Debt Archives - Page 46 of 47 - Making Sense Of Cents

What habits keep you in debt?

Last Updated: December 19, 2015 BY Michelle Schroeder-Gardner - 25 Comments

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Most of us engage in habits that are keeping us in debt. I know this, because I do this. The little things (and of course the big things) add up very quickly, and if you don’t keep track, then that could be a debt payment right before your eyes.

Here’s a list of what might be keeping you in debt:

1. Banking fees. – We’re not Guilty.

Do you keep track of your daily balances? Going under by just a cent can drastically affect you. I read an article the other day about a teenager who was around $1 under (if any of this info is wrong, sorry I read the article and can’t seem to find it again). He was only under because his account was sitting at around $9 or $10, so the bank then charged him a $10 maintenance fee. He was then charged around $30 a day for being under and in less than 10 days, he owed around $230. He barely ever checked his account and didn’t notice.
Interest and late payment charges can also add up very quickly. We’re trying to pay off our debt so that we can get rid of all of this crazy interest that’s building up. It just builds up so fast.

2. Eating out. – Guilty. We’ve been bad with this lately and reverted to our old habits. I’m blaming it on the holidays and pure laziness.

Eating out can add up quickly. The other day we went to McDonalds for smoothies, the casino for dinner and McDonalds again for a snack. And we did something like this a lot of days this past week. Sometimes eating out can cost almost the same amount as a weeks worth of groceries. That’s where the savings of eating at home really come in.

3. Being house poor. – Not guilty. We bought a house that was much under what we were approved for. This has helped a lot, especially since when we bought the house, we made around half as much as we make now.

Definition of ‘House Poor‘ – A situation that describes a person who spends a large proportion of his or her total income on home ownership, including mortgage payments, property taxes, maintenance and utilities. House poor individuals are short of cash for discretionary items and tend to have trouble meeting other financial obligations like vehicle payments. via Investopedia
A lot of people are guilty of this. Just because you are pre-approved for a certain amount, definitely does not mean that you should buy a house at that amount.

4. Impulse shopping. Mostly Not Guilty. I definitely research most of my purchases, just to make sure that I don’t have any second thoughts after I get something (which I usually do).

Groupon is a major for most people. You see something that you kind of like, and it seems like a good deal, so you buy it instantly. Lots of people don’t use these. I am guilty of this, I have some Groupons that are expired. I can use these for the face value still though, but haven’t. Most of these places are too far away for me to willingly use.

5. Spending to make you happier. Mostly Not Guilty. I’m saying I’m mostly not guilty because usually shopping and spending money does not make me happier, but of course I have done this before.

Do you often go to the mall, Target, grocery store, wherever when you’re not feeling 100% yourself and buy stuff?
These things can add up quickly. And sometimes, maybe most of the time, you won’t even like these things after a couple of days. This adds up quickly, especially if you’re always not feeling 100%.

6. Spending because you say to yourself “I deserve it.” Guilty. I am busy a lot, so I always make myself feel better with my spending by telling myself that I deserve it for all of my hard work.

These purchases can add up very quickly. Just because I think I deserve it, doesn’t mean I should buy it. Don’t I deserve to pay off my debt as well?

What’s keeping you in debt?

Have you ever found an error in your credit report? I sure have.

Last Updated: December 19, 2015 BY Michelle Schroeder-Gardner - 19 Comments

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Have you ever found an error in your credit report?

I have found errors, and some of them are still not fully fixed. Someone bought a house in my name when I was 13, and for some reason no one believes that it wasn’t me. How the heck could I have bought a house at 13? The police think that someone must have sold my social security number when I was younger, because it keeps getting re-used.

Anyone know what to do when this happens? Am I stuck with this number forever? The police and lawyers that I have talked to are no help when it comes to this. For the most part the mortgage problem IS fixed, in that it is no longer affecting my credit (I think).

