Hope for your financial life and beyond

The Hidden College Debt Statistics You Never Hear About

October 24, 2016 by 3 Comments

The cost of college continues to expand with each passing year. With it, so does the amount of student loans being processed. It’s leading to an alarming amount of college debt that is hamstringing the life of graduates.

college debtBy now I’m sure you’ve heard the alarming student loan statistics. Americans now owe over $1.3 trillion in student loan debt. For the class of 2016, the average borrower will owe just over $37,000, a figure that is up 6% from last year.

But those are just your basic top line college debt statistics. They are the most visible numbers but they don’t tell the whole story. There are some hidden statistics (i.e. not usually reported) that highlight what this college debt is doing to students later in life. They show that virtually every decision in life can be impacted by college debt.

How College Debt Impacts Your Life

[Read more…]

Filed Under: College, Debt Tagged With: ,

How to Make Sure You Never Need a Car Loan

September 6, 2016 by 6 Comments

My wife and I have recently bought a new car. It was used but new to us. The best part about the whole deal was that we didn’t have to take out a car loan.

We paid cash.

car loanNow, we are both in our forties and well established financially. So you might think this purchase was a piece of cake. On the contrary, it wasn’t. It took us two years of preparation to be able to buy this vehicle. But it was worth the effort to avoid needing a car loan.

How did we do it? I’ll share that in a minute and show you the steps to take to never need a car loan again. But first, let’s look at the reasons why people feel the need to take out a car loan in the first place.

[Read more…]

Filed Under: Debt, Saving Tagged With: , ,

4 Ways to Fund That Extra Mortgage Payment

June 20, 2016 by 8 Comments

For most people making one monthly mortgage payment is challenging enough. Why in the world would you want to make an additional one? Seems like that extra mortgage payment would be pushing the monthly budget a bit too far.

extra mortgage paymentWell, if you can see the bigger picture, the money you put towards an extra mortgage payment now can have significant impact on your long-term financial health. The more you pay and the earlier you pay it will reduce the amount of interest you owe over the life of the loan. You could be looking at tens of thousands of dollars saved in the long run.

If you don’t believe me, run your own numbers on any online mortgage calculator. You’ll be amazed on how much you can save.

Making an extra mortgage payment each month (or even a partial payment) takes a strategy. More importantly, it takes extra money. That’s where the real problem lies. When you look at your monthly budget you may be left scratching your head wondering where that extra money is going to come from.

Back when my wife and I decided to pay off our mortgage early, we faced the same problem. Here are the ways we came up with to free up some money to make that extra mortgage payment.

[Read more…]

Filed Under: Debt, Real Estate Tagged With: , ,

The Hidden Step to Pay Off Debt You’ll Not Want to Miss

May 2, 2016 by 8 Comments

If you are looking to pay off debt, the first place you’ll probably look is at your monthly expenses. That’s what my wife and I did when we wanted to pay off our mortgage early. We wanted to squeeze some extra money out of our budget. To do that we needed to cut expenses.

pay off debtWe looked long and hard at our budget and made some adjustments. While we were paying off our mortgage we disconnected our cable TV, ate out less, spent very little on things around the house (like landscaping and home furnishings) and pretty much stopped going to movies just to name a few things. The extra money we saved by cutting our expenses and changing our lifestyle we put towards the mortgage.

For us that was enough to speed up the process. We were overspending in some areas in the worst way. Believe me when the sacrifice was worth it to not have any debt following us around.

But for many others simply cutting expenses in the budget will not be enough to pay off debt at the pace the want. The reason is that you can only cut expenses so far. You’ll still need money to pay for food, housing, utilities, transportation and clothing. All those things cost money and you can’t eliminate them entirely from your budget.

That leaves many who want to pay off debt frustrated. They’d like to pay off their debt faster but they just can’t. There is too little money to go around and nowhere else they can cut expenses.

What they are missing is that there is actually a two-step process to find the money to pay off debt. Cutting expenses is only half the equation.

[Read more…]

Filed Under: Debt Tagged With: , ,

When to Avoid Zero Percent Financing Offers On Cars

October 5, 2015 by 7 Comments

At some point we’ve all run across an advertisement on TV from a car dealer pitching some form of incentive. Manufacturer incentives are special offers designed to entice you to buy a car. Overall they have been found to be very effective in drawing consumers to car lots.

zero percent financingThese deals usually come in the form of rebates (cash back) or a low annual percentage rate (APR). The APR is the amount of interest on the loan that you will pay during the year. Of course lowering the interest rate reduces your monthly payment. The lowest APR a manufacturer could offer would be zero percent. This means you pay no interest on the car loan.

Zero percent financing on a car sounds like too good a deal to ignore. Who should pass up free money, right? However, you may want to think twice before signing on the dotted line. There are several reasons these deals could be bad for the consumer.

The Story on Zero Percent Financing

[Read more…]

Filed Under: Debt, Spending Tagged With: , ,

This Is What Happens When You Don’t Pay Back Student Loans

September 14, 2015 by 12 Comments

Student loans have helped many pay for the expenses of a college education. Of course you need to pay back student loans those even if you don’t graduate. Fortunately student loans have what’s known as a grace period – a set time after you graduate, leave school or drop below full-time student status before the loan repayment begins. The grace period gives you time to find a job or deal with a difficult life issue before you have to pay back the student loan.

pay back student loansIf you can’t or choose not to pay back student loans, you risk going into default. To default on a loan means you did not pay it back on schedule according to the terms of the promissory note ­– the legal document you signed when you received the loan.

