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Starting a Business With a Friend: 4 Things to Consider

The ultimate question: Could you and your friend make the perfect business duo? The answer may be more complicated than you think. You love spending time with your friend and the idea of becoming entrepreneurs together. Why not fulfill your dreams with each other? Companies like Airbnb and Ben & Jerry’s had success in this area — they all started from friendships.

But much more goes into starting a business with a friend. You may make great business partners, or you could wish you had taken your venture solo. Before making any financial decisions, analyze the pros and cons and ask hard questions. For example, will you equally invest? Who will take on which tasks and responsibilities? Sift through the easy and hard questions to see where your business friendship lies.

To help you and your friend make a confident and informed decision, skip to our flowchart or keep reading.

karen-gordon-quote

Questions to Ask Before Going Into Business With a Friend

Before jumping into your business plan, ask the hard questions. These can be tough to ask and answer, but they could save your friendship from a business relationship gone sour.

Question 1: Do You Share the Same Values?

Depending on your life stage and goals, your values could differ greatly from those of your potential business partner. You may appreciate living a relaxed lifestyle that gives you the financial freedom to do what you love, while others may value a fast-paced lifestyle filled with activities and long workdays. Differences in values could spark tension in your business relationship.

Ask yourself: Do you and your potential business friend have the same values? If so, great! If not, note your differences and if they’re worth working through.

Question 2: Do You Share the Same Business Goal?

To make sure you’re on the same page, schedule a brainstorming session with your friend. Map out your one-month, six-month, one-year, and five-year goals for your startup. Is your goal to make a certain amount of revenue? To hire a certain number of full-time employees? Or to take your business idea global?

If you have the same intentions, move on to question three. If any of your goals contrast, there may be trouble in paradise. See if you can work through your differences before investing your time and money.

Question 3: Do Your Skills Complement Each Other?

You and your friend each have your own strengths For example, you may be good at time management while your friend is better at sales. For skills you’re both lacking, think about how you’ll fill in the gaps. If you and your friend’s startup plan has a budget for hiring freelancers, or one of you has the dedication to learn something new, this may not be a concern. No matter what, especially if you’re bootstrapping your business idea, it’s essential to talk through it.

If you don’t compliment each other’s needed skills, who will step up and learn them?

Question 4: Do Your Career and Lifestyle Habits Align?

Depending on your business goals, this could be a make or break question for a professional partnership. For instance, one friend may be a morning person while the other’s a night owl. One can take over morning meetings and emails while the other’s responsible for evening website development and customer service.

If one friend’s lifestyle habits don’t suit the other, it may be best to opt for other business opportunities. While starting a business could adjust your habits, it’s easy to fall back into old ones from time to time.

baylie-carlson-quote

The Pros and Cons of Doing Business With Friends

Before entering any business arrangement, it’s reassuring to weigh the pros and cons. Could your new business idea benefit or hinder your future relationship and career?

Pros: You Have a Friend Through the Ups and Downs

Starting a business with a friend is similar to marriage — you’re there for each other through the good and bad. Whenever you’re having trouble, you know who you can go to for help. And you’ll be able to do most tasks together. For example, approaching investors as a team vs. going solo could put your nerves at ease.

Cons: You Know the Same People

Instead of getting together for your weekly catch-ups, you could spend all day together! While this can be exciting, it can also be hard to leave work at work. When you both hang out with the same people, there may be little room to disconnect from each other and your business.

Pros: You Understand Each Other’s Strengths and Weaknesses

You likely already know how each other operates and your strengths and weaknesses. Instead of learning the way a new business partner functions, you already have the upper hand. On day one, you and your partner could delegate tasks that fit everyone’s strengths best.

Cons: Your Friendship Could Turn Strictly Business

Your current friendship can be hard to separate from your new work partnership. Taking your work too seriously could stiffen your current relationship. Even after your work’s done, “friend” time may slow down. To have the best of both worlds, over-communicate throughout your entrepreneurial adventures.

mike-falahee-quote

Pros: You Feel Comfortable Communicating

You may have been friends for months, years, or even decades. Having a strong friendship foundation helps bolster your communication in the workplace. Plus, you most likely know how your friend may react to a situation gone wrong. Take note of your friends’ communication habits and foster them throughout your business relationship.

Cons: It’s Easy to Let Emotions Get the Best of You

Be careful not to let your emotions dictate your business decisions. A situation could happen in your friend group that makes its way into the office. To avoid any personal matters in the workplace, come to an agreement — no drama. If situations arise, take some time off to clear your mind, rest, and come back more motivated and inspired.

