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Tag Archives: protect

Home / Posts Tagged "protect"

9 Apps That Will Help You Manage Your Debt

February 10, 2021 by Liam Lane Posted in Debt, Mortgage Tagged apps, Auto, bar, budget, Budgeting, CRC, Credit, Credit Card, Credit Card Debt, credit cards, credit report, Credit Score, Debt, Debt Management, debt snowball, Debts, Digit, existing, ExtraCredit, Financial Wize, FinancialWize, investments, lexington law, line of credit, Loans, Make, Managing Debt, money, More, Motivation, Pay Off Debt, principal, protect, Rates, real, save, Save Money, savings, Savings Account, Student Loans, Tally, top-five-post
December 23, 2020 &• 5 min read by Credit.com Comments 0 Comments

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Disclaimer

Debt can feel like a terrible thing, but paying off your debts is how you demonstrate that you can successfully manage your finances. Whether you make your debt payments on time makes up 35% of your credit score. Making on-time payments is one of the smartest ways to use your debt to your advantage.

If you need a little help, debt management apps can help you organize and manage all of your debts in one place. Just input all debt data into your phone and manage them there. Here are a few options to consider.

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App Best Used For Price Platform
Tally Credit card management Free to download iOS and Android
Debt Book Borrow/lender communication Free Android
Debt Manager Snowball Method, debt summary and tracking, progress bar $0.99 iOS
Pay Off Debt Motivation to make your debt payments $4.99 iOS and Android
Mint Budgeting for debt payments   Web, iOS, and Android
ChangEd Student loan repayments $1/month iOS and Android
Unbury.me Quick payoff calculator Free Web only
Digit Savings to apply to debt $5/month iOS and Android
Credit Report Card All-around financial wellness and credit score tracking free Web, iOS and Android

Tally is a debt management app that makes it easy to save money by automating your credit card payments to help you reduce your debt faster. The app is free to download, but the real value of Tally comes if you are approved for a Tally Line of Credit that consolidates your credit card debt with a lower APR. You’ll owe interest on that loan, but Tally will automate your credit card payments and determine the best way to save you money based on your credit card rates.  

>> See our full review

Debt Book is an app for borrowers as well as lenders. It allows you to track and update your debt in a “Master Book,” which shows your borrowed/lent amount, how much has been paid/collected, and how much remains. The app also gives you options to view this data in a statistical chart for a visual representation of your current debt situation. And if the borrower and lender are both on the app, they can communicate and send payments through the app. This makes it easier to stay in contact with one another and to stay on top of existing debt.

Debt Manager uses your debt information to create progress bar graphs to help you see how far along you are in paying off each debt, how much debt is remaining, and your interest rate. The application specifically focuses on the Snowball Method to track and pay off all debts quickly and efficiently. The interactive app gives hints and tips based on your debt situation. You can also track monthly payments within the app manually or automatically and test out different “What If?” scenarios.

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Pay Off Debt helps you choose the payoff method and order that works best for you. You can use the debt snowball method, debt avalanche method, or something else. Track your payoff progress and the interest you’ve saved. Pay Off Debt also prioritizes keeping you motivated during your debt payment journey: the app provides a burst of motivation with a PAID icon each time you pay off a debt, and you can add pictures to symbolize your “Why.”

You’ll need to budget in order to efficiently pay off your bills. Mint helps you do just that. It’s one of the best-known budgeting apps for good reason. It’s easy to use and is packed with extra features. Mint gathers everything in one place—your cash, credit cards, loans, investments, credit score, and more. Track your bill payments, budget for future payments, and get alerts when you overspend or a bill is due.

A round up app like Acorns, ChangEd is an easy way to automate regular extra payments to pay off your student loans early. Connect your loans and bank accounts and create an FDIC-insured ChangEd savings account. As you spend, ChangEd will roundup your purchases and transfer those roundups to your ChangEd savings account. Once you reach $100, they’ll send that money to the student loan you want to pay off first.

If you want a quick and easy way to visualize your debts and how long it will take you to pay them off, Unbury.me is a great tool. You don’t need an account to use it—just start entering your information—but you can sign up for a free account to save your information. Enter the principal remaining, interest rate, and monthly payment and see how long it will take to pay off those loans based on the payment methods you choose.

Features of ExtraCredit

In order to pay off your debts, you need money. That’s where an app like Digit comes in. It’s not a traditional debt management app, but it’s definitely a debt management tool. For $5 per month, it helps you save automatically without even thinking about it. You won’t miss the money it puts in savings for you, but you will benefit from it when it’s time to pay your bills.

If you want to see how your debt management is improving your credit, sign up for Credit.com’s free Credit Report Card. Our Credit report Card is an easy-to-understand breakdown of your credit report information that uses letter grades so you can track —plus you get a free credit score updated every 14 days. 

Get Your Debt Under Control

Regardless of what approach you prefer to manage your debt, these apps have options for everyone. We suggest taking a look at which app works best for you and personalizing it to fit your needs.

Ready to take your finances to the next level? Sign up for ExtraCredit. This five-in-one financial tool will help you build, track, protect, and restore your credit profile—and reward you while you’re at it! Learn more about all the amazing benefits of an ExtraCredit account at Credit.com/Extracredit.


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Source: credit.com

Got Cash? What to Do with Extra Money

February 10, 2021 by Liam Lane Posted in Moving Guide Tagged 401(k), apartment, Auto, big, building, Buy, car, College, Credit, Credit Card, Credit Card Debt, credit cards, Debt, Debts, Emergency Fund, Extra Money, Family, Financial Goals, Financial Wize, FinancialWize, Grow, Home, house, housing, How To, Insurance, Interest Rates, invest, Investing, investment, investments, IRA, keep, Life, Loans, Make, money, More, more money, mortgages, Move, Moving, Personal, Personal Loans, protect, Rates, rent, Retirement, retirement savings, Roth IRA, save, Save Money, Saving, savings, Savings Account, School, Security, Spending, spouse, Student Loans, tax, Taxes

Have you found yourself with extra cash? Lucky you! Laura’s 3-step system will help you spend, invest, or save it wisely.

By

Laura Adams, MBA
October 21, 2020

investing your emergency money unless you have more than a six-month reserve.

The goal for an emergency fund is safety, not growth.

If you don’t have enough saved, aim to bridge the gap over a reasonable period. For instance, you could save one half of your target over two years or one third over three years. You can put your goal on autopilot by creating an automatic monthly transfer from your checking into your savings account.

Megan mentioned using high-yield savings, which can be a good option because it pays a bit more interest for large balances. However, the higher rate typically comes with limitations, such as applying only to a threshold balance, so be sure to understand the account terms.

Insurance protects your finances

Another critical aspect of preparing for the unexpected is having enough of the right kinds of insurance. Here are some policies you may need:

RELATED: How to Create Foolproof Safety Nets

How to invest for your future

Once you get as prepared as possible for the unexpected by building an emergency fund and getting the right kinds of insurance, the next goal I mentioned is investing for retirement. That’s the “I” in PIP, right behind prepare for the unexpected.

Investments can go down in value—you should never invest money you can’t live without.

While many people use the terms saving and investing interchangeably, they’re not the same. Let’s clarify the difference between investing and saving so you can think strategically about them:

Saving is for the money you expect to spend within the next few years and don’t want to risk losing it. In other words, you save money that you want to keep 100% safe because you know you’ll need it or because you could need it. While it won’t earn much interest, you’ll be able to tap it in an instant.

Investing is for the money you expect to spend in the future, such as in five or more years. Purchasing an investment means you’re exposing money to some amount of risk to make it grow. Investments can go down in value; therefore, you should never invest money you can’t live without.

