Month: May 2017

Should You Spend, Save or Invest Your Graduation Gift?

Posted on by Lauren Schwahn

When you graduate, you might end your academic journey with more than a diploma in hand — you could wind up with a generous cash gift, too.

The average person giving graduation gifts last year planned to spend about $53 on each, with cash being the most popular present, according to the National Retail Federation’s 2016 Graduation Spending Survey. If 10 people were to give you a monetary gift in that amount, you’d pocket about $530.

So what should you do with your graduation money? Put it toward that trip to Europe you’ve been dying to take or the student loan balance hanging over your head? Ultimately, it’s up to you.

“When you’re young, your decisions are important and should align with your goals, your circumstances and your values,” says Jason Kirsch, a certified financial planner in Santa Monica, California. “That will prevent people from regretting things going forward.”

Factor your savings, debt and job prospects into your decision. Here are some recommendations to get you started.

Save first

Building an emergency fund is an important first step toward financial health. You probably won’t own a house fresh out of college and therefore don’t have to worry about the cost of homeownership-related emergencies, but you still might face unexpected expenses like car repairs or medical bills.

Having a $500 cushion is a solid foundation. In the long term, aim to save enough to cover three to six months’ worth of expenses. Your graduation gift alone might not be enough to get you there, but any emergency reserve deposit helps.

For nonemergency costs, set up a general savings account, if you don’t already have one. Tuck away some of your gift to cover living expenses like gas or work clothes, even if you live at home with your parents rent-free, says Donna Wood, a certified financial planner in Haymarket, Virginia. Or think big and save for goals like a new car.

Invest for your retirement

Saving for retirement might not be top of mind when you’re young. But the earlier you contribute, the better off you’ll be in the future. Even a modest contribution from your graduation haul will work to your benefit.

At an assumed 6% average annual return rate, a $100 investment at age 22 will reach $1,226 by age 65. This can get you in the habit of saving, and watching your money grow might add extra motivation. Consistent contributions are where compound interest really pays off. If you can scrape together $25 a month to add to that initial deposit, you’ll have $57,495 by age 65.

If you have a job lined up that offers a 401(k) and company match, make sure to contribute enough to get the full match. Consider opening an IRA as a supplement, or if you don’t have access to a 401(k).

Tackle crippling debt

If expensive textbook and laptop purchases resulted in high-interest credit card debt, make paying it down your next priority. Once it’s gone, use a budget calculator to learn how to allocate your money and avoid future debt.

Lingering student loan balances often spur more anxiety than credit card debt. But, generally, there are options available to help you handle this lower-interest debt, like modified repayment plans, tax deductions and a six-month grace period after graduation.

“I wouldn’t worry about putting gift money toward student loans right off the bat unless you’re working with a significant amount of money or it just gives you a better peace of mind,” says Ben Brown, a certified financial planner in Bethesda, Maryland. “It’s going to go a lot further if you put it towards really focusing on your most valuable asset as a young person, which is your earnings potential.”

Spend it on yourself

If you have no job in place, Brown suggests spending the money to boost your prospects. Use a professional resume service or career coach, or take additional courses to develop your skills.

And it’s OK to treat yourself. A graduation gift is meant to be a reward for your achievement, after all. If you want to improve your financial habits but still indulge before entering the workforce, Brown recommends spending between 10% and 20% of the gift on fun purchases. If you’re comfortable with your financial situation, give yourself more leeway. Go ahead and take that trip. Update your wardrobe. Buy a new phone.

Lauren Schwahn is a staff writer at NerdWallet, a personal finance website. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

This article was written by NerdWallet and was originally published by USA Today.

The article Should You Spend, Save or Invest Your Graduation Gift? originally appeared on NerdWallet.

How Student Loan Refinancing Could Affect Your Mortgage Application

Posted on by Miranda Marquit

Though some grads put off a home purchase because of student loans, it’s certainly possible to buy a home when you have student debt.

However, you might need to approach your home purchase differently if you’re balancing student debt, too. Before you decide to apply for a mortgage, consider the impact of refinancing your student loans.

Depending on your situation, refinancing your student loans can either help or hurt your chances of getting approved for a home loan. Carefully consider your own circumstance before moving forward.

Does refinancing hurt your credit?

Because your credit is the first thing mortgage lenders look at, make sure that refinancing your student loans won’t hurt your chances.

“A refinanced student loan will appear as new debt on a credit report and could have a negative impact on the buyer’s credit score in the short-term,” said Ken Pederson of Fairway Mortgage in Lancaster, Pennsylvania. “Lower credit scores can impact interest rates on their mortgage, the cost of private mortgage insurance, and even the ability to qualify for a home mortgage.”

