Category: Money

Are you facing some issues with cash flow? If yes, it is only understandable that you would want to solve it as fast as possible. 

No matter what the reasons might be behind your financial concerns, below are some tips on how to handle cash problems. 

Boost Your Profit Margins

Increasing your prices might not be typically your preferred action but auditing your finances may reveal room for improvement. You can also negotiate better deals with your suppliers to further improve your profit margins. 

Make Credit Control a Priority 

It is a must that you know the specific amount of money that you owe at a particular time or period. Prioritizing the collection of owed money can help your business maintain a more positive cash flow. You can set up a computerized system to achieve this and this system will provide notification for late-payments and reduce the overall period of collection. 

Audit the Finances of Your Business 

Perform a review of all incoming and outgoing revenue to check where you can make some improvements or have some savings. A direct strategy to upsell complementary goods or services together with your primary offers can have a substantial effect on your turnover. 

Cut Down Costs

It may seem simple to streamline costs by moving the best deals and tariffs on a regular basis. However, this is one of the best ways to make significant savings. Providers wouldn’t want to stop doing business with you and this threat alone might be more than enough to convince them to give you a better deal so you can save money every month. 

Consider Small Business Lines of Credit 

Small business lines of credit work similar to credit cards. As a borrower, you just need to pay interest on your outstanding balance and not necessarily the whole credit line available. Once you have your balance paid, the credit amount will replenish and you will be able to borrow all over again. 

Turn to Short Term Business Loans 

It is easy to get approval for short-term loans and lenders can offer funding in just a single business day at the soonest. While these loans have a higher APR or annual percentage rate, the overall capital cost is often cheaper than longer-term options that have a lower APR. 

Reduce Business Expenses

One of the most common approaches to fix cash flow problems is to reduce expenses. But, it is easy to do it wrong and end up cutting larger expenses that could hurt the ability of a business to generate revenue. Good thing that there are some expense-reducing measures that can be taken to reduce the cash flow amount that a company receives with no need to hurt the overall business operations. 

For instance, you can suspend some non-essential expenses such as pest control or landscaping to improve cash flow. Cut anything not essential before you reduce cut on necessities such as labor, inventory, or marketing. 

These are some ways on how to handle cash flow problems. Be smarter and put an end to your financial worries in no time. 

Have you noticed how your credit score seems to fluctuate depending on where you have it checked? Well, don’t be surprised by this inconsistency. That fluctuation is because the United States has three major credit bureaus that independently calculate credit scores to ensure fairness. These include Transunion, Equifax, and Experian. All of these three also use several models for credit scoring. 

FICO® Score is the most commonly used model for credit scoring although Vantage scores have also risen to popularity since its launch in 2006. The three credit bureaus are using a predictive scoring system to determine the credit risk of a consumer. 

Although these three bureaus are using the same models, each of them has proprietary and small differences for calculating credit scores. But, the basis of the systems is the same across the three bureaus so a consumer with high scores on the data of one bureau will likely see the same high score at the rest of the two bureaus. 

Why Do You See Different Credit Scores?

There could be several reasons why you might be seeing different credit scores from each of the three bureaus. The most common ones include the following:

The dates of the credit scores are not the same

Your credit score can change at any time. Since the data in your credit reports can get updated at different times at every bureau, a certain bureau might be missing one account or other details that might hinder or help your score. If you requested your credit report from one bureau two weeks ago, it is highly likely that it will be different next week depending on the new reports. 

Different credit scoring models were used to calculate the scores

Similar to a fingerprint, all of the three bureaus are using scoring systems that are slightly different from each other. Although you know the basis for calculating your credit score, each model is slightly different from one person to another depending on the different lenders’ requirements and the person’s history. For instance, a car lender might use a completely different scoring model than a mortgage lender since both of them place more importance on specific different factors. 

The details in your credit reports are different among the credit bureaus

It is actually a very common scenario than what you might think. There are lenders that report to the three bureaus but some might not even report to any of them at all. This is why it is always a wise idea that you go through your credit reports every now and then to check for errors because even the smallest mistake can easily impact your score. 

