Debt Collector Will Write Off $3 Million of Debts, Close Doors

The Georgia Consumer Protection Office ordered an Atlanta-area debt collector to shut down his business and stay out of the industry for five years following numerous consumer complaints about the company’s practices and its alleged use of illegal debt-collection techniques, according to the Daily Report. Earnest Earvin IV, owner of Zenith Financial Group, agreed to get out of the collections business for five years, and he will be subject to a $460,000 penalty if he violates the agreement.

According to complaints filed with the Better Business Bureau (33 were filed and resolved in the past three years), the company is accused of calling consumers and threatening them with arrest, criminal charges and physical violence if they don’t pay the debts, many of which consumers claim are not legitimate in the first place. Zenith Financial Group has an F rating with the BBB.

As part of the agreement with the consumer protection office, Earvin and Zenith will no longer attempt to collect on more than $3.1 million in supposed debts, in addition to paying $15,000 in penalties, according to the Daily Report. (The total penalty is $460,000: $15,000 now and $445,000 immediately coming due if Earvin violates the agreement.)

The phone number for Zenith Financial Group is out of service, and an email to the company seeking comment was returned as undeliverable.

The things Zenith is accused of doing — attempting to collect debts that have already been paid, threatening consumers, calling borrowers at all hours and pursuing debts on which the statute of limitations have expired — are common complaints consumers have about the debt collection industry. When dealing with debt collectors, its crucial for consumers to familiarize themselves with their rights, and doing so can help them identify and put an end to any illegal collection tactics they may experience.

The first thing to do when you hear from a debt collector is ask them to verify the debt in writing so you can determine whether or not you have to repay it. Once you know what you’re dealing with — where the debt originated, how much you owe (if you legally owe anything at all) and who you have to pay — immediately put together a plan for addressing the debt, because the longer you put it off, the messier (and more expensive) the resolution can get. You can keep tabs on what’s being reported about you by checking your credit reports regularly. You’re entitled to your free annual credit reports from each of the three major credit reporting agencies through AnnualCreditReport.com. You can also get a free credit report summary from Credit.com, updated monthly, to watch for changes.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.


8 Credit Cards With No Annual Fee

Are you one of those people who refuse to pay an annual fee for a credit card? Although some of the best cards offered have steep annual fees, not all of them do. And while paying an annual fee can be a good value for big spenders, those with more modest spending requirements may not find the added costs to be justified.

Thankfully, there are no-fee credit cards that offer impressive interest rates, promotional financing and even reward travel opportunities, but you have to know where to look. Here are eight of the top credit cards with no annual fee and what they offer.

1. Amex Everyday

This card offers double points for purchases at U.S. supermarkets, and one point per dollar spent elsewhere. The points are earned in the American Express Membership Rewards program, which can be redeemed for gift cards, merchandise or travel reservations. But in addition, this is the only no-fee card that allows you to transfer points to airline miles. Furthermore, cardholders receive a 20% points bonus each statement period when they make more than 20 transactions. Other benefits include purchase protection and travel insurance policies.

2. BankAmericard Travel Rewards

This card offers several outstanding features often found on more expensive cards. For example, this card has an EMV chip and no foreign transaction fees, so it’s an excellent card to use when traveling outside of the U.S. It is also a competitive rewards card that offers 1.5 points for every dollar spent, as well as an additional 10% points bonus when you have an active Bank of America checking or savings account. Finally, cardholders receive 0% APR promotional financing for 12 months on purchases.

3. Discover it Miles

This card offers 1.5 miles on all purchases with no limit, and will double the miles earned during your first year as a cardholder, for a total of 3 miles per dollar. Each mile is worth one cent as statement credits towards travel purchases, or just cash back. In addition, cardholders also receive an annual $30 worth of statement credits towards in-flight Wifi purchases. Finally, cardholders receive 12 months of 0% APR promotional financing on both new purchases and balances transfers (with a 3% balance transfer fee), and a free monthly FICO score.

4. Capital One QuickSilver Rewards

Cardholders receive 1.5% cash back on all purchases, plus a $100 sign-up bonus when they spend $500 within the first three months of card membership. Cardholders also receive a full slate of Visa Signature benefits, and there are no foreign transaction fees for this card.

5. US Bank Cash+

This card offers 5% cash back on your first $2,000 combined spent each quarter in two of the purchase categories you choose. Another 2% cash back is offered on your choice of one everyday category (such as gas or groceries), and 1% cash back on all other purchases. You also receive a 0% introductory APR for nine months on balances transferred within 30 days of account opening.

6. PenFed Promise

In addition to no annual fees, this card has no late fees, foreign transaction fees, balance transfer fees or any other fees whatsoever. To apply you must join the Pentagon Federal Credit Union, which you may do based on your employment with one of many military, government, or defense organizations, or that of your family members or household members. Or you can become eligible by joining a military support charity for a small, one-time fee.

7. Citi Simplicity

Simplicity now offers a class-leading 21 months of interest-free financing on both new purchases and balance transfers, with a 3% balance transfer fee. In addition, Simplicity has no late fees or penalty interest rates, making it simple to use.

