How My Wedding Helped Me Be a Better Saver

Keeping a wedding on budget is hard work, but not impossible. I can attest to that — I got married in April and I was able to do it without going into debt. In fact, I saved too much and ended up ahead of the game.

First, a few caveats. My husband and I had some financial help from our parents to cover wedding expenses. I won’t get into too many details to protect their financial privacy, but we were definitely able to afford a nice wedding because of their generosity. If we had to pay for it all on our own, we would have either left out some of the things we ended up spending money on or would have done a less formal affair. (My husband and I both recognize that having some cash from the parents to cover wedding costs was a privilege, and it did impact our spending decisions.)

After crunching the numbers using a few wedding budgeting tools and the advice of friends, we decided we needed to save roughly $15,000 on our own as a couple. With our wedding about 15 months away, we devised a plan to put away roughly $1,000 a month, saving whatever we could when we could. Here’s what we learned.

1. Save More Than You Think You Need

When we first devised our wedding budget, I did a lot of digging into how much we “should” spend. Here’s the bottom line: There’s no amount you “should” spend. Everyone’s wedding is different and everyone’s tastes are different. The one universal is this — if you can avoid it, try not to spend more than you have. I realize this is a lot of preaching coming from a personal finance editor, but it’s very true. I added about 15% cushion to our wedding budget to make sure we didn’t have to carry a balance on credit cards, take out a wedding loan (they do exist!) or dip into our emergency fund. My husband and I knew we wanted to move, buy a car and own a home in the near future and knew that taking on debt or maxing out our credit cards could hurt our credit scores and affect those goals that were truly important to us. We didn’t want to risk getting a not-so-great interest rate on our mortgage just to get larger centerpieces at the wedding — it was a decision we made together.

We also monitored our credit scores throughout the wedding-spending process, since we wanted to make sure charging a venue deposit to our credit cards wouldn’t hurt our scores. (You can check your credit scores for free every month on Credit.com.)

2. Make a Game Plan

Knowing we’d need to be able to track our savings progress, I set up a joint savings account for us. This was helpful for me because I didn’t need to do math and split out our emergency fund from our wedding savings fund when I checked my financial accounts online (I do it daily). I also used an online budgeting tool to help me track my progress and linked it to my wedding savings account, but you can easily do this with just pen and paper, too. Knowing we had to save $1,000 a month, we wanted to get ahead of the game as soon as possible, so we split the amount we each individually expected to contribute based on our salaries and started depositing money as soon as possible. It helped to save more some months when we knew we had more to spare so that when the holidays rolled around and we knew we’d have to pay more for gifts and travel, we had a bit more breathing room.

How we did it:

• We stopped eating and ordering out as often, which saved us WAY more money than you might think.
• We didn’t spend money on vacations like we normally would.
• We checked our savings and spending progress often and didn’t withdraw money from our wedding savings unless it was for wedding expenses. Be strict with yourself — it pays off in the end.

3. Don’t Get Cocky

About two months before our wedding, I was looking at all the cash we had saved — over $7,000 in the savings account, and more than $10,000 of our wedding obligations paid off. We were $2,000 ahead of the game and two months early to our goal! Oh, but wait… there are a lot of last-minute expenses you may not anticipate like the cost of your hotel room, rental car, last-minute alterations for you and your spouse-to-be, cake-tasting costs, etc. There are a lot, and I mean A LOT, of small expenses you have to pony up some cash for right before the wedding. And that $50 here and $100 there can really add up. After all of the wedding expenses had been paid, we ended up with (drumroll, please) …. $3,546 we over-saved! We’re putting that money toward a down payment on a house. And that leads me to the last tip…

4. Don’t Stop Saving

Since our wedding, my husband and I have closed our wedding savings account, rolled those funds into our regular savings account and kept piling on the deposits to save more cash for a down payment and closing costs. Once you get into the routine of saving, it’s a lot easier to continue than it is to pause your progress and start again. We’ve been putting money into our savings account regularly since the wedding and it’s helped us finance a move, buy a new car and pay for upcoming trips.

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This article originally appeared on Credit.com.

This article by Kali Geldis was distributed by the Personal Finance Syndication Network.

4 Things Your Bank Won’t Tell You When You Get a Mortgage

As the Consumer Financial Protection Bureau strives to create more transparency within the mortgage industry, there are crucial homebuying truths that endure — and knowing what they are can help you to be better informed as a homebuyer. But don’t expect to hear them from your bank.

