The Right Mindset Is In The Grey Matter

After 9 years of teaching alternative financial models I’ve discovered the critical challenge consumer’s face when trying to absorb and understand the concepts I teach; it is their mindset. If we are to learn anything new, whether it be a new golf swing or financial concept our minds need to be open to accepting something new and unfamiliar, regardless of how contrarian it might appear. If we are to allow our minds and our beliefs to accept something new we need to be in the right frame of mind. Our mindset must tell us; “listen up and pay attention, this could be good”.

Have you ever noticed how extreme we get with many of the decisions we make in our life? There seems to be no middle ground once we’ve made our decision. We tend to gravitate to and then live at the extremities of our beliefs. Our world becomes black or white; no middle ground. When our beliefs live at one end of the spectrum or another our beliefs become permanent and we tend to defend that position with all of our might. In our vane effort to protect our pride, ego or image, human nature disallows us to deviate from our decisions because deviation equates to an element of failure. This life of extremes prevails with our financial decisions, especially so when the discussion turns to our debt management decisions. In fact, when the debt discussion comes into play often time’s people will hold on to that black or white extreme like it was their first born child. The chosen methodology or strategy becomes the immovable foundation of their debt management and debt repayment strategies.

You may have heard in the past that ALL debt is bad. This is a good example of an extreme mentality. People who live at this end of the spectrum believe they are categorically correct (ALL debt is bad) and there’s nothing you can say to convince them otherwise. Do you know anyone like this? It’s hard to have a meaningful conversation with this type of person. But, if they’re extremism is so right and everyone should live to that extreme then what argument is there for millionaires who don’t have debt (consumer/installment debt), but they have mortgages? From the ‘ALL debt is bad’ extreme; are millionaires financially inept because they carry mortgage debt? Such a heavy handed stance indicates an equally extreme level of arrogance and ignorance. One of my favorite sayings is by Dr. Wayne Dwyer: “The highest form of ignorance is to reject something you know nothing about.”

I’ve heard well respected financial “guru’s” say; “any 65 year old with any mortgage debt is an idiot”. I believe anyone who makes such a statement has no compassion or understanding for the human condition. If a 65 year old has mortgage debt there is more than likely a good reason. There are 101 circumstantial reasons a 65 year old has mortgage debt, but I’m pretty sure it wasn’t in his initial financial plans. If any one consumer has mortgage debt that late in life I can promise you it was due to circumstance, whether it is planned or unplanned. The point; making that kind of extreme judgment on an individual without first learning about and understanding their human condition is appalling.

Here’s the rub; we live within and life exists between the extremes. Nothing in life resides at the extreme black or white end of the spectrum. We live in the grey matter and we continually gravitate within the shades of grey as we manage our way thru life. Take a quick inventory of your debt management beliefs. Do you live by one extreme and discount all others? Can you gravitate towards middle ground to get a better perspective of your options and how to compare the two? Mentally notate those beliefs that live at the rigid extremes and recognize their limitations. You may already exist in the grey matter with your investments. You have to do the same on the debt side of the ledger if you want better results.

When the decision process resides within the grey matter you have more clarity and it is easier to compare and contrast without extreme prejudice. When you stand right in the middle and approach life’s decisions from a balanced perspective you have an equal view of each extreme, of each argument. A balanced perspective allows new light to shine in from both sides. A clear vision of the pro’s and con’s of each precipitates a decision that fits your particular circumstance or situation as opposed to force fitting the extreme into a world it may not belong. We learned this at a very early age: don’t force the puzzle piece to fit, find the one that fits just right. To do this you have to look at all of the puzzle pieces, not just the piece in your hand.

When it comes to decisions about debt management and debt repayment force yourself to reside in the grey matter before making your decisions. Stand in the middle. Don’t be swayed by those who advise from the extremities. Look at your options without extreme influence. Recognize that extreme choices are inflexible and intolerant. Living within extreme conditions ultimately lead to limited results and limited possibilities. Stand in the middle and let some new light shine on your beliefs. With new light comes new perspective. A new perspective will present opportunities that may have not been visible from extremes.

The truth is in the proof!

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

Saving with a “Salvaged Title” Car

Many families need a reliable, spacious vehicle. For many, new vehicles are unaffordable. According to Kelley Blue Book, the average cost of a 2015 vehicle is over $33k. Ouch. That’s why many are looking for affordable options. Some are considering buying a wrecked vehicle that has been repaired or can be. Prices are drastically reduced, which makes them very appealing. While it may not be an option for everyone, guidance is needed to make the safest choice possible.

Common sense tells buyers to look for light damage; however, most don’t know what should be avoided. With the right professional advice, an informed decision can be made. A professional can determine the extent of damage, needed repairs, and safety factors. Even if the vehicle has already been repaired, it should be properly inspected.

Rodney Goins of Goins Automotive in Shelby, North Carolina has been in the auto repair business for 31 years. As a body repair expert, he has extensive experience in salvage repair. He feels there are four types of damage that should be avoided: all water damage (especially salt water), cowl damage (located at front door hinges), major front-end damage (can damage sensors), and rear damage to hybrid vehicles (can damage battery). Mr. Goins advises that major frame damage should be avoided, but light frame damage can be repaired easier now than in the past. Your body repair expert can alert you to what vehicles should be avoided.

Mr. Goins says other light damage may be acceptable. Examples are light rear damage (except to hybrid vehicles) and hail damage. If you’re considering a hail-damaged vehicle, he advises to inspect for water damage. Another option is a theft recovery vehicle that has little to no damage. A professional can determine safety and extent of damage.

Choose an expert with multiple years of repair experience and favorable reviews. If you don’t know one, contact your local Better Business Bureau. Another option is to find one through social media outlets; ask others for recommendations and then follow up to meet them and inspect their backgrounds. Mr. Goins says not to "be fooled" by certifications; some only require a class and test. Instead, look for salvage experience and familiarity with state laws. Once you find a trusted professional, ask if they will inspect a damaged vehicle. If so, confirm their inspection fee. If possible, it’s best to accompany them during the inspection. This will allow time for questions and concerns to be addressed. If it passes inspection, you can then decide if it’s the right vehicle for you and your family.

If you decide on repairs, create a contract. It should outline repairs, parts, and labor costs, as well as an estimated period for completion and be signed and dated by both parties. In the event of damage or theft, confirm that the shop has insurance and include it in the contract.

Loan requirements vary, and many lending institutions don’t offer loans on salvage vehicles. April Sprague of State Employees Credit Union in Shelby, North Carolina advises that financial institutions have varying policies and procedures; it’s best to check with each one. She adds that lenders want to be helpful and may be able to offer alternate loan options if a traditional vehicle loan isn’t viable. It’s best to investigate options before a purchase is made.

It’s worth noting that title laws vary from state-to-state. For example, North Carolina requires that a repaired salvage vehicle pass an inspection by an official DMV (Department of Motor Vehicles) inspector. If it passes, a Rebuilt Title is issued and it can be returned to the road. Other states may vary, so check your local DMV for guidelines and procedures.

Many buyers have purchased salvaged vehicles with satisfactory results; two of those live in Dallas, North Carolina. Years ago, Jerry Thomas purchased a wrecked 1996 Chevrolet truck. It had light damage to the front and side. He purchased and repaired it for a fraction of the cost of a new vehicle. He felt it was one of his most reliable vehicles ever owned. He added that he later purchased other salvage vehicles with gratifying results. His friend, Ronnie Wiggins, added that one of his favorite vehicles was a 2004 Chevrolet Impala with salvage history. He also had good results and drove it for years. Both said they would purchase another salvage vehicle if the price fit their budget.

If budget restrictions hinder your vehicle purchase, a salvage vehicle may be an option. While not for all consumers, big savings are possible for those willing to take the necessary steps. By following regulations and hiring an expert, a salvage vehicle might stretch your dollars and fit your family needs.

Kelli is a freelance writer who lives on a small horse farm in the North Carolina foothills. She lives with her husband, horses, dogs, and bossy cats. Her hobby is saving money. Today she’s sharing her writing with TheDollarStretcher.com. Visit today for more on how to buy a cheap, reliable used car and buying an insurance friendly car.

This article by Kelli Clevenger first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.

What’s that chip doing on my credit card?

