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9 Ways To Earn Extra Money to Pay Down Debt You’ve Never Thought Of

College student catching money in the airWhen you think about earning extra money to pay down debt, what do you think of? Most people would think about things such as having a garage sale, selling stuff on eBay or horror of horrors, getting a second job. The problem with options like garage or estate sales or selling stuff on eBay is that you probably have a limited number of items available to sell. So what would you do when you run out of that stuff?

Getting a second job is one of the best ways to earn extra money to pay down debt but it just doesn’t work for everyone. We live pretty much in a 24/7 world now and the hours you’re working at your primary job just might preclude you from getting a second gig. For example, we know of tech support people that work shifts like 10 AM to 6 PM or even 10 PM to 6 AM. It’s just not possible for people like that to take on second jobs. Even if you have a traditional 8 AM to 5 PM job you might find that there are many days of the week when the job just doesn’t end at 5 PM.

So if you fall into one of these categories what could do to earn extra money?

#1. Put your car to work

If you own your car you could put it to work earning money for you. In today’s sharing economy there are numerous people looking to rent other people’s cars instead of purchasing their own. There are sites such as RelayRides and GetAround where you could connect with people that might be interested in renting your car by the day or even a week. If you’re not in a position where you could rent your car you could pick up extra money through Lyft or Uber where it’s possible to earn up to $35 an hour by taxiing people around. Plus, you get to set your own hours.

#2. Do mystery shopping

Here’s another part-time gig you could do where you get to choose your own hours. If you’re not familiar with mystery shopping it’s where you go into restaurants, stores and other places of business and then report on your experiences to help the companies determine how well they’re doing in customer service. You not only make your own schedule as a mystery shopper but you could take on as many or as few assignments as you chose. Some people who do mystery shopping take just a few assignments a week and make maybe $100. If you were to treat mystery shopping more like a full-time job you could earn up to $500 a week.

#3. Become an eBay drop shipper

If you don’t have stuff of your own to sell on eBay you could become a drop shipper or middleman. This can be a great gig because you don’t even have to ship stuff yourself. You find companies that are willing to use drop shippers and then list their products on eBay along with some good sales copy. When you make a sale, you notify the company that has the product and it ships it to your buyer for you. There is an online wholesale directory called SaleHoo that has listings for more than 8000 prescreened suppliers including companies like Playskool and Gap. Sign up for some of these companies and you would then become a storefront selling their products. The money you earn would be the difference between their wholesale prices and what ever it is you sell the merchandise for.

#4. Do affiliate marketing

Many different companies including well-known ones such as Amazon and Starbucks are looking for new customers and are willing to pay to get them. The way affiliate marketing works is that you promote a company’s’ products or services using a unique URL. When a person uses that link to buy the company’s products, you get a commission. Sites such as Share a Sale and Rakuten Affiliate Network are affiliate consolidators where you can find many different companies willing to pay you a commission to help sell their products or services. If you’d like to know more about affiliate marketing, go to the website Affilorama where you’ll find training information that could help you be successful.

#5. Become a direct seller

Thousands of people make extra money by direct selling for companies such as Avon and Mary Kay. Direct selling has earned a sort of poor reputation but does offer the opportunity to make an enviable amount of money while still working a full-time job. Direct selling isn’t just about cosmetics, either. You could earn a nice extra piece of change selling wellness products like Advocare, pet products, Tupperware or accessories.

#6. Join focus groups

Companies that would like to improve their marketing and advertising periodically conduct focus groups consisting of potential customers to help them understand what’s working and what’s not working. If you have the time necessary to participate it’s a good way to earn extra money. There are many companies that are actually anxious to pay you for your insights as a consumer and in some cases they’ll even come to your home. One company recently held a focus group that lasted two hours and consisted of talking with just several people about snack foods and tasting some cookies. The person hosting this group earned $250. The website has listings of companies looking for people that would like to participate in focus groups. Alternately you might search Craigslist using keywords like “paid study,” “market research” or “surveys.”

#7. Become a consultant

Many small companies need help but can’t afford to work with one of the big, well-known consulting groups. Instead, they look for individuals like maybe you where they can get the same skills cheaper and on an ala Carte basis. For example, HourlyNerd connects well-educated professionals with small companies that need consulting help. If you have skills in areas such as marketing, social networking, search engine optimization or program management you could pick up a nice bit of change by consulting with companies that need these types of skills.

#8. Be an online jurist

There are trial attorneys that look for people to judge cases that haven’t gone to court yet. They use online jurors to help figure out what an average group of people might think about the merits of their cases or how they might respond to the attorney’s concepts or tactics. Companies such as Online Verdict enable attorneys to access regular people to serve as online jurors. If you meet the criteria to sit on one of these juries you would likely earn between $10 and $60 for your time.

#9. Rent out a room or your househouse with cash in it

If you have a spare room in your house why not rent it out using a site like Airbnb that connects travelers with people that are willing to rent out a room or an entire house. There are also sites such as the VRBO (Vacation Rentals by Owner) and HomeAway where you could rent your house to paying guests when you’re away from home. In the event you have a friend that would let you sleep on his or her couch you could rent your house for a period of time without even leaving town.

FTC Wants To Help You Battle Identity Theft

identity theft sign

identity theft sign illustration design over white

Identity theft continues to be a problem in our society today. This crime happens when someone uses your identity without authorization so they can buy something in credit under your name. That is how they rob from you.

When you become a victim of identity fraud, that is a clear sign that you need to implement financial management. If you are a good manager of your personal finances, it would be very hard to rob you. Thieves will find it hard to get your personal information so they can rob from you.

Some people are in deep financial trouble not because they were irresponsible with their money. Some of them had the misfortune of becoming victims of identity theft. Although they were careful with their purchases, they were unaware that someone already got their information and were opening new credit accounts under their name. When the time came for these victims to borrow money, they are surprised to find out that they are disapproved because someone loaned an amount under their name and did not pay it back. If the victim cannot prove they are innocent, they will end up paying for the money and all the penalties and interest charges associated with it.

According to a press release published on, identity theft was the top consumer complaint in 2014 – at least those filed with the Federal Trade Commission. This was revealed in  the 2014 Consumer Sentinel Network Data Book. It was 13% of the overall complaints filed for the whole year.

