3 Types of Debts You Should Focus on First

Types of Debts

You’re having a laugh with a friend when they mention that they’ve paid off their mortgage loans or that they’re finally done with college student debts. Your mood instantly turns dark as you realize your situation is the exact opposite. Knowing these types of debts can help you organize your plan how to pay them faster.

You go home, whip out your calculator, and there’s a dizzying list of numbers and figures and percentages and dollar signs. Your debts are crippling, and so are you. So how do you begin paying off these debts? Well, there are a couple of ways to arrange your debt payments in order and achieve your financial goals. Here you go:

1. Secured vs. Unsecured Debts

As you know, while signing a debt contract, there are two types of debts. The ones that have collateral against their monetary value, otherwise known as secured debts. The others are unsecured debts, against which there are no collaterals. The collateral maybe your car, your business, your stocks, or even your residential property.

So while arranging a debt repayment plan, you have to choose between secured and unsecured debts first. In secured debts, something precious to you is actually at stake. You might lose your possession if you do not pay the debt in time, so it makes sense to just clear the secured debts with whatever you can arrange. 

On the other hand, your unsecured debts can become pretty troublesome if you delay them for too long. The pressure will just mount higher, and late payment may also affect your credit score. 

Both are risky, and both are urgent. You just have to keep a balance between the two sets and figure out a repayment method with the least losses incurred.

2. Debts with the Highest Interest Rates

This category is also pretty crucial in figuring out which debts you have to pay back first. The debts with the highest interest rates, such as those on a credit card or a mortgage loan. Other debts, such as student loans or other personal loans, have lower interest rates, which do not accumulate as fast as the higher interest ones.

In this way, it’s usually beneficial to pay back loans in their elevating interest rate. The higher the rates, the sooner you should try to get rid of the debt. This way, you’ll be able to reduce the more significant debts quickly and will be able to focus better on the smaller ones.

3. Small Debts

Many people follow the total opposite of the highest interest rate. They use the debt snowball method by starting paying off their debts with the smallest ones right up to the largest one. This way, you can get rid of the number of debts on your credit sheet and focus much better on the larger ones. In this type of debt arrangement, you don’t have small debtors nagging you for repayments every single day, which is a great benefit in itself.

Conclusion

Debts are terrifying. They keep us up at night. However, paying debts back is not impossible. You just need the right strategy to arrange how you will pay back the different debts you have under your name. From debt, you may then start thinking about how to build your emergency fund.

8 Healthy Financial Habits You Should Start Today

Healthy Financial Habits

Finance is one aspect of your life that’ll affect every other part. Financial security and freedom can make every other facet of your life, including your health and personal relationships, significantly better. And for that, what you need are healthy financial habits.

The earlier you get serious about your personal finance, the better off you and your loved ones will be. To help you with that, here are eight financial habits for financial security and freedom that you can start today.

1. Make a budget

Nothing else will fall else in place unless you make a budget. Calculate your income and expenses based on your financial statement from the past few months. If you want to change your financial situation, you should know where you really stand. And there are so many budget apps available that can make budgeting easier.

2. Limit your expenses

Now that you know how much you spend every month, put an upper limit on your expenses. Unless it’s a healthcare or family-related unavoidable expense, you shouldn’t go beyond this limit.

3. Automate savings

With automatic withdrawals, you can start setting up a savings fund. Setting up one will take a few minutes and once you’re done, the system will automatically deduct it from your salary. When you don’t have access to that money, you’re less likely to spend it.

4. Pay credit cards in full

Credit card interest rates are among the highest in the industry. Keep that in mind whenever you use your card and make sure that you pay your monthly payments in full. Any leftover will carry exorbitant interest rates.

5. Reduce your rent

Rent is one of the biggest expenses that most of us have to make. Ask yourself whether you need a big apartment, especially if you’re starting out. Move to a smaller apartment or get roommates.

