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28 Percent Of Non-Retired Adults Have No Retirement Savings Or Pension

MoneyTipsSocial Security was only designed to supplement retirement income, not to replace it – yet a recent report by the Federal Reserve indicates that over one-quarter of Americans will be relying on Social Security to get them through their retirement years. According to the Report on the Economic Well-Being of U.S. Households in 2016, 28% of non-retired adults reported having no retirement savings or pension of any kind. Half of the survey respondents have 401(k) programs, 31% have IRAs, 46% have outside savings such as bank accounts or CDs, 25% have traditional defined benefit pensions, and 25% have other retirement income sources such as real estate or business investments – so clearly a significant number of Americans have multiple retirement savings sources aside from Social Security. Still, 28% report having none of these sources. Who are the folks dependent on Social Security? As you might expect, lower income correlates well to a lack of a retirement program, as does youth. The survey sorted respondents into three annual income levels (less than $40,000, $40,000 - $100,000, and over $100,000) and found that only 44% of respondents with incomes below $40,000 had any type of retirement savings at all. This is not a surprising finding. The less money you make, the more difficult it is to have money left over after expenses – if you can avoid outright deficits. Still, the contrast is striking. For respondents making over $100,000 per year, 95.7% have some retirement savings, with the percentage only varying from 95.5% to 96.6% across all age groups. Ironically, high earners in the 18-29 age group have the highest participation rate. Perhaps acquiring a high salary at an early age indicates responsible fiscal behavior. In the $40,000 - $100,000 income range, 86.7% reported having some form of retirement funds, but there is a clearer difference among the ages. Only 78.3% of those aged 18-29 have retirement funds compared to 92.5% of those aged sixty and above. A similar age discrepancy shows up in the low-income category. Only 39% of low-income respondents age 18-29 have any kind of retirement funds, compared to 57.3% of those aged sixty and above. In essence, when considering the ability to save for retirement, age is a minor factor but income level is a major factor. While it may be a struggle for you as a low-income American to find money to put away for retirement (or as a young American tempted to apply your money to things other than retirement savings), it's extremely important that you do so. By starting late, younger workers miss out on the effects of compounding. Meanwhile, low-income workers have a greater need to supplement Social Security because benefits are based on income levels during working years. A lower salary equates to lower taxes paid in and lower benefits at retirement. If you have no retirement plan, it's never too late to start. Start by estimating your benefits upon retirement using the Social Security Administration's Retirement Estimator. Estimate how much income you will need at retirement – a good rule of thumb is around 80%-90% of your pre-retirement income. Calculate the difference between income and benefits. Then set up a budget to get a surplus to fill the gap in your retirement goals, and decide how best to apply that surplus (IRA, 401(k), or other vehicle). Don't be discouraged by a large retirement savings gap. You have started down the proper path, and by taking any pre-emptive action at all, you are in better shape than you were. Let the free Retirement Planner by MoneyTips help you calculate when you can retire without jeopardizing your lifestyle. Photo © Posted at: Than Half of Americans Making Less Than $40,000 Annually Have No Retirement SavingsHow Much Income Will You Need For Retirement?7 Top Retirement Roadblocks

Trump Voters Still Want that Wall… Even If We Pay For It!

