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There’s a reason so many books and blogs are dedicated specifically to women and finances. Like many other areas of life, women don’t always face the same financial problems and situations that men do. Compared to men, women generally earn less money throughout their lives, leaving them with leaner resources to cover higher healthcare expenses and longer lives. But that doesn’t mean women are doomed to falling short of their financial goals. Key Takeaway: Financial management is worth your best efforts. Negotiating salary and other perks yields dividends throughout a career. Investing is an important part of wealth accumulation. A health savings account, or HSA, allows people to set aside pre-tax money to pay for certain medical expenses. Funding traditional IRAs and 401(k) plans is especially beneficial because that allows the owner to make use of pre-tax contributions. Women who need help paying off debt can use the services of one of the top debt relief companies. Here are five money tips for women: 1. Increase income Women who worked full-time, year-round in 2017 made about 80 percent of what their male counterparts did, according to the U.S. Census Bureau. The Pew Research Center says this gap in earnings has stayed about the same over the past 15 years. Some experts theorize that this is at least in part due to women not negotiating their salaries as frequently or successfully as men do, which stifles their earnings for years to come. Linda Babcock, an economics professor at Carnegie Mellon University, said in an interview with NPR that people who don’t negotiate salary at the start of their careers risk losing more than $1 million in earnings over a lifetime. Women should negotiate their salary and other perks often throughout their careers, but especially at the beginning, as those early negotiations will yield dividends over time. 2. Invest A 2018 study by Merrill Lynch and consulting firm Age Wave found that women are less confident in their ability to manage investments than men are. The same study also found that 41 percent of women report that their biggest financial regret is not investing more. But women’s comparatively lower confidence doesn’t mean they’re actually worse at investing. “Practically every competitive trial of paper trading and stock market games has shown that women make better investors than men,” says financial advisor Jeremy Britton. Investing is an important part of wealth accumulation. Just saving is often not enough; the interest rates on many savings accounts don’t allow wealth to grow fast enough to keep up with inflation. Whereas the average interest rate for savings accounts is 0.09 percent, the S&P 500 Index has an average annual return rate of 8 percent since 1957. Investing involves more risk, but often also higher rates of return. Britton advises investing in companies where you spend money regularly — for example, your bank, insurance company, or phone service provider. “Technically it may be seen as ‘inside knowledge,’ but every shopper will know when a product or service deteriorates, and if you feel like taking your money elsewhere,” Britton continues. 3. Plan for healthcare expenses Many women deal with healthcare expenses unique to their gender. There’s the cost of general reproductive health — including regular tests, birth control, and feminine hygiene products — that one HuffPost writer estimated to be about $15,000 over the course of a woman’s lifetime. Then there’s the cost of maternal care, which has been rising for insured patients: an analysis by researchers at the University of Michigan found that average out-of-pocket spending for maternity care rose 49 percent from 2008 to 2015. There’s also autoimmune diseases. According to a 2004 study, autoimmune diseases are the most common type of disease in the United States, after cancer and heart disease, and they disproportionately affect women. The study notes that 78 percent of people with autoimmune diseases are women. Even looking at just the retirement years, a study by Fidelity Investments found that women can expect to spend about $15,000 more on healthcare than men — $150,000 in total. These considerations make it extra important for women to plan for foreseeable healthcare expenses — and keep a good emergency fund for unexpected medical expenses. Financial experts generally advise setting aside three to six months’ worth of expenses for an emergency fund. And Dr. Lacey Book, a serial entrepreneur, encourages women to make use of health savings accounts. A health savings account, or HSA, is a type of account where people can set aside pre-tax money to pay for certain medical expenses. “This allows them to save, take advantage of tax benefits, and have the freedom to choose where you spend your money in regards to your health,” Book points out. A flexible spending account is a similar tax-advantaged account that can be used for certain medical and dental expenses. 4. Save for retirement Women generally live about six to eight years longer than men do, according to the World Health Organization, which means many women’s retirement savings have to last much longer than men’s do. Even women who share income and expenses with a male partner may outlive him and be solely responsible for years more of general living expenses, and potentially long-term care, depending on their health. One way women can shore up their retirement funds is to consider retiring later than they’d planned to allow more time for their earnings to increase and their retirement funds to accumulate interest. Another is to take full advantage of retirement accounts, including any matching contributions their employer may offer. Funding traditional IRAs and 401(k) plans is especially beneficial because that allows the owner to make use of pre-tax contributions. 5. Repay debt Women hold almost two-thirds of the outstanding student debt in the United States, according to an analysis by the American Association of University Women. And data from FINRA, the Financial Industry Regulatory Authority, shows that women are more likely than men to incur fees for late payments and going over their credit card limits. The interest women pay on these debts can also be a big factor that holds them back from accumulating wealth. The sooner debt is paid off — especially debt with higher interest rates — the better. Whichever strategy you use, be sure to make at least the minimum payment on every debt each month so those debts don’t accumulate even more fees and interest. Women who need help paying off debt can look to the best debt relief companies, which offer help with credit counseling, debt management, debt consolidation, and debt settlement.
Guest Post by Allison Kade One of my favorite things about the new year is that it’s an opportunity to reset. This can mean different things to different people: Maybe you want to repair or invest more deeply in your relationships with the people you love. Maybe you want to get healthy. And if you’re like many Americans, maybe you want to refocus on your finances to finally feel more secure about your money in 2020. In fact, two in three Americans are making a financial resolution for 2020, according to a new study. New year’s resolutions often get a bad rap because so many people can’t stick to their goals, but there’s evidence that we’re doing better than you might expect — that same study found that nearly half of those who made financial resolutions last year actually kept them. All of which to say, financial resolutions can be a powerful tool to restart the clock, stop focusing on old mistakes and embark on a fresh financial future. Among financial goals, these three top the list, according to the same Fidelity survey: Save more Pay off debt Spend less At the end of the day, however, they’re all different perspectives on the same core principle: Spending less than you earn. You can save more by spending less, or by earning more. And you can pay off debt by doing either of those things and dedicating the difference to your debts. So really, for many people, the key to mastering new year’s resolutions will come down to acing that equation: Can you spend less than you earn? One way to master this savings equation is to start the year with a financial detox to help you reset some of your negative patterns from the year before. This process can also help you focus on the resolutions you’ve chosen for the future. Here’s how to pull it off. Study your 2019 patterns Dig up your old credit card receipts from the past year, or at least the past three months. What are you spending the most on? Is there anything you’re spending on less than expected? You can either do this audit by hand, or you can use an app such as Mint to group your spending into different categories. Write down your values Ask yourself this question: What matters most to you? Write out a mission statement for you and your family. Do you prize travel and exploration? Do you prize self-enrichment? Do you prize down time relaxing? This will help guide your spending. If you particularly look for travel, then maybe it’s okay that you spend your money on trips. And if you choose to place your money behind nighttime courses, that makes sense if enrichment is a top goal. But if, for example, you say that your main value is relaxing time with the family, is it the best use of time and money to shell out for five different after-school classes for your kids? If you most care about enrichment, does it make sense to spend thousands of dollars on travel if that isn’t a top goal? Now compare your values to the money patterns you’re actually finding in your own life. Are they aligned? If they’re not, what else could you do to align them? Highlight where your values are misaligned with your budget If you determine that you have some line items that are out of whack with your spending goals, write them down so you can work on them going forward. Be specific. Instead of “I’m going to spend less on coffee,” try “I’m going to cut out those mid-afternoon lattes, so I can dedicate that money to a travel fund instead.” The first part, notes exactly where you’re going to cut. The second part is just as vital: What’s the point? Keeping the larger goal in mind can help you keep up the motivation to make sacrifices in the present. After all, that coffee (or Hulu subscription or cocktail or whatever) is pleasurable right now, and there’s nothing wrong with getting it if you can afford it. But if you have to compare this specific purchase to your larger goal — which would you choose? Try a challenge To start your year off right, you might choose to do a spending/savings challenge. There are lots of versions of this, such as saving the dollar amount of the week it is during the year (for example, save $1 in the first week of the year and $52 in the last week, for a total of $1,378). Striking up a challenge can make the whole thing feel like a game, add an element of fun and help you focus on the task at hand (saving $27 because it’s the 27th week, let’s say) rather than fixating too much on a goal that feels weightier than that. Conquer your triggers with an "If/Then" Some experts suggest that framing your resolution as a trigger and an action can make a big difference. Choose an “if” or “when” as your trigger and a “then” to describe the action you’ll take to replace the negative one. For example, if you were trying to resist dessert but found yourself tempted whenever you’re out at a restaurant, you might say, “If the waiter comes over at the end of a meal asking if I want anything else, then I will order a tea.” Similarly, you can anticipate your spending triggers this way. Maybe you tend toward emotional spending, like popping into a store whenever you have a bad day at work. You might try something like: “If I have a stressful day, then I will go home and take a hot shower.” Think about the bigger picture Not everything is about spending and saving, at the end of the day. Once you achieve a stable financial base — like having enough of an emergency cushion that you won’t get in trouble if you run into any unexpected events like a car breakdown — then it’s time to think about your longer-term picture. Especially if you have a family, kids, or anyone who depends on you financially, writing a last will and testament can become important. Many people put off making a will because they don’t have a lot of assets and think they don’t need one. The truth, however, is that you don’t have to be rich to need a will: If you have any “stuff” at all, or even basic financial accounts, you have assets. A will lets you determine who gets what (that chess set from your grandfather — should it go to your sister?). The other really big reason to make a will is if you have kids. A will is an opportunity to designate legal guardians for your children. That’s who would take care of your kids if you were no longer around. Generally speaking, the default is that your children would probably go to their other parent, but what if (heaven forbid) you and the other parent passed away together? If you don’t have a will, then these decisions will be made by the probate court. That often is determined by who the closest living relative is. It doesn’t, however, take into account the fact that your child may have a closer relationship to your cousin than to your brother, or the fact that your cousin has kids and you’d like your child to grow up as their sibling. Your choices in your will are typically still subject to the judgment of the probate court, but a will can help the court understand your preferences and wishes. Generally speaking, guardianship wishes tend to be honored unless there is a specific reason why the appointed guardian is deemed unfit. For specific questions about your situation, speak to a qualified attorney. Starting 2020 off right Your resolutions should be about what matters most to you. That includes money, and also your family and values: How can you be closer to the people you love? How can you prioritize the things you care about? How can you help protect your loved ones in the future? Whatever your passion, here’s to making it happen in 2020. Allison Kade is the editorial director at Fabric, a one-stop shop for families to organize their finances. She has written about money for publications like Bloomberg, Forbes, The Today Show, Business Insider, The Huffington Post, TheStreet, Credit.com, Fox Business News, and The Fiscal Times. In addition, her work has appeared in lifestyle publications like Real Simple, Travel + Leisure, Lifehacker, xoJane, and BoingBoing.