With remote work getting regularized, you can also move further away from your office, if it’s possible.

6. Imagine paying in cash

Here’s a neat little trick to help you cut down on your spending. The next time you’re about to buy something, imagine paying it in cash. That will suddenly feel heavier.

If you’re already paying in cash, imagine someone offering you either that product or service or that much cash. What would you choose?

7. Start investing

Earning makes you comfortable, investing makes you rich. Most people can’t comprehend the power of compounding but know that the earlier you start investing the bigger your returns will be.

Spend a couple of hours every day for two weeks to learn about index funds and retirement savings. Next step? Talk to a financial advisor.

8. Develop a secondary source of income

You can only reduce expenses to a certain extent. With an extra source of income, you’ll have more to save and invest in. If you can offer a service, you can find a market through the internet.

You don’t have to start all eight on the list immediately. Pick any two for the time being and focus on them. The rewards will encourage you to stick to every other financial habit.

3 Steps To Clean Up Your Credit Report

how to clean your credit report

Spring is here! While everyone begins this time of year with spring cleaning their homes and garages, it’s also a great time to clean up your credit report and work on rebuilding your credit.

If it’s been more than a year since you last checked your credit report, you may find unwanted or incorrect information accumulated over time. There are several things to look at beyond just accuracy, such as making sure that your credit cards and loans are the best ones for your current circumstances.

On top of that, if you’ve had a serious blow to your finances, such as defaults or bankruptcies, it can take quite some time to clean that stuff up and recoup any damages to your score. Start today, and you’ll have a head start now rather than when you find yourself wishing you’d done it sooner.

How To Clean Up Your Credit Report

1.  Get A Free Copy Of Your Credit Report

Free weekly credit reports have been extended for another year, so there’s no reason to hold off here. The first step to cleaning up your credit report is to have the report in front of you. Sites like CreditKarma and FreeCreditReport make it easy to see your report and understand how you can impact it.

NOTE: You’re going to want to pull the whole credit report, from all three bureaus – not just the scores.

2.  Thoroughly Check Your Credit Report(s)

Depending on your credit history, this could take a while, or it could be pretty quick. Either way, making sure that your information is correct and up to date is critical to building, rebuilding, repairing, and maintaining good credit.

Since lenders can choose which bureau they send info to, and how often, there will be slight differences on each report and that’s normal. But when you next apply for a loan or credit, different lenders look at different reports, so an error on one may not come up on another and you want to be prepared if the lender comes back to you with something like that.

3.  Resolve Errors By Filing A Dispute

Easy fixes: Credit inquiries stay for two years, but missed payments, delinquencies, and tax liens can stay on your report for seven. If it’s been longer than legal timelines, these items should have done what’s called “aged off” and not be on your report anymore.

You also want to look out for items that are flat-out inaccurate, such as your name and address, or worse, someone else’s name on your report, along with accounts you did not open yourself.

So be sure to get those errors corrected right away. You can dispute directly with each of the credit bureaus. If your dispute is valid, they are legally obligated to correct your report. It’s easy to dispute, by the way. You can do so online or via mail.

TransUnion Consumer
Dispute Center
P.O. Box 2000
 Chester, PA 19016
Equifax Information Services P.O. Box 740256 Atlanta, GA 30374Experian P.O. Box 4500
 Allen, TX 75013

In your letter (or in the form online), explain what information you think is inaccurate and why you’re filing the dispute. Ask for the error(s) to be removed or corrected, and try to include any evidence you have that can be used to back up your claim (payment receipts, for example). Credit bureaus have 30 days to review and take action, so make sure to check again to ensure they followed through.

Cleaning up your credit report today will ensure your credit is ready for your next goal, no matter what time of year it is, so be sure to stay on top of it all year round!

How Does Social Media Affect Financial Decisions?

Social Media Affects Financial Decisions

Social media influences society in an assortment of ways. Within the past decade, related platforms have swayed elections, outed celebrities’ poor behavior, and controlled much of the public discourse. It even has a significant impact on people’s moods.

