Category Archives: Managing Debt

What Happens After You File for Bankruptcy?

Managing Debt

This article was contributed to Leisure Freak by freelance writer Stephanie Caroline Snyder. The decision to file for bankruptcy should be done with full knowledge of what to expect.

Navigating a chapter 7 or 13 bankruptcy can be intense and fear-filled. Uncertainty about what’s to come can affect every aspect of life for you and your family. Bankruptcy has its benefits, but please take the costs into careful consideration as you proceed with the filing. To ease some concerns you may have, read over the key points of what to expect during this time.

Typically after filing your claim, you will:

  • Begin Automatic Stay status
  • Be assigned a court-appointed trustee
  • Complete pre-discharge requirements
  • Discharge your case and begin recovery

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Automatic Stay: Which Debt Collections will be Paused or Stopped?

Immediately after receiving the acceptance of your claim, most of your creditor’s collection efforts, your credit report will transition into Automatic Stay status in the government system. This prohibits creditors from contacting or collecting any capital from debtors. Instead, all transactions are completed by a neutral administrator. Once this is in effect, there are some financial responsibilities that will remain active. Debtors are expected to continue payments for:

  • Support Cases
  • Pension Loans
  • Criminal Requirement
  • Specific Tax Proceedings

However, being listed under automatic stay will cease the collection of most other payments each month until your case is discharged or completed. This pause in collections provides protection from situations that would have been detrimental without taking action. Multiple garnishes from your paycheck, being evicted from your home, and foreclosure on your residential or commercial property are all examples of inclusions under automatic stay protection. Disconnection or interrupted utility services such as electricity, water, and waste management are provided by the city or state.

What Your Appointed Trustee is Responsible For:

The roles of court-appointed trustees alter from cases under each chapter of

bankruptcy filing options. The two most common are chapters seven and thirteen. Whoever the court appoints to delegate your case with your bankruptcy lawyer in NJ or your local area, they should keep your bests interests in mind.

Chapter seven trustees will analyze and collect any property agreed upon and then facilitate sales of those assets, challenge creditors’ claims when needed, and transfer funds from debtors to creditors. Your case’s discharge objectives will also be determined by your assigned trustee.

Alternatively, a Chapter thirteen bankruptcy filing trustee has different obligations. He or she will review your repayment plan and likely make objections to some content within it. Work with them patiently to find a middle ground that will satisfy the court while being manageable with your current income. This trustee is also the person to whom you will submit payments, and who will transfer the funds to creditors.

Being Prepared for the Final Court Meeting:

Before the last meeting with your appointed trustee and the creditors in court, you will be required to attend a credit counseling session and a debtor education course online. This course will provide you with information to increase your financial management skills to avoid having to file for bankruptcy in the future. You will need to visit the government website to find agencies that offer approved services for both the counseling and course. Each event will take roughly an hour to complete. You will receive a certificate of completion from each program to present to the court.

What Your 341 Meeting of Creditors will Entail:

You are required to attend the 341 meetings. Your bankruptcy lawyer will also be present to represent your case. The court-appointed trustee will facilitate the meeting for your case and probably about ten others who are scheduled for that date and hour in the same courtroom. Creditors may have representatives present for the meeting, but they are not required.

The bankruptcy trustee will place you under oath and you will need to verify your identity with both your state-issued ID card and your social security card. The trustee will inquire about the accuracy of documents that have been filed with the court, determine if you have assets that are not protected under exemption qualifications, and discuss any other issues that may affect the administration of the estate.

Questions you will be required to answer:

  • Did you review your bankruptcy schedule thoroughly before signing and do you understand the terms and conditions to which you are signing?
  • Are all of your schedules truthful and accurate?
  • Have there been any changes made to these schedules?
  • Are all of your assets on file with the court?
  • Have you included all of your debts in filing this case?

Additional questions you may be asked include:

  • How were your home and automobile valued?
  • Do you have claims files against other agencies or individuals?
  • Are you expecting to receive an inheritance from a loved one?
  • Have you transferred any of your assets prior to filing?

You will be under oath while the trustee examines your case. Be honest and forthright, and listen to your lawyer’s suggestions when applicable. Additionally, although it is not mandatory for your creditors to attend the meeting, they might show up with a representative to examine you under oath along with the trustee.

Recovering After Bankruptcy:

Filing bankruptcy is a lengthy process even after your case has been discharged. It takes ten years and longer to financially recover from filing. You will likely face many challenges if you need to apply for credit. You face losing assets and reputation. However, bankruptcy allows you a financial fresh start and a chance to correct poor decisions made in the past if utilized wisely.

Maintaining stable residence and employment, keeping a consistent bank account balance, and paying your bills on time every month by making and following an actionable financial plan to stay within your means are the best things you can do to recover successfully. When you decide to begin rebuilding credit, be sure to exercise enhanced caution and make wise decisions to avoid taking on more than your family can endure.

 

Much thanks to Stephanie Caroline Snyder for contributing to Leisure Freak this informative post regarding a touchy subject and process that many people know little about. 

Author’s Bio:

Stephanie Caroline Snyder graduated from The University of Florida in 2018; she majored in Communications with a minor in mass media. Currently, she is an Author and a Freelance Internet Writer, and a Blogger. 

Steps to Pay off Debt and Save for Retirement

Managing Debt, Saving Money

This post was contributed to Leisure Freak by attorney Camron Hoorfar who specializes in issues of debt.

The current uncertain economic situation is making many Americans rethink their finances. The figures about consumer debt are a concern for many people. So, if you are thinking about paying off debt and saving for your retirement, you are not alone. 

The ideal approach is to look for ways to settle your debts and focus on a savings plan. You can then use the savings for investments to create a source of income when your paycheck stops rolling in after your retirement. 

So, here is a step-by-step guide you can follow to pay off your debt and save a substantial amount for your retirement. We have divided it into two parts, wherein the first one focuses on bringing down debt while the other one tells how to increase your savings.

Ways to Reduce your Debt Burden

Debt reduction and retirement savings are connected. Unless you settle your debts, you will not have enough money to save for your retirement plan. Therefore, the first thing you need to do is pay off your debt. Here are some ways through which you can achieve the goal of reducing your debt.

