Tag Archives: Debt

Debt Update: November 30, 2009

Well, another month has come and gone. I know this update is a little late, but we’ve been up to quite a bit lately. Also, if you haven’t heard, I am now a contributor over at Frugal Dad. I will be sharing even more insights to our debt repayment over there so make sure you subscribe to the site. Here are our end of November numbers:

The biggest thing to take away from this chart is that we paid off the Best Buy credit card! It was such an exhilarating feeling knowing that we do not owe them any additional money. The next debt to meet our wrath will be the personal loan. Hopefully we can get that taken care of this month due to an extra paycheck. After that we will begin attacking the family loan. Like I mentioned before, it is bugging us to the core.

Well, that’s it for now. Make sure you check out my posts Friday’s on Frugal Dad!

Volunteer to Help Pay Student Loans

If you are like me, you paid a pretty penny for your college education. I however, decided to finance most of my education in the form of student loans (private and federal). It amounts to a great sum and I wonder how I am going to pay it off every day. Looking back, I know I would have been able to pay for college with cash and yet didn’t.

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I know it’s going to take a lot of hard work and dedication to pay of the majority of the loans but I am always looking for other avenues. Volunteering is one of those avenues. As you will see, there are plenty of ways to get your college education paid for by volunteering. As a bonus, you are doing good things to help around your community and the world. Here are some resources for paying off your student loans while volunteering:

AmeriCorps

Each year, AmeriCorps offers 75,000 opportunities for adults of all ages and backgrounds to serve through a network of partnerships with local and national nonprofit groups. You can volunteer in various areas such as education, business, housing, disaster relief, health, technology and more. You serve for 12 months and receive a living stipend up to $7,400. At the end of your service, you receive a $4,725 education award to be used toward your federal student loans or your tuition if you are currently in college. AmeriCorps is also the group that offers the VISTA program.

Personally, I looked around the site and found a few good positions that I would be interested in. There were several positions in financial education, foreclosures, and housing. Check it out because there is something there waiting for you!

Peace Corps

Peace Corps volunteers serve in 74 countries in Africa, Asia, the Caribbean, Central and South America, Europe, and the Middle East. Collaborating with local community members, Volunteers work in areas like education, youth outreach and community development, the environment, and information technology. The Peace Corps provides volunteers with a living allowance while they are serving. It enables them to live in a manner that is similar to where they are stationed. After completion of the program, the Peace Corps provides volunteers with a $6,000 payment to help with the transition back to a normal life.

While serving in the Peace Corps, volunteers are able to defer their federal student loans until they are finished with the program. If you have a Perkins loan, you will be eligible for a cancellation of 15% for each year you spend in the program. If you spend more than 2 years, you can have 20% of your loan cancelled in years 3 and 4. In all, you can have up to 70% of your Perkins loan cancelled.

Teach for America

Teach for America is an American non-profit that enlists America’s future leaders to help end education inequality. The program will place you in a low-income school in various locations around the country where you will teach students (you do not need an education degree). The great thing about the program is that you receive all of the same benefits as other professional teachers in the school district. In other words, you receive the same salary and health benefits as beginning teachers.

During your two years as a teacher, you can receive forbearance (they still pay the interest) of your student loans. Plus, at the end of each year you will receive a $4,725 education award that can be used to pay off federal student debt.

Military

The military offers many great education benefits while you are in the service or after you leave. With the active duty and verterans GI Bill, you can receive up to $1,075 per month for education and training. If you are in the reserves, you can receive a reduced benefit of up to $297 per month.

Charity for Debt

Charity for Debt offers a unique program in which you can volunteer your time with various non-profits in return for the payment of parts of your student loans. The program is still in the pilot stage and is currently only being offered in Dallas, Oklahoma City, and Washington DC. Basically, you volunteer your time at various sponsored non-profits and you receive anywhere from $15 to $20 per hour (tax-free) that is then used to pay your student loans.

Personally, I have signed up for this progam since I live in the DC metro area. I will keep you informed on how the process goes and if it even takes off.

Does anyone else know of any other ways to volunteer your time and have you student loans paid?

Money Genie: I Grant You 3 Financial Do-Overs

Today is your lucky day! The personal finance genie has graced this site with his presence. What’s he doing here? Well, he has come to grant you 3 financial do-overs.

What Would You Change Financially If You Had the Chance?

The genie wants to know what financial decisions you would change if given the chance. Do you wish you began investing at 18? Do you wish you never set eyes on that guy giving away t-shirts in college if you signed up for a credit card? Here are my 3 wishes:

1. I wish I never saw a credit card in my life

I’ve never wanted to get too much into detail about our personal finances because some people who read this blog obviously know me. However, I will admit that I have made some bad decisions concerning credit cards over my lifetime. I received my first card at 18 and I could just feel the immense power that it had. That power caused me to feel financially invincible and it caused me much financial harm. Let’s just say that it will take me quite awhile to dig myself out of this financial hole that I have dug.