In general, I recommend that you invest through a qualified retirement account, such as a workplace plan or an IRA, which come with tax benefits to boost your growth. My recommendation is to contribute no less than 10% to 15% of your pre-tax income for retirement.

Magen mentioned Roth IRAs, and it may be a good option for her to rebuild her retirement savings. For 2020, you can contribute up to $6,000, or $7,000 if you’re over age 50, to a traditional or a Roth IRA. You typically must have income to qualify for an IRA. However, if you’re married and file taxes jointly, a non-working spouse can max out an IRA based on household income.

For workplace retirement plans, such as a 401(k), you can contribute up to $19,500, or $26,000 if you’re over 50 for 2020. Some employers match a certain percent of contributions, which turbocharges your account. That’s why it’s wise to invest enough to max out any free retirement matching at work. If your employer kicks in matching funds, you can exceed the annual contribution limits that I mentioned.

RELATED: A 5-Point Checklist for How to Invest Money Wisely

How to pay off high-interest debt

Once you’re working on the first two parts of my PIP plan by preparing for the unexpected and investing for the future, you’re in a perfect position also to pay off high-interest debt, the final “P.”

Always tackle your high-interest debts before any other debts because they cost you the most. They usually include credit cards, car loans, personal loans, and payday loans with double-digit interest rates. Remember that when you pay off a credit card that charges 18%, that’s just like earning 18% on an investment after taxes—pretty impressive!

Remember that when you pay off a credit card that charges 18%, that’s just like earning 18% on an investment after taxes—pretty impressive!

Typical low-interest loans include student loans, mortgages, and home equity lines of credit. These types of debt also come with tax breaks for some of the interest you pay, making them cost even less. So, don’t even think about paying them down before implementing your PIP plan.

Getting back to Bianca’s situation, she didn’t mention having emergency savings or regularly investing for retirement. I recommend using her upcoming cash windfall to set these up before paying off a low-rate student loan.

Let’s say Bianca sets aside enough for her emergency fund, purchases any missing insurance, and still has cash left over. She could use some or all of it to pay down her auto loan. Since the auto loan probably has a higher interest rate than her student loan and doesn’t come with any tax advantages, it’s wise to pay it down first. 

Once you’ve put your PIP plan into motion, you can work on other goals, such as saving for a house, vacation, college, or any other dream you have. 

Questions to ask when you have extra money

Here are five questions to ask yourself when you have a cash windfall or accumulate savings and aren’t sure what to do with it.

1. Do I have emergency savings?

Having some emergency money is critical for a healthy financial life because no one can predict the future. You might have a considerable unexpected expense or lose income.  

Without emergency money to fall back on, you’re living on the edge, financially speaking. So never turn down the opportunity to build a cash reserve before spending money on anything else.

2. Do I contribute to a retirement account at work?

Getting a windfall could be the ticket to getting started with a retirement plan or increasing contributions. It’s wise to invest at least 10% to 15% of your gross income for retirement.

Investing in a workplace retirement plan is an excellent way to set aside small amounts of money regularly. You’ll build wealth for the future, cut your taxes, and maybe even get some employer matching.

3. Do I have an IRA?

Don’t have a job with a retirement plan? Not a problem. If you (or a spouse when you file taxes jointly) have some amount of earned income, you can contribute to a traditional or a Roth IRA. Even if you contribute to a retirement plan at work, you can still max out an IRA in the same year—which is a great way to use a cash windfall.

4. Do I have high-interest debt?

If you have expensive debt, such as credit cards or payday loans, paying them down is the next best way to spend extra money. Take the opportunity to use a windfall to get rid of high-interest debt and stay out of debt in the future. 

5. Do I have other financial goals?

After you’ve built up your emergency fund, have money flowing into tax-advantaged retirement accounts, and are whittling down high-interest debt, start thinking about other financial goals. Do you want to buy a house? Go to graduate school? Send your kids to college?

How to manage a cash windfall

Review your financial situation at least once a year to make sure you’re still on track.

When it comes to managing extra money, always consider the big picture of your financial life and choose strategies that follow my PIP plan in order: prepare for the unexpected, invest for the future, and pay off high-interest debt.

Review your situation at least once a year to make sure you’re still on track. As your life changes, you may need more or less emergency money or insurance coverage.

When your income increases, take the opportunity to bump up your retirement contribution—even increasing it one percent per year can make a huge difference.

And here’s another important quick and dirty tip: when you make more money, don’t let your cost of living increase as well. If you earn more but maintain or even decrease your expenses, you’ll be able to reach your financial goals faster.


About the Author

Laura Adams, MBA

Source: quickanddirtytips.com

5 Ways to Be Financially Secure

February 10, 2021 by Liam Lane Posted in Personal Finance Tagged Auto, away, big, budget, Buy, car, cons, Credit, Credit Card, Debt, existing, Family, Fees, Finance, Financial Wize, FinancialWize, gas, Home, house, How To, Insurance, Interest Rates, investment, keep, Life, Life Insurance, Lifestyle, Loans, Make, Make Money, money, More, Mortgage, property, pros, Pros and Cons, protect, Rates, save, Save Money, savings, Security, Sell, Spending, tax, weather

Learning the steps toward becoming more financially secure doesn’t have to be daunting. Here are 5 easy ways to get a better sense of your finances. 

By

Albert Cooper, Partner
January 22, 2021

financial security with having a million dollars in the bank. While having a hefty bank balance does not hurt, it is only part of the story.

Many top earners are learning this the hard way recently, as the economic uncertainty has left them on the hook for expenses they can no longer afford to pay.  However, this does not have to happen to you: here are five ways to be financially secure.

When considering how to become financially secure, your priority must be to ensure that you have enough income to cover your expenses. If you cannot pass this hurdle, then you should reconsider your lifestyle. Granted, this might be harder for some people, but even if you can put away $10 per week, this will help you to have the emergency funds you need to weather times of uncertainty, such as the COVID pandemic.

Step 1: Develop good habits

Managing your finances requires discipline, which means that you need to have good habits, as this is the only way that you can keep yourself from falling into traps. One way to do this is to keep your credits cards at home when you leave the house, as this will keep you from splurging on impulse buys. You might also want to think about getting a separate bank account for your daily spending needs, because this will limit the funds available to you at any given time.

Having good spending habits means that you need to be disciplined. However, if there is a large expense that makes sense and you have planned for it, then you should consider making it.

Another healthy financial habit is to always do your due diligence. For example, according to reverse mortgage expert Michael G. Branson, you can leverage the existing value of a property you own as a senior citizen with a reverse mortgage—but that doesn’t mean you shouldn’t research the pros and cons. Anytime you take out a loan (whether it’s a mortgage loan, personal loan, or a payday loan), open a new credit card, or finance a new car, always look at the fine print. Pay particular attention to interest rates, penalties, annual fees, and APR.

Step 2: Leave your car at home

Or better yet, sell your car. This is especially true if you are living in a city or a town where all your daily needs can be filled from shops within walking or cycling distance. Not using your car means that you can save money on gas and maintenance, and getting rid of your vehicle altogether will eliminate monthly payments for your auto loan and insurance.

If you need a car for just a day or two, then you should consider renting or using a ride-sharing app. You could also consider purchasing a “new to you” vehicle as they will usually cost less than a new car.

Exceptions to this might be if you need to use your car for work. In this case, you are using your vehicle to make money, and as such, it might be considered an investment. However, if you are using your car to make money, then you want to make sure you are accurately tracking your expenses. Not only will this help you to get any tax advantages, but it will give you the basis to determine if the money you are spending on your car is yielding the return you expected.

Step 3: Make as many pre-tax deductions as possible

While the rules might vary depending on where you live, you want to make sure that you take full advantage of any pre-tax contributions you can make. While doing so means that you will be taking home less money, it also means that you will be paying less in tax while putting money away for your future. As such, this approach is a big win for you and your financial future.

