The Fastest Proven Ways to Destroy Debt

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Ever since I wrote my first book, “Life or Debt,” nearly 20 years ago, I’ve been trying to guide readers and viewers to a debt-free life. Why? Because debt is like a cancer that eats away at your financial future.

The money you pay to use other people’s money — aka, interest — is money that’s not around to help you reach your financial goals.

Destroying debt is easier said than done, but whether you carry a small balance on your credit card or have a million-dollar mortgage, there are specific steps you can take to become debt-free at the earliest possible moment.

In this week’s “Money!” podcast, we’re going to find out what they are. As usual, my co-hosts will be financial journalist Miranda Marquit and producer Aaron Freeman.

Sit back, relax and listen to this week’s “Money!” podcast:

Not familiar with podcasts?

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About me

I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


8 Surprising Things No One Tells You About Retirement

Surprised retiree
cheapbooks /

Most of us spend decades working and dreaming of a day when we can retire. But when we finally arrive at our post-work destination, it’s not unusual to find ourselves in a world of surprises.

Knowing what to expect in advance can help you prepare for — and adjust to — life in your golden years. The following are some key things no one tells you about before you retire.

Housing will remain your biggest expense

Senior couple at home
Monkey Business Images /

Many retirees dream of paying off their mortgage so they will be free to spend money on travel and other activities. But the reality is that housing likely will remain the biggest expense in your budget for as long as you live.

U.S. households led by someone age 65 or older spent an average of $17,472 on housing in 2019, as we detail in “Here’s How Much Retiree Households Spend in a Year.” That is easily more than these households spent in any other expense category.

Work will not end — it will simply change

older worker
michaeljung /

You will probably work in retirement — and not just because you have to. More than 70% of people say they want to work during retirement, according to the findings of “Work in Retirement: Myths and Motivations,” a joint study by Merrill Lynch and Age Wave.

As you age, chances are good that the nature of work will change, though. The study found that 3 in 5 retirees plan to launch a new line of work that differs from what they have done in the past. Working retirees also are three times more likely than pre-retirees to own their own business.

If you’ve never volunteered before, you won’t start in retirement

Senior volunteer /

About 90% of Americans say they would like to do volunteer service for someone or some cause that needs their help, but just 25% actually do so, according to the Stanford Center on Longevity.

When asked why they don’t follow through on the wish to help, Americans most commonly cite a lack of free time. Yet, retirees — with plenty of time on their hands — do not volunteer at rates that are any higher than those of workers.

And among people who did not volunteer during their working years, just one-third finally begin volunteering during retirement.

Retirement can be especially lonely for single men

Sad senior man

In some ways, retirement is more challenging for women. Because they live longer than men, they will have to stretch the funds from their nest eggs over a longer period. To make matters worse, women generally start with less in retirement savings than men do.

But women who are single have one big advantage over their male counterparts: They are less likely to be lonely.

Just 48% of retired men who live alone say they are very satisfied with the number of friends they have, according to an analysis of Pew Research Center survey findings.

However, a robust 71% of women who live alone are satisfied with the number of friends they have.

Health issues likely will catch you by surprise

Lisa F. Young /

Slightly more than one-third of retirees say health problems have put a damper on their retirement years, according to a survey from the Nationwide Retirement Institute. And 75% of those folks say their health problems emerged sooner in life than they expected.

To make matters worse, about one-quarter say health-related expenses keep them from living the retirement of their dreams. Such sobering numbers underscore why many people planning for retirement would benefit from opening a health savings account and stashing as much cash as possible into that HSA.

As you grow older, you will feel younger

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Everyone has heard the cliche: “You’re only as old as you feel.”

If that is true, here is some good news for retirees: Paradoxically, the older people get, the younger they are likely to feel, according to “Growing Old in America: Expectations vs. Reality,” a paper from the Pew Research Center.

For example, among people ages 18-29, about half say they feel their age, one-quarter feel older than their age and another one-quarter feel younger.

However, among those 65 and older, 60% say they feel younger than their age and 32% say they feel exactly their age. Just a scant 3% say they feel older than their age.

