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Personal Finance

Who needs a will and why? Prepare yourself for the unexpected.

Who Needs a Will and Why

By | Personal Finance

Once you reach adulthood, your responsibilities grow exponentially, as does the complexity of your financial life. From buying a home to owning a car or even saving for retirement, you undoubtedly have assets and liabilities of some sort. To steward those in an efficient way in the event of your untimely and unexpected passing, a will can take care of everything you leave behind in a fulfilling way.

No matter how old you are or what your financial situation may be, creating a formal will ensures you leave behind a legacy for your family or friends, rather than a bureaucratic headache. Find out what could happen if you don’t make a will and what you can accomplish when you do opt to create one.

What Happens Without a Will

If you pass away without a will, the state takes over the disbursement of your assets, including your bank accounts and personal property. Each state varies on how this process unfolds. The details also depend on your surviving heirs. If you’re single, your assets would likely go to your parents or siblings.

If you’re married, your spouse (or domestic partner) will receive ownership of your assets. If you’re not married but living together, things can get tricky without a will. In this situation, it would be unlikely for your surviving partner to inherit anything. This can lead to a sticky scenario if you informally shared finances.

3 Things Included in a Will

Creating a will can be as basic or complicated as you’d like. At a minimum, here are the most common things you’ll likely need to include to cover all your bases in a legal situation.

1. Appointment of an Executor

The first part involves appointing an executor. Choosing the right person is important because they’ll be executing your wishes rather than someone appointed from the state. Depending on where you live, this role may also be called a personal representative.

Pick someone you trust because they’ll see all the details of your finances while simultaneously managing family relationships during the distribution process. Also note that your executor should be in close proximity to where you live because they’ll need to carry out many of their responsibilities in person, like filing paperwork at the courthouse of your jurisdiction. They’re also responsible for filing any owed taxes.

2. Distribution of Property and Assets

This is the part where you designate the beneficiaries of your property and assets. It’s important to be as detailed as possible. If you’re not, you leave too much room for interpretation that could potentially cause disagreements among your surviving heirs.

When appropriate, discuss things ahead of time if you have multiple people to whom you’d like to leave an inheritance. While it’s easy to evenly divide financial assets, it’s harder to do so with physical property, especially for sentimental or heirloom pieces. You can designate who receives what, or that property should be liquidated, with the proceeds being split among certain beneficiaries.

Whether you write a will using software or an experienced lawyer, you’ll leave a much more peaceful situation for everyone if you clearly spell out your intentions.

3. Guardianship for Minor Children

If you still have minor children from home, it’s important to name a guardian for them. While you don’t have to notify your chosen person (or people) in advance, doing so can be helpful to make sure it’s something they can handle both personally and financially.

Since everyone’s situation can change, from illness to divorce or anything else, you can even name several options for the guardianship role in the order of your preference. You’ll name your children (or other dependents) in your will, and you can also include language that ensures your decisions apply to any future children as well, so you don’t have to remember to update your will with every future birth.

In the event you don’t name a guardian for your child, the court will be tasked with choosing one for you. This will usually go to a close friend or relative, but it’s best to give yourself the final say in what happens to your children if you’re suddenly gone.

Get Your Financial Footing Solid Now

Another important piece of preparing for the unexpected is leaving your finances intact. This makes it easier for your heirs to sort through things and hopefully have something to help them in the future.

The first step of financial success is making sure your credit is as strong as possible. For professional help, reach out to Ovation Credit for a free consultation.

How can you save money on college expenses? Read on.

8 Ways to Save Money on These Top College Costs

By | Personal Finance

It’s no secret that the cost of college rises exponentially every year. If you are gearing up to attend college this fall, you’re likely all too aware of your school’s price tag — and the financial aid, including grants, loans, and scholarships, that will pave the way to that coveted degree. ValuePenguin estimated the average cost in 2017–2018 at $20,770 for in-state public schools and $46,950 for private institutions. As lofty as those figures may be, they don’t account for the thousands of additional “hidden” expenses a college student might encounter every year. Before you set foot on campus this fall, read up on top ways to save money during college.

1. Plan Meals Strategically

A college meal plan is more cost-effective than dining out every night. Try to focus your eating choices around your college’s approved dining establishments. When you need to eat outside the meal plan, look for free events on campus offering food, or search for discounted food specials from local restaurants. A restaurant that extends student discounts is likely your best bet. Even better? Teach yourself to cook, which will stretch your food budget much further. Stock up on snacks in bulk and carry a few in your backpack to stave off those post-class cravings.

