Take our credit counseling advice to recover from a financial mistake.

Learning from a Financial Mistake

Unfortunately, a lot of learning in life comes from making mistakes. How you handle the experience can make all the difference in the lessons you take away from it.

For example, you have trouble with the snooze button. You repeatedly show up late to work and are fired over it. If you fail to see your own responsibility in this scenario and blame others, you won’t be able to move forward in the right direction.

Many financial mistakes happen with overspending and under-saving. Let’s consider some basic financial counseling principles to find out how you can recover from these two mistakes.

Financial Mistake 1: Credit Card Debt

If you are only making minimum payments or have maxed out several credit cards, it’s time to get back to the basics. First, understand that your credit limit isn’t actually money. You are borrowing money from the creditor to buy things. Next, the best practice for using credit cards is to pay off the entire balance at the end of the month. Finally, make sure you fully understand all the terms, interest rates and features of your card. This way you can avoid fees, interest rate hikes and maximize rewards. You may also discover that you need to close a few cards. Yes, this may hurt your credit score a little, but it will come back up.

Need some more practical applications to manage credit card debt? If you tend to overshop, avoid debt by eliminating credit cards from your wallet. Or avoid the stores that you splurge in regularly. Find ways to curb your behaviors. If you ran into large medical bills or unexpected repair costs, you should consider starting an emergency fund. Credit counseling can be another helpful resource if you have questions.

Financial Mistake 2: No Emergency Fund

The next financial mistake is under-saving. Emergency funds, rainy day funds, retirement and other financial goals all require you to not only save but to have a plan. Let’s focus on building an emergency fund to offset unplanned financial costs and consumer debt.

Emergency funds are a great financial tool to combat debt. Dedicating money for emergencies is really important when unexpected things come your way. If your car breaks down, the refrigerator dies, you get laid off and your cat needs to go to the vet all in one week, you’ll wish you had money earmarked for such events. Put away a little money each month. You can also direct any extra income towards your savings, like tips, tax returns, or money made from selling personal items.

Remember, mistakes can help us be better. Use these unfortunate situations to your advantage by learning and growing.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

If you’re paying off debt, try these $20 thoughtful gift ideas!

List of $20 Thoughtful Gift Ideas

Fortunately, there are plenty of gifts available for a small budget. Setting a low gift budget can allow you to still get out of debt that you may already have. Some of the list below are retail and others are DIY. Use this collection of $20 thoughtful gift ideas to spark your holiday shopping.

Gift Ideas for a Low Budget

1. Month subscription of Netflix or Spotify
2. CD or DVD or Vinyl
3. Book
4. Quality Used Item
5. Scarf
6. $20!
7. Wool Socks
8. Yarn
9. Drawing Pad & Markers
10. DIY Recipe in a Mason Jar
11. Blanket
12. Candy
13. Movie Pass
14. Homemade Treats
15. Magnetic Framed Photo
16. Beauty Supplies
17. Simple Ring or Piece of Jewelry
18. Candle
19. Wine
20. Cute Home Decor
21. Tree Ornament
22. Hat

Don’t discount your own ability to make a DIY gift. If you are crafty or can work with a friend to create something, go for it! You may end up a few dollars below or above $20 on a gift. Just be sure to balance one purchase out with another or know where the overages can be pulled from in the budget.

Make sure to create your own holiday shopping checklist. Write down everyone who needs a present, your ideas for them and the budget. From there you can research the costs of the gifts you want. You may need to change gift ideas if it’s too pricey or if you need to find it used somewhere. Thrift shops, eBay and Craigslist are a few examples of places you can find gifts for a reduced price.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

ACCC is here to explain financial literacy terms.

10 Financial Literacy Terms

Think about the following financial literacy terms. Once you have thought about each one, scroll down to read more about them. Finally, compare your answers to the ones we have provided to evaluate yourself.