If this wish came true, I would live my life with MUCH less stress. As many of you know, debt puts a huge weight on your shoulders. You have to continually focus on the final outcome of being debt free. Having that vision helps you continue the battle and kill debt a lot faster. I cannot wait for that day to come!

2. I wish I fully funded my Roth IRA every year since I opened it 7 years ago

All I can say is that I started out on the right path. I opened a Roth IRA when I was 18 (actually, my uncle did it for me). However, over the years I completely neglected it and managed to only put around $1,500 into it. I know a lot of you will say that I lucked out because of the market collapse, but I do not see it that way. If I would have put the max in each year ($31,000 total) and invested it in an index fund (Vanguard Total Market),  I would only have around $27,000 in the account. Frankly, that sucks. However, that would be $26,000 more than I currently have in it and if I had done that every year, I imagine my credit card debt wouldn’t be as high.

3. I wish I would have paid my way through college and not taken on student debt

Looking back, I know I would have been able to pay my way through college (undergraduate AND graduate). Yet what do I have to show for it? Many times the average debt of a typical college student. In plain english, I was stupid. I really have no idea where the money went that I earned while working during college. It could have easily went to my school and yet it didn’t. I just want to scream from the hilltops for being so dumb. Don’t get yourself in the same mess I did. PAY CASH FOR COLLEGE!

I really wish there was a money genie and he could take care of all my financial woes. Unfotunately, there isn’t and I will have to live with my decisions and learn from them.

What are your top three financial mistakes? Share them with us in the comments!

Do you have a blog? Share your financial do-over wishes with your readers! Link back to this article so we can have a collection of them all. Hopefully this can be a large resource for younger individuals (college students) on what NOT to do financially at a young age.

UPDATE:

The genie has been making his way around the blogosphere. Check out some of the places that he has been:

Mrs Micah

Suburban Dollar

Budgets are Sexy

Free Money Finance

Joe Taxpayer

Give Me Back My Five Bucks

Punch Debt In the Face

Fighting Foreclosure

My Financial Recovery

Credit Cards vs Debit Cards: Liability for Fraudulent Charges

This will probably be a short post but I still wanted to address this important topic. With many individuals now becoming victims of identity theft, it’s important to know the amounts that you may be liable for if your credit/debit card is stolen.

Debit Cards

As many of you already know, debit cards are typically linked to your checking account and give you instant access to the funds that you have in your account. It is different from a credit card because you are using your available funds to pay for the item and are not borrowing money. However, you should be careful of the unlimited overdrafts because those banks will just let you keep buying! That makes it possible to rack up hundreds of dollars in overdraft fees in one day.

Even though debit cards are typically praised for their ability to control spending, they can be rather costly if they are ever stolen. With a debit card, if you neglect to notify the bank within two days of it being stolen, you can be held liable for as much as $500! You may even have UNLIMITED liablity  if you fail to report an unauthorized transfer with sixty days of when the bank sent you the statement with the unauthorized transfer shown on it. Another bad thing about debit cards is that if your card is fraudulently used by someone that you previously gave your PIN to, you may be held responsible for all of their fraudulent charges. For example, if you gave your card to your nephew to use (and gave him your PIN) several months ago for $20 at the ATM and he later steals your card and wipes out $3000 in your checking, you will be held responsible for those charges.

My advice would be to contact your bank as soon as you notice that you debit card is gone. Even if you think you accidentally just left it at the grocery store, call them right away. It’s better to be safe than sorry and it might save you quite a few bucks. Both VISA and MasterCard have “zero liability” policies that limit fraudulent purchases used as a credit transaction (not using your PIN). However, they do not apply  when you use your debit card at an ATM and for many PIN purchases.

Credit Cards

Credit cards allow you to borrow money to pay for items. If you do not pay off the balance due at the end of the month, you will be charged interest on that borrowed money. While this can be risky (just ask the millions of Americans in credit card debt), the credit card does offer you better protection against fraudulent charges.

Thanks to the Truth in Lending Act, a credit card holders liability for a lost or stolen credit card is limited. If you notify the card issuer within two days of a lost or stolen card, you are not legally held responsible for any fraudulent charges. If you notify the card issuer after two days the most you can be held liable for is $50. Many credit card companies will waive this $50 charge as a good gesture.

Although you liability is more limited with credit cards, it’s still crucial that you contact the issuer as soon as you think your card has been misplaced.

Does anyone have card fraud experiences that would like to share? How much were you held liable for?

Saturday Sneak-Peak: PFfirewall.com

Welcome to this weeks edition of Saturday Sneak-Peak! Every week I explore a personal finance blog and give a brief review of the site. My major intent of the adventure is to expose everyone to new and/or obscure blogs. Up this week is PF Firewall.