Step 4: Be insured

Having the right life insurance policy can help to protect you and your family when the time comes. As such, you want to make sure that you have enough life insurance to look after your family and to cover funeral expenses. Also, some policies can be used as collateral for loans.

While going into debt is usually not recommended when trying to become financially secure, using it to buy revenue-generating property or business might be an excellent way to get closer to your goal. As such, having insurance could help you down the road.

Step 5: Regularly review your financial health

Just like you go to your doctor for an annual checkup, you should regularly review your financial health. Doing so will give you an idea of where you stand and what additional steps you need to take to reach your goals. If you want to become financially secure, then you want to make sure that you check your financial health (e.g., budget, savings, etc.) at least once a month.


Source: quickanddirtytips.com

S Corp vs. LLC: Which Is Best for Your Business?

February 10, 2021 by Liam Lane Posted in Podcasts, Small Business Tagged Blog, budget, Budgeting, business taxes, cons, Credit, Debt, Debts, earnings, Finance, Financial Advisor, Financial Wize, FinancialWize, general partnership, Home, How To, income tax, industry, investment, keep, Life, LLC, Main, money, More, Personal, personal finance, planning, Popular, pros, Pros and Cons, protect, Rates, S corp, S corporation, Salary, save, savings, School, Security, Self-employment, Small Business, sole proprietorship, tax, Taxes, Vs.

S Corp vs. LLC: Which Is Best for Your Business? – SmartAsset

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So you own a business and you’re looking to incorporate. Two of the most popular business structure are the S Corp and the LLC. Which is best for your business can depend on many factors, such as what you do for a living, your tax situation and more. We’ll walk through the key characteristics of the two, and how to decide between them.

Why Incorporation Is Important

In most cases, the best reason to incorporate is liability. When you create a corporation, you separate your personal assets from your company’s assets. If someone wants to collect a debt or, at worst, file a lawsuit, they can only do so against the company and any assets in that company’s name. In turn, your personal savings remain protected. Both LLCs and S corporations can effectively protect your home life from a downturn in your professional world.

What Is An LLC?

A limited liability company, or LLC, is a type of corporate entity. It’s one of the most basic business types, and chiefly serves to separate the assets of the business owner(s) from the business itself.

If you opt to create an LLC, you will have created an entity that exists entirely separate from yourself. Clients will do business with this entity, which will have its own assets, debts and liabilities. If someone collects a debt or sues the LLC, they cannot pass that debt on to you.

What Is An S Corporation?

An S corporation is a tax status that allows a company to pass all profits directly through to its owner(s). This allows a small business to distribute profit-based income without double taxation.

Under the standard corporate form, known as a C corporation, a company first pays its corporate income tax. It then pays its owners and workers, who in turn pay personal income tax on that salary. This works well when a company functions entirely separately from the people who own and operate it.

However, in many small businesses, owners will take the profits entirely as their personal income. This creates a problem of double taxation, because in this case a business owner’s corporate income tax and personal income tax are one and the same. An S corporation allows the company’s owners to pay taxes only once via their personal income tax forms.

S Corp vs. LLC: Similarities and Differences

It is important to note that, because one is a corporate form and the other a tax status, LLCs and S corporations can, and do, overlap. To be clear, an LLC can file for S corporation tax status. Conversely, if you have S corporation tax status, you can also incorporate as an LLC. These forms do share a number of similar features, though, including:

  • Asset Protection – Both S corps and LLCs protect your personal assets from debt, bankruptcy, legal liability and other possible losses incurred by the corporation.
  • Double Taxation – All corporate profits pass along to the owners of LLCs and S corps without incurring corporate income taxes. This helps you avoid being taxed twice.
  • Multiple Members – LLCs and S corps can each have anywhere from one to multiple members, though an S corporation caps out at 100 shareholders. Further, only U.S. citizens and legal residents can be members of an S corporation.

In practice, one of the largest differences between LLCs and S corporations lies in how they assign payment. Under a default LLC operating as a sole proprietorship/general partnership, profits and expenses pass entirely through to the taxes of the individuals involved. Each participant both deducts business expenses and claims all profits on their personal income taxes. The LLC itself does not have any tax filings.

Under an S corporation, the members assign themselves a salary that the company pays out of its operating budget. This income must be reasonable for their position and industry. Then, after the company pays all expenses, it passes along any additional profits as a distribution to its members.

Here’s an example that illustrates these differences. Sue is a freelance programmer. She currently has an LLC that she operates. Last year she made $100,000 in income and had $10,000 in business expenses. Here’s how her tax situation plays out under the two statuses:

  • Sole Proprietorship LLC – Sue would claim $100,000 of personal income on her income taxes. She would reduce her taxable income by the $10,000 in expenses she incurred, leaving her with $90,000 in taxable personal income.
  • S corporation LLC – Sue has determined that a reasonable salary is $75,000. She would report that $75,000 as earned income. Her corporation would then pay the $10,000 in expenses and pass the remaining $15,000 as a profit distribution to Sue, who would report and pay taxes on it as corporate profit income.

Operating requirements for a multi-member S corporation are also significantly more complex than they are for an LLC. An S corporation must adopt bylaws which meet IRS guidelines and must have a corporate governing body that includes a board of directors and officers.

How Taxes Affect S Corps and LLCs

Most Americans pay a FICA tax of 7.65% of their income under $132,900, encompassing contributions to both Social Security and Medicare. Their employer pays the same 7.65% on their behalf. The self-employed, however, pay both sides of this tax, creating what’s known as the “self-employment tax.” This combines the aforementioned rates to the tune of a 15.3% tax on all self-employment income beneath the $132,900 limit.

The self-employment tax applies to all pass-through income as well. It does not apply to corporate profit distributions, though. The profit distributions will likely be taxed as ordinary income, while you may be able to classify them at the lower dividend income rate. In the end, you will not pay any payroll taxes on them.

S corporation members do not pay self-employment taxes on their profit distributions either. As a result, these members usually try to minimize the income portion of their earnings in favor of profit distributions. This is entirely valid as long as your income remains within a reasonable range. If you attempt to reduce your income too much, you will likely trigger an audit.

Continuing our previous example, Sue’s LLC earned $100,000 and spent $10,000 in business expenses last year. Under the S corporation form, Sue would save herself more than $2,000 in payroll taxes. Here’s how things would shake out:

  • Sole Proprietorship – Sue will claim the $100,000 of income and the $10,000 of expenses herself. This will lead to her having $90,000 of taxable income. She will pay the 15.3% self-employment tax on all of it, leading to $13,770 in self-employment taxes.
  • S Corporation – Sue takes a salary of $75,000. Her LLC will pay $10,000 in expenses and send her $15,000 as a corporate profit distribution. Sue and her LLC will pay the full combined 15.3% tax on her salary earnings, coming to $11,475. She will pay no payroll taxes on her profit distribution.

Bottom Line

In most cases, if you do business as an individual or a partnership, you should consider forming an LLC. This corporate form is inexpensive and highly flexible. Unless you anticipate major growth involving external shareholders and outside investment in the future, an LLC is a good way to protect your personal assets.

For an individual operator, the choice to elect S corporation tax status is largely a matter of accounting. If you would save a meaningful amount of money in self-employment taxes, it is likely worth electing S corporation status.

For a partnership, consider the operating requirements of an S corporation carefully. Would it significantly affect your business to adhere to bylaws and corporate governance? Do you have few enough members, and will you likely keep that membership group small? If so, once again, consider whether an S corporation would create enough tax savings to justify the costs of filing and paperwork.