8. Chase Freedom

New cardholders receive $100 in cash back after they spend $500 on purchases within three months of opening the account. In addition, you can earn another $25 in cash back by adding an authorized user who makes a purchase, also within three months of account opening. You also get 5% cash back on up to $1,500 spent each quarter in combined purchases from featured categories of retailers, and 1% cash back on all other purchases. Finally, this card also offers 15 months of 0% APR promotional financing on both new purchases and balance transfers — with a 3% balance transfer fee.

Before you apply for any credit card, it can be helpful to check your credit score to see where you stand. Then you can target your search to cards that are geared toward your credit range so that you apply for a card for which you’re more likely to be approved. There are many ways to get your credit scores for free — including through Credit.com, where you get two free credit scores updated every month, plus personalized tips on how to improve your scores.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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This article originally appeared on Credit.com.

This article by Jason Steele was distributed by the Personal Finance Syndication Network.


Prenup vs. Postnup: Which Is Better?

Hearts, flowers, love, prenuptial agreement. Remember the old Sesame Street song that went “One of these things is not like the others, one of these things just doesn’t belong.” That’s the feeling of dread that often accompanies a discussion about a prenuptial agreement. But what if you wait? Maybe have that nasty talk after you get married? Is there a difference between having a prenuptial agreement (which is negotiated and signed before marriage) or a postnuptial agreement (which is negotiated and signed during marriage)?

With more than 50% of first marriages ending in divorce (and the rate is even worse for subsequent marriages), having the financial details of your marriage worked out can be a blessing. Divorce is often included as one of the top most traumatic events in a person’s life. Being able to quickly handle the financial details once you have decided to part ways can often be a godsend.

A prenuptial agreement must be accompanied by full financial disclosure. This ideally not only means a financial statement, but all of the bank statements, tax returns and deeds to support the information on the financial statement. In a perfect world, the signed document is then placed into a binder along with the financial statement and the support documentation and is stored like that until it may be needed. If one spouse later finds out that the other spouse failed to properly disclose financial information, the agreement could be found invalid and unenforceable, meaning it could be totally set aside. The divorce would then be treated as if there was never an agreement in place. Other ways that the prenuptial agreement could be set aside is if the court would find that one party entered into the agreement under duress. To alleviate this issue, it is recommended that the agreement not be presented to the soon-to-spouse at the church just before the ceremony. That might end badly. The further in advance that the agreement is signed the better.

Want to protect your future income? Retirement account contributions? Appreciation on your non-marital business? Then a prenuptial agreement is the only way to get that done. Without that document, all of the above becomes marital the day you say “I do.”

When You’re Already Married

Postnuptial agreements require many of the same elements that prenuptial agreements do. Courts generally like to see full financial disclosure (or, sometimes with postnuptial agreements the spouse can demonstrate a “general and proximate knowledge” simply because they had been married and in a position to “know,” but that can be risky so full financial disclosure is best), and that the agreement was entered into freely and voluntarily.

The main thing to remember with postnuptial agreements is that because there wasn’t a prenuptial agreement to begin with, many of the assets that may have been acquired during the marriage have already become “marital,” such as retirement assets, stock options that have vested and been earned during the marriage, or real estate that was purchased with earnings during the marriage. Thus, the agreement will have to address what’s going to happen with these already marital assets.

Both types of agreements should be as specific as possible. Spell out exactly what’s happening with assets, earnings, appreciation (active and passive) and real estate. Be clear about who is paying which bills and how. Be precise about future alimony payments – how much will they be, when will they be paid, and for how long? Or is there a waiver of support? Also, include a provision for attorney fees. Will there be a clause providing that if either party challenges the agreement unsuccessfully that person is now on the hook for both parties’ fees?

So what can’t be handled by either type of agreement? Anything to do with children – present or future. Courts have a duty to determine what is in the “best interests of the children,” so any predetermination of children’s issues will likely to be found unenforceable.

In conclusion, both types of agreements can be found valid and enforceable and both types of agreements can simplify a potentially traumatic divorce situation, but prenuptial agreements are a bit “cleaner” because they can prevent the accumulation of any “marital” assets before they even begin to be acquired. In the long run though, a solid agreement streamlines a divorce and that’s better than no agreement at all.

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This article originally appeared on Credit.com.

This article by Rebecca Zung was distributed by the Personal Finance Syndication Network.


5 Secret Habits of Self-Made Millionaires

When I finished my five-year study on the habits of 233 self-made millionaires, I made a breakthrough discovery. Nearly every one of the millionaires attributed their success in life to habits they learned primarily from their parents or some mentor in life. The secret to success is our daily habits. I thought this was a secret that needed to be shared with everyone so I began writing books about these habits. To date, I’ve identified more than 300 of what I call Rich Habits — and here are a few of them.

1. They Create Multiple Streams of Income

Self-made millionaires do not rely on only a single source of income. They develop multiple streams. Three seemed to be the magic number in my study. Sixty-five percent had three or more streams of income that they created over time. Diversifying your sources of income allows you to weather the economic downturns that always occur in life. These downturns are not as severe to the rich as they are to the poor. The poor put “one pole in one pond” and when their single income stream is negatively impacted in some way, they suffer financially.