Because the holiday season is often about gathering friends and family, enjoying special meals and treats together, and exchanging gifts, it can be easy to overspend. To keep your spending in check, follow these tips to lower your holiday expenses and keep your budget feeling jolly: Set priorities Be selective and intentional about your traditions Plan ahead Find savings Track your spending Avoid debt Set priorities Think about what matters most to you during the holidays and consider what makes the holidays fun for your immediate family. Is it the food? Time spent together? Decorations? Serving others? Once you’ve narrowed it down, think of ways to focus on those parts of the holiday and reduce focus on other aspects. This way, the money you do spend over the holidays will contribute more to what matters to you and to your immediate family. Be selective and intentional about your traditions If you’re just starting to create holiday traditions with friends and family, be thoughtful about what you really want and how these traditions may affect you in the future. Start simple traditions around the parts of the holidays that matter most to you. You can also start traditions that help you off-set holiday expenses. For example, Kate Raidt, founder of Kate Raidt Sales Coaching, has an annual yard sale. “Every year in November or December, we have a yard sale. It's amazing in one year how much the kids outgrow. We make $500–$1,000 every year selling stuff that has collected dust,” she says. If you already have holiday traditions, take some time to evaluate them. Which ones do you enjoy most? Are there traditions that your partner or kids value? See what you can do to adjust or reframe your holiday traditions to make them easier on your finances. For gift exchanges, try setting limits or limiting who you exchange gifts with. Logan Allec, personal finance expert and owner of of Money Done Right, suggests, “It’s often made fun of in movies and TV, but a gift limit with your loved ones is a win-win for everyone. Without a gift limit, it’s easy for someone to accidentally over-spend. Not only will this make the other people feel bad for not buying as nice of a gift, but you can quickly end up spending a significant amount of money.Instead, talk ahead of time to agree with everyone on a limit for your gifts. Whether it’s $10, $20, $50, or more per person, you all will now have the freedom to buy an affordable gift.” You can also talk to relatives and friends about alternatives to gift giving, like spending time together. Holly Wolf, the Director of Consumer Engagment for SOLO Laboratories, Inc., says, “Most people are agreeable to not exchanging gifts if you approach it kindly. Suggest that you spend time together rather than exchanging gifts.” Plan ahead Planning ahead for the holidays includes organizing activities with friends and family. As you plan for holiday celebrations, be sure to include a financial plan by budgeting. Your holiday budget should include all holiday-related expenses — travel, food, gifts, decorations, and anything else you buy specifically for the holidays. “If you set an overall spending limit first, you can then decide how all of your different costs will fit into your budget. Furthermore, this will help you define what overspending truly means and discover cost-saving options,” advises Chris Terschluse, head of Marketing and Content for Chime. If you want to set aside money for the holidays throughout the year, that can help you have a larger budget and a little more wiggle room. “Start by making a list of the food you think you'll serve and what items you'll need to buy. Add other holiday costs to the list, such as decorations and gifts.Once you have a rough budget, total it and divide it by eleven. Start saving money each month, starting in January, to be used for your holiday expenses. As the holidays approach, you'll be ready with enough money saved to pay for holiday expenses without going into debt,” suggests Deacon Hayes, owner and founder of WellKeptWallet.com. The amount and frequency is up to you and should be based on what’s feasible with your regular budget and how much you’d like to have for holiday spending. The most important part is to be consistent. If you’re planning ahead, you can also try to spread some of the costs throughout the year so that they don’t all hit at once. Shopping early can also help you save money on last-minute mark-ups. “When you finish your holiday shopping early, you won't have to pay extra for either the item or the shipping simply because you waited to shop until the last minute,” says Hayes. You should make travel-related purchases early because those prices increase around the holidays. “Airlines, car rental agencies, trains, and every other form of transportation dramatically increase prices around the holidays. Even gas stations raise prices as they know that people will pay whatever they need to in order to get home and see their families.As a result, the best way to save here is to end up booking your travel as early as you can. This way, you can save money and ensure that you’ll still make it home for the holidays,” says Allec. Depending on your shopping habits, it may actually be best to put off shopping as late as possible. Anne Keery, Unique Gifter owner and editor, says, “Lots of people, myself included, love to find the perfect gift... and then the next perfect gift, and the next. By the time Christmas rolls around, I'll have found six perfect gifts for one person and be wildly over budget. Start shopping later, so that you don't run out of budget before you run out of time. There will be new sales and deals, so don't worry, you aren't missing out." You know yourself, so take the approach that best suits your needs. Find savings As the holidays get nearer, create a shopping list. Once you have your gifts determined, stick to your list and keep an eye out for when those items go on sale so you can comparison shop. You can do your own research and compare prices manually, or you can use an extension that does it for you. “Using a browser add-on, like PriceBlink or InvisibleHand, will ensure you never overpay. The free browser extension automatically checks for lower prices, coupons, and free shipping anytime you are shopping online. It also tracks prices and price history, so you can decide the best time to buy,” says Karl Quist of PriceBlink. You may also be able to find discounted gift cards. “Discounted digital gift cards are also a great way to save. On GiftCardGranny.com, you can find discounted gift cards that you can purchase and then shop with (automatically creating your own discount) or give as gifts (the recipient will never know that you saved on their gift!),” says Trae Bodge, smart shopping expert for TrueTrae.com. You can also try other shopping methods, like Facebook or garage sales. “Use Facebook Marketplace as a place to find gifts for people. Allow someone else to make the impulse buy and resell the item back out to the Marketplace for a discounted price. You can find many items new and then use the chat feature to negotiate the price,” says Brittany Kline of The Savvy Couple. Alternatively, you can create homemade gifts or regift. Just be careful not to regift to the same person who gave you the gift. “Homemade gifts are a great way to save money and provide someone with a unique gift. Not all homemade gifts are created equal. If you are going the DIY gift route, give a gift that people can actually use! Homemade hand scrubs, cookie ingredients in a mason jar, hot cocoa and a mug, homemade candles...the list goes on. Nothing like a quick Pinterest search. Think about practicality. You don't want to waste your money on making homemade gifts that people really don't want,” says Kline. Gifts also do not have to be products—they can be charitable donations. This is especially great if you have friends or family who are passionate about causes. “Instead of buying gifts, make a contribution to a charity in the name of those who you normally buy gifts for. Your tax deductible contribution can be far less expensive than buying gifts. The charity will never reveal the size of the gift, and you can use one donation to cover many people,” advises Wolf. Determining the best way to approach gift-buying will help you find a solution that shows thought and care without wrecking your finances. While there may be some decorations that need to be purchased every year, you can approach decorations in many of the same ways that you would gifts. You can create your own and watch for sales. Plan to reuse decorations every year to reduce those costs. Bryan Stoddard, Director at Homewares Insider, counsels, “I've seen this problem when people approach each year's holiday as a completely new event. They need to have the latest and newest decorations, and their old decorations are forgotten and left gathering dust. I don't mean to say that decorations are the main way people spend too much during the holidays, but in my opinion, they affect spending in a big way. Because of that, I'd recommend you bring out your old decorations and reuse them.” Another good way to find savings is to research cheaper options for your recurring expenses. “See if you’re paying too much for a monthly service like cell phone service, TV, or internet. Wirefly.com offers a comparison engine for cell phone plans, TV, internet, insurance, and more,” says Logan Abbott of Wirefly.com. You should also make sure that you’re not paying for subscriptions that you’re not using.“Take a look at your monthly subscriptions on your credit card. Many people sign up for some monthly delivery service like vitamins, or razors, or an online news website, and then they stop using the product but forget to cancel. You can do this yourself by spending 15 minutes scanning your credit card bill,” Abbott adds.These tips are great because they help you save on expenses throughout the year, not just over the holidays. Track your spending If you don’t know how much you spent on the holidays last year, keep good records this year. Track your spending as you go so that you know how much you’re spending on the holidays and compare it to your budget. You can track it yourself in a spreadsheet or use a budgeting app.“During the holiday season, incidental purchases can easily pile up. That's why it's important to keep track of every expense during the holidays. Whether you do it by spreadsheet or via an app, it's important to know how much money you really have. It doesn't matter if it's an ugly Christmas sweater or just an extra cup of cocoa — you need to know that money is gone,” says Michael Bonebright, DealNews.com consumer analyst. If you’re spending more than you planned, evaluate why and find ways to reduce costs. Once the holidays are over, review your spending. “Tracking will also help you gauge how healthy or unhealthy your holiday spending habits are and help prepare you for the following year,” cautions Nathan Wade, Managing Editor for WealthFit Money. Understand the reasons behind your purchase decisions. If you’re comfortable with the amount you spent, that’s great. If you feel that you overspent, figure out how you’ll approach the holidays differently next year. Avoid debt It can be tempting to put holiday expenses on a credit card or use layaway programs for gifts. While these are nice options and tools to have, be sure to use them carefully. Debt often comes with interest, which means that you’ll typically end up paying more for an item than its sale price. As you’re making purchases, it can be helpful to think about the cost in terms of work hours, not dollars. “Consider your purchases in work hours, not dollars — how long would you have to work to buy that huge LEGO set? Putting your purchases into a different perspective can help you stay on track,” suggests Bonebright. If you’re working extra hours or anticipate a holiday bonus, don’t spend it before you have it. “Leave the holiday overtime pay and bonuses out of your budget. These funds are not guaranteed until they show up in your bank account, so you should never count on them. Then, if you do get a sizeable holiday paycheck, you can put those funds toward something fun,” says Bonebright. If you’re taking on large amounts of debt for the holidays, it’s probably not worth it. Instead, it may be best to reset expectations for your family and friends or find other ways to lower your spending. As you thoughtfully consider your holiday traditions and budget wisely, you’ll be able to enjoy the holidays without worrying about your finances and financial future. For more holiday budgeting tips, check out Consolidated Credit’s “Debt-Free Holiday Budgeting Guide” or Kalicia Bateman's "How to Create Your 2020 Holiday Budget".