If you plan to buy a home in the next couple of months, “Sit tight, buy your home, and refinance after the settlement,” Pederson said.

However, that new credit probably won’t cause mortgage problems in the long run. Once you start making regular payments, the effect becomes positive.

“For homebuyers with a longer timeframe before purchasing, go ahead and make the move, assuming the refinance will lower the payment,” continued Pederson.

Student loan refinancing can help you buy a home

In some cases, planning to refinance your student loans first can improve your ability to buy a home.

Dan Green, a 14-year veteran of the mortgage business and founder of Growella, thinks homebuyers can come out ahead by refinancing student loans first.

“Refinancing student loans reduces your monthly obligations, which lowers your debt-to-income ratio,” Green said. With less of your monthly income going toward debt repayment, your numbers look better — especially in terms of the 28/36 qualifying ratio. You can present yourself in an improved light by refinancing first.

On top of that, you might increase the size of your mortgage. “The advantage of refinancing your student loans prior to making a mortgage application is that you can increase your maximum mortgage loan size,” said Green. “If that’s unimportant to you or unnecessary, the order of transactions won’t matter.”

“At today’s mortgage rates, every dollar you save on a student loan refinance raises your maximum mortgage size by $210,” he said.

Pay attention to the home loan program

Before you take the plunge, Pederson suggested discussing your options with a loan officer. Depending on the lender and the loan program, their view of student loans might be slightly different.

A conventional mortgage might have slightly different underwriting requirements related to student loans than an FHA loan, VA loan, or USDA loan. “All these programs have slightly different viewpoints on how lenders should look at student loans, especially if they are in deferment,” said Pederson.

Talking to a loan officer or mortgage broker can give you an idea of your options. Plus, a broker can help you navigate the realities of student loans, refinancing, and buying a home.

The same applies if you hope to use grants to help you with your down payment. Talk to someone knowledgeable about the options as you make your choice.

Don’t refinance your student loans while a mortgage is pending

It’s perfectly acceptable to refinance your student loans before or after closing on a home. But you should never begin the process while the mortgage is pending.

Have you already started the mortgage process? Even if you’re approved and the home is under contract, don’t refinance your student loans.

“Every lender has to check credit again, just before settlement,” said Pederson. “If we see any new inquiries or loans, this new information has to be researched and can cause the file to go back into processing and underwriting.”

Applying to refinance your student loans while your mortgage is pending could put your home purchase at risk.

A mortgage could impact your chance to refinance student loans

Depending on the situation, your mortgage could impact your ability to refinance your student loans. A high debt-to-income ratio could result in a rejected refinancing application. Your mortgage adds to your debts. If your income isn’t high enough to absorb that debt and provide a buffer, it could cause problems for your student loan refinance.

Make your mortgage payments on time and it shouldn’t hinder you from getting a student loan refinance. In fact, after a few months of on-time payments, you should see an improvement in your credit score.

Student loan refinancing and buying a home

It’s not a huge deal whether you refinance your student loans before or after you buy a home. The biggest impact comes from whether or not your debt-to-income ratio is holding you back.

In that case, refinancing can lower your monthly payments enough to allow you to qualify for your home.

The article How Student Loan Refinancing Could Affect Your Mortgage Application originally appeared on studentloanhero.com.

The Complete Guide to Federal Student Loans

Posted on by Kat Tretina

The cost of college continues to rise. If you’re planning to attend school in the fall, you can expect high bills. A year of school at a private university costs $32,405 on average. Since most students don’t have that much money stashed in savings, many will turn to financial aid.

There are many different types of financial aid, from grants to private student loans. But when it comes to student debt, federal loans offer more flexibility and lower costs to students.

Find out what federal loans are available to you and what makes them so beneficial.

Student loan options

You might have to take out student loans to pay for college, even if you receive scholarships or grants. You have two choices: federal and private loans.

Federal student loans

Issued by the government, federal student loans should be your first choice to pay for school. They tend to have lower interest rates and more generous repayment terms than private ones, and the government will issue loans to borrowers even if they have poor credit. Federal student loans do not require a cosigner or guarantor for your debt.

If you qualify for a subsidized loan, the government will even help you pay for interest charges. While you’re in school, your loans will build in interest. But the government covers the fees on subsidized loans while you study, which can cut down on the amount you owe.

Private student loans

Private student loans are issued by a bank, credit union, or private company. They’re not linked to the government, and often have different interest rates, repayment terms, and rules.

To get a private loan, you need to have an established credit history and good credit score. If your credit score isn’t high enough, a lender may require you to have a cosigner.

With federal loans, the interest rates are fixed for the length of your loan. But if you opted for a variable interest rate with a private lender, the interest can fluctuate. That means your payment can increase along with higher interest charges.