FTC Returns Money to Consumers Tricked into Buying Phony Health Insurance

The Federal Trade Commission is mailing 6,832 checks totaling more than $1.1 million to consumers who lost money to a health insurance scam.

In 2012, the FTC charged the Independent Association of Businesses (IAB) and Health Service Providers (HSP) defendants with violating the FTC Act and the FTC’s Telemarketing Sales Rule by deceiving consumers seeking comprehensive health insurance. Instead of health coverage, consumers received membership in IAB, an obscure trade association that provided purported discounts on services such as identity-theft protection, travel, and roadside assistance, and some healthcare related benefits that were subject to broad exclusions and limitations.

Under settlement orders issued in 2013 and 2014, the defendants are banned from selling healthcare-related products.

Consumers who purchased IAB memberships from HSP’s telemarketers will receive checks in the amount of $167.63 from the FTC’s refund administrator, Gilardi & Co., LLC. Consumers should deposit or cash the checks within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed. 

Consumers who receive checks and have questions can contact Gilardi & Co. at 1-877-255-2476. Learn more about the FTC’s refund program.

Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.

Raising Future Millionaires

Maybe it’s a bit presumptuous on my part to title this post “Raising Future Millionaires”, a better title may have been “Raising Potential Future Millionaires.” Although I do not know what the future exactly holds for my three children, I do know my wife and I have laid down a solid foundation for them so far. No I’m not here to pat myself on my own back, we still have a long way to go before we can kick back and declare victory on this one. I do however feel like we have laid such a solid path for them. We have led and taught be example, just like our parents did for us. My parents were married for 50 years and my in-laws are on their way. We have always taught the basics, right from wrong, say please and thank you, be respectful, be humble, be kind, share, forgive, and many other things as our children have grown up. It hasn’t been perfect, as an example we are in the middle of negotiating how and when summer homework will be done. (When I say negotiating, I mean telling our children it needs to be done by this date or else) Then five years ago we introduced money into the equation. The initial involvement was just so they understood why they were hearing the word “no” so often, now it has even bigger meaning.

Paths to FIRE

Talking to teenagers about a financial independence, or retiring early and my guess is you are going to get a lot of blank stares. In a lot of cases these teenagers haven’t ever worked a full-time job yet, but as I’ve mentioned it before if you need an attention grabber or conversation starter with your teenager how about trying “how would you like to be a millionaire?” This usually peaks their interest.

That’s been the key for us, making sure when we discuss money in our home that has meaning, and purpose. The initial conversation with our children was that there were going to be changes, in order for us to clean up our financial mess we had to make sacrifices. That was a good start, but unless we explained the “why” there would have been a lot of kicking and screaming. Our why was to have a better future, to reduce stress, to build wealth, my wife and I put it in terms our children could understand. It meant we could say “no” less, they agreed at the time that was a good thing. We than began to involved them more as the years went on, and as I look at it now it’s an incredible gift, because if these things are used from a young age that have the potential to grow exponentially.

Involvement – It just that simple, just involving our children in money discussion raises the financial IQ. They know that it’s okay to talk about money, even in bad times. This has taken the fear and taboo out of money discussions.

The “Why” – They understand the why behind shutting off lights or ticking the heat down a degree or two in the winter to save, because they’ve seen the electric and heating bills. If we blindly yelled at them all the time for these things it would create resentment. They understand why we shop with a list, why we compare prices, and why we wait before making a major purchase. It’s all about having a purpose for our money.

Tools – We’ve discussed things like budgets, a companies 401K match, saving, reward credit cards, compound interest, and the rule of 72. All tools that they can use to help build and protect wealth.

I’ve always been excited for my children futures, and believed we were doing a good job preparing them for their futures, but after educating ourselves on personal finance I realized we overlooked this piece of it. We have now taught them to learn from our mistakes and showed them with discipline and team work that mistake can be overcome. I’m now ever more excited for their futures. Adding the financial and career pieces to our parenting feels like we are rounding out our parenting curriculum. I’m hopefully that they will take these lesson and run with them, turning what we are doing in our forties into habits they form in their twenties, or possible earlier.

I’m looking forward to sitting back and watching it all unfold and helping in any way I can, advice, course correction, or maybe just asking “how would you like to be a millionaire?”

This article by Brian Brandow first appeared on Debt Discipline and was distributed by the Personal Finance Syndication Network.

5 Inspiring Warren Buffett Investing Quotes

Warren Buffett is considered one of the most successful investors of our time. According to BusinessInsider‘s Andy Kiersz, in “Here’s How Rich You’d Be if You’d Invested $1,000 in Buffett Way Back When”, $1,000 invested in Berkshire Hathaway in 1964, would be worth about $11.6 million today. This information uses the 1964 share price of $19 and the February 27, 2015 closing price of $221,180 for Buffett’s Berkshire Hathaway (BRK-A). With the more recent closing share price of $194,620 (September 25, 2015) you’d still be rich.

I don’t know about you, but this type of information doesn’t particularly cheer me up. The ‘woulda, coulda, shoulda’s’ aren’t particularly helpful. Let’s pull out the helpful nuggets from these inspiring warren buffett investing quotes.

Use these inspiring Warren Buffett Investing quotes to educate and motivate you to investing greatness.

Here are some of the Top Inspiring Warren Buffett Investing Quotes: 

“Rule No. 1: Never lose money. Rule No. 2: Never Forget rule No. 1”

This is a great rule, but as any seasoned investor knows, if you invest in the financial markets you occasionally lose money. In fact, even Warren Buffett has lost money a time or two. The best way to avoid losing money on an investment is to do your homework, research the stock or fund and buy at the right price.

Bonus content: What Does PE Ratio Mean?>>>

“Price is what you pay. Value is what you get.”

Investing in individual stocks is time consuming and requires a tremendous amount of research. That’s why I don’t invest in individual stocks anymore. But even if you stick to mutual funds, you may overpay. 

Stocks and stock funds have a price tag(s) which are calculated with valuation ratios. If you pay too much, even the best stock bought at the wrong price will take your money.

“In the business world, the rear-view mirror is always cleaner than the windshield.”

Phrased another way, ‘hindsight is 20-20’. If anyone says they know what’s going to happen in the future, run the other direction. The best way to invest is by being lazy and average. In any given year no more than approximately 25-35% of active managers beat the market indexes. And the catch is that even if someone beats the markets one year, it’s unlikely they’ll outperform the next.

“Only buy something you’d be happy to hold if the market shut down for 10 years.”

This means, active trading is a losers game. Investor’s who buy and sell are more likely to lag the market than to beat it. Look at the research! 

On a John Bogle video I watched awhile ago, the founder of the modern day index fund and Vanguard Investments suggested (tongue-in-cheek) that you should invest throughout your life and only check the stocks, bonds, and funds prices when it’s time to retire. Although checking mutual fund prices once, at retirement, is not enough checking prices every week is too often. Once per year or quarter, will help you sleep better.

“What I advise here is essentially identical to certain instructions I’ve laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife’s benefit. . . . My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors . .” ~ CFA Institute.org; Enterprising Investor in “Warren Buffett’s 90-10 Rule of Thumb for Retirement Investing” on March 4, 2014.

Last year on a CNBC Squak Box interview, he  hit it out of the park with this  inspiring Warren Buffett investing quote. In that quote, Buffett disclosed plans for how to invest his estate. Guess what, it’s in index funds. If the greatest investor of this generation recommends a passive investing approach, maybe you should listen!

These 5 Inspiring Warren Buffett Investing Quotes and their interpretation can serve as a ‘cheat sheet’ for index fund investing practice and success.

Source; Quotes 1-4 – Ruleoneinvesting.com, “29 Warren Buffett Quotes on Investing and Success”.

This article by Barbara A. Friedberg first appeared on Barbara Friedberg Personal Finance and was distributed by the Personal Finance Syndication Network.

HMDA data shows more people took out a mortgage to purchase a home in 2014 than 2013

Know Before You Owe: Loan Estimate

Know Before You Owe: Closing Disclosure

How To Empower Yourself Through Personal Finance

“What do you do?”

After your name, it’s probably the most common question people ask – I know I do.

During my career as a full-time actor I would state my profession, either dreading or anticipating the inevitable follow up – “So, what are you working on?” If I was doing a show, I’d excitedly humble brag about it, and if I wasn’t, things would get a little awkward.