  • Pay off Expensive Debt First 

Firstly, list down all the debts with a high-interest rate, such as credit card debt or student loans. It is vital to understand that not all debt is bad. If you have a mortgage or a car loan, it is eventually contributing towards your retirement savings. 

However, debts with high-interest loans will quickly drain your finances. 

Therefore, your priority needs to be increasing payments to get rid of those debts quickly. Once you clear out all your high-interest loans, you can divert those funds towards an investment plan to have a significant amount when you retire.

  • Create an Emergency Fund 

Emergency funds are essential in case you have to deal with an unforeseen expenditure. There is no saying when you have an urgent bill or medical expense to deal with.

 If you don’t have a pool of resources available to deal with it, you will have to turn towards high-interest loans, which can further plunge you into more debt. 

But with a backup plan, you can effectively deal with the expense without taking on more debt. The ideal amount in an emergency fund should cover around 6 to 9 months of your basic expenses. Also, it needs to be as good as cash since you will need quick access to the money.

  • Revise your Budget to Cut Down Expenses

Updating your budget can primarily help you reduce your debt, but it can help in also increasing your retirement savings. You can kill two birds with one stone if you can revise your budget and look for ways to bring down your expenses. By doing so, you will have extra cash in hand. 

You can use it to pay off your high-interest debt, or if you want, you can add it to your retirement savings as well. If you don’t have a monthly budget, then it is high time you create one to find out how much you are making, spending, saving, or investing. If you already have a budget, you need to revise it. 

Also, when creating a budget, you need to consider a debt reduction plan and a savings plan. You need to allocate some money for both of them, so it will be easy for you to maintain a balance in saving and paying off debt.

Ways to Increase your Savings for Retirement 

Now that you know about the steps to reduce your debt, you can use the saved money and channel it towards your retirement plan. Here is how you can increase your savings in 3 easy ways.

  • Take upon a Side Hustle 

If you have the time and energy, it is better to invest those valuable resources in creating a new income stream. With the extra cash in hand, you can save it up and use it for your retirement plans. 

Although it will be challenging and tiring to take up a second job or a side gig, it is still better than being in debt or with no money in your retirement. The extra pool of resources can help you build an emergency fund sooner. 

You can also use the extra cash to pay off your debt. However, it will be best to save it rather than spend it on anything else. In addition, taking a side job gives you the advantage of stretching out your working life and getting health insurance to cover the time to your Medicare age.

  • Set Incremental Saving Goals 

It is best to go for an incremental strategy by setting small targets for your saving plan. You can’t save all the money in the short run if you plan to have a substantial amount in your hand upon retirement.

 So, it is better to set achievable saving goals and duration to achieve them. It will not burden you too much and will give you a plan on how to proceed with your savings.

  • Take Advantage of your Employer’s Contribution in Retirement Planning

The best way to save up more money without any hassle is by contributing more towards your retirement plan. If you have a 401(k) or 403(b), your employer will give you the same amount you are saving.

 So, if you are saving up to 10% of your income, the employer will match it by giving the exact figure. 

You should work towards raising the proportion of contribution to retirement savings. You can take advantage of it till you’ve reached your employer’s optimum defined contribution plan. Also, check the duration of the time before your employer can vest into your retirement plans.

In a Nutshell

By following these easy steps, you can settle your debts in no time and have an ample amount of money for your retirement. To summarize, all you need to do is pay off the expensive loans first. Next, you need to use the saved up money to invest in your retirement plans. 

You can always take the help of financial advisors if you are not sure where to begin from. These advisors analyze your situation and give you a pathway to reduce your debt and increase savings for your retirement.

Much thanks to Camron Hoorfar for sharing his steps to pay off debt and save for retirement.
About the Author:

Steps to Pay off Debt and Save for Retirement

Camron Hoorfar is a licensed attorney with vast experience in consumer debt, litigation, bankruptcy, tax, business laws, criminal laws, and non-profit organizations. He is also the spokesperson of DebtConsolidationCare – the Internet’s first get out of debt community.

Why You Should Eliminate Debt Before Saving Money

Financially Free, Managing Debt

 

Today’s informative post was contributed to Leisure Freak by money master Chris Panteli of the site Life Upswing.

Building up savings is an essential part of becoming financially healthy. At the very least having an emergency fund that can cover 3-6 months’ worth of expenses is recommended. However, if you have debts you may be wondering if you should save or pay off debt first!

How do you know if you should eliminate debt before saving your money?

Good news, this guide will help you understand why you should pay off your debt first. As a bonus, there will be some tips on how to pay off debt quicker.

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The First Steps

OK, you’re in debt up to your eyeballs and are asking yourself what to do first. First, take a deep breath and tell yourself that it will be OK.

The next thing you need to do is to create a realistic budget. Include all expenses to the exact penny and importantly every debt. Once you know exactly what your incomings and outgoings are you can build a plan to tackle the debt.

Why You Should Eliminate Debt Before Saving Money

There are a few reasons why you should concentrate on paying debt down before saving. To start with, some debts have insanely high-interest rates. Debts like payday, pawnshop, and car title loans can have an Annual Percentage Rate (APR) of over 100%!

When debts have high rates like this it’s important to get them paid off as fast as you can. Otherwise, those debts can quickly spiral into enormous amounts of money.

Another reason to pay off    debt first is that in the long run, you will have more money available. Paying only the minimum payment means it takes longer to pay the debt off    and you pay more because of interest charges. When one debt is paid off, you now have that money free to put towards other debts. When all the debts are cleared you now have plenty of money to add to your savings!

What Is The Best Way To Tackle My Debt?

As mentioned earlier you should pay off the high-interest debts first. Once those debts are cleared start tackling the low-interest debts like student loans, car loans, and mortgages.

To pay off your debts there are two strategies you could consider using.

The first strategy is called the snowball method. To begin with, list all your debts by total amount with the smallest first. Then concentrate on paying them off    in that order, from smallest to biggest. When each one gets paid off    the money you are saving can help pay off    the next debt quicker.

Many people find the snowball method works well for them because getting a debt cleared is a psychological boost. Even though at first, it’s only small amounts getting paid off    this motivates many to keep going.