1. Budget
2. SMART Goals
3. APR
4. FICO
5. Liquid Assets
6. Credit Counseling
7. Debt Management Plan
8. Reverse Mortgage
9. Charged Off Debt
10. Estate Planning

Definitions to the Financial Literacy Terms

Budget

A budget plan is a chart that shows you the flow of money in your everyday life. It calculates money coming in and money going out- income and expenses. Typically, line items are grouped together in budget categories. For example, rent, utilities and insurance would all fit under the “Housing” category. Additionally, you may have goals and dreams but if you don’t set up guidelines for reaching them and you don’t measure your progress, you may end up going so far in the wrong direction you can never make it back.

SMART Goals

When setting financial goals, make sure your goals are SMART. This ensures that your financial goal will not be too broad, vague, or so far in the future that the goal will fall to the wayside. SMART stands for:

• Specific
• Measurable
• Achievable
• Realistic
• Timely

APR

APR stands for annual percentage rate. It is the yearly rate of interest that you will pay on your personal credit card debt. They can change from year to year because issuers frequently offer special promotional or introductory rates. This is especially true for balance transfers (see below). APR will also increase as a result of missing or making late payments.

FICO

FICO is a company that developed an algorithm to calculate consumer credit scores, known as FICO Scores. This is the credit score most frequently relied upon by lenders to assess creditworthiness, but it is not the only credit score there is. There are hundreds of credit scoring methods that each provide a different score and change constantly. FICO is the top brand of credit score and is the easiest for consumers to monitor themselves.

Liquid Assets

A liquid asset is very easy to access and won’t lose value once it’s converted to cash. Since you never know when an emergency is going happen, it’s important your emergency fund is highly liquid. Basically, don’t invest your emergency fund; put it in a savings account that doesn’t have fees or restrictions for accessing your funds.

Credit Counseling

Credit counseling is a one-on-one session with a certified credit counselor and someone wanting additional input or help managing their finances. The session will go through your current finances, analyze it and provide ways to meet your financial goals. These goals could include eliminating credit card debt or avoiding foreclosure. Some outcomes of credit counseling advice include financial education, entering into a debt management program, managing your own debts or filing for bankruptcy.

Debt Management Plan

A debt management plan (DMP) is a service offered by a credit counseling agency where you will make one monthly payment to the credit counseling agency. Then that money is distributed out to your creditors. Additional benefits you may receive could be lower interest rates and waived fees. Additionally, you will end up paying the unsecured debt in a shorter amount of time. A credit counseling agency like American Consumer Credit Counseling can help to evaluate your needs and if you would benefit from a DMP.

Reverse Mortgage

Reverse mortgage solutions allow the homeowner to borrow against the equity in their home to receive a lump sum cash payment, monthly payments or a line of credit. Homeowners receive payments on the proceeds of the loan, rather than making payments toward the payoff of a mortgage. Some seniors can find great relief at this access to cash while still living at home.

Charged Off Debt

The creditor does not expect to collect the balance that’s owed. Rather they transfer the account to an accounting category such as ‘bad debt’ or ‘charged to loss’. These accounts are usually turned over to collection agencies. This is the most adverse status reported on accounts.

Estate Planning

Estate planning is a way to legally protect yourself and your loved ones if tragedy or death occurs. Who will make medical decisions for you if you are incapacitated? Who gets the house when you die? What about paying for your children’s education? There are a few main documents in an estate plan:

• Will
• Power of Attorney
• Living Will/Health Care Proxy
• Trust (not everyone will need this)

These are just a sampling of financial literacy terms which cover a variety of topics. Use this list to test yourself and your knowledge.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

Achieve a fall savings goal with ACCC’s tips.

Setting a Fall Savings Goal for College Students

A fall savings goal focuses on the future; save now for a big win down the road. For college students, this could be next semester costs and much more. This exercise is a great way to start budgeting and saving for the first time. There may have not been much experience with money management before this point. Let’s jump into some examples.

Examples of Fall Savings Goals

Just like other adults, a savings goal can be a fantastic and essential financial tool. Without good goals and direction, they won’t know where to go or how to get there. Depending on each college student’s individual situation, there could be a great need for savings goals or none at all.