When people ask, “What do you do?” these days, I no longer feel that uncomfortable angst, I just find myself responding, “Where do I begin?”

Eventually all the pieces of my professional life emerge – personal finance writer, author, speaker, actor, etc. – and people, understandably, want to know how they all fit together. More than anything, they want to understand how a musical theater actor becomes a personal finance entrepreneur.

Though my two occupational pathways are on seemingly opposite ends of the professional spectrum, the discovery and evolution of my personal finance career could not have been more natural – or necessary.

How Personal Finance Empowered Me

Growing up, I was one of those kids who did well with lots of things- school, music, gymnastics, theater. Not because I was particularly exceptional, but because I understood what I needed to do to get ahead and was able to execute. Unfortunately, that kind of formulaic approach to success no longer applied when I found myself floundering in the real world.

It was hard to accept that efforts and results were not always equal and that so very little of anything was within my control. After five years or so stumbling between epic highs and painful lows, I started searching out more sustainable approaches to success. I turned to the things I could harness some power over and poured my efforts into those endeavors, leading to the surprise discovery of two of my greatest passions – running and personal finance.

While I couldn’t control much of what happened in between the time I’d leave an audition room and the time I was offered or passed over for a job, I did have control over my money, however limited – how I was spending it, even how I was earning it – though it didn’t always feel that way.

I slowly began to realize the power of the choices I was making every day – how I was prioritizing my spending, how I was choosing my income streams, etc. Understanding that I had ownership of my financial life, I became passionate about personal finance, and soon after, empowered.

I developed new income streams by chronicling my empowerment journey and eventually stumbled upon a career path that empowers me each and every day, without needing permission from anyone else or reinforcement from an external “employment status”.

Personal finance changed my life in more ways than one. It empowered me to realize the tremendous opportunities available through smart financial habits, intentional goal setting and a positive money mindset.

How Personal Finance Empowers Others

In sharing my story of empowerment through personal finance, I’ve been lucky enough to hear from others who’ve experienced similar life changing liberations.

Jennifer Bright Reich, cofounder of http://ift.tt/1lN1Dxm, felt empowered to leave her bad marriage after improving her knowledge of personal finance fundamentals through a financial education course. “It completely changed my way of thinking about, spending and budgeting money. After a year following the program, I had financial independence, knowledge and courage to leave my marriage. And just a few months out, I know I can make it with my boys on my own.”

Amanda Bowles wrote to me from a rooftop bar in Istanbul after three weeks of island hopping through Greece –all part of fulfilling her dream of an around the world trip. “Years ago I set up a savings account, linked it to my checking account and set up automatic transfers every two weeks on the day after my paycheck hit the account. I set up a few different sub-accounts (long term savings, taxes and insurance, fun money, etc.). As I received annual raises year after year, I upped the amount that moved into those savings accounts – leaving my take-home amount flat. I was thrilled to see how quickly the savings were building up.” Those years of small, dedicated savings empowered Amanda’s realization of her travel goals.

Jordette Singleton harnessed control over her finances by cutting back on discretionary expenses and putting those resources toward launching her own online dress boutique, bootstrapping her way to successful entrepreneurship. “I had a business background and degree, lots of ideas, not the greatest credit and no money. I stopped going to the salon, cooked for my children everyday instead of eating out and dropped my husband off at work whenever I could to save money on gas. I started to purchase dresses wholesale out of each paycheck and hired a freelance web designer to create my website.” Adapting frugal spending choices freed up the money Jordette needed to get her business off the ground, empowering her entrepreneurial desires.

The stories of financial empowerment are varied, but they all share common traits, most notably, a shift toward understanding and using money as a tool, rather than a hindrance or excuse.

If you find yourself subscribing to negative financial scripts – “It’s hard to make money” or “I’m bad at math” or “I don’t have enough money to worry about managing my money” or anything else- challenge yourself to realize your own fiscal control.

How to Empower Yourself Through Personal Finance

Let Go of Limitations. What limiting money beliefs are you holding onto? For the longest time I subscribed to the idea that my job title, degree, employer and a host of other external factors were the reasons for my limited income. As soon as I identified that limiting belief, I was able to bust it, realizing my own capacity to generate earnings on my own terms and tripling my annual income.

Identify the negative money scripts that stand in the way of achieving your goals so that you can challenge and change whatever destructive financial patterns you’ve adopted and replace them with positive, empowering alternatives. 

Make it Tangible. Connect your goals to your finances by breaking them down into next actionable steps and costs. By putting big, abstract dreams into tangible terms, i.e. numbers, you begin to put yourself in a position of power by knowing exactly what you need to succeed.

Knowing how the numbers directly affect your ability to live out your dreams – be they starting a business, traveling the world or enabling independence – can help keep you motivated and on track in your financial journey.

Build a Vocabulary. People are often intimidated by personal finance, shutting down before they even begin for fear of not understanding. Don’t fall into that disempowering trap. The fundamentals of money are actually quite common sense – you just need to develop your vocabulary for understanding them. Jargon is everywhere, but when you take it upon yourself to learn the basics and give yourself a context for understanding those terms, you quickly realize how simple and empowering financial planning can be.

Find Community. The money talk taboo has certainly overstayed its welcome in mainstream society, but you can find community by seeking out individuals and resources that share your financial values. I spent last weekend at a financial blogging and media conference with over 900 other attendees – all of whom were as honest and open about their financial triumphs as their fiscal challenges.

Find your tribe, in person or online, the people that speak to you and support your money mission. I walked away from the conference last weekend feeling inspired and ready to conquer the world – no limiting money script has a chance of standing up to a community that makes me feel empowered in that way. Find yours.

Ultimately, personal finance is personal, not just in the sense that values vary from person to person, but also in the sense that it’s up to each individual to decide how they think and act around money. That’s not to say that external circumstances can’t and don’t make things challenging, but realizing that the money choices we make in response are up to us is hugely empowering.

This article by Stefanie O’Connell first appeared on The Broke and Beautiful Life and was distributed by the Personal Finance Syndication Network.

3 Financial Habits to Start Before Fed Raises Interest Rates

Predicting if and when the Federal Reserve will raise interest rates is a fool’s game, though plenty of people try doing it.

Last week’s inaction by the Fed to hold interest rates where they are may prolong global uncertainty, though it’s a global uncertainty that has been around since the last time the Fed raised interest rates in 2006. Its main interest rate has remained practically zero since then.

The Washington Post reported that some Fed officials expect interest rates to be raised sometime this year — which leaves only four months. Its top officials are scheduled to meet twice more in 2015: October and December.

3 ways to beat the Fed

If interest rates do rise this year, there are some financial habits worth starting now in preparation for the rise. Here are three:

Repay student loans

This may be difficult for college students, many of whom have student loans, but limiting debt and paying loans before graduation will help avoid inflated balances and reduce monthly payments after graduation, according to Scott Smith, president of Seattle-based CreditRepair.com.

Early repayment will free up income for post-grad purposes. It will also reduce a borrower’s credit utilization ratio, an important factor in keeping a credit score as high as possible.

Higher credit scores will help qualify you for lower interest rate loans, which will ultimately offset any future interest rate hikes by the Fed, Smith says.

Don’t carry credit card balances

Credit cards can help build a credit score if used properly. If you’re carrying a monthly balance, it could hurt your credit score, as could making late payments.

An interest rate hike will ultimately cause credit card rates to increase, affecting people with large credit card debt.

When applying for a credit card, consider annual fees, your ability to repay and all service charges, Smith recommends.

Practicing discipline with a credit card is important, as is paying all of your bills on time. By doing this, an interest rate hike will have very little effect on credit card users.

Savings accounts finally win

The best part about the Fed raising interest rates is that savings account will finally see a rate hike in interest rates.

Saving is difficult, so starting the habit of saving now before interest rates rise will make it a lot easier when you’re earning more money on your savings.

This article by Aaron Crowe first appeared on CashSmarter.com and was distributed by the Personal Finance Syndication Network.

Are Kids Really That Expensive?

Becoming parents this summer has been the biggest change in our lives. So far it’s been a blast with our daughter. She’s such a happy and laid back baby.

We did our best to prepare for the big event including emotionally and financially. I’ve heard from people (friends and online blogging buddies) that raising a kid can be expensive.