Private loans are also ineligible for federal loan benefits, such as access to income-driven repayment plans or Public Service Loan Forgiveness.

Benefits of federal loans

Federal loans have more benefits than most private lenders. Their terms can make it easier to manage your loans in case of a financial hardship or medical emergency.

Income-driven repayment plans

If you can’t afford the minimum payment on your loan, you could be eligible for an income-driven repayment (IDR) plan. Under IDR, the government extends your repayment term. Rather than a Standard Repayment Term of 10 years, they extend it to 20 or even 25 years. That can dramatically reduce your payment, helping your budget.

There are four kinds of IDR plans:

  • Income-Based Repayment
  • Income-Contingent Repayment
  • Pay As You Earn (PAYE)
  • Revised Pay As You Earn (REPAYE)

While each plan varies slightly, the basic structure is the same for all four.

Under IDR, the lender sets your payment as a percentage of your discretionary income. If you experience big life changes, such as a cut in salary or you have a child, your payment will go down, too. After 20 to 25 years of making qualifying payments, the government forgives the remaining balance of your loan.

The discharged balance is taxable as income, but having your loans eliminated can be worth it in some instances. An IDR plan can be a short-term solution if you’re struggling with an entry-level salary or a long-term approach to managing your debt.

Deferment and forbearance

If you can’t keep up with your payments, you might qualify for deferment or forbearance. Either option allows you to pause making payments on your loan without becoming delinquent or going into default. If you lost your job or became seriously ill, you can delay making payments while you recover.

While deferment or forbearance are not ideal, they can be useful when facing an emergency that makes managing your loan payments difficult.

Student loan forgiveness programs

Some student loan forgiveness options are only available for those with federal student debt. If you work in a career serving others, the government offers programs that allow your loans to be forgiven.

Those that work for nonprofits or the federal or state government may be eligible for the Public Service Loan Forgiveness (PSLF) program. If you hold a qualifying job for 10 years, you could have the remaining balance of your debt forgiven.

Similarly, various federal loan forgiveness programs for teachers could mean big savings on student debt. Depending on your eligibility, you could have part or all of your loans forgiven after teaching for one to five years in a qualifying role.

Types of federal loans

There are two categories of federal student loans: the Federal Direct Loan Program and Federal Perkins Loans.

1. William D. Ford Federal Direct Loan Program

The William D. Ford Direct Loan Program is the largest federal student loan program. It’s made up of four different loan types:

  • Direct Subsidized Loans: Designed for undergraduate students that can prove a financial need, you can take out up to $5,500 each year to pay for school. Unlike other loans, you are not charged interest on the loans while you’re in school.
  • Direct Unsubsidized Loans: Unsubsidized loans can be used by undergraduate, graduate, and professional degree students. You can take out a maximum of $20,500 each year to pay for school, and interest accrues on your account.
  • Direct PLUS Loans: A federal Direct PLUS Loan is for parents of undergraduate students to pay for their child’s education or for graduate or professional degree students to pay for their own education. You can use a federal Direct PLUS loan to cover the total cost of attendance.
  • Direct Consolidation Loan: If you have other forms of federal loans, you can consolidate them into one loan and one easy payment with a Direct Consolidation Loan.

2. Federal Perkins Loan Program

Federal Perkins Loans can be used by undergraduate, graduate, and professional degree students. Perkins Loans are an excellent choice because they have lower interest rates than other loans. If you’re eligible, you can get a Perkins Loan at 5% interest.

However, not everyone qualifies for a Perkins Loan. It is dependent on your financial need and the availability of funds at your chosen university. In addition, there’s a cap on the amount you can borrow. Undergraduate students can borrow up to $27,500 in their lifetime; graduate students cannot exceed $60,000.

Under the Perkins Loan program, the school you attend is the lender of the loan. You will make payments directly to the school or a servicer they appoint.

Not all schools participate in the Perkins Loan Program, so it’s a good idea to check with your intended college’s financial aid office to learn what options are available.

Federal loan interest rates

The United States Congress decides the interest rates for federal student loans. They determine the rates based on legislation linked to the financial markets. Interest rates can vary from year to year, but your interest rate is locked when the lender disburses the loan. It cannot be changed unless you pursue student loan refinancing.

The interest rates for federal loans disbursed on or after July 1, 2016, and before July 1, 2017, are as follows:

  • Direct Subsidized: 3.76%
  • Direct Unsubsidized: 3.76%
  • Direct Unsubsidized (graduate or professional degree): 5.31%
  • Direct PLUS Loans: 6.31%
  • Perkins Loans: 5%

Eligibility requirements

To get a federal student loan, borrowers need to complete the Free Application For Federal Student Aid (FAFSA). The FAFSA is what schools and states use to determine the aid you receive, including grants and loans. You cannot get a federal loan without completing FAFSA. That means you’d have to use private loans, which can be more expensive.