At the end of the day, even if you see variations and differences in your credit scores, rest assured that all of these have been based on the information indicated in your credit reports. This is why you need to focus on what is in your reports as this can help you in building your credit as a whole.

Embarrassment is probably the first thing you will when you cannot pay your bills. And when you are embarrassed, it is easy to give in to the temptation of hiding and running away.

Unfortunately, that is the worst decision you can ever make. This kind of financial problem is something that you need to face and deal with head-on. 

Here are some tips on what to do when paying your bills goes out of your reach:

Ditch the Non-essentials 

Check your list of expenses and get those that you don’t need for survival. You have to let go of paid memberships, additional phone features, newspaper subscriptions, satellite or cable, and streaming services until you find solid footing with your finances. 

Make Your Bills Your Top Priority 

If your money is still not enough for paying your bills, you have to decide on the bills you will pay now and those that need to wait. Review your list of monthly expenses then prioritize those items that are crucial for your existence. You must include things such as your mortgage or rent, insurance, and utilities. Your next priority should be your secured debts such as your home equity loans, car loans, and other debts attached with collateral. 

Your least priorities are your unsecured debts. These include things such as personal loans, credit card debts, and the majority of service-related bills. After you have prioritized your bills, list down the bills that you won’t pay right away. 

Look for Ways to Make Money 

Skipped payments and late payments can take their toll on your credit score and might make you lose your car or home. Do your best to earn the amount of money you need for covering that gap in your budget. Start a side hustle, take on a second job, sell some items, and do pretty much anything in your power so you can have your bills paid on time. There are now many ways to make money fast and you need to exhaust all your options before deciding not to pay your bills at all. 

Renegotiate Your Medical Bills and Student Loans 

If you are still paying off your medical bills or student loans, you might negotiate new terms for repayment to free up some money. You can place federal student loans in deferment or forbearance if you are really in a tight spot. This will let you stop making payments in the meantime or reduce your payments. 

It is much easier to renegotiate medical bills. You just need to get in touch with the accounting office, discuss the amount that you can afford to pay, and most of the time, they will be willing to work around that. 

Talk to Your Creditors 

After doing everything you can to lessen the damage, it is now time for you to inform your creditors of what is happening. Call them before the due date of your bill and explain your current situation. This call wouldn’t be a happy one but it can help you stay out of trouble. 

HELOC or home equity line of credit is a big help for most people. This helps you use your home’s equity and borrow against its value. HELOC funds can be used for pretty much anything as long as you don’t forget that your home will serve as the collateral here. 

Below are top reasons to use a HELOC:

Pay Off Existing Debts

HELOC may have a lower interest rate than some credit card debts with high-interest rates that might leave you struggling. You can make your payments simpler and lower your interest costs if you consolidate all of your higher-interest debts and pay them off with your HELOC. 

Home Improvement Projects 

It is probably one of the most common and popular uses for a HELOC. You can increase or maintain your home’s value through home improvements in the form of repairs and renovation. There are several home improvements known to give greater returns on investments such as kitchen remodels, siding replacement, bathroom remodels and additions, space repurposing to add to your home’s square footage, and energy efficiency improvement. Meanwhile high-end remodels or pool installation might not give the best ROI. 

Tuition and Other Educational Payments 

A HELOC can also help you with better management of the costs related to a college education or private school for younger children. Your home equity line of credit also lets you access funds whenever you need them the most. You could borrow when due to the tuition payment comes and pay it later and borrow once again if another expense arises. 

Long Term Care Expenses and Medical Bill Payments

Health is one of the biggest issues in most countries across the world now more than ever and sadly, not all people are backed by reliable health insurance. It can lead to colossal amounts of medical bills. If your budget is limited, you need to search for other ways to pay your medical bills. This is yet another instance when a HELOC can come in handy. You can use this to pay your medical bills and pay them off later on. 

It also applies to long term care expenses. Most people have elderly parents who live longer and require long-term care that can be a serious expense for the family. You can also pay for such expenses with the help of your home equity. 

