Seniors, many of whom are on fixed incomes, are carrying an average of over $4,000 in credit-card debt. Recent college graduates are also in jeopardy from credit-card debts that average $2,200, on top of student loans that average about $40,000. If the current softness in the economy continues, a growing number of people won’t be able to keep up.
You are at or near the limit of your credit lines. You can only make the minimum payments on your credit cards. More than 15 percent of your take-home pay is used to pay credit-card-debt payments. You have to skip some bill payments to make others. You are unable to make your payments as your adjustable-rate mortgage increases.
Rarely. Using credit to pay off other credit can become a vicious cycle. However, if you have considered the total costs of the loan, both principal and interest, and understand the risks, a debt-consolidation loan may be a viable option for some.
Create a budget and stick to it; figure out how much you owe and to whom. Exceed monthly minimum credit-card payments as often as possible and add extra cash to accounts with higher interest rates.
Counseling is about financial education– how to develop a budget, good saving practices. A debt-management plan is an arrangement with multiple creditors for repaying your debts, which is then accepted by creditors and administered by a credit-counseling agency. A DMP is but one option that a consumer should be presented with as a solution.
No. Seeking the assistance of a credit counselor may improve one’s score and will certainly help a consumer get back on track to financial health. What are signs of a good agency?
It is accredited and certified by a third party, and is a 501(c)3 nonprofit entity. It does not ask for large monthly fees. Counseling sessions are substantive, including a full budget review. It belongs to a national organization such as the NFCC to ensure it meets quality standards.
NFCC members are required to maintain nonprofit status, offer counseling services regardless of the consumer’s ability to pay and offer consumer financial-literacy programs on money management, budgeting and the responsible use of credit and other financial tools.
Debt-management plans can cost around $50 to set up, and average $25 a month thereafter. An NFCC agency will provide counseling regardless of a consumer’s ability to pay.
title: “Ask The Pro” ShowToc: true date: “2023-01-16” author: “Timothy Spinks”
Sometimes this means putting both properties on the market to see which sells first. Sometimes this means cutting the price of the first property and taking your losses right away.
Price it right and get it “staged.” Price them low, very close to the bottom line. When there’s a lot of inventory, price is essential. Of course, having the home in “show shape”–decluttered and clean for any showings–is putting your best foot forward.
If the home is vacant, we’ll bring furniture in. We hire stagers and offer that service to sellers. The stager I work with charges less than $100 an hour and typically works for two to four hours. Another rents furniture by the room for $350 a room.
The kitchen and the master bath are the hot spots for buyers in today’s market. The midrange fix-ups are ones that are the most worthwhile. Don’t go crazy and put in granite and high-end appliances. Paint the cabinets, spruce them up with new hardware, replace the lighting with up-to-date fixtures. Buy new carpeting.
It has been said that the first six weeks of a listing is the “hottest” time for a sale, and we want to make sure it shows the best right away.
Over 98 percent of what’s available can be viewed on realtor.com, including listings from discount brokers.
This is a great time for buyers to get into the marketplace. Interest rates are low and there is wonderful selection for buyers in all price ranges. But these conditions might not last.
title: “Ask The Pro” ShowToc: true date: “2022-12-12” author: “Brian Ferree”
The pension law that went into effect Jan. 1 encourages employers to offer retirement- investing advice to their workers. Should you take it? TIP SHEET’s Linda Stern asked Keeler.
It may be an add-on to their [401(k)] statement or a separate report or a one-on-one meeting with a financial adviser.
The company retirement plan would typically conduct an education and enrollment meeting. This often amounted to nothing more than the adviser simply handing out enrollment kits and saying, “I’m not allowed to tell you what to do.” The result is that employees do nothing, save little and invest in things that do not stand a chance of providing a positive outcome.
The advice will be provided by a “fiduciary adviser”–someone required to act in the best interest of the employees they advise.
Use online calculators and models to evaluate the accuracy of the results of the advice. Consider getting a second opinion if they feel there’s advice that’s not objective or if the advice isn’t complete.
Workers with assets that are outside the purview of their employer’s retirement plan should consider hiring an adviser to take a closer look.
Through the financial-planning association ( fpanet.org ) or through the Certified Financial Planner Board of Standards ( cfpboard.org ).
Save more! If you don’t get around to saving into your employer’s 401(k), the employer may do it for you starting next year. Employees will have to opt out if they do not want to save.
title: “Ask The Pro” ShowToc: true date: “2022-12-07” author: “Olive Lawson”
What is the best strategy for paying down debt in a hurry? Start with your credit-card bills. Make a chart listing the interest rate (annual percentage rate, or APR), annual fee, balance, credit limit and minimum payments on all the cards. Total the balances. Analyze your repayment time by using an online calculator at bankrate.com or fool.com. Put the lion’s share of your resources to paying down your highest-interest card first, then moving on to the card with the next highest APR. Even $10 more per month can make a difference.
What about transferring balances to home-equity lines or low-interest credit cards? I don’t recommend exchanging unsecured debt (credit cards) for secured (mortgage or home equity). If you stop paying your mortgage or home-equity lines, you could lose your home. If you have good credit, consolidating your debts on a zero-interest or low-interest credit card might save money.
Should troubled borrowers contact creditors themselves? This is a tough question to answer. Borrowers facing default can contact the creditor and ask to work out a modified payment plan that reduces their payments to a more manageable level. However, it can be difficult to get a firm commitment on a work-out plan, and in calling, you may be signaling to the creditor that you are in trouble, which may result in higher interest rates or reduced credit limits.
At what point should they seek credit counseling? When you are in debt, speaking with a nonprofit credit-counseling agency affiliated with the National Foundation for Credit Counseling (www.nfcc.org) is never a bad idea. These agencies offer budgeting and money-management services without the necessity of enrolling in a debt-management plan. Learn all the details before you commit to a formal debt-management plan. These programs are not for everyone, and it may feel as if you’re no longer in control of your own finances.
Any other strategies you ’ d recommend? Debt problems are often income problems, so moonlighting or selling assets can help you pay off your debts faster. Consider a part-time or weekend job, renting out an extra room or selling your car and buying a lower-cost used vehicle.