I decided to look at the numbers and examine how our baby girl is affecting our finances.

Can You Afford Having Kids?

Where do people get that idea that kids are expensive? One source often cited is the USDA’s Cost of Raising a Child Calculator.

Based on how many kids you have and how old they are, you can get national and regional averages for the costs associated with children.

I tried it out to see what it said and compare it to our expenses. Here’s how it breaks down for a child under 1 year of age:

• Housing ($4,375)
• Food ($1,675)
• Transportation ($1,863)
• Clothing ($913)
• Health Care ($963)
• Childcare ($3,238)
• Other Expenses ($950)

The grand total is $13,975 for the Southeast. The national average for a child under the age of 1 is $14,938.

Looking at the Costs

If you look at the numbers though, many of the expenses are sunk costs.

Housing

We bought our townhouse before we had our daughter. We have no intention of upgrading our housing JUST for her. We converted our guest room into her nursery. It’s the smallest bedroom area, but it’s definitely big enough for her right now.

We don’t plan on moving in the immediate future. We’re working to pay off our mortgage faster by sending in extra payments.

Since the baby expenses haven’t hurt our budget we’re planning on keeping the extra payment amounts the same. However, should we need more wiggle room  in our budget, we’ll redirect those payments.

I think the increasing in housing is due to utility bills increasing. Right now, we’ve see our electric bill go up, not because of the baby though.

With the heatwave we’ve had the air conditioning on. With the cool down (relatively), we’ve been using the windows and fans.

Food

We choose to breastfeed, not for the financial benefits (it’s free!), but for the health ones. So far it’s going well.

Groceries have gone up as I’m eating more to accommodate my new role feeding my child. The plus side is that we’re eating out less often and cooking more meals at home.

Should something change and we have to switch to formula, it will raise the costs, but I still don’t see how it would add up to almost $1,700. Sites like Baby Cheapskate often posts deals on formula, so parents who are formula feeding can get some savings.

Transportation

While the baby hasn’t affected our transportation bills yet, she will have an effect on what car we purchase next year.

Right now my husband drives a coupe and I drive small sedan. We were planning on buying a car, but we’re looking at roomier cars with the baby on board now.

Our plan is to buy the car with cash, either a family sedan or a small crossover. I’ll track our progress with our next car purchase.

Health Care

I think having a baby will affect this area of our budget the most. Who knew babies needed so many well visits? Fortunately we have well visits covered 100%.

We have a $2,500 deductible, but when we had to pay that for her delivery, we had most of that reimbursed by my husband’s job.

What eats a big part of my husband’s paycheck now is the health insurance premiums. Before the baby, our plan was costing us $101.06 every paycheck.

Now the family premiums are $193.33 each paycheck. If we decide to have more children, the premium doesn’t increase.

Clothing

I’m really surprised with this one. I realized that we’re fortunate to have our friends grab some of the baby’s outfits for us at our shower.

For us, we have bought a few items new, but I’m a big fan of the kids consignment shop near us.

Babies grow so quickly, I wouldn’t want to spend a huge amount of money on my daughter’s clothes.

Thoughts on Having Kids

I know we’re just beginning this journey, so numbers will change as time progresses, but I want to share what we’ve learned so far.

I hope having an open discussion about the finances of being parents can help us to pick up tips from one another.

I do think parents should be prepared and save money for expected and unexpected expenses.

I agree with Glen’s post that many well meaning parents that sometimes they go overboard with their kids.

It’s a balancing act and we have keep an eye on our own spending. I’d love to hear your tips and stories.

This article by Elle Martinez first appeared on Couple Money and was distributed by the Personal Finance Syndication Network.

How to Budget on a Teacher’s Salary

How Much Do We Need to Save For a Baby?

Having a baby girl has been a wonderful blessing for us. As we’re settling into her 3rd month, we’re constantly surprised at how quickly she’s growing.

When we found out we were expecting, my husband and I decided that we were going to set aside some money to cover baby expenses.

If you’re in the same boat, I hope this helps you find the right amount for your family.

Why We Saved Up for the Baby

We’ve been comfortable with our emergency fund/savings in general, but we wanted to step it up. We’re now trying to be a bit more conservative -having a full six months of essential expenses tucked away makes us feel a bit more comfortable.

Between diapers, baby gear, and unexpected baby expenses, we wanted some peace of mind knowing that we can cover these bills as they come.

Though we expect some expenses to go decrease (less eating out for example), we want to play it safe and assume in our estimates that we’ll see an overall increase as we get adjusted to being parents.

What Does the Baby Fund Needs to Cover?

What expenses can you expect? Every family is different, but here are some estimates based on what we’ve had and what our friends have shared:

Hospital Bill

While we were pregnant I asked friends, both with insurance and without, how much their hospital bill was for their babies.

For those without, the bill was approximately $10,000-$12,000. For others, it was around a few thousand.

The bill we received from the hospital and our OB/GYN office was $2,500. Our insurance has a higher deductible than some people’s policies, so that’s how it worked out .

We were fortunate that my husband’s job reimbursed our expenses and we were able to get a good discount by paying our medical bills promptly. That saved us significant money.

Diapers

Babies will go through more diapers that you’d expect. Even if you get diapers as gifts (wonderful idea- put that on the top of your baby registry!), you’ll still need quite a few.

The Bump has these estimates when it comes to diapers:

Newborn babies use an average of 75 diapers per week and up to 320 diapers per month.

At about $.25 per diaper, that adds up over the year. Tack on two boxes of wipes per month ($3 each), and baby soap, lotion, powder, oil, and diaper rash ointment (about $14 month) and you have an additional $240 per year.

Cloth diapers will save you money, if you plan to do the laundering, however using a diaper service costs about the same as disposable diapers.

Right now we’re using disposable diapers with our daughter. To save on diapers we’ve joined Amazon Mom  and with a diaper subscription, we’re saving 30%.

For us, that means a box of 190+ diapers cost about $20 each month.

You may also want to consider getting cloth diapers. while there is an upfront cost, you can save some significant money using them on your little one.

It seems that there is quite a few options for parents when it comes to cloth diapers, with several ‘big’ brands to choose from like:

• bumGenius
•  FuzziBunz
• Happy Heinys
• gDiapers
• Rumparooz.

By the way, you also want to add baby wipes with your estimates.

You don’t need a wipe warmer, but a Diaper Genie is a good ‘extra’ item if you’re finicky about diapers.

Food

Whether you breastfeed or formula feed, please make sure you’re taking care of yourself and eating well. Having a baby keeps you on your toes and you’ll need to be as healthy as you can be.

As for formula, Baby Center estimates that it will cost about $105 a month. Adding solid food for your baby later on will add just a bit more to your monthly grocery bill.

Baby Gear

Babies are wonderful people – it doesn’t take much to keep them safe and happy. If you haven’t received certain things from your registry, hold off on buying them until you need to.

You may find you don’t have to buy as much as people think or a friend might have what you need.

For example, some babies are fans of bouncers and others can’t stand them. My daughter received a beautiful baby swing from a friend whose son didn’t like it at all. It’s like new and my daughter absolutely love it.

Childcare

This varies greatly depending on your choice on type of childcare (stay at home parent, nanny, daycare, etc) and the area you live in.

For my estimates I used BabyCenter’s Baby Cost Calculator:

• Daycare (Moderate): $768/month
• Home Daycare: $568/month
• Nanny (Moderate): $2,600

If you decide to go the stay at home parent route, please sit down and see how it will affect the family’s entire financial picture.

How We Saved for Our Baby Fund

For us automated savings was the main strategy. Whenever we got a windfall such as a tax refund or bonus from work, having an automated deposit or transfer has helped us stay on course.

While we have created some sub-savings accounts at Capital One 360 for specific goals, we decided to keep this in the general savings account.

Thoughts on Savings for a Baby

Whether or not you start a baby fund separate from other savings, the important take away is having savings can help you ease one of the biggest changes in your lives.

For those readers who have been through this before and/or are going through this right now, I’d love to hear your stories.

How much did you save for your baby and how did you do it?

This article by Elle Martinez first appeared on Couple Money and was distributed by the Personal Finance Syndication Network.