Conversely, the rich have “several poles in several ponds” and are able to draw income from other sources when one source is temporarily impaired. Some of the additional streams might include: real estate rentals (each rental unit = a stream of income), REITs (each one = a stream of income), tenants-in-common real estate investments (each one = a stream of income), triple net leases, stock market investments, annuities (each one = a stream of income), seasonal real estate rentals (beach rentals, ski rentals, lakefront rentals), private equity investments, part ownership in side businesses (each one = a stream of income), financing investments, ancillary products or services and royalties (patents, books, oil, timber etc.).

2. They Dream-Set Before They Goal-Set

Dream-Setting is the act of clearly defining a dream. Sixty-four percent of the millionaires in my study were pursuing one single dream. Here’s the two-step process to Dream-Setting:

  • Step One – In 500 words or less, write down what you’d like your ideal life to be 10, 15 or 20 years out. Include specific details of your ideal future life: the income you earn, the house you live in, the boat you own, the car you drive, the money you’ve accumulated, etc.
  • Step Two – Using this script of your ideal future life, make a bullet-point list of each one of those details that represent your ideal life. These would be the income you earn, the house you live in, the boat your own, etc. These details represent your wishes or dreams.

Only after you’ve defined your wishes or dreams does the Goal-Setting process begin. Fifty-five percent of the millionaires in my study set goals around their dreams. This Goal-Setting process requires you to build goals around each one of your wishes or dreams. In order to build goals around each wish or dream, you need to ask yourself two questions:

  • Question #1: What would I need to do, what activities would I need to engage in, in order for each wish or dream to come true?
  • Question #2: Am I capable of performing those activities? Do I have the necessary skills and knowledge?

If the answer to Question #2 is yes, then those activities represent your goals. Goals are only goals when they involve physical action and you have the capability to perform the action required.

Let’s summarize this process:

  1. Paint a picture with 500 words or less of your ideal life.
  2. Define each wish or dream that must be realized in order to have that ideal life.
  3. Establish specific goals around each one of your wishes or dreams.
  4. Take action. Pursue and achieve each of the specific goals that will make each wish or dream come true.

You then repeat this process for every other wish or dream. When you realize each one of your wishes or dreams, your ideal future life will then become your actual life.

3. They Avoid Time-Wasters

When most people think of risk, they think of it in terms of some financial investment they make: investing money in a new business; investing money in stocks, mutual funds, bonds etc.; playing the lottery, gambling or lending money to someone. But financial risk is not the greatest risk most take. You can always earn more money. Money can be recouped. But there is another risk almost everyone takes for granted. This is a risk that, when made, can never be recouped. It’s gone forever. What is it? The greatest risk we all take is time. When we invest our time in anything, it’s lost forever. It never gets renewed or returned to us. Yet, because we are all given what seems to be an abundance of time, it has very little value to us. So we spend an enormous amount of our time engaged in wasteful activities such as sitting in front of a TV, on Facebook, watching YouTube videos, sitting at a bar, lying in bed or engaged in some other time-wasting, non-productive activity. And when we waste time, it’s gone. It will never return. We don’t consider how precious time is until we are older and we realize our time is running out.

Time needs to be invested wisely in pursuing goals, dreams or some major purpose in life. Any investment we make of our time should pay dividends down the road in the form of happiness events, financial security, creating a legacy or in helping improve the lives of others. When you see time as the greatest risk of all, it forces you to become more aware of exactly how you invest your time. Invest it wisely, because you will never get it back. Sixty-seven percent of the self-made millionaires in my study watched less than one hour of TV each day and 63% spent less than one hour a day on the Internet (recreation-related). This freed up time for them to pursue their dreams, goals, read, learn, exercise, volunteer and network.

4. They Found at Least One Success Mentor in Life

The average net liquid wealth of the 233 rich people in my research was $4.3 million. If you do the math, finding the right mentor in life is like someone depositing $4.3 million into your bank account. Ninety-three percent of the self-made millionaires in my study who had a mentor in life attributed their wealth to their mentors. Sixty-eight percent said that the mentoring they received from others was the critical factor in achieving success.

Success Mentors do more than simply influence your life in some positive way. They regularly and actively contribute to your success by teaching you what to do and what not to do. They share with you their mistakes and valuable life lessons that they learned either from their own mentors or from the school of hard knocks. Finding a success mentor in life is one of the least painful ways to become rich. It can put you on the fast track to success. In my research, I discovered five types of Success Mentors:

  1. Parents – Parents are often the only shot any of us have at having a mentor in life. This is why parenting is so important. Parents need to be success mentors to their children. They need to teach their children good daily success habits. If they don’t, it is likely their children will struggle in life.
  2. Teachers – Good teachers = good mentors. Teachers can reinforce the mentoring children receive at home from their parents, or step in to provide the success mentoring absent at home.
  3. Career Mentors – For those not fortunate enough to have had parents or teachers who provided success mentoring, finding a mentor at work can lead to success in life. Find someone at work who you admire, trust and respect and ask them to be your mentor. This person will be at least two or three levels above you in the pecking order at work.
  4. Book Mentors – Books can take the place of actual mentors. Sometimes the best source for mentors are found in books, particularly books about successful people. Fifty-eight percent of the self-made millionaires in my study read biographies of other successful people.
  5. The School of Hard Knocks – When you learn success habits through the school of hard knocks, you essentially become your own mentor. You teach yourself what works and what doesn’t work. You learn from your mistakes and failures. This is the hard path to success because those mistakes and failures carry significant costs in both time and money. But this is also the most powerful type of mentoring you can get because the lessons you learn are infused with intense emotion, and thus never forgotten.