2. Limit Unnecessary Spending

Coffee can fuel your way through an all-nighter and help you ace your exams — but if you’re stopping by the local coffeehouse every day, your caffeine habit will eventually drain your budget. An at-home coffeemaker is an excellent investment that can save you hundreds of dollars. While you’re at it, try to avoid excessive spending on alcohol, which is one of the best ways to save money during college.

3. Socialize on Campus

Your college probably hosts a number of social activities, sporting events, and other free events each day. In addition, your tuition covers the cost of your college’s gym, pool, library, and access to a host of academic and career resources. Take advantage of the free amenities as much as you can. Your student discount can also nab you lower-priced admission to local stores, museums, and movie theaters.

4. Don’t Go “All Out” on Back-to-School Shopping

Avoid buying a whole year’s worth of living necessities and school supplies all at once. Instead, focus on the first few weeks, then take stock of what you still need and what you can afford to do without. Restrict your school supply shopping to online retailers or discount big-box stores, and steer clear of the higher-priced options on campus.

5. Buy Used Textbooks, or Rent Them

You can save hundreds on one of the top college expenses by either buying used textbooks or renting at one of the various textbook rental websites, such as Chegg.com or ECampus.com. If you choose to buy used, you can recoup your investment by selling the textbooks after your semester ends. Take note: Avoid the college bookstore — you can find much cheaper rates when you search for the required class materials online.

6. Scope out Secondhand Options

Whenever possible, shop secondhand for larger expenses such as beds, vacuum cleaners, toasters, and couches (that is, if you aren’t already planning to bring those items from home). You can probably score much better deals by scouring Craigslist and Facebook Marketplace than by purchasing any of these items brand new.

7. Hunt for Student-Focused Deals on Tech

Most students will require a new laptop or computer. Make sure you purchase any new technology through the company’s education section, which offers discounts especially geared toward students. If you need to install certain software, chances are an education edition is available as well. You can also hunt for used or refurbished models, which are often in like-new condition. Skip the printer and take your papers to the campus library to print for a few cents a page, which will also save you the cost of purchasing ink cartridges and paper.

8. Plan Travel Wisely

Travel can capsize even the most carefully planned college budget. Take this opportunity to cash in on any miles or rewards from your parents’ travel rewards credit card. As soon as you find out about when you need to travel, book your trip as far in advance of the desired dates as possible. When you’re headed off campus, try to walk or bike to your destination, or use public transportation. Leave your car at home to cut down on the gas, parking, and maintenance costs.

Build Your Foundation for Financial Success

Your healthy credit life starts now. Make sure your credit report stays intact as you broaden your educational, cultural, and financial horizons and learn ways to save money during college. Find out more about how the team at Ovation Credit can help you here.

References

https://thecollegeinvestor.com/22453/save-money-in-college/

https://www.valuepenguin.com/student-loans/average-cost-of-college

It's not the easiest of conversations but it is one you need to have. Speak up and ask you boss for a raise.

5 Tips for Asking for a Raise

By | Personal Finance

Excelling at your job often comes with extended responsibilities, but that doesn’t always mean an automatic pay increase. Instead, you may have to initiate the conversation with your manager to lay out why you should get a raise and how much you expect. You may not always get a yes, but there are a few things you can do to improve your odds. Here are our top five tips on how to ask for a raise no matter what industry you’re in.

1. Focus on What You Deserve, Not Need

When it comes time to make the case for a raise, don’t focus the conversation on your finances. The argument for a raise should be based on your merits, not the reasons why you need the extra money. Your boss won’t be impressed by talking about any financial downturn you’ve had recently, even if it wasn’t your fault.

Instead, talk about the value you add to the company and outline any new responsibilities you’ve taken on since your last raise. These are the types of things that can showcase you as an asset to the team and can help you get the pay increase you deserve.

2. Research Your Position’s Market Value

When wondering how to ask for a raise, be as strategic as possible. Instead of pulling a random number out of thin air, do some market research on what comparable positions in your area earn. There are a couple of different ways you can do this.

One way is to look at online review sites like Glassdoor, where people actually submit their salaries by job type. This gives you an idea of what other companies pay for the same job. Just make sure you don’t look at positions in larger cities since that can skew the numbers due to the cost of living. The second way is to look at job openings that are similar and see the current hiring range.