1. You Can Get a Better Deal Elsewhere

Fannie Mae and Freddie Mac publish mortgagee guidelines that banks use to originate loans. In addition, individual banks may place additional credit requirements on these guidelines to minimize their risk. Let’s say that Fannie Mae has a maximum debt-to-income ratio of 45%, but the bank that you’re applying with has a maximum debt ratio of 43%, conforming to the CFPB’s definition of a ‘qualified mortgage.’ Your bank will likely never tell you can get a better deal elsewhere, even though you probably can. When you work with a bank, you are limited to their programs and their products. Direct lenders, brokers and some smaller banks have access to more credit, which ultimately dictates whether or not your loan will move forward.

Caveat: A better loan offer elsewhere is not a better offer if it won’t close because you are unable to meet the loan guidelines. So make sure that you can meet the requirements of that “better deal” before you go for it.

2. Time Is Not Your Friend

Once you’ve locked in your interest rate, the clock is running – and time is now indeed money. Let’s say you’re nearing the end of your 30-day interest-rate lock, and you need an additional 15 days. Your lender might charge you as much as 0.25% of the loan amount – on a $300,000 loan, that’s $750 more in fees because you took an additional week to get your financial documentation back to the lender. Lock fees vary, as do rate lock policies among banks. Be informed, ask upfront. After you have chosen to lock your rate, get your financial documentation back to the lender in 24-48 hours as needed in the process. While this is recognizably an inconvenience, it will ensure that your loan closes in the timeframe in which the interest rate is locked.

FYI: The reason why interest rate lock extensions cost you is because if interest rates go up and you’re locked in at lower rate, your loan is less profitable, and therefore less desirable, to the end investor.

3. You’d Better Have a Ton of Equity

Equity is a crucial factor when applying for a mortgage. If you intend to get the absolute lowest possible interest rate the market will bear you’re going to need a minimum of 30% equity in your home — ideally more. Mortgage pricing adjusters (factors that drive mortgage costs) — like occupancy, credit score and loan-to-value — begin after a loan to value of 65%, or 35% equity. That means if you have 35% equity to finance a loan for an owner-occupied home, the pricing is going to be quite a bit better than if you have 25% down, for example. Loan officers will normally tell the borrower the minimum amount they need to get a mortgage, but not necessarily the minimum amount they need to get a mortgage with the best possible combination of rate and fees.

Here’s a nifty calculator you can use if you want to see how much home you can afford. Your credit score has a big impact on that number, so you can see where you stand by getting your free credit scores once a month on Credit.com.

4. Appraisers Hold All the Cards

Mortgage professionals who work in a non-banking capacity will be more likely to tell you that appraisers do hold all the cards. Loan professionals who work for a bank have more rules and requirements for originating than non-bank loan officers. Additionally, many bigger banks own the appraisal companies, subsequently getting a piece of the appraisal revenue. The Home Valuation Code of Conduct that arose in the aftermath of the financial collapse took away the ability for loan officers to have any direct access to appraisers, including the ordering and scheduling of the appraisal. Currently, the entire appraisal process is automated to meet federal compliance regulations.

Now, you may qualify for a mortgage on paper with your credit score, income, credit and debt, but the appraiser’s opinion of your home’s value can kill your mortgage, even though a different appraiser’s opinion of value may give you a green light. Even a $5,000 difference in value is enough to throw a loan off-course. Should your appraised value not meet expectations, you do have recourse. Ask a real estate agent friend to pull comps identifying neighboring houses not included in the appraisal report. Next, ask your bank to have a “re-consideration of value” performed with the new information. In most cases, it’s a 50/50 shot, as the loan industry has been forced to give appraisers absolute power.

The more clarity and understanding consumers have about the loan process, pricing and general guidelines, the more information they will have to make an educated choice. Always best to continually ask questions — and then some — throughout the transaction.

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This article originally appeared on Credit.com.

This article by Scott Sheldon was distributed by the Personal Finance Syndication Network.

Can I Get Someone to Take Over My Car Payments?

If you can’t make your car payments, can you just find someone who can? Credit.com blog reader Carlos asks:

I have had my car for 5 months my payment is $330 but I will soon be getting married and getting my own place. I have tried to advertise my car and have someone take over loan on my car and everyone is just trying to get a notarized agreement and keep the car under my name. I won’t be able to make my next payment.