Pros: You Get to Spend More Time With Each Other

You get to spend countless hours talking and doing business activities together. You could spend all day tackling business tasks and wrap up the workday chit-chatting about your lives. It’s an amazing opportunity to spend more time with your friend without letting other responsibilities slip through the cracks.

Cons: Friendship Failure Could End in Financial and Business Failure

When tension builds in the workplace, it could damage your business outcomes. Not wanting to attend a meeting with your partner could halt business productivity, or worse, end it. To avoid losing profits on your friendship and investments, you should both outline an exit plan if things go wrong.

Tips for Starting a Business With Your Friend

Before toasting to your other half and investing in your passions, properly prepare yourself. Show up to your new business like you would a new job. Have your plan documented before building your business empire.

1. Nit-Pick Your Business Plan

Small issues could grow months or years after starting your business. To avoid future problems, talk through small and large inconsistencies with your partner. Having different lifestyle habits may not be an issue now, but could be difficult after a year of working together.

2. Communicate Often

About one third of projects lack proper communication. Avoid project or business failure by finding a communication method that works for you and your partner. Daily catch-up meetings or weekly email updates are a few examples. Make it enjoyable by sipping your favorite coffee or eating your lunch while playing catch up.

3. Establish and Honor Boundaries

Eliminate tension in the workplace by setting a rubric for working hours. Avoid talking about personal matters until you step away from your work tasks. If you and your partner need to establish additional boundaries, clearly outline them as they come up.

4. Make it Official With Contracts

Once you’ve worked through any complications, put it all in writing. If things were to go wrong, documents and written statements can be referenced in court. To do this, contact a lawyer and draft up a business plan. Any business promises you make should be in writing for any miscommunications. Compensation rates, profit shares, investment contributions, and business accounts are a few things that should be listed on this document.

Before investing your time, energy, or money into your startup dreams, make sure you’re fully prepared. Could you and your friend be great business partners? Take our quiz below to find out. Don’t forget to keep track of your budget and investments throughout the startup process.

Starting a Business With a Friend: 4 Things to Consider appeared first on MintLife Blog.

Source: mint.intuit.com

The No-Cash Envelope System That Works

The post The No-Cash Envelope System That Works appeared first on Penny Pinchin' Mom.

I am a strong believer in the cash envelope system. It works great for our family. But I also know that is not the case for everyone.  You may not want to use cash but love the envelope system concept.  Fortunately, there is a program you can use that marries your desire to use plastic with the discipline of a cash envelope budget.

When it comes to managing your money, spending and trying to get out of debt, there are many programs and apps out there. But, not all of them can do everything.  That means one app for your budget, another for trying to get out of debt and then yet another for managing your spending.

ProActive does it all.  You can manage your money, spending, budgeting, and debt payoff – all from one simple to manage app! But, before you jump in and download it, make sure you read this honest review.  That way, you’ll know what to expect!

What is ProActive?

ProActive combines the beauty of shopping with plastic and the discipline of cash envelopes.  The system ensures that you never overspend – ever!  Just like with cash, when the envelope is empty, you are done shopping!

 

What is the cash envelope budget?

A cash envelope budget is what it sounds like. Rather than using plastic to shop you get cash and place the budgeted amounts into envelopes.  For example, if your budget for food is $200 a paycheck, then you get cash and place $200 in an envelope earmarked for groceries.

When you grocery shop, you use only the cash in the envelope. That is all you have available to spend. It is impossible to overspend.  If there is only $20 left then that means you can’t spend $22.  There is not enough money there.

It is a system that works very well for people who want to better manage and control spending.

 

How does it work?

Once you sign up and create your account, you will get a ProActive branded debit card.  When you are ready to spend, you use the ProActive card.  But, before you can swipe, you have to let the app know which envelope the money needs to come from.  That way, you always stay on budget and don’t spend more than you should.

 

Add funds to your account

When you get paid, review your budget.  Pay the bills that are due.  What you have left over is what you have left to spend on everything else on your budget.  It will include items such as clothing, household items, personal care and beauty, groceries, entertainment, dues, etc.

You will go into the app and click the “+” icon.  That starts the transfer from your bank account to your ProActive debit card.

 

Allocate the money to your virtual envelopes

Once the funds are deposited, you have to assign an amount to each category (a.k.a. envelope).  Review the budget to see what you have available to spend.

 

Shop as usual (but pay with the ProActive card)

You can’t swipe your card until you have told the card which category (or envelope) the money should come from.  Simply open the app and click the spend category.  Then you can swipe.

If there is not enough money left in the category to cover your purchase, it will be declined.  That makes it impossible to overspend.