MoneyTipsDuring his successful Presidential campaign, Donald Trump vowed to crack down on illegal immigration, promising, "I will build a great, great wall on our southern border, and I will make Mexico pay for that wall." Do we still want a wall built? A recent MoneyTips survey says no, but Trump voters say yes. In fact, they're willing to have America pay for it! When Donald Trump accepted the nomination for President at the Republican convention, he told the crowd, "Decades of record immigration have produced lower wages and higher unemployment for our citizens, especially for African-American and Latino workers." In an exclusive MoneyTips survey conducted in June, 466 Americans were asked whether they agreed or disagreed with the following statement: I believe President Trump's immigration policies are improving the American economy. Half of the people surveyed disagreed, with nearly 3 out of 4 of them (74.2%) disagreeing strongly. The results: Less than 1 out of 3 (30.3%) agreed with the statement, with less than 15% agreeing strongly, and less than 16% merely agreeing. Women especially do not feel Trump's immigration policies are helping the economy; 54.5% disagreed to some extent, with only 27% in agreement. For men, less than 45% (44.5%) disagreed, with more than 34% agreeing. Age also appeared to be a factor, as only 20% of people younger than 40 agreed at any level with the statement, and a whopping 58.8% disagreed. Among those older, 35.6% agreed, and 45.4% disagreed. Who did agree with the President? Trump voters. Nearly 35% agreed strongly, while more than 35% simply agreed. More than 70% of Trump supporters agreed overall, while less than 7% disagreed at all with the statement. In contrast, less than 5% of Hillary Clinton supporters agreed, and more than 87% disagreed. People who didn't vote for either top vote-getter, or didn't vote at all, also didn't agree. Says Dr. Michael Zey, Professor of Management at Montclair State University's Feliciano School of Business in New Jersey, "The majority of Americans surveyed reveal that they are not convinced his immigration policies will help the economy. Trump must take his case to the American people even as he attempts to dramatically transform America's immigration strategy." What's the most we should spend to build a wall between the US and Mexico? 59% of people surveyed did not want a wall built. A look at the results: Women wanted the wall less than men did, with 63.5% of the women and 53.6% of the men reporting that they opposed building it. Although the majority was against it in nearly every age group, older respondents tended to want the wall more than younger ones. More than 72% of adults under 29 were opposed, while that number drops to 51% for people aged 60 and up. Two-thirds of the people whose families make $50,000 or less annually were against the wall, as opposed to 54% of the people whose families make more. On the other hand, less than 20% of Trump voters said they didn't desire a wall, as opposed to more than 80% of the non-Trump voters. Compare that to Hillary Clinton supporters; nearly 88% were opposed. Among the people who want a wall, is there a limit to how many tax dollars we should spend? The answer appears to be no. Over half (52.4%) of those who want to build the wall say do it no matter the cost. Of the rest, 31.4% say spend up to $10 billion, 10.5% limit it to $15 billion, and 5.8% cap spending at $20 billion. Regarding the cost in April, Trump estimated, "I think $10 billion or less. And if I do a super-duper, higher, better, better security, everything else, maybe it goes a little bit more." He recently proposed a "solar wall" that could "create energy and pay for itself." Among people who desire the wall, the group that wants it the most no matter the cost contains families who earn more than $200,000 annually. 63.6% of those high-earners who want the wall wouldn't cap the costs. Among those surveyed whose families earn $50,000 annually or less, less than half (49.2%) don't care about costs. Older people also cared less about cost than younger people polled did. Only 43.4% of wall-proponents under 40 set no limit on costs, compared to 55.8% of those 40 and older. Trump supporters may want to build the wall, but many also want to budget for it. While more than 56% of wall-proponents wouldn't limit the costs, 31.1% would spend up to $10 billion, 9.1% up to $15 billion, and 3.8% would cap spending at $20 billion. Those findings are similar to the overall numbers. However, among the few Clinton voters who want the wall built, over half (52.6%) would only spend up to $10 billion, and only 31.6% would build it without considering cost. Summarizes sociologist Zey, author of many books including Ageless Nation, "Throughout the election campaign, Trump repeatedly argued that a restriction on both legal and illegal immigration would stem the influx of cheap labor and thereby strengthen Americans' job and wage prospects. He also linked illegal immigrants entering via the US-Mexico border to terrorism and crime. Americans not only voted Trump into office but also provided him a GOP House and Senate to produce legislation that addresses their concerns. Expect Trump to follow in the footsteps of previous presidents and make good on his campaign promises through legislation and executive orders." Read more exclusive Trump survey results and check your credit score and credit report for free within minutes with Credit Manager by MoneyTips. Photo © Originally Posted at:'s Headlines Trump and Taxes Part 2Poll: 57% Of Americans Think Trump Will Affect Their Retirement StrategyHow Will Trump Affect The Workplace