It sounds like Carlos is hoping is that someone will officially take over his payments and assume his loan. But that may not be possible. “In most cases, car loans are not assumable,” says Edmunds.com Senior Consumer Advice Editor Philip Reed. “When the registration and title are transferred to a new owner, the lender needs to be notified. The lender will then step in and require a credit check to make sure the new owner can make the payments. This leads to the initiation of a new loan at the new owner’s credit level.”

Policies with regard to auto loan assumptions vary by lender. A representative from Wells Fargo said its car loans are not assumable, while a representative from Ally Financial said that it will “work with a customer to determine whether an assumption is an option for them. If the assumption is allowed, the person taking on the finance contract would need to fill out an application to see if they qualify to assume the responsibility of the vehicle and payments.” (Of course, someone who qualifies to assume a car loan can shop for a car and not worry about taking over someone else’s payments.)

That doesn’t mean Carlos couldn’t let someone else drive his car and make payments to him, so he can make the payments to his lender. But that can be risky.

If the person who is driving the car doesn’t pay on time, Carlos will have to try to get the car back; in a sense, he will be repossessing his own vehicle. And anyone who has repo’d cars for a living knows how challenging that can be. In the meantime, he could fall behind on his car loan if he isn’t receiving the funds he needs to make the payments each month. (Here’s a guide that explains what to do if you can’t make your car payments.)

Another concern is that the new driver could put a lot of miles and/or wear and tear on the vehicle. And that, in turn, could make it more difficult for him to sell it in the future.

And then there is the issue of insurance. Carlos would have to make sure the car remains fully insured while registered under his name. One way to do that would be to keep his insurance and add the new driver to his insurance policy. But “if the additional driver has a poor driving history or is young, the rate is likely to increase,” warns Laura Adams, senior insurance analyst for insuranceQuotes.com. Not all insurers will cover an unrelated driver living at a different address, so drivers attempting to do this should check with their own insurance company and shop around first.

Another option would be for the new driver to get insurance and add Carlos on “as an additional insured, so he would be notified of any changes,” says Adams, adding that “Some carriers will allow you to insure a vehicle that you don’t own, as long as you have a good reason.” But that’s also risky. One day (and one accident) without insurance could create a huge financial mess — and damaged credit scores — for Carlos. (You can see how your car loan is impacting your credit scores for free on Credit.com.)

Guarding His Own Credit

Finally, there’s the risk that the new driver could run up unpaid tolls or parking tickets that may end up in Carlos’ name since he is the registered owner of the car. One of these items could wind up on his credit reports as a collection account, and his credit scores could drop significantly. A recent settlement with the credit reporting agencies and 31 state attorneys general will change how certain fines are reported in the future. Here’s what the credit reporting settlement will do.

If Carlos has a friend or family member he trusts to take over the payments until he gets back on solid financial footing, letting them assume his car payments might work. But relying on a stranger to make payments, insure the vehicle, and take good care of it is fraught with risk. If he decides to move forward anyway, he will want to get the agreement in writing, get a deposit and make sure the car remains fully insured.

Given his precarious financial situation, though, a better strategy might be to talk with a credit counseling agency or bankruptcy attorney to explore his options for getting out of this car loan.

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This article originally appeared on Credit.com.

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

Watch This Reporter Confront His Alleged Credit Card Thief

For many people, an incidence of credit card fraud goes like this: Your bank alerts you to suspicious activity on your card, you confirm it wasn’t you and the bank cuts off the card, reverses the charge and sends you a new card. The end.

A television reporter in Texas took a different approach. When Steve Noviello of FOX 4 in Dallas-Fort Worth received an alert that his card was used at a hotel in nearby Richardson, he decided to track down the alleged credit card thief. He wanted answers to questions many consumers have in this situation: How did this person get his card? Why did this person steal his card?

Noviello filmed his impromptu investigation on his smartphone, which shows him questioning an embarrassed-looking woman as she is led out of the hotel in handcuffs (he called the police). After Noviello repeatedly asks where she (allegedly) got his credit card number, she says, “Someone gave it to me.” Beyond that, Noviello gets very little information from the awkward encounter, except perhaps the satisfaction of confronting the alleged thief. (You can watch the full video here.)