Given this information and the seemingly growing threat of this crime prompted the FTC to create a tool that will educate consumers in case they face this in their life.

FTC released a tool to help victims of fraud

The tool that was launched recently is at This website shows the step by step instructions for those who are already victims of identity theft. Although you can protect yourself from this type of crime, there are thieves who are just too smart and good at what they do. In the event that you do end up becoming a victim of this crime, your next steps will determine the extent of the damage that will be done to your finances.

This is what the website wishes to solve. Based on the site, these are the things that you need to do.

What To Do Right Away

As soon as you find out that someone took your identity and is using it to steal from you, it is important to inform the company involved. For instance, if your credit card was stolen, you need to get in touch with the credit card company immediately. Let them know that any transaction done after the time the crime was committed should be taken with caution. You can ask them to freeze the accounts and ask for more identification before any transaction is to be completed. You also have to change any passwords, PIN or other security questions associated with your account.

The credit bureaus should also be alerted after. You need to raise a fraud alert on the stolen account. You only have to get in touch with one of the three credit bureaus (Equifax, TransUnion and Experian). The one you will call will tell the other two on your behalf. This fraud alert will be raised so that everytime someone uses your account, they will be asked for extra identification. That means only you can use it.

The identity theft incident should also be reported to the FTC so you can get an FTC Identity Theft Affidavit. This is one of the documents that you need to submit to the local authorities when you report the crime.

What To Do Next.

Once you have accomplished the reports needed, you need to start repairing the damage – if there is any. Check if there are any new accounts opened under your name. You need to close these. Just call the companies involved and tell them that you were a victim of identity theft and that you want to close the new accounts. The company should send you a letter confirming that the fraudulent account was closed. Make sure you keep this document in case a transaction appears in your credit report in the future.

You should also check your existing accounts in case there are charges that you did not make. You need to dispute these transactions so they will be removed from your credit report. Again, make sure the companies will send you a letter proving that the charges have been removed.

The actions that you will do is to help you correct any information in your credit report.

This website is a great way for you to know what to do about identity theft should you become a victim. Again, this crime is only destructive if you fail to act on it immediately. If you can raise the fraud alert or freeze your accounts immediately, the perpetrator will be unable to do harm to your finances or credit report.

This site also has information that you can follow in case you are a victim of specific identity theft like your tax identification, Social Security, etc. For child or medical identity theft, there are certain things that you need to do so it pays to take a look at this site. Regardless if you are a victim or not, check out this site and try to memorize what has to be done so you will know what to do in case you become a victim of identity theft.

Tips to keep yourself from being a victim of identity fraud

According to a study published on, there is a new victim of identity theft every two seconds. This study was done by Javelin Strategy and Research. According to the published report, victims of this crime does not only bear the financial damages. There are also emotional effects after becoming a victim of identity fraud. There is an emotional roller coaster to be dealt with while you are trying to solve the crime. And of course, the paranoia will never really leave you – even years after the incident.

This should give you more motivation to make sure that this will not happen to you. There are critical things that you need to know about identity theft so you can avoid it. Here are some tips that you need to implement in your life.

  • Always check your credit report. You are entitled to three free reports each year – one from the three major credit bureaus. All you have to do is to download a copy from the Free Annual Credit Report website. You can get one copy every four months so you do not have to spend to look at your credit report.
  • Be cautious when entering your personal and financial details online. Make sure that the website you are accessing is secure. There are logos to look at to make sure it is a trustworthy site.
  • Avoid accessing your financial records or entering your PIN or password using a public wifi. It is very easy to intercept your information if you access it through a public wifi.
  • Keep the antivirus program of your computer, laptop and other devices updated. Malwares can steal your information. Make sure your electronic devices are protected at all times. If you have to invest in a software, then do just that.
  • Stay informed. Lastly, you need to always keep yourself informed. Try to find out the new scams and techniques of criminals to get your information. Also, be aware of what you need to do in case you become a victim of identity theft.

In the end, vigilance is the best way to be protect yourself from the threat of identity theft. Although you need to trust others, it is important to know whom you should put your trust to.

10 College Majors You Might Want To Shun Like Ebola

Young black college graduate with tuition debt, horizontalBy now you (or your child) have chosen a college, are getting ready for those great graduation parties and probably giving a lot of thought to your future. Have you decided on a college major or are you still vacillating? Truth be told you really don’t have to choose a major until you’ve been in school for at least a year as the courses you’ll be taking your freshman year will be mostly basic classes you’ll be required to take before moving into your major field of study.

We understand that when it comes to choosing a major you may want to follow your passion – be it working with preschoolers or becoming a world-renowned artist. There’s an old saying that a rising tide lifts all boats meaning that a rising economy will benefit everyone. Unfortunately, in the case of careers that’s not always the case. Our economy has certainly gotten much better but there are still careers that remain low paying. Your may want to follow your heart but it’s important to also follow your bank account by knowing what you could expect to earn. The Georgetown University Center on Education and the Workforce recently used census data to determine the 10 lowest paying college majors and you might want to know what they are before choosing a major.

The bottom five

You might want to make a difference in the world by teaching preschoolers and kindergartners but you should know that an early childhood education major would yield an average annual salary of just $39,000. Your passion might be community organization or human services but do understand that the average annual salary for people that majored in it is just $41,000 followed by studio arts with an average annual salary of $42,000.

Social work might be a very rewarding career emotionally but not monetarily as its graduates earn an average annual salary of just $42,000. Those who majored in teacher education have the same annual average salary – $42,000.

The next five

Visual and performing arts came in number six with an annual average salary of also $42,000. We can’t think of many careers more exciting and interesting than performing arts so long as you know that one of the rewards isn’t a salary. Of course, if you were to major in performing arts and became a star on Broadway or in Hollywood you would certainly be earning a great deal more than at $42,000.

Ranked number seven in low-paying jobs is theology and religious vocations at $43,000 a year. However, this is definitely an area where your annual salary would probably be a distant second to your “calling”.

As you have read a major in early childhood education would earn you an average of just $39,000 a year and elementary education does not fall far behind at $43,000 a year.