Tips for Managing Your Finances

  • In-depth budgeting is a worthwhile strategy to adopt if you’re looking to improve your long-term finances. It may, however, be difficult to build a budget if you have little to no experience doing so. To get some help, stop by SmartAsset’s budget calculator.
  • Many financial advisors specialize in financial and tax planning for business owners. You can find a financial advisor today using SmartAsset’s financial advisor matching tool. Simply fill out our short questionnaire and you’ll be matched with up to three fiduciary advisors in your area.

Photo credit: ©iStock.com/andresr, ©iStock.com/PattanaphongKhuankaew,©iStock.com/alfexe

Eric Reed Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.
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Refinance soon to avoid the FHFA adverse market refinance fee

February 10, 2021 by Liam Lane Posted in Money Etiquette, Money Management, Mortgage News, Refinance Tagged Conventional Loans, covid-19, crisis, Finance, Financial Wize, FinancialWize, government, Home, house, housing, industry, Insurance, Loans, Make, market, money, More, Mortgage, Mortgage News, mortgage payments, Mortgage Rates, mortgages, News, protect, Purchase, real, Refinance, refinancing, Security, Unemployment

FHFA fee starts on December 1, but rates will go up before that

Starting on December 1, a new “Adverse Market Refinance Fee” will be imposed on most conventional refinances.

But homeowners won’t pay the new fee at closing.

Instead, lenders will cover it by raising refinance rates — likely by as much as 0.125% to 0.25% on average.

To avoid higher rates, you’ll want to refinance before the fee takes effect.

But there’s a catch: to avoid FHFA’s fee, your refinance loan needs to be closed and delivered to Fannie Mae or Freddie Mac before December 1.

Homeowners who want the lowest-possible refinance rate should apply 2-3 months before December 1 — which is pretty much right now.

Find and a low refinance rate now (Feb 9th, 2021)

What is the Adverse Market Refinance Fee?

On August 12, Fannie Mae and Freddie Mac announced they would assess a new fee on all conventional refinance loans.

The fee is equal to 0.5% of the loan amount.

That means if you had a $200,000 refinance, the new fee would amount to an additional cost of $1,000.

Refinances take a long time to close and deliver, so a September 1 start date meant the fee was already being added to refinances in process.

Originally, the fee was meant to start on September first — meaning it would have applied to all loans not yet delivered to Fannie or Freddie by that date.

But because refinances take a long time to close and deliver, the fee effectively started being added to loans that were already in process prior to September 1.

However, Fannie and Freddie have since changed the rules (and delayed the start date for the fee) in response to a strong industry backlash against it.

Changes to the FHFA refinance fee

On August 25th, FHFA announced two changes to the new refinance fee.

  • The start date moved from September 1 to December 1
  • The new charge will not apply to loan amounts below $125,000, or to HomeReady and Home Possible loans

This is good news for borrowers. It means rates may stay a little lower, a little longer.

It also means that borrowers who were already in the process of refinancing might not see their rates go up as a result of the fee.

In fact, loans currently in the pipeline might have their loan costs re-adjusted in borrowers’ favor, notes Matthew Graham of Mortgage News Daily.

But each lender will handle its own loans differently, so make sure you talk to your mortgage company if you were in the process of refinancing.

Also, note that loans must be delivered to Fannie or Freddie before December 1 to avoid the fee.

That means the refinance will have to close much earlier (in October or early November), so time your refinance accordingly.

Find and lock a low refinance rate (Feb 9th, 2021)

The new fee could push refinance rates up by 0.125% or more

When the new fee does go into effect, borrowers won’t pay it directly.

Instead, it’s likely to be charged to borrowers in the form of higher rates.

“The fee is 50bps [0.50%] in terms of PRICE, and that equates to roughly 0.125% in terms of interest rate,” says Graham.

Though others have estimated that refinance rates could rise as much as 0.375% on average when the fee goes into effect.

Either way, that’s a significant difference in refinance rates for borrowers.

For those who planned to refinance in the near future, it makes sense to get the ball rolling as soon as possible.

The earlier you start your refinance, the better your odds of closing and having the loan delivered to Fannie Mae or Freddie Mac before the fee once again goes into effect.

Find a low refinance rate today (Feb 9th, 2021)

Will all refinances be affected by the new fee?

The Adverse Market Refinance Fee will only apply to refinance loans sold to Fannie Mae and Freddie Mac.

In other words, it applies to ‘conventional’ refinance loans.

But other types of mortgages could be affected indirectly.

In fact, the initial announcement set off higher rates for both purchase and refinancing loans, including some not intended for sale to Fannie Mae and Freddie Mac.

Those who had not locked in rates suddenly faced higher interest costs.

So in the coming months, it seems safe to assume that conventional refinances won’t be the only type affected by rising rates.

No refinance fee on loans under $125,000

One piece of good news from Fannie and Freddie’s most recent announcement is that the refinance fee won’t be charged on loans under $125,000.

Note, that’s based on the loan balance — not the home’s value.

So if your home is worth significantly more than $125,000, but you’ve paid down a lot of the balance, you might end up refinancing less than $125K and the fee won’t affect you.

In addition, the fee won’t be charged to those refinancing a Freddie Mac Home Possible loan or Fannie Mae HomeReady loan.

Why was a new fee developed?

We have faced the COVID-19 economy for months. Some 55 million people have filed for unemployment, and lenders have had to adjust many of their policies to account for the added uncertainty.

But did something new happen to justify this extra fee?

According to Freddie Mac, the new fee was necessary “as a result of risk management and loss forecasting precipitated by COVID-19 related economic and market uncertainty.”

Fannie Mae explained that it was adding the fee “in light of market and economic uncertainty resulting in higher risk and costs.”

But on August 25th, a different answer emerged.

According to the Federal Housing Finance Agency (FHFA) — the regulator that runs Fannie Mae and Freddie Mac — the new money was “necessary to cover projected COVID-19 losses of at least $6 billion at the Enterprises.”

“Specifically,” says FHFA, “the actions taken by the Enterprises during the pandemic to protect renters and borrowers are conservatively projected to cost the Enterprises at least $6 billion and could be higher depending on the path of the economic recovery.”

This refers to relief packages passed during COVID-19, which allowed borrowers to skip mortgage payments without penalty and prevented lenders from foreclosing on any delinquent loans.

But this amount is a fraction of the $109.5 billion in profits Fannie and Freddie have added to government coffers, even after paying back bailout funds they received during the 2008 housing crisis, according to ProPublica.

Using a small percentage of past years’ profits to help homeowners through a worldwide pandemic seems like a good idea to us, anyway.

Will Congress stop the new fee before it goes into effect?

The Adverse Market Refinance fee is now set to start after the November election.

So, could the results of the election impact whether or not the fee actually goes into effect?

That’s not certain. Both Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, and Congressman Wm. Lacy Clay (D-MO), Chair of the Subcommittee on Housing, Community Development and Insurance, oppose the new charge.

If opposition to the fee is strong enough, there could potentially be an investigation into the fee and an attempt to stop it. But there’s no guarantee this will happen.

What to do if you want to refinance

Rates are still sitting near record lows — below 3% in many cases. This is basically unheard of in the mortgage world.

Rates are likely to go up as the new refinance fee start date nears. But that’s just one of the many, many factors that can impact mortgage and refinance rates.

If the economy starts to see a real recovery any time soon, rates could start going up regardless of what happens with the refinance fee. On the flip side, they’re not likely to go much lower than they are now.

So for borrowers hoping to refinance at record-low rates, it makes sense to get started sooner rather than later.

Verify your new rate (Feb 9th, 2021)

Source: themortgagereports.com

Can You Buy a House if You Owe Taxes?