Therefore, it’s no surprise that social media also affects many US citizens’ financial decisions. But how much clout do Facebook, Twitter, Instagram, Snapchat, and all other platforms carry regarding money?

This blog will examine social media and its sway over financial decisions:

Social Media’s Financial Influence is Generational

In 2021, consumers gather financial product information from places such as Facebook. They might double down with a blog to inform themselves more.

However, the stats skew toward proceeding with caution with regards to trusting sources. Only 23% of surveyed consumers are very confident that social media information about financial products is accurate and reliable.

Furthermore, consumers only click on social media financial product advertisements 15% of the time. This number pales compared to the 34% of the timepeople click on ads for other items.

It does appear that older consumers are responsible for swaying these percentages. Millennial – and younger – consumers have far more confidence in the financial information they access on social media. They’re also likelier to click on advertisements for relevant institutions.

This difference between generations probably results from familiarity and comfort with technology. It also likely results from more eagerness to learn about what’s out there in the world of finance.

People Are Spending More Recklessly Because of Social Media

Financial decisions aren’t solely based on products from a bank, an accountant, or overall investing decisions. Finances are involved whenever somebody spends money.

In that vein, social media brings with it some negatives. Namely, 35% of respondents to one survey claimed to spend more money than they could afford to share experiences with friends. Moreover, these decisions were directly influenced by what they saw on social media.

In bringing this blog back to the generational theme, younger people were more impacted by the above problem. 48% of Millennials and 41% of Gen Z fell victim to overspending because of social media’s somewhat nefarious influence.

People must keep in mind the social media often paints a very one-sided picture of people. Sure, your friends could be vacationing in Spain—but they might be maxing out their credit card to do so. Or they’re neglecting their retirement savings.

Social Media’s Impact on Your Finances Depends on How You Use It:

Social media is a double-edged sword for finances. Provided you allow it to influence overspending because you want to fit in with your friends, it will turn into a negative by accumulating credit card debt.

Conversely, social media brings with it the following financial advantages (if you do your research):

  • Find better deals on products you need
  • Receive discounts from your preferred stores
  • Market a crowdfunding campaign
  • Learn about DIY ideas instead of spending on a service
  • Perform product research to make purchases that bring you value

It’s through the above methods that social media can become a positive force for your financial future.

How to Pay Down Credit Card Debt in 2021

The average American has $5,700 in credit card debt, so if you’re struggling with high card balances, you’re not alone. Knowing how to get out from under this debt load can be challenging, though — especially with high interest rates adding to your balance every month.

Fortunately, there are a variety of ways to pay down credit card debt. You can do some of it on your own, and other strategies require you to seek help from a lender or a company that focuses on helping people like you.

Are you ready to get free from credit card debt? Let’s dive in.

Create a Repayment Strategy Yourself

The easiest way to handle credit card debt is to set up a repayment strategy that fits your lifestyle. One of the most common is to focus on your smallest debts first. As they are paid off, you put your payments toward larger debts.

Over time you create momentum and end up with more money to put toward larger balances. If you can handle your minimum payments and still have a little bit of cash left over, this could be a great way to pay down debt.

Consolidate Your Debt

One of the biggest problems with credit card debt is that the interest rates are very high. The average credit card interest rate is between 14% – 18%. If you have a low credit score, it could be even higher.

This interest is added to your balance every month, making it very difficult to get out of debt. Fortunately, interest rates on other types of loans are much lower. As a result, you can get a consolidation loan and use the money to pay off your credit cards. Then, you pay a single monthly payment at a much lower rate.

This can help you reduce the amount you owe each month even as you pay down your debt balances. Just be sure to remove the credit cards from your wallet so you don’t build the balances back up.

Get Better Credit Cards

Perhaps the credit cards you have now have fees or extremely high interest, but you qualify for better offers than you used to. If that’s the case, you can apply for new credit card accounts and transfer the balance.

