Using a Debt Calculator to Pay off Post-Holiday Debt

January 4, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money

debt calculator


If you used a credit card to finance your holiday purchases and don’t have the cash to pay your balances in full, now’s the time to form a plan for how you’ll dig out of holiday debt. (Or any debt you’re ready to shed, for that matter).

Despite the many apps and budgeting software tools that now exist, a debt calculator is one of the most effective tools you have at your disposal. With it, you can plan your debt payoff strategy based on what you owe, and what it costs you. Plus, it’s completely free, and requires almost no financial literacy on your part.

Here’s a step by step guide to using a debt calculator to pay off your debt.

Gather the hard numbers. Compile all of your credit card statements and take note of two key pieces of  information on each statement: The total balance owed, and the interest rate each card charges. Create a five column list that includes:

  • The name of the creditor (ie, Chase Freedom card)
  • The minimum payment due
  • Total balance owed
  • Interest rate associated with the card
  • Payment due date.

Sort the list so that the card with the highest interest rate is on top. The credit card with the second highest interest rate should follow, then the third highest, etc.

Total the sum of what you owe.  Add the total amount of your debt. It may not be what you want to see and quite frankly, it may give you anxiety. But you need to know exactly where you stand, in order to plan your way out of debt.

Figure out what you can afford to pay.  Check in with your budget to calculate your monthly take home pay.  Write down all of your fixed costs. These are essentially those that are unlikely to change significantly, in the short term. (Think utilities, car, house, and student loan payments). Then, create a list of monthly expenses that could be eliminated or reduced fairly easily (assuming you are willing to make some lifestyle adjustments). This will usually include costs like phone/internet, cable, gas, groceries,  gym memberships and miscellaneous expenses like entertainment, and travel.

Play around with some different payoff scenarios to see just how long it will take you to get out of debt, based on how aggressively you plan to pay your balances down. Subtract your monthly take home pay from your fixed expenses. In theory, this is how much you could pay to debt each month, if you were willing to eliminate many unnecessary expenses. Using that number, subtract your unfixed expenses total. This is what you currently have left to pay towards debt, assuming you do nothing to change your current budget and spending.

Consider the difference in the two numbers. Are you motivated enough by the thought that you could have a lot more money to pay off debt than you realized (which ultimately becomes cash flow), if you make some changes to your budget?

Plug the numbers into a debt calculator (CNN offers a free version that’s easy to use). You’ll get a sense for how long you’ll be in debt, based on what you pay each month. Like knowing the sum total of your debt, understanding about how long it will take you to get out of it based on what you pay can be a depressing view. But it’s the first step to financial freedom. Only when you know where you stand can you can decide how and when you’ll get out of debt.

Maximize the Value of Your Debt Payments.  Despite what debt consolidation services promise, there are but three ways to get out of debt:

  1. Reduce expenses so you can put money towards your monthly debt.
  2. Make more money
  3. Maximize the value of every dollar you put towards your debt balances by tackling the most expensive debt first. Revisit the list you created in step one. If you pay as much as you can towards the first creditor on your list, regardless of the balance owed, you’re tackling your priciest debt first. Though you’re still making the minimum payment due on your other cards, this is the quickest way to put a dent in the debt, because you’re eliminating that which costs you the most.

Learn how to use credit cards responsibly. Cutting up your credit cards will not make debt go away. Freezing credit cards doesn’t remove spending temptation (especially now that you can store your credit cards in a website, or pay using your mobile wallet). Closing credit card accounts won’t help your credit score; it can actually lower your credit score.

So what does help manage credit card spending? You. More specifically, your behavior, and your financial attitude.  Just as a dieter who successfully loses weight will gain it back if they fall into their old habits of mindless eating and not exercising, so will a person who pays down credit card debt but doesn’t change their financial lifestyle.

Consider the personal “triggers” that got you into debt in the first place. Do you tend to avoid thinking about money because it makes you feel vulnerable? Do you spend to resolve stress? Do you live beyond your means to keep up with social pressure? These are all common reasons for spending. But all can be resolved if you understand what leads you to spend. When you can be aware of the factors that lure you into bad spending decisions, you can proactively take control of your financial life.

Money Moves to Make Before Year End

December 22, 2015  |  No Comments  |  by Stephanie  |  Make More of Your Money

year end money moves

Before you go into holiday mode, set a aside an hour to check in with your financial accounts to see if you could benefit from any of these simple financial moves before year end.