 

The smart way to use ProActive

As parents, we teach our kids.  They need to know how to take care of themselves, cook, clean and do other things around the house.  But, it seems that financial responsibility is one that gets overlooked.

One thing that ProActive allows is for you to add your kids and teach them how to manage their own money.  You can put funds on their account and they too can set up categories.  And, just like mom and dad, they have to select the category before they spend so they are not spending more than they should either.

ProActive not only teaches your kids how to use a debit card, but also the financial responsibilities that go along with it.  And, it is in an environment that both mom and dad can see (and control).

 

Who is ProActive a fit for?

Just like with every other app or budget system there is never a one-size-fits-all system. That means this may not work for you.  If you love your credit card for the rewards then this will not work for you.  You can’t attach a credit card and use this program.

But, if you struggle to try to manage your money and spending then you really need to get this app. It makes it impossible to overspend and helps you learn how to think about every purchase you make.  You may not need to use it forever as you will become disciplined.

 

What does it cost?

When you sign up, ProActive will give you a 15-day trial.  They want to make sure it is a fit for you before they make you pay.  Then, if you love it, you continue at $5.75 a month (paid annually, so $69).  You can add a second user for $29 a year and even add your kids for just $24 each.

 

What happens if I forget my phone?

It happens.  We leave our phones behind. In that case, it is important that you always have an alternative payment method handy, such as your bank debit card, credit card or cash.

If your goal is to get out of debt, you have to first start with your budget and spending. If you don’t do that, you will never achieve your goals.  ProActive is one tool that helps you every step of the way.

The post The No-Cash Envelope System That Works appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

Chase bonus categories extend into 2021 – The Points Guy

Throughout the pandemic in 2020, Chase added a number of temporary and long-term benefits to help cardholders continue to maximize purchases and card benefits through dramatically shifting spending habits and priorities. Now that 2021 has arrived and some pandemic-era benefits have ended on some cards, it can be hard to keep track of what’s still …

Source: thepointsguy.com

What You Need to Know About the New Apple Credit Card

Man in light green shirt shopping on a tablet with his apple credit card

UPDATE: Some offers mentioned below have expired and/or are no longer available on our site. You can view the current offers from our partners in our credit card marketplace. DISCLOSURE: Cards from our partners are mentioned here.

The Apple credit card launches this summer, and it pairs the high-tech, app-based culture of the brand with some favorite credit card user perks. Before you join the flock likely to flood Apple with credit card applications, do your homework to make sure this card will meet your needs. Check out the details about the Apple credit card below, as well as some alternative credit cards you might apply for.

What’s the Apple Credit Card?

The Apple credit card is a payment card offered by Apple and issued by Goldman Sachs. Despite the Apple name on the card, whether or not a consumer is approved and the day-to-day financial management of accounts is handled by Goldman Sachs.

The design of the card and all its cash-back credit card perks, however, are courtesy of Apple and include:

  • Integration with Apple Pay and Apple Wallet
  • Integration with your iPhone or another iOS mobile device to support phone-based payments and access to accounts
  • Apple’s customary security and privacy levels
  • Cash back offers that are especially useful to Apple fans

Basic facts to know about the new Apple credit card include:

  • It comes with a 49% to 23.49% variable APR (as of 12/19/2019) depending on your creditworthiness.
  • You earn 1 to 3% cash back on purchases.
  • The Apple credit card doesn’t come with any fees—that includes no annual fee, late payment fees, foreign transaction fee and over-limit fees.
  • Though you do receive a physical card whose number you can use in Google Wallet, the Apple credit card also comes as a virtual card number designed to live in your Apple Wallet.

The wide range APRs suggest so some that the card may be available to people with a fair credit score.1 No one will know until the card actually launches though.

Benefits and Perks of the Apple Credit Card

While interest rates and credit limits are important, most consumers also choose a card based on the perks its rewards program affords them. Intelligent use of perk-related cards, such as travel rewards cards, can help you save money or earn extra pennies on cash you already plan to spend. Here’s a look at how Apple credit card perks stack up for users.

Expense and Spending Organization in One Place

Apple is making a big deal out of the user experience element of this credit card, which involves heavy integration with iPhones. The card itself is housed in the Apple Wallet app on your iOS device. Since you can only use the digital version of the card where Apple Pay is accepted, you also get a unique physical card that’s as sleek and high-tech as any Apple device.

The card’s digital component offers specific benefits:

  • You can apply for the card and, if approved, it’s immediately in your Wallet app. You can start using it the same day without waiting for a card to arrive in the mail.
  • Without using a physical card, you don’t have a card number or other elements that can be stolen, which increases the security of your account.