3. Practice in Advance

Get your spouse or close friend to help you prepare. It doesn’t matter that they won’t be able to replicate the conversation exactly as it will likely pan out. What matters is that you rehearse what you want to say to your boss beforehand. Go over each question and talking point and discuss what you could have said better or shouldn’t have said at all.

Don’t try to memorize exactly what you want to say. Instead, just remember key phrases. If you try to memorize a giant speech, you’re going to sound robotic and it will appear as if you are extremely stressed. You want the opposite of that. You want to seem calm, collected, and confident.

4. Time Your Request Strategically

You can’t ask for a raise any time you want and expect success. To better your odds, wait until after you’ve completed a big project (or whatever your job’s equivalent is). We’re not talking basic job description stuff. It has to be bigger than that. It should be a high-stress situation that required your extra effort to run smoothly. Wait for something like this to pass so that when you walk into your boss’s office, his or her first thought should be “key player” before you even utter a word.

Essentially, be as indispensable as possible when you walk into your boss’s office.

Another time to ask is when your company does performance reviews. Raises and promotions will already be on your boss’s mind, so it’s the perfect time to ask. Just don’t expect to receive a raise even if you deserve one. You should always ask and push the envelope. Many bosses won’t give raises unless pushed.

5. Ask for Feedback

No matter how well you position your ask, sometimes you’ll still receive a “no” response. If this is the case, don’t despair. The best thing you can do is to ask for feedback from your boss. Find out how you can improve in your current role and let him or her know that you’re interested in developing your career further.

This can set you up for a pay raise and even a promotion later on. Sometimes asking directly and letting people know your intentions (plus your commitment to the job) is the first step in asking for a raise.

Improve Your Finances with Ovation Credit

While earning more is a great way to improve your ideal situation, you can also set yourself up for financial success with the help of a professional credit repair service. Sign up for a free consultation with Ovation Credit today.

Living a minimalistic life can lead to more riches both personally and with your finances.

How to Marie Kondo Your Finances

By | Personal Finance

Whether you’ve picked up her book at your local bookstore or seen her hit show on Netflix, there’s no doubt that Marie Kondo is fueling an entire movement of minimalism and mindfulness. By truly taking stock of what you have and honing in on the things that truly spark joy in your life, Marie Kondo’s methods are a phenomenon in bringing more joy into your home, along with an extra dose of gratefulness.

In addition to tidying up your closets and drawers, you can Marie Kondo your finances as well. Check out these tips to declutter your bank accounts for a more fulfilling financial future.

Be Grateful

When Marie Kondo tackles any cluttered home, the first thing she advises her clients is to give thanks for what they have, before they begin the purge process. This simple act sets the tone for a stress-free session of decluttering and the same can be said when you Marie Kondo your finances.

No matter what your current financial outlook is, be grateful for where you are and what you have in this moment. Understand that knowledge is power and that the process you’re about to implement will ultimately open a clear path to action. You’ll be able to see what steps you need to take for credit repair, paying down debt, bolstering your savings, or whatever other goals you may have.

Start by taking a moment to pause and be grateful for the abundance and experience you have today, knowing you’re about to give yourself an even greater gift of financial security.

Spark Joy With Your Money

Marie Kondo’s main criteria for deciding whether or not to keep an item is determining if it sparks joy for you. She advises clients to hold each item and really think about how it makes them feel.

While you don’t need to physically hold every dollar you have, here are three steps you can take to make sure every aspect of your finances is working to providing you with joy, rather than stress.

1. Take Stock of What You Have

Just as you would pile all your clothes at once to see what you own, you can do the same thing in order to Marie Kondo your finances. Divide this process into at least four different sections: income, savings, credit, and debt.

Income: Look at your bank statements for the last three months and determine how much income you’ve actually brought in. If your earnings fluctuate, find an average of what you can reasonably expect each month. This number gives you a baseline for how to make your money work for your current stage in life.

Savings: Next, take stock of each savings account you have in your name. This should include both liquid accounts, like regular bank savings accounts, and long-term retirement accounts.

Credit: Another important step is to analyze your credit and see if it needs to be improved. Check your credit report for accuracy and dispute any credit errors you find.

Debt: Access each credit card and loan statement you have to truly understand the debt you currently carry. Many people don’t know the exact amount they owe, but it’s a crucial piece of information if you want to Marie Kondo your finances.

