ACCC can help if you have questions about retirement or debt.

Stupid Questions About Retirement

Stupid Question 1: What is investing?

Investing is the act of putting in money, time or effort into a project that will create profit in return. The idea is that what you invested in will have a return of something that is more valuable than what you put in. Depending on what you invest in, the return could be high, low or somewhere in between. Lets breakdown some types of investment opportunities:

Stock: A piece of a company’s ownership. Owning stocks means that you get paid a dividend of the companies profits. People who own stocks are called shareholders.

Bond: A debt obligation from a government, corporation or municipality. When you own a bond, you get payments on the interest of the debt.

Stupid Question 2: How can I retire?

Retirement is the goal of being able to exit the workforce and enjoy senior citizenship. The simple answer is to save up 10-12 times more than your current income. There are multiple things to consider. First, will your savings support the lifestyle you are trying to live? Second, will your money and lifestyle last as long as you live? If you have enough, then where do you save it? Here are some options:

IRA: Individual Retirement Accounts are accounts that allow you to invest in stocks and bonds. Initially, you don’t pay on investment gains, but you do pay income tax on the money you withdraw once you retire. You can’t withdraw from this account without a penalty until 59 and a half, and you must start withdrawing annually at age 70.

401(k): A 401(k) is a plan that is only provided by your employer. You save money by putting a percentage of your pre-tax income goes towards investments to save on your retirement. Like the IRA, you can start withdrawing (without penalty) at age 59 and a half, and must withdraw annually at age 70. The biggest advantage of 401(k)’s is that your employer will match the amount that you contribute to it. It’s free money!

Stupid Question 3: Is it Too Late to Start?

NEVER! Investing and retirement saving are activities that you can begin right now, even if it’s your first time. Our credit counseling advice is to start doing these things earlier in life. The sooner you start, the more you will gain. But if that was not possible for you in the past, there is always hope for the present. Having some investments and savings in your older years is better than not having any.

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

Take our credit counseling tips to fix credit report errors.

Check Your Credit Report for Errors

The first step is to request a copy of your credit report. You are entitled to one free credit report from each of the three credit reporting agencies (Experian, Equifax, Trans Union). You can request one report, or all three at once. To make your request, you can do one of two things…

1. Go to AnnualCreditReport.com
2. Call 877-322-8228

How Do You Dispute Credit Report Errors?

Once you have obtained your credit report, review it and look for anything that looks out of place. You will see a list of every line of credit and loan that you have ever had, as well as payment history on those accounts. You will also find other personal information including past and present addresses, social security number, employment history, public records, and more.

If you see any incorrect information that may negatively impact your credit score, you can dispute the error by contacting the agency who reported it. Each agency has their own convenient process to dispute credit report errors on their respective websites.

• Equifax
• Experian
• TransUnion

Once a dispute is submitted, the agency has 30 days to investigate and respond. If you disagree with their findings, you can submit a dispute letter to further argue your point and provide more information.

Sample Credit Report Dispute Letter

You can submit a written statement explaining your dispute, and cite specific information to prove your claim. Use this sample credit report dispute letter as an outline when writing your credit report error dispute.

Why Dispute Credit Report Errors?

Incorrect information on your credit report can wreak havoc on your credit score, and thus hurt your chances of obtaining lines of credit and loans.

It may feel intimidating to dispute an error by the credit reporting agencies, but it is not difficult and completely worth the effort. In the financial world of credit and lending, your credit report is incredibly important. Take the time to make sure all the information is correct.

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

Splurge without going into debt with an adult allowance.

Reasons for an Adult Allowance

You’re not exactly tying this allowance to any chores. I mean, that’s basically what your job is. I’m not going to sit here and give you more work to do. This is about allocating your paycheck and giving yourself a set amount of money.

Determine your adult allowance after paying your regular monthly expenses. These expenses include things like rent/mortgage, utilities, groceries, transportation, credit card bills, and other loan payments. For some help, use ACCC’s Household Budgeting Worksheet to identify all your income and expenses. Set aside some to save and some that you can afford to spend. This is your allowance.

Taking this approach makes your spending more fun. It will encourage you to find ways to save in other areas so that your allowance can be even larger.

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

Use ACCC’s resources to audit your budget.

Budgeting is a great way to identify what you are really spending your money on each month. Doing so will help you identify areas of your budget where you can spend less and use that money to pay off debt. Now and then, you should also audit your budget.