The FAFSA has to be completed and submitted every year for you to remain eligible for federal aid. Even if nothing about your situation has changed, you still need to submit it again.

You can complete the FAFSA online. For the 2016-2017 school year, the federal government’s deadline is June 30, 2017. However, schools sometimes have much earlier deadlines, so it’s a good idea to complete it as soon as possible if you have not done it yet.

Taking out loans for school

While college can be expensive, federal student loans offer lower interest rates and more flexible repayment terms than other options. You can get loans to cover the full cost of attendance and even be eligible for reduced payments or forgiveness options.

Federal loans are a good place to start funding your education. For more information about why federal loans are a smart choice, check out the difference between private and federal loans.

The article The Complete Guide to Federal Student Loans originally appeared on studentloanhero.com.

When to Pay for ‘Free’ Shipping

Posted on by Courtney Jespersen

First they wanted free. Now they want fast. As shoppers turn to the convenience of cyberstores, they crave shipping that can keep up with their demands.

“For consumers, it’s one of the top things they’re looking for, and it’s a decision maker between buying at one site versus another,” says Aaron Cheris, a partner in the San Francisco office of Bain and Co., a management consulting firm.

Free shipping is expected, says Luke Knowles, founder of Free Shipping Day, a one-day, annual online-shopping event in December. On Dec. 16, 2016, more than 1,000 retailers offered free shipping and delivery by Christmas Eve.

Retailers have answered the call for free and swift delivery in different ways. Under Amazon’s subscription model, members pay a fee to get free shipping. Wal-Mart and Best Buy provide free and fast shipping if you meet their conditions.

Should you still pay for a subscription? It depends. Before you decide, consider how often you order and what you’ll get beyond shipping. Here’s what you should think about.

Low minimums

If your orders meet minimum-purchase thresholds, you can get speedy and free delivery without a subscription from some retailers.

Wal-Mart announced free two-day shipping on eligible orders of $35 and above on more than 2 million items in categories from food to electronics while eliminating its membership program in early 2017.

Best Buy offers free two-day shipping on thousands of items for orders of $35 and up. Apple boasts free two-day shipping on most in-stock products.

“The first battle was [over] free,” says Cheris, of Bain and Co. Now, consumers have their eyes set on two-day delivery. “One of the problems with the old, ‘I’ll get it to you in three to five days’ is, well, which is it? Is it three? Is it four? Is it five? The nice thing about two is it’s not only faster, but it’s more specific.”

Features

Even if free two-day shipping becomes standard, don’t dismiss subscriptions. Consumers should consider other features, Cheris says.

For instance, a membership at shopping service ShopRunner unlocks free two-day shipping on eligible items at hundreds of participating retailers. After a 30-day free trial, the fee is $79 a year or $8.95 a month.

Amazon Prime is perhaps the best known of all programs. After a 30-day free trial, members pay $99 a year or $10.99 a month to get free two-day shipping on more than 50 million items, plus free same-day and two-hour delivery on household goods, groceries and other items in select cities. Shoppers also get extras such as video and music streaming.

“The reason people join is for the free, fast shipping, but the reason they stay is because a lot of them get attached to other stuff, whether it’s Prime Now or Prime Pantry or Prime Instant Video,” Cheris says.

See if you can share your membership and split the price. At Amazon, two adults can form an Amazon Household to share select benefits of Prime, like free shipping and photo storage.

A membership to online marketplace Google Express can be shared with one person in your household at no additional cost. After a three-month free trial, the program costs $95 a year or $10 a month for free same-day delivery on eligible orders.

Price

When shopping without a membership, ensure that a retailer with free shipping isn’t charging more for its products than what you would save on shipping.

For example, a pair of Nike running shoes recently sold for $48.75 at J.C. Penney with $8.95 shipping, for a total of $57.70 before tax. The same item came with free shipping at Zappos for $65.

Frequency

It’s a matter of what you buy, too, says Mabel McLean, a director of client strategy at L2, a New York-based company that tracks the online performance of brands.

If you make frequent online purchases of items such as paper towels and cleaning supplies, shipping charges can add up, so investing in a subscription may be better.

“It depends on how frequently you shop the category,” McLean says. “I think paying seven bucks for shipping when you’re buying clothing and maybe only order online five times a year, that’s a little bit more palatable than higher-frequency categories.”

Make a choice

Before you buy a subscription, weigh the cost to ensure that the fee is offset by the benefits.

In any case, you now have a breadth of options. “Shoppers are winning here,” says Knowles, the Free Shipping Day founder.

