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Ever Wondered Why Some People Find It Difficult To Get Out Of Debt?

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Every person suffers a financial crisis at different times in their life, what matters most are the decisions we make to stabilize at these critical times. We also have always to maintain sufficient funds to pay regular bills and daily expenses. Most people prefer taking debts and loans, whatever the decision you make it must have a viable payment plan and within your financial discipline as well. Otherwise, you will never have enough get out of debts or start an investment.

get out of debt

[Read: Things to Know About Debt Negotiation]

Factors to consider before taking any debts

A good debt should not only stabilize you financially, but it should also enable you to pay any existing debts and allow you to avoid any debts in future. To establish a tactical debt plan, several important factors you must consider. To determine your most viable debt plan, you need to achieve a proper balance among these factors. These factors include:

  • Your credit score.
  • Your monthly total income and earnings
  • Your total monthly expenses and outstanding bills
  • The debt’s total interest and payment duration
  • Your outstanding debts and loans if any

Having known the important factors that affect your debt’s viability, it is necessary to maintain an updated and real debt record. If you are currently struggling under a mountain of debts, you must be suffering consequences of a negative mindset. Unless you adjust to a positive one, here are five reasons that prevent you from getting out of debt.

  1. Unplanned or undocumented spending

Some people spend extravagantly beyond their optimum budget numbers. If you are among this lot, you need to adjust. If you don’t match your budget to your income, you will find it boring, dumb, and restricting. Indeed, if you don’t budget you’ll always find it difficult to balance your income to your expenses and might never get out of debt. Whenever you consult your bank account, it will always seem a crapshoot with insufficient funds. If you excuses to budgeting are about tediousness, you are yourself to blame since several free software like PowerWallet are available to make your budgeting hassle-free. This software does everything for once you input your monthly income and expenses.

  1. Shopping for fun

Once you spending habits become a form of recreation, you will probably spend your savings to the last coin. Without a significant disposable income, you won’t have much to afford this lavish spending habit. Most people of such lifestyle will buy any they like without considering its essence or cost. By doing extensive research on the prices of goods in different stores before purchase, you will not only spend less and save more, but you will also get quality products on each purchase. That way, you will never get into credit card debts.

  1. Choosing wrong friends or partners

Evidently, it is always hard for anyone to advance if they follow a multitude with everyone trying to outshine others. You will certainly spend more trying to keep up with such friends. That does not mean ditching your friends; instead, you should reason rationally to choose real friends to spend time with and avoid those that are always competing to outshine you. Your real friends will always appreciate you even when you can’t afford their lifestyle.

  1. Having a tendency to postpone things

You are doomed to downfalls if you always have excuses for failing to budget your money. Do not wait until the holidays ends or you get a better-paying job so that you draft your budget or clear your debts. Or hope to stop spending if you buy evolving products. You will never get a perfect time. Smart budgeting demands that you prioritize the basic needs first and the others to follow. You will always be in debts as long as you keep postponing things.

  1. Living devoid of character

If you are too lazy, weak or extravagant chances are when in debt you tend to accumulate more debts. From my past such experiences, I have learned that we should always be optimistic about our debts regardless to the extremism of our situations. Whether the reason for the debt was a hospital bill, receding economy, or inflated housing market, we should always be responsible for our actions. Taking responsibility means that everyone should accept their actions and react responsibly to the consequences. This situation does not apply to those living in poverty; rather, it applies to those who have suffered a catastrophic experience like a total disability that pushed them beyond their ability.

[Read: What Are Your Debt Repayment Options?]

You hold the ultimate decision

Usually, people face problems that exceed their current financial capacity. In such a case you are forced to borrow a debt in order to meet these demanding needs, however, before getting into debt, you must reason rationally. This process involves examining your ability to recover the debt without getting into more debts. Once you conclude that the debt is viable enough and accept the debt’s terms, you must act responsibly by paying your debtors in time. That way, you will win your debtors’ trust and live in financial freedom.

Top Money Tips for 2016: Part I

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Learning how to manage your personal finances efficiently can be time-consuming because in order to get an overview of the top money tips for 2016 you might have to gather thorough research, do a lot of reading and filtering between certain strategies and categories which can be quite daunting.

Before you make any major decisions about managing your money or setting goals, try to mentally prepare first and know your situation with your money.

You need to ask yourself certain questions before heading onto any major decisions and setting goals in order to progress with your money managing.

Do you have credits to pay back? Are you in debt? Do you owe other people? Have you clearly thought through your incoming earnings relative to your outgoing costs? Are you a spender or a saver?