This is Chapter 1 of 5 in our Ultimate Guide to Debt Relief series. One of the joys of adulting is managing your finances. Credit counseling can help you get a handle on your finances and manage them better. Credit counseling is one option when trying to get out of debt. If you feel like your finances are beyond your control or if you’re dealing with debt that seems impossible to pay off, reviewing your finances with your credit counselor can help you successfully gain control of your finances and understand your options. “Most people don’t know what to do when their debt gets out of control and should shop around to make sure they don’t fall into a scam,” says Daniel Rodriquez, director of operations at D.R. Hill Wealth Strategies, LLC. Here’s everything you need to know about credit counseling before you start: What is credit counseling? How does credit counseling work? How does credit counseling affect your credit? Who needs credit counseling? What are the benefits of credit counseling? What makes a good credit counseling company? What red flags should I watch out for? What’s the difference between credit counseling companies and credit repair companies? What’s the best way to prepare for a credit counseling appointment? What is credit counseling? Credit counseling is one way to get financial advice tailored to your situation. Credit counselors can help you create a budget, make a plan to pay off debt, and evaluate your credit report and credit score. Sometimes credit counseling agencies offer free workshops on personal finance. “A credit counselor is only the first step forward in resolving your debt or financial concerns. They will guide you and give you the resources to get out of the hole, but it's up to you to put things into action,” says Jared Weitz, United Capital Source Inc CEO and Founder. Most credit counseling companies offer these services for free. One paid service these companies offer is a debt management plan. If you enroll in a debt management plan through a credit counseling company, you can expect them to work with your creditors to lower interest rates and waive fees. Ultimately, this will make it easier to pay off your debt. The credit counseling company will also manage your monthly payments for you, so all you have to do is make one large monthly payment. The company will then disburse the funds to your creditors. Enrolling in a debt management plan typically involves a one-time enrollment fee and a monthly charge for managing your payments. How does credit counseling work? Whether or not you’re having trouble managing debt, meeting with a certified credit counselor can help you get a better handle on your money. The first step is scheduling a free consultation. At the consultation, the credit counselor will review your finances and help you make plans to manage your money better. “Credit counseling won’t provide you with a hands-off debt solution. Instead, you’ll typically talk with a financial professional who will help you find a way to tackle current debts and devise a budgetary approach that should help you keep out of debt in the future,” advises Sean Messier Credit Card Insider credit industry analyst. How does credit counseling affect your credit? Credit counseling generally has no effect on your credit. However, creating and implementing a plan to pay off debt and meet your financial obligations can help your credit score. Credit scores are calculated based on your current accounts, current credit card usage, and your history with both. When scoring companies consider the history of your accounts, they look at how consistent you are with making payments on loans and credit card bills. Becoming more consistent and paying off your current debt obligations has a positive impact on your credit score over time. Who needs credit counseling? Since credit counseling primarily focuses on financial education, anyone can benefit from it. “If you are opening your first credit card, need to manage student loans or a mortgage, and looking to make a long term financial play, credit counseling is a good option for you to pursue,” suggests Weitz. A credit counselor can help you understand your financial obligations and make plans to manage your finances well. Credit counseling can be especially helpful if you don’t feel like you have a handle on your debt. “Someone who is looking to pay off all their debt without ruining their credit score would seek out a non-profit credit counseling agency. These often have an education component to them as well, so clients can learn better money management skills during the credit counseling session,” says Katie Ross, Education and Development Manager for American Consumer Credit Counseling. Credit counselors help you assess your finances and understand your options for dealing with your debt. “Credit counseling could be a beneficial move if you’re struggling with debt management in any capacity, especially if there are free services available in your area. If you’re considering a more drastic approach to your debts, like bankruptcy, credit counseling is an essential first move,” adds Messier. What are the benefits of credit counseling? Credit counseling offers several benefits, including increased financial literacy, budgeting assistance, and reviewing your credit report. Credit counseling can also help you make a plan to pay off debt and become debt-free. Taking advantage of a credit counselor’s help in crafting a plan you implement on your own or using a credit counseling company’s debt management program can be beneficial if you are trying to get a handle on your debt. Even if you feel good about your financial situation, it’s always helpful to work with an expert to see if there are habits you can change to do better. Experts on the benefits of credit counseling Jared Weitz United Capital Source Inc CEO and Founder“In most instances you are getting free advice. For many people working through credit debt or floundering in financial hardship, having someone lay out a plan forward will help you reduce your stress and be able to better manage your finances moving forward. They can give you key tools and educate you on how to get out of debt and stay there.” Simon Nowak, 3 Credit Scores CEO“The biggest benefit of credit counseling is learning how to budget properly. When you budget, you're aware of precisely where you're spending is excessive. Once you see where you can reduce spending you're able to allocate the savings towards eliminating debt which is the ultimate goal.” Daniel Rodriquez, director of operations at D.R. Hill Wealth Strategies, LLC“People will have a plan and budget in place to reduce or eliminate their debt, resulting in higher credit scores, lower interest rates, less stress and more disposable income.” What makes a good credit counseling company? As you’re choosing companies to work with, you need to recognize good companies to work with. One easy way to start identifying a good company is through its communication and education practices. “The program should include (at no extra charge) educational information and material, and help and advice on creating and using a budget, and managing debt,” says Sean Fox, Freedom Debt Relief co-president. The credit counseling company you choose should also be clear about the cost of services. Most debt relief companies offer free consultations, to make it easy to ask questions and understand fees before committing to a program. “The agency should provide clear information, written and verbally, that explain the program, the timeframe, and the fees,” adds Fox. Industry accreditations, memberships, and certifications Accreditations and participation in organizations show a company’s dedication to providing high quality credit counseling. Fox identifies two to look for: “It can be a good sign if an agency is a member of the National Foundation for Credit Counseling (NFCC) or Financial Counseling Association of America (FCAA, formerly the AICCCA); this indicates the company follows industry standards,” he says. Memberships in these organizations is typically easy to determine because they are often displayed on a company’s website. Both organizations account for accreditations from the Council on Accreditation (COA), though the AFCC also allows certification through Bureau Veritas and BSI Group. These organizations conduct in-depth reviews of companies against industry standards to determine how well they serve clients. If you’re also considering bankruptcy or if bankruptcy comes up when you meet with a credit counselor, double-check that the agency you work with is approved to offer bankruptcy counseling. “The Trustee Program of the U.S. Department of Justice offers a list of credit counseling agencies approved to provide counseling before a bankruptcy filing,” says Fox. If your agency isn’t on the list and you need bankruptcy counseling, choose one that is. In addition to looking for accreditations at the company level, you should also consider the training and certifications of a company’s credit counselors. The NFCC and FCAA also account for these when they grant membership to companies. “When you sign up with a counselor, make sure that they are certified and educated in financial management. This might seem straight forward, however there are many instances where counselors know just as little as the customer,” recommends Weitz. Ask questions about your counselor’s background and experience. Their response will help you determine if they are someone you want to work with. It should also be apparent from how they talk through creating your budget, setting financial goals, and getting out of debt how knowledgeable they are. If your credit counselor’s responses and solutions seem in-line with common practices and make sense to you, they’re probably trustworthy. If you do not know much about finance, do some research beforehand about the financial goals you want to reach so that you’ll know. If your credit counselor makes a suggestion that seems odd, ask more questions to learn more about why that approach would make sense. If it still doesn’t make sense to you, you’re not obligated to follow the advice. Formal and informal complaints You’ll also want to know the history of the credit counseling agency you work with. This means checking for formal complaints and reading customer reviews. “Check each one out with the State Attorney General and local consumer protection agency for complaints possibly filed against them,” cautions Rodriquez. Understanding the nature of the complaints and how frequently and recently the complaints are filed will help you quickly eliminate credit counseling agencies to work with. If your options are limited, knowing what to watch out for will help you protect yourself if you do decide to work with a specific company. Good credit counseling companies will also have good customer reviews. It’s not unusual for every company to have a few bad reviews. However, if you see an overwhelming number of bad reviews, consider working with other companies. You can check well-known review sites, but be sure to understand how they moderate reviews. Some companies may repress reviews or may not have a good process for weeding out fake reviews. Best Company moderates all the reviews that come in to ensure that they meet verification standards and does not repress reviews. What red flags should I watch out for with credit counseling companies? Look out for the following red flags when investigating a credit counseling company: High, upfront fees Upfront requests for sensitive financial information, like your Social Security Number Charges for financial education and advice Unrealistic claims Limited debt resolution options presented Dropout and success rates "The agency should provide dropout and success rates to you upon request," says Fox. Researching companies in advance will also help you avoid scams and bad companies, but don't ignore unsettling feelings if they come up during your first meeting. "As unscientific as it may be, you'll know if something does not feel right when checking out a company," says Fox. Experts on red flags Jared Weitz United Capital Source Inc CEO and Founder“Scams and poor service exist when it comes to credit counseling. A key way to tell if you are part of a scam or working with an agency that isn’t up to par is if they ask for any large upfront set-up fees and if they make promises that sound too good to be true. There is no easy way to get out of debt and if they make it sound like you will be debt free tomorrow, tread carefully.” Katie Ross, Education and Development Manager for American Consumer Credit Counseling“Some red flags to watch out for to prevent credit counseling scams include high fees from the get-go, and the scammer asking you for sensitive personal financial information. If you’re unsure whether or not the agency you’re dealing with is legitimate or not, check with the Better Business Bureau,” says Ross. Daniel Rodriquez, director of operations at D.R. Hill Wealth Strategies, LLC“The company requests a payment before any services are provided. Consumers are told not to directly contact a credit bureau. The company tells the consumer to create a