. You can also do things like start a blog or sell things online.

6. Take Jobs With More Responsibility

The best career choice that I made was to take a job that paid me less but that provided me with significantly more responsibility right out of college. By gaining leadership experience in my first couple of jobs, I was able to very quickly double my salary. Meanwhile, I know people who took better paying jobs with less responsibility and have had to toil for years working their way up the ladder. While it might sound counterintuitive that you’ll be able to save more by the time you’re 30 by working in jobs that pay less right out of college, you may find that employers will pay you more within a couple of years due to the experience you gain.

7. Don’t Be Afraid to Change Jobs

Millennials have a bad reputation for being frequent job switchers. Changing jobs, however, has been the best thing that I have done in my career. By looking for my next opportunity and making a switch, I was once able to make over $15,000 more per year. Just be sure not to switch jobs too often as some employers will be afraid of hiring you.

8. Say No

One of the hardest things about trying to save in your 20s is that you’re going to have to say no to a lot of fun things that your friends will invite you to do. If you do say no, you’ll be much better off financially the long run, but you might feel like you’re missing out in the short-term.

By keeping your eyes on the prize and knowing that because you’re saying no you’ll be more likely to be safe and secure throughout your life, this might make you feel better. If it doesn’t, just suggest an alternative. Instead of going out, host a potluck or party. You could have just as much fun and save money.

9. Set Short-Term Goals

Instead of thinking about saving $100,000 by the time you’re 30, think about saving $10,000 by the time you’re 23 and $20,000 by the time you’re 25. By creating annual and biannual savings goals, you’re less likely to be overwhelmed by the big number and give up. Remember that you’re more likely to make more money in your late 20s than you are in your early 20s, so expect to save more then.

While it might seem impossible to save $100,000 by the time you’re 30, if you follow these steps and end up debt-free with $10,000 in the bank — you’re going to be in a much better place. Saving $100,000 by 30 is a stretch goal that not everyone is going to be able to meet. After all, you might currently be 25 and have $100,000 in student loan debt.

The moral of the story about the two sisters is not necessarily that you need to have $100,000 by 30, so much as it is to point out that the financial choices you make in your 20s will affect you for the rest of your life. By setting yourself up to make good financial choices while you’re in your 20s, you’re setting yourself up for a much easier financial road ahead.

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This article originally appeared on Credit.com.

This article by Amanda Reaume was distributed by the Personal Finance Syndication Network.

4 Tips for Summer House Hunters

Making the decision to buy versus rent is a big step. A home will likely be the largest single purchase you make. Summer is often the big season for real estate; many families with children hope to be settled by the time school starts. In particularly hot real estate markets, houses can sell very quickly, so it’s a good idea to get prepared now for the homebuying process.

1. Know Your Price Point

The most important factor in buying a home is affordability. Considering your marital status, salary, job security, debt and credit situation, it’s important to calculate how much house you can truly afford. Try to get all your financial ducks in a row before you begin your hunt. Look over your credit report (you can get a free annual report), research loan options and get a pre-approved for a mortgage. From there, you can determine how much money to use for your down payment and how much mortgage you can afford in your monthly budget. (You can also get a free credit report summary once a month on Credit.com if you want to improve your credit and track your progress before you apply for the loan.)

2. Find a Real Estate Agent

Even in the age of online listings, it’s often beneficial to have the help of a seasoned expert. Real estate agents can provide useful market knowledge that comes from first-hand experience. They can also provide serious help when it comes to the mounds of paperwork involved in the homebuying process. There are a different types of real estate experts so be sure you find one who fits your needs.

3. Location, Location, Location

When you are looking for your next property, it’s important to have an idea of where you want to live. Whether it is based on your job, school districts or proximity to friends and family, it’s a good idea to figure out what is specifically important to you and base your search on that information. Location is one of the most important things when it comes to resale value and buyer satisfaction.