The ninth -ranked lowest paying college major is drama and theater arts at an average salary of $45,000 a year. Of course, this major holds the same potential as performing arts, which is that if you were to become a breakout star your earnings would far surpass that $45,000.

Finally, the 10th ranked lowest paying college major is family and consumer sciences with an average annual salary of $45,000. This major was formally known as home economics and is all about the economics and management of the home and the community. In addition to preparing its students for homemaking or professional careers it also teaches about real-life responsibilities at home. This means it could actually be a good choice for people whose goal is to juggle a career with being homemaker.

The highest-paying majorsstack of cash

If your passion is more about money than making a difference in the lives of young children, you might be interested in knowing the highest paying majors. As you might imagine, nine of the top 10 are in engineering fields. Petroleum engineering leads the pack with an annual average salary of $136,000. The second highest paying major is all about drugs but in a good way as it includes pharmacy, pharmaceutical administration and pharmaceutical sciences where these majors earn $113,000 a year. This is the only area in the top 10 that doesn’t have anything to do with engineering.

Ranked number three with an average annual salary of $98,000 is metallurgical engineering followed by mining and mineral engineering at $97,000 a year. Chemical engineering ranked fifth as its graduates have an average annual salary of $96,000 followed closely by electrical engineering at $93,000 a year.

It clearly pays to be a rocket scientist or at least to major in aerospace engineering as its graduates have an average annual salary of $87,000. Computer engineering continues to rank well at number eight with an annual average salary of $87,000. While geological and geophysical engineering ranks last in the 10 highest paying majors its graduates still earn an average of $87,000 a year or almost $50,000 more than those that majored in early childhood education.

The school you choose also makes a difference

Maybe you or your child has already chosen your school but if not you might be interested to know which ones can have the biggest effect on your salary.

For example, if you were to choose the California, Institute of Technology
(Caltech) you increase your annual earnings by 49% just by attending it versus attending comparable colleges. Colgate isn’t just toothpaste as it’s also a school you might want to attend as its graduates enjoy an annual average boost of 46% vs. comparable schools.

It will probably come as no surprise that graduates of the Massachusetts Institute Of Technology enjoy a salary boost of 45% and Rose-Human Institute of Technology graduates get a boost of 44%. However, here comes one that might shock you. The graduates of little Carrollton College, a liberal arts school located in Northfield, Minnesota, enjoy a salary boost of 43%. Graduates of Washington and Lee University also see a 43% boost vs. comparable schools.

If you’re thinking you might like a maritime career there is the SUNY Maritime College whose graduates also enjoy a 42% salary boost over comparable schools, plus they have the opportunity to earn licensure as a ship’s third officer

The remaining schools you might want to attend to boost your salary are Clarkson University, Manhattan College and Stanford University. Graduates of Clarkson University enjoy a 42%salary boost as do graduates of Manhattan College and Stanford grads see a 41% boost over comparable schools.

The net/net

Putting all this together the bottom line is that if you have the right prerequisites and want to maximize your potential earnings, you should go to Caltech and major in petroleum engineering or major in pharmaceutical sciences at Colgate University. A third the choice would be to attend Massachusetts Institute of Technology and major in metallurgical engineering. If none of these appeal to you there’s always Carlton College where you can earn a Bachelor of Arts degree but still do well vs. graduates of equivalent liberal arts colleges.

3 1/2 Circumstances When It’s Okay To Take On Debt

Inductive reasoning is when you try to determine the truth of something by reasoning from the specific to the general. An example of this in the case of debt would be:

I have this debt, which is bad.
Therefore, all debt is bad

woman with percentage signs and credit cardThe problem with inductive reasoning is that it’s impossible to prove its conclusions are true. And this is certainly true in the case of debt. Despite what you may have been told many times over the years not all debt is bad. In fact, most financial experts today recognize the fact that there can be good debt as well as bad debt.

Bad debt

Bad debt is debt you use to finance things you consume. The biggest example of bad debt is probably credit card debt because of the way most people use credit cards, which is typically to buy clothing, furniture, a cell phone or to pay for a night out on the town.

Even though we may not want to admit it, using debt to pay for a vacation is also bad debt. A vacation might improve your health and emotional outlook and help you be more productive when you get back but vacations never appreciate in value. When you use debt to finance a vacation you’re basically borrowing from tomorrow in order to pay for today’s fun. Once the fun is over all you really have left are some happy memories and a lot of debt. This is especially true if you use debt to finance a vacation you can’t afford.

What is good debt?

What’s good debt? Many financial experts now regard debt you use as an “investment” as good debt. How, you might ask, can any debt be considered an investment? It can be if you use it to buy something that will increase in value over the years and contribute to your general financial health. Here are three concrete examples of debt that most experts would agree is good debt.

Buying a home

Getting a mortgage to buy a house is considered to be good debt because housing always increases in value over the long run. As an example of this where we live houses have increased an average of 12% just in the past year. If you lived here and bought a house a year ago for $200,000 home, it would now be worth at least $224,000 and would therefore be a very good investment. In addition, owning your home can contribute to your emotional health because for most people owning their homes gives them a heightened feeling of security and happiness. Of course, it’s important to never take out a mortgage that you can’t afford, as this would turn that good debt into bad debt.

Going back to schoolDiploma with money

A second example of good debt is to finance your education if you decide to go back to school to further your career. In fact, this could be a very good debt because it’s likely you would be able to see a nice return on the investment. As an example of this let’s suppose you were to spend $20,000 to get an MBA, which then enabled you to get a job earning $10,000 more a year. You would have that MBA “paid for” in just two years and by year three you would be clearing a “profit” of $10,000 a year. Of course, just as with using debt to buy a home it’s important that you don’t run up too much student loan debt. Studies have shown that when people end up owing $50,000 or more on student loans it’s because they used too much of the money to finance expensive vacations or for their everyday living expenses.