Owning A Home: The homebuyer’s trusted resource

Know Before You Owe: Making the mortgage process easier for you

Budgeting for Travel as Part of Your Retirement Planning

For years, you dreamed of traveling after you retired. Now the time is near and you’re ready to pack your bags, but you wonder how much it will cost and how you’ll budget for the trips you’re planning.

To help us answer that question, we contacted Donna L. Hull. Since 2008, she’s traveled and blogged about it at My Itchy Travel Feet, The Baby Boomer’s Guide to Travel.

Q: Are there any apps or tools that can help you estimate how much a trip will cost?

Ms. Hull: For a general idea of what travel costs will be, Budget Your Trip allows you to see the average costs from international and U.S. destinations. The site is free and offers the ability to track expenses. And the Independent Traveler offers a travel calculator that can be customized for your trip. Both are excellent for anticipating travel costs.

Q: Have you found that most retirees get homesick after a while?

Ms. Hull: I think homesickness is more about personal preferences than age. Some retirees sell their belongings to travel the world indefinitely. Others appreciate a home base. I’m in the second category. After an extended trip, I enjoy returning home to familiar surroundings and community to process what I’ve seen on my travels.

Q: Are there steps that you need to take to make sure that routine things at home aren’t disrupted?

Ms. Hull: I’m sure that most of your readers are already familiar with the advice to stop the newspaper and hold the mail. It’s also important that someone comes into your home periodically to make sure that all of the mechanical systems are running properly. Another option is to hire a housesitter and/or petsitter.

And take the time to review financial obligations to make sure that they are taken care of before leaving home. It’s always the annual or semi-annual bills that are often forgotten about. Having your home or medical insurance lapse because you didn’t think ahead is not fun.

Q: What advice would you have for someone whose mate isn’t as interested in travel as they are?

Ms. Hull: If you’re mate refuses to see the world with you, find a travel companion. Seek out a compatible friend or family member to accompany you. Joining hobby clubs or civic organizations that sponsor travel is another option. And don’t rule out traveling solo. Research the articles at Solo Traveler or Journeywoman for inspiration.

Q: Are there tricks that can be used to avoid tourist traps while still exploring a new city?

Ms. Hull: Venture out from the center of a city to avoid the tourist traps that are usually located there. Look for small hole-in-the-wall eateries. Ask locals for recommendations. Purchase gifts to take home at shops displaying handmade items or shop in local grocery stores. For iconic monuments and museums that define a city, arrive before the crowds, see what you came to see, and move on.

Q: What are some ways to hold down the costs of travel during retirement?

Ms. Hull: The best way to avoid costly travel during retirement is to forego expensive transportation and accommodation costs. Riding the train or driving is cheaper than flying. Booking a vacation rental costs much less than a fancy hotel room, and you’ll save money by cooking some of your meals. Housesitting or house swapping are other low-cost lodging alternatives.

When it comes to cruises, look for repositioning sailings. These are usually priced two for one but do have a lot of sea days, so plan accordingly.

Q: What financial considerations are there if you’re traveling outside the U.S.?

Ms. Hull: Using an ATM at your destination is the smartest way to save money when obtaining foreign currency.

When my husband and I travel internationally, we always have a small amount of local currency for tips and taxis. Most of the time, we use a no-transaction fee credit card. We also alert credit card companies as to where and when we’ll be traveling.

To keep up with currency rates, download an app like XE Currency App.

And to save money on international roaming charges, we turn off the cell phone function, choosing to communicate by email when connected to free WIFI instead.

Freelance writer, Donna L. Hull, is checking off adventures one trip at a time at My Itchy Travel Feet, The Baby Boomer’s Guide to Travel Since 2008, My Itchy Travel Feet has published articles and photographs focusing solely on active boomer travel: where to go, what to do and how to do it. The site also publishes a monthly newsletter.

Visit TheDollarStretcher.com today!

This article by Gary Foreman first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.

Are Your Advisers Biased?

Saw an interesting item in the Harvard Business Review. Let me quote them:

“In an experiment, advisers who had a financial incentive to give biased advice were 56% more likely to do so if they knew their advisees would get a second opinion, say Sunita Sah of Cornell and Harvard and George Loewenstein of Carnegie Mellon University. Awareness of a future second opinion apparently made the primary advisers feel less generous toward their advisees and less constrained about acting in their own self-interest. However, on balance, the researchers found evidence that if a primary adviser is biased, getting a second opinion is usually beneficial for the advisee.”

So to put it bluntly, over half of financial advisers who stand to gain by their advice would be willing to give me worse advice that benefits them if they knew I was going to talk to another adviser before making a decision.

I guess that shouldn’t be surprising. When they find out that they’re in competition with another adviser, they begin to look at it as a sales situation, not one of a trusted adviser with a client.

What can we learn from this? Three things come to mind immediately:

1. If you can, find an adviser that’s not commission based.
2. If you are working with a commissioned adviser, find out how much they make on each option presented to you. That might take some persistence on your part. Often they won’t want to tell you, which should tell you a lot already.
3. Wait until they’ve presented their suggestions before you tell them that you’re going to get a second opinion. I recognize that’s a little unfair to the adviser. I was there at one time. But, you don’t want to take a 50/50 chance that they’ll give you less than their best advice.

Awhile back, I wrote an article on “Finding Financial Advisers” that might prove helpful.

Gary Foreman is a former financial planner and purchasing manager who founded TheDollarStretcher.com website and newsletters in 1996. He’s been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money and he’s a regular contributor to CreditCards.com. Visit TheDollarStretcher.com for tips on financial planning for seniors.

This article by Gary Foreman first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.

Reporter Discovers Student Loan Shit Your Pants Syndrome #SYP

Question:

Dear Steve,

I borrowed a grand total of $88,000 in private loans (Sallie Mae) for college. Struggles with health (migraines, vertigo, etc.) forced me to take nearly six years to finish my degree.

Since that time, the total has ballooned out to $119,316.52 as I’ve only been able to pay the interest and have had to use forbearance requests on a few occasions. I continue to pay $360 per month but it feels as though that is a wasted effort and the total will never dwindle.

As you suggested, I don’t have any savings, nor a rainy day fund. I am a successful award-winning reporter, but it isn’t very financially rewarding ($26,000 annual salary). Suffice to say, I feel very trapped. I don’t want to go into a field I don’t like. I don’t care to spend my life paying off a debt that seems impossible. To be honest, I wish I hadn’t gone to school at all.

What is the best course of action to take? What are my options? Any advice would be greatly appreciated.

Adam

Answer:

Dear Adam,

My condolences for being a professional and award-winning reporter. The people who read or view the stuff folks like you produce, just don’t understand how little most talented reporters, journalists, and writer actually make. It’s pretty sad.

I’m a champion of do what you love. Trust me, there were so many things I could have done in my life that would have made me a shitload of money but I elected happiness over working at a job I hated.

When people are in the middle of what I like to call “Shit Your Pants Syndrome” and all panicked and afraid of life because of their debt it’s hardly the time to explain that if you are doing what you love to do and it pays crappy wages, the bonus is doing what you love. And that has real value.

So many people are out searching for those high paying, low responsibility jobs that never exist. Instead, most go for a higher paying job they hate to go to.

Dealing with your situation is more of a math problem than a complex life conundrum.

Here is what seems clear, you don’t make enough to service your debt. In fact, dealing with debt is stupid simple to do if we just look at the math. If we look at the bigger picture though we have to deal with this and How to Get Out of Debt. The Honest and Unvarnished Truth.

From a math point of view you do not have enough income to ever dig yourself out of this hole with regular payments that will stop your balance from growing or reduce it according to the original terms. That just is what it is.

If you could not pay $88,000 off on your income, you are not going to be able to pay off $120,000 in a way Sallie Mae will love. But that doesn’t mean there are not options.

There are a couple of really important financial responsibilities I need for you to get on top of right away. The first is working on that emergency fund. You know the need for that. The second is to start saving for retirement. Use my online calculator here if you are brave enough to see how wasting time before saving for retirement will cost you millions. By not saving a little each month today, you will have to save more that you don’t have in the future.

And trust me, you do not want to be among one-out-of-three people who say Social Security will be their only retirement income. Those people will need to decide what flavor of cat food they prefer or make a choice between heat, medicine, or food.

So here is the in-your-face truth nobody wants to hear, you will most likely need to default on your student loans and then have the balls to deal with what comes next.