Apple also provides an app that lets you manage your spending and account in a single location. You can view charges based on a map to figure out where money was spent, get a color-coded breakdown of your expenses to help you budget and view visual and numeric information about how various payment amounts impact the total owed. Log in to the app when you’re ready to make a payment on your account, and you’re also provided with estimates on how much interest you’ll be charged and can see how much interest you’ll pay if you pay your card off sooner than later and vice versa.

Cash Back and Daily Cash Back with Some Purchases

The card gives account holders the chance to earn cash-back rewards too. And you get even more cash back rewards when you spend with Apple.

  • You get 3% cash back on all purchases from Apple. That includes purchases at apple.com, Apple stores, iTunes and the Apple app store. You earn cash back on the game, app and in-app purchases, including music, storage plans and books.
  • You get 2% cash back on anything else you purchase and pay with using Apple Pay.
  • If you have to break out the physical Apple Card to make a payment, you still earn 1% cash back.

Cash back is always a great perk for a credit card, but it’s especially nice when the card doesn’t have an annual fee. The Apple credit card makes cash back even more of a perk by awarding it to you the day after you spend rather than waiting for the statement cycle to close.

To make use of cash back the next day, you do have to have an Apple Cash card, which is how Apple transmits rewards to you. If you don’t have an Apple Cash card, then the cash back rewards are applied as a statement credit on your Apple credit card account.

Who Benefits Most from This Credit Card?

Because of its heavy integration with iOS technology and the Apple Wallet, the Apple credit card is more likely to be useful to Apple customers. Individuals who carry Android or other devices won’t be able to access many of the features available with this card. And if you’re not shopping with Apple or using Apple Pay, you miss the top tier cash-back rewards.

You might benefit from this card if:

  • You have an iPhone, especially if you’re prone to or like the idea of handling your finances via a single app on your device.
  • You’re an avid user of Apple technology and have already adopted Apple Pay and Apple Wallet.
  • You make a lot of purchases at Apple’s stores or using Apple subscriptions or the Apple app stores.

Alternatives to the Apple Credit Card

The Apple credit card is obviously not right for everyone. If you don’t have an iPhone, prefer Android or aren’t interested in using any or much technology for your financial management, you may want to opt for a different kind of credit card account.

For those who don’t fit the target audience for the Apple credit card, plenty of other rewards cards are available. Here are a few you might consider.

  • The Chase Freedom® Unlimited card comes with 3% cash back on your first $20,000 in purchases your first year as a cardholder. After that, you can earn 1.5% cash back on every purchase.The extra cash back your first year makes this card ideal in order to maximize your rewards. And the 1.5% after that is nothing is nothing to sneeze at.
  • The American Express® Gold card, which does require decent credit but offers some spectacular perks for those who love a fine dining experience or are always chasing the next fun foodie adventure. This card is also known as a great travel rewards card.
  • The Capital One® Quicksilver® card, which offers unlimited 1.5% cash back without limits. That makes this card an ideal daily swiper. And an APR of 0% intro on purchases for 15 months lets you double your rewards by making a large purchase and paying it off without interest in the first year or so.
  • The Credit One Bank® Platinum Visa® with Cash Back Rewards is a rewards card option for people with bad, poor or fair credit. It lets cardholders earn 1% cash back rewards on eligible purchase (some terms apply).

Apple isn’t the only—or first—company to enter the market of branded credit cards. If you like the idea of rewards that are brand-based, but you don’t use an iPhone or spend a lot at the Apple store, consider some of the options below.

  • The Montgomery Ward credit card that lets you buy now and pay later for hundreds of brands at Montgomery Ward.
  • The Kroger REWARDS Prepaid Visa® card that lets you earn rewards to use for free groceries and to save on gas.
  • The Official NASCAR® Credit card from Credit One Bank® that pays you double cash back on items purchased from the NASCAR.com Superstore (terms apply) and 1% cashback on all other purchases too.

Ultimately, there’s a credit card option for almost any spending or financial goal. Browse the selection of offers on Credit.com to find a card that works for your needs and preferences, including:

  • Cards for building or repairing credit, which usually start with lower limits that grow as you handle the account responsibly.
  • Balance transfer cards, which let you move balances from higher-interest accounts and pay them down faster to save money.
  • Rewards cards, which let you earn money on expenses you would be paying anyway, including travel, utilities, food and clothing.
  • Cards with no annual fee that let you avoid paying the card issuer to use your credit card.