Another method that is popular is called the avalanche method. You will need to list your debt by interest rates rather than the amount owed. Once listed start paying off the debts with the highest interest rates first. Make sure to keep paying the minimum payments on everything else of course. If you have a lot of high-interest debt like credit cards or payday loans, the avalanche method is usually the best one to follow.

Whatever method you choose for paying off debt never forget to pay at the least the minimum payment on everything. Keeping accounts up to date helps avoid falling further into debt with additional fees or higher interest.

4 Tips To Pay Off  Debt Quicker

To get debt-free quicker here are some suggestions that anyone can do. All these tips can result in having more money available, the extra money can then be used to pay off    debts quicker!

Start A Side Job

Starting a side job has never been easier thanks to the internet. You could find work online or offline and earn extra money. Ideas for online side jobs include starting a blog, freelancing, or data entry.

If you prefer working offline think about finding work as a delivery driver, an uber driver, or look around your area for part-time jobs.

Give some thought to your skills and search online for suitable opportunities. There are thousands of things you could do to earn extra money!

Live Frugally

Frugal living is all about prioritizing your spending to make sure not a single cent is wasted. To live frugally cut out all unnecessary spending on things like eating out, subscriptions, and memberships.

When making a budget ensure that every single cent is accounted for.

Make sure to claim coupons, discounts, and cashback whenever you can. To get started check out sites like Ibotta, Honey, and Swagbucks to find offers that can help save money. Switching to cheaper brands when grocery shopping can also be a great way to save money.

Use The 30-Day Rule

A great tip to cut spending is to use the 30-Day rule. When you see something that you want to buy you need to put the money aside for 30 days. At the end of the 30 days, you can buy the item if you still want it. Often the result is you will no longer want the item and can now use that money for anything else, including paying off debt quicker!

Negotiate Bills

A great way to save money is to reduce your expenses. Negotiate every bill you can such as insurance, energy, and cable. Also, cancel subscriptions you no longer need. Don’t pay for the gym, Netflix, or magazines if you aren’t using them anymore!

Should I Save Anything?

Ideally, everyone should at least have an emergency fund that could cover 3-6 months’ worth of expenses. However, if you have lots of debt it makes sense to clear that first, and then you can save more. However, does that mean you should save nothing?

If you can afford it, try to save something each month. When creating your budget prioritize debts and expenses, but if there is some left over do try to save it. Building the habit of saving will be good in the long run. This is because when you do have more money you will find it easier to save all or some of it.

Ultimately the choice is yours. You could put everything towards debts first, then start saving but saving just a few dollars a month soon adds up over time.

Final Thoughts

One thing you mustn’t do is ignore your debts. You can’t eliminate debt without taking action!

Start by listing all your debts and making a budget. Then, follow the advice here and get those debts paid off. Once those debts are gone you have extra money to save, invest, or treat yourself to a dream holiday!

 

Thank you Chris for contributing this debt elimination guide to Leisure Freak. One of the first steps towards financial independence and the freedom it brings is clearing debt.

Author Bio
Chris Panteli contributed postHey, I’m Chris Panteli. I have a degree in Business Economics from the University of Liverpool, own a small fast food business and run LifeUpswing.com. I will help you to make money, save money, and think about money in a way that will give you back your freedom.

 

Does Your Credit Score Matter After You Retire?

Managing Debt, Retirement Plan, Saving Money, ,

Retirees, and especially individuals looking to retire early, may wonder if their credit score matters after they retire. The short answer is that it does. You may still need to borrow in retirement, and your credit report significantly affects your ability to do that. 

Individuals with good credit scores get more favorable interest rates on loans. They are also more likely to be approved for loans, to begin with. Higher credit limits are allotted to people with good credit, allowing you to enjoy more of your golden years. 

While your relationship with money may change dramatically upon retirement, it will still be a necessary part of your life. The following are some things your credit score will affect even in retirement. 

Does Your Credit Score Matter After You Retire?

Photo by Elena Saharova on Unsplash

Buying A New Car

Your credit will be checked when purchasing a new vehicle. Many people buy new vehicles after retiring for either travel purposes or to downsize. You may even decide to sell your home entirely and purchase an RV home in which to travel. 

Fortunately, you are unlikely to be denied a car loan even if your credit isn’t stellar. This is because vehicles are easier for banks to repossess should you default on the loan. However, a vehicle will cost substantially more due to higher interest rates if your credit is bad. 

Buying Property

You may still purchase property in retirement, even if you aren’t planning to. For example, you may downsize from your existing home into a condo. Health issues may necessitate moving into an assisted living facility. A better credit score will make it easier and cheaper for you to buy a property of any kind. 

Even if you plan to rent, landlords check credit as well to evaluate the risk of taking you on as a tenant. In fact, your income and credit history are two of the biggest factors landlords evaluate when reviewing your application. Be sure to budget appropriately for your living costs in retirement. 

Refinancing A Mortgage

If you are still paying a mortgage in retirement, it may be a smart idea to refinance your house. Doing so can help you save significant amounts of money on your monthly mortgage payments. However, to get a good deal on refinancing, your credit score has to be good. 

Remember that borrowing against your home equity can affect your credit score. Go in with the best credit score possible and a solid understanding of how a refinance can affect your credit. Your lender can even cancel your refinance loan if your credit score falls below a certain level. 

Keeping Low Insurance Rates

Certain states do not allow credit rating to affect insurance rates, including California, Hawaii, and Massachusetts. If you live anywhere else, insurers can take your credit rating into account when determining your rates. The lower your rating, the higher your rates will be. 

You cannot afford to live without certain types of insurance. In particular, the costs of not carrying adequate homeowners insurance are too high to be worth the risk. Car insurance is legally mandatory. You may also need to carry insurance on items such as boats or RVs. 

Facilitating Better Travel

The freedom to travel is one of the biggest perks of retirement, especially retiring early. Some credit cards give you incredible rewards you can use to travel for cheap or free. However, these cards all require a very good credit score to be approved for them. 

It can also be difficult to travel without a decent credit limit. Doing so can take away money from other necessary expenses. This can create a cash flow problem that could be a real issue under the right circumstances. Never charge more than you can comfortably repay. 