You must come up with a realistic conclusion as to what type of financial situation you are currently in and what you’re expecting to happen in the future.

How your money affects your life not only reflects a lot about your personality but it can seriously define your days, weeks, months and technically the rest of your life.

top money tips for 2016

That’s why it’s a good idea to consider your personal finances wisely and take the time to plan and adopt the following money tips for this year if you wish to control your finances better.

1. Schedule an appointment with a financial advisor

It’s never too late to see an expert in the financial field. Don’t be shy to ask for help and turn to an advisor, because they really know their job. And even if it takes time and not all of the options work for you, the time spent on considering the following options will be worth your while.

Financial advisors can help you to start off with the money managing by looking at the following:

  • Your credit rating
  • Insurances such as health or home insurance
  • Debt repayments
  • Checking out deals for your mortgage
  • Personal assets, wages and earnings
  • Considering interest rates
  • Pension and retirement savings

2. Get into budgeting

Having an idea of where your money is regularly going, controlling it and building up a necessary plan are all vital to filter through anything that you don’t actually need in your life. This can be simply achieved by keeping a constant budget, because by doing so you can see where you’re money is going and where you’re money should be going such as:

  • Debt payments
  • Savings accounts
  • Future investments

The financial expert Whitney Johnson who co-funded the investment company called Rose Park Advisors thinks that smart proactive money making is important because it teaches you to work properly, to earn the money you deserve for the work and to save up from it because you’ve learned to value it.

3. Make a living out of doing a job you love

At times, you will get into the situation when the job you do will not satisfy you nor earn you a good deal of money. It might not be the dream job and believe it or not, most people start with jobs where they don’t necessary feel happy, but because of simple survival and needs, you always have to be humble and work hard in order to earn your living.

However, the point often arrives at which you question yourself whether you’re happy with what you’re doing, how you’re earning your living and how it is affecting your life. Are you going to keep chasing your dreams forever or be brave and give a shot to a job that would make you satisfied in your life? There is no better feeling than earning money with a job that makes you truly happy in life.

4. Start saving for your retirement

Pension savings should be a financial priority because it’s going to cost you a lot of money sooner or later if you ignore thinking about it. Having a comfortable and secure life in your elderly years is going to make your future finances much easier for you and allow for greater financial independence. Besides, every cent you plan to save is a good cause that you’re making for your future self.

top money tips for 2016

5. It’s all about perspective

If you want to be independent with your money you need to shift your mindset first. Being mindful and calm is highly important because at harder times finance can be difficult and may dispirit you. However, remaining positive and having an optimistic take on life can always help to keep a good and realistic perspective and weigh between the positive and negative things that affect your financial situation.

6. Have a plan

Creating a certain “emergency plan” for your finances by putting cash aside, is a smart way to manage your money because it allows you to reach for your reserves in the future.

Additionally, you should always keep your financial goals in your mind and make steps to reach your goals. If it helps, write them down and make a long-term plan and devise it in a way so that you will surely know how you will achieve those goals.

 

Continue reading in Part II of this article.

Using Clever Strategies That Can Help You Conquer Debt

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Like many other things in life, choosing how we pay off our debts is a highly personal choice. Getting into debt is easy, but getting out requires clever strategies that can help you conquer debt. There is no one strategy that will work for everyone, because debt is a very personal thing.  Finding a rewarding way that works for you is the most important thing in paying off debt.

clever strategies that can help you conquer debt

[Read: What Are Your Debt Repayment Options?]

There are many strategies, some more effective than others. You need to be aware of how you spend money, save money, and where your weaknesses are in order to choose the most effective of the clever strategies that can help you conquer debt.  Two.  Finding the best match can be a process of trial and error.

A few common strategies

  • Pay your debts based on what the smallest balance is
  • Pay your debts on the most irritating bills first
  • Pay from the highest interest to lowest interest
  • Pay off the debts that do the least good first

These are all clever strategies that can help you conquer debt, but it is a personal choice in which one you’re going to use. Only you can choose the strategy that will fit best with your budget- you may not have to keep this as a choice, once some of the debts are paid off.

Choosing to pay off the highest interest rate debt may be good for you.  All not only will this prevents interest charges, but if it’s one of your smaller debts, it may actually pay off in a completely first. This will free up more money for other debts, and help make the debt shrink. One reason you may not wish to use this is if this is an account that has a large effect on your credit, like a home or car loan: doing the math is the only way to insure that you don’t hurt yourself in the long run.

