Here is Why Debt Elimination Can Be Difficult PLUS A Helpful Debt Repayment Tool

This blog post is part of the Pay Down My Debt (PDMD) blog tour, sponsored by US Equity Advantage. PDMD is a solution that accelerates debt payoff and helps consumers monitor their credit and make smarter purchasing decisions. If you’re looking to pay off debt, find out how they can help.

Human beings are pack animals and have an innate desire to belong . For many the desire to belong leads to debt. This phenomena is often referred to as “keeping up with the Joneses.” This English language phrase refers to individuals that live beyond their means to achieve or maintain their social status. Keeping up with the Joneses  and debt have become a way of American life.  According to CNBC, in 2015  8 out of 10 Americans had some form of debt.Read More

4 Money Lessons I Learned From #GirlBoss

I’ll be honest, when I picked up #GirlBoss by Sophia Amoruso I never thought there would be so many valuable personal finance lessons in it. Business advice, tips, and motivation were my expectations, but what I received was a well rounded, personal account of someone who did the unexpected in her own way. Read More

7 Inexpensive Self-Care Tips When Dealing With Stressful Finances

Financial stresses not only affect your well-being, but also they can negatively affect relationships, job performance and pretty much rule your life – if you let them. When coupled with the demands of everyday life, it can feel like there are innumerable obstacles standing in the way of your financial goals.

Although critical, it can be difficult to maintain a positive outlook. A healthy financial journey doesn’t consist of deprivation just like a healthy diet doesn’t consist of starvation. It’s extremely important to practice self-care when working towards your financial goals.

sad womanRead More

Things to Consider Before Closing Your Credit Card

This article originally appeared June 2013.

I recall when my mother first found out I owned a credit card.

I was in college and the bill arrived at my parent’s house.  Why didn’t I have the foresight to have my bill sent to school? Call it fate. As she scrolled through the charges and saw my lavish Red Lobster dinners and my Journey’s shopping sprees I’m sure anger bubbled inside of her. After all I had no job and pretty much no plan to re-pay my accumulating debt.  There was no “your card is declined” surprise at the register though. She closed my card down immediately and made sure I was on the phone to hear it.

And this is what several people move to do when they find themselves a bit over their heads or in hot water with a credit card company.

However it might not be to your benefit to close out the account. While closing out your account may prevent you from continuing to rack up charges on a card and possibly sabotaging your repayment plan, closing a credit card account can hurt your credit score.

Cancel card ImageAccording to MSN money there are five situations where it might be okay to close a credit card account:

Post Break-Up. If you are separating or getting divorced from someone with whom you share a joint account, go ahead and close it. Otherwise, as long as the account is open, you are fully responsible for any bills your soon-to-be-ex runs up. (That’s true even if your divorce decree says he or she will be responsible for that bill. Your issuer can still look to both account holders for payment as long as there is a balance.)

The Friggin fees. If your credit card company is charging an annual fee that you don’t want to pay, ask to have it waived. The same thing is true if you are accidentally late with a payment and get hit with a late fee. (As long as you’re late only once in a blue moon, you should be able to get the fee removed.) But if your issuer won’t budge, especially on a hefty annual fee, it may be time to take your business elsewhere.

The card no longer makes sense. For instance if you own an airlines rewards card for Us Airways because their hub is located in your city, but youmove to another city where another airline is the primary hub and you find yourself flying US Airways significantly less. Most airline reward cards carry hefty annual fees after the first year, so you may find it necessary to close one of these accounts and switch to a card with a more useful rewards program.

You’re done with debt. Some people prefer to live debt free lives. And that is completely fine and I applaud you. I once worked with a woman and she and her husband only financed major purchases like homes and vehicles. Everything else was paid for in cash.While it may be best for your credit score to keep a credit card or two open and simply pay in full each month, that approach may not work for you. You know yourself. If the temptation that piece of plastic offers is too great, then get rid of it.