Today's Headlines: Credit Scores Drop For Mortgage Refinances

MoneyTips Opening Up the Housing Market According to a recent report by The Urban Institute, mortgage credit is coming into reach for a growing number of Americans. The median credit score associated with home mortgages backed by primary mortgage purchasers Fannie Mae and Freddie Mac dropped from 742 to 725 between June 2016 and April 2017, resulting in the lowest median value since the housing crisis. At the same time, Fannie and Freddie are altering one of the primary criteria for potential mortgage borrowers. Both agencies are increasing the acceptable limit on debt-to-income ratio (DTI), the percentage of your gross income devoted to paying off your monthly debts, from 45% to 50%. In essence, lenders are willing to cut you more slack on your debt load when evaluating your ability to repay a mortgage. On the surface, this is good news for the housing market. A lower median credit score and greater debt tolerance opens up the housing market to more potential homebuyers, helping to spur market growth. However, each factor has secondary considerations that may blunt the positive effects. Supply and Demand The Urban Institute's more detailed analysis found that mortgage refinancing was the primary driver in falling median credit scores. The median credit score for refinancing actually rose from June 2016 to October 2016, and then fell 27 points to reach 725 in April 2017. Median credit scores for home purchases also hit 725 in April 2017, but only fell four points from October to reach that mark. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. The data shows a similar cycle between October 2014 and July 2015, where the median score for refinancing increased and broke away from the median credit score for home purchases, only to fall back to the same level. Why would these cycles occur? It may relate to differences in supply and demand. For home purchases, supply and demand are dictated by the number of available homes in the price range of potential homebuyers, the number of buyers competing for those homes, and the general financial conditions of those homebuyers. With refinancing, the number of available homes or buyers is not a factor – you only care about your home and its current value. Refinancing requires a low enough interest rate for you to see a financial benefit. Rates have been relatively low for some time, and many who qualified for refinancing have already done so – leaving lenders scrambling for more business in this segment. Rising home prices and interest rates that are still relatively low make refinancing a reasonable opportunity, but to get the desired loan volume, lenders must find ways to extend loan qualifications in a responsible way. Lenders and the agencies are not adjusting rules out of empathy – they are proceeding because it's a sound business decision from their perspective. Recalculating Acceptable Risk While lenders may be willing to extend the DTI limit to attract more customers, they're not willing to simply open the floodgates as in the pre-crisis days. There is still genuine business incentive – and regulatory pressure – for lenders to accurately gauge borrowers' ability to pay. Fannie Mae made this clear, noting that over a decade of research has shown that borrowers that fall into the 45% to 50% DTI range are a relatively good risk and not likely to default. Many have mitigating factors such as significant down payment funds or financial reserves. In order to maintain the same risk ratio, it's possible that borrowers with a higher DTI ratio — but an otherwise stellar credit history — could receive a mortgage loan over a borrower with a DTI ratio below 45% but with other extenuating factors, such as a history of periodically missing payments. The DTI shift is increasing the pool of potential applicants, but not necessarily the number of approved borrowers. These changes may help you to qualify for a mortgage, especially a refinancing loan, but in the end you still have to qualify based on your collective financial metrics. The Takeaway Lower credit score thresholds and greater acceptable debt levels may make it easier for you to buy or refinance a home, but you need to consider all factors carefully before taking on a new mortgage. Just because you have the ability to act doesn't mean you should. For refinancing, start by setting your objective. Are you simply trying to lower your monthly payments? Pay off your loan earlier and save on total interest cost? Remove private mortgage insurance? Once your objectives are clear, it's relatively easy to use online refinance calculators to determine if your desired benefits are greater than the refinancing costs. You must be equally cautious when buying a home. Don't be tempted to buy a larger, more expensive home than you need – especially when you are now able to qualify because your current debt load is considered to be less of an obstacle. The bank may have decided that you will be able to repay the debt, but can you realistically agree? Map out your future budget assuming occasional large, unexpected expenses to verify that you are likely to avoid dangerous debt levels. If you find that these new conditions are in your favor, congratulations! Feel free to take advantage of your new opportunity. Just don't let it take advantage of you. MoneyTips is happy to help you get free mortgage and refinance quotes from top lenders. Photo © Originally Posted at: Of First-Time Homebuyers Kept Out Of MarketVideo: How Your Credit Score Affects Your Mortgage RateToday’s Headlines: Housing: Supply Down, Prices Up