February 10, 2021 by Liam Lane Posted in Home, Money Etiquette, Mortgage, Taxes Tagged Buy, Buying, Buying a Home, Credit, credit history, credit report, Credit Score, Debt, estate, Financial Wize, FinancialWize, Home, homeownership, house, Loans, Make, market, money, Mortgage, mortgages, News, proof, property, protect, real, Real Estate, state taxes, tax, Taxes
January 23, 2020 &• 4 min read by Chris Birk Comments 16 Comments

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Looking for the perfect home on the real estate market? Unfortunately, it can be tricky if you have unpaid taxes. Failing to pay your federal income taxes can lead to the Internal Revenue Service placing a lien on your property or your assets. These legal tools protect the government’s ability to get its money. They also set off alarm bells for lenders.

Can you buy a house if you owe taxes? The good news is that federal tax debt—or even a tax lien—doesn’t automatically ruin your chances of being approved for a mortgage. But you do usually have to take steps to resolve the issue before a lender will look favorably upon your mortgage application.

Can You Buy a House If You Owe Taxes?

It’s still possible, but you could have to actively work on the tax debt before a bank will approve a home loan. It might be best to pay off the lien before you fill out a loan application. But if that’s not something you’re able to do, you still might be able to forge ahead, provided you’ve actually tried to make a dent in that debt.

The specific details of your situation come into play, though. And lenders typically have slightly different requirements and documentation needs, so you’ll need to work closely with your bank or mortgage lender. If you know you have tax debt you can’t pay immediately, be honest about it so the lender can let you know what you may need to accomplish to be approved.

Can You Get an FHA Loan If You Owe Back Taxes?

Yes, you may be able to get an FHA loan even if you owe tax debt. But you’ll need to go through a manual underwriting process to make this happen. During this process, the lender looks for proof that you have a valid agreement to repay the IRS. It also requires that you have made on-time payments on this agreement for at least the last three months.

Obviously, FHA loans aren’t only contingent upon your tax debt status. You’ll also have to meet any other requirements, including those related to income and credit history.

Can Military Borrows with a Tax Lien Get a Home Loan?

Lenders can view liens differently depending on the loan type and other factors. But in general, military borrowers with a tax lien may be able to obtain VA mortgage preapproval if:

  • They have an acceptable repayment plan with the IRS and have made on-time payments for at least the last 12 consecutive months.
  • They can satisfy all debt-to-income ratio requirements with that monthly tax repayment included.
  • They note their outstanding tax lien on the standard loan application.

Can You Buy a Home If You Owe Other Types of Tax Debt?

If you owe state taxes or property taxes, you could also put your dreams for homeownership at risk. The rules vary slightly for each situation, but any type of debt you owe can cause your lender to consider you a higher-risk applicant. Even if you’re approved for the mortgage, your interest rate may be higher.

The best bet with any type of tax debt is to pay it off as quickly as possible. And if you can’t resolve it before you apply for a mortgage, at least reach out to the agency you own to make arrangements.

Research and Preparation Are Important

Whether you want to buy a home while you owe federal taxes or you’re certain your credit report is squeaky clean, take time to prepare before applying for a mortgage. You may be surprised by an error or negative item on your credit report, for example. It’s better to fix credit issues before you try to buy a home than be side-swiped by them during the process.

After taking steps to pay off or make three to 12 timely payments on your taxes, check your credit reports. Then, use your score and other information to find out what types of mortgage rates you might qualify for. This helps you understand whether or not it’s the right time to apply for a loan and buy a new home. If you’re in the market for a mortgage loan, look at the options available from the lenders on Credit.com.

The Bottom Line on Buying a Home When You Have Tax Debt

So, if you’re a prospective homebuyer with a tax lien, a good first step is making sure your track record shows at least a year’s worth of on-time payments. Pay it off in full if possible, but if that’s a tall order, know that you might have diminished purchasing power and a rockier road until the slate is clean.

In the meantime, you should also be keeping tabs on your overall financial progress by checking your credit reports regularly. You can get these reports free once a year from each of the three major credit reporting agencies, and you can get your free credit score from Credit.com.

Monitor your credit scores for increases or drops. Taking an active role in your credit can help you get on track to buy a home, especially when you’re facing certain financial hurdles such as a tax lien.


Sign up now.

Source: credit.com

What Is Mortgage Insurance?

February 10, 2021 by Liam Lane Posted in Money Etiquette, Mortgage Tagged borrowing, Buy, Buying, Buying a Home, Credit, credit history, Credit Score, Extra Money, Family, Fees, FHA loan, Financial Wize, FinancialWize, Home, home buying, home loans, homes, housing, Insurance, insurance premiums, Life, Loans, Make, money, More, Mortgage, mortgage payments, Mortgage Rates, protect, Purchase

If buying a home is your next financial goal, then you may have heard about mortgage insurance. Mortgage insurance is probably not what you expect it to be. We will cover what you need to know about mortgage insurance before you buy your future home.

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What is mortgage insurance?

Mortgage insurance is a way for lenders to protect themselves from high-risk borrowers. The mortgage payments allow lenders to compensate for any losses due to defaulting on a mortgage loan.

When you think of insurance of any kind, you typically think that the insurance would help you in times of need. Instead, this helps mortgage lenders to limit the risk from borrowers, which allows for more lending to happen.

The mortgage insurance payments protect the mortgage lender. It does not protect you in any way if you fall behind on your monthly payments.

Mortgage insurance makes the home buying process more expensive for the borrower. However, it will make it possible for some to buy a home at all. If your down payment is less than 20%, then receiving a loan with mortgage insurance attached may be the best (and only) way to secure a home loan.

How Mortgage Insurance Works

As the borrower, you would need to pay extra money to the lender as a form of insurance. The method of payment can vary by lender.

You may need to pay an upfront fee or a monthly insurance payment that is added to your mortgage payment. Some lenders may even require both an upfront fee and an additional monthly payment.

The payment amount will vary widely based on your own credit, loan amount, and ability to pay the mortgage. Typically, low-risk borrowers will be entitled to lower mortgage insurance costs. High-risk borrowers should expect to pay a higher mortgage insurance premium.

The borrow is basically paying for the privilege of borrowing the money even though the borrower has a high associated risk.

Why would I get mortgage insurance?

Borrowers are required to pay mortgage insurance if they make a down payment of less than 20% of the home purchase price. Many federal programs like the FHA and USDA loans also require mortgage insurance as a part of the loan conditions.

If you are purchasing a home through a loan, your lender may require that you purchase mortgage insurance. You may have no choice in the matter if your lender dictates that you must purchase mortgage insurance to receive the loan.

It is generally not helpful for your financial situation to sign up for mortgage insurance. If you have the option to skip mortgage insurance, then that may be a good choice, depending on your situation. Otherwise, you will be paying for your lender to be protected, but you will not gain anything in the process.

What are the common types loans that require mortgage insurance?

There are many different kinds of home loans. Each type of loan has a slightly different type of mortgage insurance associated with it for some high-risk borrowers. We will cover the most common kinds below.

Conventional Loans

Conventional loans are typically offered through private companies. Depending on your down payment amount and your credit score, the private lender may require private mortgage insurance (PMI) as a condition of the conventional loan.

The amount of private mortgage insurance will also vary based on the down payment, loan amount, and your credit history. Higher credit scores and down payments will generally lead to lower required mortgage insurance premiums.

With private mortgage insurance, the premiums are usually paid out monthly with no initial upfront fee. You may also have the ability to cancel your private mortgage insurance in certain situations.

Department of Veterans’ Affairs Loans

If you are a service member or a veteran, you have likely heard of the VA loan. The idea is to help these honorable men and women purchase homes.

The VA will back your loan, so there are no monthly mortgage insurance fees required. However, you may need to pay an upfront funding fee that will act as mortgage insurance. The initial funding fee will vary based on your military history, down payment, credit score, and several other factors.

