Have You Automated Payments By Your Thirties?

July 26, 2015 By laurasomewherelse in Grab Bag, Money Tags: automate, automatic payment, Bank, bank account, cable, credit card, direct debit, electric bill, internet, Money, paycheck, rent, Student loan, Suze Orman, thirties, variable Leave a comment

By your thirties, there are some serious bills to keep track of that may not have been around before.

For the first time ever, I’m dealing with my own internet service bill (that bill has always been in someone else’s name before, though I did have to pay into it) and my own electricity bill. Then there are small bills that come up frequently such as my Hulu bill, and the infrequent website hosting bills for multiple websites. There are credit card bills and student loan bills, plus of course, the ever-present rent bill.

Because my schedule can get really busy (as I’m sure yours does as well), I’m a huge fan of automated payments. They’re a great way to make sure you don’t forget a payment, and incur late fees, which can add up- or worse- hurt your credit score!

The financial advisor Suze Orman recommends automated payments highly. But when I went online to do research for this article, I noticed that a lot of advisors were on the fence about automatic payments. If you set up autopay for something and then never check it again, you’re definitely taking a risk. You have to make sure you’ve set up autopay for the correct date, so your account doesn’t get overdrafted when your Cable bill is automatically paid right before your paycheck comes in. It’s always possible that you’ll set up autopay and then get overcharged or have a fraudulent payment go through- if you never check your statements and bills, you won’t know about these issues, and therefore automated payments could cost you money. But all you have to do is occasionally check in on your autopayments, and they’ll more than likely save you money…and will definitely save you time! If you simply make it a process to check on things occasionally, I think automated payments are almost always the best way to go for busy thirty-somethings.,,definitely great insurance against late payments!

Some bills are better for automatic payment than others, and some payment setups should be different for different bills. Below are some automated payment tips so you can better use automatic payments to your advantage:

For repeated payments that will be the same every month, autopay is the way to go.

These payments include things like your student loan monthly minimum, subscription to Netlix, Pandora, Spotify, Hulu, your website hosting service, etc. If the payment is the same every month and never varies, automatic payments are a no-brainer. You very likely won’t be overcharged. Take payments off your to-do list and automate! All of the above subscriptions and payments have a repeating direct debit option.

For repeated payments such as your rent or mortgage payments, autopay would be a great way to go if it’s available.

Not all homes or buildings will allow you to autopay. Check with your building management company, mortgage lender, or landlord and see if there’s any way to set something up.

For variable payments, such as credit card bills, a minimum payment autopay is usually the best way to go.

You can also have the full amount owed on your credit cards completely paid every time. Whether you automatically pay just the minimum owed or the full amount owed on credit cards completely depends on your comfort level and how you feel. I have the minimum owed Autopayment scheduled every month, but I’m always checking in on my credit cards and paying them in full a couple of times a month anyway. I watch my credit card statements very closely. I’m thinking about changing my system to automatically pay the full bill every month as an even bigger backup system against any interest possibly accumulating. If you’re not afraid of a possible overdraft and don’t wish to keep a close eye on credit card statements, you can probably just do an automatic payment in full every month on all your credit cards as well. Or else make sure you set up Autopayment for the minimum due. Then you won’t get hit with an accidental late fee and a hurt credit score.

For variable payments such as electricity bills, internet, and cable bills, I still think autopayments are the best

This is where opinions really differ online, especially with electricity bills sometimes varying so widely in the very hot and very cold months, you can sometimes get socked with a bill you weren’t expecting. Also, if you’re overcharged and you’ve used autopayment, charges will take a little longer to dispute. I still think it’s worth it to not have to think about these payments- just check in on everything from time to time.

If you have a credit card that earns points or miles, see if you could use that to make automated payments, as opposed to just paying straight from your bank account

Getting paid in points and miles to pay my bills? Um, yes please!

Now sit back, relax, enjoy, and pretend you have a whole team of people paying all your bills for you, and you don’t have to do anything but concentrate on more important things…like your creative endeavors…and your next vacation. Yes!

Feels good, doesn’t it? 😉

Really Awesome Credit Bureau Changes You Should Know About

May 28, 2015 By laurasomewherelse in Money Tags: credit, credit bureau, credit card, credit report, dispute, equifax, experion, Money, transunion Leave a comment

I just wrote an article about credit card myths, and right afterwards, big news broke about some credit bureau changes happening in 31 states in the near future. A lot of the changes will be very helpful to consumers 🙂

Now that you’re in your thirties, make sure you’re keeping your credit report in extra good shape by checking it at least once a year. You can easily check it on a site like http://www.annualcreditreport.com Errors pop up in credit reports all the time and you want to catch them early before they damage your score. The new rules getting put in place among the credit bureaus should help stop these accidents from happening. Here they are:

If there’s an error on your file with one of the three agencies, that agency must notify the others
It will now take 180 days for medical debt to appear on your credit report. So if you have medical debt because your insurance is supposed to take care of a bill and things are still processing, the issue will get squared away before doing any credit damage.
The bureaus will closely track data furnishers who most often supply disputed info- so if an organization or debt collection agency is being disputed all the time by everyone, credit bureaus will get way more suspicious.
The bureaus have to educate consumers on getting access to free credit reports as opposed to paying for promoted credit reports.
You’ll get an additional free credit report provided to you if you’ve recently disputed a claim.