Roth 401(K) Better Than Traditional 401(K)

MoneyTipsIs a Roth 401(k) preferable to a traditional 401(k)? Generally, that depends on tax rates and whether you prefer to pay taxes as you contribute in your working years or as you withdraw funds in retirement. Roth 401(k) plans are created with after-tax funds, while traditional 401(k) plans are funded through pre-tax dollars. By choosing a Roth 401(k) and paying your taxes upfront, the savings in your account grow tax-free, and once you have held the account for at least five years and are past age 59-½, your withdrawals are also tax-free. Withdrawals from traditional 401(k) plans are taxed as ordinary income upon retirement. Harvard Business School researchers found that Roth 401(k) accounts produce greater purchasing power in retirement than traditional 401(k) programs because of basic human nature – people's tendency to use rules of thumb when determining their retirement contributions. Contributions are often made in terms of percentages or dollar targets, and a flat savings rate makes a huge difference when considering pre-tax vs. post-tax dollars. Let's assume that you are maxing out your 401(k) at the current limit of $18,000 annually (and that you haven't reached age fifty yet to allow a $6,000 catch-up contribution). With a Roth 401(k), that $18,000 contribution will still be worth $18,000 at retirement. With a traditional 401(k), that $18,000 contribution is only worth $18,000 minus whatever tax rate applies at retirement. To think about it another way: If you are contributing $18,000 to a Roth 401(k), you are indirectly contributing more than $18,000 toward your retirement because you are also paying the taxes on those funds in that same year. This advantage could be partially neutralized by future tax rates. If you are in a high tax bracket now, your tax bracket in retirement is likely to be significantly lower – thus the taxes you pay now by contributing to a Roth 401(k) are greater than the taxes you will pay upon withdrawal. Lead study author John Beshears gives the following example in an interview with the Wall Street Journal: Assume an annual $5,000 contribution to a 401(k) for forty years until retirement, with a 5% return. The balance will be $600,000 at retirement. At a 20% tax rate – not unreasonable upon retirement – the spending power is reduced to $480,000. With a Roth 401(k), the spending power of that nest egg is still $600,000. While the Harvard study finds that Roth 401(k)s tend to result in greater purchasing power, that doesn't mean that you should dismiss a traditional 401(k). If you are maxing out your 401(k), a Roth is clearly a better choice – but otherwise, you can simply adjust the contribution amount to a traditional 401(k) upward to account for anticipated taxes at retirement, and gain the further tax advantage of lowering your taxable income during your working years. Depending on your employer's plan, you may be able to hedge your bets. Some employer plans allow you to have a traditional 401(k) and a Roth 401(k) simultaneously – but your total contributions are still capped at the annual limit. You may be able to alternate annual contributions between the two accounts, or possibly divert an annual percentage to each account. The cost/benefit calculations are not straightforward and require some assumptions on growth, inflation, and tax rates. We advise running scenarios on your preferred retirement scenarios using online calculators – or, better still, seek the advice of a financial professional who can address your retirement goals and lay out your best options in an understandable way. Let the free Retirement Planner by MoneyTips help you calculate when you can retire without jeopardizing your lifestyle. Photo © Posted at: 6 Things to Do for Your Retirement at Age 50The Biggest Retirement Mistake is Complacency5 Common Mistakes in Retirement Investments