Give strategically.  You can minimize your 2015 tax burden by being mindful of how you make charitable donations–but you must act before year end. If you want to donate money to charity, consider gifting stocks. Those you’ve owned for at least a year that have appreciated will be recognized at fair market value when you gift them to charity, but neither you or the non-profit you will be on the hook for capital gains taxes associated with the stock’s appreciation and sale.

If you’re ready to throw in the towel on stocks that have lost value in 2015, you can also benefit by selling them, and donating the proceeds of the sale to charity before year end. When you file your 2015 taxes, you can claim both the capital loss, and the charitable contribution.

Before you choose a charity to gift your stock, check to confirm the organization is officially considered a public charity. (Otherwise, you won’t get the tax benefits of gifting appreciated stock).

Revisit asset allocations. The markets turned more volatile in 2015 than they have in previous years. While ups and downs in the market are never an indicator that you should panic and sell, they do signal the need to revisit asset allocations to ensure you’re still invested in the right products to help you reach your long-term investment goals, and manage risk. If you determine you need to sell some assets, doing so before year end can work to your advantage when you file taxes–but only if you sell strategically.

  • Focus on assets you’ve held the longest. Investments that you’ve owned for one year or longer usually mean lower capital gains tax rates. Start there–even if selling means losing money. You may be able to carry losses from stock sales forward into a future tax year, if you exceed the capital gains loss you can claim for the 2015 tax year.

 Get your financial house in order.  Time off work during the holidays is an opportunity to catch up on the financial tasks that often get pushed to the back burner.

  • If you still have  401(k) accounts from previous employers, move the funds into a rollover IRA with a financial institution you can easily access.
  • Check in with your workplace retirement contributions to confirm that you’ve come as close as possible to your $18,000 contribution limit for the 2015 tax year. Don’t think you can afford to contribute? Failing to maximize your retirement contributions can cost you more than you realize. Maxing out your pretax retirement contributions at $18,000 could amount to saving more than $6,000 in federal and state income taxes each year.
  • If you have a ROTH IRA or traditional IRA account, you may be eligible to contribute to one or both of those accounts as well, based on your adjusted gross income (AGI).






How to Enjoy Thanksgiving Dinner at a Restaurant

November 23, 2015  |  No Comments  |  by Stephanie  |  Better Your Life

thanksgiving dinner

Ready to kick back and let someone else make thanksgiving dinner this year?  You’re in good company, according to the National Restaurant Association, which estimates more than 14 million people choose to eat at restaurants on Thanksgiving. Here are some ways to ensure your thanksgiving dinner remains enjoyable, even when it’s spent in the “professional” dining room of a restaurant.

Allow for family input. Because Thanksgiving tends to bring about memories and emotional attachments to tradition, etiquette expert and author Thomas P. Farley (Mister Manners) says to have the conversation about dining out for Thanksgiving well before Thursday. Discuss the opinions and preferences everyone has about the idea itself, and the style and feel of the restaurant, the location, and the price.

Respect family dynamics. To ensure a tension-free Thanksgiving dinner at a restaurant, lifestyle expert Limor Suss says it’s important to let everyone choose their own spots in terms of where to sit, and when and how to interact. Farley says restaurants that offer private rooms can add to a relaxed holiday vibe, and allow guests and small children plenty of space to relax, chatter, and roam.

 Be open to options. At a loss for where to celebrate thanksgiving dinner?  Open Table makes it simple to search availability by date, price, neighborhood, and type of food served. As an added bonus, you may even earn some valuable points (aka, cash) through your Open Table account for reserving space for a large group.  But, if you’re willing to search a little further than your computer for your thanksgiving dinner locale, remember that small family-owned local venues may be highly accommodating and welcoming to your group (provided they have advance notice of your plans) even if they don’t advertise thanksgiving options.

Agree on the experience in advance. Successful thanksgiving dinners are those that are joyful and stress-free–regardless of where they’re held, or who cooks. Once you decide on the type of food everyone will enjoy, look for places that allow people to serve themselves, or those that will leave dishes on the table for a “family style” dining experience. You can also maintain the hometown feel of your thanksgiving dinner out if someone who lives near the restaurant is willing to host after dinner dessert, coffee and drinks (for those who want to attend).

Don’t let money sour your Turkey Day. Money isn’t often a part of thanksgiving dinner conversations when hosted at a person’s home–but it can cost just as much to make your own turkey and sides as it does to outsource it when your consider food costs, time, energy-and stress. If possible, give each family who will be a part of your thanksgiving dinner out their total cost owed–including what each guest/family will pay for a generous gratuity, and beverage service–well before the dinner begins. If some guests drink alcohol and others don’t, let guests pay for their libations with cash at the restaurant’s bar to avoid confusion.  In this day and age, it’s simple to transfer funds electronically (whether via Paypal, electronic bank transfer, or check) so no one feels like they’ve been tasked with the unpleasant job of settling a large bill after dinner, or collecting money on turkey day.