If you have good credit, you may find that balance transfers have 0% interest for a year or more. This can give you time to make payments and get rid of that debt without having the balance grow.

You may also choose to have a single credit card you use and pay off each month. If you do, you might enjoy having one that gives you cashback, travel points, or other perks. Shop around to find the best deal!

Home Equity Loans

If you have owned your home for a while, you’ve probably built up equity. Equity is the value of the house that you own versus the amount you owe the bank. For instance, if your home is worth $200,000 and you owe $150,000 on it, you have $50,000 in equity.

You may be able to take out a line of credit based on the $50,000 in equity. However, it’s best not to borrow more than you need because you have to pay the money back, and you don’t want to risk losing your home if something goes wrong.

Another idea is to refinance your home entirely. This would give you a new loan of $200,000, you’d pay off $150,000 to the old lender, and you’d have $50,000 in the bank. Of course, there are fees when you refinance, but it can be a big win overall if you can lock in a lower interest rate.

Debt Settlement

If you’re struggling with credit card debt and none of the other options work, you might decide to work with a debt settlement company. These companies will work with your creditors on your behalf to reduce your debt.

Debt settlement companies charge a fee for their services, but it’s worked into the monthly payment for your plan. Settling debt in this way does impact your credit score, but you can build it back up over time.

If you’re at the end of your rope, debt settlement is often a better option than outright bankruptcy. You can settle your entire balance much more quickly than you ever could making minimum payments.

Make 2021 Different

Take advantage of these strategies to pay down your credit card debt. You’ll feel freer with less debt to manage, and your

Check Your Mailbox! Here’s How Financially Stressed Consumers Turn To COVID Debt Consolidation

Covid Debt Consolidation

While politicians continue to debate the new stimulus package, millions of Americans are barely getting by. Many people found themselves without a job and had no choice but to make poor financial decisions to survive. Some people stopped paying rent, mortgage, utilities, and car notes. Others started relying on credit cards and retirement accounts to cover the bare necessities. 

Thinking that the pandemic would pass quickly, they continued these practices to the point of financial demise. Now, a year later, many people are dealing with no emergency funds, maxed out credit cards, and ruined credit. Unfortunately, many fear having their homes foreclosed on, getting evicted, or being on the hook for large utility bills. Looking for a way to regain some stability (and their sanity), some consumers turned to COVID Debt Consolidation for solutions. 

Tackling Credit Card Debt

When your credit card is maxed out, you’re missing payments, and the interest and penalties keep piling up, it’s time to devise a plan. You have several options available. What you chose ultimately depends on your circumstances. 

  • Contact Creditors – There’s a wide misconception that you shouldn’t reach out once you owe a company money unless you’re ready to pay. However, that’s not the case. Creditors understand what’s going on in the world right now, meaning they’re more inclined to want to work with you. You can ask about lowering interest rates, removing late fees, and organizing a more affordable repayment plan. 
  • Crunching Numbers – Paying more than the minimum amount is another efficient way to get credit card debt under control. While it may appear you don’t have the money to afford higher payments, that’s not always the case. Many consumers found that when they created a realistic budget and eliminated wasteful spending, that they had extra money, they could dedicate to credit cards. 
  • Balance Transfer Cards – There are credit cards that allow consumers to transfer balances. These cards often start cardholders off with no interest, which gives them the chance to pay down the principal balance faster. There are a few things to keep in mind. You must have decent credit, and you’ll have to pay the balance off within the promotional period, or you’ll be stuck with a high balance and interest rates. 
  • Debt Consolidation – Companies like COVID Debt Consolidation offer low-interest loans to individuals interested in paying off high-interest credit cards. Their outstanding accounts get lumped into one, make it more affordable and easier to manage. 

Relief In Other Areas

Although credit card debt was only part of American consumers’ financial stress, getting things under control provided relief in other areas. 