4. Close the Deal

Once you have found the home that’s right for you, you can get to work on negotiating the terms and the price. It’s important to learn how to make an offer as well as the process of closing on a home. If you thought down payment and mortgage payments were the only costs involved, know now that this is not the case. Between lender charges, settlement services and escrow, closing can be an expensive and lengthy process. It’s important to know what you are paying for and whether you can reduce the costs. Then, get excited — this is the last step in becoming a homeowner.

Buying a new home can be exciting and stressful, but if you plan ahead and take calculated step towards ownership, you can have an easier and more successful experience. If you are hoping to pull the trigger on a home purchase this summer, good luck!

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This article originally appeared on Credit.com.

This article by AJ Smith was distributed by the Personal Finance Syndication Network.

5 Credit Cards You Can Get After Bankruptcy

There is nothing fun about declaring bankruptcy, but those who emerge from it can be thankful for the opportunity to rebuild their finances without the burden of debt. And while one of the quickest ways to rebuild your credit is with a credit card, there are few cards that you can get soon after bankruptcy.

The exception is secured cards, which generally approve all applicants who’ve had their bankruptcy fully discharged, and can offer proof of identity. These cards require that a refundable security deposit be submitted first, but then work almost identically to standard credit cards. Secured card holders must make monthly minimum payments, and are subject to interest charges when they carry a balance. In addition, payments are reported to the three major consumer credit bureaus, allowing you to improve your credit score as you make on-time payments. (There are many ways to get your credit scores for free so you can track your progress over time — including through Credit.com.) So after a year, many secured cardholders are able to transition to a non-secured card and receive their deposits back.

Here are five credit cards you can be approved for after your bankruptcy is fully discharged:

Capital One Secured MasterCard

This is one of the rare secured cards with no annual fee. Cardholders submit a refundable security deposit of $49, $99 or $200 in order to receive an initial credit line of between $200 and $3,000. The standard interest rate for purchases is 24.9% APR, and it has no foreign transaction fees imposed on charges processed outside of the United States.

Wells Fargo Secured Visa Credit Card

New accountholders must submit a minimum of a $300 refundable security deposit, which then becomes their credit limit. Benefits include auto rental collision damage waiver coverage, emergency card replacement and a roadside dispatch service. In addition, cardholders are also covered by a cellular telephone protection policy that covers theft or damage up to $600 (with a $25 deductible), when you charge your monthly service to this card. The standard interest rate is 18.99% APR, and there is a $25 annual fee for this card.

BankAmericard Secured Credit Card

New cardholders pay a minimum refundable security deposit of $300 to open an account. Then, their maximum credit limit (up to $4,900) is granted based on their income, ability to pay and the size of the security deposit provided. After 12 months, the account may be reviewed and cardholders may qualify to have their security deposit returned, without any interruption of their existing account. The standard interest rate is 20.24% and there is a $39 annual fee for this card.

US Bank AeroMexico Visa Secured Card

This is one of the few secured cards that is also a reward card. Cardholders receive double miles on gas and grocery purchases, and a mile per dollar spent elsewhere. In addition, new account holders earn a 5,000-mile bonus and a complimentary companion certificate after their first use of the card, as well as a $99 companion certificate each year with renewal. Other benefits include a complimentary checked bag on AeroMexico flights. There is a 22.99% APR and a $0 introductory annual fee for the first year, which is $25 per year after that.

USAA Secured Card American Express

This card requires a $250 deposit, which is placed in a two-year, interest-earning certificate of deposit (CD). Then, the amount of your deposit, from $250–$3,000 becomes your credit limit. This card includes benefits such as auto rental collision damage waiver, extended warranty coverage and travel accident insurance. To apply, you must become a member of USAA, which is open to active and retired members of the military, as well as their families. The standard interest rate is 9.90%–19.90%, and the annual fee is $35.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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This article originally appeared on Credit.com.

This article by Jason Steele was distributed by the Personal Finance Syndication Network.

How Travelers Checks Came to Be

There used to be an item on almost everyone’s “get ready for vacation” list — go to the bank and pick up travelers checks, and maybe stock up on film for the camera. But times have changed. Many people find it more convenient to use ATMs, credit cards or debit cards for their vacation spending. And now you may be using your smartphone for vacation photos and to manage cash flow.