Here is a list of possible fall savings goals:

• College Tuition
• Clothing
• Extra Food
• Travel Expenses
• Class Supplies
• Textbooks
• Spring Break
• Senior Thesis Project
• Rent
• Club Fees
• Christmas Gifts

How to Save for a Fall Savings Goal

The first step to succeeding in a fall savings goal is to have a budget in place. Then, it’s time to prioritize savings goals. Spring Break may not be a reality if next semester is full of textbook heavy classes or art classes. Try making a list of savings goals and then number them based on priority. Distribute the amount of money earmarked for savings to the top goals on the list. Once these are accomplished, move down the list.

Some college students may need to avoid using credit cards to stay on budget. It’s easy to overspend when it’s not cash in hand. That could lead to credit card debt. Another helpful hint is to use a budgeting app. It makes access easy across different devices as well as updating in real-time. Excel or paper budgets can also be utilized. Repaying student loans will be a lot easier if borrowers are already used to budgeting and prioritizing.

Finally, enjoy the thrills and achievement of accomplishing a fall savings goal. It’s not only a current success, but it has long-term positive consequences for personal finances.

Bottom Line…

Accomplishing fall savings goals is a multifaceted approach that requires commitment, discipline, and smart financial planning. By implementing robust budgeting strategies, prioritizing savings goals, making informed spending decisions, and utilizing modern and traditional budgeting tools, college students can experience the fulfillment of achieving their savings goals while setting the foundation for a secure financial future. This journey, although challenging, is rich with learning and is crucial for personal financial growth and responsibility.

If you’re struggling to pay off debt, schedule a free credit counseling session with us today. 

Debt consolidation isn’t a split-second decision.

Debt Consolidation Loans and Programs

Debt consolidation is the process of joining all of your current debts into one new loan. Generally, debt consolidation means taking out a new loan to replace your existing loans with one new interest rate & due date. This process can be helpful for those who are struggling to make payments to multiple creditors each month. It’s also helpful for those having trouble keeping track of different due dates.

For debt consolidation to save you money, you must secure a lower interest rate than you currently hold. Otherwise, you could pay more towards your debts in the long run. Also, taking out a consolidation loan without addressing the cause of your financial problems can lead you down the same path of accruing debt – this time with another loan at risk.

National nonprofit American Consumer Credit Counseling (ACCC) can help you consolidate your debt without taking out a new loan. ACCC’s debt management program is one of the best alternatives to a traditional consolidation loan.

A debt management program (DMP) allows you to consolidate all of your current debts into one without borrowing more money to pay your existing debts. When you enroll in a DMP, a certified credit counselor at a non-profit agency, like ACCC, will negotiate with your creditors to reduce interest rates, outstanding late fees, and any over-limit fees.

So Is Debt Consolidation Wise For Me?

Everyone’s finances are unique. Therefore there is no black and white answer. If your credit is in good standing and you don’t typically struggle with debt, a debt consolidation loan could work  well. Consumers with many debts and struggle to manage their finances, would probably benefit from more guidance in a DMP. Review your finances, do some research and decide if it’s true: is  debt consolidation right for you?

For more information about getting out of debt, sign up for a free credit counseling session with us today! 

Pay off debt by establishing SMART goals.

SMART Goals Review & Financial Planning

Here is a quick SMART goals review!

SMART stands for Specific, Measurable, Achievable, Relevant, and Timely.

• Specific: I will pay off $5,000 in unsecured consumer debt.
• Measurable: I will apply at least $100 each month to that debt.
• Achievable: I can achieve this if I cut back on my cable, mobile phone service, and additional discretionary spending.
• Relevant/Realistic: I need to reduce my debt to apply more money to savings and future goals.
• Timely: I will pay off this debt in 30 months.

You can break down your goals even further by categorizing them as either short-term, mid-term, or long-term. Having an accurate estimate of time is essential to successfully completing a goal. It can be motivating to know that you will pay off the debt quickly or to work harder.

• Short-term Goal: Less than 1 year
• Mid-term Goal: 2-5 years
• Long-term Goal: More than 5 years

So why are SMART goals important to financial planning? Basically, you have to be the boss of your money- don’t let your money boss you around. Telling your money what to do is critical to achieving your financial goals.

If you want to retire early, you need your money to work quickly and probably be invested in the stock market as soon and as often as possible. If you need to save money for a down payment, then you have to know how much money you will need and by when. Want to eliminate all your debt? You need a plan to beat the interest!