Email staff writer Courtney Jespersen: courtney@nerdwallet.com. Twitter: @courtneynerd.

This article was written by NerdWallet and first published by The Associated Press.

The article When to Pay for ‘Free’ Shipping originally appeared on NerdWallet.

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How to Eat Healthy on a Budget

Posted on by Kelsey Sheehy

Ask anybody who’s shopped at Whole Foods: Adopting a healthy diet can test your will and your wallet. Proper planning and savvy shopping can help you overcome challenges on both fronts.

Armed with these tips, you can eat healthy, wholesome foods and stick to your budget.

Make your own meals

Cooking at home kills two birds with one stone. You eat healthier by using a fraction of the butter and salt that restaurants tend to use, and you spend less money.

Order salmon at a restaurant, for example, and you’ll likely pay at least $15. You can get a pound of frozen salmon fillets, enough for three 5-ounce servings, for the same price or less at your local grocer.

When you do eat out, order an appetizer or split an entree with your dining companion to save on money and calories.

Plan your weekly menu

Meal planning is a great way to stick to a healthy diet without blowing up your budget. Map out your meals for the week — breakfast, lunch and dinner — and make a grocery list, taking into account what you already have in your pantry. This will keep you from over-shopping and helps guard against impulse purchases.

Planning will also help you maximize your grocery haul. Roasting a chicken one night? Shred the leftovers, add some salsa and toss it on a tortilla for lunch the next day. Or mix it up with some homemade mayo and a diced apple for a tasty chicken salad.

Buy frozen produce

Fruits and vegetables are a staple of any healthy diet. But fresh produce has a short shelf life and can be pricey, especially if the item isn’t in season. Opt for frozen goods to save money, without sacrificing nutritional value.

“Produce is flash frozen at peak ripeness, meaning flavor and nutrients remain intact,” says consumer savings expert Andrea Woroch. “Plus, frozen goods store longer than fresh and you can stock up during sale time.”

Opt for store brands

Generic products are often identical to their name-brand counterparts in ingredients and quality. Where they differ is price.

“Shoppers can save 30% to 50% when they buy generic or store brands of such healthy foods as whole wheat pasta, canned organic vegetables and more,” Woroch says.

A 16-ounce bag of frozen broccoli at Giant is just $1 if you opt for the store brand. Buy the Bird’s Eye brand instead and you’ll pay $2 for a 14-ounce bag.

Hit the tail end of the farmers market

The early bird gets the worm, or so the saying goes. But when shopping at your local farmers market, you can get the worm — or berries, greens and beets — for less if you show up late.

“I shop at farmers markets right before the market closes to get a discounted price on produce,” says Jerlyn Jones, a registered dietitian who works at a health center that serves low-income and homeless individuals. “Most times the farmers are happy to sell at lower price than take food back to the farm that didn’t sell.”

Many markets accept federal and state food benefits, such as the Supplemental Nutrition Assistance Program, commonly referred to as SNAP. Some even offer matching dollar programs, helping your benefits go further.

Try cheaper cuts of meat

Think beyond boneless, skinless chicken breasts, which can run anywhere from $4 to $9 per pound. Instead, snag some chicken legs or thighs for less than $2 per pound.

Not hungry for chicken? Pop a pork shoulder or beef roast into the slow cooker. Either will yield enough to feed your family with leftovers to spare, and both are more budget friendly than steaks or chops.

Shop at discount grocers

Eating healthy doesn’t require shopping at Whole Foods. Discount stores like Aldi and Trader Joe’s offer healthy, organic eats for less than mainstream grocery chains. A bag of quinoa, a protein-packed whole grain, is $2.99 at Aldi, compared with $5.99 at Giant.

Hitting multiple stores can also help stretch your budget. Check weekly circulars and look for coupons to determine which retailer offers the best deals for the items on your grocery list.

Kelsey Sheehy is a staff writer at NerdWallet, a personal finance website. Email: ksheehy@nerdwallet.com. Twitter: @KelseyLSheehy.

The article How to Eat Healthy on a Budget originally appeared on NerdWallet.

Wedding Budget Tips: Say ‘I Don’t’ to Debt

Posted on by Courtney Jespersen

Congratulations! You’re getting married — or at least planning to soon.

As you begin to ponder all-important decisions about cake fillings and floral arrangements, not to mention the dress, it’s important to take a step back. Weddings aren’t cheap, so you need to decide how much you can afford to spend on your big day.

Here are a few ways to keep your matrimonial expenses in check.

Something old

A budget is one of the oldest money-saving tools, and for good reason. If you track spending and limit expenses in discretionary categories, you can save more for a financial goal, like a wedding. Even if you’ve never built a budget before, now’s the time to start.