Your early golden years might not gleam as you had hoped

Unhappy senior woman
Asier Romero /

Nearly one-third of recent retirees — 28% — say life is worse in retirement than it was during their working years, according to the Nationwide Retirement Institute survey.

What is the source of this gloom and doom? Money — or lack thereof.

Among those who lament post-work life, 78% cite a lack of income and 76% cite a high cost of living as the top factors in giving them the blues during their golden years.

The message to future retirees is obvious: Save early, save often and keep saving. For more tips, check out “9 Ways to Rescue Your Retirement in 2020.”

Initial disappointment will give way to later satisfaction

Happy senior couple
David Tadevosian /

If you are among those disappointed with retirement, take heart: As with so many things, retirement is what you make it. You can take steps to boost your overall satisfaction with life during your golden years.

For example, researchers at the University of Exeter in the United Kingdom found that people who volunteer are less likely to be depressed and more likely to be satisfied with life. There is even evidence that volunteers live longer.

So, if retirement has got you down, stop gazing at your navel and start looking outward at ways to help others.

A lot of other research has found that a happy marriage and spending time with close family and friends can greatly boost retirement satisfaction.

Even if you don’t take steps to make yourself happy, you might just end up feeling joyous anyway. The Pew Research Center found that 45% of adults 75 and older believe life has turned out better than they expected.

Just 5% say it has turned out worse.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


9 Hidden Ways to Get More Out of Amazon

Woman shopping online
Jelena Zelen /

While a Prime membership is the single best way to get the most out of Amazon, the retailer’s website offers plenty of features for everyone.

They can be overlooked easily, but these hidden features can save you money, streamline shopping and even help eliminate clutter.

Keep reading for lesser-known tactics for getting more out of Amazon.

1. Use a price tracker

Stock market
violetkaipa /

Honey, a browser extension, and CamelCamelCamel, a website and extension, are free tools that offer Amazon price tracking.

That means you can use one of these tools to find out how the price of a particular product on Amazon has changed over time, and to keep tabs on its price going forward. This helps you get a better deal.

Learn more: We explain more in “7 Free Tools for Saving More Money at Amazon,” or you can head straight to Honey’s website or

2. Get stuff for free

A woman smiles while enjoying reading an e-book on an e-reader and lying on the grass outside
baranq /

Who doesn’t love free stuff? You can get plenty of it on Amazon, regardless of whether you have a Prime membership.

Freebies range from e-books to valuable home goods that you could receive by registering for wedding gifts from companies such as All-Clad, Mikasa and Kenmore.

Learn more: See our article “10 Things That Really Are Free on Amazon” for details on these and other freebies offered through the site.

3. Shop the secret departments

PixieMe /

Amazon is already known for its bargain prices on many goods, but there are additional savings to be found if you know where to look.

Visit the “Bargain Finds” page for low-priced goodies of all kinds. Or hit the Outlet to find discounted overstock items. You can also visit the Renewed section for refurbished electronics.

Learn more: More on these and other secret departments can be found in our story “7 Secret Departments of Amazon You Should Know About.”

4. Trade your clutter for gift cards

Amazon gift card
Nicole S Glass /

Minimalists might bemoan Amazon as a way to quickly fill up your house with unnecessary purchases, but the retail giant also can help you cut your clutter.

The Amazon Trade-In program lets customers send in unwanted electronics, books and more. In return, they receive an Amazon gift card.

Learn more: Visit the Amazon Trade-In program page, where you can also see how much credit you could get for a particular piece of clutter that’s sitting around your home. Click on a product category to get started.

And for more tips like this, check out “5 Ways You Can Score Free Amazon Gift Cards.”

5. Check for coupons

carballo /

Yes, Amazon has coupons — lots of them. No scissors necessary: You can “clip” these digital coupons with the tap of a button, either on a product’s webpage or Amazon’s coupons page.

Learn more: Visit the “Amazon Coupons” webpage to view all coupons that are currently available.

6. Buy exclusive generic brands

Ken Wolter /

It’s well-known that generics can cost significantly less than their brand-name counterparts, but did you know that Amazon has its own generic brands as well?