A hotel worker told Noviello the woman used a card with her name and his card number — the magnetic stripe didn’t read when swiped, so the worker entered the card information manually. As of July 27, when the video was posted, the woman was still in jail.

There are a number of ways Noviello’s card information could have been stolen, like credit card skimming or a data breach, and such data is often sold online. Chances are the thief had no idea the victim was a journalist who covers consumer issues like fraud and identity theft.

Noviello’s approach to investigating the fraud isn’t the sort of thing most consumers would (or should) do, but his experience also offers some great tips. He spotted the unauthorized activity because of transactional monitoring he set up on his credit card, which allowed him to look into the problem as soon as it happened. Many credit and debit card issuers offer these monitoring options for free, so it makes sense to sign up. On top of reviewing your account activity on a daily basis, you should routinely check your credit reports and credit scores, in case a fraud incident has been going on long enough that it’s been reported to the credit bureaus. You can check two of your credit scores for free every month on Credit.com.

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This article originally appeared on Credit.com.

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My Art Institute and Fullsail Student Loans Are Outrageous and Unaffordable

Question:

Dear Steve,

I have obtained private loan debts from for-profit schools such as the Art Institutes and Fullsail. These debts have doubled from the interest alone. I find myself in a cycle: when I do work, all of my income goes to paying the minimum payment, or I go back school, but a legitimate state school to postpone payments.

I accrued these debts before getting married in the past year, and I am fearfully concerned. I’m currently unemployed, and my husband is bringing in the income, which pays all of the bills (even $186) towards interest only payment on ONE 46k private loan).

I fear not being any sort of income help once I do obtain a job, not being able to get a car under my name, not being able to help cosign a mortgage, and hell not being able to afford my retirement or life insurance when I do get on the ball for that.

What can I do? According to Navient, I owe $130,000 in private loans, I have two cosigners… I don’t know how to begin. My loans are currently in deferment until I graduate, except for the one I’m paying (through my husband).

I am sorting through my options before I graduate in a year. It’s not like I haven’t tried paying in the past, but if I have no job, my credit is doomed.

Michelle

Answer:

Dear Michelle,

It is of little comfort for me to confirm you are a good example of a larger problem faced my scores and scores of students in America.

Currently the benefit for schools, both for-profit and non-profit, is to sell butts into seats and not provide an education that is both affordable and beneficial.

Just today the Department of Education released a statement which said, “Today, only students, families and taxpayers lose when students don’t succeed–that makes no sense. Institutions must be held accountable when they get paid by students and taxpayers but fail to deliver a quality education. So should states and accreditors who are responsible to oversee them under the law.”

What complicates your situation is the loans are held by a private lender and there are cosigners involved.

When someone agrees to cosign for a private student loan they are agreeing to accept 100 percent of the responsibility for the debt if you don’t pay. My rule on cosigning is if anyone ever asks you to cosign for them, don’t do it.

I understand the strategy you’ve elected. The deferments and delays in paying take away the pressure of making unaffordable payments right now but it also inflates the balance due. A continuation of this path will only make things worse. But the consequences of dealing with your situation at this moment are not pretty.

If there were no cosigners then here are Top 10 Reasons You Should Stop Paying Your Unaffordable Private Student Loan.

But with cosigners involved the lenders will go after the cosigners and maybe even sue them if you stop paying. That’s not a great emotional outcome to face. But the truth is the cosigners were financial enablers who helped to leverage you into this situation. They bear some of the responsibility here even if they don’t want it.

You should have a conversation with the cosigners and explain the current situation. They deserve to know the pit is getting deeper. They also deserve the right to help you pay your way out of the student loan debt if they want to avoid any negative financial consequence.

If they don’t want to participate, then you may need to embark on a solution or strategy that is best for you and that probably includes defaulting on the debt.

Keep in mind, you also have a big risk for having cosigners as well. If the cosigner goes bankrupt or dies it is not uncommon for the private lender to demand the full payment for the total loans.

Again, if a cosigner was not an immediate concern it is also possible to think about discharging all or part of your student loans in a consumer bankruptcy. Your situation sounds a lot like the Opp case I talk about in this article. In that case the Court found the Art Institute loans were excessive and substantially reduced the balance due.

There have also been some recent cases that show how the bankruptcy courts are contemplatively considering the situations of student loan debtors in trouble. See this case and this one where the bankruptcy judge sided with the student loan debtor and discharged all of the debt.