new credit report by applying for a FEIN instead of using their SSN. Consumers are not informed about actions they can do themselves for free.” What’s the difference between credit counseling companies and credit repair companies? Credit repair companies are very different from credit counseling companies. Credit counseling companies focus on helping people move forward and improve their finances through budgeting and making plans to get out of debt. Credit repair companies focus on helping clients deal with bad credit by reviewing their credit report and credit history and correcting errors. Credit repair companies also offer credit monitoring and fraud notifications. They do not typically offer financial education. “If there is a valid item being disputed, it will be removed (permanently) from the credit report. However, if it is not valid, or is resolved in favor of the creditor or lender, it will go back on the file after about 60 days. As such, some people may use a credit repair service to try and achieve only a temporary increase in a credit score in order (for instance, to improve short-run chances of getting a loan). The danger in that outlook is that it may be taking a short-term view, not a longer-term commitment to improving credit profiles and scores. Consumers should note that credit repair services do not solve the root problem of why a consumer’s credit is poor in the first place,” says Fox. While credit repair can help fix errors from the past, it does not help boost your credit score over time. “Credit repair companies won’t always be able to help you, particularly if there’s nothing inaccurate on your credit reports. Credit counseling, on the other hand, can provide you with a solid educational base you can use to manage your finances more wisely in the future,” adds Messier. What’s the best way to prepare for a credit counseling appointment? Preparation will help you get the most out of your credit counseling. Have clear goals in mind. For example, maybe you want help creating a budget, starting a savings account, building up an emergency fund, or getting out of debt quickly. Let the credit counselor know your financial goals and intentions. They will be able to target their advice to your goals. You should also have hard numbers regarding your spending and your income ready. This will enable the credit counselor to work through your specific situation, and you’ll walk away with good advice and an actionable plan. “Know your numbers. Bring paystubs. Prepare a detailed list of the money coming in and the money going out. Identify who you owe and how much you owe. Identify your financial goals and what you’re looking to accomplish by the end of everything,” advises Rodriquez.
Homeownership is an exciting step. It’s also a lot of responsibility. Whether you’ve just bought a house, are considering home renovations, or are house shopping, it’s important to assess how much you’re spending on your house and how much house-related debt you have. A 2019 study conducted by Freedom Debt Relief found that more than half of Millennials (54 percent) and just less than half of Gen X (43 percent) do not know how much they spend on their house every year. Houses cost more than a monthly mortgage payment. Homeowners must pay additional taxes, pay for services and utilities, buy insurance, and more. If you’re already a homeowner, you should spend time reviewing your home-related expenses, including your mortgage. “Have a solid understanding of your actual budget, not what you think your budget is. Most people are off anywhere from 25–50 percent of what they think they are spending compared to what they actually are. After that, make sure you understand ALL the expenses that go into purchasing and owning a home. This includes closing costs, PMI, maintenance costs, etc. Many renters don't realize how much their landlords do for them until after they own a home, and this can unpleasantly alarming,” says Jeff Rose, CFP and CEO for Good Financial Cents. Calculate how much home-related debt you have. Keep in mind that this may be more than what you owe on your mortgage, especially if you’ve been using loans or carrying a balance on your credit card for other home-related expenses. If you’re planning a renovation, you also need to set a budget for that and stick to it. Once you’ve reviewed how much your spending and what your total home-related debt is, you’ll be in a better position to manage your expenses and your debt. Managing debt The same study by Freedom Debt Relief found that the most common ways homeowners dealt with debt was through home refinancing (38 percent), home equity loans (34 percent), and debt relief or debt settlement (24 percent). Here are eight tips from experts on the best ways to manage home-related debt — when it’s manageable and when it’s become overwhelming. If you’re dealing with manageable home-related debt, including your mortgage: Get a smaller loan than approved by bank Use cash for all other home expenses Practice strict budgeting If you’re dealing with an overwhelming mortgage: Downsize your home Meet with a housing counselor Renegotiate loan terms If you’re dealing with overwhelming home-related debt separate from your mortgage: Receive credit counseling Consider debt consolidation or debt settlement If you’re dealing with manageable home-related debt, including your mortgage Get a smaller loan than approved by bank “The smartest thing to do is to take out less of a mortgage than what a bank approves you for. Having it so that payments can be covered on only one income reduces stress in case one person loses their job.” — Steffa Mantilla, debt payoff and wealth building strategist for Plantsonify “The first and best way, of course, is to plan appropriately. You’ll need to have accumulated plenty of savings — and then some. Ideally, a downpayment will be 20 percent of the purchase price. But savings must go much further than that.” — Tanya Peterson, vice president of brand at Freedom Debt Relief Use cash for all other home expenses “My best advice is to avoid going into home-related debt. Besides your mortgage, your goal should be to pay all of your home expenses with cash. This planning starts well before the purchase of your home. When you identify what the home needs in order to be move-in ready for you, or if you decide you want to renovate along the way, budgeting for these costs is essential along the way! If not, it can be incredibly overwhelming to assume a new mortgage and establish more debt related to your home, in addition to that.” — Lauren Mochizuki, Casa Mochi founder Practice strict budgeting “Decide if you can pay down the debt on your own with serious budgeting and belt-tightening. Determine an amount you can allocate to paying off debt each month — an amount that is more than the total of all minimum payments. Then select either the avalanche or snowball method.” — Peterson If you’re dealing with an overwhelming mortgage Downsize your home “If home debt is overwhelming, it’s smart to think about downsizing. No home is worth the intense financial stress caused when you’re house poor. Owning a home is more expensive than renting so going back to renting is always an option temporarily while you get your finances back in order to be in a stronger position to buy again.” — Mantilla Meet with a housing counselor “One of the best practices for overwhelming home-related debt is to get help from housing counselor. There are some that are free and some that cost. They can sit down with you and go over your situation. They will come up with a plan to walk you there your situation. The free ones are just as good as the paid services. They will also help you fill some paperwork if relief is offered. Here is the link to the housing counselor site and you just put in your zip code to find the closest one to you.” — Harold Trinh-Moore, JH Moore, Inc Renegotiate loan terms “If your home debt has become overwhelming, your options will depend on the type of debt. For example, if you are struggling to make your mortgage payments, you could attempt to renegotiate your loan terms with the goal of achieving a lower monthly payment or lower interest rates. However, mortgage lenders are rarely willing to do this. In extreme circumstances, bankruptcy could be a last-resort option.” — Omar Chouche, CEO of Liberty Debt Relief If you’re dealing with overwhelming home-related debt separate from your mortgage Receive credit counseling “Consider credit counseling if you would benefit from a slightly lower interest rate on a credit card. This lowers the monthly payment, but it can take about five years to completely get out of debt. For a consumer with a significant amount of debt, this may not be the best alternative; they may need more help than just a reduced interest rate.” — Peterson Consider debt consolidation or debt settlement Debt consolidation “See if you can consolidate debt with a personal loan. Many people end up accumulating debt on credit cards — for home expenses, or for other expenses when the home-related ones become overwhelming. For someone maintaining accounts with high interest rates, a personal loan from an independent lender may be helpful. Personal loans can offer rates much lower than credit cards offer. Their rigorous payment schedule can be helpful to keep one on a strict schedule to eliminate the debt.” — Peterson Debt settlement “Evaluate debt settlement. This option may be helpful for someone with $7,500 or more of credit card debt, who is having avery hard time making minimum payments, and who has suffered a financial hardship (such as job loss, medical expense, divorce). Debt settlement companies are regulated by the Federal Trade Commission. They work on a consumer’s behalf to lower principal balances owed. The American Fair Credit Council is a resource for reputable providers.” — Peterson
Guest Post by Brian Meiggs The number one rule in personal finance is to spend less than you make. This can be accomplished by having a budget which can help you save money and make your financial goals a reality. How much you have in your savings account depends on how much you are budgeting each month. The typical American household has an average of $8,863 in an account at a bank or credit union, according to a recent report from Bankrate that analyzed inflation-adjusted data from the Federal Reserve. How do you stack up? Here are five easy steps to put a solid budget plan in action so that you can save more money: 1. Determine your income Your first order of business is to figure how much money you have coming in from your job and any variable income from side gigs. If you have variable income, such as driving for Uber Eats full time, then you will need a different style of budgeting system and you’ll need to learn how to manage your variable income to the tee. It’s crucial to budget for how much money you have coming in every month in order to meet your expenses. 2. Determine your fixed expenses Your next step in creating a budget is accounting for your fixed expenses. Fixed expenses are recurring monthly charges like bills, rent, car payment, and your student loans. Your fixed expenses do not change monthly and can easily be accounted for. 3. Determine your variable expenses After figuring out your fixed expenses, take a look at your variable expenses. Variable expenses change from month to month and include spending on eating out, date nights, recreational fun, and other shopping-related expenses. When you are focused on lowering your monthly expenses, you usually start with variable expenses to find ways to trim spending. 4. See where your money is going After you have a solid picture of where your money is going — it is time to evaluate. Ideally, you would want to create a budget where your expenses are less than your income. This means that fixed costs should take up no more than 50 percent of your income. Variable costs that change monthly should take up 30 percent and you should allocate 30 percent towards savings, ideally in a high-interest online savings account. 5. Adjust your expenses to meet your goals After you create a budget, you want to find ways to trim spending and be able to put more money towards savings. This can be done by using automated saving tools like Digit and Qapital, restricting variable expenses, canceling unnecessary subscriptions, and living below your means. The bottom line Making and managing a budget consists of a few common-sense factors: determining your income, determining your fixed expenses, determining your variable expenses and seeing where your money is going, and adjusting your expenses to meet your goals. When you get serious about your budget, you will find more ways to save and perhaps you can be debt-free at last. Brian Meiggs has a Finance degree from Virginia Commonwealth University and founded My Millennial Guide after six years of Financial, Accounting, Mortgage, and Credit Lending experience in Virginia and Washington, D.C. Meiggs has spent the last several years writing about personal finance and been quoted in prominent online publications, including Yahoo! Finance, NASDAQ, MSN Money, AOL, Discover Bank, and GOBankingRates.