A budget should be put in place well before you book a venue, says Anne Chertoff, trend expert for WeddingWire, an online marketplace for wedding planning.

Before you lock in any elements of your wedding day, decide how much you can afford to spend. This will likely depend on how much you can save each month toward your goal. Then, make your selections accordingly. WeddingWire created a budget breakdown that estimates how much you can expect to pay in wedding categories like the venue and photography.

Don’t settle on a ballpark figure until you start calling vendors and caterers so you can make realistic estimates, says Ricky Eisen, founder of Between The Bread, a catering and events company in New York.

You’ll also want to prioritize which elements are most important to you, says Kristen Maxwell Cooper, executive editor of digital at The Knot, another wedding-planning online marketplace. For instance, some couples opt for a larger guest list, while others choose a more elaborate experience for a smaller set of guests.

Something new

Don’t feel tied to old-fashioned financial etiquette, at least for the most part. Payment traditions nowadays can be more flexible, Chertoff says. That’s good news, because as the bride or groom, you’re likely not on the hook for all of the wedding costs.

“Traditionally, the bride’s family pays for almost all of the wedding costs, but today the couple, both sets of parents and sometimes grandparents will all chip in to help cover the costs of the wedding,” Chertoff said in an email.

Tradition still persists in that the bride’s side typically foots a larger portion of the bill. On average, the bride’s parents contribute 44% of the overall wedding budget, the bride and groom contribute 42%, and the groom’s parents contribute 13%, according to The Knot’s 2016 Real Weddings Study. Your family situation may be different.

Talk with your relatives and significant other from the outset about all of the things you’ll be responsible for. This step goes hand-in-hand with creating a budget. Talking about finances may be difficult, but Nora Yousif, an associate vice president at RBC Wealth Management in the Boston area, says it’s essential.

“I get that this kind of conversation can be tough and a little uncomfortable to have, but it’s so important, so that way the couple that’s getting married will know exactly what their capacity is, how much they can work with and how much they’re each going to have to contribute to make the wedding happen,” she says.

A financial conversation can also open the door for the couple to talk about post-wedding money matters, like shared or separate checking accounts and life insurance, Yousif adds.

» MORE: 19 ways to save on a wedding

Something borrowed

You know that old saying, expect the unexpected? Borrow that as your motto for wedding budgeting. Unexpected costs can and will pop up, and it’s best to leave room for them upfront before you’re left at the altar with a stack of bills.

If it rains on your big day, you may find yourself chipping in for umbrellas, Chertoff says. And your officiant may need a taxi from the airport, Eisen adds. Build an “other” or “miscellaneous” category into your budget from the outset for things you may not anticipate.

Something blue

You don’t want your wedding expenses to leave you feeling blue — or send your bank account into the red. Some newlyweds resort to personal loans or credit cards to finance their nuptials, but starting your marriage in debt is always the wrong thing to do.

Don’t spend more on your wedding than you can afford. There are a few financial tools and tricks that can help.

Open a savings account to separate wedding money from day-to-day funds so you won’t be tempted to dip into wedding savings accumulated in a checking account. A savings account can also earn interest.

Use a rewards credit card responsibly. If you charge some of your wedding-related purchases and pay off the balance in full each month, you’ll be building credit and earning rewards at the same time. And you could use travel rewards for the honeymoon, Chertoff says.

Make adjustments to your monthly cash flow. Cut out unnecessary expenses in the months leading up to the wedding so you can bulk up your savings, Yousif advises.

Something to remember

Whatever you do, don’t get talked into spending more than you can afford. “I think the most vulnerable people in the universe are brides and their mothers,” says Eisen of Between The Bread. Stick to your budget and don’t cave in to vendor attempts to upsell you, she adds.

And don’t hurry your timetable. If the saving process looks like it’ll take longer than you expected, remember there’s nothing embarrassing about a long engagement or an intimate ceremony.

“Stay level-headed, remembering this is one day and you don’t want to start your union on weak financial footing and a basis for any kind of animosity,” says Yousif, a third-generation financial advisor.

Ready to get started? NerdWallet’s wedding calculator can estimate your total wedding cost. We pre-filled it with average 2016 wedding costs, as determined by The Knot.

Courtney Jespersen is a staff writer at NerdWallet, a personal finance website. Email: courtney@nerdwallet.com. Twitter: @courtneynerd.

The article Wedding Budget Tips: Say ‘I Don’t’ to Debt originally appeared on NerdWallet.

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How to Monitor Credit in (Exactly) 250 Words

Posted on by Bev O'Shea

Why should I monitor my credit? Regularly checking your credit reports and credit scores can help you catch and fix errors or detect identity theft. It also lets you see progress as you improve your credit.

Who needs to do it? Everyone, even people with no credit activity. If someone has your Social Security number, he or she may have applied for credit in your name.