Using Mobile In Your Small Business Strategy

November 19, 2015  |  No Comments  |  by Stephanie  |  Improve Your Business

business strategy

Now that the percentage of Americans who own a mobile device outranks those that don’t, entrepreneurs can integrate mobile as a business strategy to cut costs, increase efficiency, improve customer experience, and deepen customer relationships. Here’s how.

 Confirm maps listings are accurate. Forrester predicts that a businesses’ ability to connect with customers during relevant mobile “moments” will dictate competitive advantage going forward. Confirm the accuracy of your businesses’ online listing with all  the possible location based search engines (like Google and Yelp) to make sure your locations, hours of operation and contact numbers are accurate. Ideally, your contact information will also be optimized for mobile. Customers should be able to contact you directly from their mobile device without having to key in a phone number, or email address.

Design your website for mobile relevance. A mobile-centric business strategy isn’t just about whether your website accommodates a mobile user’s smaller screen.  Analyze your website and social media metrics to understand which devices your customers use, and which pages they visit on them. Consider how mobile use impacts your customer experience, and potentially, hinders your acquisition rates. If your mobile users have low conversion rates, for example, it may be an indication that your current site makes it difficult to make a mobile purchase. The issue can be due a host of issues, including slow load times, inappropriate design elements on your web page, or your site’s configuration. All can be solved for–but not until you know it’s a problem.

Your promotions can all be adapted for mobile,too. Just keep one word in mind: Simplicity. If you send customers a promotion via email but then take them to a forced log in page in once they’ve clicked, it’s not conducive to mobile users (most of whom use their device to check email). If you showcase a product on social media (another channel primarily visited with a mobile device) but don’t allow a seamless transactional experience that empowers the mobile user to purchase it, your efforts are for naught.

Mobile as a business strategy is one of the simplest improvements you can make; you already have the one tool you need to see exactly what the customer sees on their mobile device! Stress test all of the touch points on your own mobile devices. Is the experience seamless throughout. If it gets clunky at certain points, why–and how long did it take you to get frustrated?  Does your mobile site and purchase flow stack up to the functionality offered by major brands? If not, what’s lacking–and how can you address it? Be honest: Would you be happy with every aspect of the interaction with your business if you were a customer on a mobile device?  If the answer is no, make a list of where you can improve–and make those adjustments part of your business strategy.

Make your business model mobile. Using mobile as part of  a business strategy means taking advantage of mobile tools that empower you to connect with customers exactly when they’re looking for a business like yours. That means during search, when they’re ready to purchase, and when they’re moved to leave a review of their experience with your business. How can you replace current processes in your business model with a mobile alternative, for a better experience?  Replace traditional checkout lines (and their wait times) with mobile point of sale devices that allow your sales team to “meet” customers the moment they’re ready to checkout. Deliver promotions and coupons to mobile users’s devices so they can redeem them on the spot, without having to remember a coupon or a loyalty card. If you have a physical storefront, how might you expand your market presence and reach with a mobile version of your business that you can leverage to attend events, showcase your core product offering outside of your typical geographic boundaries, and bring your business to your customers?


The Ultimate Career Test: Rekindling Your Passion for Work

November 10, 2015  |  No Comments  |  by Stephanie  |  Better Your Life

career test

The ability to command a respectable salary, influence positive social change, or bring new ideas to a stale or conservative industry can draw you to a profession in the beginning. With any luck, it will keep you engaged for years.

But just as your life changes, so do your goals and interests. But when you find that your interests have changed to the extent that you’ve lost all passion for your work, it can be the ultimate career test–especially if you’ve spent several years in one industry, have no desire to learn the ins and outs of a new one, or are bound to your profession by the proverbial golden handcuffs.

The great news about feeling “meh” about your career?  Your relationship with your profession and the impact it has on your emotions and your satisfaction with life can be revived–just like your many other relationships that ebb and flow throughout life.

The key to acing this career test and coming out better for it? Be open to honestly identifying what’s not working, what is, why– what you’re willing to change in order to proactively reshape your professional destiny.

Here’s how.