Save Money By Making Internet Shopping Harder

MoneyTipsFor years, shopaholics had to battle against the ease and convenience of late-night TV ads. Their classic pitches led thousands of people to buy items that they did not need, all available with a simple phone call. The advent of 24-hour shopping channels like QVC and the Home Shopping Network made it even easier to spend yourself into bankruptcy. Then, the Internet arrived. Internet shopping allows you to search for any item you can think of and purchase it online with a simple click of the button and entry of a credit card — or just the simple click if your payment information is already on record. Even browsing the Internet with no intention to buy can turn into a shopping spree if you run across items that you "simply cannot do without." What's a shopaholic to do? The first order of business is to admit that you have a problem with impulse shopping on the Internet. After that, it is a matter of setting up minor roadblocks to make Internet shopping more difficult without taking drastic measures like closing your credit card accounts. Consider these measures that will slow down the process and give you time to reconsider whether or not you really need that customized bowling ball or package of thirty smartphone covers. Do not Store Information – Most sites encourage you to store your basic information so that they can expedite the checkout process — especially your shipping and credit card information. Your browser is probably set to autofill the information into most forms. Disable the autofill capability of your browser and decline to store credit cards and other information online. It will take you several minutes to enter that information, which may be enough time to talk yourself out of the purchase. Budget your Small Purchases – Apps for mobile devices are so cheap that it is easy to make impulse buys without thinking how quickly small purchases add up. That is also true for music purchases through iTunes, or other similarly inexpensive downloadable items. Set yourself a budget by using a prepaid gift/credit card and use it to budget small app and download purchases. Load it at the beginning of the month with your budgeted amount and track the balance during the month. You may run out in the first month, but with time, you will learn to track your spending and get in the habit of controlling your purchases throughout the month. Pause Before Checkout – Websites give you the opportunity to review your basket before purchase to make sure that all the details are correct. Take a set amount of time (perhaps five to 10 minutes) to leave the items in your checkout basket and simply walk away from the computer. If you still want the items when you return to the computer, go ahead — but at least you will have had some time to think about it. Block Sites – If nothing else works, try blocking sites at various times during the day when you are most vulnerable to impulse purchases. Programs like StayFocusd or Leechblock can allow you to block websites temporarily and save you from draining out your bank account. We hope that these tips can help you from maxing out your credit cards with Internet impulse buys. If not, you may want to shop exclusively at stores with liberal return policies. At least, then there’s a chance you’ll have come to your senses by the time the now-unwanted purchase arrives. If you want more credit, check out MoneyTips' list of credit card offers. Photo © Originally Posted at: Online Store Return PoliciesWackiest "Of The Month" ClubsToday’s Headlines: Online Shopping Surpasses In-Store

Survey Shows People Using Credit Cards For Home Renovations

MoneyTipsAre you planning to renovate your home in 2017? There's a better than 50/50 chance that you are, if a recent poll by LightStream is accurate. The January 2017 LightStream Home Improvement survey found that 59% of homeowners plan to spend money on renovations during this year, with 42% of the planned renovations costing $5,000 or more. Surprisingly, while 60% of those planning renovations intend to fund their project out of savings, 29% plan to pay for their home improvements with a credit card. That's far more than the 9% expecting to use a Home Equity Line of Credit (HELOC) or the 7% who prefer to take out a home improvement loan. Use of credit cards to pay for home renovations appears to be on the rise. The 29% cited in the 2017 survey represents an increase of four percentage points over the 2016 survey. Is it wise to put such a large expense on your credit card? That depends on your financial situation and your renovation plans. Paying for home renovation costs with your credit card can earn significant credit card rewards, but those rewards can be quickly negated by interest charges if you have to carry a balance. Review your renovation budget to see how long it will take to absorb the costs, and whether the costs can be spread out evenly enough that you can avoid carrying a balance throughout the entire project. Compared to a HELOC or a home improvement loan, credit cards are likely to have considerably higher interest rates. If your renovation budget is likely to surpass your cash flow, it makes more sense to review loan options and rethink the use of plastic. There's no guarantee that loan terms will be better, especially if you have a poor credit score or enough collective debt that you only receive high-interest rate offers, but at least you have options to consider. (You should probably also consider whether you can afford to renovate at this time.) Do you need to move forward quickly with your renovation? If so, credit cards may become a more attractive (and instantaneous) option – but loan approval process times vary by vendor, and you may be able to find loans with attractive terms that only delay your plans by a few days. In essence, if you cannot afford to pay off your renovation costs out of your savings, you should compare your credit card terms with loan options. How do HELOCs or home loans that you can qualify for compare to your credit card interest rate? Use online resources to compare the interest charges over the life of a loan with the estimated interest charges on credit card balances. Don't forget to consider the effect on your credit score under either scenario. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. If you can afford renovation costs up-front, it probably makes sense for you to use your credit card instead. Pay off all charges at the end of the month, and reap all the possible rewards. You may temporarily close in on your credit limit and lower your credit score, but your credit score should fall back into shape once your spending returns to normal levels. Perhaps you can apply your credit card rewards toward a final accent piece that makes your renovation complete – or take a well-deserved vacation instead. You can always enjoy your new home renovations when you return. If you want more credit, check out MoneyTips' list of credit card offers. Photo © Originally Posted at: Improvement Spending On The Rise5 Home Improvement Projects under a GrandMortgages for Buying and Improving a Home