How do I start? Get your free annual credit reports from the major credit-reporting bureaus, Equifax, Experian and TransUnion. Access them on AnnualCreditReport.com.

What am I looking for on my reports? Make sure:

  • Information is accurate and up to date
  • Accounts listed are actually yours
  • No one else’s information has gotten mixed into your file

What if I find errors? You can ask the credit bureaus to correct them.

Then what? Once you’ve made sure the credit bureaus have correct information, keep an eye on your credit score and watch for new information on your reports. You can use a personal finance website that offers free credit scores and credit report information, such as NerdWallet. Some credit card issuers also offer free scores.

What do I watch for with my score? Make sure good credit habits are accurately reflected. Paying on time and whittling down balances should build your score. A big swing you don’t expect could indicate identity theft.

How often can I check without hurting my score? As often as you like. Checking your own credit does not affect your score.

Bev O’Shea is a staff writer at NerdWallet, a personal finance website. Email: boshea@nerdwallet.com. Twitter: @BeverlyOShea.

The article How to Monitor Credit in (Exactly) 250 Words originally appeared on NerdWallet.

11 Ways to Save Money on Entertainment

Posted on by Lauren Schwahn

Tickets to concerts, plays, movies: you could live without them, but saving money shouldn’t mean sucking the fun out of life.

Here’s how to curb your entertainment spending without giving up your favorite pastimes.

1. Trim your services

Explore different pricing options for the services you already have. Take steps to lower your internet and cable bills, such as negotiating, downgrading your plans or bundling the two.

2. Seek an alternative to cable

If trimming won’t save you enough, cut the cord completely. Based on the average cable bill cost, this could put upward of $100 back in your pocket each month.

Axing cable doesn’t mean you’ll be starved for content. If you can survive without watching networks like CNN and AMC live, streaming services such as Netflix and Amazon Prime Video feature movies, TV and original series libraries. If you must have extra channels, consider replacing your traditional cable package with a service like Sling TV, which offers live TV for a fraction of the cost of cable.

Looking to save even more? If you subscribe to multiple streaming services, such as Netflix and Hulu, drop the one you use less often.

3. Share memberships

Split the cost of a paid membership with a friend or relative. For example, Amazon Prime memberships cost $99 per year, but members can share benefits with another adult for no extra charge by creating an Amazon Household. This gives both parties access to free movie and TV streaming, Prime shipping and Kindle books for about $50 each. Or you can cut your Costco membership fee in half by sharing with a spouse or roommate. Members receive a free household card that they can share with another person over 18 years old who lives at the same address.

4. Shop wholesale clubs

Wholesale clubs, such as Costco and Sam’s Club, have an abundance of affordable entertainment. They sell discounted movie and theme park tickets, restaurant gift cards and more in bulk, which is helpful, especially if you’re shopping for multiple people. You’ll also find inexpensive electronics, books, movies and games.

5. Get a library card

With a public library card in hand, the entertainment world is your oyster: You don’t have to buy, or even rent, to get your fix. Use your library card to surf the web or check out movies, books, audiobooks, games and music for free.

6. Attend free events

Take advantage of street fairs, concerts in the park or other free happenings in your community. Some venues that normally charge admission — such as museums, zoos and aquariums — host free-entry days once per month. Next time you plan a dinner out or hit the bars, look for joints that feature live music or comedy shows. Check your local newspaper, coffee shop or university for a list of upcoming events.

7. Volunteer

If the sporting event or concert isn’t free, you still might be able to attend at no cost by volunteering at the venue. Just be aware that you might not fully enjoy the event if you’re busy checking tickets or collecting trash.

8. Ask about discounts

Identification is all some people need to save money. Seniors, students and members of the military — or their families — often qualify for discounts at retailers, movie theaters, theme parks, national parks and restaurants. Kids often receive discounted admissions well.

If who you are doesn’t cut it, your membership status might. For example, AAA and AARP memberships come with savings benefits. Ask if you’re eligible for special rates when making entertainment purchases.

9. Buy used

Save serious money by buying televisions, tablets, computers, movies and video games secondhand. Shop thrift stores and used book stores, and check retailers like Best Buy and Wal-Mart for refurbished tech.

10. Use credit card perks

Under the right circumstances, plastic is more budget-friendly than cash. Your credit card might offer points or cash back on tickets to the theater or sporting events, electronics purchases and other entertainment-related transactions. Certain cards give exclusive discounts on or early access to event tickets through partnerships and promotions.

11. Cut back

An obvious way to save on entertainment without giving up your “wants” entirely is to adjust your budget and set a lower spending limit for entertainment expenses. For instance, rent a movie every other week instead of weekly, or refrain from buying the latest gaming console if your old one still works.