Get out of your box (or cube). You may have mastered the skills outlined in your job description, but that’s a gift and a curse. When you can perform your job by rote, you go on auto-pilot. You disengage. You stop looking for new ways to solve problems. You probably get a little lazy. Most importantly, you stop being challenged. (That’s required in order to grow, by the way).

Instead of going through the motions or coming to the conclusion that the only solution is to find a new job, consider how you can rebrand yourself as a resource in your organization–and in your mind. Forget about what you “do” based on your title, and think of yourself as a consultant. Better yet, what if you were the owner of your company? What positive changes could you make? How would you eliminate waste and redundancy? How would you make the group more efficient? How would you add more value?

Once you’ve given that some thought, approach your boss. (You don’t have to share the imaginary consultant exercise). Tell your boss you’re willing to assist with “overflow” needs because you crave the opportunity to learn through new experiences, and think you can accomplish even more than you currently do.

Likewise, if a team is struggling to complete a project, offer your assistance—even if the task is way out of your comfort zone. Broadening your exposure makes you inherently more valuable to your company. More importantly, you feel a renewed sense of challenge and purpose. As you interact with new teams, you’ll likely build and deepen relationships with new contacts as well. Through your new connections, you may develop a whole new perspective about your job, and your company.

Take on interesting projects with no strings attached.  When you begin your career, money has a way of being very important–and with good reason: You’ve probably got student loan debts to pay, new bills that come with living as a grown up, and potentially, longer term financial goals like buying a home, getting married, or starting a family.

Though getting paid what you’re worth is never completely irrelevant, money only motivates for so long. Once you’ve conquered some of those early adulthood milestones and been in the working world for a few years, a high salary isn’t enough to keep you moving forward. When that happens, it may be worth taking on extra professional challenges, even when there’s no indication that they’ll boost your paycheck or trigger a promotion. Instead, consider it an investment in your energy, and your happiness.

No idea where to start, or how to get involved? Lauren Still of Careerevolution Group recommends approaching a mentor to honestly discuss your goals. Be very specific with a statement like ‘I aspire to be [fill in the blank] in the future. What would I need to achieve/do/demonstrate in order to be seen as a potential candidate?’” When you can leverage the insight of a superior who has “been” where you wish to go, you can be strategic about the extra work you take on, and know your extra effort has a purpose.

Measure your value. Tracking individual progress is an important aspect to setting and reaching goals, whether you’re training for a marathon, gunning for a promotion or saving for retirement. But Michelle Maratto Itkowitz a partner at the boutique law firm Itkowitz PLLC says that when job burnout is an issue, it’s also important to identify how your efforts relate to the “bigger picture” of your workplace. What’s the big corporate agenda for the year? What’s the focus of the executive team? What are the “hot” initiatives? Now consider how every one of your actions contribute to one of those areas. If you don’t see that it does, there may be opportunity to improve processes, adjust your focus, or take on different work.

Not only will the data help you make sense of those less than challenging but necessary tasks that are part of your job, it can help you determine if it’s worth attending certain networking functions, or joining in on corporate volunteer opportunities and committees so you can become involved with the company goals and initiatives you find most exciting.


Take Charge of Your Own Debt Consolidation

October 14, 2015  |  No Comments  |  by Stephanie  |  Make More of Your Money

debt consolidation

Debt consolidation loans might sound like an easy way to get out of debt. But there’s no need to pay someone to lower your debt, when you’ve got all the tools you need to do it on your own, starting now. (Plus, let’s be honest. The money they’d charge you to consolidate debt could go to alot more useful things–like paying if off).

Here are four no “bs”  ways to kick start your own debt consolidation. Whether you make a goal to tackle one of these a day, a week or a month, I guarantee you will emerge at least one step closer to being debt-free.

1. Laser focus your effort on reducing your most expensive debt first.  Your most expensive debt is the loan that has the highest interest rate, not the one with the highest total amount owed.

I repeat: The highest interest loan you have is the one you focus on as your top priority to get out of debt. Have an extra $20 because a friend paid you back? Got an extra $50 for watching your neighbor’s cat? Put it toward the debt that costs you the most.

This example is admittedly not a perfect mathematical calculation, but it’s an idea we can all grasp quickly, so humor me: If you’re paying your credit card a 15% interest rate to carry a balance and you pay an extra $70 this month to it, you just got a 15% return back on that money.

Put in meaningful terms: If you’re willing to charge items on your credit card to earn a measly 1% in rewards or apply for a store credit card to save 10% on a $50 purchase, why would you forego a chance to get 15% back on your money?

