Car Buyers: Beware This Sneaky Fee

Looking to buy a car? Beware of fine print on the next auto purchase you make to include extra fees for glass etching that you didn't ask for — or want.
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Steer Clear of Risky Bond Funds

High yield bonds a.k.a. junk bonds may prove to be a bad investment for 50+ wanting a good ROI. Reduce risk and check for FDIC certificate of deposit.
Posted in Uncategorized

7 Last Minute Things to Get Done Before The Start of Summer

Summer

I love the summer and getting extra time off, but there always seems to be something that gets overlooked. We all know Summer is coming but we allow procrastination to get the better of us. While not bad, per se, it can hinder us in the long run.

The Summer time is when your expenses can skyrocket out of nowhere. Vacations, BBQs, and outdoor activities can consumer a lot of your disposable income. Getting ahead of your finances and taking pro-active steps can help you prepare for what’s ahead. Here are some last minute things to tackle before the start of summer.

Make A Debt Payoff Plan

Do you have any consumer debt you’re currently paying off? More than half of Americans feel insecure about their finances, most often about their debt. If you have debt, you don’t have to feel ashamed or uncertain about your efforts to pay it off. You can take control of your debt with a payoff plan.

Write down all of your debts and figure out what’s needed to pay off each one. That may mean getting a personal loan to consolidate the debt, or it could mean finding a way to make extra money to throw at the debt. Form a plan and take action on it. You’ll be that much closer to becoming debt free as a result.

Start Working on an Emergency Fund

Would you be able to handle an emergency if one happened tomorrow? The Federal Reserve reports that 48% of people would have to sell something to cover an emergency of $400. That’s not really that much money when you think of it.

I know it seems silly to build an emergency fund when interest rates are so low, or if you’re paying off debt. That’s not the point. You never know what will happen in life, so you want to be prepared. Start small, even if it’s $50 per month. Begin there and build on that to amass a respectable emergency fund.

Use Your FSA Money

A FSA, or Flexible Spending Account, provides a way to save money on healthcare costs. There is one catch with FSAs though, it’s a use it or lose it system. In most instances, you lose any money you have in your account if left unused at the end of the year.

If you have a FSA through your employer, there are many ways to use those funds. Visit the doctor, make that trip to the dentist you’ve been avoiding or see the optometrist. Just make sure to verify the expense qualifies before using the money.

Invest Your Money

Investing may be the last thing you’re thinking of as you celebrate the holidays. Don’t let the hustle and bustle of the holiday season hold you back. Instead, look for ways to start investing if you’re not already doing so. If you’re looking for the best online brokerage account to begin your investing journey, always take into consideration the number of trades you’ll be making as well as the commission amount.

Will you receive the full match in your company’s 401(k)? If not, adjust your withholdings to receive it all. Have you opened an IRA account? It’s not too late. Don’t listen to the excuses not to invest, instead find a way to get started in the last few weeks of the year.

Prepare Your Taxes

Like it or not, tax season will be here soon. Now is the time to start planning for it, not April. There are many things you can do to start planning for tax time, such as:

  • Getting all your financial records in order
  • Making charitable donations
  • Taking advantage of business expense reimbursements

Not only will getting everything together save you time in the spring, but it can potentially save you some money.

Think Back over the Past Year

I don’t know about you, but this year has been a busy one for me. While I’ve accomplished some of the goals I had in mind at the beginning of the year, other things have fallen by the wayside.

I like to take some time before the year is over to review my progress toward my goals. You want to be honest with yourself here so as to truly see where you did well and where you fell short. Use those findings to take action and complete the next step.

Start Planning for the Next Three Months

The takeaway from these last minute things is to take action. We will greet summer in a few months.  Don’t let debt and a lack of financial preparation set you back for the last half of the year. If you start planning ahead, you’ll be able to enjoy life without overstretching yourself.

The post 7 Last Minute Things to Get Done Before The Start of Summer appeared first on ReadyForZero Blog.

4 Steps to Take to Avoid Money Arguments With Your Significant Other

couple arguing_lg

Talking about money can be a touchy subject — so touchy, in fact, that one survey found finances to be the leading cause of stress in a relationship.

While there’s bound to be a bit of wariness when it comes to discussing your intimate financial details with your significant other, there are certain things you can do to help make the situation less fraught. If you haven’t had a money talk yet with the person you’re planning to move in with, marry or share other significant financial decisions with, now’s the time perfect time to do so.

