Sweating The Big Stuff

This Should Be Your Monthly Financial To-Do List

Posted by Daniel Packer in Money • 0 Comments - Be The First!

For most of us, managing our money is just another chore, like mopping the floors or switching out the air filters. It’s something we dread doing, and if we’re lucky, we only need to check in on our money once a month or so.

Obviously, some things (like paying your bills) should be done more than once a month, but there are some financial to-do’s that you can tackle every four weeks. These tasks will keep you on track without overloading you with daily money chores.

Every 30 days or so, take an hour to address the following list. Trust me: it’ll give you some peace of mind and ensure you’re doing everything you need to in terms of financial security.

Do a Soft Pull on Your Credit Score

Although you don’t want to do a “hard” pull on your credit report too often, it’s smart to use one of your credit card accounts or another app to check your credit score without affecting it. This helps you monitor for unapproved activity and make sure your credit score is staying in good shape. Soft pulls aren’t as accurate as hard pulls, but they’re fairly close and harmless to your score.

If your credit score is lower than you want it to be, this is your chance to respond to negative changes quickly. Missed a payment? Call your credit card company and ask them to waive it. Lost points because you applied for a loan? Freeze your credit so that you’re not tempted to apply for anything else in the near future. By checking your credit score often, you’ll become more adept at making necessary changes to keep it at a healthy number.

Check in on Your Net Worth’s Progress

I’ve talked about the importance of net worth before, but it’s not something that’s worth checking on a daily basis because it typically grows slowly. However, you should take a look at your overall worth at least once a month to ensure it’s progressing the way you want it to. The better understanding you have of your big financial picture, the easier it is to make smart decisions over the course of the next month.

Look Over Your Spending Habits

I’ll admit that budgeting isn’t effective for every kind of spender, but everyone should know where their money goes each month. Take time to sit down and figure out how you’re distributing your spending. Are you spending an obnoxious amount on eating out? Is your insurance costing you more than a high percentage of your monthly income? Keep an eye on everything so you know when you’re overspending.

Move at Least 10 Percent into a Savings Account

It always blows my mind when I read that 39 percent of Americans have enough savings to cover a $1,000 emergency. About 44 percent can’t even cover a $400 emergency expense! No wonder most of us are incredibly stressed about money.

To prevent yourself from stumbling into debt or panic, try to squirrel away at least 10 percent of your monthly income to prepare for emergencies. Experts recommend that your monthly personal savings should be at least that high, but many people are only saving around 5.6 percent.

Take One Hour to Secure Your Financial Future

Today, roughly 49 percent of Americans are “concerned, anxious, or fearful about their current financial well-being.” If thinking about a monthly financial to-do list makes you queasy, know that you’re not alone.

However, I can assure you that being more aware of your money problems is the best route to take in the long-run. Just take one afternoon each month to sit down and take a hard look at your spending, debt, credit score, and savings. Your sacrifice will pay off for years in the future.

5 Money Moves to Make Before You Quit the Job You Hate

Posted by Daniel Packer in Money • 0 Comments - Be The First!

Every Monday morning is a drag. Whether it’s because you can’t stand your boss or you detest your work environment, it’s not uncommon for Americans to dislike their jobs. In fact, a Gallup Poll in 2017 found that roughly 85 percent of people hate their jobs. It’s safe to say that you’re not alone in your sentiments.

Before you call it quits at your current company, think about how the decision will impact you financially. There are a handful of steps you can take to minimize the blow to your savings and leave you in a secure position.

1. Give Yourself a Substantial Emergency Fund

If you’re planning to quit your terrible job without another gig lined up, you’ll need to live off your savings for a bit. That means your savings need to be substantial. According to experts at The Balance, you should have a minimum of three months’ of living expenses socked away. I personally recommend hoarding six months’ worth of living expenses before exiting.

This will give you the peace of mind you need to choose your next job without desperately leaping at the first paying opportunity you stumble across. Plus, you’ll be equipped to handle any unexpected financial emergencies that pop up in the next few months.

2. Determine What Your Unemployment Budget Will Look Like

When you’re going without a paycheck, you’ll need to live differently than you do now. Don’t wait until you give your two-weeks notice to decide how you’ll survive. Plan ahead; determine what your budget will look like once you’re not employed. What unnecessary expenses can you cut? Where will you need to start saving more?