Down Payment for a Second Home or an Investment Property

A lot of people don’t realize that they can actually use a HELOC to help them buy a second home or investment property. If you already built up plenty of equity in your existing house and you want to raise some funds for a down payment for another property, the most logical solution lies with a HELOC. 

Extra Cushion for Emergencies 

There are times when unexpected things happen and you end up with a financial emergency. Your furnace might have died down, your roof developed a major leak, and your car needs some serious repairs. In cases like this, it wouldn’t hurt to have available funds that can help you pay for these unforeseen events with no need to use up your savings. 

These are just some of the top reasons to use a HELOC. Make sure you use it well to make the most out of your home equity. 

Do you still get some debt that might stop you from enjoying the holidays? Do your loan payments hold you back from achieving a bigger financial goal?

Here are the top 3 ways to pay off your debt fast so you can enjoy your finances to the fullest:

1. Start By Paying Off High-Interest Rate Loans 

The general rule of thumb when it comes to debts is to make it your top priority to pay down those debts that come with the highest rates of interest. Through this particular strategy, it will be possible for you to pay off your debts faster with lesser overall interest down the road. 

To make it possible, you might want to make minimum payments on the rest of your accounts with lower interest. Then, once you have paid off your highest interest rate loan, you can now apply this minimum monthly payment that you would have otherwise spent on the highest interest rate loan to your next loan with the highest interest rate. This cycle continues until you manage to pay off everything and be free from debts completely. 

2. Go for Biweekly Payments 

A very popular strategy to speed up debt repayment is through making biweekly payments or every two weeks wherein each totals half of your payment every month. One important thing to remember is that this particular method means you need to make a total of 26 payments every year that is twice more than you will make if your payments are made every first day and middle of the month. This is why it is a must that you budget accordingly. 

One significant advantage of this is that you can lower the amount that you owe at a faster rate that will allow you to save on interest. A biweekly schedule can also lessen your cash flow concerns as this will result in an even distribution of smaller payments for the whole month. 

3. Loans with Smallest Overall Balance Should be Your Priority 

Another good strategy for repayment that you might want to try is known as the debt snowball method. With this particular method, the main idea is for you to pay back the loans with the least total balance first before redistributing the money that you might have spent on these payments to the rest of your larger loans. Getting rid of your smaller debts as fast as you can help you maintain your motivation to continue paying off your bigger debts. Once done correctly, this can lead to a faster period of repayment and less overall interest paid.

Bonus Tip: Pay Your Debt in Lump Sum

If you are in luck and you received a nice bonus check that you don’t know how to use, you might want to make a single large payment for your debt, whether it is your mortgage, credit card debt, or auto loan. 

Once you have paid off your debt, your money will give you a guaranteed return and this is the amount of interest that you would have otherwise paid on your outstanding balance. 

Refinancing is one of the most appealing ways to reduce the costs of your auto loan. The extra cash you can get here can be saved for your future or added to your monthly budget. But, should you refinance your auto loan in the first place?

Auto Refinancing Defined 

When refinancing your auto loan, you are basically paying off your original loan’s balance then getting a new loan to replace it. There are times when changing lenders might be necessary because many lenders are not going to refinance their own loans. But, auto loan refinancing will help you lower your payments every month or adjust the term of your loan. 

There are three situations when it makes perfect sense to consider auto loan refinancing. 

1. You Want to Lower Your Monthly Payment 

If the monthly payment for your auto loan is quite high, refinancing can reduce this cost every month. When you pay your original loan longer, your principal balance will also be lower.

 This means that if you will start a new term with this balance, the leftover funds are going to be spread out over a new period of time. You can lower your payment every month if you extend the term of your loan if you receive a lower interest from the lender or both. 

It is usually one of the reasons why borrowers decide to refinance. A smaller payment every month can help you with your monthly budgeting. 

2. You Wish to Lower Your Interest Rate 

You might be stuck with an auto loan with a higher interest rate because of various reasons. However, this will still cost you hundreds or even thousands of dollars during the life of your loan. 