Currently we are in a purgatory between students loading up on debt and realistic ways to deal with it. I see substantial progress being made for students but more hope will require federal legislative action and it is too early to predict what an upcoming presidential party change may do to the efforts put forward by the Obama administration. I just don’t have that crystal ball.

The good news is while the options for dealing with the debt are not awesome or easy, you do have some options and a way forward.

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

Help! Verizon Lost My Cable Box & Is Charging Me $2K

Question: Help! Verizon lost the cable boxes and remotes I returned to it via UPS after I moved out of my apartment. Now it’s trying to stick me with a $2,000 bill, even though UPS tracking showed it had been delivered, and even though the Verizon representative I spoke to agreed and updated my account to show that they had received the equipment.

Here’s the problem: I discarded the UPS tracking information after speaking with the Verizon rep in early December, never dreaming that it would come back to haunt me on my January bill.

Verizon is the one that provides the UPS return shipping label; I asked Verizon to connect me with the department that generates these shipping labels, naively thinking that they would have a record of mine. The three representatives I spoke with said they had no contact with the departments that handle equipment and shipping and were unable to connect me.

I don’t understand why the tracking number on the UPS shipping sticker that Verizon provides isn’t automatically linked to my Verizon account.

Meanwhile, UPS says it can’t track packages without the tracking number. My name and address are insufficient.

I’m at my wits’ end. As a young professional, I can’t afford the $2,000 Verizon is demanding. As a human being, I feel bullied by a big corporation that thinks it’s easier to stick me with the bill for their mistake. Is there any way to find that UPS tracking number?  — Jean Schindler, Arlington, Va.

Answer: Verizon shouldn’t charge you for equipment representatives say it’s already received. But how can you prove it was received? Only the UPS receipt would work, and UPS can’t furnish you with a new one.

You’ve painted yourself into a little corner.

Looking back, you probably should have kept the receipt until your next bill. But there was no way to know you’d have this problem. Future Verizon customers would be wise to keep your case in mind; don’t throw away any receipts until at least one billing cycle is complete. You might even consider taking a picture of the paperwork with your smartphone. Got that?

I think UPS bears some responsibility here. I mean, here’s one of the most sophisticated companies, in terms of information technology, and they can’t generate a new receipt? They also can’t find a record based on an address? Did they use a carrier pigeon to deliver the receipt the first time?

Your next step would be an appeal to someone higher up at Verizon. I list many of the Verizon corporate contacts on my site. You can also turn to my consumer help forum for assistance from an advocate.

I contacted Verizon on your behalf. A representative was able to track down the equipment you returned. Verizon apologized for the “inconvenience” and credited you for the fees billed in error.

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This article by Christopher Elliott was distributed by the Personal Finance Syndication Network.

More Than Half of Students Don’t Check Their Credit Scores

For the most part, there’s no good reason to not check your credit score. There are so many places you can get free credit scores, so access isn’t an issue, and even though all those scores are a bit different, they can be very helpful as you make financial decisions. Checking your credit scores is so easy (you can get your free credit score on Credit.com), you can make it part of your personal finance routine from the start of your adult life. But that’s not what people actually do.

Only half of college students check their credit scores, according to a survey from U.S. Bank of undergraduates ages 18 to 30. The survey was conducted online and fielded responses from 1,640 part- and full-time undergraduate students in the U.S.

Perhaps some of those students don’t have credit scores to check — unless you have a credit card or a loan, you won’t have a credit history on which to base credit scores — but given the ubiquity of student loans, it seems unlikely that such a large share of students are without credit scores.

As soon as you start using credit, you need to keep track of how well you’re managing it. Credit scores are used for a number of common things, like getting an apartment, setting up utilities, activating a cellphone account and getting car insurance, to name a few. Of course, if you want to get credit cards, an auto loan or a mortgage at some point, you’ll want a great credit score: The better your credit score, the more options you have when shopping for credit products, and the lower your interest rates on borrowed money are likely to be.

Make checking your credit scores a habit, just like reviewing your bank account activity or maintaining your budget. (If you’re not doing those things, you might want to re-evaluate your approach to money management.) No matter what scores you look at, make sure you know how to understand the number. Credit score ranges are different and are generated using different formulas, but they pretty much measure the same things, like payment history and debt levels. You can read more about understanding your credit score here.

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