5. They Never Quit on a Dream

Self-made millionaires are persistent. They never quit on their dream. They would rather go down with the ship than quit. Twenty-seven percent of the self-made millionaires in my study failed at least once in business. And then they picked themselves up and went on to try again. They persisted. Persistence requires doing certain things every day that move you forward in achieving your goals or life dream. Persistence makes you unstoppable. No obstacle, mistake or momentary failure can stop you from moving forward if you keep at it. These millionaires learned to pivot and change course, growing in the process. Persistence allowed them to learn what didn’t work and continuously experiment until they found what did work. Persistence is the single greatest contributor to manifesting good luck. Those who persist eventually get lucky. Some unintended consequence emerges, something unexpected and unanticipated happens to those who persist. Sometimes, those closest to you will urge you on and encourage you. But more often, those closest to you — those directly impacted by the obstacles, mistakes and failures that are part of the success journey — will try to stop you from persisting. It takes superhuman effort to continue to pursue success when there are so many forces fighting you. That’s what makes successful people so special — and also so rare. If you want to be successful in life, you must persist in the face of unrelenting adversity. Successful people are successful because they never quit on their dream.

There are many other Rich Habits, but I think these are some of the most powerful.

Habits, I learned from my research, dictate your circumstances in life. They unconsciously program us for success, failure or mediocrity in life. They can determine our social status – rich, poor or middle-class. Habits, I also learned, can be changed. The key to habit change is awareness and tracking. You need to become aware of the habits you currently have and would like to change and then you must track your new habits until they take hold. It takes an average of 66 days to replace an old habit with a new one. When you eliminate old bad habits and adopt new good habits, your life will begin to change for the better. It takes time, but it’s worth the effort.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

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This article originally appeared on Credit.com.

This article by Tom Corley was distributed by the Personal Finance Syndication Network.


I Sold T-Shirts to Pay Off My Student Loan Debt

Like many college students, Jeremy Kalgreen had student loan debt and wanted to be free of it. “I hate being in debt,” he says. But unlike many students, he found a creative way to both pay off his debt and launch what turned out to be a lucrative part-time business that morphed into something more.

The T-shirts Kalgreen designed allowed him to pay off student loan debt, about $15,000 worth, well ahead of schedule. And in the process, he learned some valuable lessons that can benefit new grads.

T-ShirtsHere’s how it happened. Each summer, Kalgreen says, he tries to learn a new skill. (Lesson No. 1: Try new things.) One summer he tried learning how to silk screen T-shirts. But he wasn’t very good at it, he says. An art student who was studying photography at the time, he did enjoy designing the shirts, but not actually making them.

He heard about a website — Spreadshirt.com — where he could upload his designs and they print the shirts for him. He decided to create a few for his personal wardrobe. But the day he went to place his order, his car broke down and he couldn’t afford the $90 or so it would take to purchase them.

“There was an option to make my designs public,” he recalls. “I wasn’t planning to do that but I thought maybe someone would want a T-shirt.” His only thought at the time was that it would be cool to sell enough so that he could purchase a few for himself.

Almost immediately he got a trickle of orders. It wasn’t a lot, but in a relatively short period of time he was making around $300 a month. Then some bloggers saw his science-themed designs and mentioned them on their blogs. Soon the orders started really coming in.

His first order of business? Paying off his student loans.

“The first thing I did was funnel all the money I was making to clear out what I owed,” he says.  (Lesson No. 2: Ditch the debt.) Fortunately it wasn’t a fad. “It stayed stable, and I made enough money to quit my day job school at the photo lab and delivering pizza.”

His T-shirt business, WearScience.com, is what he now does full time.

It’s important to note that Kalgreen took a cautious approach to his finances right from the beginning. He kept his standard of living very low even after he graduated from college in 2005. “I was still living the life of a college art student with a couple of roommates,” he says. (Lesson No. 3: Live like a student for as long as you can.) He knew sales could drop at any moment and he didn’t want to find himself back in debt if they did. It took him roughly two years to pay off the loans, but that was significantly faster than if he had followed the standard 10-year repayment schedule. (You can see how your student loans are affecting your credit by getting your credit scores for free on Credit.com.)

He also believes the fact that he wasn’t good at silk screening worked to his advantage, because it forced him to look into other options. He got lucky: he stumbled on a business opportunity that didn’t require him to invest a lot of money upfront on equipment, a website shopping cart, inventory etc. (Lesson No. 4: Keep costs down.) “If I had to do the traditional business model I would have gone bankrupt,” he says.

With his business well established, Kalgreen now has a house (and mortgage) and family. But the lessons he learned while starting his business have served him well. He’s managed to save and invest, and turn his passion into a career.

Image: Jeremy Kalgreen

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This article originally appeared on Credit.com.