Thanks so much! Hope this all gets put into place! 🙂

Credit Card Myths You May Still Believe In Your Thirties

May 22, 2015 By laurasomewherelse in Money Tags: bad credit, cancel credit, credit card, credit history, credit report, credit utilization, fico, fico score, fix credit, Money, myth, thirties, Thirty 4 Comments

I feel like getting and keeping good credit is something that should be taught in schools. Otherwise you really have to dig to learn the ins and outs of the mysterious FICO score.

Then again, there are many financial topics that should be taught in schools but aren’t.

Sadness.

Just because I’m in my thirties doesn’t mean I was necessarily taught anything about the ins and outs of FICO. Most of my answers have been self taught.

So I’m here with some common credit card myths that I used to believe in the past. The only way to counter the misinformation that abounds about FICO scores is to provide some solid facts. Hope they’re helpful!

1. Applying for Credit Cards majorly damages your credit score

FALSE – Actually, applying for new Credit Cards will likely help your score in the long run because it will lower your debt-to-credit (or credit utilization) ratio and will increase your credit history. Applying for new cards temporarily lowers your credit score- but way less than you may think. The dip will usually be around 5 points. The long term gains you see will likely be much more than that.

2. You must carry a balance on your credit cards to build credit history and increase your score

FALSE- I really used to believe this one and used to wonder what the magic number was- should you carry a 5% balance? 1%? The answer is that you can pay off your cards in full every month and your score will only increase because of your better debt-to credit ratio.

3. Canceling your credit cards is good for your credit score

FALSE – If you’re an out of control spender, financial gurus such as Suze Orman recommend that you cut up your credit cards- but don’t cancel them. Canceling them will lower your all important debt-to-credit ratio, and will likely end up lowering your score. The only time you should cancel a card is when it has an annual fee that you don’t feel is worth paying anymore. It’ll still lower your score a bit, but it may be worth it.

4. Once you have a bad credit score, you can never fix it

FALSE- This is very untrue. Credit scores don’t really reflect how things are today- they’re a collection of happenings over the years. Missed and late payments and other score damagers will actually fall off your report in 7 years! So there’s likely very good FICO news in your future if you got off-track but now are back on.

5. Checking your credit report hurts your score

FALSE- I believed this one forever. But it’s just not true. If you check your own credit, it’s known as a soft inquiry, and doesn’t have ANY effect on your credit score. If someone else (a credit card issuer, lender, etc) checks your credit score, it’s called a hard inquiry, and that affects your credit score. But not by as much as you think (see Myth #1 above).

Hope this was helpful! These are the simplest myths, but I’ll be back with a part 2 very soon 🙂

Am I Liable if I Marry Into Debt?

January 5, 2015 By laurasomewherelse in Money, Relationships Tags: credit card, Debt, family, finance, husband, loan, marriage, marry, Money, Student loan, thirties, Thirty, wife 20 Comments

The other day a friend of mine and I were having dinner and she was discussing buying a house with her boyfriend. They’d been together for some time and were hoping to get married within the next few years.

“I’m wondering though,” she said, “if I’ll take on his debt when I marry him. ”

For the last two or three years, the number of people I know who are engaged, about to be engaged, or married has skyrocketed. This definitely corresponds with the thirties- many people hitting their thirties are (possibly) beginning to settle down and find others they want to be with for the rest of their lives. Not everyone, of course, but it’s definitely been a trend.

Which is why I was surprised that I didn’t know the answer- I felt like I’d researched this before, and the answer was no, but I couldn’t be positive. I actually forgot to look up the answer that night and then today Suze Orman just happened to bring it up on her podcast.

For anyone about to be married and wondering about it, the answer is: NO, YOU WILL NOT LEGALLY INCUR ANY OF YOUR SPOUSE’S DEBT FROM BEFORE YOU WERE MARRIED. (Big sigh of relief!!) If your spouse incurred debt BEFORE you got married, it’s his or her debt ALONE. Of course, you can help with the debt, and some would say that once you’re married you share everything, including debt. But LEGALLY, debt incurred by one spouse before a marriage doesn’t touch the other one. No one is going to come after you for your spouse’s debt, and if they do they are JUST TRYING TO SCARE YOU.

To avoid all the clarification questions Suze Orman (and all the finance websites I’ve been to) get all the time, I will clarify up front: the debt you’re NOT liable for includes EVERYTHING before marriage. It includes student loan debt, credit card debt, auto loan debt, tax debt, bank loans, EVERYTHING. You’re legally liable for NONE OF IT.

HOWEVER, debt incurred AFTER you get married is totally different. If you get married and your spouse suddenly gets into a lot of debt, that debt will be legally yours too IF you live in what are known as “Community Property States.”

Community-property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin and the territory of Puerto Rico. Alaska also allows married couples to opt in to community-property status. Most people do not :p

If you’re NOT in any of these states, you’re in what’s known as a Common Law state. This means that in general if your spouse gets into debt, you’re not legally responsible. There are exceptions here such as if you open a joint account together and that account goes into collections (obviously, because now BOTH your names are on the account.)

Hope this solves things for any of you newly marrieds or almost-newlyweds! If any of our Canadian, UK, and other international readers would like to weigh in on the policy in your country, I’d love to learn about that (and I’m sure others would too!)

Sorry if this wasn’t the most fun topic ever, but it’s an important one as we head through the thirties. Here’s some funny photos of a flash mob I did once to lighten the mood, haha: