Today’s top story: A stress-free guide to holiday tipping. Also in the news: How to ease the financial strain of caregiving, financial resolutions to keep in 2015, and credit card strategies for travelers.
A Last-Minute Guide to Holiday Tipping
One less thing to stress over.
5 Ways to Ease the Financial Strain of Caregiving
Hiring help can actually save you money in the long run.
10 Financial Resolutions to Keep In the New Year
“Keep” being the operative word.
3 Irresistible Credit Card Strategies for Travelers
Supercharging your travel budget.
Retirement: 5 ways to make the most of 2015
Your retirement checklist for 2015.
Today’s top story: Tips for writing your will. Also in the news: The most important thing to ask your financial advisor, how to spend the rest of your FSA money, and how to calculate your tax refund by checking out your pay stubs.
5 Tips for Writing Your Will
An unpleasant but absolutely necessary task.
The Most Important Question To Ask Your Financial Advisor
No, it’s not “can you make me rich?”
3 Tips to Use Remaining Health Flexible Spending Account Money
Don’t let your FSA money go to waste.
3 Ways to Calculate Your Tax Refund Using Your Pay Stub
Get a preview of next year’s bounty.
How to Stop Making Excuses and Finally Get Your Finances in Order
Excuses are for wimps.
Today’s top story: What the experts think you should do with you money in 2015. Also in the news: Saving money on winter driving, tax strategies to use before the end of the year, and how to survive living paycheck to paycheck.
Here’s What the Experts Are Saying You Should Do With Your Money in 2015
New strategies for the new year.
5 Ways to Save Money, Your Sanity for Winter Driving
Surviving the winter in one piece.
Living Paycheck to Paycheck: 7 Strategies for Survival
Getting through the tough times.
7 Holiday Savings Tips for Newlyweds
Your first holiday together doesn’t have to break the bank.
Today’s top story: How your procrastination is costing you money. Also in the news: Holiday shipping mistakes to avoid, which report you need to read before buying a house, and the digital piggy bank that could finally convince you to start saving.
5 Ways Procrastination Costs You Money
Time equals money.
Don’t make these costly shipping mistakes this season
The gifts were expensive enough.
The Report You Should Ask For Before Buying A House
Get a C.L.U.E.
This Digital Piggy Bank Could Finally Get You To Start Saving
Meet your new savings pal.
The Best Way to Tap Your IRA In Retirement
Using your IRA strategically.
Today’s top story: The credit card perk that can save you time and money. Also in the news: The dumb things people do to be frugal, why a big tax refund isn’t always a good thing, and the investment fees you didn’t know you were paying.
The Credit Card Perk That Can Save You Big Money
Getting the lowest price on your purchase.
7 Dumb Things People Do in the Name of Being Frugal
Good intentions, bad results.
Why a Big Income Tax Refund Is Not a Good Thing
The instant windfall that means you’ve been shortchanged.
The Investment Fees You Don’t Realize You’re Paying
How to start tracking stealthy fees.
The Best Hotel Rewards Credit Cards in America
Getting the most points for your money.
Dear Liz: I am working on paying my bad debt from the past to rebuild my scores. I have one credit card that I pay in full every month, but no installment loan. I recently was given the opportunity to take a car loan with monthly payments I could easily afford. Here is my confusion: Taking on more debt while trying to eliminate past debt is usually not advisable. But I also know creditors like to see both revolving and installment credit. Am I OK taking the car loan to give the “well-rounded use” credit, or should I just put that extra money to pay off my past debt?
Answer: Paying off old bad debts typically doesn’t help your credit scores. If these accounts are now in collections, the damage has been done and won’t be erased by your payments.
And if the accounts are in collections, the money you’re paying probably isn’t going to the creditors you originally owed. Those creditors probably sold your debts to collection agencies for pennies on the dollar. If that’s the case, those collectors may be willing to settle for 50% or less of what you owed the original creditor. If you have the cash to make lump sum offers and you decide to take this route, get written assurance from the collector — in advance and in writing — that any remaining debt won’t be resold to another collector. Also, reserve some cash for the tax bill, because forgiven debt is usually considered taxable income.
You also can request a “pay for deletion,” which means the collection agency stops reporting the collection account to the credit bureaus in exchange for your lump sum payment. Getting rid of the collection could help your scores, but many collectors resist this step.