This article by Gerri Detweiler was distributed by the Personal Finance Syndication Network.


5 Ways to Cut the Cost of Moving

It may be obvious that buying a house will be a very large — and expensive — decision. Even if you calculate your monthly mortgage payments, evaluate the overall price tag, factor in future maintenance and repairs, and consider any commute and renovation costs, you may forget a few things that can add up to more than a few (hundred) dollars. From closing costs to movers, you can end up spending more than you expected to in your first year of homeownership. Check out some tips below to help you keep those relocation costs down.

1. Plan Ahead

Getting organized before crunch time can help you save. Change your address with all of your creditors and the post office ahead of time so nothing important will slip through the cracks. A missed or late payment can do serious damage to your credit scores and will end up costing you in the form of higher interest payments down the line. (You can check your credit scores for free on Credit.com.)

It’s also a good idea to create a budget for all moving expenses so you can evaluate what other aspects of your lifestyle you can cut back on that month to help fund your relocation. It usually adds up faster than you think — so try not to leave anything (from truck rental and mileage charges to gas and electric setup) off your list. You may want to consider investing in movers insurance to protect your belongings. In addition, it’s important to secure all important documents in a safe place so they do not get lost during the commotion and you will have them whenever you need them.

2. Time It Right

The price of moving can vary greatly based on when you move and whom you hire. It’s a good idea to do some comparison shopping. Research a few options and get multiple quotes before you choose a moving company or truck rental. If possible, avoid moving in the summer, when it is most popular. Rates are lower between September and May when these companies are less busy. Similarly, you may find lower prices on weekdays as opposed to weekends and further from the beginning of the month when many rental leases change hands.

3. Mix DIY & Professional Help

Moving on your own is almost always the cheapest option. This requires more time and sweat, while calling in the professionals can make it easier. Of course, there are some options that combine the two. You can pack boxes yourself or even prep the furniture and just pay the movers to physically move your belongings between homes. You can move all the smaller items and boxes and hire movers for only the heaviest objects, like your couch, bed and dresser.

4. Come Prepared

When the movers or moving day comes along, it’s important to be ready. If not, you can end up paying the movers to watch you organize your things. Collect packing materials, like tape, boxes and bubble wrap as soon as you know about the move. See if there are old boxes available at work or your grocery store. Ask friends or neighbors if they can pitch in with the packing. By starting early, you can take your time and possibly even choose some things to sell or give away before the move. This way you de-clutter and don’t pay to move things you don’t want anymore. You may need parking permits or, if you live in an apartment building, insurance permits. It’s a good idea to get those ahead of time.

5. Get (Financial) Help

Track all your moving expenses so you can get some of the money you shell out back. If you are moving for work, ask your employer to cover some of the costs. Even if your employer will not pay for the expenses, you can deduct some of the costs on your income tax return. It can be a good idea to consult a tax adviser before the move and through your filing process to be sure you do this properly.

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This article originally appeared on Credit.com.

This article by AJ Smith was distributed by the Personal Finance Syndication Network.


Should I Use My House to Finance a New Car?

Q. I need a car loan, and I’m thinking of using my home equity instead of taking a loan with the dealer. How can I decide which is a better deal?

A. There are pros and cons to every borrowing situation — including the strategy of using the equity in your home to buy a car.

People who use home equity lines of credit (HELOC) often make the choice because of the potential tax savings.

“The interest rates on home equity loans are often tax-deductible while the interest on a car loan is not,” said Kim Viscuso, a certified financial planner with Stonegate Wealth Management in Oakland, N.J. “This tax advantage is only beneficial to those taxpayers that itemize their deductions, and there may be limits if you exceed $100,000 on the loan.”

A HELOC functions like a credit card, Viscuso said. It makes a certain amount of credit available on an as-needed basis for a limited term then follows with a repayment period.

The interest rate on a home equity loan is probably going to be lower than that of a traditional car loan, but it will be variable after some period of time, said Claudia Mott, a certified financial planner with Epona Financial Solutions in Basking Ridge, N.J. Although we have been in a period of very low interest rates for a long time, you need to consider the likelihood that the HELOC rate will probably increase over its lifetime, she said.

The potential for rising interest rates isn’t something to ignore.

What You’ll Need to Consider

A higher move for rates could force you to be make larger payments for the car down the road, Viscuso said. Also, if you decide to make interest-only or smaller payments on the amount borrowed, the repayment period could last longer than the life of the asset itself.

Choosing to borrow through a home equity loan can also be a cash-flow decision.

Mott said the option to repay on the interest might enable you to have a new car with lower payments, but you will still need to be in a position to pay off the loan when the term ends.

“Keep in mind that the value of the car will continue to depreciate from the moment you drive it off the dealer’s lot and may have no salable value when it comes time to pay off the HELOC obligation,” she said. “If cash flow is an issue and the ability to make a balloon payment is going to be a problem, you may need to rethink the idea of a new car entirely.”

Another potential negative is that you will have to pay closing costs for the home loan, Mott said, so make sure you run the numbers so you understand the cost of borrowing for all your lending options.

Another disadvantage to using funds from the HELOC to purchase a car is that the borrowed funds are no longer available for other uses, Viscuso said.

“Many people use their HELOC for emergency situations,” she said. “If you eat up the funds by paying for a car, they may no longer be available for unforeseen future emergency situations.”

And finally, Mott said, if it turns out that the auto loan is a better option for you, make sure you shop around because the dealership’s offerings may not be the most attractive.

“If you have good credit and meet the qualifications, using a local bank, credit union or an online loan provider may get you a better rate and hence savings over the long term,” she said.

(You can check your credit scores for free on Credit.com to see where you stand.)

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This article originally appeared on Credit.com.

This article by Karin Price Mueller was distributed by the Personal Finance Syndication Network.


Sabbatical Financial Planning 101: How to Travel and not get into Debt

Sabbatical Financial Planning 101: How to Travel and not get into Debt

Sorting out your finances will be the major part of planning for your sabbatical. Preparing well for that reduced income – or no income at all will be crucial for your overall financial future. We all know that sabbaticals can be life-changing. We’ve laid out below a financial plan 101: How to travel and not get into debt:

Rule No. 1 – Still contribute to your Benefits

While you are off – still be prepared to continue contributing to your benefits, including making pension plan contributions. If you are like most people you want to have your cake and eat it too. Most of us wouldn’t want to delay our retirement because we took a break from work. We can all do this but we need to make the extra effort. Do you have a savings or retirement spending goal? Don’t let your sabbatical or time-off interrupt that. If you have a retirement spending goal of say $55,000 a year – stick to it and remain committed to that goal even when you’re planning for a sabbatical.

If you have health insurance – you will need to ensure that you still maintain it and can access it while on a sabbatical.Your health benefits may be reduced while you are on sabbatical leave. Check with your human resources department to determine their policy for providing coverage for medical, dental and vision care during sabbaticals. If you will not receive coverage during your sabbatical, you will need to cover health care expenses yourself out of pocket.

Most employers provide insurance coverage for their employees. This includes life insurance, and long- and short-term disability insurance. This is especially important if you are the primary breadwinner in your family, and the one through whom the coverage is provided. You will need to determine if coverage still applies during sabbaticals, and if not, make alternative arrangements.

Rule No. 2 – Decide how you can plan to sell/lease items to Raise additional funds

The bottom line is that you do want to be prudent and reduce your expenses as much as possible during your sabbatical. If you rent an apartment, you may be better off subletting the apartment rather than giving it up entirely and paying for storage.

If you are a homeowner – you can effectively rent out your home to get additional income. Make sure to properly screen tenants and if you can – get a very good property manager to look after it while you’re gone.

Garage Sales: Ever thought of a garage sale to get rid of unwanted items? Now may be the time to do one. You can raise funds for your sabbatical and declutter at a time when you’re going to have to do it anyway.

Crowdfunding: People are crowdfunding EVERYTHING nowadays. I’ve also see a few good crowdfunding campaigns dedicated to raising cash for a sabbatical. Here are a few:

https://www.indiegogo.com/projects/crowdfunding-for-mr-lu

Try a crowdfunding campaign on Aspire-Canada if you like: https://www.aspire-canada.com/crowdfunding/

If you do decide to do a crowdfunding campaign to pursue your sabbatical please make sure its tied to some awesome benefits for your contributors. This can be done if you will go to volunteer or establish projects related to health, education etc. in countries that need it the most.

Rule No. 3 – Draw up a Budget

After you’ve analysed how much expenses you will have while on sabbatical and thought about you you may be potentially able to raise additional funds to finance it – the next logical step would be to draw up a budget. Don’t do the budget unless you’ve thought about potential income vs. potential expenses.

First off, its important to detail what you will be spending during the sabbatical, as well as ongoing expenses at home. Then you can look for expenses to cut, such as the cost of operating your vehicle. Create a spreadsheet in excel and lay out all expenses and potential revenue in it. Make sure to include all the places and attractions in the budget so you’ve included everything. Feel free to include other intangible benefits in your budget in a comments slot – this will put things into perspective for you. Here are two examples of jotting down places to visit and intangible goals:

Theme based Experiment: Different country/experience every week. (Seven weeks, Budget: $10,000 )
Week 1: Two countries in Central and South America
Week 2: Teaching/ volunteering
Week 3: Family and friends time
Week 4: Thailand- Beach, Detox and yoga
Week 5 and 6: Cambodia, Hong Kong, other Asian destinations
Week 7 : Spiritual Retreat

Global Trotting Experiment: Eight months with one around the world ticket (Budget: $20,000)

60 Days in Africa (Adventure and Volunteering): From Cape Tow to North Africa
Turkey: 15 days around the country highlights
India: Cross country train trip (six weeks)
Mongolia: Living in the desert experience (one week)
Southeast Asia: Visiting Top cities (one month)

Rule No.4 – Plan to stay with Relatives or Friends during parts of your Travel

If family and friends are out of the question – seek out low-cost options. If you’re travelling frequently while you’re on sabbatical you may want to organize to spend some weekends with various family-members and friends. Just plan in advance – you will be surprised how much this can shave off additional costs.