They go by names like AmazonBasics and Amazon Elements, and some products from these brands are among the site’s bestsellers.

Learn more: Visit Amazon’s “Explore Our Brands” page to get a quick sense of the array of brands and products.

7. Subscribe and save

Mom and daughter brushing teeth together,
Creativa Image /

Put your shopping on auto-pilot using Amazon’s Subscribe & Save feature. A wide variety of products are eligible for Subscribe & Save orders — from toothpaste and diapers to dog food.

You select the items and the frequency of the shipments. Amazon will not only send the items to you automatically at the frequency of your choice, but it also will ship them for free.

What’s more, you’ll see extra savings of 5% or, if you subscribe to five or more items, up to 15%.

Learn more: Visit Amazon’s “Subscribe & Save” page.

8. Return purchases to a Kohl’s or UPS Store

Eric Glenn /

Amazon has made returns easy for Prime and non-Prime members alike. You no longer have to hunt down a box and packing tape or print a shipping label.

Instead, you can simply take the item to your local Kohl’s or UPS Store for a free return. You can do this at certain Whole Foods Market locations as well.

You will receive a QR code from Amazon. Then, at the store, an associate will scan the code, take the item you are returning, and package it up and ship it back to Amazon for you.

Learn more: To find out whether this return option is available for a particular item that you wish to return, log in to your Amazon account and go to Your Orders, Amazon says.

9. Use old boxes to donate to charity

Amazon packages
Hadrian /

Wondering what to do with the empty Amazon boxes collecting in your garage? You could recycle them — or you could use them to send your unwanted goods to charity instead.

Amazon partners with Give Back Box to encourage people to declutter their homes and donate to charity.

It works like this: After you’ve unpacked your Amazon order, look around your home for items that are in good condition but that you no longer need or want. Then, put them in the Amazon box, go to the Give Back Box website for a free shipping label and send your excess off to a good cause.

Learn more: Visit the Give Back Box website. To print a free shipping label, click on Amazon’s logo.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


Where Are Millennials Buying Homes?

Millennial couple walking through their new neighborhood as homeowners
Monkey Business Images /

This story originally appeared on Porch.

Millennials have a notoriously low homeownership rate, which despite inching upward in recent years is far lower than the rates of previous generations at the same age.

The Urban Institute finds that a variety of factors contribute to depressed homeownership among young adults, including a propensity to delay marriage, increased student loan debt, lack of affordable housing and geographic preferences.

According to the latest data from the U.S. Census Bureau, the national homeownership rate is 63.9%. For millennials, the homeownership rate stands at just 39.5%.

Recent evidence shows that millennials are fleeing large, more expensive cities for more affordable, smaller locales. While millennials helped boost urban growth after the Great Recession, in recent years, the population of older millennials and younger Gen Xers has declined in these cities.

The COVID-19 pandemic may continue to fuel this trend, as dense city living becomes less attractive. Additionally, the economic and financial uncertainty that many Americans now face will make buying a home in pricey, large cities less feasible.

To find the metropolitan areas where millennials are buying homes, researchers at Porch, a marketplace for home services, analyzed the latest data from the U.S. Census Bureau, the Bureau of Economic Analysis and Zillow. The Pew Research Center’s definition of millennials is people born from 1981 to 1996; therefore, people ages 22-37 were used in the analysis of the Census data.

The researchers ranked metro areas according to the homeownership rate among millennials. In the event of a tie, the metro with the larger number of millennial homeowners was ranked higher. Researchers also calculated the median home price, the typical monthly mortgage payment, median earnings for full-time millennial workers and the cost of living.

Here are the large metro areas (with populations above 1 million) with the highest rate of homeownership among millennials.