I don’t even know where this house is. They won’t tell me. They say that they can’t tell me. If it’s my house, I would like to know where I’m supposedly living. I mean if I went into the house, could I even be charged with trespassing since the house is technically mine?! Could I go in and just steal everything (is it even technically stealing if it’s all in my name?)

I remember reading this story awhile back (like 5 years ago) about how this woman had her identity stolen and she was at Starbucks ordering a drink. She has an unusual name, and the person before her had her name called out so that she could pick up her drink, and the name was similar to hers. This lady then followed her supposed identity theft person and rung out again behind her and noticed that this lady HAD HER CREDIT CARD. The lady then followed her outside and tackled her and called the police. The person who stole her identity is in jail, but I believe it was for a ridiculously short time (like a couple years).

Here’s what to do when you find an error:

You should be constantly checking items on your credit report, ESPECIALLY if you are like me and things like this keep on happening. I am “subscribed” to a credit reporting agency and I check mine every month.
When you eventually do find an error, contact the credit bureau where you found the error. You can call (to get more information on it) but make sure that you write. When you write, then include the date, your name, address and the problem.
If there is an error with more than one credit bureau, then do the same thing for all 3 credit bureaus.
Include a copy of your credit report and the page that has the error (make sure you don’t include any originals of anything). Originals should of course stay with you.
Include your proof that this is not you. It was VERY hard for me to find proof that the house wasn’t mine. How was I supposed to prove that? I WAS 13. Who the heck remembers what they were doing on an exact day when they were 13? I was probably at school when I allegedly bought this house.
And then wait for a response

If you never check your credit report, and don’t find out about it until you buy a house or try getting some sort of loan. This can greatly affect you. You might not be able to get the loan and your credit score will be affected.

Here are the numbers and websites to get a copy of your report.

Experian-1-888-397-3742 www.experian.com
TransUnion-1-800-916-8800 www.transunion.com
Equifax-1-800-685-1111 www.equifax.com

Have you ever found an error? How was the process for you?

Debt Traps

Last Updated: December 8, 2014 BY Michelle Schroeder-Gardner - 8 Comments

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Cash Money Life had a great article on 5 Debt Traps. I HATE debt, who doesn’t? I can’t wait until my house is paid for, my car is done and my student loans have completely vanished.

Here are debt traps that you should avoid:

Payday loans. I hope this trap is obvious. When I was younger, I distinctly remember my dad laughing at the TV whenever payday loan commercials would come on. The fees are exceedingly high, and you just fall into a crazy debt trap circle that you might not be able to get out of.
Having maxed out cards and only paying the minimum. You are ruining your credit and also falling into a hard to get out of trap. I pay all of my credit card balance completely off every month. I have ever carried a balance.
Buying too much house. You will most likely get approved for a mortgage that is too big. We were approved for a mortgage of around 33% more than what we could actually afford. You should definitely go under what you are approved are.
Having too much in student loans. Read my past posts on why I don’t regret my student loans, and also my other post on how student loans might be bad for you. Carefully consider your degree, the loan amount and the school you are going to and make sure it’s worth it.
Co-signing on a loan. Make sure you trust this person, or it will end badly.

What other debt traps do you think I left out?

Using Savings to Pay Off Debt

Last Updated: July 14, 2017 BY Michelle Schroeder-Gardner - 10 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

I’m currently trying to build up my emergency fund to $15,000. This fund is to cover job loss, anything wrong with the house or cars, and so on. I don’t separate my different emergency funds just yet.

Anyways, I often ask myself when I should apply more money to paying off debt or to use more to fund my emergency fund. And then I also wonder if I should just take some of my savings to pay off my debt. Here’s a great article on this. Here are some tips in order to help you figure out what you should do:

First off, do you even have an emergency fund? If your savings are earning you less than the cost of your debt/loans, then of course you will be saving money by paying your loans first (instead of saving). But if you don’t have an emergency fund set up at all, then paying off your loans completely first might not be a great choice.
I would try to make an emergency fund of around 3 months pay. That’s what I’m trying to do right now. In the article it says just to have an emergency fund of $1,000 at first, but I do not think that’s enough.
After I have my emergency fund set up, then I would start aggressively paying of any debt like it says in the article.