Avoiding Identity Theft

If you haven’t checked your credit score much in retirement, you may be at higher risk for undiscovered identity theft. Identity theft is particularly high among seniors because there are many scams targeted to that demographic. Knowing the status of your credit and being in control of it is key to detecting identity theft immediately. 

Credit cards also offer protection against fraudulent purchases that other forms of payment do not. Aside from guarding against identity theft, credit cards can also come with added warranties for items you purchase. 

Starting A New Business

Upon retirement, you may decide that you don’t want to actually stop working. Retirement can be an excellent opportunity for pursuing a lifelong dream, hobby or passion. To do this, you may be considering starting a small business. 

Many businesses will require loans to set up. Like other loans, you will be charged a higher interest rate the worse your credit score is. This added expense will be a burden on your business from the beginning and make it more difficult to remain in business. It will also be much more difficult to get a business loan at all if your credit worthiness is poor. 

Existing Debt

If you have outstanding debt upon retirement, you will want to maintain a good credit score to keep interest rates low. Credit card issuers regularly change the interest rates of cardholders depending on how their creditworthiness changes. 

Interest can accumulate quickly and put you in a bad financial situation. This is especially true if your interest rates suddenly or gradually increase due to a decreased credit score. Do not let this happen. Continue to pay off debt and maintain a good credit score, and you will pay less in interest over time. 

Getting A New Job

You may not plan to get another job after you’ve retired, but plans can change. Perhaps you decide you need something to do or could use the extra income from a part-time job. Neither of these situations is uncommon among retirees, and you should be prepared for the possibilities. 

If you do get another job at any point, your credit score will be something your potential employer views. While it certainly isn’t the only factor in determining whether to hire someone, it can be a red flag for an employer if you fail a credit check. A hiring manager is going to view someone with strong credit as a more reliable candidate. 

Supporting Family Members Financially

You may be financially well-off, but your family members, especially your children and grandchildren, may not yet be. This often results in parents giving their children a little financial help every once in a while. Unfortunately, doing so can become more difficult and costly if you have bad credit. 

Being able to cosign for children who need help to get loans of their own is a major way parents help their kids. Doing so can help ensure your children get loans and at favorable rates. You can be a cosigner on things such as leases, car loans and more. However, you need to have good credit to be a cosigner. 

Preparing For Healthcare Costs

As you get older, you will often run into increased medical costs. Even if you have saved for retirement responsibly, medical expenses incurred due to age-related conditions can add up quickly. 

A high line of credit, which you can only get when you have and maintain good credit, will help you pay for these medical expenses. Hospitals are also more likely to agree to a favorable payment plan if your credit history is good. 

Preparing For Emergencies

A good credit score will give you a higher line of credit to cover the costs of any emergencies when they occur. You need to be prepared to financially cover emergencies no matter your age. Unexpected expenses are sure to occur at some point during your retirement. 

Emergencies where having good credit and a higher credit limit can pay off include car repairs, home repairs, medical bills, and other possible necessities. You may need to borrow to cover these costs, and the loans will cost less if your interest rates are lower due to good credit. 

Other Places That Check Credit

Other places check your credit you were probably not even aware of. For example, cell phone companies will give better deals to individuals with good credit. Utility companies will also do a credit check when you set up services with them. 



Your credit undeniably plays a major role in your life at any age. It is one of the best tools you have to prove your financial reliability in a wide variety of circumstances. Maintain good credit so it won’t affect unforeseen areas of your life. 

Retiring is ultimately no reason to stop monitoring your credit score. Check it regularly to ensure your score is good and that there are no issues such as fraud occurring. Maintain good credit by paying bills on time, keeping a budget and using your credit responsibly. 

Do you have a question or anything else to add? Be sure to leave a comment.

Thank you John Blakely for this informative article contribution to Leisure Freak

About the Author:

John Blakely has had a passion for all things personal finance for over a decade. He is a firm believer in having big financial dreams and executing on a plan to realize them. He is an Education Ambassador for ScoreSense where you can find more of his writings.

How To Improve Your Financial Situation Today For A Better Future

Financial Independence, Frugal Living, Managing Debt, Retire Early, Retirement Plan, Saving Money, , , ,

Money is something that not everyone is comfortable talking about. Either you’re doing well and you don’t overly want to go into your situation or seem like your boasting, or you’re not doing so well and you don’t want to have to think about it. Despite which option applies most to you, you may find that you just don’t want to have to think too much about money. But if you want to be able to let your finances really flourish, you just have to. You have to be okay with thinking about money, coming up with ideas, and planning what you’re going to do for a better financial future. There’s no way around it. Because if you are going to enjoy a healthy financial future, you have to start putting the wheels in motion today. And this is something that not everybody realizes.

So, you want to enjoy your retirement or have a more comfortable standard of living in ten years time? Well, that all starts today. Today is the day that you really need to be okay with making changes to your current circumstances, habits, and actions. When you can work on making improvements now, you will find that you really turn things around. Even if you’re not struggling and you have your sights set on being in an incredible situation. If you want that to happen, you need to get real about it all today. If you’re not sure where to start, let’s take a look at some steps that can help you to do it.

How To Improve Your Financial Situation Today For A Better FutureImage source

 

1- Be Real About Your Financial Situation

 

When you’re looking to make any kind of change in life, the first thing you need to do is access where you are. So think about your current situation. Whether it’s negative or positive, you need to understand what position you’re in now, so that you can work out what it will take for the better future you want. From living frugally to investing in yourself more, there are so many solutions to consider. But first, you have to really get to grips with where you are.

 

2-Deal With Debts

 

One thing you absolutely have to address is any debts that you have. If you are debt-free, then move on to point three. But if you do have debts, no matter how big or small they may be, you’ll want to work on paying them off as soon as possible. So speak to your providers and see if you can work out a repayment plan that is going to be as favorable to you as possible – no matter how long it takes.

 

3- Ensure You Have The Funding Available For Now

 

From here, you will want to make sure that you have all the funds you need to live today. This means that you will need to know that you can pay your bills and afford food for the time being. If you are in a short-term financial bind you can consider borrowing money. This is easily done if your credit is decent. But, you can get a small loan for bad credit too.  Just something to consider as help to cover a short-term gap. By working out a rough budget that you can stick to for now, you should be able to cut back on things that aren’t necessary, so that you are always living within your means going forward.

