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DIY finance repair: Pulling yourself back from the edge


DIY finance repair: Pulling yourself back from the edge

Published 10/10/14

By Justin Boyle

Woman contemplates bills

Confession time: I'm an inveterate do-it-yourselfer. I've fixed vacuum cleaners, sink faucets, coffee tables, lawnmower engines -- you name it, I've tinkered with it. DIY efforts are usually successful if you follow the right advice, and the lessons you can learn from fixing your own stuff can stay with you for years afterward.

If you've been cavalier with your credit cards or run up a few big expenses lately, you might need to approach your finances with the same attitude. Here are some red flags to help you spot potential problems and some fix-it tricks that help get things back in working order.

Signs of trouble

It's sometimes a fine line between running rough and beyond repair. If these situations sound familiar, a financial tune-up might help you prevent an emergency:

  • Making minimum utility payments. Minimum payments on a credit card are bad enough, but only paying the power company what it takes to keep your lights on month to month and never clearing your account to zero should tell you that something's really wrong.
  • Stressing out about everyday purchases. If you find yourself struggling to find the money for a tank of gas or a trip to the grocery store, there's probably some work to be done.
  • Buying on credit with no savings. It's true that a perfectly functional personal finance strategy can include a certain level of debt, but it should be kept to a minimum without a savings account or other safekeeping instrument to back it up.

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Making your student debt worth its burden

Published 9/30/14

Making your student debt worth its burden By Peter Andrew

If you write about personal finance for enough years, you end up on a lot of strange email lists. So I wasn't surprised when a message intended for debt collection agencies turned up in my inbox yesterday. But I did raise an eyebrow over its content.

It was advertising a publication called "Student Loans -- A Primer," and the message's subject line read, "One Trillion Reasons to Collect Student Loans -- What You Need to Know." The trillion (it actually topped $1.2 trillion last May) refers to the amount of outstanding student loan debt in this country, and is a sum that makes this the second biggest form of consumer borrowing, behind home mortgages but well in front of auto loans and credit cards.

Am I alone in finding the email a touch distasteful -- not dissimilar to training sharks to be better at sniffing out blood in the water? Maybe I should be. Without collection agencies, paying debts would become optional, and that could create a collapse in the economy and society faster than any zombie apocalypse.

Public problems with student loan debt

There are problems surrounding both public and private student loan debt.

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Is income-based student loan repayment right for you?

Published 9/19/14

Is income-based student loan repayment right for you? By Georgie Miller

According to a popular estimate, more than 40 million Americans now owe a combined $1.2 trillion in student loans. That's made the issues surrounding these loans -- including income-based loan repayment plans -- a hot topic lately.

Income-based repayment plans may lower your monthly payments and, over time, even eliminate some of your student debt. But not every borrower is eligible for an income-driven plan, and if you are eligible, there's lots to consider when deciding if it's the right choice for you.

Income-based repayment options

The standard repayment plan for a federal student loan is 10 years. However, as you will learn about money after graduation, your grown-up salary may not be as big as you think it is. You will also have other priorities, including savings and retirement, and maybe even an occasional vacation.

According to the Federal Student Aid website, an income-driven plan is worth considering "if your outstanding federal student loan debt is higher than your annual income or if it represents a significant portion of your annual income."

There are three main types of federally available income-driven plans:

  • Income-Based Repayment (IBR)

  • Pay As You Earn (PAYE)

  • Income-Contingent Repayment (ICR)

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Today, scandalous celebrity photos. Tomorrow, your financial records?

Published 9/11/14

Today, scandalous celebrity photos. Tomorrow, your financial records? By Justin Boyle

Can you believe it? If Jennifer Lawrence, Rhianna and other A-listers are vulnerable to major thefts of information like the high-profile leak perpetrated in August, wouldn't it be just as easy to swipe personal data from all of us regular people?

For anyone who uses online savings accounts or personal finance apps, the news that's come out since the attack has a twofold upshot: The bad news is that your data might be insecure, but the good news is that you can take steps to guard your account info against would-be attackers.

How it happens

Authorities initially pointed to Apple's cloud hosting service, iCloud, as the source of the vulnerability, but those accusations have since been dismissed as simplistic. Apple, for one, has avowed that none of the cases of data breach they'd seen were the result of iCloud being compromised.

Apple spokespeople report that the victims' accounts were most likely accessed using their actual usernames and passwords, rather than through a "back door" into the iCloud backup server. If that's the case, then the stolen data was mainly vulnerable because of poor security on the user side.

In other words, you can likely protect yourself better than the victims here. Here's how to do it.

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How separate finances can work for married couples

Published 9/3/14

How separate finances can work for married couples By Georgie Miller

Generally, the expectation when a couple says "I do" is that one of the first financial tasks they will handle is to switch to joint accounts. However, joint finances are not mandatory and may not work for everyone.

Here are some things married couples should keep in mind when considering maintaining separate finances.

1. Separate accounts foster a sense of autonomy

No matter how long you dated before tying the knot, going from an "I" to an official "we" can be overwhelming. Especially if one partner makes more than the other, merging accounts can make the lesser-earning spouse feel as if they don't have as much of a say when decisions need to be made. Additionally, when accounts are jointly held, it is easy for one partner to end up with all the responsibility of bill-paying -- whether they are interested in doing so or not.

Keeping accounts separate puts each spouse in charge of how the money they earn is spent.

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New credit score rules: Will you benefit?

Published 8/29/14

New credit score rules: Will you benefit? By Peter Andrew

If your credit score's less than perfect, this could be the most cheerful thing you're going to read all day. That's because FICO, the company whose scoring systems are used in 90 percent of all lending decisions, and two of the three major credit bureaus are making changes that might give your score a boost -- without you having to lift a finger.

In other words, one morning soon, you could wake up with a significantly better credit score, simply because of the way these scores are tallied.

FICO Score 9: the best sequel ever?

In August, FICO announced that it was launching a new version of its credit scoring system. And FICO Score 9 includes some big changes that could save you money the next time you borrow.

The first affects those who have medical collections on their reports. Up until now, these have had the same negative impact on scores as all other debts. But they're set to be counted differently. And the company estimates that the median impact on its 300 to 850 scale for those who have medical collections as the only major negative references on their reports should be a score boost of 25 points.

Others who might benefit include those with "thin files."

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