The Costs Of Convenience

MoneyTipsWe live in a world where convenience is king. Sometimes we buy products purely for the convenience aspect without even giving them a second thought. If you are struggling with your budget or just wondering whether a particular purchase was wise, perhaps it is time to rethink the balance of cost vs. convenience. There is no single answer for cost versus convenience — it is an individual decision based on many factors. Your income level, available free time, stress levels, where you live, and even your particular stage in life come into play. Your decisions may be different when you are young and single compared to when you are a parent with multiple toddlers or past retirement age and into your twilight years. Spend Time or Spend Money If you are questioning some of your cost vs. convenience decisions, consider the following examples below and some of the tradeoffs involved. Which philosophy do you agree with? Dishwashers – You have a dishwasher because dishwashers save time — but do they? Are you one of the people who pre-washes their dishes to the point that putting them in the dishwasher is superfluous? Do you overload your dishwasher or make such messes that dishes do not come out sufficiently clean? In either case, why did you spend $300 to $500 on a dishwasher? Disposable Diapers – For many parents, disposable diapers are a godsend. Any parent who has dealt with a diaper emergency two minutes before they have to leave for work understands its appeal. However, not only are they expensive compared to cloth diapers, they are unquestionably worse for the planet. Your decision here involves social costs as well as economic costs. Convenience Foods – From frozen dinners and pre-packaged small bags of lettuce to 100-calorie snack packs, specially packaged foods are likely the most often-used convenience items in your home. Yet with time, most of them could be easily replaced for half the money or less. It may take a lot of time and effort to prepare a fresh dinner compared to a frozen one, but how hard is it to buy snacks in bulk and package them into 100-calorie portions yourself? Another consideration with convenience foods is whether the packaging fits your needs for perishable items. If you are eating solo, it may be cheaper to buy a head of lettuce and throw away half of it compared to buying a small prepared bag that is twice as expensive — but is it responsible to do so? Robotic Room Cleaners – These sound so simple — just turn them on and let them go. For $400, you can have something that automatically vacuums your house while you are at work. The tradeoff depends on how much time you spend sweeping/vacuuming your house, and whether the robotic cleaner is reliable enough to meet your needs. There have been tales of robot vacuums meeting animal waste that resulted in more mess, not less! Microwave Ovens – Today these seem like a necessity, yet for years people got along just fine without them. Just for fun, write down every use of your microwave for a month. Could you have used your oven or other appliances to create the same meal? Most of us would consider a microwave a necessity now, but it ties in with the concept of convenience foods listed above. How much time do you save and is the microwaved dish equivalent to oven-baked? In most of these cases, the question is how to place a cost value on your time. If you were a business, you could assign yourself the cost of a salary and make a decision from a purely economic standpoint. While that analysis is possible, let's face it ... most of these decisions have little to do with economic tradeoffs. They usually boil down to likes and dislikes ("I hate cleaning the floors or chopping vegetables"). That is why convenience items exist, and often sell briskly. If you want more credit for that "must-have" convenience item, check out MoneyTips' list of credit card offers. If there is one direction modern society has been moving in during the last 100 years, it is convenience. We are living in an era of conveniences, but at what price? Let’s not forget that the first syllable of convenience is con. Photo © Originally Posted at: to Create a BudgetSpending Less than You Make Paying for Fish That You Don't Get