Paying off the smallest debts will make give you a sense of victory, and eliminate some of the worries that you may have about having so many debts. This one of the clever strategies that can help you conquer debt may give you the incentive to keep paying off the debt you have, and help you stay out of it.

clever strategies that can help you conquer debt

And paying off the loans with the will that annoy you first may make more sense. Sometimes, these loans effect not our financial, but our personal strategy.  Many times, having loans to family or friends feels worse than owing a more impersonal institution.  Paying off these quickly may become one of your favorite of the clever strategies that can help you conquer debt.

Tools to use

Find ways to incorporate your chosen of the clever strategies that can help you conquer debt. Shifting a credit card balance to a new card, with an low interest introductory period may be just enough to let you pay off this debt. Read the fine print, of course. And don’t use the new card for any other purchases. Make sure you can pay off the debts all at the lowest possible rate, and don’t add more debt to what you need to pay.

Looking at your budget may allow you to find it a small expense, that you can use as a reward.  Regardless of how clever strategies that can help you conquer debt, they are useless if you feel like you’re not getting anything back, so incentives may be needed. The thrill of paying of a debt can be its own reward- some people may need the extra incentive when it comes close to a special occasion to keep paying down their debts.

Something that is not mentioned often is to make sure that the debt you pay off stays personal.  Paying off the bill just because it’s there doesn’t give me much of a sense of accomplishment, but knowing that I have paid off a couch, a video console, or a computer feels much better. Another section of this type of clever strategies that can help you conquer debt lets me think of additional interest as actual things lost: “If I don’t pay this off, the interest will be as much as going out to a movie.” This keeps me motivated to keep the payments up, and to avoid going back into debt.

[Read: TSR Guidelines for Getting Debt Help]

As long as you are paying on your debts will, any of these clever strategies that can help you conquer debt will work.  If you find yourself not able to make progress using one strategy, you need to take a look and see if a different strategy would work better for you.  Keep looking, and trying different combinations. Once you have gotten yourself out of debt, you will have built good habits to avoid getting back into debt again.

How To Stick To Your Budget

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So you just got paid, but unlike any other payday you decide it’s time to finally make a budget plan. First of all take a minute to silently congratulate yourself. You are already ahead of the game by making that plan. Some people don’t make a budget, thus not really knowing where their money is going. Now, with that being said, you got your plan all made up, can you stick to your budget? Well lucky for you there are some things you can do to help yourself succeed and stick to your budget. Having a budget plan is not only helpful but necessary to show you where you money is going and how much you have left to spend on what. It just keeps things more organized and helps you run the finances a little more smoothly. First lets take a look at why most budget plans fail and go from there.

stick to your budget

[Read: Common Budgeting Mistakes]

  • Feel deprived of their money. Most people don’t give themselves the opportunity to spend a little on themselves.
  • Impulse buying.
  • Don’t have a concrete budget plan. There’s room for error.
  • Not having a back up fund and end up cutting into budget money.

How Can I Stick To My Budget?

Now that we have went over how budget plans tend to fail we need to go over what you can do to help yourself stick to your budget. There’s lots of tactics you can use to help yourself stick to your budget. The most important thing is to take it seriously. If you make this plan you need to give yourself no excuses to stray away from it. Let’s take a look at some of the things you can do to set yourself up for success.

1. Carry What You Need.

The first thing on this list that might help you stick to your budget is to carry only what you need on you at all times. For those of us with impulse buying issues this is a great way to avoid spending over the budget you have just formulated. Now, this takes careful planning every morning before you leave the house to go to work. Get up a little earlier whole having your coffee go over what bills need to be paid what you will need for gas and everything else that requires money and leave the rest at home. This way there’s absolutely no way you can spend over your budget plan.

2. Be Good To You.

The next tactic that may help you stick to your budget is to be good to yourself every once in a while. Leave a little extra money in there to grab that cup of coffee you look forward to every morning. This way you won’t feel so deprived and give up on the budget before you even begin. Make some room to budget yourself in there and you most likely will stick to your budget.

3. Pay Bills First.

One of the most important things you should do to stick to your budget is pay all of your bills first. This way if you do slip and buy something on impulse atleast you won’t have to worry about not being able to pay the bills. If you pay your bills as soon as possible the most important part of the budget is taken care of. That burden is gone, well until the first of the month comes around I guess.

