Debt Counseling
Debt

Surviving the Holiday Spending Trap With Debt Counseling

After the school season starts, many people start getting ready for the holidays. Following Labor Day, the major holidays that often run up debt for the average American include Halloween, Thanksgiving, Christmas and New Year’s. By receiving debt counseling in the fall, you gain valuable insights and information about how to pay off debt, budget, and set financial goals. You may decide to enroll in a debt management program so you can get a fresh start. A debt management plan is an agreement to pay back creditors, but typically with better terms. In most cases, you pay less money toward interest and pay off your debt much faster by consolidating the debt. To save money for the holiday season, consider consolidating old debt while resisting the temptation to take on any new debt. According to an article by marketwatch.com, one of the best way to tackle holiday credit card debt is to lower your interest rate. Talk to a credit counselor about how you can pay a lower interest rate by consolidating debt.

Living below your Financial Means

One of the lessons you learn with debt counseling is to live below your means. By having a budget, you know exactly what you owe to creditors, what you owe to the mortgage company or your landlord as well as how much you have for discretionary spending. Buying holiday gifts or costumes for Halloween and other parties is not a necessity. However, you can put aside money for gifts as long as you save some money for discretionary purchases. Living below your means does not mean you can’t spend money on others, but it’s about spending less than you earn.

Figuring out how much your time is worth

Another way to improve your financial situation is figuring out when you should do something yourself or when you should hire another person. If you can earn more money working at your career, it could make financial sense to pay someone else to clean your house, mow your lawn or cook for you. On other hand, you also have to think about your core values as well as hobbies. If you get exercise from mowing and love the outdoors, it’s more than a financial decision. When it comes to the holidays, save money by making your own costumes if it makes sense. If you earn a lot by working, consider hiring someone else to put up your holiday lights or deliver your Christmas tree.

Spending time and not money with family

If you are having trouble balancing your budget, avoid hosting holiday parties or buying a lot of gifts for others. Taking holiday trips also tends to run up credit cards. On the other hand, if you consolidate your debt prior to the holidays, you will have a firm grasp on how much money you have leftover in your monthly budget after paying on your debt management plan.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

    Full Name (required)

    Email (required)

    Are you a current client of Christian Credit Counselors? (required)

    Type the code below in the text box. (required)
    captcha


    CCCc2abutton

    ​Read More
    Investing, Money Management

    Investing 101

    You and Your Investments

    Maybe you have asked yourself, “How do I start investing?”  It’s very simple, but before you start, make sure you have your house, budget, and savings in order.  There are many things you can invest in: stocks, bonds, mutual funds and real estate, to name a few.

    Bonds

    One type of investment can be in the form of a bond.  Many refer to it as a “Fancy IOU.”  This is when you lend out your money and in return you gain interest on it.  However, the return may be very small.  Bonds have predetermined intervals of when they pay interest which usually occurs semi-annually.  The maturity date on a bond refers to the end date of the agreement between the lender and the buyer.  Also, it is important that you know that interest rates and bond prices have an inverse relationship.  As interest rates fall, the price of the bond increases and vice versa.

    Stocks

    Stocks are another type of investment and the way people make a profit is when they increase in value.   When you own stocks in a company like Coca Cola, it means you own part of the company.  The concern with stocks is that the value fluctuates on a daily basis.  Stocks can have a high return, but the loss can also be very high.  To safely invest in stocks, invest in a company that will be around for a long time, for example, Pepsi Co, Apple, etc.

    Mutual Bonds

    Mutual bonds provide more of a safety net than regular bonds and stocks because you are not putting all your eggs in one basket.  Putting together money from many investors and purchasing stocks, bonds, etc., form a mutual bond and another person manages them.  Having the money professionally managed is a positive for many because it adds a level of security.

    Researching Investments

    With investing there are no guarantees but with the proper research you will be investing your money in a safer outlet with a higher chance of gaining profit. Regardless of what you choose to invest in, check the track record and know what you are getting into.

    If you are still doubtful about investing, think of the money you set aside for savings that is not accumulating any interest, meaning you aren’t making any extra money. In fact, you are losing money at the current inflation rate if you do not invest at a higher interest rate, so use this as motivation to start growing your money!

    Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

      Full Name (required)

      Email (required)

      Are you a current client of Christian Credit Counselors? (required)

      Type the code below in the text box. (required)
      captcha


       

      ​Read More
      Kids & Money, Loans, Student Loans

      Student Loan Forgiveness Options

      Student Loan Forgiveness

      After my last post about Student Loans, I received a question asking for more in depth information about student loan forgiveness.  I researched and found the following information.  These are the careers that can possibly eliminate your student loans.  If you decide to partake in one of these programs, make sure beforehand that you can use it towards loan forgiveness.