Going into business for yourself

A third situation where debt can be considered good is if you’re starting a business. According to the website Nerd Wallet two thirds of today’s millionaires are entrepreneurs – meaning that they started their own businesses. If you’re starting a business and need to purchase equipment or lease space you could need an SBA (Small Business Administration) loan to help you get started. Just as with going back to school you need to borrow as little as possible. For example, instead of leasing space you might be able to work out of your home. If you do need to borrow money you might be able to get it from family members at much more favorable terms than if you were to go to a bank. Of course, you will still need to be diligent about paying back the money or you could end up causing a horrible family situation.

The ½ — buying a car

This is definitely a gray area because most experts would say that buying a car is bad debt – as automobiles never appreciate in value. In fact, the minute you drive a new car off the lot it will lose somewhere around 20% of its value. However, if you require that automobile to get to and from work or if you use it in your business then it could be considered to be good debt. If the size of your family has increased and you need a larger sedan or an SUV in order to haul everyone around, you could consider that loan to be good debt or at least necessity debt. If you do find you need a new vehicle, it’s always better to buy used and avoid that 20% depreciation you’d get hit with when you drive a new car off the lot. You’ve probably seen dozens of television commercials offering 24- or 36-month automobile leases. When the leases run out on all those vehicles they are sold at much more affordable prices, which means you might be able to pay off that loan in 36 months instead of 60 or even 72.

When it’s okay to use a credit card

As we said before, credit card debt is bad debt. But if you keep your balance low enough that you can pay it off every month then having a credit card can be a good thing. Using a credit card is certainly safer than carrying around a big wad of cash and can be more convenient than writing a check. The credit card business has become very competitive and there now numerous cards available that come with nice rewards in the form of points, airline miles or cash back. So long as you can pay off your balance at the end of every month it’s certainly okay to use a credit card and reap some of those rewards. In fact, there are people who put everything on a credit card – groceries, gas, clothes, movies, school supplies, take-out meals – in order to earn the maximum number of miles or cash back. There’s absolutely nothing wrong with this strategy as long as you pay off your balances every month. But if you start carrying balances forward you could soon find yourself paying 15%, 19% or even more in interest, which would quickly gobble up those airline miles, points or cash back you’re earning.

Here, courtesy of National Debt Relief, is a short video with 10 good tips for using your credit card(s) sensibly.

Why You Should Let Technology Take Over Your Financial Life

skeleton hand and piggy bankThere you are at your favorite supermarket in checkout. You watch the money add up as the clerk scans your items. You break out in a cold sweat because as the total grows you become increasingly worried that there may not be enough money in your checking account to cover the cost. If you go into overdraft your only option will be to start putting things back. And how embarrassing would that be?

Fortunately you can keep this from happening. You can also avoid other financial disasters such as neglecting to pay a bill on time, completely missing an important payment or having a credit card payment denied because you’re over limit

The answer? Let technology take over your financial life by automating your spending, bill paying and saving. As an example of how technology could help just go back to our example about standing in line at the grocery store. Instead of stressing out before you hit checkout you could simply pull out your cell phone, open your checking account app and look to make sure there is enough money in it to cover that grocery bill.

Assuming you can’t afford to hire someone to keep track of your money for you the best solution is to use financial automation to do all this. It can tell you how much money you have and whether you can spend it. In fact, if you set up financial automation correctly it will make the best decision you intended to make – except it does it for you.

Here’s what you need to do to use financial automation.

#1. Make a list of the bills you could automate

You need to first gather information. This means listing all your bills you believe could be automated via your bank or a bill paying service such as Mint Bills. Paying bills via your bank is best because the bill paying service will likely charge a fee. Check with your bank to see if it will let you set up online bill pay. If so, use it to pay as many of your bills as possible

#2. Create a special account

Set up a separate account that you will use just to pay your fixed/reoccurring monthly bills. If your partner or spouse and you each have income that flows into your checking account, create an automatic transfer from each of those accounts into that special account bimonthly. That will allow both of you to contribute to bill paying. If you’re single you should still set up a separate account for bill paying and variable spending. Next, figure out what your bills average each month, add a 15% buffer and create an automatic transfer of that amount of money from your checking account into your bill-paying account every payday.

checklist#3. Batch your payments

If you are paid twice a month this will make the most sense. If you’re an entrepreneur or own a small business it would still be a good idea to divide your bill paying into the first and second half of the month in place of having to pay them scattershot during the month. Find the customer service number for each of your bills then call and ask to have the due date for particular bill changed because you want to batch your bill paying. You should make it either the 5th or 20th day of the month. If you’re paid on the first and 15th of the month this would give you several days for the transfers to go through to the your bill paying account before your bills are paid. As an example of this, you could set your rent or mortgage to be paid on the fifth and all of your other bills on the 20th. That should just about equal out the two payments. One good trick is have a rewards credit card set up to pay your bills so you would earn points and then have its full balance paid automatically every month on the 20th.

#4. Don’t turn on automation quite yet

You need to create a savings buffer before you turn on auto-transfer and auto bill paying. You just wouldn’t want to set up all of this and then run out of money and create an avalanche of late fees and overdrafts. What many financial experts recommend is that you save up enough in your bill paying account for two months’ of fixed and recurring bills before you turn on the system. This assures you that you’ll always be somewhat ahead of the game in case you have a bill that comes much higher than you had expected.

Once the money starts going out of your checking account to your bill paying account every two weeks you will want to set up an automatic transfer from that account to your savings account. In the personal finance book, All Your Worth, Elizabeth Warren councils the 50/30/20 rule. This is where you try to keep your fixed expenses to 50% or less of your monthly net pay while putting 30% towards your variable spending and the final 20% into paying off debt and savings. Since you’re now paying your credit cards from your bill paying account you should be able to set up auto transfer of 10% of your income into savings monthly, which means you will soon have a nice emergency fund, a retirement account or an account for some other savings goal.

#5. Now, let ‘er rip

Once you have your buffer in place you can now go all in. This means going into your bill paying account and turning it on. You can choose monthly, recurring or pay in full each month for each bill and then watch how your system operates in all of its wonderfulness. Of course, you will want to take a look at your accounts at least twice monthly to ensure that everything is working as you had planned. The good part is that you will no longer have to “manage” your bill paying or think about how much money you want to save that month. This will all have been taken care of for you.