Start with ACCC’s Household Budgeting Worksheet. You can download an interactive excel file here. Using this worksheet, you can write down everything you spend, whether it’s recurring monthly bills like rent and utilities, or less frequent expenses like hair cuts and clothes shopping.

If you want to take it a step further and really dig into your spending habits, download ACCC’s Daily Expense Tracker. This will help you account for every dollar you spend on a daily basis, and will ultimately paint a clear picture of your spending habits and how you can save money.

Use these worksheets to audit your budget, and you will most likely find areas where you can spend less, save more, and put more money towards bills, debts, or paying off credit cards.

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

Try ACCC’s steps to improve credit.

Strategies to Improve Credit

• Paying Down Debts – A large factor in determining your credit score is your credit utilization ratio. In simple terms, this is the amount of your outstanding debt vs. your total available credit. Going above 30% credit usage signals financial trouble. If you reduce or eliminate debt, then your ratio improves and your score goes up. This requires borrowers to make payments that are larger than the minimum amount due.
• Stop Using Credit Cards/Keep Balances Low – Reducing debt is pointless if you’re adding it right back on a different card. If possible, switch to a cash budget to help control spending and avoid new debt. Also, don’t open new cards since each credit application will ding your credit score.
• Become an Authorized User on Someone Else’s Account – If you know someone, like a parent or spouse, who’s a responsible card holder with good credit, becoming an authorized user on their account will gradually improve your credit. This only works if the account you join is kept current and with a low balance and no late payments. You don’t need to actually use the card or access the account if the person is not comfortable with that. Just being listed as an authorized user will boost your credit thanks to their positive credit activity.
• Don’t Close Old Cards – You might think it’s smart to close cards after you pay off debts, but doing this hurts your credit utilization ratio. Instead of closing cards, just leave them at home while you continue to implement your debt reduction plan. This is especially smart because older credit card accounts look better on your credit report.
• Be a Responsible Borrower – Staying current on your debt repayment is critical for more than just maintaining your credit score. Your credit history follows you and affects your life drastically. Be sure that you’re making payments on time and staying current on all of your accounts. Budgeting effectively will ensure that you’re able to manage credit card debt and other payments. If you find yourself struggling with debt in spite of budgeting efforts, it may be time to research debt consolidation options.

Additional Tips for Maintaining Credit Health

One additional way to maintain or improve credit is to access and consistently monitor your credit report. This allows you to track fraudulent activity or correct reporting errors that can have a negative impact or your credit. The Fair Credit Reporting Act guarantees you one free credit report per year from each of the 3 main credit reporting bureaus (that’s three total free reports per year). You can access your reports for free at AnnualCreditReport.com. Spread out when you access your three reports by a few months to consistently monitor your credit all year.

Finally, signing up for a free service, like CreditKarma, is a great way to monitor your credit report and score as often as you want. This way you can constantly track accounts to make sure you’re making payments to everything on time. Watch for accounts being opened in your name or other indicators of identity theft.

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

ACCC’s debt counselors can advise you on debt repayment strategies.

The Debt Avalanche and The Debt Snowball

These two debt repayment strategies offer recipes for success when it comes to paying off debt. Both methods are based on the idea that you should focus more effort and money towards one account at a time. The Debt Snowball tackles the account with the smallest balance first, while the Debt Avalanche focuses on the account with the highest interest rate. See the image below for an explanation of both.

Your choice of debt repayment strategy can be based on your personality and your goals. If you like to see fast results that will motivate you, then you may choose the debt snowball. If you like to tackle your biggest issues and want to save as much money as possible, then maybe the debt avalanche is right for you. Regardless of your repayment method, you could also benefit from speaking to a certified credit counselor to analyze your budget.

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

If you’re in debt management, try these tips to save money on St. Patrick’s Day.

Tips to Save Money on St. Patrick’s Day

• Skip the bars and party at home. Have a BYOB party with some simple snacks. This is a great way to have fun on a budget.
• Turn your house party into a pot-luck dinner. Prepare a main dish and ask friends to contribute their favorite side dishes.
• Don’t buy St Patrick’s Day attire. It’s mostly overpriced junk that you’ll probably never wear again. All you need is something green. If you must get something, visit a nearby thrift store or discount retailer.
• If you do head out to party with the masses, try to find bars or restaurants that don’t have a cover charge. You can also look for reviews online to find an inexpensive option that fits your budget.

Above all, be responsible and safe while you celebrate St. Patrick’s Day. If you’re already struggling to find debt advice, paying for bail and missing work for your court date isn’t going to help your financial situation. Cheers!