Lauren Schwahn is a staff writer at NerdWallet, a personal finance website. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

The article 11 Ways to Save Money on Entertainment originally appeared on NerdWallet.

Battling Your Servicer? How a Student Loan Ombudsman Can Help

Posted on by Kat Tretina

If you’re having issues with your student loan servicer and can’t resolve them, you can always contact a student loan ombudsman. An ombudsman reviews both sides of the problem to help identify a solution.

Find out what issues a federal student aid ombudsman can resolve and how to contact one.

What is a student loan ombudsman?

The Federal Student Aid (FSA) Ombudsman Group is an unbiased and confidential resource for when you have issues with your federal student loans. If your account is wrongfully in default or the balance is incorrect, an ombudsman can intervene.

A student loan ombudsman is a neutral contact, meaning they are not your advocate is a dispute. But they also are not on the loan servicer’s side, either. The ombudsman enters the conflict from a neutral standpoint. They then evaluate the data and enable both parties to come to a resolution.

An ombudsman can’t overturn decisions, but they can create an argument to present to the lender or collection agency. The ombudsman can help the decision makers make an informed ruling, which can help give you relief.

What kind of issues can an ombudsman resolve?

A student loan ombudsman can assist with many issues, including:

  • loan balance discrepancies
  • explaining interest or default charges
  • consolidation
  • bankruptcy
  • identifying repayment options

An ombudsman cannot make decisions about loan forgiveness or repayment plans, though. And if you have private student loans, you need to work with an ombudsman specializing in private loans. The federal student loan ombudsman cannot help you. To find a private loan ombudsman, you can contact the Consumer Financial Protection Bureau.

Before submitting a request

Reaching out to the FSA Student Loan Ombudsman Group should be a last resort. It’s a step you should only take when you have exhausted all other options. You should try to work directly with your loan servicer, credit bureau, or collection agency on your own first.

The Federal Student Aid Office created a resolution checklist you can use to help you manage problems on your own. Use the checklist and follow their recommended steps to try and resolve any issues. You should check off all the appropriate steps for your problem to ensure you did all you could before contacting the ombudsman.

Here are two common issues borrowers face and the steps you should take before reaching out to an ombudsman for common problems:

Incorrect loan balance

If your account balance has the wrong total, contact your loan servicer directly. You can gather bank statements or payment confirmation emails, and submit your proof to them.

When you contact the loan servicer, record the date, time, and name of any person you speak with and follow up via email or in writing. Save the originals of any payments, receipts, or emails about your issue. If you make payments electronically, download and save copies of the confirmation notifications.

If the loan servicer asks you to submit documentation, send in copies via certified mail, so you have a record of when they received it.

Inaccurate credit report

If you think your loan servicer sent incorrect information to the credit bureaus and it’s affecting your credit score, you can dispute the report.

If you contact Experian, Equifax, or TransUnion, and show documentation of your accurate loan balance and payments, they will correct your credit report. You can monitor your credit report and check for errors for free at AnnualCreditReport.com.

How to contact an ombudsman

If you’ve tried to resolve the issue on your own but failed, you can contact the student loan ombudsman online or through mail.

If you use the online form, you’ll need your:

  • Social Security Number
  • Name
  • Address
  • Phone number
  • Email address
  • Loan information
  • Details about the problem

They need all of this information so they can locate your federal student loan account.

If you prefer, you can send a written request. If you choose this option, make sure you include all the information above in your letter. You can send the request and the documentation to:

The U.S Department of Education
FSA Ombudsman Group
P.O. Box 1843
Monticello, KY 42633

When reaching out to the ombudsman, make sure you have the documentation about your situation ready. And be able to pinpoint exactly what the problem is and what resolution you want. The FSA Ombudsman Group has an information checklist you can use ahead of time to outline the essentials.

Next steps

After you’ve contacted the federal student aid ombudsman, they’ll research your situation and review the documentation you sent. They’ll work with you, your loan servicer, school, and even the collection agency managing your debt, if necessary.

From there, they will help you identify potential solutions and steps forward. For example, they may advise your loan servicer that the loan amount on your account is incorrect. Or they may refer you to another agency for issues outside their scope.

The ombudsman will ensure there is a resolution and will create a plan to avoid future issues from coming up.

Resolving issues

When you’re having issues with your student loans, it’s easy to feel helpless when you’re battling big loan servicers. But when you have tried everything you can think of and still haven’t been able to fix the issue, a student loan ombudsman can be an essential resource to find a resolution.

For more information about how to handle student loan disputes, learn more about defense repayment rules and how they can help you.

The article Battling Your Servicer? How a Student Loan Ombudsman Can Help originally appeared on studentloanhero.com.

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