When you default on your loans your credit will suffer, but it can be rebuilt. Your student loan balance will explode and you’ll wind up chased in collections. Who knows, you might even be sued over the bad debt. And let’s not forget that you will probably even get a big tax bill for the bad debt. But you can deal with that by reading this.

Defaulting on your debt is traumatic if you don’t know what to expect or how to deal with it. The fear and terror of facing this unknown has actually made people shit their pants. I’ve seen it happen. But if you want someone to coach you through this private student loan mess, consider talking to my debt coach friend, Damon Day.

But once your private student loan debt is charged off you can either negotiate with the servicer to repay the debt for less than you owe, enter a stipulated repayment plan you can actually afford when you are sued, or just hide out till the statute of limitations expires and then discharge the debt in bankruptcy. Yes, you really can discharge private student loan debt in bankruptcy. In fact, some private student loan debt can be discharged in bankruptcy immediately without waiting. If you don’t believe me then read this.

The options I just told you about, really happen. Just last week I was sitting with an attorney who told me he was able to settle a private student loan debt at court for a third of the balance, at 0% interest and ten years to pay. Other people are getting lump-sum settlement offers from Navient / Sallie Mae in the 30-40% range. Read This is How You Can Settle Your Navient Student Loan.

But by far one of the most important articles you need to read is Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan. The attorney who provided the tips laid out some excellent reasons to consider.

Get Out of Debt Guy – Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

If you’d like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

10 Affordable Father-Daughter Dates

A father’s display of his unconditional love is important in the development of his children. Statistically speaking, when a daughter feels that her dad is available and attentive in her life, she is more likely to feel confident and self-assured. In 2013, Utah State University revealed their findings from a study done on father-daughter relationships, with the results showing that fathers have a positive impact on the mental and emotional well-being of their daughters.

One of the ways that a father can connect with his daughter is by taking her on daddy-daughter dates. This can start when his child is a toddler and continue into young adulthood.

Elaine Taylor-Klaus, a parenting certified coach says:

“There are many benefits to father-daughter dates. When a girl has a comfortable relationship with her father, it sets a positive tone for future relationships in her life, including significant others, business relationships, and friendships. If she feels valued and respected by her father, she’s more likely to expect that out of other relationships with men.”

Single mothers can encourage uncles, close male friends, and grandfathers to spend one-on-one time with their children and develop a safe relationship with mature, kind adults. She can also create a special bond with her children by taking them on individual dates.

There are many inexpensive ideas for father-daughter dates, below are just a few.

1. A park and picnic date: Younger children especially will enjoy a special walk with their father to a local park. Bringing along a blanket and picnic lunch is an inexpensive way to make the date extra special and fun.
2. Splash pad and ice cream: In the summer time, there are often splash pads, ponds, or shallow beaches that are free to the public. Cooling off on a hot day with a dip in the water and an ice cream cone after is an excellent way to bond.
3. Camping in the backyard: Many children love the idea of camping, but also enjoy the comfort of being close to home. Setting up a tent in the backyard and camping all night is a fun way to experience the outdoors, while still having access to a flushing toilet and fridge.
4. Volunteer together: Older children may enjoy the opportunity to volunteer at a local soup kitchen or food bank. Every city has multiple needs for volunteers and volunteering together is a great way to bond and serve others.
5. Surprise her with a pizza lunch: If your job is flexible, you have some vacation days, or you have weekdays off, you can surprise your daughter by picking her up at school for a special pizza lunch. Taking her out for a surprise lunch is an easy way to grow closer and create special memories.
6. Visit a museum: Many museums offer free days a few times a year, keep track of free days at local museums and take your daughter for a fun day of exploring and learning.
7. Hike a trail: Enjoy the outdoors by going for a fun trail hike. Bring snacks and water and take stops along the way. Try to find a trail with beautiful scenery, such as a hidden waterfall or pond.
8. Cook or bake together: On a rainy day, consider seizing the opportunity for a special date in the kitchen. Bake some cookies or make dinner together to surprise the rest of the family.
9. Go to the farm: Take a special drive into the country and visit a farm. Try to find a farm that has a petting zoo and fun activities for kids. During certain times of the year, you can also try picking apples or strawberries to take home.
10. Go biking: Take a bike ride or roller skate together. Keeping active as a family is a great way to encourage healthy self-esteem and body image.

These are just a few ideas to get you started on a life-time of father-daughter dates. Remember to include dates that are interesting to both dad and daughter, but most importantly, focus on spending time talking, laughing, and creating fun memories together.

Visit TheDollarStretcher.com today for more ways to make a game room for your family on a dime and how to build a backyard ice skating rink.

This article by Brianna Bell first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.

FTC Action Stops Scammers Who Collected Millions in Phantom Payday Loan Debts

The operators of a fraudulent debt collection scheme will be banned from the debt collection business under a settlement with the Federal Trade Commission, resolving charges that they illegally processed more than $5.2 million in payments from consumers for payday loan debts they did not owe.

The settlement resolves a complaint the FTC filed against Kirit Patel, Broadway Global Master Inc., and In-Arabia Solutions Inc. in 2012, alleging that callers working with the defendants harassed consumers into paying on bogus debts, often pretending to be agents of law enforcement or fake government agencies such as the “Federal Crime Unit of the Department of Justice.” The court subsequently halted the operation and froze the defendants’ assets pending litigation

In a separate criminal proceeding, Patel pleaded guilty to mail and wire fraud charges brought by the U.S. Department of Justice based on his scheme. This week, he was sentenced to a one-year prison term.

In addition to banning the defendant from the debt collection business, the FTC’s settlement order also prohibits the defendants from making misrepresentations about any product or service, profiting from customers’ personal information, or failing to properly dispose of customer information.

The order imposes a judgment of more than $4.3 million. Due to the defendants’ inability to pay, the amount will be suspended upon payment of $608,500, which will be used for consumer redress. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The Commission vote authorizing the staff to file the proposed stipulated final order was 4-0. The order was entered by the U.S. District Court for the Eastern District of California on September 10, 2015.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

To learn more, read Phantom debts and fake collection notices.

This article by the Federal Trade Commission was distributed by the Personal Finance Syndication Network.

When to Save Money vs. Attending a Conference

Years ago when I worked at newspapers, I rarely had the chance to attend a journalism conference, mainly because my employers couldn’t afford to send me. And if they did have the money, it was usually only for a portion of the costs, such as a registration fee. Hotel, transportation and meals were my responsibility.

At one of the few conferences I did attend, I came back with so many ideas that I implemented that I’m sure my work more than paid for the cost of attending the conference.

But this week — as I’m into my seventh year as a freelance writer specializing in personal finance content —  I’m unable to attend a conference that I’ve attended the past two years that caters to my niche. FinCon, a financial conference for personal finance media, starts today, Sept. 16, in Charlotte, N.C., and I won’t be there.

Most people there are freelancers and work for themselves, so taking time off to attend the conference is probably costing them money if they’re not working during FinCon.

It’s breaking my heart not to be there, and for many reasons: meeting other personal finance bloggers, attending seminars, networking, and best of all, finding new clients.

The reason I’m unable to attend is simple — I can’t afford it.

It’s a reason that many people don’t attend work-related conferences, especially freelancers who don’t have a staff to do their work while they’re gone, or paid time off to attend a conference.

Conference pays for itself

For the two years I’ve attended previously, FinCon more than pays for itself with new clients. Most conferences, I suspect, pay for themselves in tangible and other ways.

But this year for me, however, I couldn’t justify the expense of attending the conference Why? In part due to the successes I’ve had from what I’ve learned at FinCon. After years of writing for other websites, I finally got my own personal finance website — CashSmarter — off the ground in January 2015 in an attempt to write for myself and not others about a topic I’m extremely interested in. As a personal finance writer, it didn’t make sense to just write for others and not for my own website.

Took on 4 sites this year

After attending FinCon14 and getting some advice from some expert personal finance bloggers there, I started CashSmarter. It was tough to build a PF website from scratch and gain readers, so I was on the lookout to buy an established personal finance site that I could write for.

A month later in February 2015, I bought the personal finance website Add-Vodka.com, as an investment and another site to write for myself.

Four months later, in June 2015, I bought two more websites. BeforeYouInvest.com is another personal finance that I also own and write for.