15. Hartford-West Hartford-East Hartford, Connecticut

The skyline of Hartford Connecticut, where median rents are relatively low
Sean Pavone /
  • Millennial homeownership rate: 43.4%
  • Median home price: $241,177
  • Monthly mortgage payment: $856
  • Median earnings for full-time millennials: $50,000
  • Cost of living: 2% above average

14. Indianapolis-Carmel-Anderson, Indiana

f11photo /
  • Millennial homeownership rate: 43.7%
  • Median home price: $187,285
  • Monthly mortgage payment: $664
  • Median earnings for full-time millennials: $40,000
  • Cost of living: 8% below average

13. Oklahoma City

4kclips /
  • Millennial homeownership rate: 43.7%
  • Median home price: $160,931
  • Monthly mortgage payment: $571
  • Median earnings for full-time millennials: $37,000
  • Cost of living: 9% below average

12. Nashville-Davidson–Murfreesboro–Franklin, Tennessee

Nashville, Tennessee
jdross75 /
  • Millennial homeownership rate: 44.1%
  • Median home price: $287,200
  • Monthly mortgage payment: $1,019
  • Median earnings for full-time millennials: $40,000
  • Cost of living: 5% below average

11. Raleigh, North Carolina

Raleigh, North Carolina
Sean Pavone /
  • Millennial homeownership rate: 44.1%
  • Median home price: $290,686
  • Monthly mortgage payment: $1,031
  • Median earnings for full-time millennials: $44,000
  • Cost of living: 3% below average

10. Baltimore-Columbia-Towson, Maryland

Baltimore, Maryland
ESB Professional /
  • Millennial homeownership rate: 44.3%
  • Median home price: $297,468
  • Monthly mortgage payment: $1,055
  • Median earnings for full-time millennials: $50,000
  • Cost of living: 7% above average

9. Rochester, New York

Rochester, New York
Sirichai netthong /
  • Millennial homeownership rate: 44.8%
  • Median home price: $161,366
  • Monthly mortgage payment: $573
  • Median earnings for full-time millennials: $40,000
  • Cost of living: 2% below average

8. Birmingham-Hoover, Alabama

Birmingham, Alabama
Sean Pavone /
  • Millennial homeownership rate: 45.6%
  • Median home price: $171,641
  • Monthly mortgage payment: $609
  • Median earnings for full-time millennials: $40,000
  • Cost of living: 11% below average

7. Louisville, Kentucky

A historic district of Louisville, Kentucky
Philip Rozenski /
  • Millennial homeownership rate: 45.7%
  • Median home price: $185,506
  • Monthly mortgage payment: $658
  • Median earnings for full-time millennials: $40,000
  • Cost of living: 10% below average

6. Pittsburgh

esb-professional /
  • Millennial homeownership rate: 45.9%
  • Median home price: $162,803
  • Monthly mortgage payment: $578
  • Median earnings for full-time millennials: $43,000
  • Cost of living: 7% below average

5. St. LouisGateway Arch in St. Louis, Missouri /

  • Millennial homeownership rate: 46.7%
  • Median home price: $183,000
  • Monthly mortgage payment: $649
  • Median earnings for full-time millennials: $41,600
  • Cost of living: 9% below average

4. Detroit-Warren-Dearborn, Michigan

Detroit, Michigan
Susanne Pommer /
  • Millennial homeownership rate: 47.4%
  • Median home price: $187,529
  • Monthly mortgage payment: $665
  • Median earnings for full-time millennials: $41,500
  • Cost of living: 5% below average

3. Salt Lake City

Salt Lake City, Utah
Joe Guetzloff /
  • Millennial homeownership rate: 47.9%
  • Median home price: $391,450
  • Monthly mortgage payment: $1,389
  • Median earnings for full-time millennials: $40,000
  • Cost of living: 1% below average

2. Minneapolis-St. Paul, Minnesota

Lake Calhoun, Minneapolis
Roger Siljander /
  • Millennial homeownership rate: 48.6%
  • Median home price: $301,440
  • Monthly mortgage payment: $1,069
  • Median earnings for full-time millennials: $48,300
  • Cost of living: 3% above average

1. Grand Rapids-Wyoming, Michigan

Grand Rapids, Michigan
Henryk Sadura /
  • Millennial homeownership rate: 56.8%
  • Median home price: $227,246
  • Monthly mortgage payment: $806
  • Median earnings for full-time millennials: $40,000
  • Cost of living: 8% below average

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


4 Credit Repair Company Lies — and How to Fix Your Score Without Help

Man worried about repairing his bad credit
Photo by fizkes /

Buying new furniture with a credit card, financing a car and agreeing to that variable-rate mortgage all seemed like good ideas. That is, until you couldn’t make your payments.