College Students Wasting Millions On Avoidable Fees

MoneyTipsCollege is not only supposed to give you the skills you need in a particular field of study, but also the general life skills that you need to survive and thrive. Without good habits, your collegiate financial education can come via the school of hard knocks – through incurring fees and interest charges. According to a new NerdWallet study, America's college students spend almost $800 million per year on bank and credit card fees through college-sponsored accounts with partnering financial institutions. These fees are generally avoidable through responsible handling of finances. Students incur typical overdraft fees and late payment fees of around $35 per incident on average. Given that the average college student overdraws a bank account 2.2 times annually, undergraduate students in America rack up over $722 million in overdraft fees alone. That’s nearly three-quarters of a billion dollars! The study also found that one-third of soon-to-be-graduating students with credit cards have missed a payment date and incurred a late payment fee, adding up to approximately $73 million annually. Combined overdraft and late fees were near $800 million in the past year and are likely to continue on past the $800 million mark before the end of 2017. Throw in interest charges from carrying credit card balances, and the annual cost to students surely passes the $1 billion mark. Through a 2015 set of guidelines aimed at colleges and universities, the Consumer Financial Protection Bureau (CFPB) has tried to act as an advocate for students. The guidelines were intended to assist schools in selecting partner banks that provide the best financial packages for their students. Progress is slow, as the CFPB's 2016 Student Banking Report found that "many general marketing agreements do not prohibit certain fees account providers may charge students." These fees could include overdrafts, maintenance, and ATM fees on out-of-network devices. How can you avoid these charges? Overdraft charges can easily be avoided by selecting an account that doesn't charge them, whether or not that account is part of your college's network. Credit unions or online banks may offer you a better alternative. You can generally set up your account to de-activate "overdraft protection," meaning that banks will reject transactions instead of allowing you to spend beyond your limit and incur a charge for the privilege. Make sure that your account doesn't charge an insufficient funds fee for rejecting the charge – and that you have a second means of paying for important charges. As to late fees, the only way to avoid them is to make your payments on time. Even if you must carry a balance, you must pay on time to avoid the double penalty of late charges and a drop in your credit score. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. In addition to late fees, many cards for the collegiate market will activate a penalty APR that can approach 30% – imposing a heavy penalty on carrying a balance. College students can use one advantage they have over older Americans – their love for technology and apps. Gerri Detweiler, Head of Marketing Education for Nav, explains, "You can set up alerts for your bills...use technology to stay on top of your bills, because one late payment can drop your credit score 50, 75, 100 points or more." That same philosophy will keep you from accumulating unnecessary late fees, not to mention interest charges from carrying the balance over to the next month. The easiest way to avoid banking fees is simple yet difficult – don't spend more than you can afford to pay off at the end of each month, and make sure that all bills are paid on time. This requires budgeting skills. Track your expenses to get a feel for where your money really goes. Incorporate those expenses into a long-term budget, and stick to that budget. It's best to get used to budgeting prior to college before you are faced with college's unique combination of expanded freedom and temptations to blow cash. College is expensive enough without throwing away money through unnecessary fees. Educate yourself on proper handling of personal finances, and put what you learn into practice. That way, you will have plenty of pizza and beer money when you need it, and your friends will be asking for your secret. Be sure to teach them fiscal responsibility as well – next time, they can buy. If you are starting from scratch with no credit history, check out MoneyTips' list of credit cards for limited or no credit, which can help you to build a credit history. Photo © Posted at: Overdrafts 101How To Avoid Bank Overdraft Fees30% Of Credit Cardholders Carry Balances