Firstly, I want to congratulate Jesse. He and his wife added a new bundle of joy this past week! If you don’t click on any of the links, at least leave a comment and congratulate him on this great blessing (they had a girl). 🙂

Jesse has been blogging since February and has been know to have lengthy, well-thought out posts. He averages about 15 posts a month so those of you who do not like to be bombarded with posts, he is your guy!

Here are some of my favorite posts from him:

Selling Oil Changes Door-to-Door?

Shopping Out of Season

The Real Reason for Lehman Brothers’ Downfall

Now off to the questions!

YMR: Why did you want to start a personal finance blog and what blogs did you read before you started?

Jesse: I started my blog for several reasons. I am actually really new to the blog scene, I hadn’t even read any blogs previous to late 08 aside from The Consumerist, which I didn’t realize was a blog.

When reading The Consumerist, I read about a girl that paid off around $14k in debt by following some Consumerist tips. This led me to think about my debt which I was completely ignoring. One of the tips was to call credit card companies and ask for rates to be lowered, and if they didn’t lower the rate, transfer the balance to another credit card. While searching for credit cards with better rates, I happened on MyMoneyBlog.com, which led me to a few other personal finance blogs including GetRichSlowly.com, BudgetsAreSexy.com and BrokeAsASpoke.com and I was hooked on Personal Finance blogs. I started following blog networks and finding more and more blogs about personal finance to read.

So I decided to start a personal finance blog to track my finances. I also thought if my finances were out there in the open, I would be more accountable and wouldn’t be able to ignore my financial incompetencies.

A second reason, I have always felt like teaching is the best way to learn. By researching what I want to write about, I learn so much about finance from those out there that know more about it than I do, then I can share the information with my readers knowing it is accurate.

Yet another reason was that I am a pretty big geek, and having my own website is one of those things that I wanted to do, coded completely from scratch of course. I had started several websites from scratch but none of them really had a purpose so I would code them, put them up and never update them. I felt like this was holding me back from learning more about web development, so I thought if I started a blog that was really easy to update, using a blog engine like WordPress instead of coding from scratch, I could get the content rolling, get motivated, then be able to spend time coding and modding the blog. I am happy to say this is working. I recently released a new custom theme for my blog, I have been doing a ton of design work in photoshop such as logos, banners and icons, and I have even been hired to redesign someone elses blog.

I even started another site coded from scratch with a purpose/idea that I found while writing my blog. This new site hasn’t really gone public yet as I am still designing it but it fills my geeky void 😉

YMR: Which post (on your site) has been your favorite and why?

Jesse: I think my favorite post was The Most Important Part Is Starting: Debt Recovery and the reason is I felt like the post, massive as it was, was really going to help people. The post was spurred by a friend that was having trouble getting started on the road to debt recovery. I realized there may be more people out there like her that have no clue on how to get started repaying debt so I was really happy to be able to help a friend out as well as anyone else that may read the post.

YMR: How would you describe your writing style?

Jesse: Another reason I started my blog that I left for this section is that I wanted to use my blog to start a writing portfolio. I have always loved to write and thought of doing some freelance writing but I have no public writing experience.

So my writing style reflects this desire. I write as if I am writing for a newspaper. Factual, informative and to the point. I try to hold myself to professional standards. I am known to be long winded but I want to make sure I cover all the facts and leave nothing out that may be important. On that same note I try and make the information more understandable as if I am talking to my readers versus writing to them.

YMR: Tell us something about yourself that some may not know.

Jesse: I am much geekier than I let on in my blog. I am a Linux user..I worked on the Geek Squad when I was younger..and even my TV is running on Linux. I even switched keyboard layouts to be more efficient when typing. I use the Dvorak instead of QWERTY layout and now type a few dozen words per minute faster than I used to. It took about a year to fully switch.

I am much geekier than I let on in my blog. I am a Linux user..I worked on the Geek Squad when I was younger..and even my TV is running on Linux. I even switched keyboard layouts to be more efficient when typing. I use the Dvorak instead of QWERTY layout and now type a few dozen words per minute faster than I used to. It took about a year to fully switch.

YMR: Tell me a little bit more about this financial highway adoption you got going on.

Jesse: Well, I started my blog to be more financially responsible yet I spent about a hundred dollars on hosting. I knew it was necessary especially on the commitment and motivation side but I felt bad about it. Even before I started trying to get my finances in order, I had a real hard time spending money on myself for any reason. Even my play sites that I mentioned before were hosted on my home computer, making them unbearably slow. I couldn’t bring myself to ask for donations in the traditional way because I felt like a hypocrite, telling people to save money yet asking them to give me money. So I started thinking of ways I could reduce the cost of my blog without asking for a hand out.