Now, your credit score has dropped through the floor, and it feels like you’ll never get back on your feet.

Never fear! A credit repair company can undo the damage and have your score back to near-perfect condition in no time.

Or can they?

Credit repair scams are rampant. Sure, there are some legitimate companies that will help sort out the details of your credit report, but many others are simply preying on desperate people.

Before you fork over what’s left of your hard-earned money, know that the following things you might hear from credit repair companies are all untrue.

Lie No. 1: You can start over

Wouldn’t a do-over be nice? Some credit repair companies may say you can do just that. They may say you can get a new identification number that will make it easy to rebuild credit and erase past mistakes. Some companies may refer you to the IRS website to request an employer identification number, or EIN.

The problem is that it’s illegal to request an EIN under false pretenses. It’s also illegal to lie on a loan application. And we certainly shouldn’t have to tell you that it’s illegal to use a fake Social Security number.

Lie No. 2: It’s OK to fudge your income

A sketchy credit repair company may tell you it’s OK to inflate your income on an application to boost your chances of approval. No one will ever know, they might say.

But the credit repair company is lying when it says this practice is OK. It’s not. As you may have already guessed, it’s illegal to lie about anything on a credit application.

For more sage advice on deterring fraudsters, check out: “10 Golden Rules to Avoid Getting Scammed.”

Lie No. 3: You have to pay upfront

If the first thing a credit repair company says to you is “show me the money,” you need to show it the door. You don’t need to pay a retainer or an upfront fee to use a credit repair company. In fact, the federal Credit Repair Organizations Act prohibits companies from demanding payment in advance.

What’s more, federal law requires that credit repair contracts be in writing. If a company doesn’t provide this and insists on being paid upfront, you know you’re dealing with a scam.

Lie No. 4: Only we can help you

This lie makes people think they are trapped into using a company’s service. The reality is that you don’t need to pay anyone to fix your bad credit. There is nothing a credit repair company can do for you that you can’t do for yourself.

At Money Talks News, we are always on the lookout for bad actors who take advantage of consumers. You can learn more about all manner of common scams by checking out our latest scam stories.

How to repair bad credit on your own

So, how do you repair your credit on your own? It’ll require a little work, but you can do exactly what a legitimate credit repair company would do. Even better, you don’t have to pay a dime.

First, you need to request copies of your free credit reports. You can get them through That’s the official place to request your reports, and you’re entitled to one free report from each of the three major credit bureaus — Equifax, Experian and TransUnion — every 12 months.

Other websites may try to charge you for this information. So, if you’re asked for your credit card information, you’re in the wrong place.

For step-by-step instructions for requesting your credit reports, see “How to Get Your Free Credit Report in 6 Easy Steps.”

Next, comb through those reports for any incorrect information. Did you pay off that balance? Were you only late on that account once rather than the three times reported? Circle everything that may be wrong.

Finally, send letters of dispute to the credit bureaus asking them to review the info. You can even do this online now.

If the credit bureaus side with you, the negative reports will drop off and your score will rebound. Otherwise, you’ll need to wait as long as seven years in some cases for the info to disappear.

Still feeling overwhelmed? We can also connect you with a legitimate company that may be able to help.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


7 Tricks to Cleaning Your Bathroom Faster

Woman cleaning her bathtub
Serhii Krot /

Losing the battle to keep your bathroom clean? We’re here with some reinforcements that can help you turn the tide.

The following hacks can help get your bathroom sparkling and smelling great without a lot of elbow grease. Most won’t cost you much more than a little time.

Use canned air or a dishwasher to clean vents

ucchie79 /

When your bathroom vent cover gets dirty, one quick and easy solution is to clean it with a can of compressed air — just as you would with your computer fan.