  • Better Financial Management – With a system in place to tackle credit card debt, people started applying financial management practices to other areas. Creating a realistic budget to free up cash and sticking to their payment plans got positive results. Their credit improved, they got smarter about their money, and they paid down balances faster. 
  • More Money For Necessities – Whether you contact your creditor to create a more affordable payment plan or you opt for debt consolidation, you’re saving a ton of money in interest and late fees. These financial savings were ultimately applied to other necessities. 
  • Peace of Mind – There’s something about paying down debt and managing your finances that gives you a sense of security. You’re not worried about collection calls, your credit history turns around for the better, and you have money to get things you need. 

Financial stress has reached an all-time high since the start of the pandemic. As people do what they can to survive, they consequently create more problems later. Feeling as if they were drowning with no way out, they turned to methods like those discussed above to tackle credit card debt. Learning how to reduce financial pressures and develop positive financial habits ultimately helped many Americans. They saw a positive change in their credit history, eliminated the chaos, used savings to cover other expenses, and found peace of mind. 

Here’s How I Tackled My Debt Without Using My Stimulus Check

Brice Capital debt consolidation company

The federal government decided to help American citizens by providing a stimulus check during these uncertain times. The idea was to give a financial boost to cover things you may need. Most of the people I talked to stated they would use the check to buy food, pay the rent, or dig themselves out of debt. Although these aren’t bad ways to use your stimulus payment, it’s not the route I wanted to take. 

No offense, but $1400 wasn’t going to be enough to scratch the surface of my household debts. Rather than watching the money disappear as quickly as I received it, I wanted to invest in something that would secure a financial future for my family and me. So, I decided to look into other debt reduction methods and use my stimulus money another way. 

Negotiating

The first thing I did was try and negotiate with creditors. As the pandemic has impacted everyone, I was confident that they’d be inclined to help get the account resolved. I talked to them about my financial hardships and asked about other solutions to pay the balances. To my surprise, some companies were willing to remove late fees, reduce the interest rates, and restructure my payments to make them more affordable. 

Debt Consolidation

I decided it might be best to consider debt consolidation for the credit cards with the highest balances and interest rates. I found a reputable site called Bricecapital.com, where I completed a short form and talked with a financial advisor. The agency was able to offer me a loan with a lower interest rate. Brice Capital debt consolidation loans also come with reasonable repayment options, making it easier to fit into my budget. I no longer had to worry about keeping up with multiple accounts, and I was paying more towards my principal balance. Not to mention, it wasn’t long before my credit score started to improve. 

Debt Management Practices

Even though I managed to negotiate some of my debts and consolidate others, I realized the only way to lift the weight completely was to stay on top of my finances. So, I developed positive financial habits and used various tools to help me manage my debt. I found a money management app that allowed me to create and stick to a realistic budget. I also used my calendar to remind me of upcoming bills and set up automatic payments to ensure I don’t miss a beat. 

Invested My Stimulus Check

Since I had developed a way to tackle the debt accumulated amid the pandemic, I was free to invest my stimulus check as I saw fit. Instead of splurging on something that would only provide temporary happiness, I invested in something that would help set my family up for a lifetime. Me and my significant other decided to use the money to invest in real estate. We found an affordable fixer-upper in our neighborhood and bought it at auction for a steal. Since my partner has experience in general contracting, he was able to knock out many of the issues and save us a lot of money along the way. We hope to complete renovations over the next few months and then put it on the market for rent. The rent can be used to create an emergency fund, cover household expenses, or make other investments to keep growing our assets. 

When the government decided to distribute stimulus checks to millions of Americans, I wanted to do more than just pay a bill or reduce my debt. I wanted to invest the money to secure a better future for my family and me. I realized that in order to do that, I first needed to find a way to get my finances under control. Working with Brice Capital and developing positive financial habits helped me get back on track so that I could use the stimulus payment to invest in something greater.