Creating and sticking to a budget is the bedrock of effectively managing your finances. It helps you set short-term and long-term financial goals and achieve them. But, it can be a difficult thing to do. Luckily, there’s an app for that. Actually, there are several. “There are many different kinds of budgeting apps that each have their own perks. Depending on what your goals are, some may be better than others for your situation,” says Matt Dworetsky, Dworetsky Financial President. As you research different budgeting and financial planning apps, here are a few great ones to consider. Budgeting Mint Security features: VeriSign for data transfer and multi-factor authenticationCost: FreeCompatible devices: iOS and Android How it works Mint was created by Intuit, which is the company that owns quickbooks and turbotax. If you use any of these additional services, you can use your same Intuit account to access Mint. Mint users can view all of their financial information in one place on the app. It allows you to track spending, create a budget, track bill payment, and view investments. Mint also shows you your credit score and sends alerts for ATM fees, bill due dates, overspending, and unusual spending. Finance expert opinion Matt Dworetsky, Dworetsky Financial President“Mint is a great “one stop shop' budgeting app. You can connect your bank account, credit cards, monthly bills, and investment accounts to Mint and see all of your financial information organized in one place. Mint will send you updates on your spending so you can see how and where your money is being spent, as well as offer ideas on how you can budget better. One of the best things about Mint is that you no longer have to log into multiple websites to track your finances, Mint makes it easy by organizing everything on one dashboard.” Tommy Wilke, CreditLiftoff.com Co-founder“Mint is free and works on a variety of different platforms. Mint will create a budget based on your spending habits, tracks your bills, provides alerts (i.e. late payment), and reports your credit score on an ongoing basis... what's not to like here?” Wally Security features: Password protectedCost: FreeCompatible devices: iOS and Android How it works Wally allows users to track daily and monthly spending by scanning receipts and inputting spending amounts manually. While the manual input is not as convenient as an automated update, it does help you track spending. Seeing how you spend money daily, weekly, and monthly, helps you understand your habits and make changes as needed to meet your goals. Finance expert opinion Matt Dworetsky, Dworetsky Financial President“With Wally, every time you make a purchase, you can manually enter it into Wally or take a picture of your receipt. It will then show a breakdown of how you spend your money to help you budget. A con with Wally is that it doesn’t actually link to your financial accounts, so you have to be accountable with updating the app to make sure the numbers match. Even though it might be a little more work on your end, it’s a free app that will help you get the basics of budgeting.” YNAB Security features: Data encryption, bcrypt hash user passwords, accredited data centersCost: $6.99 per month or $83.99 per yearCompatible devices: Windows, Mac, Android, iOS, Amazon Echo, Alexa, Apple Watch How it works YNAB stands for “You Need A Budget.” It syncs to bank accounts in the U.S. and Canada. It makes it easy to set budgets and track spending for individuals and people with shared finances. YNAB also creates reports and tracks progress towards financial goals. Budgets can be set in different currencies. YNAB’s philosophy is to empower people to be active and informed about their finances so that they control their own spending. To support its app users, YNAB offers online budgeting workshops for free. YNAB professionals also offer individualized support to users via email. Because of these additional services, YNAB has a monthly fee. YNAB offers a full refund if its app does not help people. YNAB offers a 34-day free trial. Students can use the app for free for one year. If they continue, they can get a one-time 10 percent discount. Finance expert opinion Marco Baatjes, Bottom Line Cents Founder“One of the top budgeting apps in 2019 is You Need a Budget or better known as YNAB. It is the most popular and go-to budgeting and personal finance app and only costs $6.99 per month (which is a monthly in app purchase) with the first month being free and it could literally change your life and how you work with your money. The password and data security makes it impossible for a hacker to figure out the exact combination and the plus side is if you do end up deleting your account all your data is wiped from their database. YNAB works by implementing a zero based budget which means at the beginning of every month you ensure that every dollar is accounted for. I like using YNAB as it makes budgeting far easier, it provides eye candy reports and it helps you set goals. This makes paying debt off much easier than if you were using a mundane excel spreadsheet.” Tommy Wilke, CreditLiftoff.com Co-founder“YNAB accounts for every dollar you earn and then puts together a budget based on those earned dollars. Unfortunately, it is only free for a limited time.” Personal Capital Security Features: layered security, encryption, and strict internal access controlsCost: Free, can upgrade for more services with certain investment asset requirementsCompatible Devices: iOS, Android, Smart Watch, Apple Watch, tablets, computers How it works Personal Capital allows users to track their spending, investments, portfolio, and home value. It combines daily budgeting with long-term financial planning and tracking in one app. Personal Capital offers its financial tools app for free. If you are interested in additional services, like access to an advisory team, 24/7 phone assistance, and more, there are additional features that you can add to the app. Finance expert opinion Tommy Wilke, CreditLiftoff.com Co-founder“Personal Capital is ideal for investors who like to review investment performance. It also comes with a Fee Analyzer which helps cut fees on 401(k)s.” Kyle Kroeger, Financial Wolves Founder“My favorite budgeting app still remains Personal Capital. I've set a few boundaries on my monthly expenses and their intuitive dashboard for spending and cash flow makes it very easy for me to manage my cash flow. They don't bombard you with in-app purchases. Their graphs are very simple and easy to use. I've been able to repay over $60,000 of student loans in less than five years by maintaining disciplined spending. It's simply the best free option out there.” Financial planning Vimvest Security features: bank level 256-bit encryption, user funds insured up to $250,000 by SIPC ® Cost: FreeCompatible devices: iOS How it works With Vimvest, users create financial goals for investing, saving, and donating to charity. All of the money you donate to charity using Vimvest goes directly to the charity. When Vimvest users deposit money into their Vimvest account, they can put it towards each goal. Users can also make one deposit that spilts across their goals with the Vimvest Split™ feature. Vimvest is a good tool for saving and planning for the future. Founder insight Justin Bailey, Vimvest Co-founder“The app includes a Goal Marketplace, which is an inspiration hub of thousands of long-term, short-term, and charitable goals to help people discover goals and curate their future. There are also tons of ideas, insights, tips, and stories for users to learn more about goals and money. When setting up a goal, users tell Vimvest how much they need and when they need it, and Vimvest lays out the path to get there. If users want to get to their goals even sooner, they can turn on the “Lifestyle Boost” feature to deposit a set amount into the Split every time they swipe their card.” HomeZada Security features: encryption in transit and at rest, two factor authentication, Amazon AWS cloud hostingCost: Free (home inventory, News and Recommendations, contacts); additional features for $59 per year or $99 per yearCompatible devices: all mobile, tablet, desktop devices How it works HomeZada allows users to store their home inventory in case of an insurance claim, store contacts, and view news and recommendations. Users can also share access to their account with other people if they’d like to. For an annual subscription fee, users can view their house’s current value estimate and 3-year value forecast, equity, mortgage balance. Users can also track their mortgage budget, home insurance, utilities, and property taxes. Additionally, HomeZada allows you to set a preventive maintenance schedule to avoid more expensive future repairs. You can also plan remodel projects, track their budgets, and keep digital records. With HomeZada, you can manage rental properties and get your home ready to sell. While this app doesn’t help with your overall budget, it’s a great tool for homeowners to track their home expenses and projects. Founder insight John Bodrozic, HomeZada Co-founder“The biggest tip for getting the most out of HomeZada is to take one step at a time when starting out. Start with what is important to you as a homeowner first and then grow with the app features over time. It might be that you really need to focus on getting a handle on home value, mortgage balance, and home equity first. You might live in an area highly susceptible to natural disasters (hurricanes, tornadoes, wildfires, floods, etc.) so protecting your home with a home inventory is most important. You might be a first-time homeowner and realize that you don’t really know all the regular maintenance tasks you need to do. Start using a part of HomeZada first and then grow with it over time.” Fabric Vault Security Features: 256-bit encryptionCost: FreeCompatible devices: Web-based How it works Fabric Vault lets you securely store your financial information — bank accounts, retirement investments, insurance policies, etc. You can also create and store a will with Fabric Wills. You can share your vault with your partner or spouse for easy access if you passed away. It’s a nice resource for getting your finances in order and preparing your family for the future. Founder insight Adam Erlebacher, Fabric Founder“After our first child arrived, I knew I needed to get my finances in order. While I had some savings, I hadn’t created a last will and testament, bought life insurance, or set up a college savings account. These were all new products that I never had to think about before starting a family. Buying life insurance was a total nightmare that took three meetings with an insurance salesman, a health exam, and multiple phone calls. I believed there had to be a better way to help families achieve long-term financial security.”