I’m still paying my debt right now, I’m just also trying to finish my emergency fund also.

How much do you have in your emergency fund? What’s your plan of savings versus paying off debt?

Too much student debt to handle

Last Updated: April 7, 2021 BY Michelle Schroeder-Gardner - 8 Comments

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Do you have so much student debt that it’ll ruin your life? Check this article out.

I know my past posts have related to this, but this is the most debt that I have ever heard of. In this article, a couple from Seattle graduated with a combined $500,000 worth of debt. I believe school loans can be good, as I stated in this post, but in this case, I’m not so sure they are worth the debt.

The couple has two children and a combined annual income of $80,000, and they couldn’t even make the initial payments on their loans.

“Of the 3.4 million federal-loan borrowers who entered repayment in 2008 (as the economy slid into recession), 7% defaulted within the year, the highest percentage in more than a decade. That statistic doesn’t include the thousands of borrowers who fell behind on their payments without defaulting, or those who couldn’t keep up with their private student loans.”

The article states ways to help you pay off your loan, but it also lists ways to defer it and what happens when you don’t pay. You should’ve realized that $500,000 is TOO MUCH!

Where to Apply for Scholarships

Last Updated: July 13, 2017 BY Michelle Schroeder-Gardner - 5 Comments

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You can find scholarships in many places. If you have applied for a college, then when you get your acceptance letter usually you will also get some sort of financial aid package letter also.

First you need to fill out your FAFSA form at FAFSA.org. The deadline to fill this out by FAFSA is in the beginning of each year. Also, you usually have to fill out a separate financial aid form for your school. The deadline for this is usually different, so I would check with each individual school.

However, if you cannot make it by the deadline, FAFSA will still accept it, as will most schools, so no need to worry. If you don’t fill out the forms by the required date though, then you might qualify for a smaller amount of loans, scholarships and grants because after that date, you basically qualify for what and any funds that are left. I have filled out my FAFSA and financial aids late before, and i noticed no difference in my scholarship/financial aid package though.

I received all of my scholarships directly through the school I attended. I received a scholarship package of $16,000 a year, plus some financial aid.

You can also receive scholarships through websites and private organizations. I have tried to apply for scholarships through private organizations, but I felt that for most scholarships, a lot of work was needed. They might want a very long paper, an invention, some sort of research project and so on. I am NOT saying these are a waste though. I have met many people who have received these private scholarships.

For masters programs, the schools in my area do not offer ANY scholarships or financial aid (besides loans) for any of their MBA programs. This is very upsetting because I got into all of the schools I applied to, and I didn’t know that masters programs only offer loans. This made the price of going to graduate school much higher than for my undergraduate degrees.

Some websites that I would check out are:

Finaid.org
Fastweb.com
Scholarships.com

Have you had any luck with receiving scholarships outside of the ones that your school gave you?

Getting Out of Debt

Last Updated: July 13, 2017 BY Michelle Schroeder-Gardner - 9 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

I noticed that in other posts a lot of people were commenting on their debt. What have you been doing to get out of debt?

I have some debt. I have around $25,000 in debt for my two undergrad degrees and a part of my MBA. I also have around $6K in a car loan and of course my mortgage. I however do not have any credit card debt (thankfully!) I’m undecided what I want to do in order to pay off debt more quickly. I would like to get a second job or some kind of gig such as tutoring. I’ve also been thinking about if I should apply all of my extra cash towards paying off my loans, or if I should be building an emergency fund at the same time.

Now, here’s a ton of questions for everyone. Please share.

What kind of debt do you have? Car loans? Credit card debt from shopping?

To get out of debt have you been cutting back expenses? Have you been working extra hours or gotten a second job to pay down debt? Are you paying down all of your debt right now and also building up an emergency fund at the same time? Or are you working on one but not the other?