The Fastest Proven Ways to Destroy Debt

Subscribe: Apple Podcasts | Google Podcasts | Spotify | RadioPublic | Stitcher | RSS

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?

A podcast is basically a radio show you can listen to anytime, either by downloading it to your smartphone or other device, or by listening online.

They’re totally free. They can be any length (ours are typically about a half-hour), feature any number of people and cover any topic you can possibly think of. You can listen at home, in the car, while jogging or, if you’re like me, when riding your bike.

You can listen to our latest podcasts here or download them to your phone from any number of places, including Apple, Spotify, RadioPublic, Stitcher and RSS.

If you haven’t listened to a podcast yet, give it a try, then subscribe to ours. You’ll be glad you did!

Show notes

Want more information? Check out these resources:

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.

Source: moneytalksnews.com

10 Mistakes That Cost You Money at Warehouse Stores

Unhappy shoppers
Pressmaster / Shutterstock.com

Being a member of Costco, Sam’s Club or BJ’s might seem like a steal when you find great deals. But there’s a chance you’re wasting more money than you’re saving.

Sure, deals abound at warehouse stores. However, if you’re not approaching shopping trips smartly, you could be throwing money away, regardless of which warehouse store you go to.

Following are some key ways you might be overspending at these membership clubs — likely without even realizing it.

1. Not earning cash back

grocery shopping
Stokkete / Shutterstock.com

Hopefully, you already know there are multiple ways to earn cash back when shopping online — including on wholesale clubs’ websites. But you’re leaving money on the table if you aren’t also earning cash back every time you shop at a Costco, Sam’s Club or BJ’s store.

A free app called Ibotta routinely offers cash rebates on purchases from these three chains’ brick-and-mortar stores — among many other retailers’ stores.

To start using Ibotta, sign up for an account, which is free. Then, download the app and launch it. From there, you can select Costco, Sam’s Club or BJ’s from the list of retailers to see what cash rebates Ibotta is currently offering for purchases from those wholesale clubs.

Of course, you can also always earn cash back by paying with a cash-back credit card. Go to our Solutions Center to find the right credit card for your needs.

2. Assuming that you need a membership

ARTYOORAN / Shutterstock.com

There is a lot you can buy at a wholesale club without a membership, especially if you’re open to buying items online or shopping with a friend or relative who has a membership to the store.

In fact, some people will save money overall by paying nonmember surcharges instead of an annual membership fee.

Let’s take Costco, for example. Becoming a member will cost you at least $60 a year, while not joining means you will pay a 5% nonmember surcharge on most purchases.

So, technically, if you spend less than $1,200 per year at Costco, you save money by paying the surcharge instead of the membership fee.

To learn more, check out:

3. Not planning your meals

Woman in pantry
VH-studio / Shutterstock.com

Large packages of cheap goods such as rice and pasta make bulk shopping seem enticing. And for families who go through such items quickly, they’re a great investment. But if your family seldom uses these things, you’ll only end up with a lot of food going to waste.

Before you hit the warehouse store, plan meals for the next few weeks so you know what to buy.

If you’re new to the concept of meal planning, check out our primer, “This Habit Saves Me Money and Stress All Week Long.”

4. Not reviewing the ads and deals

working from home
Monkey Business Images / Shutterstock.com

Warehouse stores already have good prices on a lot of things compared with regular stores. But most warehouse clubs give even deeper discounts.

To find them, check the ads and fliers just like you would at a regular grocery store.

I tend to check the Costco app to see what offers are coming up. You can also find Costco’s periodic discounts on its Warehouse Savings webpage. Meanwhile, Sam’s Club’s periodic discounts are on its Instant Savings Book webpage.

5. Not figuring what you actually need

Nomad_Soul / Shutterstock.com

If you’re going to buy that big pack of batteries, make sure you’re prepared to use them all before the expiration date. Just like many items sold in bulk, batteries have a shelf life.

Before you make this kind of purchase at a warehouse store, ask yourself how many of the items you actually will use. If they go bad before you expect to use them all up, the bulk package isn’t the deal it might seem to be.

6. Keeping things you don’t need

return policy
Stockbakery / Shutterstock.com

Have you ever bought something that you later realized you didn’t need, want or like? Have you held on to it or thrown it away — barely used — because you didn’t think you could return it?

Before stashing or trashing it, check the return policy of the store where you bought it.