The good news is you don’t have to panic if you miss one payment. Going into default won’t happen right away. If you miss a few payments your student loan will first be tagged with a delinquent status. It won’t officially go into default until 270 days have passed without a payment.

At that point, you will face some serious consequences. The U.S. Department of Education’s Federal Student Aid office lists these possible actions that may be taken if you default on your student loan:

[Read more…]

Filed Under: College, Debt Tagged With: , , ,

How to Avoid a Foreclosure When You Are Struggling Financially

June 29, 2015 by 20 Comments

If home ownership is the American dream then a foreclosure is a homeowner’s worst nightmare. Thousands of people face this situation every day because they are struggling financially and have failed to pay the mortgage. It can definitely lead to some sleepless nights worrying over whether or not the bank will come take your home.

avoid foreclosureAvoiding foreclosure is extremely important for several reasons. For starters, it damages your credit score. You may see a drop of 200 points or more even if you had perfect credit beforehand. In addition, the information stays on your credit report for seven years. This makes it very difficult to secure a new mortgage loan or open other lines of credit in the future. It’s a stain on your personal financial record that takes years to overcome.

How to Avoid a Foreclosure

In the end you may have no choice but to foreclose. However, don’t assume all hope is lost because you may be a month or two behind on the mortgage.

[Read more…]

Filed Under: Debt, Real Estate Tagged With: , ,

Check Your Debt Emotions at the Door

February 9, 2015 by Leave a Comment

Getting out of debt and moving towards a cash based existence can create a lot of emotional turmoil. Today I’m guest posting at The Debt Myth about my experience with just such a move.

There is a door waiting for you to walk through. It leads to a land of contentment where you can live without fear of creditors dialing your number. There will be no late fees or interest payments in this land and the money you make will be 100% fully yours.

This place I speak of is known as Debt Free Land. It exists…it really is out there.

I navigated the path to this land and have been living peacefully here for the last year – 100% debt free, payments to no one.

But it wasn’t an easy journey. There were many obstacles and emotions I had to overcome along the way. In fact, the most difficult part was simply starting…

Click here to continue reading at The Debt Myth…

[Read more…]

Filed Under: Debt Tagged With: ,

The Best Solution For Those Buried in a Snowdrift of Debt

January 26, 2015 by 17 Comments

In the winter of 2004, we had the fortune/misfortune of visiting my parent’s house in Ohio just before a severe winter storm hit. We had arrived just as the snowfall began and it…just…never…stopped…falling. Snow, snow, snow for two straight days.

van buried in a snow driftBy the time the skies cleared their tiny little town had received over two feet of snow – a kid’s dream but an adult’s nightmare. It had blanketed and buried everything in sight, including our van as you can see by the picture to the right.

Walking through that knee-deep snow I kept thinking to myself, “How will we ever get out of this mess?” It’s not like it’s going to magically melt away. No one in town is going to come rescue us – they have their own snow problems.

In fact, some exacerbated our problem. Thank you snow-plow man for clearing the road and pushing another two feet of snow to our curb.

Even worse, as I started to look at the mountain of snow from different angles the situation seemed even more desperate. At least in the first picture I can still see the van. From this viewpoint hardly anything is visible…

[Read more…]

Filed Under: Debt, Work Tagged With: , , , ,

This Is What Makes Dumping Girlfriends and Credit Cards Hard

January 19, 2015 by 26 Comments

Do you remember your first love? I don’t mean that boy or girl you kissed in kindergarten. I mean that first true love…the person with whom you were destined to spend the rest of your life.

breaking up with credit cardsI do and when I was with her she seemed perfect in every way. A match made in heaven.

However, it didn’t last. We broke up after a few years, the reasons for which won’t be mentioned here.

But then we got back together a few months later and it was just like old times. It was like we hadn’t missed a beat. And this time things would be different. We were committed to make our relationship last.

Except it didn’t. Again we split after less than a year.

But…

…you know what’s coming next.

[Read more…]

Filed Under: Debt, Inspiration, Relationships Tagged With: , ,

3 Tips to Boost Your Credit Score Before Getting a Loan

December 17, 2014 by 13 Comments

Getting a loan soon? In today’s guest post, Certified Financial Adviser Joseph Hogue shares some ways to boost your credit score before you apply for a loan.

The original title of this article was going to be, “3 Tricks to Boost Your Credit Score…,” but then I thought better about giving the impression that your credit score and lenders were something to be tricked into giving you a better interest rate. Like most things in life, there is no quick-and-easy solution to improving your credit score but with a little work and these three tips, you can save yourself thousands in interest over the life of a loan.

The graphic below shows the five credit score factors used by credit bureaus to determine your credit score and on which is based the interest rate you pay on loans. Using ways to manage each one of these will go a long way to boost your credit score and save big money.

boost your credit scoreMore than 5% of credit reports contain errors

[Read more…]

Filed Under: Debt Tagged With: , ,