2. Investigate how you might reduce your debt. If you carry higher interest credit card debt but have a good credit history overall, you may be able to pay off debt sooner by transferring a higher interest credit card balances to a low or no interest credit cards.

You might also be able to score a lower interest rate by calling the credit card company and requesting a lower rate, especially if you’ve been a customer in good standing for several years. You may qualify for a low interest loan through a peer to peer marketplace lender like Lending Club, or Prosper that gives you cash you can leverage to pay off the debt that costs you more.  If you’re drowning in student loan debt, you may be able to secure a better interest rate through an alternative lender like SoFi. Or you may qualify for a repayment plan that’s offered through the Federal government, for some student loans.

3. Find some way to make more money. There are two ways to make more money: Spend less to free up cash you can use to pay off debt, or make more money. In a perfect world, you’ll do both.

Let’s get the excuses out of the way first: I’t’s not easy to make more money when you’re stuck in a fixed salary job or when you work full-time, or when you’re divorced or you have kids who cost you money in order to even leave the house and work to make money.

But rest assured, when there is a will to get out of debt, there is a way.

Cruise right past your mental excuses and give yourself the financial freedom you deserve–even if that means taking it on the chin for a hot minute if need be. Personally, I walked dogs on my lunch break from my full time job for two years for $10 a bucks a pop to get out of $15,000 in debt when I was in my twenties. I love animals and I love exercise, but let’s be real. I didn’t do it for the love of either. I just wanted to get out of debt that badly! (I was also going to grad school and training for a marathon at the time. I was busy, but I made the time because getting out of debt and feeling financially stuck was something I so desperately wanted).

On days that I was ready to lose it and accept that it was my destiny to be poor, I kept myself focused on the goal at hand. The second I paid off that last credit card bill with all the extra money I generated, I stopped dog walking. But those two dog walking years remain one of the smartest things I ever did.

There are tons of ways to make money online now and if you find a gig that works for your life and pays you well enough, go for it. But with the online marketplace being so flooded with people calling themselves freelancers and consultants, I’ve personally found that most of the “virtual gig” sites pay so poorly you’re better off to find a  side gig the old fashioned way.

Do not over complicate the issue. You don’t need to spend money on a website, you don’t need to take meetings with clients. You really don’t even need to do research. Figure out something that gives you complete control in the sense of when you do the work, where, for how much, and for how often. What could do with your time that will cost you little to nothing in effort and gas money? Go do it.

We all have skills someone is willing to pay for whether it’s watching a cat, cleaning an office space a couple of nights a week, or picking up someone’s dry cleaning. It’s not your passion and it’s not a long-term career. It’s a means to get out of debt!

4. Stop filling the wrong need. When you’re desperate to get out of debt, that’s what you need. You do not need a new shirt, no matter how little it costs. You may not need to take taxis or your car when you could walk or take the bus. You don’t need a new smartphone. You may not need to watch cable when you could stream that same show on your computer for free. Or maybe you do.  What you need is for you to decide–but you have to make choices and concessions somewhere to get out of debt. If you continue to spend a strategy and discipline for how you separate needs and wants, the best debt consolidation plan–whether managed yourself, or with the help of a financial professional–won’t work.

Whatever path you choose, debt consolidation is nothing more than a basic barter and trade. As long as you’re disciplined enough to put the money you make or save–either by earning it, finding a lower interest loan or cutting expenses–and put it immediately to your debt, you will save money and make progress.

It’s not easy, but it’s really that simple. You do not need to be a financial guru (or hire someone who claims to be) in order to consolidate your debt.




Email Etiquette 101

October 13, 2015  |  No Comments  |  by Stephanie  |  Improve Your Business

Email etiquette

In 2011, The Radicati Group predicted that there would be more than four billion email accounts worldwide by the end of 2015. Back then, it estimated that “the typical corporate user” sent and received about 105 emails a day.  Fast forward to today, and the research firm says that number has jumped to 121 messages a day.

Though email can be the quickest way to say what’s on your mind, at the exact moment you need to communicate your thoughts to the recipient, the sheer volume of messages that are exchanged make it all the more difficult to stand out in an already crowded inbox.

Whether you’re among the 75% of small business owners surveyed by the Direct Marketing Association who called email marketing an “important” aspect of their marketing strategy, a corporate worker who relies on emails to communicate with others in your company, your vendors or your boss, or a freelancer trying to establish connections with new clients and peers, there’s a right and a wrong way to write emails.

Here’s a look at the new rules of email etiquette we all must follow–or risk being placed in the dreaded trash bin or spam folder.