2. Organize Spending

Once you have all of those numbers compiled, it’s time to organize your spending. Look at your income and monthly expenditures to create a realistic budget. You can look at all of those bank statements you pulled to see where your money really goes.

Start by assigning budget lines to expenses you can’t change right away, like your housing payments, student loans, or car payments. Then challenge yourself to minimize discretionary expenses like food and other shopping.

In true KonMari fashion, also streamline all of your financial paperwork. Sign up for e-statements to minimize bulky statements in the mail, and create a simple filing system for the papers you do need to keep on hand. This keeps you on track and makes it easy to find the information you need.

3. Create a Long-Term Plan

Once you have a better handle on your day-to-day finances, consider your long-term goals. You may decide to focus on fixing your credit to improve your future financing opportunities. Alternatively, you might set up automated savings so that you prioritize those funds with each paycheck.

Keep the Momentum Going

Ready to make room for change in your financial life? Sign up for a free consultation with Ovation Credit to see if we can help.

Mom help teen learn credit cards

Smart Credit Card Habits for Teens

By | Credit Cards, Personal Finance

If you’re like most parents, you’ve taken the time to instill healthy financial practices in your youngsters. That informal education does not always extend to the use of credit cards — but it should. Right on the heels of proms and college applications, teenagers will soon find themselves thrust into a plastic-saturated world — and having some basic knowledge about smart credit card habits can make a tremendous difference. Smart teen credit card habits will put your kids one step ahead of their peers, allowing for a smooth transition into adulthood and a nice jump start on building a healthy credit history.

Give them a Starter Card

Teens who understand responsible credit card usage in high school will be less likely to fall into the common college debt spiral. One option to teach smart teen credit card habits is with a prepaid debit card, which can be funded directly from the student’s savings. Or you could add your teen as an authorized user to your own account. If you consider your teen responsible enough to hold a credit card, make sure he or she is also capable of maintaining a bank account from which to make the payments. Show them how to set a monthly limit and keep a record of their purchases. Point out when the running tab is nearing too close to the monthly limit of what they can afford to repay.  Be sure to set guidelines on what your teen can and cannot buy with the card — and review the statement each month as it arrives.

Teach Them That Credit Isn’t Free Money

It doesn’t take long for the average consumer to understand that overuse of credit leads to debt. However, teens might be less likely to appreciate this risk. One idea is to ask your teen to hand over the amount of cash (plus a few dollars extra) that he or she spent, or plans to spend, on a credit card. Once your teen sees that amount disappear from a checking account or allowance, he or she might reconsider the purchase. This also helps them to understand that any credit card spending must, eventually, be repaid — and often ends up costing more in the long run, thanks to interest and other fees.

Use the Monthly Statement as a Learning Tool

Just as teens are starting to appreciate the convenience and glamour of credit card usage, it’s time to peel back the curtain and point out some of the stark realities. Dig up one of your latest credit card statements and show them the total amount of your purchases, as well as the amount of interest charged and your APR rate. Most statements will also provide a rundown of how long it will take you to pay the balance — and how much you’ll pay in interest — if you only make the minimum payment every month. That is another good teen credit card habit to learn — how paying your balance in full every month, or making more than the minimum payment, can save thousands of dollars in interest fees.

Resist the Urge to Bail Them Out

If your teenager spends excessively and ends up accruing a mountain of debt, don’t panic — or try to solve the problem alone. Together with your teen, come up with a plan for him or her to repay the outstanding amount — whether through an after-school job or a monthly payment plan. It may seem cruel at first, but in the long run, it can be a momentous lesson for your child. In the real world, parents don’t just sweep in and erase debt problems — and the sooner your child can understand the realities of managing financial responsibly, the better.

Talk About the Importance of Credit Scores

Credit scores will be extremely important in your teenager’s future — and now is an excellent time to explain how their impact penetrates far beyond qualifying for loans and credit card offers. In a few short years, they could be applying for a job or trying to rent an apartment. Explain that employers, landlords, and creditors all use credit checks to verify an applicant’s financial status and level of responsibility. If teens grow into adults who understand the importance of smart credit card habits, they will have no problem achieving a solid credit score.

Set a Good Example

It’s no easy feat to teach kids about smart teen credit card habits. While you’re spending this time educating your child, make sure you take this opportunity to check in with your own credit report. Give us a call today at Ovation Credit and we’ll be happy to offer our wisdom with a free consultation.