4. Think On It.

Okay so you find this beautiful couch, it’s on sale at the local furniture store and you need a new couch and have been looking for a while. Okay, stop right there, walk away and think about the purchase for a while. Often times when you force yourself to walk away from buying something you don’t regret making that decision. Our later find that purchase wasn’t as good as it sounded at the time. But if you have taken some time to think about it and you decide it’s a good buy, take some time to put that item into your budget plan. This way out will avoid impulse buying.

[Read: Affordable Travel Tips That Can Help Minimize Your Vacation Budget]

5. Set Money Aside.

To succeed and stick to your budget it’s always a good idea to set aside some extra money in case of an emergency, or you need something at the last minute. Let’s face it, no matter how hard we try to be prepared we always have to expect the unexpected and part of that means setting aside extra money so when something does go wrong you aren’t completely broke afterwords. Maybe take out twenty dollars, that will buy a small package of diapers in case you run out and have already been to the grocery store. You can never be too prepared, you won’t regret it when you do need something at the last minute and you don’t have to dig into the money you already have budgeted out for other necessities.

What Are Your Debt Repayment Options?

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When we find ourselves in debt it’s easy to turn away and hope that everything will work out okay in the end. But the harsh reality is that not paying off debts can have serious consequences to our future. Holding on to credit card debt, for example, will make it harder to get credit in the future. That means a serious squeeze to the amount of credit cards, loans and mortgages available to you. Not paying back your student loans can have an even worse effect on your future, as well as putting additional strain on your life at the moment. Some of the possibilities facing those who don’t pay back their debt include:

  • The IRS could choose to garnish your salary or take away your tax return altogether.
  • Losing your drivers’ licence.
  • Losing an occupational licence, such as those required by doctors, nurses and teachers.

debt repayment options

[Read: Options for Payment with Credit Cards]

But why allow these horrors to become a reality? With careful planning and frugal spending you will soon see the light at the end of the tunnel. Let’s take a look at what your different debt repayment options are.

What to do if you can’t pay back your student loan

Regardless of your current circumstances, it is best to research what debt repayment options are available to you. Look to see what government student loan forgiveness options and employer contribution plans are available to you. If these don’t help, apply for a new repayment option on your student loan to reduce your monthly payment amount. Plans available include the Income-Based Repayment, which is a set rate of 15 per cent of your monthly income. Federal Student Aid, part of the US Department of Education, has advice on the different debt repayment options open to those looking to pay off their student loan.

Depending on your profession, you may find that different debt repayment options are available to you. For example, some teachers can apply for the Teacher Loan Forgiveness Program, meaning that if they stay in their profession for at least five years then a portion of their student loan will be written off. (This depends on the type of loans that you initially took out.)

If you have more than one student loan you can choose to consolidate them into one direct consolidation loan. This can simplify the repayment process so that you only have one monthly payment to make. However, make sure that the rates are suitable for you so that you don’t end up pay more than you were previously.

One of the debt repayment options available is to defer your payments for a limited time, giving you some freedom to concentrate on other debts that need to be tackled first. Loan deferment isn’t available for everyone, and you may still have to pay interest whilst the loan is on hold, so make sure that you get all of the necessary information when applying for deferment.

If you aren’t able to defer your loan you may be able to apply for forbearance. This is similar, but with forbearance the payments may only be reduced rather than stopped completely. Forbearance is available for those in certain professions such as if you are serving in a medical internship.

Choosing between your debts

It’s a difficult decision to make – which debts should you pay off first? You may think that it makes sense to pay off the lower balances first. However, this means that you’re still earning a higher level of interest on other debts, so make sure that you put money towards the debt with the highest rate first.

If you only have enough money to pay back either your student loan or your credit cards, pay off the credit cards. Regardless of what happens, the bank will still expect these to be paid, whereas you can apply for deferment or forbearance on your student loan if you need it. If possible, pay off your credit card balances in full each month.

Take some time out to plan your finances according to your lifestyle. For example, many people make the mistake of setting their student loan repayment date just before they receive their salary. Make sure that you update this so that the money is in the bank when it’s needed.

[Read: Need a Small Business Loan? What Aspects to Consider]

Where to go to when you need help

If you feel like the debts are continuously stacking up and you can’t escape from them, consider speaking to an expert such as a financial advisor so that you can get some personalised advice on what debt repayment options are open to you. There are also numerous student loan experts and bankers who will help you work through your financial difficulties. Speak to your bank or credit union, your employer and the government department that financed your student loan. Remember that you’re not the only person to have encountered financial difficulties, so there are plenty of debt repayment options already in place that could make your life a lot less stressful.