Get to the point. Your subject line is the first thing your recipient may notice about your email–especially when it’s read on a mobile device (which is now the case with 2/3 of all email messages). Craft a headline that’s accurate, relevant and meaningful, based on what you know about the person on the receiving end.

A couple tricks to try:

  • Test your subject line by reading it aloud before you hit “send” to eliminate unnecessary words.
  • Pretend you’ve got  three seconds or less to explain your email on a friends’ voice mail. Take note of what you say, and make it a coherent subject line.

Focus your effort.  If you’re using email to generate business, focus on the marketing strategy most likely to provide the most bang for your buck. In the DMA’s survey, more than half of respondents said that regular newsletters and welcome emails were important contributors to business goals. Fewer than 20% of respondents got anything worthwhile from birthday/anniversary-related offers, or product replenishment notifications.

Know when to hold–and fold.  Email is a communication that’s hard to “undo.” Consider how long you’re willing to wait for a response when you send an email. If you need an immediate answer, pick up the phone and call the person or stop by their office. Whatever you do, don’t send the email, wait five minutes–and call. It’s overkill.

If you’re sending an email whose “journey” you want to follow, like an invoice, a resume, or a request for an important conversation, consider a tool like Yesware that will sneakily “track” your email’s status. Most people will ignore that “high importance” flag, or refuse to acknowledge that “read” receipt.

If you’re using email to generate publicity, stick to the “one and done” approach. If you send a pitch to a reporter who doesn’t bite, sending  a follow up email to see if there’s interest is probably more likely to land you in the spam folder than result in a relationship. That doesn’t mean you shouldn’t send them another idea in the future, but be respectful of how many messages person likely receives in a 24 hour period. Lack of response is often a non-verbal “no.”

 Be contextually appropriate. Email is an informal communication, but it’s not a license to be sloppy, thoughtless in what you say or why, or presumptive in your relationship with the recipient.

Consider the impact when you send an email has on its ultimate fate. As mentioned above, most emails are opened on mobile devices. People tend to check email on their phone or tablet in the midst of doing something else: They’re bored in a meeting, waiting in line at the grocery store, or sitting in traffic or on mass transit. If your email uses large graphics, or attachments or links that take longer to load or navigate than your recipient has to invest in it, adapt your message to your user–or risk getting send to the “trash” folder.

The time of day or night you send emails speaks volumes on how it’s perceived, too. Save promotional or email marketing messages for the times a person is “off the clock” and reserve serious, business-oriented communications for the work day.  A slew of messages  about concerns with a project sent to a team at midnight will probably be taken a lot less seriously than one you hold off on sending until appropriate office hours.

Reserve those emoticons, caps, swear words, winks, explanation points and “LOL”s” only for those email recipients you consider friends.

Stop replying to all.  Hard to believe this rule is still being broken in 2015, but the offenders are still out there. If you’re replying to an email on a mobile device, figure out how to reply only to the sender before you include a group of 20 unnecessary recipients in your response.



6 Things Parents Don’t Know About Fafsa (But Definitely Should)

September 11, 2015  |  No Comments  |  by Stephanie  |  Make More of Your Money


If you’re a parent who expects that your kids may go to college at some point, you’re probably well aware of the doom and gloom that surrounds the topic of college tuition, student loans and financial aid. Not only are tuition costs rising, student loan debt is a big reason millenials put off a whole host of other major life events–from moving out of your basement to buying a home, to getting married, to having kids.

But the price tag to attend college is only half the problem. The other? Serious misunderstanding about student loan options, and the costs they’ll ultimately present by the time the degree is in hand–and the student loan repayments begin.  Somewhat ironically, the rules about fafsa ( Free Application for Federal Student Aid),  a program designed to provide cost affordable option to make college with financial reach is one of the most misunderstood student loan options out there.

Here are six things many parents things don’t know about fafsa–but definitely should. What you learn may change your entire college savings strategy.

Your paycheck matters. It helps to have a big paycheck  when you apply for a mortgage, and really, any other kind of loan–but not if you’re hoping to get money from fafsa. That said, don’t assume that you’re “too rich” to qualify. Though your paycheck is a primary driver behind the fafsa loan decision, not all savings accounts, home equity, or even 529 savings accounts are factored equally into the fafsa “need” equation. In fact, your retirement assets aren’t considered in it at all.

Being an older parent is an advantage. An older couple that applies for fafsa on behalf of their child could receive a higher “asset protection allowance” than parents in their 40’s. The assumption apparently being that when you’re younger, you have more time to work and pay for your child’s college tuition.