Technology is always developing and changing. New technologies surface to help improve connections, offer entertainment, support wellness, and much more. Technology has increased access to information and made many things more convenient.“Fintech solutions like peer-to-peer financing, AI-based financial management solutions, online identity verification (KYC solutions), open banking and mobile payment systems have revolutionized the way people manage their finances today,” Damien Martin Shufti Pro Marketing Executive says.Technology has affected personal finances in the following ways: Opportunity Convenience Financial literacy Security Opportunity “Some of the positive aspects of financial technology is the access it provides to those who previously did not have access to or only had limited access to financial services. The gap between developed and developing nations is closing, and technology has helped bridge that. Access to money and investment is key to initiate growth and there are a multitude of solutions ranging from traditional banking to microfinancing to crowdfunding which have been enabled through financial technology,” says Lauren Wilson of Voleo. Broadly speaking, technology is leveling the playing field when it comes to accessing investment opportunities, banking, and financial knowledge.“Investing in the stock market used to just be for the wealthy people, or at least people who could afford to put a lot of money away. Thanks to apps like Acorns, Betterment, and Robinhood, a person of nearly any income can invest and try to grow their money,” advises Bill Walsh, finance writer and contributor to SproutCents.com.However, this broader access also puts the education and decision-making responsibility even more on the investor instead of sharing the burden with a financial advisor.“There is a catch to this however. Novice investors using Robinhood for the first time will often start purchasing stocks without fully understanding what they're doing. Robinhood doesn't charge a commission, making trading affordable. But you don't get some of the perks that commission money pays for, like personalized advice about how you should trade to meet your goals. Then they'll sell at the first sign of trouble and swear off the market forever. This "democratized" market could mean more fear based selloffs, and increased overall volatility. Acorns makes saving money super easy and convenient by investing spare change. It sounds like a great setup. However, the $1 a month fee may sound minimal to the average person, but that dollar can really eat into your returns when you're investing with such low amounts,” says Walsh. While there are still hurdles in leveling the playing field, like ability to use or access financial technology and financial education, it has demonstrated its capacity to offer increased access to financial services globally. Convenience “Technology has greatly changed financial culture. The app market has created a wealth of programs that can automatically save and even invest your money. You no longer need a calculator, some scrap paper, and a large coffee to properly manage cash. Banks and other financial institutions are expanding their mobile capabilities. Because it’s more convenient to do so, more people will be properly watching over their finances. This will lead to smarter money management and better spending decisions. Just the ability to automate your savings will mean people will have more stored away for a rainy day,” says Walsh. Technological developments have made it easy to monitor spending, bank accounts, and credit cards online and from mobile phones.Most employers offer direct deposit for paychecks, which means that you can access your money faster and avoid fees associated with cashing a check or the delay from waiting for it to come in the mail and then to deposit it yourself. If you’re depositing a hard copy check, most banks have mobile deposit, which makes the deposit process instantaneous.Lots of mobile apps help people set a budget and track their spending. This makes it simple to compare how you planned to spend your money with how you actually spend your money quickly. Some online banks also have budgeting trackers.Technology has also reduced operational costs for banks. Technology has also allowed banks to catch fraudulent charges on cards in real time, which helps to reduce the impact of lost or stolen cards.“FinTech has been monumental in helping banks and financial institutions make their data entry, compliance and financial management systems more efficient and productive. With advanced AML compliance systems, are now potentially capable of saving the banking sector billions of dollars of fines and operational costs. Advanced risk analytics and digital KYC procedures are now capable of mitigating the risk of identity theft and credit card fraud,” adds Martin.However, financial technology isn’t just about convenient budgeting, saving, and theft protection. It’s also about convenient payment options.Most companies and online banks allow you to set up automatic payments for bills. This makes it easy to stay ahead of bill due dates and reduces the memory load — you don’t have to remember to pay your bills because you have automatic payments set up.“Technology certainly has made it easier and convenient to enable people to borrow and spend…and spend. Many components of Fintech focus on the technology side to make a process easier, but it is important to remember that there is still a financial side too. The vast majority of technological innovation or “disruption” is to find ways to get people to spend money, not save it. With the ever growing consumer debt burden in the United States there needs to be a realignment to truly educate people on how to manage their personal finances, retirement, and investment opportunities,” says Michael Micheletti, Director of Communications at Freedom Debt Relief.Apps like Venmo and PayPal have made it convenient to send money to friends or family members.“Consumers have options to pay digitally in stores using a mobile wallet, or transfer money through financial apps. The acceptance of such modes of payment at brick-and-mortar stores has increased the sales,” adds Mangala Bhattacharjee, Research on Global Markets Senior Manager of Marketing and Communications.Because financial technology has lead to increased spending, it’s essential for people to watch their finances carefully and understand them. Financial literacy “In financial services today we are seeing technology applied to everything from payroll automation to investment support. Many companies are incorporating technology, machine learning and AI into their website and applications to help consumers increase their financial understanding and improve decision-making. The premise for many of these technological innovations is to create opportunities for those who lack the education and experience to better control their finances. From a culture perspective there is a sense of a “set it and forget it” mentality as we automate everything from paycheck deposits to paying our bills and begs us to ask the question do we understand how we manage money,” advises Micheletti. The more work we divert to technology, the less we think about it. This practice can free up brainpower to focus on other things. While this is nice and convenient, it can also be harder to be fully aware of what happens with our personal finance.In a 2019 study, Freedom Debt Relief found that 55 percent of Americans checked their paystub the last time they were paid. Just under half of those surveyed had not checked their paystub the last time they were paid. Infographic courtesy of Freedom Debt Relief. When people do check their pay stub, most look at the federal and state income tax withholdings. Infographic courtesey of Freedom Debt Relief. Before direct deposit, employees received a paystub along with their paychecks. Since the documents came together, it was easy to keep an eye on taxes and retirement contributions.“Features such as direct deposit and automated bill paying don’t require human interaction beyond setting up the accounts. Consumers no longer look at a paper paycheck while standing in line at the bank to make a deposit. There is no longer a need to reconcile your checking account at the end of the month. It’s all done without thought or purpose. We aren’t paying enough attention, and it is having a drastically negative effect on the entire country. Worst yet, it will be passed to future generations,” warns Bill Westrom, creator and co-founder of TruthinEquity.com and co-author of Master Your Debt.While companies still provide paystubs to employees, these are usually available online through the employer’s HR software. Looking at your payslip regularly helps you know how much you pay in taxes, contribute to retirement, and what you earn regularly.Freedom Debt Relief’s study found that most people who looked at their payslip checked federal income tax, state income tax, and 401(k) contributions.But it’s not that technology is bad. Many things that make our lives more convenient, also allow us to think less — even without delegating responsibility to technology. Continuing with the example of payslips and tax withholdings, taxpayers paid the government directly instead of going through their employers before World War II. During World War II, the government changed the tax paying method so that employers would pay taxes from their employees’ paychecks before disbursing the earned income. This change meant that the government got money faster and that taxpayers became less and less familiar with the total amount they paid in taxes and how tax law changes affected their taxes.When we delegate tasks for convenience and efficiency, it’s important to stay informed by looking at payslips, account statements, and personal budgets. Recognize that technology offers a lot of tools to make managing finances convenient and to manage them instead of being passive. “The most dangerous downside of technological advancements lies underneath control delegation. There is a huge gap between the result of some algorithm work and the understanding of the algorithm's logic. People take machines for granted and sometimes forget that machines are not yet capable of what humans are capable of in terms of logic. Thus, it is important to bear in mind that machines so far are only supplements rather than substitutes,” says Ruslan Gavrilyuk co-founder and President of Kepler Finance. Realize the limitations of financial technology. Set financial goals and make plans to meet them. Hold yourself accountable for you spending at frequent and regular intervals. It can be harder to budget when everything can go on a credit card that gets paid at the end of the month. Checking in on your budget weekly and assessing it monthly is a good practice in understanding where you’re sending money and start planning for how you’re going to use it. It will also help you avoid consumer debt.Technology adds value and convenience to managing personal finances. However, all tools and innovations must be used wisely. As we continue to enter a digital finance world, it’s important to keep the valuable personal finance approaches that pre-date online banking and digital innovation. Security “Online banking, payment applications and investment apps have, and will, continue to revolutionize the way consumers live within the financial world. This technology has enabled more visibility and convenience for both consumers and sellers. However, this convenience does come at the cost of security and regulation control. With the constant evolution and advancement of fintech innovation, the regulation setting cannot keep up. Consumers often express concerns about online banking and money management systems. In order to combat this, stay away from wi-fi usage with these sites and applications, keep your anti-virus software current and do your due diligence to set up security on your devices by changing passwords often and requesting text message confirmations,” suggests Jared Weitz CEO and founder of United Capital Source. As financial tech has developed, hackers have become more adept at breaking in to steal information. Data breaches are becoming more and more common. Fortunately, security measures also develop and improve in tandem with hacker skills.Companies that gather data invest in data security. Laws like the GDPR in the European Union regulate how companies acquire and secure data online. “The downside to financial technology could be the increased sharing of user data across different channels. This makes the data vulnerable and prone to breaches. However, companies that observe strict data protection and cybersecurity protocols are less in danger of having their information exposed to breaches. On a personal level, people must be careful about sharing their personal information on unreliable sources and take good measures to protect their data online,” says Martin.But it’s not just personal information that worries some consumers."People often worry about the safety of online banks. However, even if your money is "stored online" that doesn't make it more hackable. Traditional brick and mortar banks use online programs to keep track of their accounts as well. If an online bank is FDIC insured, your money is protected from run-on-the-bank situations and just as safe as it would be elsewhere," advises Claire Shaner, Best Company’s online banks expert.Even with a company’s investment in security, data breaches happen frequently. Data breaches can result in identity theft and affect people’s privacy.