Improve Your Financial Situation Today For A Better FutureImage Source

 

4- Increase Your Income

 

Now, you need to work on increasing the money you earn. These ideas to drastically increase your income are always worth considering. Yes, this is going to take work. But if you want to improve your future, it will always be worth it.

 

5- Get A Side Hustle

 

Another option is to get yourself a lucrative side hustle, as seen in that post. Sometimes, you won’t always be able to earn the money that you want from your job. But doing something on the side will allow you to get the extra income you need.

 

6- Save Today To Benefit Tomorrow

 

Now, you may struggle to cut back today, because you think you need all of those things in your life to live comfortably. But if you really want to be able to enjoy your future, you will want to make sure that you’re living frugally today, so that you can enjoy more tomorrow. This may be something you need to do for a few months or a few years, but if you’re serious about your future, this will always pay off.

 

7- Start A Savings Plan

 

To help you do exactly that, you’re going to want to come up with a savings plan. Think about the amount of money you have free to pay towards your goals for the future (more on this in point ten). When you create a plan, you should find it much easier to start putting money away automatically, rather than seeing it as difficult to part with the cash.

 

8- Think About Your Retirement

 

Now, a huge part of your future will be retirement. You’re likely here because you want to retire early. But how early are you talking? Do you know what age you’d like to retire and how you’re going to do that? Maybe it’s time to sit down and really plan out what you need to do with your career to make this happen.

 

9- Watch Your Money More Closely

 

To really help you to make this work, you have to keep an incredibly close eye on your financials at all times. Check in with your accounts daily, assess your spending daily, and make judgments going forward to help you to keep things in line.

 

10- Set Financial Goals

 

Lastly, you should find that it really helps you if you can set yourself some financial goals. Now, they don’t have to be huge, but you should ensure that you have some kind of guide in your mind about what you want to do with your money. This could be to save a set amount of money to go on a vacation or it could be to commit to a certain payment each month to a 401k. As long as you have goals in place, you should find that you can really improve things for the future.

How to Achieve Debt-Free Retirement

Financial Independence, Managing Debt, Student Debt,

It’s never too early to think about planning for retirement, but before you start maxing out your retirement fund, you may find that it’s in your best interest to tackle debts first. After all, high-interest debts can cost you over the years. If you don’t address them early on, they could cancel out a surprisingly high percentage of your retirement savings. Find out how to get a handle on your debt and work your way toward debt-free retirement.

Get a Handle on Credit Card Debt

How to Achieve Debt-Free RetirementImage via Flickr by ccPixs.com

Many debt management experts recommend using what’s known as the debt snowball method to get a handle on what you owe. The idea behind this method involves addressing your smallest debt first and gradually checking each one off your list until you’ve paid them all.

In many cases, paying off your credit card debt will get the ball rolling. Rather than merely paying the minimum payment each month, write a check for as much as you can afford. Use your preferred budgeting tool to calculate how much you can spare, cut monthly costs where you can, and watch your credit card slowly melt away as a result of your hard work.

Leave Your Auto Loans in the Dust

Just because you have a five-year car loan doesn’t mean you have to carry it for the next 60 months. To pay down your auto loan quickly, assess your options. Find out if you can pay your loan off early without penalty, and then make a plan to do so.

Making more frequent payments and contributing your whole paycheck during extra pay periods can both help you take a chunk out of a large auto loan. If early repayment isn’t an option, consider refinancing your auto loan instead. Your local credit union or bank may offer a lower interest rate or more attractive repayment terms.

Deal With Student Loans

If you’re convinced that you’ll be paying off your student loans for the next several decades, don’t give up so quickly. After all, unlike credit card payments and auto loans, student loans offer more creative repayment options.

Look into student loan consolidation options to turn multiple smaller loans into one larger debt. Choose a consolidation option that includes a lower overall interest rate and a monthly payment that you can afford to amplify your savings. Remember that most student loan servicers allow you to prepay as much as you like, so you may be able to tackle your student loan debt faster than you’d anticipated.

Should you refinance your student loan? Check Student loans refinancing calculator

Pay Off Your Mortgage

If you have a home loan, there’s good chance that this is by far your largest debt. While you should always make your monthly payments, save any rapid mortgage repayment strategies until you’ve taken care of your other debts. Changing to a biweekly payment plan, making extra payments toward your principal, and refinancing your mortgage are all smart ways to put this debt behind you.

 

Getting a handle on your debts takes time and commitment, but it’s a strategy that’s bound to pay off in the long run. Use these tips to pay off your debts before investing more than any employer match in tax-advantaged retirement accounts and make your retirement planning count.

4 Simple Ways To Turn Your Early Retirement Dream Into A Reality

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We all ache to quit the rat race. The daily grind of the commute, dark winters, a stressful office environment and performance reviews can lead us to wonder why we put ourselves through it. Surely, there must be more to life? The thought of retiring at 65 fills you with dread – that’s another 30 or 40 years with your nose to the grindstone. It doesn’t have to be this way.

You see stories popping up every now and again, complete with pictures of relaxed, smiling faces. People who have managed to retire at the age of 40, 45 or 50. With more than just a touch of the green-eyed monster you eagerly read their stories. Then only to discover that they sold their houses, bought a van and camped in their all too kind neighbors garden for a decade or more. This isn’t something that you’d entertain. Isn’t there an easier more appealing way to achieve the dream of early retirement? There is indeed.

I was age 40 when I made the decision to do whatever it took to retire young. Retiring early doesn’t necessarily mean living like a peasant for your remaining working life, eating gruel and never switching on your heating (although this is an option!) Early retirement means planning, planning and more planning! You need to know what you will be doing financially every day for the rest of your working life. Whether this is ten or twenty years.

You need to decide when you want to retire. It pays to not be too ambitious. It’s best to settle on an age that realistically gives you enough time to save enough and pay off all of your debt. If you’re in your twenties, you may be able to choose an age beginning with a four. If, like most people reading this post, you are a disillusioned thirty-something, fifty is the ideal age to shoot for.