Now, back to your question. Adding an installment loan such as an auto loan, mortgage or student loan to your credit mix can indeed help rehabilitate troubled scores. The scoring formulas like to see people responsibly handling a mix of credit accounts.
If you decide to take out a car loan, shop around for a lender before you commit. Those affordable payments you were shown could disguise a bad loan — one with a sky-high interest rate, a long repayment period or both. It’s wise to make at least a 20% down payment on any car purchase and to limit the loan term to four years or less.
Dear Liz: I co-signed a student loan for my son. He was unemployed for a year and has now returned to work. The lender is not being cooperative with accepting a lesser monthly payment or any payment until he gives them a lump sum he does not have. They have been calling me about this debt. I am retired, 74, with a pension and Social Security as my sole income. I have no assets. What can they do to me?
Answer: If this were a federal loan, the government could take a chunk of your Social Security check and withhold your tax refunds. But your son also would have far more options for getting caught up, including a pathway out of default and income-based repayment plans.
Because it’s a private loan, evidenced by the fact it required a co-signer, the lender has fewer powers to collect, but you and your son also have fewer consumer protections. The Consumer Financial Protection Bureau recently released a report detailing people’s complaints about private lenders’ unwillingness to offer affordable payment options or modifications for unmanageable student loans.
That doesn’t mean your son should quit trying. The CFPB has a sample letter on its site that he can use to request a repayment plan he can afford. If he’s still having problems, he can make a complaint to the CFPB.
When you co-signed, you promised to pay if he couldn’t. Private collectors typically can’t take your retirement income, however. You may want to make an appointment with a bankruptcy attorney who can assess your situation. (Student loans, federal or private, typically can’t be discharged in bankruptcy, but the attorney will know the rules for creditors and borrowers in your state.) You and your son also should review the information about negotiating with private student lenders that you’ll find on the Student Loan Borrower Assistance site run by the National Consumer Law Center.
I‘ve written a lot recently about digital advisors (including the piece I wrote for AARP, “Do-it-yourself made easy“). Wealthfront, one of the leaders in this space, now has $1.7 billion under management.
That seemed pretty impressive, until I saw a recent piece in InvestmentNews about Vanguard’s Personal Advisor Services. Although still basically a pilot program, the “human-augmented online advice platform,” as IN termed it, now has $4.2 billion under management.
For all that’s been written about the start-ups who use powerful algorithms to manage your portfolio while you sleep, it’s the the Vanguard offering that may be the game changer. Vanguard can offer everything the start-ups do–asset allocation, automatic rebalancing, ultra-low-cost investment choices–in the mantle of a trusted firm known for its integrity and thrift. The cost? Three-tenths of one percentage point, or $300 a year for a $100,000 portfolio. That’s only slightly more than the .25 percent the newcomers typically charge.
Advisors charging more certainly will argue they’re adding value. But if you’re paying much more for financial management, you might want to at least take a look at what you can get for less.
Today’s top story: 50 ways to improve your financial life in 2015. Also in the news: Why deferred interest rates on purchases isn’t always a good idea, how to decide which debts to pay off now or later, and the lazy guide to dealing with debt collectors.
50 ways to improve your finances in 2015
You’ll want to get comfy for this.
Why you should think twice about ‘buy now, pay interest later’ deals
Deferred interest can do a number on your wallet.
5 Debts You Should Pay Off Now – or Later
Not all debt is created equal.
The Slacker’s Guide to Dealing With a Debt Collector
Dealing with debt collectors while exerting the least amount of effort.
Will You Remain a Debt Slave Until Death?
Or will you see the light?
Today’s top story: Planning for you child’s college costs. Also in the news: How to destroy your debt in 2015, the crucial steps in setting up your first 401(k), and what you should do with your year-end bonus.
How to Plan for Your Child’s College Costs
The sooner you get started, the better.
5 Sure-Fire Ways to Start Killing Your Debt Next Year
Your debt won’t know what hit it.
3 Crucial Steps to Setting Up Your First 401(k)
Starting off on the right foot.
What to do with your year-end bonus
Don’t spend it all in one place.
Make Sure Your Retirement Savings Last With the “Bucket” Method
Filling the buckets for peace of mind.