Shopping store centers and retail credit

Everything You Need to Know About Retail Store Credit Cards

By | Credit Cards, Personal Finance

Everything You Need to Know About Retail Store Credit Cards

When you shop at a certain store frequently, you might think opening a credit card account there makes solid financial sense. After all, many retail establishments tout incentives as a perk to their loyal credit card holders — such as, for example, Nordstrom’s offer of a $20 gift certificate once shoppers spend $1,000. Other cards dangle discounts to attract bargain-hunting shoppers — perhaps only credit card holders get access to special sales and promotions, or they might receive cash back for certain purchases. But is a retail store credit card really a benefit to your credit — or does it simply encourage you to spend money that you don’t necessarily have?

They can be a good credit-building tool — but proceed cautiously.

If you are trying to establish a good credit record, retail credit cards are a relatively safe way to do so. Most retail credit cards have a low barrier to entry — meaning that even if your credit score is less than stellar, it is fairly easy to be approved for one. Using a store credit card judiciously — that is, keeping your spending habits in check and paying at least the minimum amount due every month — can serve as an excellent exercise in building your credit properly. But be careful. If you open up an account at every store, that will end up looking like too much open credit on your credit report. Also, having a store credit card can tempt you to spend money that you don’t have, or go hunting for items that you don’t really need.

You can easily hurt your credit.

Most credit cards offered in-store boast a low credit limit. How much trouble can you really get into with a credit limit that low? Well, you might be surprised. Low limits mean there’s little wiggle room if you happen to overspend one month. Also, if you continually carry a high balance from month to month — and you are close to hitting your max — it will start to negatively affect your credit score, as you will appear to be maxing out your credit limit. And each time you open a new retail store account, it registers as a hard inquiry on your credit report, also known as the store’s check into your creditworthiness, which can lower your credit score.

The interest rates tend to be higher.

Retail establishments certainly tout the benefits you’ll enjoy as a cardholder, but you’re less likely to hear about the interest rate or APR — that is, unless you dig into the fine print. A 2016 report from CreditCards.com found that store credit cards charge an average of 23.84% interest, up from the average credit card interest rate of 15.22%. That means you actually end up spending more money than you’re saving when you don’t pay the full amount due every month.

Some retailers also waive interest for a certain period of time — such as six months or a year — if you promise to pay off the balance in full in that time period. That can be a good benefit if you want to finance a big-ticket item. But again, it can be a risky move if you are unable to pay the full amount within the promotional period. Many retailers will then begin charging you all of the interest that would have accrued from the date of purchase.

Weigh the risks versus rewards.

It helps to weigh the risks versus rewards when you’re deciding whether to open a store credit card. Do you already have a solid track record of paying your debts every month? Then a retail credit card might be a good idea for you, as long as the store is offering you considerable incentives to become a cardholder. However, store credit cards don’t necessarily provide better benefits and loyalty packages than, say, a major credit card that can be used at all establishments. So, you might be better off sticking with one credit card that offers cash-back rewards across a range of different retail stores, rather than just one.

Do your research.

The bottom line: Make sure you do your research before signing up for just any retailer’s offer. Read into the interest rates and compare the incentives and rewards to those offered by other establishments or major credit cards. And be honest with yourself about how responsible you’ll be with a store credit card, so you don’t end up digging a deeper financial hole.

Retail credit cards are just one way you can improve your credit and build a pathway to a smarter financial future. At Ovation Credit, we aim to guide clients through the process of rebuilding credit and becoming a more responsible credit card user. Contact us today for a free consultation to review your credit reports and answer any questions you may have.

Man receives tips on co signing a loan

Co-Signing a Loan? Read This First

By | Personal Finance

If someone asks you to co-sign a loan, it is typically because they do not possess the requisite credentials needed to qualify for a loan on their own. Your friend or family member might have another shot at getting their application approved if you are willing to co-sign the loan. As a co-signer, you will be contractually obligated to pay off the debt if and when the primary account holder defaults. Co-signers serve an important purpose, helping those with little or negative credit history overcome those limitations and qualify for loans. If all goes well, you may help that person cultivate positive credit history that will allow them to later qualify for a solo loan. However, if the arrangement were to sour — as it unfortunately does all too often — it could have a disastrous impact on your own credit. Before you dive into co-signing a loan, here’s what you need to know.