Tips For Downsizing

MoneyTipsMost people have no idea how much stuff they have accumulated in their lives until they decide to move. Try packing all of your possessions and watch the boxes multiply. You will be amazed at how your stack of possessions becomes larger than the house they were stored in. Moving defies the laws of physics. In a similar vein, you may be wondering where all your money goes. You may think that you have budgeted properly, but constant unexpected and undocumented expenses slip through the cracks and consume your paycheck. You always end up with too much stuff and not enough money. There is a common thread to solving both of these problems. Downsize and simplify. Here are a few tips to help you restore order in your physical house as well as your financial house. Avoid Procrastination – It's important to dive right in, even with the understanding that you cannot deal with the whole task at one time. Simply starting the downsizing process will help to create positive momentum. Cleaning up your house by sticking all of your things in a storage locker just prolongs the inevitable and gives you a false sense of having dealt with the problem. Similarly, cramming all your bills into a shoebox with the intention to sort them out and prioritize it later delays the process. Start the simplification process today. You will feel so much better once you do. Downsize in Consistent Increments – To paraphrase, Rome wasn't de-cluttered in a day. Unless you are already in a position where you have to move soon, or nearing the point of being featured on a TV show about hoarders, attack your downsizing and organization in manageable increments. Downsizing and simplifying in increments on a regular basis is an excellent way to be prepared when you hit the empty-nest years. Instead of spending months trying to deal with twenty-plus years of accumulated possessions and feeling pressured to make snap judgments, you have the time to think about items that you cannot get rid of just yet. Think of it as a series of trial runs at de-cluttering. Make Value Decisions – Too many people simply let items pile up or accumulate running expenses out of a combination of tradition and laziness. Do you have a premium cable package, but only watch three channels? Consider downsizing the premium package or cutting the cord. Do you auto-renew gym memberships you don't use or magazine subscriptions you don’t read? Out they go. Have a stack of magazines and books you've been meaning to read someday? You will probably never get to them. It's good to evaluate possessions and expenses periodically to see if you are getting value out of them. If an object or expense doesn't provide value, you don't need it. Beware Duplicates – Possessions have tremendous powers of accumulation. Do you have 47 storage boxes full of each child's mementoes from preschool to grad school? The chances are pretty good that you won't need all of them to retain your happy memories. Make choices that preserve the sentimental value without adding to the clutter. Keep one third-grade project if you must, but not all of them. Apply the same principle to all of your possessions. Budget Money and Space – Set a goal for a certain amount of space in your home for storing mementoes. Similarly, set a budget for your expenses, and leave yourself a certain amount for discretionary purchases. If you want more credit, check out MoneyTips' list of credit card offers. Now, stick to those goals and follow the principle of something in, something out. Any new memento displaces an older one, and any new discretionary expense replaces an older expense. With expenses, this may not always be possible, but do the best you can to stick to the rule. Once you are comfortable with periodic reviews, shrink the allotment over time. Shrink your expenses and transfer the difference to savings. Shrink the memento space in your home and enjoy the reduced clutter. Consider novel space-savings methods. For example, sentimental mementoes can take up enormous amounts of space. Would any of them be equally preserved with a space-saving photo of yourself with the memento instead of the physical memento? We'll say it again: Downsize and simplify. Do this on a regular basis and you are likely to enjoy less stress, better physical and financial health, and greater efficiency with your time. You may even have time to watch some hoarding shows on TV featuring people who could never make value decisions in their lives. Feel free to gloat. Photo © Originally Posted at: Living Paycheck to PaycheckMillennials are Not Saving for Retirement1 In 5 Have No Emergency Savings

Video: How Your Credit Score Affects Your Mortgage Rate

MoneyTipsShould you wait until your credit score is higher before taking out a home loan? Personal Finance Expert and Author Jordan Goodman explains your options for getting the best mortgage rate. You can check your credit score and read your credit report for free within minutes using Credit Manager by MoneyTips. Originally Posted at: Can I Get the Lowest Mortgage Rate?7 Ways To Reduce Your MortgageToday's Headlines: Credit Scores Drop For Mortgage Refinances
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