Whether or not you’re approved for the Apple credit card or any of these other card offers depends on your creditworthiness. Review the information about each credit card carefully, ensuring you understand the offers, fees and rewards structures. Then, check your credit score—for free—and apply for a credit card on Credit.com.

1 https://www.cnbc.com/2019/03/26/apple-credit-card-read-the-fine-print.html

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

The post What You Need to Know About the New Apple Credit Card appeared first on Credit.com.

Source: credit.com

How a financial coach can help you get out of debt

If you can’t give up your daily latte, your twice-a-month false eyelashes or weekly fresh flowers, a financial coach won’t judge you.

But that coach or counselor will stress that you won’t reach your financial goals if you don’t give up most of your splurging.

“I had one client who was spending $200 a month to have people glue eyelashes on her lashes every two weeks,” said Christine Lane, an accredited financial counselor. “Until I met her, I didn’t even know that was a thing.”

“Everyone has different things that are important to them,” said Bridget Todd, head of trainer development at The Financial Gym, a credit coaching business. “A big one for people is often personal or mental wellness. Some people pay for an Equinox membership and they don’t want to go to a cheaper alternative. For others, an acupuncturist or a chiropractor is important to them to feel their best. We find the non-negotiables and ask them what expenses can come out.”

See related: How to match your spending with your values in 2021

What a financial coach does

A financial coach or counselor helps clients take a comprehensive look at all of their finances, bridging the gap between a debt counselor, who focuses on reducing your debt, and a financial advisor or planner, who focuses on helping you build wealth, Todd said.

“We focus on your entire financial life,” she said. “We take a deep dive into the day-to-day, how you’re spending your money. We give you different scenarios: if you do this, this will happen. We allow you to improve your finances and also help you feel comfortable and live your life.”

No matter how bad your debt or how frivolous your spending, financial coaching is a collaborative, judgment-free zone. A coach or counselor helps clients develop healthy spending habits, reduce debt, and build short-term and long-term savings. The goal is long-term financial wellness, said Rebecca Wiggins, executive director at the Association for Financial Counseling and Planning Education.

“A financial coach views the client as the expert in their own life, collaborating with them to define their goals, create solutions and an action plan that helps them achieve their goals,” Wiggins said.

Like many coaches, Lane uses a “spending, debt and savings” spreadsheet to open her clients’ eyes to their true financial picture. She shows clients how much they can spend every week or month on wants without going further into debt. Entering higher or lower spending or savings numbers in the spreadsheet immediately changes the long-term picture.

“The key is telling them what the number is,” Lane said. “I tell them, ‘Here are your fixed expenses and here’s what you have left. Focus on spending no more than $200 this week.”

Good budgeting is about categorizing expenses.

  • Amassing credit card rewards and points is more important than paying off the balance every month.
  • Investing in individual stocks is the best way, even for financially inexperienced people, to invest.
  • Supporting your adult child financially is a good idea, even if you haven’t saved for retirement.
  • Techniques to curb spending

    Like many coaches and counselors, Lane asks her clients to give up all credit card spending for a set period – in her case, three months.

    “I once had a woman who was $10,000 in credit card debt and was paying a ton of interest say she didn’t want to give up earning her points and that she’d already gotten two free hotel rooms,” Lane said. “I told her, ‘You’re going to pay in interest so much more than those free hotel rooms.’”

    Another technique Lane uses is asking clients to set just one so-called buy day a month: all other days are window shopping, or more likely now, screen shopping.

    “You can shop any day you want, go in person, take pictures, put things on Pinterest,” Lane said. “But there’s only one day a month where you’re actually allowed to make the purchase. If you have anything on the list that you haven’t thought of, then you don’t really want it.”

    See related: How to stop overspending during the pandemic

    Bottom line results

    Lane has worked with clients with credit card debt up to $60,000 and total debt, counting student loans, up to $200,000. Most are in their 30s to early 40s and have $20,000-$30,000 in debt.

    Many can get out of debt in about two years, she said. But these reforming spenders start feeling better about their financial life and life in general much earlier, Lane said.

    “Generally after six weeks, they say a weight was lifted from their shoulders,” she said. “They say, ‘I’m running more. I have a better relationship with my girlfriend.’”

    On average, their first year, clients at The Financial Gym see their credit scores go up more than 100 points, save $5,000 to $10,000, and pay off $5,000 to $10,000 in debt, Todd said.

    How much does financial coaching cost? 

    At The Financial Gym, coaching rates are about $99 a month for individuals, $150 a month for couples and $250 a month for business owners, Todd said.

    Fees for accredited coaches and counselors range from $50 to $150 an hour, Wiggins said. Some coaches offer packages or work on a sliding scale based on income, she added.