Although the upfront funding fee is not termed as mortgage insurance, the idea is the same.

US Department of Agriculture Loans

USDA loans offer great mortgage rates meant to help low to moderate-income home buyers in rural areas. The hope is that these loans will help to infuse life back into rural areas.

The loans offer zero down payments to home buyers, but mortgage insurance is required. A USDA loan requires that you pay an upfront premium as well as monthly premiums.

Federal Housing Administration Loans

FHA loans are insured by the Federal Housing Administration but are completed through private lending companies.

FHA loans offer another low down payment option for people with lower credit scores. However, there is an enforced maximum loan limit that varies by county.

Every loan insured by the FHA requires mortgage insurance. You pay the annual mortgage insurance premium (MIP) monthly for the life of the FHA loan. The upfront and monthly mortgage insurance premium amounts vary by loan, but you can expect to pay it with FHA loans.

See also: FHA Loan Requirements for 2021

Can I avoid paying for mortgage insurance?

The easiest way to avoid mortgage insurance is by making a down payment of 20% or more. Of course, this is not feasible for every situation. Depending on your current financial picture, you may need to pay for mortgage insurance in order to purchase a home.

Alternatively, you can request to have your PMI canceled once the equity in your home reaches 20% of the purchase price or appraised value.

Bottom Line

Mortgage insurance is a required expense for many home buyers. If you are unable to make a 20% down payment on your home purchase, you will likely be required to pay for mortgage insurance.

Source: crediful.com

Does Unemployment Affect My Credit Score?

February 10, 2021 by Liam Lane Posted in Saving And Spending, Unemployment Tagged big, Blog, Coronavirus, Coronavirus (COVID-19), covid-19, Credit, credit cards, credit report, Credit Score, Emergency Fund, employment, Financial Wize, FinancialWize, Home, Loans, More, News, proof, protect, Salary, savings, second, Security, Unemployment

This content is for the first stimulus relief package, The Coronavirus Aid, Relief and Economic Security Act (The CARES Act), which was signed into law in March 2020. For information on the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, the stimulus relief package currently pending legislation, please visit the “New Coronavirus Relief Package: What Does it Mean for You and a Second Stimulus Check” blog post.

The COVID-19 pandemic has changed the economy in many different ways. One of the biggest changes has been changes to employment for many people. In some cases, many have been laid off. In other cases, people have been furloughed or had their hours reduced. The number of people receiving unemployment compensation has also hit record numbers. In this article, we’ll take a look at how filing for unemployment and/or receiving unemployment compensation can affect your credit score.

How does unemployment compensation affect your credit score?

The process for filing for unemployment is different in each state. Generally, you will need to file paperwork with your state’s unemployment office, either in person or online. The amount of unemployment compensation you receive generally depends on the salary you earned at your most recent job.

The CARES Act of 2020 made several changes to the unemployment process. First of all, it waived the requirement that several states had in place where one must be actively looking for work to receive unemployment compensation. It also broadened the definition of who was eligible for unemployment and gave an extra $600/week to most people receiving unemployment compensation.

The good news is that filing for unemployment or receiving unemployment compensation does NOT appear on your credit report. Generally, credit reports will not update your employment information unless you apply for new credit. And remember, only information about your financial accounts affects your credit score.

Is filing for unemployment bad for your credit?

As we discussed, the mere act of filing for unemployment or receiving unemployment compensation is not bad for your credit. Being on unemployment does not affect your credit score and in most cases will not even appear on your credit report at all.

Where being unemployed can hurt your credit is all of the ancillary effects from being without a job. Generally speaking, unemployment compensation is less than the salary that you were receiving (though the extra $600 from the CARES Act has changed that for some people.) With less income, that will obviously have a big impact on your overall household budget. 

What can damage your credit while you’re unemployed? 

Even though the act of filing for unemployment or receiving unemployment compensation does not affect your credit score, your credit can still be damaged while you’re unemployed. Two of the factors that make up your credit score are your total balances and your credit utilization ratio. Both of these can be affected if your finances are impacted due to a loss of income.

If you find yourself to continue living below your means while your income is reduced, it is likely that you may end up with higher balances on your credit cards. This results in the increase of your credit utilization ratio, leaving a negative impact on your credit score. 

How to protect your credit when on unemployment

There are a few steps you can take to help protect your credit while unemployed. The key here is to minimize the effects that being without your regular salary has on the rest of your finances. 

One good way to protect your credit while on unemployment is to make sure to have a solid emergency fund. Ideally, you should aim to have 3 to 6 months of expenses in an emergency fund. But if you haven’t been able to create one yet, it’s no help saying that you should have! If your emergency fund or savings won’t cover your time without employment, you have a few options.

  1. Cut down on your expenses
  2. Ask a favor from close friends or family 
  3. Accept that your credit score will be impacted

The good news is that if your time with a limited income is short, your credit score should bounce back in no time as well! 

Does unemployment affect your ability to get new credit/loans?

Yes, it will have a significant impact on your ability to get new credit cards or other loans. Most places that offer credit ask for your current employment status. This makes sense since they need to assess your ability to repay the loan or credit that they are offering.

Different banks and creditors will have different policies for evaluating the information that you provide to them. In many cases, the bank will ask for proof of employment, such as your paystubs. This is especially true when trying to qualify for a home mortgage. If you’re not able to provide current pay stubs, this can have an impact on your ability to get a home loan, even if you’ve already been pre-qualified or approved. 

Hopefully, this information was helpful if you are in a situation where you are wondering how unemployment affects your credit score.

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Source: mint.intuit.com

12 Jobs Working with Animals That Pay Good Money

February 10, 2021 by Liam Lane Posted in Life Hacks, Making Money, Personal Finance Tagged Auto, Career, Credit, credit report, Credit Score, Education, employment, Family, Finance, Financial Wize, FinancialWize, keep, Make, Making Money, money, more money, Personal, personal finance, protect, Salary, School, top-five-post
September 16, 2020 &• 6 min read by Sheiresa Ngo Comments 0 Comments

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Love the idea of working with animals, but don’t have the resources or desire to go through vet school? You can still put your love of pets or wildlife to work in your career. Here are twelve jobs working with animals that can pay the bills for any animal lover.

1. Groomer

Groomers help pets look their best by cleaning them, trimming fur and providing other services. Pay depends on skills, certifications, experience and which state you work in. The highest pay in each region typically going to specialists who provide boutique grooming services.

Here are the job details:

  • Median Salary: $34,702
  • Salary Range: $22,666 to $51,323
  • Minimum Qualifications: high school diploma or equivalent

How to Become One: Typically, animal caretakers must have at least a high school diploma or GED. Most training takes place on the job, but some choose to study at a grooming school. Employers generally prefer candidates to have some experience working with animals.

2. Pet Sitter and Dog Walker

Pet sitters and dog walkers care for pets while owners are traveling or unavailable. You might choose to work through a service that pays you as an employee or hire your own services out as a freelance dog walker or pet sitter. In the latter case, you may make more money per job but will also have to handle your own marketing and business administration expenses.

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Here are the job details:

  • Median Salary: $31,095
  • Salary Range: $20,211 to $45,826
  • Minimum Qualifications: varies

How to Become One: Employers may require a high school diploma or GED and some training or certification. However, if you want to freelance as a dog walker, you may just need experience and references, so concerned pet owners can learn more about you.

3. Veterinary Assistant

Veterinary assistants work in a vet office, clinic or animal hospital helping veterinarians with animal care. They are responsible for assisting with routine tasks, which might include checking in patients or helping as the vet provides services.