Bigger families could get more financial aid.  You dished out plenty of money on diapers and child care when you chose to have two or more kids who were close in age, but but you could actually score more fafsa dollars for your hard work once they hit college. Families with two or more children who attend  college at the same time are considered in greater need by fafsa than families with high incomes and only one student enrolled in  college.

You can reasonably predict your fafsa eligibility. You can narrow down which colleges your child (or rather, you) can afford to attend without having to complete the entire fafsa dog and pony show. That’s because fafsa uses a monetary figure called the EFC (Expected Family Contribution) to arrive at how much they think you need to borrow to maintain your “financial strength” while footing the bill for college. It’s based on  your allowable assets, income, age, benefits and other factors. While not the end all be all, it’s a ballpark estimate to help you see what–if any amount– you’re likely to be approved to borrow. (The lower it is, the more likely you’ll get fafsa).

You can’t phone it in at school and keep financial aid. Different forms of aid have different criteria in terms of what’s required to maintain financial aid eligibility.  For example, Federal Pell Grant recipients must be enrolled in at least 12 credit hours to receive their maximum financial aid amount. If a student fails a course of doesn’t cancel enrollment based on the university’s procedure, those funds may still be due for the course. In some cases, the student cannot secure more financial aid until it’s paid back.

Fafsa may not take you all the way to graduation. Fafsa requires that you apply every year you’re in school if you want to continue receiving financial aid. But colleges have a say in how and to whom funds are distributed; they can change strategy when they want. If you couldn’t already tell by the price tag, colleges are a business. They’re going to make more money by acquiring new customers than maintaining those who only have a few quarters to go. If they must choose funds accordingly, they will. Research the historical financial aid patterns of the colleges you’re considering before you choose a school to see the percentage of students who have their financial aid needs met, and how those numbers change over the years of enrollment.

5 Warning Signs to Get Out of Debt Before It’s Too Late

August 20, 2015  |  No Comments  |  by Stephanie  |  Make More of Your Money


Most people have some kind of debt–whether on a credit card, student loans, an auto loan, or a mortgage. And not all of that debt is a problem. But when your debt climbs to a point that far outweighs your income, starts to lower your credit score,  puts you in jeopardy of missing monthly payments and keeps you up at night, it becomes a problem that’s tough to solve.

Yes, there are debt consolidation options, private loans, and other financing options to get out of debt, but unless you’ve got a really generous neighbor willing to lend you some cash, no debt relief option that comes through a third party is free.

So what’s the easiest way to get out of debt? Spot the trouble signs before it snowballs. Here are five surefire signs you’re in the debt danger zone–and how to manage your growing credit card balances before it’s too late.

Debt Warning #1: You’ve taken advantage of low interest balance transfer offers–but barely made a dent in your credit card debt. Low interest balance transfers offers aren’t inherently bad. They can help you eliminate credit card debt faster than you would by making monthly payments on a high interest rate credit card, and probably at a lower cost. But for that low interest rate to work to your advantage, you must commit to being aggressive about your debt payoff strategy.  That’s because most low interest balance transfer offers are valid for a limited time only. During the low interest rate time period, the monthly payments you make  will help you gain some momentum in paying off your credit card debt–but you have to make as big a payment as you can afford during that time period. Otherwise,  most of the credit card balance you transferred will remain when the low interest period ends. It could be subject to  as much interest (or more) than it was you were before you made the transfer–and you’ll stay on the credit card debt treadmill.

Debt Warning #2: You spend about 20% of your income on debt. Whip out your calculator and log in to your online banking: What’s 20% of your monthly take home pay? Does your non-housing related debt (like credit card monthly payments, car and student loans) add up to more than that number? If so, start managing your debt before it’s too late. That means pay way more than the minimum on your highest interest rate debts, limit your monthly spending–or find a way to make more money. It’s really that simple.

Debt Warning #3: You’re using  more than 30% of your available credit. Your credit card company has given you a $10,000 credit line; why not use it all? I’ve got plenty of reasons. For starters, your credit line and what you can afford are two very different things. According to MyFico, your credit balance compared to available credit shouldn’t exceed 30%. For a cardholder with a $5,000 card limit, for example, that means should never charge more than $1,500–even if you pay it off in full at the end of the month.  Once you use more than 30% of your credit, your credit score could be lowered, and you may find competitive loans harder to come by. Basically, it tells lenders you’re living beyond your means, and you’re a greater risk. Do the math, see where you stand and if you’re over the 30% limit, change your habits.  To boost your credit score, pay your creditors before the statement close date; your lower balance will get reported to the credit bureaus. Then, stop using credit for new purchases altogether until you’ve paid down the balance. Not only will it “self correct” any tendencies to overspend, you’ll make more progress in getting your debt utilization back in check.

