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debt reduction

Friday’s need-to-know money news

January 22, 2016 By Liz Weston

Zemanta Related Posts ThumbnailToday’s top story: How to get your credit card’s annual fee to pay for itself. Also in the news: Balancing debt reduction and retirement savings, money lessons to teach your kids, and why you should check your FAFSA status.

How to Get Your Credit Card’s Annual Fee to Pay for Itself
Getting the most out of your credit card.

How to Balance Debt Reduction and Retirement Savings
You can do both.

4 Money Lessons Smart Parents Teach Their Kids
It’s never too early to start teaching them.

How and Why to Check Your FAFSA Status
Staying on top of the financial aid process.

Filed Under: Liz's Blog Tagged With: annual fees, Credit Cards, debt reduction, FAFSA, financial aid, kids and money, retirement savings, Student Loans, tips

Wednesday’s need-to-know money news

June 11, 2014 By Liz Weston

Zemanta Related Posts ThumbnailToday’s top story: How often should you check your credit report? Also in the news: How not to get duped on your summer vacation, some of the worst ways to handle your debt, and how to construct a realistic debt reduction plan.

How Often Should I Check My Credit Report?
Don’t go overboard.

Summer Vacationers, Beware: 5 Travel Scams That Won’t Die
From souvenirs to scenic tours.

4 of the Most Foolish Ways to Handle Debt
Never pay just the minimum.

A realistic debt-reduction plan for retirement
Mind over money.

Filed Under: Liz's Blog Tagged With: Credit Reports, debt reduction, vacation scams

How to pay off your credit card debt

February 4, 2014 By Liz Weston

Dear Liz: I’m confused about paying down credit card debt. Some say to pay the lowest-balance cards first and others say the highest balance or the one with the highest interest. I have almost $16,000 on credit cards ranging from a $4,930 balance on a card with an 8.24% interest rate to $660 on a card with an 18% rate.

Answer: Actually, the first question you should ask is “How much credit card debt do I have compared to my income?” If your balances equal half or more of your annual earnings, you may not be able to pay it all off. You should make appointments with a legitimate credit counselor (such as one affiliated with the National Foundation for Credit Counseling at http://www.nfcc.org) and a bankruptcy attorney (referrals from the National Assn. of Consumer Bankruptcy Attorneys at http://www.nacba.org).

If your situation isn’t that dire, the fastest way out of debt is to pay the minimums on your lower-rate cards and send as much money as possible to your highest-rate card. Once that’s paid off, concentrate on paying off the next-highest-rate card, and so on. Some people instead like to target balances from smallest to largest to get a quicker feeling of victory, but you typically pay more in interest with that approach.

Filed Under: Credit & Debt, Credit Cards, Q&A Tagged With: credit card debt, credit card payoff, debt, debt reduction

Can you be too focused on paying off debt?

November 27, 2013 By Liz Weston

It’s probably my Lutheran upbringing that makes me wary of extremism in any form. Moderation in all things, doncha know.

Lately, I’m noticing extremism when it comes to paying off debt.

People think they’re doing the right thing by targeting student loans and mortgages for early payoff. But they could be hurting themselves if they’re stinting their retirement funds or leaving themselves with too little financial flexibility.

Let’s take student loans. Their interest is tax-deductible. If they’re federal loans, they have fixed rates and a number of consumer protections, including the ability to delay payments if you run into economic hard times.

Once you prepay those loans, though, the money’s gone. You can’t borrow it back, as you could with a line of credit.

I just heard of another family that rushed to pay off student debt, only to face an emergency fund on fumes when the father was furloughed.

Mortgage pre-payers face a similar problem these days. Before the financial crisis, they could have opened a new equity line even if their incomes were diminished or non-existent. These days lenders are wary of anyone who’s lost a job, which can make borrowing against a home problematic when you’re facing a financial crisis.

One solution is to open a home equity line of credit and keeping it open and unused for emergencies. Another is to simply make sure your debt payoff strategy makes sense with your larger financial picture. If you’re not saving enough for retirement or emergencies, those should be your priorities long before you target low-rate, tax-deductible debt.

Filed Under: Liz's Blog Tagged With: debt, debt reduction, mortgages, pay down debt, Student Loans

How to deal with your debt

July 31, 2013 By Liz Weston

Zemanta Related Posts ThumbnailDebt may be a four-letter word, but it’s not necessarily the enemy. Some debts are much, much worse than others, and knowing which to tackle first can leave you richer.

That’s the central idea of my book “Deal with Your Debt,” and I go into more detail in this interview with Experian’s Mike Delgado. (Also, you’ll get a great view of one of our bedrooms…I couldn’t get my laptop to cooperate with Google Hangout, so I had to resort to the desktop.)

We covered a bunch of topics, including:

  • What you need to know about getting, and paying off, student loans
  • Why retirement has to be your top financial goal (yes, even ahead of paying off debt)
  • What debts to tackle first and
  • When to consider filing for bankruptcy

…and much more.

Filed Under: Liz's Blog Tagged With: Bankruptcy, Budgeting, college costs, college students, Credit Cards, Credit Scores, debt, debt reduction, pay down debt, Retirement, retirement savings, Student Loans

Tuesday’s need-to-know money news

July 30, 2013 By Liz Weston

School Kids DiversitySaving on back-to-school shopping, tool to make managing your money easier, and what you need to do financially when your marriage comes to an end.

Be Smart on Back-to-School Shopping
How to fill their backpacks without emptying your wallet.

8 Money Tools You Should Try
8 tools to make managing your money much easier.

How To Reduce Your Debts Without Spending Unnecessarily
You shouldn’t have spend money to get out of debt.

Save Your Way to $1 Million Dollars
It might be easier than you think!

We’re Getting A Divorce, Now What?
Ways to protect yourself financially when your marriage comes to its end.

Filed Under: Liz's Blog Tagged With: back to school, back-to-school shopping, couples and money, debt reduction, Debts, Divorce, money tools, saving money

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