4 Ways to Make Money on the Side with Your Car

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Nowadays owning a car can be exciting due to the recently very low gas prices and all the new high quality cars that are coming out. With the asset-sharing revolution, if you don’t own a car it is no big deal. In addition, there are now creative ways to earn money because you own a car.

make money

From being a taxi service for your friends and peers to now being able to rent out your car when it is idle, we are going to share with you some creative ways that allow you to earn easy cash for owning a vehicle.

1. Take Someone Else for a Ride

“Be your own boss and get paid in fares for driving on your own schedule,” Uber says on their website. Services such as Uber and Lyft allow you to become a peer-to-peer taxi service of sorts. They turn drivers looking for cash, into money-making chauffeurs.

You do not need any special kind of license, like a chauffeur license, to be eligible to sign up for a wide variety of peer-to-peer taxi services. All you do is sign up on the Uber app as an independent contractor and the app does the rest for you. Uber will offer you nearby fares that are individual to your availability.

Like everything else in the world, this isn’t the most perfect job opportunity but it is something. Uber has said in the past that Uber contractors made an average of $25 an hour as drivers. That may seem like a lot until you subtract the gas money you need to fill up after that hour and the cost of maintenance on your vehicle you may need. Despite these factors, it is a very popular way to make money by using your car. This doesn’t seem to be changing unless the industry experiences tighter regulations.

2. Feed the World

Another way you can make money using your car is delivering food. This takes away the feeling of discomfort because of strangers in your car and adds the quiet presence of food instead. There are a vast majority of upstarts that are looking for Uber-like drivers. “Postmates” features an app that allows drivers looking for cash, the opportunity to pick up and drop off takeout orders. After the driver has been accepted, they will then be given the final destination of where to drop the takeout off at.

Along with being a taxi-like driver, delivering takeout also comes with some challenges. Convenient parking may not always be available at the restaurant you need to pick food up at. Differing from peer-to-peer taxi services, food delivery services often have a peak period during the day that occurs between 6 p.m. and 8 p.m. If you work a 9-to-5 job and are just looking for some extra cash on the side, this peak may not be an issue for you because you are most likely going to be available. A bonus is the tips you may receive from satisfied customers.

3. Getting By on Your Own Supply

Another way to make money on the side with your car is being a general delivery service. A service by the name of Instacart is a great way to get started. Instacart promises independent contractors around $25 an hour just for shopping or delivering grocery orders. You must be at least 21, have a Smartphone and be able to lift up to 40 pounds. If you are just a personal shopper, you won’t even need a car.

This is a growing business opportunity. Companies such as Uber and Amazon.com are supposedly researching and testing crowdcourced delivery services. It is a win-win situation for businesses that don’t offer delivery, shoppers and drivers who are looking for cash, and people looking for convenience.

make money

4. Share the Wheel

If you want to ear money and don’t particularly use your car all the time, you could rent out your car. RelayRides and Getaround are companies that offer car owners the opportunity to rent their cars out.

[Read: What Are Some Good Side Jobs to Make Extra Cash]

If you are not using your car, then renting it out can make a lot of sense and be a great opportunity. One downside from allowing people to rent your car is the maintenance you might have to deal with even though the customer has to refill the gas tank before returning it. They could be a bad driver and wear the car out or you may have to experience oil changes more than usual. Despite the maintenance downfall, out of these four options, this one requires no physical activity or work from the independent contractor. If you choose to use Getaround, you must have an automated unlocking device installed in your car.

Tax Benefits for the Self-Employed

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Self-employment brings with it many benefits and drawbacks. When you work for yourself rather than for somebody else, you will inevitably have to take on many risks and respond to costs that would otherwise be handled by an employer. Not only are you the primary party responsible for creating sales/making money, but you also have to prove the value of your product or service to new and returning customers. In addition, you are responsible for paying the bills associated with operating a business: Internet and phone bills, employee payroll, and travel expenses – just to name a few.

tax benefits for the self-employed

Because you are financially responsible for operation costs, tax time can become a confusing and frustrating time. On the bright side, there are a lot of tax codes written specifically for the benefit of self-employed individuals. Because these tax codes help cover the costs associated with running your business, you should remember to claim those business tax deductions that you qualify for.  Below are the most common tax benefits for the self-employed.

Self-Employment 

Self-employed individuals (and every worker who pays taxes) must pay taxes on Medicare and Social Security. For those who are self-employed, these taxes are nearly double that of other employees. However, the self-employment tax deduction allows you to deduct half of your Medicare and Social Security tax. The half that you are able to deduct is considered a business expense, since you would not normally pay the other half of the tax if you worked for somebody else.