But first, read this and consider taking the following actions …

Step 1: Talk about your financial past

Understanding how each person in a relationship grew up with regard to finances is a great way to understand why one person might feel a certain way about money today. For example, if your girlfriend’s parents never talked about money in front of her, it stands to reason that money might be a sensitive or taboo topic for her. If your boyfriend’s family grew up struggling to make ends meet, it makes sense that he would feel safer with a more significant savings cushion to fall back on in hard times. It still might be difficult to talk about money, but at least understanding your starting points is a strong foundation for an honest and empathetic financial conversation.

Step 2: Vow to be honest

Hiding things from your special someone will only make matters worse, especially when you consider the fact that these things are bound to come out later, anyway. If your future includes owning a home, moving in together or buying a car, it will be even harder to hide something like looming credit card debt once you try to make those dreams into a reality. Financial infidelity could become a serious problem within your relationship if you try to hide something (or think your partner is doing the hiding), so both of you should promise to be as open as possible. (Check out this piece for more about financial infidelity.)

Step 3: Create a shared financial plan for your future

Once you’ve discussed the past (how you both relate to money based on the way you grew up with it) and the present (whatever debts you might both owe), then you can start to make plans for the future. Moving in together, buying a house, retirement planning and having kids — along with plenty of other goals — will take a lot of financial planning, so it’s a good idea to start discussing all of that as early as possible. There are plenty of ways to divide expenses, and what works for one couple might not work for you. Some couples are able to save one entire paycheck and live off another, while others split things evenly down the middle. Still others decide to break up expenses based on who makes more money. Consider all of your different options before jumping into action, and make a plan to check back in after a couple months to ensure that whatever scenario you go with is working for both of you once you start acting on it. 

Step 4: Have frequent check-ins

People get raises and lose jobs, rents go up and bills magically appear. Finances are not a fixed point, which means it’s important to plan for regular financial status check-ins. Plan to do this at least once a month, if you can, and it doesn’t have to be a drag. Whether you make it a easy breezy check-in on date night out or something somewhat more serious where you stay in with a bottle of wine, try to keep in mind everything you’ve discussed in the past and all of your future financial goals — after all, there’s a solid reason you’re doing this.

Remember, even couples who are careful to discuss their finances frequently may run up against sticky money situations from time to time. Check out this piece for some advice on how to navigate certain awkward money talks with your partner, and if you’re interested in advice on how to handle financial chats in other areas of your life, too, read this piece about five embarrassing money situations and how to handle them.

The post 4 Steps to Take to Avoid Money Arguments With Your Significant Other appeared first on MagnifyMoney.

Will the Obama Administration Side With Debt Collectors?

budget_fails

With the Supreme Court in flux, the highest authority in U.S. law has punted a landmark case over to the executive branch, effectively asking it to decide whether debt collectors can charge interest rates so high they’re deemed illegal in some states.

In Madden v. Midland Funding, LLC., a debt collection company purchased the plaintiff’s charged-off debt, but the plaintiff resided in New York state where the usury limit is 25% annually. The complaint was simple. Midland had tried to collect 27%, two points more than the state usury laws allowed. The U.S. Court of Appeals for the 2nd Circuit decided in the plaintiff’s favor, taking the view that the two percentage points over the state usury limit violated the Fair Debt Collection Practices Act.

The question answered by the 2nd Circuit had nothing to do with whether or not debt collectors should be allowed to hunt and potentially mortally wound those who are not financially strong — but more simply what sort of weaponry they should be able to use to do so.

Bazooka or Pellet Gun: The Problem

Madden v. Midland Funding LLC is a classic manifestation of our nation’s often rudderless approach to consumer financial safeguards.

For those who follow these things, it won’t be news that the lack of steerage has absolutely nothing to do with any inherent design flaw. The basics of the banking system’s ability to extend loans and charge interest on them established by Alexander Hamilton still works fine. Having said this, that system has sustained damage on the many rocks and reefs of patchwork legislation over the years, laws and regulations aimed specifically at empowering the lender—with the exception of extreme cases like loan sharking and other RICO offenses—over the interests of the borrower.

Necessary Background

A 1978 Supreme Court case, Marquette Nat. Bank of Minneapolis v. First of Omaha Service Corp., decided that the National Banking Act of 1863 allowed a national bank to charge the interest rate of the state in which it was headquartered, regardless the rates applicable in the state where a borrower resides.

In 1980, Congress passed the Depository Institutions Deregulation and Monetary Control Act, which exempted federally chartered installment plan lenders from state usury limits. This is the underlying reason so many lenders scurried to set up shop in states like South Dakota and Delaware. They offer the most bank-favorable terms.