But travelers checks were (and arguably still are) a more secure way for travelers to carry cash. Customers sign the checks once when they are purchased, and then countersign when they are used, and salesclerks are responsible for making sure the signatures match. They work like cash, and if they are lost, you can report the loss (and the serial numbers) and the checks can be replaced — often within 24 hours.

Since the 1990s, the use of travelers checks has been in decline as other methods of payment, also secure, became more popular. And in recent years, some consumers have complained about some merchants and banks not accepting travelers checks. But travelers checks have a long history in the U.S., predating credit cards.

Travelers checks came to the United States in 1891; American Express employee Marcellus Berry is credited with coming up with the idea after company president James C. Fargo couldn’t get checks cashed in Europe despite his “letter of credit.” It was quite the insult for a widely recognized American businessman who was not quite so recognized when he traveled.

American Express offered the first U.S. “Travelers Cheques,” and competitors later offered similar products. But the allure of not having to carry lots of cash became less meaningful with the wider acceptance of credit cards, and then with debit cards that offered consumer protections.

If you’re planning a trip this summer and are looking to travel safely with your money, you may want to consider a credit card with no foreign transaction fees, as that can add 3% or so to every purchase you make while traveling with the card. (Understanding your credit can help make sure you apply for credit cards for which you’re most likely to be approved. You can check your credit scores for free on Credit.com.)

Keep in mind that travelers checks can help fill the cash gap you may encounter though, so travel prepared!

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.

Help! A Debt Collector Is Going After My 5-Year-Old

Other than a few birthday cards, preschoolers generally don’t get mail. That’s why a Credit.com reader was surprised when the reader’s 5-year-old son received a debt-collection notice:

My son is 5 years old and I recently received a letter in the mail from a collection agency addressed to him saying he owes a debt from his former hospital…he has insurance so I’m not sure how he can owe anything but what advice do you have for me and what can I do to pursue this?

Based on this short message, there are two issues to explore: First, having health insurance doesn’t mean all medical expenses are covered, so it’s definitely possible a health care provider required payment for whatever service the child received, even after insurance. Medical bills often go to a debt collector — sometimes, that’s the first time the patient learns about them — and because collection accounts damage your credit standing, it’s important to address them as soon as you can.

The other issue this reader brings up is what parents and guardians should do when a debt collector pursues a minor.

“Minors can’t contract, by law,” said Craig T. Kimmel, a consumer attorney and founding partner at Kimmel & Silverman. “The general rule is a parent is not responsible for a contract by a minor.” Of course, there’s an exception, and it includes medical care. Medical services fall under the doctrine of necessaries, which varies by state, but generally means a parent or next of kin can be held liable for bills a person incurs out of life-sustaining necessity, like food, shelter and medical care.

“If the debt’s legitimate, the parent must be responsible for the child, whether or not the parents brought the child to the hospital,” Kimmel said.

Because the parent is the one responsible for the debt, the name on the account and contact information used by the debt collector should be updated.

“Calling the debt collector and addressing that is the most straightforward way,” said April Kuehnhoff, a staff attorney at the National Consumer Law Center. “To the extent that the parents are having trouble with the debt collector, they can always go back to the hospital.”

The debt should be reported to the adult’s credit report — a child shouldn’t have a credit report, but parents can request one to make sure the debt doesn’t generate a credit report, and if it does, they can work to fix the problem.

That’s sort of the neat-and-tidy scenario in a situation like this, but it’s possible there’s something messier going on. If your child is receiving debt collection notices or other debt- or credit-related mail, it could be a sign of identity theft — that someone is using your child’s personal information to fraudulently obtain and use credit instruments or medical care. As with any debt collection notice, you should first request a letter of validation from the collector, and if the debt isn’t legitimate, it’s time to start investigating what happened. This is another reason you’d want to request a child’s credit report: to see if they’ve been a victim of identity theft.