How It Works

A co-signer is just as critical to the loan as the actual borrower — so that means you will have to show up for the actual signing in person. If you are taking this step, it’s best to treat the situation as if you are applying for the loan yourself. Just as you would with your own applications for loans or credit, you need to evaluate your financial situation and whether you can afford the risk. Simply put, if you could not easily cover the payments if the primary account holder defaulted, co-signing would be the wrong choice.

What It Means for Your Credit Score

Even though you may not submit a single payment as a co-signer on a loan, all of the loan payments will be reported to the credit bureaus as if you had made them yourself. That means that if the primary borrower stops paying, all of the missed payments will show up on your credit report, too. Late and missed payments are the quickest ways to sink a credit score — even if yours was rock-solid when you initially agreed to co-sign the loan. Your score could plummet even more dramatically if the borrower defaults on the loan and it winds up in collections or litigation.

Protecting Yourself

If you decide to proceed with co-signing a loan despite the risks, make sure you let the primary borrower know that you will be keeping tabs on their payments. Find out what day the payment is due and give them a heads-up a few days before. It’s in your best interest to ensure the payments are made on time every month — even if it means you have to nag the primary borrower.

Loan Approvals Will Get Trickier

Adding another loan to your financial load — even if you aren’t technically making any payments on it — will make it tougher for you to qualify for loans or credit. Creditors or loan officers will observe that your amount of debt has risen but your income, most likely, has not.

Contracts Are Rock Solid

You may think that you can easily request a release from the loan if circumstances change. Unfortunately, loan terms and conditions are ironclad for that very reason — so that if the primary borrower shirks their commitments, the loan officer can seek you out for payment. You’ll be on the hook for as long as the debt is unpaid. Don’t rely on a verbal agreement with the primary borrower. You may be better off asking the loan officer directly if the contract includes a provision for release.

Worst-Case Scenario

Unfortunately, the doom-and-gloom scenario may very well play out in reality. If a loan officer is hesitant to take a risk on a borrower, they have a very good reason. Your friend or family member may likely default, leaving you fully responsible for repaying the debt — plus any interest and collection costs that have accrued when the original account holder’s payments lapsed. Even though that is exactly why you co-signed in the first place, it can still be hugely unsettling to begin receiving collection notices and even warnings of legal judgments. Beyond the financial repercussions, your relationship with the borrower may not recover.

Although co-signing a loan is a generous gesture, you may decide it is ultimately not worth the risk. Consider alternatives, such as offering financial assistance in another way — one that doesn’t put your credit score on the line.

We offer a wealth of educational content to help you navigate credit and financial concerns here at Ovation Credit, but that’s not all we do. Head here for a free consultation to find out more about how we can give your credit reports an instant boost.

improve your finances stress free and breath

3 Stress-Free Ways to Improve Your Finances

By | Personal Finance

Committing to bettering your finances doesn’t just have to be a new year’s resolution; it’s a worthy goal you can tackle any time of the year. But if just thinking about giving your budget a second thought is enough to make you break out in a cold sweat, don’t worry. We’ve compiled three easy steps you can take today that will help you improve your finances completely stress-free.

Ready to get started?

1. Automate Your Savings

Between mobile apps and extra services offered by banks, it’s easy to automate your savings so you can build your nest egg without worrying about over-spending. One easy way to do this is to split up your direct deposit paycheck between checking and savings. Because the money automatically goes into your savings account, you’re not tempted to spend it on non-necessities throughout the month.

Another tactic is to sign up for a mobile app that helps you save when you perform certain behaviors. There are countless options, such as rounding up each purchase to the next dollar and depositing the change into savings. Pick one that makes sense for you and you’ll see your savings grow without even trying.

2. Weed Out Extraneous Expenses

While you eventually want to give your monthly budget an in-depth review to see what you can cut back on, there’s no time like the present to make a few small changes that can quickly add up. Here are three suggested expenses you can reduce or eliminate today to improve your finances stress-free.

Cancel One Subscription Service

The first place to consider cutting back on is your monthly subscription services. It’s easy to accumulate these automatic fees that may only seem like a few dollars a month. From streaming music and movies to receiving regular subscription boxes, it’s very possible that you could be shelling out a large chunk of change without even realizing it.

For a totally stress-free tactic, challenge yourself to cancel just one subscription. If you’re trying to build your savings account or pay down debt, make sure that extra money is going toward your financial goal. Otherwise, you can put it toward any other savings goal you have, like an upcoming vacation. Even saving an extra $12 can add up to $144 a year, and if you can cancel one additional subscription each month, you’ll really start to see your financial situation improve.