My adoption system does just that. When someone adopts my blog, they pay a small piece of my costs, roughly the cost of hosting per year divided on a weekly basis, and in return get recognition from my readers for doing so. They get a banner in every post of their week and a banner on a dedicated page, forever.

I also want my readers to feel like they are a part of the little community my blog creates. Through the people that have adopted so far I have made some great contacts and friends, and gotten to know some of the bloggers that read my blog much better.

Thanks Jesse! Have a great weekend everyone! I am heading off to PA so limited posting this weekend.

Carnival of Twenty Something Finances – DC Edition

Welcome to this weeks edition of the Carnival of Twenty Something Finances! Last weekend, the future Mrs and I headed down to Washington, DC to check out the famous cherry blossoms. Although it was VERY crowded, I must admit that it was an amazing time to see them. DC is a great place to see on the cheap. Most museums in the city are free and they have a great transit system. Personally, we parked outside of the city at one of the free metro stations and rode the train all day. It cost us about $5 per person and we did not have to deal with the horrendous traffic and confusing streets.

Sprinkled throughout the carnival this week are some common places to see while visiting DC. Like I mentioned before, most of these sites are free to the public. You can get away with spending very, very little compared to other cities. I advise packing a lunch for you and your family as food can be rather pricey if you purchase it from vendors. Anyway, off to the carnival!

This is a picture that we took in the midst of the trees. The cherry blossoms were at their peak this year from around March 28th through April 12th.

Editor Picks

Debt Kid shows you that getting a mortgage after foreclosure is not so simple.

Debt Ninja at Punch Debt in the Face wants to know what’s your favorite dumb but fun expense? I would have to say that mine was my iPhone. I love it with a passion but I really do not need all of the features and the added expense.

Jerry at Deal Supermarket talks about getting unplugged with frugality. This was a very creative post!

DR at The Dough Roller gives you 10 tips to declutter your finances.

The Washington Monument is the most prominent structure in DC. It was built in 1884 in honor of George Washington. It’s free to get in but make sure you get their early!

The Rest of the Field

KC Lau shows you 5 ways to take charge of your finances.

Fabulously Broke in the City shows you why a small space does not mean you put your life on hold and whine.

Bank Savings Review let’s you know about four banks that gave their TARP funds bank.

Kathryn at Out of Debt Christian has the top ways to waste money on your home.

Shaun from Learn Financial Planning shows you why being frugal is just the first step.

SVB at The Digerati Life helps you choose the best online stock brokers for cheap stock trades.

Personal Finance Analyst wants to know if saving money damages your quality of life.

Patrick at Cash Money Life tells you when you should tell your boss that you are pregnant.

The Smithsonian Institution has a ton of great free museums to see in DC. You can go to the Air and Space Museum, Museum of Natural History, Freer Gallery of Art, etc.

Mr CC at Ask Mr Credit Card let’s you know how American Express submits your credit information to the credit bureaus.

Matt at Fine-Tuned Finances compares new credit card programs for saving for college.

Ginger at Ginger Won’t Snap has some credit card fraud problems.

Peak Personal Finance has 3 smart personal finance tasks that you are probably putting off.

Diego at Bankling shares with us his top 50 economics blogs.

Big Cajun Man at Canadian Personal Finance Blog has some advice for new grads.

Patrick at Money Saving Deals gives us the lowdown on how to get up to $150 from TradeKing.

RJ at Our Financial Planner shows you the miracle of compound interest.

The Lincoln Memorial is another great (free) site to see in the city.

MoneyNing shares with your his review of Everbank.

Jeff Rose at Good Financial Cents let’s you know what to do if there is a layoff pending.

Destroy Debt shows you how to get the last drop out of many popular products.

Pinyo at Moolanomy shows you how to transfer credit card balances.

Raj at DebtGoal is cutting the bill on digital services.

Wren at True Adventures in Money Hacking shows you how to get a free car. Really!

Dan at Everyday Finance gives you the best CD yields in April.

Jim at Bargaineering shows you how to pick the best credit card.

J Money at Budgets are Sexy gives some advice on Roth IRAs vs 401ks.

Visit Arlington National Cemetery and pay your respects to the thousands of fallen soldiers. You can also view the resting place of JFK and see the Eternal Flame.

Patrick at Military Finance Network shows how the stimulus plan assists military members affrected by the mortgage meltdown.

Credit Card Assist wants to know if you have ever looked at your credit card closely.

Apply 4 Credit wants to know if credit card protection plans are really worth the added cost.

Christian Personal Finance is giving away a free subscription of Kiplinger’s personal finance.

Investing School compares Etrade, TradeKing, and Zecco.

Mike at Money TLD lets you know that some expired foods can still be edible.

Eric at Twenties Money has five pieces of advice for twenty somethings.

BillEater shows you how to avoid debt reduction scams.

Kyle at Suburban Dollar gives you his review of CashCrate.