Kimmel mentioned another possible reason a minor might receive a debt collection notice: The debt collector is pursuing someone else with the same or a similar name. In that event, the consumer should try to correct the confusion, but if the collector insists on pursuing the wrong person (the minor), the adult has legal recourse under the Fair Debt Collection Practices Act.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.

Can You Spot an Email Scam? (Most People Can’t)

Plenty of folks think they could never be outsmarted by a hacker; plenty of them are wrong. In fact, perhaps 97% are wrong.

Two new studies make this point, and show the devastating consequences of being wrong.

Security firm McAfee has created a tool that lets consumers test their ability to distinguish between real emails and fake “phishing” emails designed to steal their personal information. So far, consumers have failed the test — miserably.

In a report released earlier this month, McAfee said that of the 19,000 plus visitors from more than 140 countries, only 3% of test-takers identified every email correctly.

Even worse, four out of five thought at least one phishing email was real.

“The worldwide average score was 65.4%, which means test takers missed one in four phishing emails on average,” McAfee said.

Those results are dismal. It costs criminals almost nothing to send phishing emails, and this study suggests that they only need to get four of them into a potential victim’s inbox in order to pull off a caper.

That’s bad enough, but traditional phishing attacks are little more than vaguely targeted spam — a fake Bank of America email sent to a million people in the hope than 25,000 are actually Bank of America customers. The really insidious, and increasingly successful, crime is known as “spear phishing.” Rather than send out a million fake messages, spear phishers send out only a handful — or even only one — at a time. These emails are meticulously designed to trick the recipient. A common tactic: A booby-trapped email sent to an important person’s administrative assistant with a realistic-sounding urgent message, such as “Traveling: Please review this document immediately.”

Spear phishing is blamed for some of the most high-profile hack attacks ever. A report released earlier this month by the InfoSec Institute blamed spear phishing for the Target and Sony attacks, and cyberattacks operated by the Syrian Electronic Army and others. The group Citizen Lab provided evidence last year that the Islamic State in Iraq and Syria (ISIS) had used spear phishing attacks against a group attempting to document human rights abuses in an effort to unmask its members’ location.

“Thank you for your efforts to deliver a true picture of the reality of life in Raqqah,” reads a translation of part of the email, Citizen Lab claims. “We are preparing a lengthy news report on the realities of life in Raqqah. We are sharing some information with you with the hope that you will correct it in case it contains errors. …We also hope that if you happen to be on Facebook, you could provide us with the account of the person responsible for the campaign.”

A recipient who clicked on the attachment in the email was infected with software that attempted to transmit the victim’s location to the sender, Citizen Lab says.

It should be no surprise that phishing emails have also been used to attack workers at America’s critical infrastructure plants and other crucial systems.

“Spear phishing represents a serious threat for every industry, and the possibility that a group of terrorists will use this technique is concrete,’ the InfoSec report concludes.

The best defense against phishing and spear phishing is humility. Yes, you can fall for a well-crafted trick email. It only takes one moment of weakness, one click when you are distracted by something seemingly more important, to make a critical lapse in judgment that can ruin your whole day, or much worse. Your best defense: Be skeptical of every email, even those that appear to be sent by friends or co-workers. If you have any feelings of doubt, don’t click — call.

McAfee offers these additional tips:

Keep an eye out for telltale signs. Bad grammar, bad syntax, suspicious senders and links to misspelled URL addresses are all telltale signs of phishing.
Also watch for emails from unknown senders or ones asking you for personal information, especially if it’s in a threatening manner.

You may not always know that your information has been compromised until the damage has already been done. However, regularly checking your account statements, credit reports and credit scores for signs of fraudulent transactions and new accounts can help you spot many problems before they become even bigger. You can get your credit reports for free every year from AnnualCreditReport.com, and you can get two of your credit scores for free every month on Credit.com to watch for big, unexpected changes that could be a sign of fraud.

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This article originally appeared on Credit.com.

This article by Bob Sullivan was distributed by the Personal Finance Syndication Network.