The other site, FamousParenting.com, is a parenting site that I bought in June 2015, partly to diversify my sites, but also because I’m a dad and I already write about teaching personal finance to my daughter. FamousParenting curates the best parenting articles online, and I’m trying to figure out how to monetize it.

Still in the red

Of those four sites I started or bought this year, none are making money except for CashSmarter — and that’s because I started the site myself and the initial cost was low. The other three sites are slowly making money, and I expect all of the personal finance sites to be out of the red and making money by the end of 2015. The parenting site will take longer.

The bottom line is that will all of these expenses, including an excellent virtual assistant who helps me run them, and a top-notch tech expert, I can’t afford to attend FinCon this year. I’m often happy to be frugal and save money if I know it will help our family finances in the long run.

But missing this event and all of the costs associated with it — flight, hotel, registration fee, meals, etc. — is one of the toughest frugal choices I’ve ever had to make. Attending FinCon may have helped me more in the long-term, but sometimes I need to consider the short-term implications.

This article by Aaron Crowe first appeared on CashSmarter.com and was distributed by the Personal Finance Syndication Network.

Department of Education Tips Hand on Student Loan Defense

The Department of Education is scheduled to publish a request that seems to tip their hand about a borrower defense that could allow lots of students from having to repay their student loans.

Clever attorneys will find a way to confirm if schools have violated state laws, as the government has claimed some have. If proven the school had violate state laws, the Direct Loans the student owes could be eliminated in full.

The notice from the Department of Education says they are looking closer at “borrower defenses are specified in 34 CFR 685.206(c). The regulation states, in part, “(c)(1) [i]n any proceeding to collect on a Direct Loan, the borrower may assert as a defense against repayment, an act or omission of the school attended by the student that would give rise to a cause of action against the school under applicable State law.”

Prior to 2015, the borrower defense identified above was rarely asserted by any borrowers and no specific methods of collecting information was defined or found necessary.” – Source

It will be interesting to see how effective this defense will be in dealing with overwhelming student loans, especially from those for non-traditional schools. These schools include vocational, technical and for-profit colleges. According to a recent Brookings Papers on Economic Activity paper, “Of all students who left school and who started to repay federal loans in 2011 and who had fallen into default by 2013, 70 percent were non-traditional borrowers. In contrast, the majority of undergraduate and graduate borrowers from 4-year public and private (non-profit) institutions, or “traditional borrowers” experience strong labor market outcomes and low rates of default, despite having the largest loan balances and facing the severe headwinds of the recent recession.” – Source

The authors of the paper, Adam Looney of the U.S. Treasury Department and Constantine Yannelis of Stanford University, state “Between 2000 and 2014, the total volume of outstanding federal student debt nearly quadrupled to surpass $1.1 trillion, the number of student loan borrowers more than doubled to 42 million, and default rates among recent student loan borrowers rose to their highest levels in twenty years. This increase in debt and default and more widespread concern about the effects of student loan debt on young Americans’ lives has contributed to a belief that there is a crisis in student loans.”

These for-profit schools have been the subject of large actions by the government like that by the Consumer Financial Protection Bureau against Corinthian College, which included Everest College, Everest Institute, Everest University, Everest University Online, Everest College Phoenix, Everest College Online, WyoTech, and Heald College.

Recently the for-profit Art Institute announced the close of some of its campuses as well.

In fact, some of these vocational and for-profit school loans have been able to be discharged in a consumer bankruptcy because the schools never met the Title IV standards required by Department of Education. It’s something I’ve been talking about for quite some time now.

In my experience, these same niche non-traditional schools are also big into pushing private student loans. These loans have the least favorable repayment options and if it is proven the schools have massively higher default rates then it could be said an entire generation of students was led to financial slaughter.

The falsification of school performance and failure to live up to the promises made to enrolling students could be used by clever attorneys to show how the schools violated state unfair and deceptive practice laws and that could possibly lead to an elimination of the student loans in full. Just saying, keep your eyes open for more on this to come.

Get Out of Debt Guy – Twitter, G+, Facebook

If you have a credit or debt question you’d like to ask, just click here and ask away.

If you’d like to stay posted on all the latest get out of debt news and scam alerts, subscribe to my free newsletter.

This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

Most Parents Saving for Kids’ College Education in Wrong Places

With their children facing an average student loan debt of $33,000 when they graduate from college, some parents are helping by saving for their kids’ college education in various accounts.

They mean well, but they may be doing themselves and their children a disservice with less money saved and less tax relief.

Along with the traditional ways of saving for college with a 529 or a Coverdell Education Savings Account, parents are also saving for a college education through savings accounts and their retirement plans.

45% save for college in savings account

A recent study by T. Rowe Price found that 45 percent of parents saving for their kids’ college education are using a regular savings account, and 30 percent are using their 401(k) retirement account.

The study found that 31 percent are using a 529 account that’s designed to give them the most taxable savings when saving for college.

By not using a college savings account, they’re not only losing tax benefits, but may be making a lot less money on the interest rates the accounts make. And even if they’re making more money in a retirement account, that benefit may be lost when it’s time to pay income taxes.

Using a comparison calculator at Savingforcollege.com and researching federal income tax rates and average returns, here are how different savings vehicles would help in saving for a college education:

529 Plan

Federal income tax: Non-deductible contributions; withdrawn earnings excluded from income to extent of qualified higher education expenses.

Rate of return: Returns vary by state, but the Colorado plan, for example, has a return rate of 3.09 percent per year in 2015.

Overall, an average rate of return of 6-7 percent could be expected in a 529 plan for a college education.

Coverdell

Federal income tax: Non-deductible contributions; withdrawn earnings excluded from income to extent of qualified higher education expenses and qualified K-12 expenses also excluded.

Rate of return: One online calculator puts the default return rate for a Coverdell account at 8 percent. A Franklin Templeton guide to Coverdells also puts the average annual return at 8 percent.

Making a $2,000 contribution to a Coverdell account each year for 18 years with an 8 percent average annual return, compounded monthly, would result in $16,448 more in a tax-deferred investment than in a taxable investment, according to the guide. The tax-deferred Coverdell account in this scenario would have $83,524 after 18 years.

Savings account

Federal income tax: Interest earned on savings account is taxed as income.

Rate of return: As of Sept. 10, 2015, the standard rate of return for a money market savings account at Bank of America was 0.03 percent. We only chose BoA because it’s one of the biggest banks in the country.

One-year certificates of deposit are averaging 0.23 percent. That just barely beats the U.S. inflation rate of 0.2 percent.

U.S. savings bonds

Federal income tax: Tax-deferred for federal; tax-free for state; certain post-1989 EE and I bonds may be redeemed federal tax-free for qualified higher education expenses.

Rate of return: Series EE bonds pay 0.30 percent after 20 years, which is almost enough time before a newborn starts college.

Roth IRA

Federal income tax: Non-deductible contributions; withdrawn earnings excluded from income after age 59 1/2 – and five years; 10 percent penalty on early withdrawals waived if used for qualified higher education expenses.

Rate of return: The S&P 500 has an annual rate of return of 8.06 percent for the past 10 years. From January 1970 through December 2014 the S&P 500 has a return of 10.7 percent.

Traditional IRA

Federal income tax: Deductible or non-deductible contributions; withdrawals in excess of basis subject to tax; 10 percent penalty on early withdrawals waived if used for qualified higher education expenses.

Rate of return: Fidelity gives the example of a 7 percent rate of return for an IRA contribution.

401(k) retirement account

Federal income tax: Same as for a traditional IRA, except there isn’t a penalty waiver if the money is used for college expenses. In other words, a 401(k) shouldn’t be used to pay for college.

A loan from a 401(k) retirement plan can be taken out. Plan loans aren’t taxed or penalized if the loan is repaid within a specific period of time, generally within five years.

Rate of return: The Vanguard Wellington mutual fund, which is one of the most common balanced funds found in 401(k) plans, has an average annual five-year return rate of 12.07 percent as of June 30, 2015. Pulling money out through a loan to fund a college education would of course lessen the amount of money earning the return rate.

How to pay for a college education

Among all of these methods, borrowing or withdrawing money from a retirement account to pay for a college education seems like the biggest potential for not making as much money as you would through an education savings accounts. You might get a higher rate of return, but the tax implications could negate it.