    See related: What is credit counseling, and how can it help you?

    How to become a financial coach

    To become a counselor accredited through AFCPE, students take one to three years to meet the education requirements and complete the exam, Wiggins said. The most common pathway is self-study with books and materials. This pathway’s cost is $1,455, including a $50 registration fee, $675 for books and materials, and a $730 exam.

    To become a certified financial coach through Sage Financial Solutions, applicants complete three modules, which can be done in as little as six months, at the cost of $1,200 and about 30 hours for the first module, $550 and 15 hours and for the second module and $750 and 22 hours plus 100 experience hours for the third module.

    The Financial Gym prepares its own coaches, which it calls trainers, with a two-week training session, then an interview with several team members, shadowing current trainers, creating mock financial plans and passing an exam with a score of 80 or higher, Todd said.

    Back to lattes and lashes

    Lane’s client still spends $200 every month on false eyelashes, which for her are nonnegotiable. But the client gave up her weekly fresh flowers, cut back on her dog walker and improved her financial picture from overspending her income by $200 a month to saving $1,000 a month, Lane said.

    “Different people have different blind spots,” Lane said. “That’s an advantage of counseling; you get a really personalized look at your needs. We try to work toward their goals, not ours. Accountability without judgment is our superpower.”

    “At the end of the day, it’s just math,” Todd said. “You have to be honest with me about what you’re willing to give up to get there.”

    Case study: From $15,000 in credit card debt to zero

    When Moira Sedgwick started working with a Financial Gym coach, her debt topped $250,000, with about $110,000 in student loans, $15,000 in credit card debt and a mortgage.

    “The bad surprise was how much debt was staring at me,” said Sedgwick, 39, who works as the director of The James Beard (Culinary) Awards and also consults in hospitality and event management. “I had always been messy at all of this. This was a way to stop being messy and own my finances.”

    Sedgwick already was paying extra on her student loans and was thinking about saving more for retirement, but her coach told her paying down debt, especially the high interest credit card debt, was the top priority.

    The next bad surprise was putting a cap on her spending. “I had only $100 a week for my fun money,” she said. “I had been spending everything that was coming in. I’m in the restaurant world, so a lot of it was dining out. I would justify it by saying, ‘This is my industry. This is my job.’

    “But no one on my job was reimbursing me. Cutting that out was a huge difference. I was getting real about how much eating out was really costing me and getting real about how much that was keeping me from my goals.”

    She still does takeout on Fridays and Saturdays – that was her nonnegotiable.

    Sedgwick, who didn’t have a lot of financial guidance growing up, said she feels like she has a partner to guide her decisions. “I finally have a support system,” she said.

    A few years in, Sedgwick has cut her credit card debt to zero and cut her student loan debt by nearly half, and paid her mortgage down to $68,000. Her credit score has improved from a respectable 740 to a nearly perfect 800. She saved up $30,000 in her emergency fund but recently used about half to buy a rental property, a longtime goal. She talked to her financial trainer first.

    “I talk to my trainer before I do anything,” she said. “That’s the only way I feel safe.”

    Source: creditcards.com

    Tips to Consolidate Credit Card Debt

    Tips to Consolidate Credit Card Debt

    Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the issuer.

    If left unchecked, extensive amounts of credit card debt can cripple your finances. The good news is there are many ways to handle debt, though each requires a dedicated effort on your part. But if you can manage to consolidate credit card debt, you will reduce your burden relatively quickly. In the process, you’ll avoid the exorbitant interest rates that accompany most credit cards. Below we take a look at some of the most effective techniques you can use to make this goal a reality.

    Find Out Your Credit Score

    Before you can work on improving your credit and minimizing your debt, you have to know where you currently stand.

    Many credit card issuers allow cardholders to see their FICO® credit score free of charge once a month, so check out if any of your cards include that free credit score. The three major credit bureaus – TransUnion, Experian and Equifax – also give out free annual credit reports. If that’s not enough, websites like Credit Karma™ and Credit Sesame provide a free look at your credit score and reports as well.

    It is vital to review your credit report with a fine-tooth comb to ensure the accuracy of the information. If you find errors be sure to let the credit bureau in question know so the issue can be eradicated as soon as possible.

    Zero Interest Balance Transfer Cards

    Although it might seem counterintuitive to apply for another credit card to lessen your debt, a zero interest balance transfer card could really help. These cards typically include an introductory 0% balance transfer Annual Percentage Rate (APR) for six months or more. This ultimately allows you to move debt from one account to another without incurring more interest. However, once the introductory offer concludes, any leftover balances will revert to your base APR.