For example, Costco has one of the best return policies for both online and in-store purchases. Some things do have a return window — like 90 days for many electronics — but you can return most things at any time.

7. Not splitting what you can

coffee
idelem / Shutterstock.com

In my household of three, we know there are plenty of things bought in bulk that we won’t go through. So, if there’s a sale on something we want but we know it’s too much for just us, we try to split it with someone else. Such things might be food, paper goods or coffee. If it’s a great deal, we find a way to make it work.

Consider shopping with a friend or family member and splitting some of your purchases. What might be too much for one household can be perfect when it gets broken up for two.

8. Ignoring your household size

single life
szefei / Shutterstock.com

Bulk goods are meant to feed and care for a lot of people. So, determine which products best fit your household.

If you’ve got kids at home or your parents live with you, it’s easier to justify larger quantities. But if it’s just you and your partner, reconsider some purchases — or split them with another household.

9. Forgetting your home’s space limits

small bathroom
Ehpoint / Shutterstock.com

You might think that buying toilet paper in bulk will save you a few dollars — and it might. But do you have a place to put all those extra rolls?

Larger bulk items are not worth buying if you don’t have a spot to store the excess. So, evaluate your home’s space before splurging on larger quantities.

10. Not being flexible about your shopping list

free samples
stockfour / Shutterstock.com

Sure, eating the samples at a warehouse store is like having an extra lunch. But they could help you make better shopping decisions, too.

Wouldn’t you rather buy something that you know is good than buy something blindly? That’s why samples exist — to give you the chance to try something you wouldn’t otherwise eat. Sure, warehouse stores know you’re likely to buy the food you sampled — that’s why they have samples.

It’s OK to change up your shopping list if you taste something you’d like to cook soon. And it’s even better if it’s on sale.

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

Source: moneytalksnews.com

7 Surprising Things That Damage Your Credit Score

Woman sitting on exercise ball
Photo by cunaplus / Shutterstock.com

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.

Source: moneytalksnews.com

25 Things You Should Never Buy — and What to Buy Instead

Unhappy shopper
Take A Pix Media / Shutterstock.com

American consumers are swimming in sea of products. Any need, want or whim can be met with a quick trip to the mall or click of a keyboard.

In this retail wonderland, it’s easy to make a few mistakes.

We’ve all fallen victim to aggressive marketing and been lured in by budget-busting convenience products, impulse buys and things that simply don’t make sense. (That reminds me, does anyone want a gently used Shake Weight?)

If you want to save money, it’s time to become a more intentional consumer. Following is a look at some of the things you should never buy — and what to buy instead.

1. Flushable wipes

Yevhen Prozhyrko / Shutterstock.com

Marketed as a step-up from toilet paper, adult wet wipes are another product innovation that we didn’t need.

Besides being far more expensive than traditional toilet paper, these “flushable” wipes are anything but (pun intended). They’re nonbiodegradable and wreak havoc on plumbing and sewer systems, as we report in “9 Things You Should Never Flush Down a Toilet.”

The bottom (ahem) line? Save your money, save your pipes and stick with traditional toilet paper. If you just can’t live without a moistened wipe, consider a toilet tissue spray. Amazon has multiple options to choose from.

2. Baby shoes

Mom and baby
Julia Zavalishina / Shutterstock.com

I get it: Baby shoes are adorable. Their cuteness factor ranks right up there with puppies in Halloween costumes. But since babies don’t walk, investing in fabulous footwear for them doesn’t make sense.

Instead of buying those itty-bitty Adidas, direct that money toward something with real traction. Invest in a college savings plan, buy a savings bond or stop by our Solutions Center and find a great savings account to open in your baby’s name.

3. Bottled water

nenetus / Shutterstock.com

According to the Mayo Clinic, bottled water and tap water generally are comparable in terms of safety.

If you’re concerned about the purity of your local tap water, invest in a faucet-mounted or under-sink filtration system, or a simple pitcher filter. Any of these options is far more convenient than lugging home cases of bottled water every week from the store.

And by keeping a few reusable water bottles on hand, you can still stay hydrated on the go.

4. Natural diamonds

Couple Engagement
YAKOBCHUK VIACHESLAV / Shutterstock.com

Diamonds have an undeniable emotional appeal. And couples are willing to pay up for these symbols of love.

But thanks to new technology, lab-grown diamonds might give natural stones some serious competition, since they cost as much as 50% less.