“Data security and vulnerability to malware attacks are the biggest downsides for financial technology. The banking sector is new to technology adoption and hence hackers sometimes find it very easy to breach through the gaps. As a result user data gets compromised,” adds Bhattacharjee. However, technology has become common place and vital for functioning in many societies. Since it’s more inconvenient not to use technology, how can people protect their finances and other personal information?“Even with the best in security software, you can never feel 100 percent safe. We simply put our trust and faith in them to protect us. Unfortunately, that’s not always the case. Short answer: pay attention and keep your eye on the ball so you can spot anything out of the ordinary. Ultimately it’s our responsibility to pay attention to and protect our information,” says Westrom.Everyone should take measures to ensure that their data and identity are protected. This can start by taking steps to secure your home Wi-Fi. You can also purchase a VPN to help secure your data. This is an especially good idea if you’re accessing your financial information online.“Adopting secure browsing methods is the most basic thing that people need to make sure of. It’s also important that people change passwords of financial accounts, Wi-Fi, etc. frequently. Avoid using free internet to public internet to access financial information as the public internet networks are the easiest to breach,” says Bhattacharjee.Being careful with your online presence is also a good idea. Be selective of where, how, and with whom you share your information online. Martin shares some additional data security tips: “Beware of phishing scams — never click on links provided via email; they tend to have malware. Banks or companies rarely send out emails inviting customers to use new products or services or offer them discounts or gift vouchers. Beware of social engineering scams — banks, governments and online retailers never ask people for their personal information (ID card numbers, account or credit card numbers, passwords and PINs) via email, phone calls or direct messaging. Keep your personal information secure — avoid giving out any potential identity information on social media platforms. Block your stolen credit card as soon as possible and report the theft.” The bottom line Financial technology has made many processes faster and more convenient. It can make it easier for people to monitor their spending and create budgets. It has also helped reduce the cognitive load of remembering to pay bills. However, it’s important to capitalize on the convenience financial technology brings to keep your finances and spending habits in good shape. This can mean setting up an automatic transfer to your savings account and automatic bill pay. Be sure to revisit your settings at regular intervals to stay informed about your finances and make adjustments as appropriate.“Research and education are the only solutions. It's up to people to do their due diligence before handing over their hard earned money. All these new apps means more of our information is floating out there in cyberspace. Times today require you to keep a closer eye than ever on your finances, which in a strange way, these apps are making us do,” says Walsh.While you capitalize on the positive aspects of financial technology, don’t ignore the risks. Take steps to keep your information secure online. Be selective of the companies you share your personal and financial information with. Hold yourself accountable for your spending and stick to your budget.Making the effort to understand and track your finances and keep your information secure will help you use financial technology wisely and to your advantage.For more insight into how technology is affecting personal finance, check out [email protected] High School’s podcast.
Guest Post by Bryce Welker Are you in your 40s and starting to worry about the state of your finances?Maybe things are looking a bit better than they did in your early 20s, when you were living off ramen noodles and struggling to pay your rent — but now you’re thinking about your pension, paying off your mortgage, or other big goals.We can’t all become CPAs and manage our finances seamlessly (CPA exam costs aren’t exactly cheap as this article shows) … but we can all get on top of our finances.Here are six key goals to aim for in your 40s: 1. Pay off high-interest debt If you’re carrying credit card debt or student loans that you’re still paying off, then your 40s are a great time to aggressively pay down that debt. You may want to look into options for refinancing, especially if you’re paying off a high-interest student loan from the 1990s. You can find some great tips on refinancing here. If you’re in a position to pay off your debts over time, you may find the “debt snowball” technique helpful. Pay off your smallest debt first, which will give you a sense of momentum and help you to pay off larger debts — just like a snowball that grows as you roll it down a hill.If you have a lot of debts, though, and you’re struggling with multiple high-interest payments, consolidating your debts into a single monthly payment could be the easiest way forward. Even if takes a while to pay off, it’ll be a lot simpler to handle than tracking dozens of different debts. Finally, if you’re really struggling to pay back your debts, you’ll want to consider settlement. This means making an agreement with your creditors that you’ll pay less than the full debt; they’ll then write off the remainder. This can have a serious negative impact on your credit score, though, so consult a financial advisor before taking this step. 2. Establish a strong emergency fund Hopefully, you already have an emergency fund of some sort — with easy to access cash stashed away for sudden unexpected problems, like medical expenses or a job loss.In your 40s, you may well own a home and have dependent kids, so it’s particularly crucial to have an emergency fund. It should contain at least three months’ living expenses; a year’s worth of expenses is ideal. 3. Ensure you’re putting enough away for retirement If you hit 40 with nothing saved for retirement, it’s not too late. Putting away $650 a month is enough to net around $1 million in retirement savings by age 67. Aim to save around 8 percent to 15 percent of your salary.Retirement plans, including a 401(k) and a Roth IRA, have special tax benefits and will earn compounded interest — increasing the value of your savings over time. The sooner you start putting money aside, the sooner that interest can begin to accumulate. 4. Boost your earnings through a raise or a side gig Many people find that their 40s are when they hit the peak of their career. They’re at a stage in life when they’re still in great health, but probably also at a point where their children (if they have any) are in school — so sleepless nights and childcare arrangements aren’t taking such a toll.This can be a great point at which to push for a promotion or pay raise at work, or even to start hunting for a new job that pays more. If that’s not the right option for you, then it might make sense to take on a side gig — starting up your own business that you can run in the evenings and/or weekends. This can, of course, introduce financial responsibilities; you may want to invest in software like QuickBooks that can help you keep on top of things. 5. Save for college costs, but not too much College doesn’t come cheap, and when you’re in your 40s with kids rapidly entering their teens, it’s easy to want to put aside every penny you can for their education. Don’t fall into the trap of paying for college at the cost of your own retirement savings, though.Obviously, the earlier you can start saving for college, the better — but do keep in mind that your child will have other options open to them, like scholarships and loans. You don’t have nearly as many options available to you when it comes to your retirement savings. 6. Avoid cosigning your teen’s loans or credit cards If your teen wants a credit card (an important tool for them to build their own credit history), then they might well ask you to cosign their application. The same goes for auto loans or any other loan agreement.The danger here is that if your child misses a payment, your credit rating will take a hit. Only cosign if you’re absolutely sure your child is responsible enough to be on top of things. You may want to insist on access to their monthly statements so you can check that they haven’t run into problems that you’re unaware of.You’ve likely got a lot going on in your 40s, and it’s easy to push financial issues aside if they’re not causing day-to-day problems. By staying on top of these goals, you’ll put yourself in a great position for your 50s, 60s, and beyond. Bryce Welker Bryce Welker is an active speaker, blogger, and tutor on accounting and finance. As the Founder of Crush The CPA Exam, he has helped thousands of candidates pass the CPA exam on their first attempt
I'm not being dramatic when I say that the only things more difficult than choosing the perfect gift is giving birth or trying to peel a mango with wet hands. On a more serious note, buying the right gift is even more difficult when you’re doing it for those who desperately need money. Is it better to just give money to those struggling through a financial crisis? Are there gifts that can help someone on their path to financial freedom? Would it be rude to give a gift that draws attention to someone’s financial situation?I decided to ask a network of financial experts for some advice on the best gifts for friends and family who are struggling financially. Should I give money as a gift? The majority of financial experts I questioned (about 95 percent) did not like the idea of giving struggling debtors cash as a holiday gift. Instead, they suggested books on finance, financial wellness programs, and budgeting tools. This bothered me a little bit. Yes, their arguments do make sense — giving money to someone who needs it may play into the “give a man a fish, feed him for a day” philosophy. But, the holidays should have some hint of happiness other than “well, time to get to work you poor, unfortunate soul.”I prefer compromises between a stack of books on finance and $100 cash. However, the gift should match the person who receives it. You must answer one question: does the person you’re shopping for need money, financial education, or simple, sincere emotional support? I’ve split this article, and the gift ideas, into three separate categories: Money-Centric Gifts, Education-Centric Gifts, and Support-Centric Gifts.Cash-centric gifts are all about giving the person what they want most. Education-centric gifts are about “teaching a man to fish, feed him forever.” And finally — my favorite type of gift for the financially oppressed — support-centric gifts provide a balm to the stresses of poverty.When viewed in these categories, you can see why experts would prefer education and family would prefer support. Cash-Centric Gifts 1. Better spending with an AegisFS prepaid debit card Jim Angleton, President of Aegis FinServ Corp.The beauty of this card is that it allows for monitored spending — perfect for parents who want to keep an eye on their kid’s spending habits while they’re away at college. You would most likely only want to gift this to a close relative or one of your children. “AegisFS is a prepaid and debit card company and provides cash conveyance cards plus spending programs for students, financially strapped individuals and struggling business startups. We offer a very good prepaid debit card that can be used as a gift card or cash card. We routinely see parents who have irresponsible students in college provide these cards. It allows them to view the account balances, spending, and pie-chart showing where their money goes. Additionally we allow “topping-off” which essentially credits the card with more money. Homeless people are often provided these same cards from charities and place a certain amount but add restrictions whereby you cannot use the card for alcohol, baseless food snacks or beer/wine or non-medical items. What this does is allow someone the opportunity to manage their money better and see online, via 800 phone number for free, their balances. We also offer SMS or text messages too. When you have cash in hand you act differently. When you have a card that is restrictive, has other eyes watching it, or requires reloading the card, it tempers that individual to spend prudently.” 