Here are the job details:

  • Median Salary: $30,898
  • Salary Range: $19,431 to $43,072
  • Minimum Qualifications: high school diploma or equivalent

How to Become One: If you want to become a veterinary assistant, you should at least have a high school diploma. Most veterinary assistants learn their trade on the job. Certification isn’t always required, but it could help you get promoted or obtain an advanced position.

4. Research Animal Caretaker

Laboratory animal caretakers work in labs with animal scientists, biologists or veterinarians. They feed, care for and monitor the well-being of lab animals.

Here are the job details:

  • Median Salary: $37,890
  • Salary Range: $35,215 to $46,105
  • Minimum Qualifications: high school diploma or equivalent

How to Become One: Laboratory animal caretakers are required to at least have a high school diploma. Most laboratory animal caretakers learn their trade through on-the-job training. Certification isn’t required to become a laboratory animal caretaker, but some employers prefer it. Having a certification could also help you get promoted.

5. Animal Trainer

Animal trainers are responsible for training animals for tasks such as riding, performance, obedience or assisting the disabled. They can also help animals become more comfortable with human interaction.

Here are the job details:

  • Median Salary: $30,430
  • Salary Range: $20,810 to $59,110
  • Minimum Qualifications: no formal education requirements

How to Become One: There are no formal education requirements to become an animal trainer. Those who train animals usually receive on-the-job training. In addition, animal trainers can receive education through organizations such as the Humane Society of the United States and earn certificates or other credentials to help them move up in their careers.

6. Veterinary Technician

Veterinary technicians perform medical testing with the supervision of a licensed veterinarian. They help diagnose an animal’s injury or illness and may also perform some routine procedures, such as ultrasounds, catheterization or EKGs, and administer anesthesia.

Here are the job details:

  • Median Salary: $35,308
  • Salary Range: $24,619 to $48,002
  • Minimum Qualifications: an associate degree

How to Become One: Typically, you must complete at least an associate degree or get a certification from an accredited program. Depending on the state, you may need to pass an exam and become registered, licensed or certified. Many employers look for techs with at least some experience in the field, which means many vet techs start in an assistant position.

7. Animal Control Worker

Animal control workers help ensure the proper treatment of animals, investigate cases of mistreatment, may help locate abandoned animals and may be called on to deal with nuisance animals of certain types.

Here are the job details:

  • Median Salary: $38,490
  • Salary Range: $23,160 to $58,220
  • Minimum Qualifications: varies by location

How to Become One: Animal control workers are required to have a minimum of a high school diploma or the equivalent. Additional training usually takes place on the job. The National Animal Care & Control Association offers training programs. In addition, some states require certification in animal control.

8. Conservation & Forest Technician

Conservation and forest workers help keep track of wildlife, gather data, suppress forest fires and work to improve the health of forests. They may lead guided tours or help train others in managing natural habitats.

Here are the job details:

  • Median Salary: $39,180
  • Salary Range: $26,160 to $56,410
  • Minimum Qualifications: high school diploma or equivalent

How to Become One: In many cases, all you need is a high school diploma. You receive on-the-job training, but you can potentially advance your career with certifications or degrees in various sciences.

9. Breeder

Breeders select and breed animals according to characteristics and genealogy. They may use artificial insemination equipment and need to keep meticulous records on animal health, genetics, dates of birth and family history.

Here are the job details:

  • Median Salary: $46,420
  • Salary Range: $26,030 to $69,550
  • Minimum Qualifications: high school diploma or equivalent

How to Become One: Animal breeders are required to have a minimum of a high school education. In addition, breeders learn their skill through short-term on-the-job training. Those who want to breed zoo animals are required to have a bachelor’s degree in veterinary science and, depending on career goals, may also want to pursue postgraduate study in zoology.

10. Biological Technician

Biological technicians help medical scientists in the laboratory. They are responsible for the setup, operation and maintenance of laboratory equipment. They also monitor experiments.

Here are the job details:

  • Median Salary: $49,110
  • Salary Range: $29,540 to $73,350
  • Minimum Qualifications: bachelor’s degree

How to Become One: Biological technicians generally need a bachelor’s degree in biology or a similar field. Technicians must also acquire laboratory experience and a working knowledge of computers and lab equipment.

11. Zoologist & Wildlife Biologist

Zoologists and wildlife biologists study how animals and wildlife interact with their environment. They may also help care for animals in captivity.

Here are the job details:

  • Median Salary: $67,200
  • Salary Range: $38,880 to $101,780
  • Minimum Qualifications: bachelor’s degree

How to Become One: A bachelor’s degree is necessary for those seeking entry-level positions. A master’s degree is usually required for advanced or scientific positions. Those who want to lead independent research or work at a university might want to consider a doctoral degree.

12. Conservation Scientist

Conservation land managers work with conservation groups, landowners or other entities to protect specific wildlife and land. Often, they do so because the area is a habitat for certain animals, particularly endangered animals.

Here are the job details:

  • Median Salary: $67,040
  • Salary Range: $39,270 to $98,060
  • Minimum Qualifications: bachelor’s degree

How to Become One: Conservation scientists usually need a minimum of a bachelor’s degree, preferably in natural resource management, agriculture or another related field. Experience can be gained through internships and volunteer work. Some states require those desiring to become foresters to obtain a license.

Start Working Now to Land a Job Working with Animals

First, check out Monster.com‘s resume services and bring out the most relevant facts in your work history. Get tips and help polishing your resume so it shines when it hits employee inboxes or application systems. Then, upload your resume to ZipRecruiter and start connecting immediately with employers who are looking for people with a passion for jobs working with animals.

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Which Debts Should You Prepay First? A 6-Step Plan

February 10, 2021 by Liam Lane Posted in Skilled Nursing Care Tagged 4%, 401(k), agent, Auto, Auto Loans, big, building, Buying, Buying a Home, california, car, Career, Coronavirus, Credit, credit cards, crisis, Debt, Emergency Fund, Extra Money, Family, federal student loans, Fees, Financial Goals, Financial Wize, FinancialWize, Health Insurance, Home, housing, How To, Insurance, Interest Rates, invest, Investing, investment, IRA, keep, Life, Life Insurance, Lifestyle, Loans, market, money, Mortgage, mortgages, Personal, Personal Loans, protect, Refinance, rent, Retirement, retirement savings, save, Saving, Saving for Retirement, savings, Security, spouse, Student Loans, tax

Hooray, you have some extra money each month to pay down debt! This 6-step process will help you decide how to use that money wisely to reach your financial goals.

By

Laura Adams, MBA
May 13, 2020

10 Things Student Loan Borrowers Should Know About Coronavirus Relief

6 Steps to Decide Whether to Pay Off Student Loans or a Mortgage First

Let’s take a look at how to prioritize your finances and use your resources wisely during the pandemic. This six-step plan will help you make smart decisions and reach your financial goals as quickly as possible.

1. Check your emergency savings

While many people begin by asking which debt to pay off first, that’s not necessarily the right question. Instead, zoom out and consider your financial life’s big picture. An excellent place to start is to review your emergency savings.

If you’ve suffered the loss of a job or business income during the pandemic, you’re probably very familiar with how much or how little savings you have. But if you haven’t thought about your cash reserve lately, it’s time to reevaluate it.

Having emergency money is so important because it keeps you from going into debt in the first place. It keeps you safe during a rough financial patch or if you have a significant unexpected expense, such as a car repair or a medical bill.

How much emergency savings you need is different for everyone. If you’re the sole breadwinner for a large family, you may need a bigger financial cushion than a single person with no dependents and plenty of job opportunities.

If you’re the sole breadwinner for a large family, you may need a bigger financial cushion than a single person with no dependents and plenty of job opportunities.

A good rule of thumb is to accumulate at least 10% of your annual gross income as a cash reserve. For instance, if you earn $50,000, make a goal to maintain at least $5,000 in your emergency fund.