Opt Out of Overdraft Protection

While overdraft protection might seem like a wonderful convenience, it’s also an expensive one. Overdraft fees can cost as much as $35 per incident and if you come up short just once a month each year, that adds up to a whopping $420 you’ll spend annually. To avoid this costly service and get motivated to stay on top of how much cash you have in your bank account, opt out of overdraft protection completely.

Yes, you may end up having your card declined at a cash register, but you also won’t be adding a $35 premium to that purchase. To help improve your finances stress-free with this tactic, sign up for balance text alerts with your bank. That way, you’ll know when your account is about to hit $0 and you can avoid the cash register altogether.

Downgrade Your Cell Phone Plan

You might be tempted to moan and groan at this suggestion; after all, most people use their phone for just about everything these days. But downgrading your cell phone plan is a simple way to cut back on expenses without having to adjust other areas of your spending. One easy way to do this is to limit your data usage.

You don’t need to totally cut back on your phone browsing. Instead, connect your phone to your home Wi-Fi network to avoid using up your data. You can do the same thing on public networks at school, the coffee shop, or the office. Just be cognizant of entering passwords or other sensitive information when on a public network. A simple step can help you gain control over your finances with just a simple Wi-Fi login.

3. Fix Your Credit

Another easy way to improve your finances while staying stress-free is to repair your credit. This can save you money on expensive interest rates on credit cards and loans. Once you see a boost in your credit score, you can negotiate for a better rate on your credit card and potentially refinance loans to lower your monthly payments.

For a free credit repair consultation, contact Ovation Credit today.

7 Smart Ways to Use Your Tax Refund This Year

By | Personal Finance

If you’re one of the millions of Americans receiving a tax refund this year, you might be tempted to take a vacation or go on a shopping spree. But before you do any of these things, consider thinking a bit more strategically. Here are seven ways to spend your tax refund that could set you up for a more financially secure future.

1. Pay Down High-Interest Debt

Owing a lot of debt can be costly, not to mention a major strain in keeping up with your payments each month. Do yourself a favor and use your tax refund to make a large payment on your existing debt. It can help reduce your monthly bills, plus save yourself a substantial amount of money in interest over time.

2. Boost Your Emergency Savings

Another smart refund strategy is to create an emergency savings fund or add to it if you already have one. This can help prevent you from accumulating new debt because you have a built-in buffer for unexpected financial emergencies. The next time your car breaks down or you have a medical issue, you won’t have to charge or borrow money to take care of it. Using your tax refund for your emergency fund can take a lot of stress out of your life.

3. Contribute to Your Retirement Savings

Most Americans are dangerously underprepared for retirement. Even if you already contribute to a retirement fund, it’s good to regularly reassess how your progress is coming along. You can use your tax refund to contribute to an employer fund if you don’t already max out your annual contributions. You may also qualify for opening up either a traditional or Roth IRA. Each type is taxed at a different time, so do some research to determine which one is the best option for your current situation.

4. Make a Tax-Deductible Donation

Donating to a non-profit organization with your refund could help you prepare for next year’s tax season. In most cases, this type of donation is tax deductible. If you want to decrease your tax burden even further, especially if you’re riding the line between two different tax brackets, a donation could help you while also making a difference to your chosen charity. Consider chatting with a tax advisor if you think this tactic could help you next year.

5. Tune Up Your Major Investments

While a tax refund could easily be used for a major purchase or upgrade, don’t forget about regular maintenance of your existing property. Maybe your home’s HVAC needs some maintenance. Or perhaps your car could use a tune-up or some new tires. Oftentimes, a bit of prevention early on can be much less expensive than addressing a larger issue later on. If you don’t include these things in your regular budget, think about using your tax refund for your usual deferred maintenance.

6. Make an Extra House Payment

Using your tax refund to make an extra house payment each year can put a huge dent in your mortgage over the years. Depending on your principal and interest, you could easily save tens of thousands of dollars in interest over the life of your loan. Not only that, you could shave off a few years from your mortgage if you start making extra payments early enough.

7. Invest in Professional Credit Repair

If you have less than perfect credit, you’re automatically setting yourself up for more limited access to credit, plus more expensive credit even if you do get approved. There are certainly ways you can fix or improve your credit on your own, but there are several benefits to investing in a professional credit repair service. First, a reputable company, like Ovation Credit, has an expert staff to create the most effective credit disputes. On top of that, you can save yourself countless hours over the course of several months spent on fixing your credit errors. To make sure you get your credit repaired in an efficient and effective manner, it may be worth spending some of that tax refund on a better credit score.