Pay off all debt to reach Early Retirement Dream

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Debt

Before you do anything else financially, you must get your debt paid off as swiftly as possible. This means getting all of your monetary ducks lined up in a row. You need to be aggressive and utilize any spare cash to pay off credit cards and high-interest loans before you take on your mortgage.

Make a budget and stick to it. Your list of incomings and outgoings needs to be as accurate as possible. Include everything from the blueberry muffin that you pick up as a treat from a well-known coffee chain every Friday to the gourmet trail mix you love to snack on at work. This way, you’ll be able to spot the items that you can forego immediately. You’ll be surprised at just how much this will save you over time.

Any disposable income that you have after paying your bills, food, mortgage and fuel costs must be used to pay off debt. Other than maxing out your company’s retirement 401K match amount, forget the retirement savings for a little while. It’s no good managing to retire at 50 with $500,000 in the bank if you still have $200,000 in debt. Get to work aggressively paying off a large chunk of your high-interest debt every month.

As you see the debt figure decrease, you will be even more motivated to continue. When the higher interest loans and debts have been repaid, you can then think about paying off your mortgage and having an asset in your name. Owning your humble abode outright will be a huge benefit to you come retirement day.

Mortgage free helps turn Early Retirement Dream to reality

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Home Loan

The joy of a home loan is that it tends to be repaid at a much lower interest rate than store cards or secured personal loans. Even so, you need to pay back your mortgage early saving you money on interest and leaving you with some bricks and mortar. Check the small print of your home loan agreement. The chances are that you can pay back ten percent of the remaining balance of your mortgage in over-payments every year. Utilize every penny of this allowance and ensure you don’t go overboard otherwise you’ll be hit with any penalties there may be. By doing this, you could pay off your mortgage in less than half the time of the original term.

If there are no early payoff penalties in your loan agreement then you can pay any extra amount you can without restriction. Being mortgage free at retirement will bring both peace of mind and a much lower retirement lifestyle cost.

Saving money to Turn Early Retirement Dream into reality

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Savings

While you are beginning to shift the mortgage debt, you can start to think about reinvigorating your savings plan. Saving can be hard with the wants and needs of modern life. Here, you’ll have to make some very tough decisions. If you love traveling and take three or four holidays/vacations a year to exotic, far-flung destinations, then this obviously has to stop or be considerably tailed back. Cut back to one annual vacation but make it a good one. Take a couple of weeks overseas being a little bit more financially aware when you are booking your flights and accommodation. Perhaps even cutting back to every other year and travel to great destinations closer to home in the between years.

First class isn’t a realm you should be setting foot in if you want to retire at fifty. Remember, wanting to retire early shouldn’t be to the detriment of your quality of life. It’s all about financial awareness. Finding a sustainable balance between your having purposeful spending discipline while still living a full life.

If you enjoy a busy social calendar, you may need to cut this back a little or adapt the way you meet up with friends. Dinner parties are a great way of cutting the cost of informal meets. Eating out can soon see your savings pot dwindle so save the restaurants for special occasions.

If you have a commute to work every day and need a car, don’t buy straight off the new car lot. Utilize a company discounted car policy if the business you work for has one. If not, buy second-hand and realize that you are using a vehicle to get from A – B, not as a status symbol. If all goes well financially you can leave that for when you are in the joyous throes of early retirement.

Early Retirement Dream needs investments

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Investing

As you build up a little more capital, you may find that you have spare cash burning a hole in your pocket that could work for you more lucratively than if you placed it in a savings account. Consider venturing into the world of real estate. If there’s a new house for sale in your local area or in an emerging overseas market, take a look and consider its potential as a rental. By investing your money in bricks and mortar and seeing a second income from it, you’re making your money work for you more aggressively. Do the math and make sure that any rent you receive covers the mortgage. Real estate generally holds its value, and you could see a high return on your investment when it’s time to sell.

You could go down the stock market or Forex trading route. While lucrative, these forms of active trading investment also carry a greater risk. You can set up dummy accounts with agents and try your hand at the stocks before having a go for real. If you have a good decade before you hit fifty, it might be worth having a flutter on the markets. However, it pays to seek professional advice before launching yourself into the trading world.

The key to sound investing is not putting all of your eggs in one basket and spreading the risk. A varied range of high, medium and low-risk investments can ensure a well-rounded portfolio that should produce fruitful rewards. Most successful early retirees will find investment success in low-cost stock and bond funds.

Last Words

Retiring early is the dream of many yet realized by only a select few. The path to early retirement is bumpy and not for the fainthearted. You need to be proactive and aggressive, and it does involve some personal sacrifice. However, you need to weigh up the pros and cons of altering your lifestyle for the betterment of your early twilight years. It is a major life changing commitment. But by heeding this advice, you’ll be well on your way to a prosperous early retirement.

I Fought My Way Out of Debt Misery

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How I Repaid Credit Card Debt Equal to 44% of My Yearly Salary.

When I talk to people about early retirement I hear from many about the same obstacle. They are unable to save more for retirement because of their debt. I totally get it. I spent many years in debt misery myself where most if not all my paycheck went out to settle monthly bills. Of which the biggest part was to pay monthly debt payments. Mortgage, 2nd mortgage, and the worst of all were credit cards.

People think that early retirement is only for the rich and lucky. That certainly helps but it’s also for the money-wise. That wisdom includes saving and investing. But more importantly it includes figuring out how to pay off debt and living a debt free life going forward.

Paying off debt and living debt free is the first step towards financial independence. It is certainly the first taste we get of it. Debt liberation brought me a feeling of freedom second only to the day I ditched the corporate rat race with my first early retirement.

If anything, my story shows that being in debt misery doesn’t have to mean a lifetime of employment servitude. Setting into motion a plan to become debt free results in a win-win outcome and the sooner we start the better.

How I Ended Up in Debt Misery

Credit Card Debt = 44% of My Yearly Salary

My story isn’t too different from many people who start out to make it on their own. My debt misery was caused by Bandits.

Yep, little bandits. Those tiny blessings that come and take all of our love, time, and money to give them the life we want them to have. We gladly gave to 3 of them. But the cost of childcare turned us into a single income family beginning with child number 2. Besides the loss of my wife’s wages, my full-time income did not keep up with inflation. Even after adding a part-time job, especially once our 3rd little surprise came.