Now, you can have some fun. This is because whatever is left in your checking account after you have funded your savings and transferred enough money to pay your bills is all yours. You can spend it freely and without guilt on whatever you like including shopping, manicures, eating out, movies or whatever. Even if you spend every cent of that leftover money, you will never have to worry about being late or failing to pay a bill. Just as important, every time you make a payment on time and reduce your debt your credit score will get better.

Using automation for your bill paying and saving is like having an invisible robot that ensures all of your bills are paid on time and helps you save money. And once you’ve automated your finances there’s really nothing else for you to do except kick back and enjoy lif

The Things You Should And Shouldn’t Put On A Credit Card

A credit card just might be the ultimate frenemy. Depending on how you use it, that little piece of plastic could be a good friend or an awful enemy. There are really only two secrets to keeping that credit card a good friend. The first is to use it sensibly. The second is knowing what and what not to put on it.

Using a credit card sensiblyman holding multiple credit cards

This is relatively easy. If you want to use that credit card sensibly you need to keep the balance low and pay it off at the end of every month. What’s a low balance? That’s pretty simple, too. It’s whatever amount of money you have to pay off your card when you get your statement. How much is that? This is question that only you can answer, which means doing a little budgeting. Sit down with a spreadsheet program or a pencil and a piece of paper and list all of your expenses – both fixed and variable. Your fixed expenses would be things like your rent or mortgage payment, car payment and insurance. Your utility bill, transportation costs, clothing and entertainment would be variable expenses. When you finish your list add up everything and subtract this number from your monthly take-home pay. If you have money left over, which we hope you do, you should save some of it and then budget the rest for your credit card. Let’s say, for the sake of the example, that after you subtract your fixed and variable expenses and the money you’ve earmarked for saving you have $100 left over. This then is the balance you could afford to carry on a credit card because you would know you would be able to pay it off at the end of the month.

The danger of carrying balances forward

Why you don’t want to carry a balance forward from month-to-month is because of the power of compounding interest. This is something else that can be either a friend or an enemy. It can be your friend when you’re saving money but an enemy when you create debt. The way it works with a credit card is that once you carry a balance forward you’ll be charged interest on it, which will be carried forward to the next month where you will again be charged interest. This means you are now paying interest on interest. That’s compounding. And it can get ugly. If you were to run up a $5000 balance on your credit card at 15% and made only a minimum payment of $112.50 it would take you 266 months to be rid of that debt and would cost you $5,729.21 in interest – or more than that original balance.

What to put on a credit card

You’ve already seen the real answer to that question, which is to put no more on that credit card than you can pay off when you get your statement. So long as you know what that number is you can put anything on that card and you should probably charge as much as possible as this then becomes a record of your spending, which you could use in your budgeting.

The one exception

The one exception to this rule of charging only what you can afford is major purchases like a washer-dryer or refrigerator. If you need to buy one of these big-ticket items and don’t have the cash available it could be okay to put it on a credit card. Just keep in mind that you will need to pay back the money, which means budgeting for it. If you were to put a $1000 item on that credit card you should budget an extra $100 or $200 a month to pay it off as quickly as possible and keep from falling victim to that old devil of compound interest.

What not to put on a credit cardWoman depressed over bills

It’s important to remember that credit card debt is unsecured debt. Many experts believe that it’s the worst way to borrow money because it typically carries a very high interest rate – much higher than a car or home loan. Plus, credit card debt is never tax deductible as is the interest you pay on a home mortgage or student loan. Given this, there are five things you should never put on a credit card.

The first is college tuition. There are literally millions of American adults who are still paying for their college educations years after they left school. In many cases they haven’t even been able to find work in their fields of study – leaving them members of what’s now called the “underemployed.”

There are two big reasons why you should never put college tuition on a credit card. The first is the aforementioned compounding interest. The second is that it’s better to fund your education with low-interest student loans, grants, part-time jobs and scholarships as this would save you thousands of dollars over the long term.

Second, don’t put your income taxes on a credit card. Even if you find yourself hit with a big tax liability, don’t charge it. While the IRS makes it easy to make your payments with a credit card there are several reasons to not do this. First, the payment processing company will assess a fee of 1.88% to 2.35% and this will only add to the burden you’re already facing. In addition, the IRS will let you set up a payment plan with a much better interest rate. As of this writing its underpayment interest rate charge for each quarter is just 3%, which is much better than you would get with any credit card.

A third thing you shouldn’t put on a credit card is a vacation. While getting away from the stress of everyday life can feel really good don’t finance that trip with a credit card. If you do this you’ll only be coming home to the problems caused by that debt. A better solution is to plan a vacation that fits within your means such as camping, staying at hostels or visiting friends and family members. You say that’s not your idea of a dream vacation? Then set up a vacation fund, contribute to it every month and you will eventually have the money in hand to finance your dream vacation.

You should also never put a big wedding on a credit card. You might be tempted to have a really lavish event but just as with a vacation, you need to plan a wedding that will fit within your means and avoid creating credit card debt. We know that this will be a very special day for the two of you but it’s not worth it if you have to begin your lives together laboring underneath a huge pile of debt.

Last but not least, don’t put medical bills on a credit card. These bills can be staggering but if you talk with your healthcare providers you should be able to get payment plans that have little or no interest and payments you could actually afford. It’s possible that you could also tap into a charitable organization for financial help. But once you put those bills on a credit card that’s it. You ‘re stuck with that debt and with a big monthly payment probably for years to come.

What’s Better A Bigger Paycheck Or A Big Tax Refund?

Now that we have April 15 a few weeks behind us is a good time to think about the coming tax year and whether you want a bigger paycheck or a big refund. While the answer to this question may seem easy it’s actually more critical than you could guess. While the majority of us elect to get a nice check from the government in April the fact is that a huge tax refund might not really be so terrific. In fact, some experts say it’s better to give up that big refund in return for getting additional money in each paycheck as this would give you more control in maximizing your income. Of course, there are other financial gurus who say that this is an idealistic approach to saving. The harsh reality is that some of us, including you, may not be trusted to put the extra money in a savings or investment account instead of spending it.Prepare money to pay tax for the income tax returns

Why you should have more money in your paychecks

There are literally dozens of books about personal finance, including the number one best-selling “Rich Dad, Poor Dad,” that leave no question about it. You should take more money in your paychecks and not a bigger tax refund. The author of “Rich Dad, Poor Dad”, Robert Kiyosaki, explains that for every dollar we get we can either spend it or invest it. He says, “I’m not one to advocate living below your means, but suggest, instead, that we ask ourselves ‘how can I expect to expand my means?’ One way to do this is to focus on investing. And even small amounts on a regular basis will put you on the road to having your money work for you.” In addition, if you get more money throughout the year in your paychecks this offers the opportunity to create an emergency fund if you don’t already have one. That way you have cash available to handle unanticipated expenses instead of having to put it on a credit card, which probably means adding to your debt.