If you don’t have compressed air handy, and your vent is easy to take apart, you may be able to toss the vent cover into the top rack of your dishwasher, as we detail in “17 Unusual Things You Can Clean in a Dishwasher.”

Use a drill to scrub your tub

Woman with drill

For those hard-to-get-rid-of stains, you’ll need a little help. Putting a scrub brush at the end of a drill can add just the “oomph” you need without muscle strain.

You can try to make a homemade version of this. But it probably makes more sense to buy a ready-made version.

Hang a magnetic strip to gather metal items

A young woman cleans her bathroom mirror with a spray bottle and squeegee
BAZA Production /

Are your tweezers, scissors, nail clipper and other small metal items scattered all over the place? Hang a magnetic strip — such as a magnetic knife rack or magnetic tape — along the bathroom wall and keep those items together and in sight at all times.

You also won’t have to move them out of the way each time you clean the countertop.

Wipe black tea on your mirror

Syda Productions /

Forget the expensive cleaner and simply brew up a strong batch of black tea. Apply it with a lint-free cloth to your mirror, and the tannic acid will cut through grime and get the surface clean, says glass servicing company Glass Doctor.

If you’re out of black tea, vinegar will also do the trick. We’ve got the recipe for this DIY all-purpose cleaner in “Never Buy These 7 Overpriced Cleaning Products Again.”

Soak your shower head in a vinegar bath

Woman cleaning shower head
absolutimages /

Had enough of the gunk clogging up the openings on your showerhead? The white stuff is mineral deposits from hard water. Luckily, the acetic acid in vinegar can dissolve that buildup.

Just fill a small plastic bag with distilled white vinegar, place the shower head inside the bag and seal it with a rubber band. Let it sit for at least an hour, then remove the bag and rinse. A little scrubbing with an old toothbrush helps break up any remaining deposits.

Wrap a screwdriver to clean crevices

MIA Studio /

For those hard-to-reach places — think the crevices of toilets — take a disinfecting wipe, wrap it around a flat-head screwdriver end, and push the end into the crack or crevice.

Gently move the screwdriver horizontally across the spot, and you’ll clean the area and kill any lingering smells.

Clean faucets and other chrome with lemon juice

Pat_Hastings /

Faucets looking a little dingy? Rub a little lemon on them, and the citric acid will make the water spots disappear. The easiest way to do this is to cut a lemon in half, and rub the faucets with the exposed end.

Again, the acetic acid in vinegar will also do the trick here.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


7 Surprising Things That Damage Your Credit Score

Woman sitting on exercise ball
Photo by cunaplus /

The next time you check your credit score, you might discover it has taken a tumble because of a seemingly small mishap on your part.

This happened to me once because I misplaced a bill for a whopping $12.70. My nonpayment ended up being reported to credit bureaus, also known as credit-reporting agencies.

The result was an 80-point decrease in my credit score and several months of regret. My credit score rebounded, but this small oversight still haunts me.

With my precautionary tale in mind, here are some other types of mishaps that can damage your credit score.

1. Car rental reservations

Planning to rent a car? If you use a debit card to make the reservation, the rental car company might require a credit screening. That can ding your credit score, as we detail in “9 Things You Should Never Pay For With a Debit Card.”

Here’s a better option: Confirm the reservation with your credit card to avoid the unnecessary credit inquiry. Then, settle the final bill with your debit card upon returning the vehicle.

2. Closing credit cards

Closing a credit card account sounds smart, but it actually can hurt your credit score. In fact, we cite it in “10 Common and Costly Credit Missteps.”

Closing an account affects what’s known as your credit utilization ratio. That is the percentage of your available credit that you are using.

This ratio affects both FICO credit scores and VantageScore credit scores. The lower your ratio — meaning the least of your available credit that you’re using — the better your credit score will be.

Closing a credit card account you’re not using decreases your available credit, however. That increases your credit utilization ratio, hurting your credit score.

3. Past-due rent payments

Fail to pay the rent on time, and the landlord might report your delinquency to credit bureaus.