Now, under the post-Marquette reading of the National Banking Act, any nationally chartered bank could charge 27% interest, so long as it wasn’t headquartered in New York State, but that “professional courtesy” proffered by various lender-friendly generations of lawmakers could not be extended to Midland Funding. The reason: It is a non-bank. Therefore, the decision found, state usury laws applied.

The decision created quite a stir, because if upheld, many folks in the financial world argued, it would create Byzantine layers of complication since states have different applicable rates. First of all: this is ridiculous. There are already countless state and local laws that govern how debt collectors, banks and non-banks operate. One more is meaningless.

Meanwhile, the fate of countless consumers in the sights of debt collectors will be decided by the Obama administration, which has been asked to file a brief “expressing the views of the United States” in the matter of Madden v. Midland Funding LLC.

Pending Justice Antonin Scalia’s replacement, four votes are needed to get the case heard before the Supreme Court. Clearly, they don’t have the votes, and they are looking for some guidance on the matter from the president, or more precisely, from Obama’s Solicitor General Donald Verrilli.

What Should the Solicitor General Do?

Is it too blunt to say merely, “Duh?” There will always be a hunter-hunted component in the world of consumer debt collection. At issue is to what extent that will be allowed. Depending on the Solicitor General’s decision on behalf of this Administration, non-bank entities will either have to fish using the catch-and-release method, or they’ll get to use dynamite.

Right now, with Madden in the balance, the prevailing interpretation of the law allows abuses to occur. The 2nd Circuit decision suggests a new, more consumer-friendly chapter in consumer financial protections. Hopefully, Mr. Verrilli will decide that the 2nd Circuit got it right.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

More on Managing Debt:

Image: David Sacks

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I Can’t Afford to Go to My Dream School & I’m Freaking Out

graduation_cap_and_checkbook

Figuring out where to go to college is a very long process, and this is the home stretch. But for many students trying to decide where to go to school in the fall, this time of year is also the worst part. The journey that started out with so many exciting (albeit stressful) unknowns is coming down to a few hard, cold facts: where you’ve been accepted, how much money the school is giving you and how much money you’re going to have to spend to go there.

There’s no more wondering if or hoping you’ll get more scholarships, grants or generous aid packages. There’s just a lot of math with big numbers and the possibility that you’ll be in a lot of debt by the end of all this. As the financial aid award letters started arriving at her home a few weeks ago, one high school senior started to worry she’d end up in much more debt than she originally thought.

Delilah, a 17-year-old from Maryland who asked we not use her last name because she’s still waiting to hear from some schools, didn’t get any financial aid other than unsubsidized federal student loans from the first two schools that sent her letters. Still waiting to hear from her dream school — $64,000-a-year Oberlin College — she started to worry there was no way she’d be able to afford the schools she loved. In matter of days, the excitement she’d felt for months about going to college evaporated.

“I’m more nervous now,” she said. “I don’t know what’s a large amount of student loans. … How much is the debt going to screw up my financial life?”

As happens to so many students and their families, Delilah’s Expected Family Contribution (determined by information filled out on the Free Application for Federal Student Aid, aka the FAFSA) is much higher than what her parents told her they’d pay for college. Her EFC is $60,000 for the next academic year (it’s determined on a yearly basis). Her parents said they’d give her $10,000 a year.

“It’s kind of catching them off guard,” Delilah said. She’s the oldest child in her family, and her dad worked through college to pay for it. “They thought it was totally reasonable to have me pay my way through college.”

Now that her potential schools are sending her financial aid award letters, she and her parents see she may need a significant amount of federal student loans to pay for school. She has some scholarships and merit awards, and she can get varying amounts of college credit through her AP scores and some community college classes she’s taking, but this, combined with the federal student loans and her parents’ contribution won’t cover everything, it seems.

On top of all that, Delilah wants to study history and doesn’t expect to have a lucrative career. She’s struggling to grasp what’s an acceptable amount of student loan debt, but it’s hard for her to process working with such massive sums of money.

“I feel like right now I wouldn’t want to take on more than $40,000 or $50,000 [in debt] but I’m not used to dealing with this much money, ” she said. “I know people who think that $150,000 of student loan debt is the total norm.”

It’s not. The average student loan borrower from the class of 2015 owes about $35,000, according to an analysis of government data by Mark Kantrowitz, publisher at Edvisors — though those six-figure debt loads aren’t unheard of, even for undergraduates.