Regardless of how you are employed, everybody must pay a tax on Medicare and Social Security. If you are employed by somebody else, you pay a set tax rate. If you are self-employed, you pay double that set tax rate, but you get to deduct half of that tax rate. For people employed elsewhere, your employer pays the other half of the tax rate that self-employed people pay.

Home Office

A home office is most easily defined as a workspace (owned or rented) that an employee regularly uses explicitly for business. There are two options (and two separate forms) you can choose from when claiming the home office deduction. These two tax benefits for the self-employed include:

  • Standard Deduction. This method helps you calculate the expenses of having a home office. It will require precise data to help you maximize how much return you can get. You will be required to determine exact measurements of your home office and gather total amounts you paid for costs associated with your home office.
  • Simplified Deduction. If you don’t have precise data or the time to gather data, a simplified deduction is the easier method. The simplified deduction uses an IRS-determined rate to calculate the amount/square footage of your home office. The standard deduction is $1,500.

Communication

An often overlooked tax benefit for the self-employed involves your Internet, phone, and fax machine. Your communication devices, even if claimed on your home office deduction, can also be claimed elsewhere. Internet, phone, and fax expenses can be deducted if they directly relate to your business. For instance, your one phone’s monthly bill shouldn’t be deducted, since you use it for personal communications as well. However, if you have an Internet in an office which you rent out, you should claim the Internet costs since they directly relate to your business. If you have Internet at a home office that you also use for personal reasons, you would only deduct the percentage amount that you use the Internet for business (e.g. 50%).

Travel 

There are several types of travel deductions that self-employees can deduct on returns. Travel tax benefits for the self-employed include:

  • Meals (50% deductible)
  • Transportation (100% deductible)
  • Entertainment (50% deductible)

Your meals, transportation, and entertainment are considered travel deductibles if they are expenses directly related to business travel. You must have incurred costs stemming from meals, transportation, and/or entertainment during a business trip. A trip is considered business travel if you leave home in order to participate in business activity, such as:

  • Meeting new clients
  • Attending business conferences
  • Finding new customers
  • Looking for new facilities

Medical 

Medical costs are considered a tax benefit for the self-employed if you do not have health insurance through a parent or spouse and you pay for your own insurance premiums. Health insurance premiums resulting from dental, medical, or long-term care insurance programs can thus be deducted on your tax return. If your spouse is covered under your health insurance plan, you can also deduct their premiums, as well as children or other dependents.

Note:  Many of the tax benefits for the self-employed work on the honor system, so you should be extremely precise with your information. In the event of an audit, you are required to provide proof of every claim that you report to the IRS. To ensure that you are not found guilty of falsifying information, you should keep record of everything you claim. For the home office tax, this means you should safely store documents associated with mortgage interest, property interest, utilities (e.g. water, electricity), homeowners insurance, rental payments, maintenance fees/costs, office measurements, etc. For travel deductions, save all of your receipts from your trip. Finally, for medical deductions, work with your insurance company and doctor’s office to calculate every medical expense associated with your premium.

Your Credit Reports: What You Can Get Removed

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If you haven’t taken a look at your credit report in a while, it might prove worthwhile to do so. Keeping track of your credit history by reviewing your credit reports can help eliminate current and future financial problems. Unbeknownst to you, there may be some past debt that makes its way onto your credit reports, identity fraud, or a line of credit you’re not responsible for. Addressing these credit issues can lead to a myriad of positive consequences, but you needn’t be intimidated by the process. Often, you can contest certain debts on your credit reports, but it’s necessary to be aware of all of your debts, your rights, and the different policies of credit bureaus.

your credit reports

The first step in removing bad or harmful debt from your credit report is determining what can actually be removed. Below are four types of debt that you can get removed from your credit reports.

YES: Errors 

Typically, errors on your credit report show up in the form of debt that cannot be verified. Unverifiable debt includes any item that cannot be verified by the original source. It is largely the responsibility of credit bureaus to complete the verification process of items on your credit reports. Such process involves bureaus contacting the institution reporting the debt to ensure the amount owed is correct.