    These offers aren’t totally free, though. Most cards also charge a balance transfer fee that’s usually between 3% and 5% of the transfer. Even with this initial payment, you will almost always still save money over leaving your debt where it stands currently.

    If you want to consolidate credit card debt, here are three different balance transfer credit cards you could apply for, with varying introductory interest rates and transfer fees:

    Balance Transfer Credit Cards Card Intro Balance Transfer APR Balance Transfer Fee Chase Slate 0% APR for first 15 months; then 16.49% to 25.24% Variable APR, depending on your creditworthiness No fee for first 60 days; then $5 or 5% of each transfer, whichever is greater Citi Double Cash Card 0% introductory APR for 18 months from date of first transfer when transfers are completed within 4 months from date of account opening; then 15.49% to 25.49% Variable APR, depending on your creditworthiness $5 or 3% of each transfer, whichever is greater BankAmericard® credit card 0% APR for first 15 billing cycles; then 14.49% to 24.49% Variable APR, depending on your creditworthiness No fee for first 60 days; then $10 or 3% of each transfer, whichever is greater Take Out a Personal Loan

    Tips to Consolidate Credit Card Debt

    The thought of taking out another loan probably doesn’t sound too appetizing to consolidate credit card debt. But a personal debt consolidation loan is one of the speediest ways to rid yourself of credit card debt. More specifically, you can use it to pay off most or all of your debt in one lump sum. That way, your payments are all merged into a single account with your lender.

    The APR and length of the offered loan and the minimum credit score needed for approval are the main factors that should go into your final decision on a lender. By concentrating on these three components of the loan, you can map out what your monthly payments will be. As a result, you can more easily implement them into your financial life.

    Applying for a personal consolidation loan can have a detrimental effect on your credit. Unfortunately, most institutions will run a hard credit check on you prior to approval. However, many online lenders don’t do this, which might ease your mind depending on the severity of your debt situation.

    These loans are available through a wide variety of financial institutions, including banks, online lenders and credit unions. Here are a few examples of some of the most common debt consolidation lenders:

    Common Debt Consolidation Lenders Banks Wells Fargo, U.S. Bank, Fifth Third Bank Online Lenders Lending Club, Prosper, Best Egg Credit Unions Navy Federal Credit Union, Unify Financial Credit Union, Affinity Federal Credit Union Auto or Home Equity Loan

    If you own assets like a home or car, you can take out a lump-sum loan based on the equity you hold in them to consolidate credit card debt. This is a great way to reuse money you paid toward an existing loan to take care of your debt. When paying back your auto or home equity loan, you’ll usually pay in fixed amounts at a relatively low interest rate. Even if this rate isn’t great, it’s likely much better than any offer you’d receive from a card issuer.

    Equity loans are technically a second mortgage or loan, meaning your house or car will become the loan’s collateral. That means you could lose your house or car if you cannot keep up with your equity loan payments.

    Create a Budget

    Tips to Consolidate Credit Card Debt

    To build a budget, you first need to figure out your approximate monthly net income. Don’t forget to take into account taxes when you’re doing this.

    You can then start subtracting your variable and fixed expenses that are expected for the upcoming month. This is where you will likely be able to identify where you’re overspending, whether it’s on food, entertainment or travel. Once you’ve completed this, you can begin cutting back where you need to. Then, use your surplus cash to pay off your debt one month at a time.

    It shouldn’t matter if you’re dealing with substantial credit card debt or not. A monthly spending budget should always be a part of how you manage your finances. While this is likely the slowest way to eliminate debt, it’s also the most financially sound. At its core, it attempts to fix the problem without taking funding from an outside source. This should leave very little financial strife in the aftermath of paying off your debt.

    Professional Debt Counseling

    Perhaps since you’ve found yourself in serious debt, you feel like you want professional help getting out of it. Well the National Foundation for Credit Counseling® (NFCC®) is available for just that reason. The NFCC® has member offices all around the U.S. that are certified in helping you consolidate credit card debt.

    These counselors won’t only address your current financial issues and debt. They’ll also work to create a plan that will help you avoid this situation again in the future.

    Agencies that are accredited by the NFCC® will have it clearly displayed on their website or at their offices. If you’re not sure where to look, the foundation created an agency locator that’ll help you find a counselor nearby.

    Borrow From Your Retirement

    Taking money early from your employer-sponsored retirement account obviously isn’t ideal. That’s means borrowing from your retirement is a last-ditch alternative. But if your credit card debt has become such a handicap that it’s affecting all other facets of your life, it is a viable option to consolidate credit card debt.