      Military Forgiveness

      Students who are in the Army National Guard may be eligible for their Student Loan Repayment Program, which offers up to $10,000.

      Teaching Forgiveness

      Students who become full-time teachers in an elementary or secondary school that serves students from low-income families can have a portion of their Perkins Loan forgiven under The National Defense Education Act. This program forgives 15% of your loan for the first and second years of teaching service, 20% for the third and fourth, and 30% for the fifth. Contact your school district’s administration to see which schools are eligible.

      See also the US Department of Education’s pages on Cancellation/Deferment Options for Teachers and Cancellation for Childcare Providers, as well as the Teacher Loan Forgiveness Form.

      The US Department of Education maintains a database of low-income schools eligible for teacher loan cancellation for Perkins and Stafford loans.

      Legal and Medical Studies

      Many law schools forgive the loans of students who serve in public interest or non-profit positions. For more information, contact Equal Justice Works.

      The US Department of Health and Human Services offers loan forgiveness programs through the National Health Service Corps and the Nursing Education Loan Repayment Program. These programs offer loan forgiveness to physicians and registered nurses who agree to practice for a set number of years in areas that lack adequate medical care (including remote and/or economically depressed regions).

      The US National Institutes of Health’s NIH Loan Repayment Programs repays up to $35,000/year of student loan debt for US citizens who are conducting clinical medical research.

      The US Department of Agriculture’s Veterinary Medicine Loan Repayment Program (VMLRP) offers loan forgiveness of $25,000 per year for three years for veterinarians who commit to work in a veterinary shortage area for three years. The application deadline is June 30.

      Federal Agencies

      The Federal Student Loan Repayment Program allows federal agencies to establish loan forgiveness programs to help recruit and retain employees. This is technically a loan repayment program and not a loan forgiveness program, as the agencies make payments directly to the loan holder and the payments represent taxable income to the employee. The agencies can repay up to $10,000 in Federal student loans per employee per calendar year, with a cumulative maximum of $60,000 per employee. Employees must agree to work for the agency for at least 3 years.

      Public Service Loan Forgiveness Program

      This program lets borrowers off the hook from their remaining student loan debt after 10 years of full-time employment in public service.

      To be in the program, borrowers must be employed by the federal, state or local government; or any nonprofit, 501(c)(3) organization; or work full-time for AmeriCorps or Peace Corps.

      To qualify for loan forgiveness, the borrower must have made 120 payments during a decade as part of the Department of Education’s Direct Loan program.

      But, if the payments fall short or the borrower stops working full time, then there is the same risk of being kicked out of the program, with no loan forgiveness.

      I hope this information helps you further understand your options for eliminating student loans.

      Information found on finaid.org and money.cnn.com

      Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

        Full Name (required)

        Email (required)

        Are you a current client of Christian Credit Counselors? (required)

        Type the code below in the text box. (required)
        captcha


         

        ​Read More
        Budgeting, Kids & Money, Loans, Saving, Student Loans

        Student Loans: A Necessary Evil?

        Student Loans and Debt

        More than ever before, a college degree has become a necessity.  But many parents and students wonder how they are going to pay for college.  With a high number of students graduating college with student loans, the average debt will likely hit a record $28,700, projected by Mark Kantrowitz, publisher of Finaid.org.  It is important to have the necessary information on student loans before signing on the dotted line.

        Government and Private Student Loans

        There are two types of student loans – government and private.  Government student loans have flexibility with programs to help students pay back the loan because they can change the rules whenever.  This can work towards the advantage of the borrower but can also hurt the borrower.  If the student will take out multiple loans, a government loan is better because it provides continuity.

        Private loans are provided by traditional banks and they do not have as many programs to help students repay their loans.  These loans come with a low interest rate but can hurt the borrower because it accumulates over time.  Also, most of these loans include a clause that does not allow the signer to file for bankruptcy.  After graduation, you get a six-month grace period during which you don’t have to pay back your loans giving you time to find a job.

        Financial Respoinsibility

        If you decide you need a student loan, you must decide who will be signing for it.  There are two options, the student, who must be at least eighteen years old, or a (step) parent.  If a step parent or parent decides to sign he or she is now responsible for the full payment of this loan.

        For example, if a step parent signs and afterwards gets a divorce, the step parent is still held responsible for the full payment.  Also, if a student signs for a three year loan for $30,000 but he or she drops out of school after the first semester he or she must still pay the full amount of the loan.  The result is parent and child is equally stuck.