Easy Credit to Solve Everyone’s Problems

I admit I rationalized our poor debt decision. During this time all interest paid including credit card interest was tax-deductible. The credit industry makes using them for any financial solution easy. We were getting credit card offers with large balance limits in the mail daily.

We didn’t go on a spending spree and remained as frugal as we could. But life happens and things change.

We fell for the mental trap of “tax deductible” as a rationalization that debt is always OK. The tax code was changed in 1986 to what it is today removing that credit card debt perk. It happened a year after our third child’s birth which was 3 years into our poorly rationalized debt plan.

Our debt was the result of charging and using the handy checks the credit card company supplied to cover expenses above my income.

Our Plan to Repay Our Crushing Credit Card Debt

Increase Income – Our plan was simple. Use debt to help support us during our “Mom at home with the kids time” as necessary. But once our first and second child began school my wife would return to part-time work. Then when our 3rd child entered school my wife would return to full-time work. All of her income would then be devoted to paying off debt.

Our increasing income plan was a mistaken delayed strategy. There was a constantly growing debt misery to live with during the 6 years before that strategy could start.

Our costs increased beyond what my 2 jobs could cover. I was leaving the house at 7 AM and returning home at 10 PM. I was bringing in less than our bills. That’s even when only paying minimum credit card payments.

I was at times just moving credit card amounts from one card to another. I did this using their free credit transfer checks. Although we were considered current on payments our credit card debt grew. When financially desperate we can do financially dumb things.

Getting Serious About Debt Repayment

 

I was miserable seeing every penny I earned go out and watching credit card balances growing beyond amounts I never thought possible.

I decided that I needed to get fighting mad and seriously go after a repayment strategy to climb out of our debt misery hole.

I was juggling 5 credit cards. My income had slowly increased over the past 5 years to where I could just make minimum credit card payments without adding to the debt.

We swore off using any additional credit to carry us through this phase of our young family’s life except for an extreme emergency.

Prioritizing Credit Cards-

First I identified the lowest to highest interest charging credit cards. I balanced transferred as much as I could from the highest interest card balances to the lowest interest cards.

We created a strict budget that would make sure we could cover at least the minimum payments. When my paychecks came up short because of something unexpected we either sold something or I did side-jobs for cash. I hauled trash, delivered firewood; I did whatever I could do to avoid using credit cards.

When our middle blessing started school my bride got a part-time job. We stayed on the strict budget. By this time the credit card balances were equal to 44% of my yearly salary. Ouch!

Much more psychologically daunting was our credit card balance was as much as 50% of our first mortgage. It was an embarrassing secret. Repaying this debt was my only thought so that nobody else had to know about my financial mistakes.

The Delayed Repayment Phase Begins

As we had always planned, we devoted all of my wife’s income minus part-time childcare costs to credit card repayment. We targeted our highest interest rate card first for the extra payments. Because we shifted balances to the lower interest rate cards the high interest rate cards also had the lowest balances.

All of my increased income from raises also went toward the highest interest card. We worked our way through the credit cards one by one.

Two years later our youngest entered school and my bride was able to work full-time where she worked. We were then able to really ramp-up our debt repayment.

Once I finally got a promotion and a decent raise our income to credit ratio was acceptable to refinance our 2nd mortgage at our Credit Union. That refinance included enough to cover the last of the credit card payoff.  This greatly reduced the interest rate we had to pay. We then focused our debt repayment plan to the one 2nd mortgage loan.

It took 6 years to dig our debt misery hole and 3 years of concentrated effort to win the fight out of it.

We have never carried a credit card balance since then. We now win financially with our credit card use.

Debt Repayment Strategy

I didn’t know it then but my repayment plan is a hybrid Avalanche + Snowball Method. There are other strategies. Until my wife started working to add some income I was truly in debt hell.

My debt misery occurred 1983 to 1990, back in ancient times. No internet or cell phones, high inflation, and limited employment opportunities. Yes, we did have an easily accessible library but I didn’t think to search there for help on this subject. I should have. Any debt repayment strategy should begin by researching solutions and ideas.

I winged-it and made many mistakes. Fortunately we have much more easily found information available to help us escape debt misery.

For a great “How To” for getting out of debt I recommend checking out the Power Over Life website’s Create a Debt Destruction Plan. It lays out the different debt repayment strategies and gives the information necessary to get anyone started on their debt liberation journey.

Final Words

There are many reasons that can cause us to enter into a life of debt misery. At some point debt will eat your finances and get in the way of living a free life. It certainly makes retirement harder to achieve.

The best thing that came out of my debt misery experience is I learned that we can take control of our own finances. We can learn from and reverse mistakes. The lessons learned will help us to reach our Financial Independence – Retire Early goals.

As I mentioned above, my debt repayment brought a feeling of liberation and independence second only to my first early retirement.

When you experience the freedom from debt misery then use that liberating feeling to carry you through financial independence and an earlier retirement. FIRE! There is nothing better.

Can You Still Retire Early With Debts?

Managing Debt, Retire Early,

Many people wish they could retire early. But more of us than ever struggle to find the means to do so. And if you have rung up a lot of credit in the past, you may be reluctant to entertain even the idea of retiring. Can you still retire early with debts? You may ask yourself if you would really want to. Surely the idea of retiring is to enjoy a stress-free lifestyle, relaxing and having fun? It seems that having financial commitments and debts to pay could get in the way of that.

But what you do now could help speed up your process of clearing those debts and commitments. One of the biggest loans we will ever take out is a mortgage. Most people want that paid off completely before they give up their jobs. Check with your mortgage provider about the option to pay it off early. If there is a penalty for doing that, consider waiting until your current terms are up. Then simply move your mortgage to a lender more willing to offer flexible terms.

Can You Still Retire Early With Debts?

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Sometimes taking a new loan to consolidate your existing commitments can offer you a cheaply monthly repayment. Of course, this can often mean that the overall repayment sum is greater. And not everyone is in a good position to be able to take out a cheap loan at the moment. If you have had difficulties paying bills or loans in the past, chances are your credit score is not high enough. You may not be eligible for preferential rates.

