Downward dog, downward debt: Building your financial flexibility


Downward dog, downward debt: Building your financial flexibility

Published 6/4/14

Downward dog, downward debt: Building your financial flexibility By Georgie Miller

I love yoga, so when I think of the word flexible I tend to think of some of the asanas I can't do (but aspire to!). However, there's more to flexibility than limber muscles. Flexibility is also one of the key concepts in personal finance.

Ideally, your financial flexibility should allow you to handle any money-related issue that comes your way with a minimum of panic or missed payments. Just how can you accomplish this? Begin with these simple steps.

1. Start an emergency fund

No, a credit card is not an emergency fund. While zero percent credit card offers may be a good idea for balance transfers and debt payoff, adding to your debt load is never a good strategy. By starting an emergency fund while times are good, the money will be there when disaster strikes. You want the funds to be accessible in case you need them. However, you probably don't want them to be too accessible or you'll be tempted to spend the money on something frivolous.

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Hey, baby. How's your college fund?

Published 6/2/14

Hey, baby. How's your college fund? By Peter Andrew

You have a newborn baby! Congratulations. Welcome to years of sleep deprivation, decades of horrific expense and a lifetime of being petrified that something bad is going to happen to your impossibly precious offspring. Most parents envy their childless friends' clear, bag-free eyes, relative wealth and carefree existences. But almost none would swap places for the tiniest fraction of a millisecond.

Anyway, there you are, up to your ears in diapers and cooing relations, while the laundry piles up, the housework is forgotten and all you can think about is how much you need to sleep. What better time is there to ponder your baby's college fund?

Starting early pays

Unfortunately, there is no better time. A couple of years ago, The New York Times did some calculations and found that, assuming continuing inflation in college costs of just 4 percent a year, an institution that currently charges $60,000 a year could be charging more than double that by the time your baby gets to enroll. That's comes out at a cool half-million dollars for four years.

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Want a raise? Here's how to give yourself one

Published 5/16/14

Want a raise? Here's how to give yourself one By Holly Johnson

The latest Survey of Consumer Expectations from the New York Fed predicted that American's wages will rise an average of 2.4 percent over the next year. Unfortunately, prices have risen 2 percent in the last 12 months, spiking 0.3 percent in April alone -- the highest monthly rate of inflation so far in 2014.

So let's face it: Until wage increases climb higher, rising prices could keep American wages effectively flat for the foreseeable future. That's the bad news.

The good news is, you don't have to wait for the economy to turn around to give yourself a big, fat raise. In fact, simply cutting your spending can accomplish the same thing by freeing up extra cash for savings, investments or that vacation you've been dreaming of. You cannot control the labor market, rising inflation or the rest of the economy, but you do have control over how you actually spend your hard-earned paycheck. If you want truly want a raise and believe you deserve it, it might be time to take matters into your own hands.

This type of raise isn't the kind you ask your boss for. It's the kind you take for yourself -- simply by reducing your spending and keeping the difference. Want to cut your spending and earn an effective raise in the process? Here's how to do it in five steps:

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How smart wedding spending can lift your credit

Published 5/8/14

How smart wedding spending can lift your credit By Justin Boyle

With a lot of my friends getting married over the last year or so, I've heard all sorts of nightmare stories about planning and paying for weddings. The sheer fiscal magnitude of it all has made some of them wonder whether it isn't too late to elope.

With a little credit savvy though, juggling the big numbers on your wedding balance sheet can leave you with a boost to your credit score that may come in handy with your next mortgage lender (among other future creditors). Here are some guidelines for making your wedding spending work for you.

Free up some space

Although exact cost figures can vary widely from city to city, the average outlay for a wedding in the U.S. in 2014 was more than $28,600, according to WeddingStats.org.

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So you've missed a payment: Now what?

Published 5/7/14  (Modified 5/8/14)

So you've missed a payment: Now what? By Georgie Miller

So, your finances are a little tight this month. You're probably worried and wondering what to do. Perhaps you've investigated all of your last-ditch solutions for cash emergencies, but you're still going to come up short on an obligation or two. What happens next?

What happens to your credit score when you miss a payment

Payment history comprises 35 percent of your credit score, according to myFICO.com. This is the biggest single factor in your FICO score! The next most heavily weighted category is amounts owed, at 30 percent of your score.

Since payment history is such a significant component of your FICO score, missing payments can cause quite a dip in your rating. Fortunately, if the rest of your credit history is positive, then one or two missed payments shouldn't spell disaster.

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3 last-ditch solutions for cash emergencies

Published 4/28/14

3 last-ditch solutions for cash emergencies By Peter Andrew

Been there, done that, got the bills for overdraft fees. I know some readers will look down their noses at me for my bad financial planning, but a whole lot of others will know all too well that nauseous, sinking feeling when the realization dawns: This month's money simply won't stretch until payday.

It's only human to panic in such situations, but panicky people often make dumb choices. So the first things to do are sit down, calm down and think the situation through. Here are three options that may, depending on your personal circumstances, be open to you:

1. Borrow from friends, family or your employer

This may be the most excruciatingly embarrassing option, but it's usually the one that makes the most financial sense.

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