        Budgeting for the Loan

        Ideally, the student should work while going to school and open a savings account.  This way the student will have a cushion for after graduation.  This cushion should include living money and money to make loan payments.  Proper budgeting and planning when a student begins school will be more beneficial than starting to plan after graduation.

        However, if there was no proper budgeting or planning there are ways you can receive help.  Keep in communication with the lender, there are consolidation programs and government programs that can help.  Consolidation programs are for students who took out multiple student loans throughout their school career.  For example, John has four $100 monthly payments to different banks.

        Loans and Credit Consolidation

        With consolidation, his overall payments will be lowered and he will have the benefit of simplicity which will help him track the progress of his student loans.  With government loans, a student can work for a nonprofit organization or public agency for ten years which will reduce the amount owed on the account.  Also, if you are willing to commit a year volunteering for AmeriCorps, you get $4,725 to pay off your college debts, and a stipend up to $7,400.  For more information visit their website.

        In addition you can work for 27 months with the Peace Corps.  If you travel with the Peace Corps, you will get to defer most of your student loans until after you leave the program, and may get some of your loans reduced by as much as 70%. Visit their website for more details.  If you decide one of these programs is beneficial to you, make sure you have it approved before hand, know the rules, and always get it in writing.

        Other options for repayment include: pay in full, standard payment, graduated payment, income-based payment, and long-term payment.  In the majority of cases paying in full is never an option.  Standard payments are monthly payments with interest over a period of 10 years.  It gives you a great interest rate but high monthly payments.  For graduated payments, the payments will start low but increase every couple years for a 10-30 year period.  With income-based payment, your monthly payments are decided proportionate to your income and you get 15 years to pay it off.  The long-term payment method is a monthly payment plus interest for 30 years.

        Regardless of whether you decide student loans are for you or not, you now have the knowledge to make the right decision.

        Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

          Full Name (required)

          Email (required)

          Are you a current client of Christian Credit Counselors? (required)

          Type the code below in the text box. (required)
          captcha


           

          ​Read More
          Student Loans

          Student Loan Repayment Plans

          Repaying Student Loans

          Congratulations Class of 2011! You finally got that college degree! What an exciting accomplishment. However, that moving-over-of-the-tassel means you’ll need to face your student loan sooner rather than later.

          Typically, you get a six-month grace period after graduation before you need to begin the repayment process. But don’t wait until December to start considering your options. There are four main types of repayment plans for Federal Student Loans that apply to most student loans as well (if you filled out a FAFSA and then received money in the mail that you haven’t paid back, you have a federal loan).

          1. Standard Repayment: your payments would be relatively the same throughout the life of your loan (for federal loans this is 10 years). You will get a letter in the mail shortly after graduation with your monthly payment and interest rate. However, if you have a variable interest rate, your payments might fluctuate based on interest rate changes.
          2. Extended Repayment: this plan lengthens your repayment period, allowing you to make lower monthly payments. If you have a federal loan, your loan can be extended to 12 to 30 years, depending on the loan amount. However, you will end up paying more interest on the loan with this plan.
          3. Graduated Repayment: this allows you to make lower payments in the first few years of the loan and your payments will increase gradually over the duration of the loan. For example, many repayment plans allow you to only pay the interest for the first 2-4 years of the loan. However, the repayment period is the same as the standard repayment method (federal loans are 12 to 30 years, depending on the total amount borrowed).
          4. Income Contingent Repayment: this plan is based on your income. It is recalculated each year depending on your income: if your income is low, your monthly payment will be also. However, if you land an awesome job and your pay increases, your monthly payment will also increase. For federal loans, the loan term is up to 25 years and any remaining balance after that time is discharged.
          5. Forbearance: this allows you to reduce your payment amount, stop making payments temporarily or extend your repayment period. You lender will most likely ask you to provide documentation supporting this request. However, you still need to make interest payments while your loan is in forbearance.
          6. Deferment: this allows you to postpone your payments for a period of time. If you just graduated and haven’t made any student loan payments, your loan has been in deferment for the past four years (or 5 or 6 years depending on your “super senior” status). You can defer your student loan again under the following conditions:
          • You are enrolled in school at least half time (this is about 6 credits depending on the school)
          • You are actively seeking, but not able to find, employment
          • You have economic hardship

          A Financial Alternative

          If you have read through all of these options and realize that you don’t think you will have a well enough paying job by the time December rolls around, you might want to consider taking a couple classes and defer your student loan. Classes at community colleges are about $25 per credit, meaning you will only be paying $150 for the semester (if you take six credits/two classes) versus the $200 per month you might have to pay. That isn’t to say you should do this forever; once you have a full-time job, taking extra classes might  get in the way of your work rather than being an enjoyable learning experience.