The card has been used fraudulently. If your credit card has been lost or stolen, in most cases the card issuer will automatically close the account and issue you a new card. But that’s not always the case. Suppose, for example, you bought one of those diet products off the Internet, and despite your best efforts to cancel, you keep getting hit with a monthly charge for more. Or you gave a debt collector your credit card number to make a monthly payment on a debt and then discovered the collector was taking larger payments than agreed upon. In situations like that, you may want to close your account rather than risk having to fight to get charges reversed in the future.

If you are trying to rebuild your credit here’s where you should be wary.

If a credit card is in good standing and there is a lot of positive credit history that goes with that account it will stay on your credit report longer if you keep it open. A closed account doesn’t disappear from your credit reports. A common misconception is that once you close it, that account will no longer contribute to your credit score.

The actual impact to your score is that you loose that amount of credit factoring into your utilization. Unless you have low balances on your other cards, closing an account can throw your debt ratio (how much credit you are using vs. what’s available) out of wack.  It is recommended that you keep as many of your accounts open as possible. If you already have several old accounts, for example, and you close one, that won’t affect your score the way it would if you had only a couple.

You should also keep your oldest accounts open if you can. Scoring models take into account the age of your accounts, including the age of your oldest account, your newest account and the average age of all accounts. A seasoned credit history is best when it comes to this factor as having several new accounts will make creditors wary to lend to you and can bog down your score.

Closed accounts will eventually fall off your report and if you closed the account in good standing you will lose all of that positive history you built.

After being educated on the pros and cons of closing a credit card and you are comfortable with it potentially having a negative affect on your score I urge you to do what is best for YOUR situation.

If you are not good with credit, shut it down.

How Becoming an Authorized User Can Help You Improve Your Credit

People often ask me how they can start improving their credit.

One of the first questions I ask them is if they have any open revolving accounts. When working towards repairing your credit, “actionable” items improve credit. By actionable, I mean accounts where positive changes occurred.

Examples of actionable accounts are open credit cards, loans, or car payments. Keeping these open accounts in good standing is key when attempting to increase your credit score. Another actionable item can be an item coming off or falling off of your report. But what if you are like I was during my worst financial period? My credit was so bad that I wasn’t approved for respectable credit cards.  By respectable I mean the ones that don’t charge you a $100 annual fee, while only allowing a $300 limit and a 30% interest rate. Items were falling off my report. My student loans were in deferment but I did not have any “actionable” items to improve my score. After conducting extensive research, I realized becoming an authorized user was my best bet. authorizedpersonnel An authorized user, also known as piggybacking, is when the primary credit holder adds an additional person to a new or existing credit account. Not to be confused with a card holder, the authorized user submits their social security number and receives the payment history of the account they are authorized for on their credit profile. They also have access to the card yet have no liability to pay. The advantage of being an authorized user is if the person has excellent payment/ card history, it will reflect on your credit report simultaneously boosting your credit score. The disadvantage is that if that person begins to fall behind on payments, that negative information will also reflect on your credit report.

Meanddadatnicolesgame

Me and My Dad, 2008

I became an authorized user on one of my father’s accounts.  It was one of my last financial requests as I dug myself out of my parent’s pocket and worked on becoming a financially responsible adult. He designated me as an authorized user on the credit card account with the best payment history and a decent line of credit. I did not request access to his credit card because the access was solely for credit building purposes. My credit score increased tremendously as a result of being an authorized user. I received the fruits of his positive payment history and credit limit. Since he maintains a 10% credit utilization rate, my available credit amount increased by a few thousand dollars. 

During my research I came across several horror stories. They ranged from parents designating their children as authorized users and awarding their child a card, only for the child to go off to college and charge everything in sight to girlfriends adding a boyfriend as an authorized user and failing to have him removed after the relationship ended…we know how that ends.

The important thing to consider when becoming an authorized user is STABILITY and interest.  I don’t recommend asking a co-worker or a boss if you can be added as an authorized user…can we say awkward.

Ask your family. Parents, grandparents, siblings, aunts, etc. Reassure them that you only want access to their payment history to help you boost your credit. But also make sure that they are stable. For instance, if they can’t afford to miss a paycheck , you might not want to become an authorized user on their accounts. Remember if they stop paying, IT WILL REFLECT ON YOUR REPORT! I know my father is invested in maintaining his good standing as well is being careful not to adversely impact my credit.