This is Delilah’s biggest financial decision so far, and she has to make it soon. For months she’s had her heart set on Oberlin, but with a month left before she has to commit, she’s trying to figure out how to love other schools.

“I don’t want to come down to going to a school I don’t like, but finances are the biggest thing right now,” she said. With AP credits and lower tuition, the in-state school she applied to, St. Mary’s College of Maryland, could end up being significantly cheaper than her first-choice Oberlin. Still, Oberlin is her favorite. She has a lot to think about and little time to make a decision. “It really frustrates me. I think the price of college is just ridiculous — it blows my mind.”

We’re going to check in with Delilah in the coming weeks as she finalizes where — and how much she’ll pay — to go to college. (You can see how your student loan debt may be affecting your credit scores by viewing your free credit report summary, updated each month, on Credit.com.)

More on Student Loans:

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The Best MBA Programs for Less Than $15K a Year

mba

The master’s degree in business administration (MBA) is one of the traditional education choices for people seeking high-powered careers with a lot of earning potential. But MBAs aren’t cheap. A year of tuition at a top business school can easily exceed $50,000, and many programs last for two years.

Given that students are highly likely to have education debt from their undergraduate degrees, graduates’ student loan debt can easily reach six figures. That can create a lot of pressure to find a lucrative job, because that pricey MBA probably won’t seem as valuable if you can’t afford your student loans, fall behind on payments and damage your credit. (Keep in mind, there are income-driven repayment plans that federal student loan borrowers could use to help make loan payments more manageable. You can see how your student loans may be affecting your credit score by viewing your free credit report summary, updated each month, on Credit.com. )

Still, not every MBA requires you take on an obscene amount of debt. In-state tuition is probably the most common way to get a great degree for the least amount of money, though some private and out-of-state schools are still much cheaper than, say, Columbia University, which costs $65,988 per year. Using U.S. News & World Report’s MBA rankings, we rounded up the top MBA programs you can attend for less than $15,000 in tuition each year (full-time).

University of Wisconsin—​Madison

U.S. News Rank: 27 (four-way tie)
Tuition: $14,476 per year in-state, $29,293 per year out-of-state

Brigham Young University

U.S. News Rank: 31 (three-way tie)
Tuition: $11,970 per year for Latter-day Saints’ members, $23,940 per year for non-members

Texas A&M University—​College Station

U.S. News Rank: 31 (three-way tie)
Tuition: $11,100 per year in-state, $24,416 per year out-of-state

University of Florida

U.S. News Rank: 37 (tie)
Tuition: $12,737 per year in-state, $30,130 per year out-of-state

University of Alabama

U.S. News Rank: 53 (tie)
Tuition: $10,170 per year in-state, $25,950 per year out-of-state

University of Georgia

U.S. News Rank: 55 (tie)
Tuition: $13,192 per year in-state, $31,510 per year out-of-state

University of Missouri

U.S. News Rank: 59
Tuition: $350 per credit in-state, $937 per credit out-of-state
(The program is 57 credit hours over 2 years.)

University of Oklahoma

U.S. News Rank: 63 (five-way tie)
Tuition: $5,992 per year in-state, $22,937 per year out-of-state

University of Connecticut

U.S. News Rank: 68 (three-way tie)
Tuition: $13,026 per year in-state, $33,812 per year out-of-state

Iowa State

U.S. News Rank: 71 (four-way tie)
Tuition: $9,870 per year in-state, $22,808 per year out-of-state

University of Massachusetts—Amherst

U.S. News Rank: 75 (tie)
Tuition: $2,640 per year in-state, $9,938 per year out-of-state

University at Buffalo—​SUNY

U.S. News Rank: 81 (tie)
Tuition: $14,410 per year in-state, $24,390 per year out-of-state

CUNY Bernard M. Baruch College

U.S. News Rank: 85 (three-way tie)
Tuition: $14,900 per year in-state, $30,600 per year out-of-state

Binghamton University—​SUNY

U.S. News Rank: 88 (three-way tie)
Tuition: $14,410 per year in-state, $24,390 per year out-of-state

University of Kansas

U.S. News Rank: 88 (three-way tie)
Tuition: $376 per credit in-state, $880 per credit out-of-state
(The program is 50 credit hours over three semesters and a summer session.)

University of Kentucky (Gatton)

U.S. News Rank: 92 (three-way tie)
Tuition: $12,428 per year in-state, $26,964 per year out-of-state

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