For instance, you borrowed $20,000 for a car for a 60-mont term at a 6% interest rate. Throughout the life of your loan, you will pay an interest of almost $3,200. If you apply for the same term and loan but this time, it has a 3% interest rate, you will only be paying a little less than $1,600 in interest during those five years. Although this might not sound significant enough when you first took out the loan, the interest can add up after some time. 

3. You Want to Add or Remove a Co-Borrower

You will only be able to add or remove a co-borrower from a loan if you can refinance under the name or the names of the people who should be part of the loan. One very common reason for removing a co-borrower is if a person cannot be approved because of their personal credit history and the only choice left is for them to co-borrow. This time around, the person has already established their credit history and is already confident that they will be able to get approval all alone with no need for a co-borrower. 

Refinancing your auto loan can make perfect sense during the above situations. However, don’t forget that just like anything else in the world, there will always be risks involved so make the necessary considerations before you decide once and for all. 

The income level is the primary dividing line on whether you will file for a Chapter 13 bankruptcy or Chapter 7 bankruptcy. 

It simply means that those who fall below a specific level of income are qualified to file for Chapter 7 bankruptcy. Chapter 7 bankruptcy is often simpler and even takes lesser time compared to Chapter 13 bankruptcy. The majority of bankruptcy cases are actually Chapter 7 cases and the rest are Chapter 13 bankruptcies. 

But beyond the cutoff on income, the differences between Chapter 13 and Chapter 7 bankruptcies can easily confuse those who are not familiar with them. 

Here is a quick explanation of the difference between Chapter 7 bankruptcy vs. Chapter 13 bankruptcy. 

Differences in Terms of Car Loans and Mortgages

This is among the main differences between Chapter 13 and Chapter 7 bankruptcy. With Chapter 7, it is likely that you need to return the car or house to your creditor or arrange to pay the wholesale value of the item. With Chapter 13, you might be able to keep the care or house provided that you stay updated with the payment system ordered by the court. 

Differences in Having a Past Bankruptcy 

You need to wait 8 years after filing your first Chapter 7 bankruptcy. On the other hand, you just need to wait 2 years after filing your first Chapter 13 bankruptcy before you can get another discharge. 

Differences in Debts Owed for Student Loans, Alimony, and Child Support

Chapter 7 bankruptcy will not discharge your debts and you cannot also avoid your support debts. If it is impossible for you to pay off the said debts by the end of your Chapter 13 bankruptcy, you are still going to owe the rest of the balance even after the end of the bankruptcy. 

Differences in Nonsupport Debts Owed in Agreement, Property Settlement, or Divorce

Once the creditor, usually the spouse, raises an objection, the debt is not going to be discharged unless you can show that you still cannot pay the debts following a bankruptcy or that the benefit of removing the debt is beyond the damage that is caused to your creditor. On the other hand, any balance that remains once Chapter 13 bankruptcy ends are going to be erased. 

Differences in Having Nonexempt Valuable Property

With Chapter 7, you need to surrender the nonexempt valuable property that you have except if you pay the property’s fair market value to the trustee or you exchange an equal value property provided that your trustee agrees to it. With Chapter 13 bankruptcy, you will be able to keep the nonexempt valuable property that you have. 

Differences in Debts Owed Due to Previous Crimes

With Chapter 7, it is not likely for your debts to be discharged once the creditor objects and demonstrates your past actions. Meanwhile, even though you are required to pay for these debts as part of your Chapter 13 plan, this balance could be wiped out once the remaining debts are not completely paid by the end of your Chapter 13 bankruptcy. 

These are just some of the many ways that Chapter 7 and Chapter 13 bankruptcies are different. 

 

There are some instances when it is all too easy to be worry-free when it comes to debt. More often than not, this is because individual payments are often affordable and relatively low. A lot of people never feel stressed out about their debts until things go out of control. And sometimes, when it happens, it is difficult to start paying off your debt quickly. 

Below are the ten reasons to pay off your debt to convince you to tackle your financial obligations as soon as possible. 

1. Enjoy Your Income Better 

If you have a lot of debts, the payments can easily eat up most of your income. But, if you can pay off your debt early, you can fully enjoy your income every month that you can use for other purposes, like a vacation or even a home renovation.