Rule No. 5 – Start Planning your Sabbatical well in advance

Obviously, the earlier you can start planning your sabbatical the better, particularly in terms of finances. The best thing to do is to start planning years before your departure date. During that period try to put away any extra money in a special savings account, and pay down debts, and live more frugally at home. These are the three most important things you can do to make your sabbatical a reality. Start cutting out all extraneous spending like eating out, vacations, and any large purchases that aren’t directly applicable to your sabbatical. Not eating out or buying anything new will get tedious at times, but all you have to do is remind yourself how delicious those south-of-the-border tacos and margaritas are going to taste, and the whole thing becomes more palatable.

Rule No. 6 – Pursue opportunities to work abroad while on Sabbatical

Part time job: Work part time during the break—baby/pet/house sitting, freelancing, upscaling products; the possibilities are limited only by your imagination.

Rule No. 7 – Take Full advantage of any Company perks for your Sabbatical:

In the US Consulting firms like McKinsey and Deloitte are well known for paid sabbaticals. Thoroughly check out all the options for getting company perks for reducing your financial outlay before finalising any plans. In addition more than 20 percent of employers pay their employees to volunteer. U.S. Bank employees can draw up to 16 hours of pay per year for doing things like serving breakfast to the homeless or reading to kids, and this kind of thing is happening at lots of other companies nationwide.Every year, the Society for Human Resource Management surveys employers about the benefits they offer. In 2013, about 20 percent said they give their workers a bank of paid time off specifically for volunteering, up from 15 percent in 2009.

Follow the Sabbatical Financial Planning 101 Guide and go on that well deserved sabbatical. It can change your life. And you will see that your world does not stop, does not fall apart, when you invest in yourself. Even if you decide not to go on a sabbatical now, I hope you still do it in this lifetime. Remember, the trip really begins when you start to plan it. Whether it is on paper or real, enjoy it!

This article by Keisha Blair first appeared on Aspire-Canada and was distributed by the Personal Finance Syndication Network.


10 Tips for Keeping Your Job if You Freelance on the Side

Can you do your side hustle, still hold down your full-time position and avoid pissing off the people who pay your paycheck? Here are ten tips that will help you take home more cash, while still keeping your boss happy and building a stronger foundation for your career:

1. Check your Employment contract

Nobody likes sifting through the small print, but this is job #1 when you’re getting ready to start freelancing. The reason is that some companies include non-compete clauses, which might limit or prevent you from doing the same work outside the company or for the same clients. And, if what you’re doing isn’t allowed, you’re at risk of being fired or even sued. So, read those employment agreements carefully, and then stay on the right side of the law.

2. Is there a Direct Conflict of Interest?

Larger companies will have a conflict of interest assessment that employees can undertake before (or after) you undertake any endeavour. Getting a freelance contract with one of your companies current clients or consultants is a direct conflict of interest. There are assessments available that help you figure out before-hand if your freelance work or project represents that. Remember, the freelance work is one thing but also any assets or income and sources may be called into question as well. If you’re in a political field – this is even more important.

3. Come Clean

As tempted as you might be to believe that your employer will never know about your side gig, it’s neither realistic nor wise. With social media, Google searches, and just knowing people in the same industry, someone from your company is more than likely to stumble across what you’re doing outside of work. And even if freelancing is technically allowed by your company, in most cases it’s still a good idea to give your boss a heads up. So, set up a meeting to present the idea, making it clear that you won’t let it affect the job you’re being paid for.

4. Reveal The Nature of Your Freelance Work

Of course you don’t have to (and probably really shouldn’t) go into details about your clients, the size of the projects, what you’re earning and so on. But you may have to (because of your contract) let your boss know about what area your freelancing work will be in.

This will often clear up any doubts of conflicts of interest. For example, if you’re planning to freelance as a copywriter and you work as a customer service rep, you’ll probably be in the clear. Or, if you are planning to do the same work freelancing as you do in your regular job, your company might allow it as long as you work for different clients and agree not to approach ones that the company had first. Either way, being honest about the type of work you are (and aren’t) doing will help ease your boss’ fears.

5. Re-Emphasize Your Commitment to your Job – Be Loyal to your Employer

Every Employer wants to know that you are still 100% committed the job and to your role in supporting senior management. Loyalty among employees is always important. The law in Canada requires an employee to be loyal towards his employer. This means that an employee must be honest with his employer while he works for him, use good judgment in his role as an employee, put the interests of his employer above his own to protect confidential information. The duty of loyalty is based on the idea that an employer should be able to trust an employee both at work and outside the workplace.

An employee must respect his duty of loyalty regardless of the industry he works in or position he has. However, if an employee has heavy responsibilities within a company, such as a management position, his duty to be loyal may be greater.

Here are some of the types of behaviour that are considered disloyal to your employer:

lying or being dishonest with your employer
stealing from your employer
putting what is best for you before what is best for your employer (also called “being in a conflict of interest”)
misusing confidential information for your own benefit or to benefit others
intentionally damaging your employer’s reputation or harming his business
spreading false information about your employer

6. Emphasize the benefits freelancing will bring to your Employer

Beyond just getting the green light, consider showing how you freelancing will actually be a benefit for your boss, your colleagues, and the whole organization. After all, the fact that you’re ready to spend your free time doing much more than clearing out your Netflix queue shows your excellent work ethic and high motivation — what employer doesn’t want that?