    Because you are technically loaning money to yourself, this will not show up on your credit report. Major tax and penalty charges await anyone who has trouble making payments on these loans though. To make matters worse, if you quit your job or are fired, you’re typically only given 60 days to finish paying it off to avoid incurring a penalty.

    Tips To Consolidate Credit Card Debt

    • If you take the time to come up with a budget, don’t let it go to waste. While you might find it tough to stick to, especially if you’re trying to cut back, it is the best way to manage your money correctly. Even if a budget becomes habit, stay vigilant with where your money is being spent.
    • Although a financial advisor will cost money, he or she might be able to help you keep your finances in check while ultimately helping you plan for the future as well. However, if this isn’t an option for you financially, stay on track with your NFCC® debt counselor’s plan.
    • There are so many ways to gain access to your credit score that there’s virtually no excuse for not knowing it. It doesn’t matter if you do it through one of the top three credit bureaus, FICO® or one of your card issuers. Just remember to pay attention to those ever-important three digits as often as possible.

    Editorial Note: This content is not provided by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the issuer.

    Photo credit: ©iStock.com/Liderina, ©iStock.com/ferrantraite, Â©iStock.com/cnythzl

    The post Tips to Consolidate Credit Card Debt appeared first on SmartAsset Blog.

    Source: smartasset.com

    6 Damaging Side Effects of Having a Bad Credit Score

    Side effects of a bad credit score

    As you make another large purchase against your credit card, inching closer towards maxing out, you might not realize the negative ramifications this activity will have on your credit score. The same goes for making the odd late payment on your hydro bill or car loan payment. Mounting debt that is not paid off in time or in full can have a major impact on your credit score.

    A bad credit score can have more negative consequences than you may think

    So what’s the big deal about having a low credit score? These days many institutions – from loan officers, to businesses, to insurance companies – look to your credit history before making a move. You could find your low credit score putting you in a position where you can’t get approved for a loan, get a job, or even find a place to live. Here are 6 damaging side effects of having bad credit.

    1. Your Loan Applications Might Not Be Approved

    Lenders and creditors see borrowers with poor credit as high risk, which means they’ll be less inclined to lend you the money you need. Whether you’re looking for a mortgage to buy a home, or a loan to finance a new car, you might find your loan applications being denied.

    2. You’ll Be Subject to High Interest Rates

    If you do get approved for a loan, you’ll most likely end up being stuck with a really high interest rate. Since lenders see people with a poor credit score as risky business, they’ll make you pay for it by attaching your loan with a sky-high interest rate. The higher your interest rate on your loan, the more you’ll be paying towards interest rather than the principle over the long run of your loan period.

    3. You’ll Be Subject to Higher Insurance Premiums

    Even insurance companies check background credit scores. Their claim is that poorer credit scores are associated with an increased number of claims filed. This theory prompts insurance providers to check a person’s credit background. If they find that you’ve got a credit score that’s less-than-par, you’ll most likely be charged a higher premium, no matter how many claims you’ve actually filed.

    Do you know the ramifications of having a bad credit report?

    Fixing a bad credit score

    4. You Might Have a Tougher Time Landing a Job

    Many jobs – especially ones in upper management or in the financial industry – have specific criteria that potential employees need to meet, including having a strong credit score. You might find it a lot more challenging to land the job you want because of your bad credit history, particularly if you’ve got exorbitant debts amounts outstanding, or even a history of bankruptcy.

    5. Starting Your Own Business Might Be a Challenge

    Not only will finding a job be more difficult with a low credit score, but even starting your own business might be a challenge. Many new businesses need the assistance of a bank loan to get started. With a low credit score, banks will be less likely to approve your loan application, even if your business idea is a great one.

    6. You’ll Have a Harder Time Getting Approved for an Apartment

    Even landlords check the credit history of potential tenants. If you’ve got bad credit, the landlord might be less inclined to approve a lease, and will sign it over to a tenant with good credit instead. Landlords, much like insurance companies and banks, make the assumption that those with poorer credit are more likely to be delinquent on monthly payments, which puts them at a greater financial risk.

    The consequences of having poor credit may be a lot more extensive than you may have thought. Your best bet is to do everything you can to get your credit back into shape, which can be done a lot more easily with effective tools like those at Mint.com.

    You can quickly and easily put your finances in order, with Mint doing all the organizing and categorizing of your spending on your behalf. By being able to see where all of your spending is going, you’ll be better able to make better spending decisions, which will only have a positive impact on your credit.

    Click here for a free trial.

    The post 6 Damaging Side Effects of Having a Bad Credit Score appeared first on MintLife Blog.

    Source: mint.intuit.com

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