2. Retire Early 

When all of your debts are paid off right away, you can put the extra money you have into investments. Once your retirement accounts are enough, you can look forward to retiring at 65 years old or even earlier. 

3. Free Yourself from Risks 

Having a ton of debt can bring so much risk to your life. If you are neck-deep in debt without any emergency savings to back you up, a financial disaster can wreak serious havoc in your life. 

4. Improve Your Credit Score 

Your credit rating can take the blow of carrying lots of debts. But, if you can manage to pay off all of your debts, or at least most of it, you can expect to see an improvement in your credit score. 

5. Have Fun in Your Job 

Being in debt can have a negative impact on your career or profession, especially if it keeps you up all night and affects your productivity. But, if you are debt-free, you will feel happier and more contented with your job. 

6. No More Stress

Debts can be the biggest source of stress in your life. When you pay off your debts early, you can free yourself from these financial burdens and the stress that comes with them.

7. Boost Your Mental Health 

Aside from stress, debt can also be the main culprit behind depression. By eliminating your financial obligations, your mind will be more at peace and you won’t fall into the dangers of depression and anxiety. 

8. Promote Self-Esteem

Your self-esteem is also affected when you have a lot of debt to deal with. You can enjoy higher self-confidence when you know that no debt will bog you down.

9. Enhanced Cognitive Function 

Aside from being an emotional problem, debt can even impair your ability to reason and think. When your cognitive function is weak, it will also worsen your capacity to make financial decisions. If you have no debts to worry about, you can become a better decision-maker. 

10. Less Prone to Illnesses

Finally, another somewhat unique reason to pay off your debt fast is that it can make you less susceptible to diseases. Since stress damages, not only your mind but also your body, being debt-free can benefit your immune system so you can be free of infectious diseases. 

Pay off your debt whenever you can and enjoy these benefits soon!

At first glance, $100,000 might seem like a big amount that is impossible to achieve and save. But, the good news is that it is not. As long as you got the discipline and a smart strategy in place, learning how to save your first $100,000 can be as easy as 1-2-3. 

It All Begins with Your Mindset 

Training your mind is often the most difficult step in the process of saving your first-ever $100,000. It is important that you are one with your goals. To do this, write down all of them on sticky notes that you can put around your house. It will serve as your motivation to stick to your goals so it will hurt less if you sacrifice your favorite pastries just so you can save some money. 

Start Small

Nothing good will come out of setting large goals and making several major sacrifices in all aspects of your life. It will only lead to failure if you aren’t too careful. It takes 21 days or more to start forming a new habit. You have to be patient enough with yourself. Don’t punish yourself if you give in to the temptation of your daily cup of Iced Americano. 

It might take some time before the new habit sticks with you. Start with habits that you could change and follow for several weeks. The initial change will make you feel excited enough and serve as your motivation. After that, you can start adding more habits, such as setting spare change in a jar, bringing pack lunch to work, or buying only food on sale. 

Track Your Budget 

If you are really serious about saving $100,000, you need to deal with that much-dreaded word, none other than budget. However, it is not enough that you just create a budget. You need to keep close track of every dollar you spend down to the last penny. There are software programs that can help you with this or you can also use a spreadsheet that you update several times weekly. 

Record everything, whether you pay with cash or a credit card. Check every category after 3 months. Pay extra attention to categories with overspending and think of a way to change it. Once again, start with small changes. Think of the reasons why you overspend in a certain category and make some small changes to enjoy big results. 

Learn to Say No When Shopping 

Being a careful shopper is one of the easiest ways to save your first $100,000. In this modern world filled with instant gratification, everyone is guilty of buying unnecessary stuff. Before getting that must-have little black dress or getting that latest gadget, step back first and sleep on it if possible. If you wake up the next morning and you still feel that you need that item, go ahead and buy it. But, there is a big chance that you will have a change of heart or even completely forget about it. 

Saving $100,000 is not impossible or hard at all. It may take dedication and patience but one thing is for sure – it is very much possible.