But as college appears closer and closer, maybe that’s the best choice for parents who have put off or completely ignored saving for their child’s college education from the day they were born. Thinking seriously about it when high school graduation is only a few years away may help their kid get through college without any debt, but they may be giving up part of their retirement plans in the process.

If that’s the case, make sure your child graduates with a college education in a well-paying major so they can help support you in your old age.

This article by Aaron Crowe first appeared on Add-Vodka.com and was distributed by the Personal Finance Syndication Network.

Things to Consider Before Becoming a Caregiver to an Aging Parent

If you have aging parents, chances are that you’ve thought about what will happen once they need care as older adults. Here at TDS, we wanted to get an idea of things to consider before stepping into a caregiver role, so we reached out to Emily Guernon, the senior editor of health and caregiving at PBS’s popular website Next Avenue. Here’s what she had to say:

Q: Is there a way to estimate how much time it takes to be a caregiver? And will the time amounts change over time? Can you easily estimate how needs will change?

Ms. Guernon: Everyone’s situation is different. Caregiving can mean everything from picking up some groceries for your mother once a week to providing 24/7 care for a bedridden parent who lives with you. And your particular set of circumstances is certainly likely to change over time, as your loved one ages.

Q: What caregiver considerations are there when determining if an elderly parent should live alone or with you as primary caregiver?

Ms. Guernon: It is important to determine whether your elderly parent is safe in his or her own home. Does she turn off the stove after she cooks? Does he forget to take his medication, or does he take too much of it? Has your parent started falling more often? You may decide, in consultation with your parent, that it is time to either hire some help to come in, to move your parent to your home, or to move him or her to an assisted living situation. But this must be done in consultation with the older adult. Many people find it very difficult to give up their independence when they grow older, and their adult children should be sensitive to these concerns. The best way to go about it is to begin the discussions far in advance of when the issues crop up.

Q: How will becoming a caregiver affect your own personal finances?

Ms. Guernon: Again, it depends on how deeply you are involved in the caregiving. Many older adults begin to depend on their child or children more and more as time goes on. A caregiver may start with a few occasional tasks and eventually find herself having to leave work to respond to a medical emergency or other situation. Some decide to quit their jobs altogether if they are needed for full-time caregiving. Or you may need to help pay for another person to come in to offer services to your parent if he or she cannot afford to. This is another area in which advance planning is useful.

Q: When should you bring in outside help? And how can you go about finding it?

Ms. Guernon: It can be difficult to know if the time is right, but there are some excellent resources to assist you. This Next Avenue article, "When Should You Hire Home Care for Your Parent," addresses that very question. In addition, do some research on what help will cost and what it can offer before you actually need help. You can find information by calling your local Area Agency on Aging or searching online at ElderCare Locator.

Q: Do you need special training to become a caregiver? Are there tools and resources available to help someone take on the role?

Ms. Guernon: Some older adults need help that doesn’t require special training. Others need caregivers to accomplish fairly complex medical tasks for which they feel unprepared. A number of local and national organizations offer training; they include the American Red Cross and the Family Caregiver Alliance.

Q: What legal considerations should potential caregivers think about? Are there documentation requirements or liability considerations?

Ms. Guernon: The short answer is yes. You will need legal authority, such as a power of attorney, to make decisions on behalf of a loved one who cannot do so on her own, for instance. A good source for more information on this topic is AARP; see Legal Tips and Advice for Caregivers for some answers. And an eldercare attorney offers some helpful advice in this Next Avenue article, "Six Things Caregivers Must Do While There’s Still Time."

Taking on the role of caregiver can be a big change for both you and your aging parent. These are some fantastic tips to consider if you are thinking of stepping into a caregiver role soon.

Paige Estigarribia is a writer for TheDollarStretcher.com website. Visit TheDollarStretcher.com for ways to help elderly parents live independently.

This article by Paige Estigarribia first appeared on The Dollar Stretcher and was distributed by the Personal Finance Syndication Network.

How to Pay Off Student Loans… In Song

Seventy percent of college students are now graduating with student loan debt. If the ever rising cost of higher education is any indication, that’s not going to change any time soon. For members of the class of 2015, the average student loan bill was $35,051.

How are a young, twenty somethings surviving on unpaid internships and crummy starter salaries supposed to shoulder five figures of interest bearing debt on top of a place to live and a steady supply of ramen noodles?

Check out the video…

How to Pay Off Student Loans – The Breakdown

When’s It Due? And To Whom? And When?

Step One: Figure out what you actually owe. What is your total student loan balance and what are the balances for each loan respectively? What are your interest rates on each loan? What are your minimum payments on each? When do you need to start making payments, how often and to whom?

Tip: You can use NSLDS to track your Federal student loans and your credit report is a good starting point for tracking down private lenders.

Do your research. Write down the numbers, build monthly payments into your budget and schedule them into your life.

Won’t Mess Up My Credit Score

Failing to pay off student loans or even missing a payment can do some serious damage to your credit. Payment history is the single biggest contributor to your credit score, so if a lender reports your delinquent loan, it can lower your credit rating, making borrowing money for a home, car or even a credit card more difficult and more expensive in the future.

If you can’t afford to meet your payment obligations, be proactive – there are alternatives. Just don’t blow them off. Student loans cannot be discharged in bankruptcy, so those balances aren’t going anywhere unless you deal with them head on.

Gotta Budget Bills and More. Finding Out What I Can Afford

If you haven’t already, build a budget so that you know whether you truly cannot afford to pay off student loans or whether the money you need to meet your payment obligations is unnecessarily tied up funding discretionary expenses like a beer of the month club or premium cable TV package.

Rather than trying to squeeze student loan payments into your monthly spending plan, consider an alternate approach where you build your budget around what you owe. Use the income leftover after meeting your monthly payment obligations to dictate what you can afford to spend on other recurring expenses – rent, transportation, etc.

Deferment, Adjustment and Payment Plans

If, after all your due diligence calculating payments, building a budget and reducing expenses, you’re still coming up short on your monthly student loan minimums, consider the alternatives.

Student Loan Deferment. A deferment allows you to temporarily postpone making student loan payments, which can keep you from becoming delinquent on payments or defaulting. To see if you qualify for deferment, contact your lender. Situations in which you may be approved for deferment include unemployment, active duty military service, economic hardship and college or graduate school enrollment. Learn more about deferment here.

Adjustment and Payment Plans. Most student loan repayment plans operate on a standard 10-year timeline, but there are alternatives that may be better suited to your circumstances. For example, a graduated repayment plan uses the ten-year standard timeline to pay off student loans, but starts out with a lower monthly payment obligations that increases every two years. This alternative can serve those who anticipate significant income increases in their early working years. Another alternative is the extended repayment plan in which the window for payback can be stretched to 25 years, lowering the monthly bill. Note that these programs are only available for Federal loans and are subject to eligibility.

Negotiating Interest

For relief on private student loan bills, call up your lenders and negotiate directly. Remember, it’s in their best interest to come up with a plan in which you can afford to pay off your full loan balance, otherwise they’re operating at a loss. Make a solid case for relief, negotiating a reduction of interest, an extended repayment timeline or both. You can also refinance your loans through platforms like SoFi that often offer more competitive rates than you can secure elsewhere.

Consolidation 

If you’re making multiple monthly payments on multiple loans to multiple companies, consolidating your loans can simplify the repayment process with one monthly payment, often at a lower interest rate. Again, platforms like SoFi are powerful tools for this kind of student loan consolidation as well as refinancing.

Programs to Pay What I Can

Income-Based Repayment. Only available for Federal Student Loans, the Income-Based Repayment plan caps monthly student loan payments at 15 percent of discretionary income. The monthly minimum payment is adjusted each year based on your income. If you keep up with your payments, your remaining debt may be forgiven after 25 years. Find out whether you’re eligible and learn more about Income-Based Repayment here.

The Income-Sensitive Repayment Plan, Income-Driven Repayment Plan and Pay As You Earn Repayment Plan are three other Federal programs that can help you pay off student loans by keeping  payments within the parameters of your means, provided you meet the eligibility requirements.

Facing it First, Nailing it Next, Financial Freedom Ahead of the Rest!

This article by Stefanie OConnell first appeared on http://ift.tt/MM0FlJ and was distributed by the Personal Finance Syndication Network.