Another way to look at this is that if you get a large refund check it means that you’ve paid to much in taxes to the IRS. This means you’ve basically been giving it a loan for a year interest-free. Since our government won’t ever loan you money for free why should you lend it money for free?

The case for getting a big refund

We suppose that financial experts just tend to disagree on some things. This is because in many cases there is just no clear-cut answer and this is one of them. For example, there is also a school of financial experts that believe it’s better to get a nice refund in April. The reason for this according to one expert is that it’s best to get a big chunk of money at the end of the year. However, if this were an ideal world you would bank the money you received during the year in your paychecks. Unfortunately, nine out of 10 times what people do is end up spending the money. These experts say that if you get a big tax refund you might be prompted to do something immediately and save or invest the money or use it to pay off a debt. If you have your finances in pretty good order there is just no good reason to give the government an interest-free loan by letting it keep a part of your income throughout the year. Of course, if you’re short on financial discipline and were to have more taxes taken out of each paycheck then necessary you would be required to live on less money but would then have a windfall in April that you could ideally deposit into savings or investments. On the other hand, if you don’t have much in the way of financial discipline you could end up spending that tax refund on a new HDTV instead of investing it in savings.

Either one can work

It’s not bad if you want to get a big refund in April so long as you understand you’re giving the IRS a loan interest-free and that you are a responsible person and will make a good decision with the way you use that big tax refund. It’s also not bad to take the money during the year and end up with a large tax bill so long you’ve planned for it and have been earning interest on the money. On the other hand, it can be a type of forced savings account when you have the government take out more money than necessary so that you can get a big tax refund. This can be a good plan for people who need an extra push to save or invest.

Today’s interest rates

There was a time not long ago when it was best to get more money in your paycheck and put it in a savings account where you could collect up to 5% interest. However, these days when experts tell you it’s best to get the extra money in your paycheck so you could save it they neglect to say that you’ll get basically nothing in most savings accounts that pay interest. So, a case could be made that unless you have an investment account that’s returning 5% or more you might just as well get all that money together in the form of a big refund where you could then invest it in something that would get you a decent return.

Building a nest eggEgg labeled 401k in nest as next egg

There’s no doubt about the fact that the logical thing to do is give up that large tax refund and get control of your money. But then you may not always be logical. Given that there are few options today to maximize your savings, plus the fact that you may not be saving hardly anything at all, then a nice large check from the IRS might be your only chance to build a nest egg. And no, the government isn’t going to pay you anything on that “loan” but it’s also not going to pay you anything on your savings. Until interest rates change don’t feel bad about getting a big refund this year. Just make sure you save some of it.

The case for using your refund to pay off credit card debt

One of the best ways to use that big refund check is to pay down or pay off your credit card debts, especially if you’re carrying a large balance. Most credit card interest rates these days are at 15% or higher. For the sake of an example let’s suppose you owed $5000 at 15% and your minimum monthly payment was $112.50. If this were the case, it would take you 266 months to pay off the $5000 and would cost you $5729 in interest – or more than the actual balance. Use your tax refund to pay off this debt and you would not only save $112.50 a month, you would save $5729 in interest – which is a lot more than you could ever earn by saving or investing the money.

If  credit card debt is a big problem for you and you can’t pay if off with a tax refund there are some other good ways to take control of it. Here’s a short video, courtesy of National Debt Relief, that explains three of them.

7 Things You Need To Know About Long-Term Care

smiling coupleYou might be years and years away from worrying about long-term care but that may not be as true for your parents. They may be part of the 37 million Americans who were 65 or older in 2005 and are now in their mid-70s. The number of Americans over age 65 who required long-term care in 2012 was 9 million and 12 million Americans are expected to require long-term care in the year 2020. Almost 70% of those who turn age 65 will require long-term care at some time in their lives.

What is long-term care?

The term long-term care includes a number of different supports and services. Surprisingly enough much of the long-term care is assistance with the personal tasks of life and not medical care. These personal tasks are usually called Activities of Daily Living (ADL’s)’s and include:

  • Dressing
  • Bathing
  • Using the toilet
  • Caring for incontinence
  • Transferring from bed to chair or chair to bed
  • Eating

There are also supports and services titled Instrumental Activities of Daily Living (IADLs). This includes

  • Money management
  • Fixing meals and cleaning up after them
  • Taking prescriptions
  • Housework
  • Grocery and clothes shopping
  • Using the telephone or computer
  • Pet care

How long-term care is paid for

There are a number of misconceptions about who pays for long-term care. While you might think that you or your parents or grandparents would be covered by Medicare for long-term care this is true only if skilled services or rehabilitative care are required in a nursing home for a maximum of 100 days. However, be aware of the fact that the average stay in a nursing home covered by Medicare is just 22 days.

Medicare will also cover long-term care if you or your parent is at home and receiving skilled health or other skilled in-home services. But in general long-term care is provided only for a short period of time. Also, Medicare will not pay for non-skilled assistance with Activities of Daily Living and this is what makes up the bulk of long-term care services. The net/net of this is that you or your parent will have to pay for long-term care services that are not covered by a private or public insurance program.

Medicaid and long-term care

Medicaid will pay for the largest majority of long-term care. However, to qualify you or your parents’ income must be less than a specified level and, in addition, you must meet certain minimum eligibility requirements as established by your state. These requirements are based on the amount of assistance you need with Activities of Daily Living. The Older Americans Act and the Department of Veterans Affairs will also pay for long-term care services but only in certain circumstances and for specific populations.