Make no mistake, these stones are nothing like the much-maligned cubic zirconia. In fact, they’re so similar to mined diamonds that gemologists often have a difficult time distinguishing the two, as we report in “3 Reasons Lab-Grown Diamonds Are Better Than the Real Thing.”

Lab-produced diamonds are also more environmentally friendly than mined diamonds, and you won’t have to worry about whether you unwittingly bought a conflict diamond.

5. Scented trash bags

SpeedKingz / Shutterstock.com

Garbage stinks. Literally. But scented trash bags aren’t the answer.

Instead of eliminating odors, they mask them with artificial — and often overpowering — scents. The result? Your trash can smells like a weird potpourri of garbage, pumpkin spice and vanilla.

Skip the expensive scented bags and buy basic can liners or reuse plastic grocery bags.

To eliminate bad smells, try this DIY solution: Fill a disposable coffee filter with baking soda, tie it shut with a twist tie or dental floss, then place in the bottom of your trash can. This homemade sachet will absorb odors for weeks.

6. Retail-priced greeting cards

birthday cards
Niloo / Shutterstock.com

I prefer to skip greeting cards altogether and make a good old-fashioned phone call to the person I’m thinking of. If that’s not your style, consider some other budget-friendly options:

  • Cheaper retail cards: Dollar stores have a decent selection of cards for — you guessed it — $1 or less.
  • Thrift store cards: Many thrift shops offer single and bulk greeting cards at amazing prices. A little shop near me sells individual cards for only 10 cents.
  • DIY cards: Get creative and make your own greeting card. As always, Pinterest has loads of great ideas to get you started.
  • E-cards: Send a free digital card using a service like Ojolie or Open Me.

7. Class rings

Margaret M Stewart / Shutterstock.com

During my senior year of high school, choosing and comparing class rings was the social activity of the year. But if you ask me where that $250 ring is today, I couldn’t tell you.

Class ring manufacturers rely heavily on peer pressure and sentimentality to market their wares. In exchange for hundreds of dollars, unwitting students get a bit of gold, a glass “gem” and a few weeks of giddy anticipation. But these expensive souvenirs become irrelevant in a matter of months.

If your graduate is open to the idea, suggest marking the milestone a different way. Plan a celebratory dinner, coordinate a day trip or purchase something that will make the next phase of life easier — maybe a new laptop or down-payment on a good used car.

8. Mr. Clean Magic Erasers

Bykfa / Shutterstock.com

If you’ve ever used one, you know that Mr. Clean Magic Erasers live up to their name.

These wondrous little sponges are pure magic — and at $6.99 for a box of nine, they can even make your money disappear!

To avoid washing your hard-earned cash down the drain, there are generic versions of this miraculous household helper.

Skip the brand-name markup and look for any melamine sponge. Amazon has multiple options for a fraction of the price. You might even find some at your local dollar store.

9. Keurig cleaner

Coffee mug
Anutr Yossundara / Shutterstock.com

From coffee pod organizers to customized scoops, Keurig coffee makers have spawned an entire industry of peripheral products.

Cleaning doesn’t have to be complicated or expensive. A 1:1 ratio of vinegar and water will clean single-cup and multi-cup coffee makers for pennies.

In fact, the many uses of vinegar will amaze you. It’s one of the most versatile and cost-effective products in your house, as we illustrate in “27 Money-Saving Ways to Use Vinegar in Every Room of Your Home.”

10. Paper plates

RosieYoung / Shutterstock.com

Using paper plates for every meal in order to avoid washing dishes is a growing — and slightly disturbing — American trend. Sure, doing dishes isn’t my favorite activity, but neither is budgeting for disposable dinnerware every month.

So, how do you solve the daily dish dilemma? Buy some inexpensive plates and bowls that are easy to clean. (Hint: Avoid anything white.)

Then, get the whole family involved in after-meal cleanup. Assign each person a task, like clearing the table, washing or drying. At the same time, listen to music together, share details of your day, and make plans for tomorrow.

It may sound corny, but the job will be quick and nearly painless. Even better? You save a few trees and spend less “paper” on paper.

11. Electric can openers

Venus Angel / Shutterstock.com

Electric can openers may be necessary if you suffer from arthritis or another dexterity-limiting condition. But for most people, they’re conveniences that become very inconvenient when the power goes out.

Free up some valuable countertop space and save money, too. Skip the electric models and buy a well-made manual opener.

Though I’m a fan of vintage Swing-A-Way openers, OXO Good Grips makes a reliable, easy-to-use product.