There are plenty of goals that deserve planning and attention. Put your best foot forward by making them SMART goals. Use this SMART goals review any time you need a refresher.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

Prevent debt in your child’s name with ACCC’s tips.

Protecting Your Child’s Personal Information

There are several ways to protect your child’s identity from attacks. Here are a few suggestions to get you started.

• Keep all paper and electronic records with your child’s personal information in a safe location.
• Don’t share your child’s Social Security number unless you know and trust the other party. Ask why it’s necessary and how it will be protected. Ask if you can use a different identifier, or use only the last four digits of your child’s Social Security number.
• Shred all documents that show your child’s personal information.
• If you lose a wallet, purse or paperwork that has your child’s Social Security information, be sure to report them missing.

Paper trails exist on paper and electronically. Protecting your child from identity theft can help prevent future financial and other serious ramifications, such as consumer debt.

What About Your Child’s Personal Information on Social Media?

I have to attempt the joy I feel seeing all the cute photos of babies and kids in my newsfeed. However, sharing any information about your kids is a risk in this digital world. While you may have a lot of privacy settings selected, you can’t always stop the spread of information.

For example, if you post your child’s full name and date of birth on your account, an identity thief can use public records to look up your address. Now they have three very important pieces of information to use against you to cause unknown amounts of credit problems.

Additionally, protecting your child’s personal information never stops. Think about them interviewing for jobs and for college admission down the road. Anything you publish on the Internet never goes away. All those embarrassing photos and videos can haunt them. The embarrassment grows as they get older with all the silly moments with their friends. They need to understand how important it is to manage their profiles in a respectful way. In fact, there are companies actually saving information. It’s creepy! We need to be aware and evaluate how much risk to take.

It’s good to be cautious. However, it’s up to each family to decide what they think is best for them and their kids.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

Pay off debt faster with these money saving tips.

List of 50 Money Saving Tips

Check out this list of 50 money saving tips to make your budget stretch and help you reach your financial goals faster!

1. Make repairs instead of buying new items.
2. Cancel subscriptions, even if you use them. Take a break.
3. Pack your lunches.
4. Use the library more for books, music, and movies.
5. Swap clothes with friends rather than buying.
6. Turn the thermostat down in the winter.
7. Use less air conditioning.
8. Use separate savings accounts for financial goals.
9. Grow a garden to save on produce or cut flowers.
10. Make your gifts.
11. Weatherize your home for the winter.
12. Carpool to work.
13. Ditch the car and take public transportation.
14. Downsize your home or apartment.
15. Avoid late fees with automatic payments
16. Buy throw pillow covers instead of new pillows
17. Use Groupon and other deals
18. Use credit wisely and save money- like Target Red Card or one that earns miles for travel.
19. Rearrange the furniture instead of buying something new.
20. Have a girls’ night in rather than going out.
21. Trade services instead of paying cash.
22. Make a grocery list and stick to it.
23. Use CD accounts and high interest checking to make money as you save.
24. Adopt a modular wardrobe.
25. Use holidays to get the things you need/want- send out that list!
26. Take advantage or pre-tax opportunities.
27. Eat rice and beans for dinner every night.
28. Make your popsicles.
29. Drink water.
30. Buy in bulk.
31. Hit the thrift stores first.
32. Split gift costs.
33. Work out at home.
34. Cut your own hair.
35. Downsize to one vehicle.
36. Shop at the farmers market.
37. Save more by working more.
38. Attend free events with the family.
39. Travel on the off-season.
40. Use the library for toys, free events and more for the kids.
41. Make your own decor.
42. Do your own taxes.
43. Wait for sales to go school shopping.
44. Download price tracking tools and other money-saving apps.
45. Buy three-ring binders instead of notebooks every year. Simply refill with paper.
46. Bake instead of buying pre-made deserts
47. Turn off the lights when you aren’t using that room.
48. Shop around for insurance and utilities.
49. Use cash instead of credit cards to keep your budget and savings on track.
50. Invest in rechargeable batteries. This pays off in the long run.

If you’re struggling to pay off debt, schedule a free credit counseling session with us today.

Follow our credit counseling advice to write a dispute letter.