But you can also show how your side projects will encourage you to get valuable skills and experience that will be an asset for you during your whole career and to your company right now. So, if you learn amazing tech skills that you’ll be putting to use as a freelancer, let your boss know that those same skills will help you make a killer email newsletter for your company.

7. Make sure you give 110% at work

No matter how excited you and, hopefully, your boss are about you freelancing, you have to keep in mind that you still have to be committed to your job as much as before — if not more so. Be sure you’re on time for meetings, stay on top of deadlines, share ideas and enthusiasm, and just generally do what’s expected of you.

And don’t forget — that includes coming into work rested and ready to work (no staying up all night working on that side project!) and not talking about your freelance clients with your co-workers during coffee breaks, much less during working hours.

8. Keep your freelancing on your own time

Do not undertake your side-project at work. Even if it’s a slow day, save your projects for after hours. Stick to the business of your company during the day, and you’ll stick in your boss’s mind as a good employee who just happens to be doing some fantastic work on the side.

And resist the temptation to use your work laptop, phone, or even the copy paper and stapler for freelance projects. Although they’re small costs for the company, they’re still company resources. And you’ll avoid any hard feelings (or worse!) by staying within those boundaries.

9. Make the most of your freelancing time

Take advantage of the time you do have to freelance so that, when you have to be at the office, you’ll be there fully mentally and physically.

You can find time for freelancing by getting up early, staying up late (but not all night, right?!), using your weekends, or trading in your vacation for time spent on your own projects.

And you can use each and every minute as best you can by not taking on more than you can handle, planning your work carefully, staying on schedule, and focusing fully on the work to be done. All this will help you earn more money as a freelancer, get better experience, and build a reputation that will serve you both now and into the future.

10. Make sure you still keep up-to-date with upgrading your skills and on the job Training (Employer Training)

This is critical to staying competitive in your job. Still take advantage of all the training you can undertake. Never take your day job for granted. Upgrading your skills will benefit both your day job and your freelance side project. Your boss will see that you are still 100% committed to the job.

This article by Keisha Blair first appeared on Aspire-Canada and was distributed by the Personal Finance Syndication Network.


4 Housing Costs That Could Go Up

One of the nice things about living in the same place year after year is the consistency: You know the best routes home from work, how to prepare the place for seasonal weather changes, where everything belongs and how much it costs to maintain everything.

At the same time, the comfort of familiarity isn’t immune to change, and there are plenty of things about your housing situation that can change, even if you keep the same address. To avoid the shock of a sudden increase in housing expenses, anticipate these common shifts and re-evaluate your budget on a regular, frequent basis. If you’re planning to buy a home soon, this calculator can help you figure out how much house you can afford to help you budget from there.

1. Rent or Mortgage Payment

Your rent is subject to change as the landlord or property manager sees fit, depending on the terms of your lease and the tenancy laws in your state. Even if the rent has been consistent for a few years, don’t be surprised if it goes up, because it happens often. When you find out the rent will increase, do your research: First, check your lease and local laws to make sure the increase is legal, and if it is, consider negotiating. If you’re a good tenant who always pays on time and requires little attention from the property manager, you may be able to minimize the increase.

Mortgage payments can go up too, if you have an adjustable-rate mortgage. The interest rate will be fixed for a period of time (depending on the type), after which the rate will reset periodically — for example, some types adjust as frequently as every month — and affect your payment.

2. Property Taxes

Homeowners may see their property taxes increase for a variety of reasons, often because of government budget shortfalls where they live. These taxes are based on your property value, so as the assessed value of your home changes, either because of market shifts or improvements you’ve made to your home, your tax liability will also change.

3. Utilities

Depending on what part of the country you live in, you may be all too familiar with fluctuations in utility costs. Climate has a lot to do with it, whether you’re constantly changing your temperature control as the four seasons come and go or if you only get a few months of the year when you’re not blasting the air conditioning in your home in the desert.

On top of meteorologic changes, you have to anticipate economic ones. For example, the price of heating oil soared in late 2013 and early 2014, significantly increasing the heating bills of homeowners in the Northeast, where the largest concentration of oil-heated homes in the U.S. reside.

You also have to think about any special discounts you may have had that are expiring. Oftentimes, when you set up a new Internet package, you get a promotional monthly payment for the first year of service, and when that’s over, you have to pay the “normal” rate.

4. Insurance

Any significant value changes you make to your home or the possessions inside it could affect how much insurance coverage you need and, as a result, your insurance premium. Don’t forget to update your insurance, either, because if you’ve fitted your place out with a bunch of fancy new gadgets that weren’t included in your initial insurance estimate, you may not have what you need to replace them if something happens.

Re-evaluating even the most consistent expenses in your budget is an important exercise in maintaining overall financial stability. When you’re not prepared for your living expenses to increase, you strain your resources and may possibly go into debt to make everything work. Racking up debt and damaging your credit score will just make the frustration of surprise expenses worse, so prioritize preparedness. You can see how your debts are affecting your credit by checking your credit scores periodically — which you can do for free on Credit.com.

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This article originally appeared on Credit.com.

This article by Christine DiGangi was distributed by the Personal Finance Syndication Network.