YES: Judgments 

Judgments, as they pertain to your credit reports, include government decisions involving your individual finances. Judgments are typically determined through a court of law. Common examples include tax liens reported by the IRS and debt reported by a collection agency. You will undoubtedly know if this type of report is something you can remove from your credit reports. Judgments are issued after official court hearings. Below are two types of judgments that can be removed from your credit reports:

  • Tax Lien

Federal tax liens are commonly removed from credit reports if the debt in question is withdrawn. A federal tax lien which has been withdrawn means you have come to an agreement with the IRS to either pay off the debt in full or enter a repayment plan in order to pay off the debt in full over a specified period of time. If you have a withdrawn federal tax lien that still appears on your credit reports, you should file a report with the credit bureaus in order to get them removed.

  • Vacated Judgment

Essentially, a vacated judgment is a ruling made by a court of law that is no longer valid – vacated judgments basically no longer exist. This can occur if you have been sued and lost the case to a financial institution (e.g. collection agency or creditor). Credit reporting agencies often report the rulings on consumer credit reports, and will remain on your credit reports for seven years, regardless of whether or not they are paid.

YES: Identity Theft/Fraud

Identity theft is unfortunately becoming increasingly more common as it becomes easier for criminals to collect your information online and in store. Because identity theft is a common complaint, the Fair Credit Reporting Act (FCRA) requires that any report of identity theft must be temporarily removed an individual’s credit report by credit bureaus.

If you find that you have been a victim of fraud and it is negatively impacting your credit, you should immediately contact credit bureaus (and local authorities) to address the issue(s). First, you should file a police report at your local police department. When you file a report, you will be filing an identity theft report, which includes an identity theft affidavit. Once the report is made, you should provide a copy of the report to the Federal Trade Commission so that your credit reports can be adjusted.

Remember: Identity theft is a serious crime. For a complete list of your rights as a victim of identity theft, review the Federal Trade Commission’s “Statement of Rights for Identity Theft Victims.”

YES: Credit Cards

Okay, there are some exceptions to the types of credit cards that can be removed from your credit reports. If your report is showing debt from a card that you are simply an authorized user on, you can usually get the debt removed from your credit report. This is because authorized users are not held financially responsible for the debt. In other words, authorized users are able to make purchases with the card, but the lending company does not hold the authorized user liable for the debt incurred from those purchases.

Removing authorized credit card debt from your credit reports is relatively simple. First, you need to remove yourself from the card. Contact the credit card company to have them remove you as an authorized user. Doing so will ensure you are no longer associated with the card and the account’s debt. Once you have done this, you can follow up with credit bureaus to ensure the debt is released from your credit reports.

Awesome Secrets to Reducing Your Taxes that are Legal

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It is tax season! For some, this is a great time of year to get extra cash to do things. With this extra cash, you can pay off some debt or place a down payment on that car you have been waiting for months to purchase. For others, this is a disappointing time of year that causes them to pay out of pocket to have taxes filed and sometimes even face the possibility of owing the government some of your hard earned tax money. Typically, there are individuals searching for secrets to reducing taxes and luckily you have arrived to the right place. Continue reading for legal secrets to reducing your taxes.

secrets to reducing taxes

What the IRS Provides

When it comes to revealing any secrets to reducing your taxes, the Internal Revenue Service is a good source to provide you with the many secrets to reducing your taxes. This method of finding out secrets to reducing your taxes is good because if the IRS is suggesting it, then it is obviously legal and you do not have to worry about being penalized for using any suggestion made by them. With that being said, the IRS offers a ton of resources that can help you understand different tax credits that you can receive and ways to decrease your taxes.

Consider this situation…

You are in the process of filing your taxes and your tax preparer has informed you that you may be owing money to the government. In fact, you owe $2,000 in taxes. The good news is that you could qualify for one of the tax credits that will give you $200. Now, instead of owing $2,000 in taxes, you will only owe $1,800. So, the first of many secrets to reducing your taxes is to read up on the tax credits that you may qualify for and inquire about them when you go to file your taxes.

More Secrets to Reducing Your Taxes

Here are more secrets to reducing your taxes that you can use to make filing your taxes a bit easier for you and your bank account.