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

Our credit counseling belief is that small changes can help with goals.

Any worthwhile goal is going to take commitment on your part. However, there is no commitment you can make that will instantly give you the ability to pay off credit card debt or buy a home. That’s why you need to smart with small steps. You can start with any or several of these habits to make it part of your routine to save money for your goal.

• Minimize takeout food: Limit yourself to one lunch and one dinner each week. If you can do it, eliminate takeout altogether.
• Quit an expensive habit: Overindulgence of tobacco and alcohol is not only bad for your health, but also for your budget. Other habits like gambling and excessive shopping will also hurt your future goals. This may be a difficult step for some consumers, but if you can drop these habits, then you’ll see your savings grow. You can even use our Saving For a Goal calculator to calculate how much and how long it will take to reach any particular goal.
• Try DIY: If you can learn to fix and maintain things around your home, then you’ll probably be able to save some money as well. The next time you need an oil change or something needs a fix in the house, take to the internet and see if you can do it yourself.
• Switch brands: Have you gotten used to expensive brands of clothes, and even groceries? Try the less expensive options to save some money. You may even find that you like it better.
• Automatic savings: Set up a direct deposit so that a portion of your paycheck goes directly into a savings account for your goal.

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

Debt consolidation vs. debt management program.

How Does Debt Consolidation Work?

Debt consolidation is essentially taking out one large loan in order to repay your other debts. This loan usually has a more attractive interest rate than your existing debts, and allows you to have only one outstanding loan rather than many.

You will have one payment each month, which will be lower than your original debt payments combined. While it will cost you less each month, it will cost more in the long run as you will be repaying the debt for a longer period of time.

The Difference Between Debt Consolidation and a Debt Management Program

Consolidating debts makes repaying your debts much simpler. However, a debt management program (DMP) takes a similar approach without the new loan.

A debt management program is typically offered by a credit counseling agency to clients who qualify. In this plan, the agency will secure lower minimum monthly payments or lower interest rates from your creditors, making repayment more feasible and affordable for you. Any accounts entered into a debt management program must be closed. Like debt consolidation, your debts will be lumped into one monthly payment.

This is not a new loan. The agency receives your payment and disburses it to each of the accounts. For providing this service, the agency typically charges a monthly fee. This option may be less expensive than a typical debt consolidation plan.

It’s important that you do some research and speak with organizations that offer these services. This will help you sort out the reputable companies from the not so reputable ones.

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

Automatic payments can help you stay on track with paying off debt.

Are You Ready For Automatic Payments?

If your financial situation is stable, automatic payments are something you can consider adding to your financial practices. This means that you have a consistent and reliable income, and you have established an effective budget. Automating your bills is not a recommended strategy for managing credit card debt without meeting these requirements.

If you feel financially ready and are interested in the potential benefits of auto-pay, read over these pros and cons to see if it’s an approach you should consider.

Pros for Auto-Pay:

• Convenience –  Setting up auto-pay means you can handle bill payments on your own time. Scheduling multiple payments in one sitting is easier than keeping track of when you need to send in each separate payment based on due date or how much you have in your bank account.
• Paperless – Electronic payments, in general, are great for reducing the need for stamps, envelopes, or and an endless supply of checks.
• Discounts – Some creditors will offer reduced interest rates or other benefits for users enrolled in auto-pay. This is very common for student loan repayment services.
• Avoid Late Fees – If you miss payments from time to time, automatic payments can help ensure that money is received on time.

Cons against Auto-Pay:

• Overdraft Risk – Automating payments means they get sent whether the money is there or not. Overdraft or money transfer fees will result if there isn’t enough in an account to cover a payment.
• Less Control – If payment schedules and amounts are set-up in advance, you don’t fully control when and how much creditors receive. This is especially risky for bills with variable amounts, like utilities.
• False Sense of Security – Automatic payments can lead to a “set it and forget it” mentality. Finances still need to be carefully tracked even when bill pay is automated.
• Tracking Payments – With convenience comes a different set of organizational challenges. When you’re not directly in charge of sending payments, it can be easy to lose track of who receives what and when.
• Payment Info Updates – When billing address, card numbers, or other details change, auto-pay programs must all be updated to ensure no payments are missed. This can lead to unnecessary late fees.

Obviously, the choice to use automatic payments is a tough one. It must be determined by individual circumstances and habits. The best strategy may be a mixed approach where some bills are automatic while others require action each month. When it comes to debt management, the best strategy is whichever you’re comfortable with.

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