          Do you have any student loans? What kind of advice would you give to recent grads?

          Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

            Full Name (required)

            Email (required)

            Are you a current client of Christian Credit Counselors? (required)

            Type the code below in the text box. (required)
            captcha


             

            ​Read More
            Holiday Tips, Money Management, Saving

            Budgeting for a Festive St. Patrick’s Day

            Happy St. Patrick’s Day!

            Another holiday means more temptation to go out and spend money to celebrate. Whether you are Irish or not, people like to take the opportunity today to wear green, eat some corned beef, and wash it down with an Irish brew. There are many other ways to celebrate today as well. Here are some budgeting ideas for you to save some green this St. Patrick’s Day.

            1. Check out a local parade and get into the Irish spirit. This is great for the whole family and will most likely be free of charge.
            2. If you want to decorate a little bit around the house, don’t go to expensive craft stores. Opt to go to the Dollar Store to find great St. Patty’s decorations, and save some green.
            3. If you wish to celebrate by eating some traditional Irish food, instead of going out to a restaurant, find an easy recipe online and try to make it yourself. Visit Allrecipes.com or foodnetwork.com and filter the search to meet your needs. If you are planning on making tonight a date night, cook the meal together and have fun with it!
            4. Rent a movie inspired by the Irish. 411mania.com offers a list of the top 10 movies to watch on St. Patrick’s Day. Make an Irish coffee and bundle up on the couch for a relaxing evening.
            5. If you do not want to celebrate St. Patrick’s Day, that is okay! Today is the start of the NCAA’s March Madness. So kick back and watch some basketball. You can still enjoy an Irish brew if you like, I won’t tell.

            I hope you all have a Happy St. Patrick’s Day! Most importantly, even if you are feeling the luck of the Irish, be safe.

            Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

              Full Name (required)

              Email (required)

              Are you a current client of Christian Credit Counselors? (required)

              Type the code below in the text box. (required)
              captcha


              ​Read More
              Holiday Tips, Money Management, Saving

              Saving Money During the Holidays

              Holiday Money Saving Tips

              The holiday season is officially here! While money is tight for many of us this year, there are some ways to save a little bit of money.

              Reuse wrapping paper and gift bags

              Even though it’s too late now to go back and save the wrapping paper and gift bags from earlier in the year (although you can start saving this Christmas/Hannakuh for next year!), recycle the wrappings from any gifts you get between now and the holiday from work parties or friendly gift exchanges. Sometimes even the bag from the store in which you purchased the item can be fancied up with a little tissue paper and ribbon!

              Get creative with your wrapping paper

              When I was little, my mom would wrap presents in the comics from the newspaper. If you don’t get the newspaper, you can always use magazine pages, decorated paper bags, or by decorating computer paper or butcher paper if you have access to some.

              Give homemade gifts

              This is especially appropriate for co-workers and/or a boss. I don’t know anyone who wouldn’t enjoy getting some homemade baked goodies! Parents and grandparents also love homemade crafts from their children, especially if there is a picture of the child involved (such as a frame ornament made out of popsicle sticks) or the child’s handprint. For tons of great ideas for things that children can create, visit Amazing Moms.

              Christmas Postcards

              Postcards require less postage to mail, and spread holiday cheer just as well!

              Use a Smartphone App

              Check out apps such as ShopSavvy or Coupon Online Codes, both free. ShopSavvy allows you to scan the barcode of a particular item and then tell you where else it is being sold (including online) and how much it costs, saving you a considerable amount of driving all over town to compare prices. Coupon Online Codes allows you to search hundreds of retailers for coupon codes to use towards your online purchase.

              Give up Starbucks

              If you cut out your coffee, lunches, and dinners out for a month, the extra money can be put towards gifts at the end of the month. You can do it – it’s only a month!

              Split the Cost of Gifts

              For example, go in with your siblings to purchase something for your parents. Chances are that you can get a decent gift for less of a contribution than you would have shelled out on your own.

              Set a Dollar limit

              Talk with your family members/co-workers/friends ahead of time and agree on a set amount that you will spend on each other. This way, everyone knows what to expect and no one has to worry about “outspending” anyone else.

               

              Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

                Full Name (required)

                Email (required)

                Are you a current client of Christian Credit Counselors? (required)

                Type the code below in the text box. (required)
                captcha


                ​Read More