3. Take Care of Your Medical Needs While You Still Have Insurance

Depending on when you quit, your insurance may cover you for up to a month after you leave the company. Still, you should take care of as many medical procedures and appointments as possible before quitting. Go to the dentist, schedule your annual checkup, and refill your prescriptions. It’s better to be safe than sorry when it comes to medical expenses.

You may also want to look into your next insurance company if you plan to be unemployed for more than a couple of weeks. You never know when your health can take a turn. Prepare for the worst by doing your research before you’re in a sticky situation.

4. Start a Side Hustle That Can Keep You Afloat

Just because you don’t have another full-time job lined up doesn’t mean you have to go without any income after you quit. Before you officially leave, begin building a side gig that can provide you with a little bit of extra cash each month. That way, when you finally do quit, you’ll know that you can keep yourself afloat with your side hustle until you can find your next source of employment.

5. Tackle Your Outstanding Debt

Unfortunately, if you’re waist-deep in personal debt, quitting right now might not be in the cards for you. People usually acquire more debt, not less, when they’re unemployed. Get your current debt to a manageable place before quitting. If that means suffering through another few months with your current workplace, so be it. You certainly don’t want to jump ship if it’ll cost you your financial security, unless the situation is dire.

The Bottom Line

Even if there’s a part of you that wants to make a scene and quit your job today, think ahead. How will the decision impact your financial future? What can do you do before leaving to soften the blow to your bank account and mental health? These tips will help you establish a bit of a safety net before you enter the unknown world of unemployment.

Frequently Asked Questions on Informal Debt Agreements

Posted by Daniel Packer in Personal Finance • 0 Comments - Be The First!

A increasingly popular debt relief option for many is that of a Informal Debt Agreement. This allows you to negotiate your debts and repayments without the legally binding documentation that lands your name on the National Person Insolvency Index (NPII).

If you are having trouble paying down your debts, feel inundated with collection calls, or have to resolve debts with multiple creditors, you might consider negotiating an informal debt agreement. We’re going to look at the most frequently asked questions about informal debt agreements and shed some light on how they are beneficial. Dealing With Debt has provided a quick checklist on FAQs on informal debt agreements.

What’s the difference between an Informal and Formal Debt Agreement?
What if a creditor doesn’t accept my agreement?
Can an Informal Debt Agreement affect my credit score?
Are there any debts that are excluded from an Informal Agreement?
How can I make payments with my Informal Debt Agreement?
Is there a limit to the amount of debt that I can negotiate in an Informal Debt Agreement?

What’s the difference between an Informal and Formal Debt Agreement?

The key differentiation between Formal and Informal Debt Agreements is that a Formal Debt Agreement is managed through the Australian Government, whereas Informal Agreements are negotiated independently.

Informal agreements do not appear on your credit report, unlike formal agreements. They also are not binding- meaning the creditor may still choose to take further legal actions against you. Creditors are not required to accept your debt agreement.

If you have a job or professional license, you may find that they are affected by a Formal Agreement because of its impact on your credit rating.

What if a creditor doesn’t accept my agreement?

Because creditors are not required to accept any informal agreements, you may find that they choose not to accept yours. If so, you’ll still be required to maintain your minimum repayments with the creditor.

Can an informal debt agreement affect my credit score?

No. Once you create an arrangement with your creditor, your responsibility will lie in maintaining your payments according to your arrangement. If you miss any payments, the creditors may begin the process of collections. If you’ve previously had any defaults on your account that have made it to your credit rating, the informal agreement will not remove them from your report.

Are there any debts that are excluded from an Informal Agreement?

Fortunately, no. Formal Debt Agreements only apply to unsecured debts. Your Informal Agreement, however, can include all debts. This can be secured and unsecured debt, Centrelink payments, joint debts, business-related debts, and more. All that’s required is that your creditors accept the terms you propose for how you intend to make repayments under your specific circumstances.

How can I make payments with an Informal Debt Agreement?

It’s common for you to set up a direct debit from a bank account that will serve as a singular payment, which covers all the debts that are listed and covered in your Informal Debt Agreement. They are created to be affordable payments that come out in conjunction with your pay schedule.

Is there a limit to the amount of debt I can negotiate in an Informal Debt Agreement?

This is another flexible option with Informal Debt Agreements. There isn’t a limit to how much debt is covered when negotiating these terms. There is no minimum amount of debt required to qualify for an Informal Agreement, and there is no maximum amount that would exclude you from this option.

We know that sometimes debt becomes unmanageable and overwhelming. Explore your options and get on track.