Do you have experience adding an authorized user or being an authorized user? How has it helped you? Or what advice do you have for others considering this?

The Most Valuable Thing We Take For Granted

A few weeks ago on Facebook I posted a startling realization about myself. I am time poor.

I am fully employed, finishing my masters degree, partaking in an internship to finish said masters degree, growing a blog which has spawned 2 businesses, studying to become certified in financial education, maintaining a household, and attempting to have a decent social life in NYC . Yeah just reading that is tiring huh?

So yes, I am time poor.

In the pursuit of changing the world and ensuring my financial freedom while doing it I have compromised my most valuable asset.

time-pocket-watchTime.

There are moments when I stand still and disconnect, but it takes a lot of talking to myself to switch my train of thought from what I should and could be doing to just being still.

I find that being busy or time poor is more so of an issue for Gen Y’ers like me. I don’t want to blame it all on the internet, but… a lot of it has to do with the internet!  We are competitive and several of us are over achievers. We have been privy to the lives of more millionaires than our parents generation. We have seen everyday folk like Mark Zuckerberg strike big with inventions and businesses and the truth is a lot of us are so committed to the pursuit of wealth, regardless of how it impacts our schedules because “hard work pays off” right?

How did I, a women who believes in working smart and not hard become time poor? Did New York do it to me?

After reading an article by Tyler Ward called Busy Isn’t Respectable Anymorewhich is an exceptional read, he made me realize that people, well me at least, take busy as a sign of being important. When it really isn’t. Being busy is a sign or poor management of time, your greatest asset. 

I am attempting to take action. My first step in clearing up my time is saying “no” to project, ideas, or things that were not important to me or key to my growth.  

I’m still trying to figure out what the second step is though.

You can earn your money back. You can climb out of debt and reclaim your financial freedom. But you will never, ever be able to get time back. Once it’s gone it is gone forever.

Are you addicted to being busy or are you “rehabilitated”? What are ways that you have effectively managed your time?

 

My New Years Eve Look for Under $20!

Happy New Years Loves!

This is the first post of the year and one of my resolutions was to blog more about ways Im remaining financially fabulous in my daily life. What better way to start that with my New Years look.

One common mistake that people make before major events and celebrations is the need to buy a new outfit for this event. When I’m tempted to do so, I always remind myself that most likely 75-95% of the people where I’m going don’t care if I’ve worn an outfit before. And if they do care, thats actually their problem, not mine.

It’s become important to invest in quality pieces as opposed to several pieces. Quality pieces may cost more, but they can stand up to repeated wears, saving me money in the long run.

So for last nights look. My good friend Belkis and I updated a dress I had in my wardrobe that was purchased as a gift for me by my boyfriend. The dress also slipped down on the shoulder more than I liked.

We attached gold chain to the back to take the dress from basic to fab.

I purchased the chain from a local trim store for $9. We measured the back of the dress and decided where I wanted the chains to hang. I then securely hand sewed them on. Below is the before and after.

Dress DIY Before and After

 

For my hair I took it to Youtube. Being that my hair is natural (free of chemicals) , situating it can be quite a feat at times. I was inspired by my instafriend @NappturallyChicJerie. All it took was a $2 pack of braiding hair  and bobbypins to create a glamorous look for the evening in FIVE MINUTES!

Hair CloseUP

 

MYLadies NYE

Here is Jere’s Tutorial.

For my makeup I took a few pointers from my friend Naja Matthews , utilizing her recommended products which I already have included in my make-up collection. For a little more va va voom I purchased lashes from the local beauty Supply store for $2.50.

I hope you enjoyed bringing in the New Year as much as I did. Lets all agree to make this year the best it can be.

Can’t wait to speak to you on tonight’s Twitter Chat!!!!!!

NYE Celebration

ABOUT
Created by nationally recognized millennial money expert Tonya Rapley, My Fab Finance is a leading financial education and lifestyle blog for millennials who want to become financially free and do more of what they love.
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