2. Stocks instead of stockings — teach a man to fish Dustyn Ferguson, Founder of Dime Will Tell“If someone is in debt and is struggling to get out, it might be because they are simply bad with finances. Giving them straight up cash or even gift cards may not be the best of help as it could be gone within a day without any positive impact on tackling their debt. It's sort of like give them a fish they'll eat for a day, teach them how and they'll eat for a lifetime. We want to help teach, or at least guide them, to fish for themselves.How can this be done?By setting them up for financial success. Buy them a year’s subscription to a service that saves them money or helps them manage it (like Mint). Or buy them stocks, bonds, or money in a CD so they can watch it grow and maybe, just maybe, they'll get inspired to add to it themselves and start their journey to a better financial future for themselves.”Could you expand on the idea behind stocks/bonds/CD?“Being at ground zero can seem insurmountable. Being at negative ground zero is even worse. Gifting some sort of financial asset, like a stock or bond, gives them that first momentum upwards. Although they could easily sell it for cash, the hope is that it would be like selling a gift they received, which most people don't do. Instead, they'll passively see it grow and have a portfolio started, which is is often the hardest part. It might not help and they could sell it off and buy something with the money, but in the chance it sparks an ambition to grow their portfolio — that makes the gift invaluable.”What do you think the best subscription gift would be? My favorite subscription I'd gift to someone with no strong financial basis would probably be Acorns. It invests your spare change and is only a couple of dollars per month. It makes for a great gift that won't break the bank and can really prove to be useful for whoever receives the gift. 3. Pay off one small debt for them Nathalie Noisette, Founder of Credit Conversion“One of my top gift ideas for someone in debt is to pay off a debt for them. Being burdened by debt can be very stressful. If you can relieve someone of one debt (you can afford) I'm sure they would be extremely appreciative. I would advise against giving money. The money may not go to the debt and may be spent elsewhere.” Education-Centric Gifts 4. Bookkeeping tools, perspective, and support Dock David Treece, Senior Financial Analyst at FitSmallBusiness.com“If you want to give someone a tool to help them with their finances, start with a bookkeeping tool like Quicken. Quicken allows you to track all of your income and expenses so you can see where every penny goes each month. By tracking and reviewing your expenses, you can see quickly how you may need to change spending patterns to help stop the bleeding." 5. Dave Ramsey’s The Total Money Makeover Ashley Patrick, Founder of Budgets Made Easy“The number one gift I give people is a copy of Dave Ramsey's book The Total Money Makeover. If they are already working the plan, I like to give gift cards for something they want but won't buy for themselves at the moment. This book motivated me to pay off $45,000 in 17 months while working as a police officer.”What’s the most important financial lesson you learned from this book?“The best thing I learned from the book was the knowledge that being debt-free is possible. I had never thought it was an option or possibility before.” 6. Subscription to Dave Ramsey’s “Financial Peace” course Danielle Kunkle Roberts, Co-Founder of Boomer BenefitsCosts $99“Oftentimes those who are in a lot of debt have a bad relationship with money. With that, giving money to a person in debt to try to solve the problem isn’t likely to solve the larger problem.Those who struggle with budgeting money need guidance and a plan. Dave Ramsey is well-known in this space for laying out a very straightforward plan to help people get and stay out of debt.Rather than handing out cash, opt to give your friend or family member a paid membership to a financial course such as Dave Ramsey’s “Financial Peace.” This small cost (around $99) to you could be a huge answer to their financial health. (There are many others as well, such as regular investment advice from the Motley Fool, etc, depending on how much you want to spend)” 7. Your Money or Your Life by Dave Ramsey and 3-month Audible subscription R.J. Weiss, Certified Financial Planner and Founder of The Ways to Wealth“A great way to help someone long term really change their behavior is with information. I've given books, mainly Dave Ramsey's Total Money Makeover and/or Your Money or Your Life. If I know they won't read, I've given a 3-month Audible subscription with a list of books I think can help the person the most. ” 8. Pay for college finance course or seminar Megan Robinson, Financial and Behavioral Money Coach for Dollar Sprout“The best gift you can give someone in debt is the knowledge and resources to improve their situation. That could be in the form of paper or audio books, or it could be some other form of education. For example, you may gift them the experience of attending an in-person seminar or pay for a class at a local college.” Support-Centric Gifts 9. No-gift agreement or utility bill payment Holly Wolf, Director of Customer Engagement at SOLO Laboratories“Give permission not to give gifts. Some people feel obligated to buy a gift to reciprocate. Suggest NO gift giving to anyone in your family. Absolutely nothing. Then if you decide to pay a utility bill — that's the gift and it feels like one. Plus there's none of that awkward exchange, where you hand them something and they feel bad because they aren't giving a gift.”“Pay a utility bill. My favorite is putting money on a utility bill or prepaying for X gals of fuel oil. This gives you insight into the problem. Some people are upset that you did that vs. a gift card. It's usually because they want to shop/spend. If you REALLY want to get out of debt, you'd look at it as two months’ expense that you can put on another expense. ” 10. Consultations and debt repayment charts Amanda Amezcua, Personal Finance Writer for Debt Reduction Services“Consider gifting a personal finance tool kit with a variety of worksheets for budgeting, saving, and debt repayment, a stack of finance books, or even a debt repayment coloring chart (they’ve been trending this year)! You might take it a step further and cover the cost of consultation with a financial planner — though nonprofit credit counseling agencies provide much of the same advice for free.Debt is a sensitive subject, so what you give and how or when you present it should be guided by the level of closeness you’ve established with those you’re giving to.” 11. Smart gifting for the financially stressed Natasha Knox, Certified Financial Planner for PaxPlanning“The best gifts depend on the debts and how they were acquired (overspending, versus some unforeseeable life tragedy that couldn’t be insured against or planned for), and depends on your own personal financial situation and ability to help. If it’s a friend — particularly one who struggles with overspending, sometimes the best gifts can be the gift of quality time together, in a fun, but inexpensive or free setting. Maybe establish a no-gifts rule this year, so they don’t feel obliged to give you something, and invite them over for a barbecue, a picnic, or a board games night, or movie marathon. Something that can satisfy the need for connection and fun, but doesn’t cost them anything, or place them in a position of feeling like they have to reciprocate with something that costs money.” How would you gift to someone suffering from a tragedy?“I think that the best gift is real support that is well organized and long lasting. What that could look like is reaching out to your network of people on their behalf, and speaking to key contacts and experts to connect them with resources and organizations that can help. It could be organizing a meal chain (where a bunch of people commit to cooking and delivering meal that can be put in the freezer or fridge) on their behalf. Child care is a huge one — organizing a rotation schedule of child care among trusted friends and family, orchestrating a community of people to help rebuild or repair. Maybe it means offering them a place to stay if the situation is so dire that they’ve lost their home. The connecting thread in all of these is emotional support and community. So often, when people hear of a tragic situation, they will say, ‘Please let me know if I can help’, but the person suffering doesn’t reach out. A friend reaching out on their behalf to unite the community, taking people up on their sentiment of wanting to help, and letting them know exactly how and when they can help is an incredible gift.” 12. Add as an authorized user on a credit card RJ Mansfield, Author of Debt Assassin: A Black Ops Guide to Cleaning Up Your Credit“Assuming the gifter has good credit, the best gift you could give them would be putting them on a credit card or two or three as an "Authorized User." Of course, you don't give them the credit card to use but just adding them as an AU will help them establish and/or re-establish credit. There is no downside to being an AU as the authorized user is never obligated to make payments even were the primary cardholder to stop paying or die.” 13. Cosign on a loan Jacob Dayan, CEO and Co-Founder of Community Tax“The most creative way to gift someone who is debt is offering to cosign with them for any loan that they need help obtaining. There is an immense amount of relief that is given to the borrower when they have a cosigner signing with them. The borrower’s interest rate on the loan will drop significantly from when applying for a loan themselves. Also, offering to be a cosigner with someone allows for a more likely chance to get approved for a loan. This is a gift that also keeps on giving; a cosigner can arrange for themselves to be released from the cosigning responsibilities after a certain point. Most lenders will advise borrowers to not take this option, but it doesn’t hurt to request this option. Cosigning with someone in debt is risky, but it will help them out substantially in the long run. Potential cosigners should set up a strict payment schedule with their borrowers. People offering to cosign with should be invested enough to set up email notifications to know that payments have been paid on time. Along with requesting to be relieved of the cosigning duties, be sure that the loan can then be refinanced entirely under the borrower’s name.” 14. Airo Health: An anxiety-tracking wristband Maryam Jahed, Founder and COO of Airo Health“What's a common experience between everyone with debt? STRESS! What happens when you're stressed? You make bad decisions that make the situation even worse for you. When you're in debt, all your focus is on how to get out of the situation which leads to you forgetting to take care of yourself.”Together, the Airo Health app and wristband is “a product that helps you keep yourself in check, so no matter what you're doing, you're keeping a clear mind. It catches you when you're having the spiral of negative thoughts that start with ‘I owe my friend some money’ to ‘I'm going to die alone!’”“Airo sits on your wrist and tracks your anxiety. It is like a therapist following you everywhere you go and making sure you know when anxiety is starting to take over. This is important because only then you know when exactly to practice your coping mechanisms.Airo let's you stay on top of yourself so you know when it's time to push yourself or when to take a step back.”