Debt Warning #4: Your credit card balance is bigger than the one in your savings account. Yes, deposit interest rates suck. But your savings account isn’t a place to make money; it’s a place to invest in the uncertainty of your future. If your debt is greater than what you have in a liquid savings account, it’s time to spend a little less and save more.

Debt Warning #5: You won’t look your debt in the eye. Don’t want to open your credit card statements when they arrive? Avoid a budget or adding the total cost of your debt like the plague? I’m willing to bet you have too much debt. Like most things in life, we tend to know more than we think. You know when you’re overextended. Forget about what brands are in your closet, or the car you drive compared to your friends. Money should not keep you up at night. If it does, take control. Figure out what you owe, what you own, and what you can really afford in order to feel good about your financial security. What you see might not be a positive picture at first. That’s okay. It takes small steps to make big progress. The more steps you take in the right direction, the further you move from the wrong one.


This Is the Real Key to Your Financial Well Being (Hint: It’s Not a Number)

August 12, 2015  |  No Comments  |  by Stephanie  |  Better Your Life


How’s your financial well being? I don’t mean the amount of money you make, what you own, what you owe, or what you’ve saved for retirement. I mean how “well” you feel about it.  As scientific studies conducted at the University of Southern California show, you’ve got far more power over whatever your degree of financial well being at this moment–and throughout your life–than you may think. It all comes down to the gap (or lack thereof) between your aspirations (what you really want), and your attainment (what you get). Here’s a look at why what you “want” in life–material or otherwise–is the real driver for your financial well being.

Much is made about keeping up with the Jones’s, but the fact of the matter is, it’s a false story. Competition is something you choose to enter into, or completely decline. The “Jones” aren’t real. They’re you. They’re what you want in life, and what you strive to achieve. They don’t set the bar for success. You do. If you’re not happy with what you have, it’s completely within your control to rewrite your list of wants, and reset the bar.

Consider this:  You may want to drive a Mercedes while I’m perfectly happy with a used Accord. My goal is easier to attain,  in theory. I’ll probably reach it sooner than you –and with less effort. In scientific terms, once I have my accord, I’ll have narrowed the gap between aspiration, and attainment. As a result, I’ll feel happier with my life. I’ll probably be more likely to keep moving forward and feeling confident, instead of feeling stuck by a long list of things I want, and don’t have. The same theory explains why some people can make any amount of money and remain miserable, while others are perfectly content to live modestly.

Financial well being isn’t about the amount of money you have or the amount of your assets or debts. It’s determined by the amount you think you need to have in order to feel complete. But you don’t have to take it from me. Take it from longitudinal scientific studies that have revealed consistent results, across several decades, and despite changes income, buying power and the health of the economy.

The Roper Studies involved the collection of national attitudinal data from the 1970’s to the early 2000’s. The questionnaires measured respondent attitudes to family, money and other aspects of what they considered part of “the good life.” The list of 25 “good life” items asked study respondents to select which  they had—things like owning a home, having a vacation home, owning luxury cars or nice clothes, having a lot of money, having  kids, a four day work week, and a happy marriage. Then, it compared the respondent’s “wants” for the good life, to the degree they’d attained the aspects of they valued.

The data revealed some important findings, about gender, happiness, and money.  Women, as it turns out, tend to be happier with their lives in their younger years. This may be explained by any number of things, including that women tend to want marriage earlier in life than men–and that most marriages are happier in their beginning than their end. Women may also feel less financial pressure to earn alot of money, and drive nice cars earlier in life, compared to men. The spread between aspiration and attainment is narrower for women. But that all changes as men grow older. They are more likely to report having attained “the good life” items they value– while women are less likely to report having them.  This may be attributed to any number of things: Divorce rates tend to be higher later in life and the cause of financial strain for women.  Women’s finances may suffer from gender pay gaps, or the “mommy penalty” for taking a break from the work force to raise children. Whatever the reason, they tend to want more than they feel they have as the years progress.

Though that picture may seem bleak, it’s got a powerful take away: You have more control over your happiness—and financial well being—than you may believe. It starts with defining your “wants” for the good life, acknowledging what you’ve achieved and haven’t, and taking a close look at if what you thought you wanted the last time you created that list still applies. If it doesn’t, it’s time to rewrite the story of your own good life.