There are a few ways around this. Paying off your debts is one of them but not always practical to do quickly. Another way is to check your credit report and see where the problems are. You can then write letters to the companies that have affected your score to try and repair your credit report. You can find credit repair letter templates that will help you word this as effectively as you can. You can also see if this is the right path for you at this time.

Living frugally now is certainly the best way to enjoy retirement in the future. But it can also be the best way to clear off your debts and financial commitments early. Putting every spare penny into paying things off might feel unpleasant at times. After all, you’re trying to grow your nest egg, not hand it over to the credit card companies. Savings accounts earn far less than the interest you’ll be paying on your loans. Investments may not reap back the interest you have to pay either. Check the figures to make an informed decision.

Can You Still Retire Early With Debts? It Takes Smart Spending

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It seems you have two choices when it comes to debts. You could pay them all off as quickly as possible. Or maybe reduce them to a bite-size monthly arrangement that is affordable during retirement. Perhaps the most important thing to do right now is to avoid adding any more credit to your commitments. This could be easier said than done, but there are some simple ways to manage this.

Start with a budget. Use a template, or create your own spreadsheet. Detail everything you might pay money for each month. Include the cups of coffee at your favorite cafe. And don’t forget to add the utility bills and mortgage payments. Once you’ve listed everything, you can start removing the things you don’t really need. Perhaps you don’t really need to spend three hundred a month on fashion when two hundred can keep you going for now. And there is a lot to be said for instant coffee at home!

Can You Still Retire Early With Debts? Time to Budget

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It’s important to also allow yourself a little ‘going out’ money each month. We all need to treat ourselves from time to time and have a little fun. If you cut everything you enjoy out of your life, you could be at risk of a big blowout later! Little and often could be the best way to go to feel like life is still a pleasure. Living frugally should instead mean switching off the lights when you don’t need them, or walking rather than driving.

In Conclusion

It’s not easy to retire without debts sometimes. But retirement may be more pleasurable knowing you don’t have to continue paying back a loan for years to come. While it is possible to manage the cost of a loan repayment, you need to weigh up the pros and cons of doing so. Of course, paying all your debts back may cost you the nest egg you were hoping to live on during retirement. Live frugally now for a debt-free future.

What do you think? Can you still retire early with debts?

How to Settle Your Debt and Find Room for Savings

Managing Debt, Saving Money, ,

How to Settle Your Debt and Find Room for Savings. Financial obligations fall across a wide range of costs, from transportation to education. It is not uncommon to amass some debt along the way, meeting life’s financial commitments that you can’t pay entirely up front. Mortgages, for instance, represent hundreds of thousands of dollars, enabling buyers to make major purchases, paid-off over decades. Student loans and credit card debt add further to the outstanding financial obligations taken-on by many individuals.

How to Settle Your Debt and Find Room for SavingsUnfortunately, as debt mounts, it becomes harder for some people to meet the daily cost of living and still carve out room for savings. There is hope for anyone managing personal finances, however, in the form of proven debt-reduction strategies.

Keep Repayment on Track without Feeling the Pinch

Daily life generates a slew of expenses, so keeping up with the basics requires a steady financial base. At the same time, however, outstanding debt pulls at family budgets, making it harder than ever to get ahead. It can be difficult to prioritize when faced with competing expenses. On one hand, food, housing, and other necessities clearly require financial resources, but at the same time; turning your back on big-picture debt can escalate into problems.

With so many financial obligations and limited resources available, successful personal money managers must strike a delicate balance allocating funds. The good news for those able to weather the storm is that lower debt leads to increased savings. Use these tips to help reduce household debt and open-up savings opportunities:

Evaluate Debt Terms –

There are several reasons to review interest rates and other features of your personal debt. For starters, you may be leaving money on the table, failing to take advantage of better offers that were unavailable at the time you initiated a loan or other debt. Mortgages furnish one of the most obvious examples of the importance of staying tuned-in to your outstanding balances and the terms of each repayment schedule.

Let’s say you purchased a home 10 years ago, with a 6% annual percentage rate loan. Should rates drop, as they did recently, following a major industry shake-up, you may find yourself in a position to secure better terms. A 4% loan, for example, would quickly pay for the cost of refinancing, based on the comparative savings yielded by the lower rate. Each case is unique, so it is important to review all the potential costs of refinancing, before committing to a new loan.

Manage Credit Card Debt –

Credit cards are a modern-day convenience we could scarcely live without. Unfortunately, however, debt quickly rises when card use is not prudent. Periodic review helps keep tabs on card balances, before you get into trouble. Remember, there are other ways to finance purchases, so high interest credit cards may not be your best approach. Various short and long-term loan products, for instance, serve many minor financing needs, so it pays to compare and contrast alternatives.

Even with bad credit, you may qualify for reasonable financing. To help reduce your reliance on credit cards, use loans to fund purchases, but also consider a loan to wipe out existing debt. If your credit card debt has grown unmanageable, a guarantor loan, cosigned by a friend or family member, is a viable loan option for paying off a high interest card balance. Rolling debts into a loan with better interest rates not only simplifies repayment, but can save significant sums during the payoff period. For the best results finding firmer financial ground, set the cards aside as you get your house in order, to break the cycle of unmanageable debt.

Prioritize Payback –

Much like money saved consolidating debts into loans with better rates; paying your highest-interest obligations first, trims the overall expense of payback. Let’s say you have a student loan, for instance, in good standing, with multiple payback options. In such a case, it may make sense to defer repayment under your student loan terms, to address a different outstanding debt with a higher balance or cumbersome interest rate. On the other hand, during flush financial times, it may be possible for you to pay ahead on debts. Paying mortgages twice monthly, instead of just once, for example, cuts the overall interest paid on the loan. In order to set a course for success, list your balances and corresponding rates in order of highest APR to lowest, and begin to prioritize your payments.

In Closing:

Debts are an expected part of individual personal finances, so successful money management relies on certain strategies to keep cash flow in order. Periodic assessment, with an eye toward affordable payback, ensures balances are addressed efficiently. And prioritizing repayment, while limiting credit card use, frees resources to help pay off balances and save money for the future.
Do you have a smart plan to handle debt while on your Financial Independence quest?
Note: This post is brought to you by Derek Fisher (not the basketball coach) who is a freelancer.