If you’re having trouble with the rent, meet with your landlord and propose an alternative payment plan until you’re caught up. That way, you can salvage your good name and credit.

4. Defaulting on recurring bills

If you are even slightly past due on a bill from a cellphone or utility company or other provider of recurring services, chances are you’ll receive several notices before services are terminated.

But once the provider has had enough, expect to be turned over to debt collectors and subsequently reported to the three main nationwide credit-reporting companies — Equifax, Experian and TransUnion. Don’t ignore correspondence or fail to settle outstanding obligations.

5. Breached gym membership contracts

Even if you are tired of forking over hard-earned cash each month for a gym membership you aren’t using, don’t just walk away.

Properly close the account, or it could cost you in the form of early termination penalties and a damaged credit score.

6. Outstanding medical bills

If you’re having trouble paying medical bills, make sure you tend to the matter promptly. Request a payment plan, for example.

Ignoring collectors by muting the ringer on your phone or sending their calls to voicemail can eventually result in a blemish — in the form of a collection account — on your credit report.

Due to credit industry changes announced several years ago, medical debts are reported only after a 180-day waiting period designed to allow enough time for insurance payments to be applied. And in general, credit-reporting agencies are placing less weight on outstanding medical debt.

Still, tending to medical bills promptly can help you avoid a credit blemish in the first place.

7. Too many credit card applications

Ten percent of your FICO credit score is determined by how you shop for credit. According to Fair Isaac Corp., or FICO, the company behind FICO scores:

“People tend to have more credit today and shop for new credit more frequently than ever. FICO Scores reflect this reality. However, research shows that opening several new credit accounts in a short period of time represents greater risk — especially for people who don’t have a long credit history.”

So, remember this the next time you’re offered a store credit card at the checkout counter as part of a deal that could save you some significant cash on the purchase. The price of that one-time savings might be a lower credit score.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.


6 Ways to Have a Debt-Free Retirement

If you are a typical American approaching retirement, chances are you’re carrying some form of debt. In fact, the median debt per American household is $2,300, while the average debt stands at $5,700, according to a study by Lending Tree.

But retiring with debt can be detrimental to retirement planning, says credit counselor Thomas Nitzsche, of ClearPoint Credit Counseling Solutions.

“High levels of debt can leave aging consumers unable to put money aside for other financial goals,” Nitzsche says. “Unfortunately, it is common for seniors to be retiring with debt.”

Most financial advisors suggest people pay down their debt to a manageable amount – at most $5,000 – and have enough in savings for emergencies, maintenance costs, and leisure expenses.

However, a debt-free retirement is ideal. When you retire, you are living off a fixed income – meaning you are not making any more money. So spending your limited resources on debt (and interest on the debt) is like throwing your retirement money out the window. (When you are working, debt is less damaging to your finances because you are earning money.)

Kansas City-based financial advisor Tracy St. John, with Financial Avenues, LLC., and Steven Van Metre, who provides retirement planning through the firm Steven Van Metre Financial, based in Bakersfield, California, both say there are plenty of ways people can effectively manage their debt when planning for retirement.

Here are five strategies they suggest for a debt-free retirement:

According to St. John, frequent restaurant trips or extended cable packages might make life a little more comfortable, but these are living expenses that can be cut back to help manage debt.

Instead of paying $20 here and there on unnecessary services or products, advisors suggest people put that money toward paying down their debt.

“Even if it’s $25 a paycheck, it’s something they weren’t doing before,” St. John says.

Setting a strict budget and adhering to it can help. People should budget for current and future expenses, while also factoring in debt and expected retirement income.

They should plan to have no more than $5,000 in debt, or should make sure they can pay off their debt within the first three years of retirement.

“Most people spend more money in their first three years, and when you have debt on top of that, the reality is that most people won’t pay it off,” Van Metre says. “They should have a budget and stick with it so they can build into their budget their debt payments.”

Using a retirement calculator can help people determine what they will need to have saved or paid off before leaving the workforce.

Both St. John and Van Metre suggest people work longer than planned, or pick up part-time jobs, during retirement to pay down debt.