  • Contributing to a retirement account will give you the opportunity to take away the amount paid to the account from your taxable income. In addition, your retirement money can grow and not be threatened by any taxes.
  • Contributing to a health savings account is beneficial for individuals with high deductible medical plans. Any medical funds that have not been used can roll over and not be taxed.
  • You can combine your vacation with a business trip. This will decrease your vacation cost by subtracting the percentage of any unreimbursed expense that you had for business from the entire cost of the trip.
  • For individuals with home businesses or any business that is self-owned, you can deduct home office supplies expenses and even home utilities used in the room of your home where business is conducted.
  • Self-employed tax filers can qualify for a number of deductions including advertising, travel mileage and gas usage, supplies, internet and phone usage, mailing fees, and any other fee that is used for the prosperity of the business.
  • The American Opportunity Tax Credit is available for all college students. You can receive a 100 percent tax credit on all college expenses up to $2000 and 25 percent on the following $2000. There is a maximum of $2500 deduction for each qualified college student.
  • The Lifetime Learning Credit is for any adult who decided to return to school for a college degree. This gives you a $2000 tax credit per year.
  • The Earned Income Tax Credit is available for any low-income earning individual who is over the age of 25.
  • If you give to a charity on a regular basis, you can qualify for a charitable deduction. This includes donations of clothing, furniture, money, cars, and anything of value. Have your receipts handy if you are planning to inquire about this particular deduction.
  • Student loans can benefit you for a tax deduction as well. If you or your parents are paying on any student loans, you will qualify for a deduction.
  • Having a hard time finding a job? You may be able to slide in your job hunting expenses in the miscellaneous expense section of your taxes. This could qualify for a tax deduction.
  • For military persons in the reserves, you can receive a tax credit if you are required to travel over 100 miles from your home and have to stay overnight for a period of time. Any funding spent on hotels, gas, or food can be counted toward a tax deduction.

Filing your taxes does not have to a disappointing experience if you use one or more of the many secrets to reducing your taxes.

Know Your Rights: How To Do Away With Annoying Calls From A Bill Collector

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It is very annoying to have your phone ring every minute of the hour and you know that it is merely calls from a bill collector who can’t wait to harass you for money. They call relentlessly and without shame at odd hours of the morning and evening and if you should mistakenly answer the call, the threats that ensue leave you boiling with rage.

Did you know that one in every seven Americans is frequently harassed by a debt collector?

You should know your rights and be informed about how and where to report the abuse they are inflicting on you and your time. You don’t have to take it in any way. They have a way of trying to intimidate you so that you cave in to their demands. Some people do, for others is a heated exchange of words that may go on forever.

If this is happening to you, then you need to know the following:-

You have the right to complain

If calls from a bill collector are persistently coming in to your workplace before 8a.m and after 9pm, then you have the right to tell the bill collector that your employer does not allow it and it is written under company policy that they should not call the office. The bill collector has no choice but to cease and desist. These calls from a bill collector are aimed to trick you into giving them your bank details so that you can pay and schedule a time the money will be taken out of the account.

If they are to the point you can’t take it anymore, you can write a letter to the debt collector asking them not to contact you again. According to the Fair Trade Commission (FTC), they have to comply. The only instances they can write you is when they are letting you know that they have no intention of contacting you again or if they are informing you that they are going to take on another approach in pursuing their money I.e., A lawsuit.

However, sending them a letter to stop calling you does not imply that you are exempt from the debt they are calling you about. If they should file a lawsuit against you, don’t ignore it. Show up for the court date and that way, there will be more leniency for the debt. A complete no show is an automatic win for the debt collector.

You can report them to:-

  • The Association of Credit and Collection Professionals

 

  • The State’s Attorney General

 

  • The Consumer Financial Protection Bureau

 

Legally, you have rights

You are not meant to be harassed or intimidated in any way by calls from a bill collector. They are also not supposed to threaten or make you feel inadequate for whatever debt they are trying to get you to pay.

These practices are illegal and end up creating a stressful attitude for the one being called all the time. Their aim is to make you feel so anxious and miserable that you end up caving in to their demands. Nobody should be treated in that manner and they don’t have any right to do so.

Calls from a bill collector are meant to put fear in your heart. The way they speak to you makes one think that you basically have no choice but to comply. But that is not true. They know of your rights more than you do and they use every applicable angle to their advantage.

If you owe them money

If you get calls from a debt collector urging you to pay your debt and you are capable of paying, then go ahead and do so. Go into negotiation mode and ask to pay a smaller amount that you are able to afford. At this point, they will be more than eager to work with you because you are coming to terms about your debt and you are ready to pay.

If you know you don’t owe them any money

It is not uncommon to get calls from a debt collector that thinks you are the person who owes them debt. Sometimes, there are cases of mistaken identity and you have nothing to do with the debt they are pursuing you for. Unfortunately, in this case, it is not innocent until proven guilty. It is actually guilty until proven innocent. Unless you vigorously follow the whole issue, you might end up inheriting the debt of someone else.

They will come after you with a vengeance, once they get you into court, especially if you have huge debt, so it is better to make a settlement out of court and arrange for a payment plan. Calls from a bill collector need to be handled tactfully well.