You might use another standard formula based on average monthly living expenses: Add up your essential costs, such as food, housing, insurance, and transportation, and multiply the total by a reasonable period, such as three to six months. For example, if your living expenses are $3,000 a month and you want a three-month reserve, you need a cash cushion of $9,000.

If you have zero savings, start with a small goal, such as saving 1 to 2% of your income each year. Or you could start with a tiny target like $500 or $1,000 and increase it each year until you have a healthy amount of emergency money. In other words, it might take years to build up enough savings, and that’s okay—just get started!

Your financial well-being depends on having cash to meet your living expenses comfortably, not on paying a lender ahead of schedule.

Unless Maya’s brother has enough cash in the bank to sustain him and any dependent family members through a financial crisis that lasts for several months, I wouldn’t recommend paying off student loans or a mortgage early. Your financial well-being depends on having cash to meet your living expenses comfortably, not on paying a lender ahead of schedule.

If you have enough emergency savings to feel secure for your situation, keep reading. Working through the next four steps will help you decide whether to pay down your student loans or mortgage first.

2. Reach your retirement goals

In addition to saving for potential emergencies, it’s critical to save regularly for your retirement before paying down a student loan or mortgage early. So, if Maya’s brother isn’t contributing regularly to meet a retirement goal, that’s the next priority I’d recommend for him.

Consider this: If you invest $500 a month for 35 years and have an average 8% return, you’ll end up with an impressive retirement nest egg of more than $1.2 million! But if you wait until 10 years before retirement to start saving, you’d have to invest over $5,000 a month to have $1 million in the bank. When it comes to your retirement savings, procrastinating can make the difference between scraping by or have a comfortable lifestyle down the road.

When it comes to your retirement savings, procrastinating can make the difference between scraping by or have a comfortable lifestyle down the road.

A good rule of thumb is to invest at least 10% to 15% of your gross income for retirement. For instance, if you earn $50,000, make a goal to contribute at least $5,000 per year to a tax-advantaged retirement account, such as an IRA or a retirement plan at work, such as a 401(k) or 403(b).

For 2020, you can contribute up to $19,500, or $26,000 if you’re over age 50, to a workplace retirement account. Anyone with earned income (even the self-employed) can contribute up to $6,000 (or $7,000 if you’re over 50) to an IRA.

The earlier you make retirement savings a habit, the better. Not only does starting sooner give you more time to contribute money, but it leverages the power of compounding, which allows the growth in your account to earn additional interest. That’s when you’ll see your retirement account value mushroom!

3. Have the right insurance

In addition to building an emergency fund and saving for retirement, an essential part of taking control of your finances is having adequate insurance. Many people get into debt in the first place because they don’t have enough of the right kinds of coverage—or they don’t have any insurance at all.

Without enough insurance, a catastrophic event could wipe out everything you’ve worked so hard to earn.

As your career progresses and your net worth increases, you’ll have more income and assets to protect from unexpected events. Without enough insurance, a catastrophic event could wipe out everything you’ve worked so hard to earn.

Make sure you have enough health insurance to protect yourself and those you love from an illness or accident jeopardizing your financial security. Also, review your auto and home or renters insurance coverage. And by the way, if you rent and don’t have renters insurance, you need it. It’s a bargain for the protection you get; it only costs $185 per year on average. 

And if you have family who would be hurt financially if you died, you need life insurance to protect them. If you’re in relatively good health, a term life insurance policy for $500,000 might only cost a couple of hundred dollars per year. You can get free quotes for many different types of insurance using sites like Bankrate.com or Policygenius.com.

If Maya’s brother is missing critical types of insurance for his lifestyle and family situation, getting it should come before paying off a student loan or mortgage early. It’s always a good idea to review your insurance needs with a reputable agent or a financial advisor who can make sure you aren’t exposed to too much financial risk.

4. Set other financial goals

But what about other goals you might have, such as saving for a child’s education, starting a business, or buying a home? These are wonderful if you can afford them once you’ve accounted for your emergency savings, retirement, and insurance needs.

Make a list of your financial dreams, what they cost, and how much you can afford to spend on them each month. If they’re more important to you than paying off student loans or a mortgage early, then you should fund them. But if you’re more determined to become completely debt-free, go for it!

5. Consider your opportunity costs

Once you’ve hit the financial targets we’ve covered so far, and you have money left over, it’s time to consider the opportunity costs of using it to pay off your student loans or mortgage. Your opportunity cost is the potential gain you’d miss if you used your money for another purpose, such as investing it.

A couple of benefits of both student loans and mortgages is that they come with low interest rates and tax deductions, making them relatively inexpensive. That’s why other high-interest debts, such as credit cards, personal loans, and auto loans, should always be paid off first. Those debts cost more in interest and don’t come with any money-saving tax deductions.

Especially in today’s low interest rate environment, it’s possible to get a significantly higher return even with a reasonably conservative investment portfolio.

But many people overlook the ability to invest extra money and get a higher return. For instance, if you pay off the mortgage, you’d receive a 4% guaranteed return. But if you can get 6% on an investment portfolio, you may come out ahead.

Especially in today’s low-interest-rate environment, it’s possible to get a significantly higher return even with a reasonably conservative investment portfolio. The downside of investing extra money, instead of using it to pay down a student loan or mortgage, is that investment returns are not guaranteed.

If you decide an early payoff is right for you, keep reading. We’ll review several factors to help you know which type of loan to focus on first.

 

6. Compare your student loans and mortgage

Once you have only student loans and a mortgage and you’ve decided to prepay one of them, consider these factors.

The interest rates of your loans. As I mentioned, you may be eligible to claim a mortgage interest tax deduction and a student loan interest deduction. How much savings these deductions give you depends on your income and whether you use Schedule A to itemize deductions on your tax return. If you claim either type of deduction, it could reduce your after-tax interest rate by about 1%. The debt with the highest after-tax interest rate is typically the best one to pay off first.

The amounts you owe. If you owe significantly less on your student loans than your mortgage, eliminating the smaller debt first might feel great. Then you’d only have one debt left to pay off instead of two.

You have an interest-only adjustable-rate mortgage (ARM). With this type of mortgage, you’re only required to pay interest for a period (such as several months or up to several years). Then your monthly payments increase significantly based on market conditions. Even if your ARM interest rate is lower than your student loans, it could go up in the future. You may want to pay it down enough to refinance to a fixed-rate mortgage.

You have a loan cosigner. If you have a family member who cosigned your student loans or a spouse who cosigned your mortgage, they may influence which loan you tackle first. For instance, if eliminating a student loan cosigned by your parents would help improve their credit or overall financial situation, you might prioritize that debt.

You qualify for student loan forgiveness. If you have a federal loan that can be forgiven after a certain period (such as 10 or 20 years), prepaying it means you’ll have less forgiven. Paying more toward your mortgage would save you more.

Being completely debt-free is a terrific goal, but keeping inexpensive debt and investing your excess cash for higher returns can make you wealthier in the end.

As you can see, the decision to eliminate debt and in what order, isn’t clear-cut. Mortgages and student loans are some of the best types of debt to have—they allow you to build wealth by accumulating equity in a home, getting higher-paying jobs, and freeing up income you can save and invest.

In other words, if Maya’s brother uses his excess cash to prepay a low-rate mortgage or a student loan, it may do more harm than good. So, before you rush to prepay these types of debts, make sure there isn’t a better use for your money.

Being completely debt-free is a terrific goal, but keeping inexpensive debt and investing your excess cash for higher returns can make you wealthier in the end. Only you can decide whether paying off a mortgage or student loan is the right financial move for you.


About the Author

Laura Adams, MBA

Source: quickanddirtytips.com

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