“If you’ve got $10,000 on your credit card and it’s a matter of working six more months [to pay it down], it’s totally worth it,” Van Metre says. “If someone retires with that debt, they’ll inevitably take on another job.”

If retiring with debt, St. John suggests looking into odd jobs, such as mowing neighbors’ lawns, fixing meals for busy parents, or babysitting.

If possible, retirees should look into ways they can restructure or refinance their debt to find lower interest rates, Van Metre says.

For many, the quick solution to getting rid of debt often boils down to liquidating assets. But dipping into retirement savings will leave little money remaining for living expenses during retirement.

Instead, they should, for example, look for credit cards that offer 0% interest for a period of time, or have lower interest rates than their current cards.

Ways you can restructure your debt include:

Finally, consulting a financial advisor, retirement planner, or debt counselor years prior to retirement can increase the likelihood of successfully managing debt.

Ideally, people should seek advice 10 years before retiring. However, doing so five years prior would be realistic and would still allow time for financial planning. The more time left before retiring, the better chance of achieving a debt-free retirement.

“Time gives people the opportunity to put things into perspective and gives us the opportunity to guide them and make their retirement a reality,” Van Metre says.

Search for a retirement financial advisor to start the planning process.

Truly the best way to be out of debt is to avoid it like the plague in the first place.

Debt can be so tempting.  If you feel like you really want or need something, consider tips for avoiding easy debt.


The Worst and Best Ways to Destroy Debt

Do you feel buried by a mountain of debt?

Perhaps you have multiple credit card bills each month, with balances that are growing. Or, maybe a student loan obligation hounds you. And that car payment sure doesn’t help.

There are smart ways to dig your way out of debt. By contrast, pick the wrong way, and you’ll make a bad situation much worse, adding years and thousands of dollars to your burden.

Following are some of the worst ways to pay down debts — and tips on how to get the job done right.

The worst ways to pay off debt

There are some telltale signs that debt is getting the best of you. One is choosing to pay some bills and not pay others because there’s not enough money in your account.

Maxing out credit cards is another sign you have too much debt, as is using credit cards even though you swore you’d leave them in the sock drawer.

If any of these sound familiar, take some steps to pay down that debt. But don’t employ the worst possible strategies, such as:

  • Making minimum payments. While paying the minimum payment each month will keep the card companies happy, it’s a counterproductive way to pay off debt because you end up paying far too much in interest.
  • Pillaging your retirement plan. The money in retirement savings may be a tempting fix for current financial woes, but you’ll be short-changing yourself in the long run. Take the money out, and it’s no longer being invested and growing for retirement. And, other than in a few limited circumstances, withdrawing the money early means you’ll not only pay taxes on it, but also penalties.
  • Paying off debt with the wrong loans. Don’t pay off debt with loans that carry exorbitant interest rates and fees. These include cash advances from credit cards and payday loans.

How to pay off debt the right way

The best way to pay off debt is to simply look your obligation square in the eye and use every cent you can to pay it down. One of the most effective ways to do this is called the debt snowball.

For example, let’s say you are trying to pay off credit card debt. Start by making a list of all debts. Order them from smallest to largest, or from highest interest rate to lowest rate.

Paying off the credit card bill with the highest interest rate first is the smartest way from a purely financial point of view. But paying off the smallest debt first may give you the confidence boost you need. Think how good you’ll feel when you cross that first debt off your list.

So, while you continue to pay the minimum due on other credit card bills, throw every extra cent you have at the first debt on your list.

Do whatever is necessary to come up with more cash to pay down the debt. Cut expenses, sell stuff you don’t need, take on a side hustle. Anything that brings in more cash will get you that much closer to being debt-free.

Once the first bill on your list is paid off, apply the amount of money you used for payments on that debt to the next credit card debt on your list. When it is paid off, repeat the process with the next debt, until all of your debt is gone.

What if your debt has spiraled out of control and the collection companies won’t stop calling? Your best bet may be a reputable credit counseling agency. Stop by our Solutions Center to look for help paying off your debts.

For more tips, check out “7 Great Tools to Help You Get Out of Debt.”

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