Explore a Credit Report Dispute Letter

It can be very annoying and somewhat unsettling to have to address credit report errors. While there are clear steps and procedures to follow, it can still be an overwhelming process. Becoming familiar with the steps as well as this credit report dispute letter can make any current or future incidents easier.

Steps to Fix Credit Report Errors

In 1971, the Fair Credit Reporting Act was enacted to protect the consumer. It states that consumers have the right to know what information is in their credit report, and to correct any errors. This legislation was designed to promote accuracy and ensure the privacy of consumer information in credit reports.

Contact the particular credit agency in writing with a letter stating the issue. Include any additional documents that could help your case. Do not use originals, only copies. Be very specific identifying the issues and how it should be corrected. The FTC suggests to, “Send your letter by certified mail, “return receipt requested,” so you can document what the credit reporting company received. Keep copies of your dispute letter and enclosures.”

The agency has 30 days to investigate the information. “Information must be removed from a file if the CRA cannot verify it, or correct the errors. If the consumer disagrees with the result of the investigation, they have the right to submit a 100-word explanation, giving their version of the dispute.” (FTC)

• Equifax
• Experian
• TransUnion

Sample Credit Report Dispute Letter

Here is the copy of a sample credit dispute letter that you can use to make your case. The bolded parts are the text while the unbolded italic areas are suggestions or alternative text you can use depending on your needs.

Dear Sir or Madam:

I am writing to dispute the following information in my file. The items I dispute are also encircled on the attached copy of the report I received. This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be deleted (or request another specific change) to correct the information. (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents)

Enclosed are copies of documents supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.

Sincerely,

Your name

Enclosures: (List what you are enclosing)

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today. 

Avoid phone scams – and subsequent debt – with these tips.

Learn to Avoid Phone Scams & Their Consequences

Unfortunately, there are many very convincing scams out there. The consequences usually involve identity theft and personal credit card debt. Knowing how to avoid phone scams is one of the best ways to protect yourself. It’s like playing defense. Once you are aware of the clues, you can identify a scam and hang up immediately.

Generally speaking, anything that is too good to be true will be! You should also never give out personal information over the phone unless you are absolutely sure of the source. If you are unsure, just ask for a number to call back. This usually scares off the person on the other end; or they will try and keep you on the line. It’s also important to keep other family members aware of the scams circulating- especially older Americans who are targeted more frequently.

If you find yourself the victim of a scam, it’s important to act immediately. Learn the steps in this article about reporting identity theft.

FTC List of Phone Scams

The FTC keeps track of current phone scams as they get reported and investigated. Then, they release their findings to the public. Here are some of the scams to avoid.

• Travel Packages. “Free” or “low cost” vacations can end up cost­ing a bundle in hidden costs. Some of these vacations never take place, even after you’ve paid.
• Credit and loans. Advance fee loans, payday loans, credit card protection, and offers to lower your credit card interest rates are very popular schemes, especially during a down economy.
• Sham or exaggerated business and investment opportunities. Promoters of these have made millions of dollars. Scammers rely on the fact that business and investing can be complicated and that most people don’t research the investment.
• Charitable causes. Urgent requests for recent disaster relief efforts are especially common on the phone.
• High-stakes foreign lotteries. These pitches are against the law, which prohibits the cross-border sale or purchase of lottery tickets by phone or mail. What’s more, you may never see a ticket.
• Extended car warranties. Scammers find out what kind of car you drive, and when you bought it so they can urge you to buy overpriced — or worthless — plans.
• “Free” trial offers. Some companies use free trials to sign you up for products — sometimes lots of products — which can cost you lots of money because they bill you every month until you cancel.

Quick Tips to Avoid Phone Scams

• Ask questions back to the caller to get as many details as possible.
• If they are rushing and putting on a lot of pressure, it’s usually a sign of a scam.
• Keep personal details to yourself.
• Get information in writing before committing any money.
• Do your research on any deals with the state Attorney General’s office or the Consumer Protection Agency.

With these tips and an awareness of some phone scams, you will be more prepared than ever to keep your identity and bank accounts safe from predators.

If you’re struggling to pay off debt, schedule a free credit counseling session with us today.