What is long-term care insurance?

Long-term care insurance is unlike traditional health insurance.
It’s designed specifically to cover long-term supports and services including custodial and personal care in `your home, a community organization or a facility. The way it works is that it reimburses the policyholder a daily amount (to a limit you select) to pay for services that will help with the activities of living such as dressing, eating or bathing. When you purchase a long-term care policy you usually can select from a range of benefits and options designed to get you the services you need and where it is you need them.

What long-term care insurance costs

It’s impossible to say exactly what long-term care insurance would cost you or your parents. This is because it’s based on your age when you get the policy, the maximum amount that the policy will pay your per day and:

  • The maximum days (years) that a policy will pay
  • Any optional benefits you select, such having your benefits increase with inflation.
  • The lifetime maximum amount the policy will pay is determined by number of days times the amount per day

Note: Be aware that if you are already getting long-term care services or are in generally poor health you may not qualify for long-term care insurance. The reason for this is that most policies include medical underwriting. This is an insurance term that generally means an in-depth analysis of your health information.
However, there are instances where you could buy a reduced amount of coverage or you might be able to get “non-standard” rate coverage. And there are group policies, which do not require medical underwriting.

hand with keys and a house made of moneyOther ways to pay for long-term care

One option to pay for long-term care is by getting a reverse mortgage. This is where instead of making a mortgage payment every month, your mortgage company pays you. You could then use the money to pay for your long-term care. You’re usually not required to pay back this money so long as you live in your home. The loan is repaid when you die, sell your home or when it’s no longer your primary residence.

A second way to pay for long-term care is with a home equity loan or homeowner’s equity line of credit (HELOC). However, most experts say this is a really bad idea because you don’t want to take out a home loan to pay medical debt. The reason for this is because it would put your house at risk.

It’s also possible that you could have an annuity or a trust that would pay for your long-term care. Barring this, your final option would be to file for bankruptcy. For example, if you had a $20,000 bill for your long-term care and you simply don’t have the money, then you might consider filing for bankruptcy. While this would put a stain on your credit report for up to 10 years, you might be in a position where you might not care.

Getting the best deal on long-term care insurance

The way to get the best deal on your long-term care insurance or insurance for your parents is to pick a shorter benefit period. The vast majority of your long-term care needs would be covered by a benefit period of three to five years. Another effective way to cut the cost of long-term care insurance is to choose a lower level of protection against inflation. However, some financial experts worry that if you were to choose an inflation protection of 3% of or less this will not keep up with rising long-term care costs. Finally, the best solution is to buy early. The best time to buy long-term care insurance would be while you’re in your 50s. And, of course, it’s better to buy when you’re in good health. One quarter of people aged 60 to 69 applying for long-term care insurance are rejected and 44% of people aged 70 to 79 are denied coverage. And if you are over age 75, most companies simply won’t issue you a policy.

Best Careers For You Or Your Child

We understand that sometimes people just choose to follow their passion whether it’s studying the nesting habits of the Great Blue Heron or caring for children as a preschool teacher. And we applaud these people for doing what it is they care most about even if it means that they’ll never earn much money. On the other hand there are those of us that would like both a challenging and rewarding career and a decent salary. If you fall into this category here are the careers that are expected to be among the best in terms of job growth and earnings potential.

For those who choose to go to collegeSmiling doctor in front of his team

One of the best sectors by far for people who choose to go to college is in healthcare. Nurse practitioners and physician assistants are the tops in terms of healthcare workers that are most in demand. For example, this year graduate nurse practitioners in the US totaled about 750, which is just a fraction of the estimated 7000 job openings. Other highly in-demand jobs in the healthcare sector include physical therapists, audiologists and dietitians. In addition, there is a big need for people in outpatient services such as kidney dialysis and urgent care.

There will always be a good demand for technology workers but what employers are especially looking for are applications software developers, database analysts, security analysts and network administrators. It’s forecast that there will also be a growing demand for jobs in e-commerce as online shopping continues to expand almost geometrically.

There is also an ongoing demand for engineers of all types. But as of this writing there is a definite shortage of engineers to fill specialty jobs in environmental, industrial, nuclear and aerospace engineering. The recent slump in oil prices has reduced the demand for petroleum related jobs but the demand for engineers in this area is sure to pick up.

Other jobs that are going begging

There are a number of well-paying jobs in the business world. Many businesses are looking for event planners, salespeople, financial analysts and property managers. In the transportation sector there is a high demand for skilled workers ranging from tugboat captains to pilots.

If you have no interest in going to college

Regardless of what some people have said not everybody needs to or should go to college. If philosophy, English literature or psychology is what gets you excited you will need at least a four-year degree. However, if college isn’t for you there are still a number of jobs where the demand is high and the pay is good. In the healthcare area, there is a good demand for less skilled workers such as staff members of doctors’ and dentists’ offices as well as medical transcriptionists and in elderly assisted living. In the building trades contractors are looking for crane and tower operators, brick masons and ironworkers. There is also a very large demand for long-haul truckers and auto mechanics.

Opportunities vary by location

However, be aware of the fact that job needs do vary by location. As an example of this the biggest growth in healthcare employment is forecast to be in the south, California and the Southwest – those areas that are big for retiring baby boomers. In Austin, Texas; Raleigh, North Carolina; Provo, Utah; Nashville, Tennessee; and Madison Wisconsin there is such a demand for software developers that is expected to lead to double digit hiring growth.

Check into apprenticeship programs

The Department of Labor has been increasing grants to firms with apprenticeship programs in order to help our future employment demand. Its program, ApprenticeshipUSA helps employers offer people the opportunity to learn the skills necessary to succeed in high-demand careers while earning a salary. As of this writing there were 73,519 apprenticeship jobs available throughout the US. If you were to choose one of these and completed the program you would be on your way to a great long-term career with a competitive salary and, here’s one of the best parts, little or no student loan debt.

constructionWhat kind of apprenticeships is available? Where we live there are currently apprenticeships available for management training, pipefitting, as an electrician, carpenter, automotive technician, copper splicer, plumber, refrigerator construction worker and many other areas. If you would like to see what apprenticeships are currently available in your area, click on this link and then click on your state. You will see bubbles representing cities where there are apprenticeship opportunities. Click on your city and you will see exactly what apprenticeship programs are available.