Getting a tax refund is an exciting time, especially if you weren’t expecting such a large lump sum payment. Don’t rush yourself into making any spending decisions until you’ve fully thought out your short- and long-term financial goals. Think about what you need to do to help you achieve those dreams. Then think about using some of these strategies to help you get there.

Sources:

https://www.cnbc.com/2018/03/19/most-americans-close-to-retirement-have-saved-12-percent-of-what-they-need.html

https://www.bankrate.com/finance/mortgages/4-ways-to-pay-off-your-mortgage-earlier-1.aspx

how divorce affects your credit

Finances After a Divorce: 6 Things to Know

By | Personal Finance, Your Credit

Divorce can be a trying period in your life, but you’ll feel like life is a little closer to normal if you can regain your financial footing as quickly as possible. Read these tips to understand the impact on different areas of your finances after a divorce. In some cases, you may even discover a few perks depending on your situation or final divorce settlement.

1. You Can Access Retirement Funds Penalty-Free

If you receive a qualified relations domestic order as part of your divorce proceedings, you can take out an early withdrawal from your retirement account without being assessed for a penalty. Typically, you’d be charged a 10% fee on any distribution before the age of 59 ½. You will, however, be responsible for paying income taxes on anything you withdraw as part of your divorce. You can avoid taxes if you choose to roll your retirement funds into an IRA. Just be cautious not to jeopardize your financial future. Accessing retirement funds penalty-free can help improve credit if you’re trying to avoid debt or collections while going through a divorce.

2. Alimony Tax Laws Have Changed

If your divorce settlement is finalized post-2018, you’ll see some drastic changes in how alimony and child support are treated in terms of taxation. Pre-2019 agreements allow for alimony to be used as a tax deduction for the payer and counts as taxable income for the recipient. Under the new tax law, however, these rules are completely eliminated. There is no allowance for using alimony payments as a tax deduction and recipients do not have to include these payments as part of their taxable income. In short, this is a win if you’re on the receiving end, but could be a minor financial blow if you’re hoping to get a tax deduction for your upcoming divorce settlement.

3. College Financial Aid Goes Through the Custodial Parent

If your children are approaching college age, it’s important to understand how financial aid works when the parents are divorced. Rather than having to count both parents’ income on the Free Application for Federal Student Aid (FAFSA), only the custodial parent’s income must be included, which can potentially increase your child’s chance of receiving federal aid. Note, however, that child-support and alimony payments received from the non-custodial parents also have to be included as part of the FAFSA paperwork. If parents have a 50% custody agreement, the custodial parent is considered the one with whom the child stayed the most number of days in the preceding 12 months. With a bit of planning with your ex-spouse, you may be able to minimize your family’s financial responsibility by making the person with less income the custodial parent.

4. Joint Debt Can Be Assigned to One Person

You may feel happy that the judge assigns joint debt like a car loan or personal loan to your ex-spouse, but the situation has the potential to seriously damage your credit score. If your ex-spouse fails to make payments on the loan, whether on purpose or out of financial hardship, those missed payments will be reflected on your credit report. It can take up to seven years for a single late payment to naturally drop off your report unless you’re able to successfully initiate a credit dispute and get it removed before then.

5. Set Yourself Up for Credit Protection

In order to protect your credit score and financial future after divorce, check your credit report for any errors. You may want to sign up for credit monitoring services to track payments for accounts that still have your name on them. Additionally, remove your ex as an authorized user on all of your credit cards and any other lines of credit you may have. Look into refinancing joint loans so you can eventually separate your credit from your ex’s for good.

6. Hire a Pro to Expedite Credit Repair

If you’ve already experienced credit damage as a result of your divorce, consider hiring a professional credit repair firm to help get it back on track. Whether you’re feeling overwhelmed or simply want to move on to the next stage of your life, fixing your credit is a great first step to a clean slate. You can even sign up for a free consultation with Ovation to find out if you’re a good candidate for credit repair.

A divorce usually isn’t a walk in the park. But with a bit of background knowledge and some advance planning, you can minimize its financial impact and move on to brighter days.

Sources:

http://www.finaid.org/questions/divorce.phtml

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