On our city there are currently 570 of these apprenticeship jobs looking for people. If you see a program in your area that appeals to you, click on it for a description of the job, its requirements, what it pays and its benefits. For example, one of the jobs available here as an apprentice electrician has a terrific benefits package that includes dental, vision, medical, life and accidental death, life insurance, long- and short-term disability, a 401(k) with employer matching, six paid holidays and five days paid vacation. The apprenticeship program takes four years and includes 1000 hours of on-the-job training and employment that’s supplemented by related technical instruction.

The future can be hard to predict

Do keep in mind that all of these job forecasts are just that – forecasts. While there might be a huge need right now for nurse practitioners, physician assistants and software engineers the same thing may not be true 10 or even five years from now. As an example of what can happen we have a friend who decided to become a PhD in physics because at that time there were five job opportunities for PhD physicists for every one physicist. Unfortunately, by the time he received his PhD five years later there was only one job opening available for every five PhD physicists.

Choose carefully

Don’t choose a career just because it offers great job growth and potential to earn good money. Investigate and evaluate. Before you spend five years becoming a physician’s assistant, an industrial engineer or a database analyst or four years as an apprentice electrician make sure you understand what the job entails and that you would actually enjoy the work. It could be very depressing to spend four, five or more years learning a job only to find that, as many people have, you just hate the work. If possible try to talk with a half dozen or more people in the career are considering to determine what they actually do and how they feel about it. Spending a few hours with those people could save you from many years of frustration.

How To Rebuild Your Credit After Divorce

man jumping with a chart behind himGetting divorced can be one of the most stressful things you’ll ever have to endure. If you have children there’ll be the issues of who has custody and maybe visiting rights. You or your attorneys will need to determine how to split your finances as well as your furniture and personal possessions. And, of course, the more stuff you have and the more you and your spouse earn, the more complicated things will be. But there is one piece that’s easy to overlook and that’s your credit score.

Why your credit score will take a hit

Despite what many people think a divorce per se will not damage your credit score. This is because your credit score and your spouse’s credit score are different. It’s not like you had a joint credit score and getting divorced will cut your score by 50%. However, there are several reasons why a divorce will damage your credit score. First, your expenses will likely go up since you’re no longer splitting them. This will make it more difficult for you to keep up with your bills. Second, it’s likely that you and your spouse had some debts when you divorced. If they are not paid off immediately they will end up being the responsibility of one of you. If that person doesn’t pay them off then both your credit reports and ultimately your credit scores will be damaged. And third, the harsh truth is that there can be identity theft. It’s unfortunately very common for one spouse to “borrow” the ex’s personal information to get new utility services, new credit cards, an auto loan, etc.

Divorce can lead to bankruptcy

It’s also sad but true that a divorce can lead to bankruptcy. If this happens to you it might be because your finances just got stretched over the limit, as you’re now required to pay for new expenses such as alimony or childcare. But some people are actually pushed into filing for bankruptcy by his or her former spouse. As an example of this let’s suppose that you owned a house with your ex spouse but you can’t sell it because it’s upside down. Your ex agrees to pay the mortgage but then doesn’t do so. If you want to keep the house you could end up having to file for bankruptcy in order to save it. Or just to get rid of the responsibility of having to pay on it.

Making your credit score a priority

There are numerous things that need to be taken care of as the result of a divorce. This could make it easy for you to miss paying a bill. And believe it or not just one late or missed payment could cause what would otherwise be your excellent credit score to fall by 50, 75 points or more. After your divorce you will need good credit to get a place to live and to get new utility service without having to make a deposit. Plus, the stain on your credit report of having missed a payment can come back to haunt you as it will stay in your credit reports for seven years.

Get your credit reportsmagnifying glass on credit report

One of the most important things you should do post-divorce is to get your credit reports. They are available free from the three credit reporting bureaus – Experian, TransUnion and Equifax. They are also available free on the website While this site makes it possible to get all three of your credit reports simultaneously most financial experts say it’s better to get them one at a time every four months. This becomes a way to monitor your credit year round without having to pay a credit monitoring service.

There are several reasons why you should be getting your credit reports. First, it’s so you can see all your debts. Any debts that were the joint responsibility of the two of you should be paid off as quickly as possible. This is because you are legally responsible for paying off any joint debts and getting divorced doesn’t change that.

It’s also possible that there are errors in your credit reports that are dragging down your credit score. When you review your credit reports look for purchases you don’t remember making or companies you don’t remember having done business with. If you find errors be sure to dispute them with the appropriate credit bureau. You should do this in writing so that you will have a paper trail. If you are able to get erroneous items removed from your credit reports your credit score should get a nice bounce.

Rebuilding your credit

If your credit was damaged due to the divorce, take heart. While you can’t change the past, you can make sure that you pay all your bills on time going forward. Recent information about how you handle your credit tends to have a greater impact on your score then older information. This means that paying your bills on time should ultimately lead to a significant improvement in your credit score. If you lost your credit cards for some reason or just don’t have one then get a new, secured credit card. This is where you deposit money at a bank or credit union and then can use the card so long as you have a balance. If you do get one of these cards make sure that if you use it sensibly this will be reported to the three credit bureaus, as you need this in order to rebuild your credit score. You might also be able to get a personal line of credit secured by a savings account. This would be yet another step in rebuilding your credit.

If your financial circumstances are really bad

If you have a 401(k) and are in dire financial circumstances you could borrow from it to clear up your debts and get a jump in your credit score. While this is never an ideal solution it’s better than cashing in your retirement account early, which would mean having to pay taxes and penalties. There is also a relatively new way to borrow money that could help. It’s called peer-to-peer lending. Two of the most popular sites that offer these loans are Lending Club and Prosper. The way this works is that you fill out and submit an application with your name, Social Security number, address and the amount of money you need and why you need it. Once your application has been verified, your request will be put online for lenders to review. If you write a good enough “pitch” or reason why you need the money a lender or group of lenders might decide to take a chance on you and fund your loan even though you have a poor credit score.

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