12. Expensive wedding dresses

Wedding couple
Alex Andrei / Shutterstock.com

Few events in life spark emotional spending the way a wedding can, but it’s important to realize the day is about the shared experience, not the price of the dress.

Don’t stress your new marriage with wedding dress debt. Consider buying a pre-owned gown at a consignment shop, choosing a less formal dress from a discount store like T.J. Maxx or exploring other ways to pay less for your wedding dress.

13. Flossers

Dan Race / Shutterstock.com

Sometimes, a product innovation is more hype than substance. Handled flossers are a perfect example.

Though great for teaching kids how to floss, these devices are far more expensive than spooled floss, which is also better for the environment.

14. Sandwich bags

Laura Riquelme / Shutterstock.com

Isn’t buying something designed to end up in the trash the very definition of throwing your money away? It’s time to embrace a greener and more economical alternative to plastic sandwich bags.

Instead of paying for an endless stream of disposable plastic, invest in few reusable containers. Plastic, glass and even stainless steel options are available. Because these containers generally have air-tight seals, your food is likely to stay fresher. And washing is a snap.

15. New cars

Soloviova Liudmyla / Shutterstock.com

I’m not sure who said “never buy a new car if you want to be a millionaire,” but it’s an adage I live by.

You’ve heard the figures before: According to Carfax, new cars depreciate 20% in the first 12 months of ownership and roughly 10% in each of the four years thereafter.

Why buy anything that’s worth 20% less the minute you take it home? Let someone else shoulder the burden of that first big drop in value. Buy used instead.

By following a few basic steps to buying used, it’s possible to find a reliable vehicle that’s still under warranty, has excellent safety ratings and gets decent gas mileage.

16. Instant microwaveable rice

DONOT6_STUDIO / Shutterstock.com

Sure, precooked rice in a bag is quick and convenient, but it comes at a steep price.

Why pay several times more than you need to for a pantry staple? Stick with traditional rice — it’s incredibly simple to prepare. And if you have an electric steamer, you can set it and forget it.

17. Paper towels

Couple using paper towels
LightField Studios / Shutterstock.com

I know — suggesting that busy families forgo the convenience of paper towels borders on blasphemy. But there’s logic behind it.

Let’s assume you buy paper towels for the bargain price of $1 per roll. If you use two rolls a week — not unrealistic — you’ll spend $110 a year on something that’s just thrown away.

What’s a practical alternative? Hand towels. Change them often, wash with bleach and voila! You’ve done a solid for your budget and the environment.

18. Mass-produced souvenirs

Paris travelers
Song_about_summer / Shutterstock.com

When I was a kid, my parents planned elaborate two-week-long vacations each year. By age 12, I had a box full of refrigerator magnets, keychains and little metal nameplates. Though these items felt meaningful at the time, I seldom thought about them once the vacation was over.

Instead of loading up on tchotchkes when you travel, invest in new experiences.

Indulge in the local cuisine, plan outdoor adventures and connect with the people who make the place special. The best souvenir is returning home happily exhausted with a suitcase full of wonderful memories.

19. Subscription boxes

tommaso79 / Shutterstock.com

While streaming music and video subscriptions can often be more economical than buying or renting, subscription boxes — think meal kits, wine, shaving supplies and pet supplies — are often a slow-bleed on budgets.

Here’s the problem: Subscription box services charge us to deliver goods on a regular basis — whether we need them or not. And since payments are made via credit card or automatic deduction, we hardly notice.

Don’t need another box of razors right now? Too bad. You got it, and you’re paying for it.

Instead of signing of up for yet another thing-of-the-month, buy what you need as you need it. Better yet, stock up on items you know you’ll use at discount retailers or when the items are on sale.

20. Pre-cut produce

A senior couple cuts vegetables for a salad while cooking a meal in their kitchen
Prostock-studio / Shutterstock.com

Every processing step added to the sale of produce increases its price. Sure, pre-cut carrots, diced onions and shredded cabbage look enticingly convenient when you’re exhausted and hungry, but you’ll pay heavily for all that pre-prep.

According to a comparison done by Vice, the average consumer could save $100 each month by skipping all pre-cut and prepackaged produce. That’s some serious cabbage.

Lettuce (sorry) explore another way: Buy fruits and veggies whole and reserve about 30 minutes after shopping to wash, chop and store enough produce for several days. Seal everything in airtight containers and pop in the fridge.

21. Gym memberships

A woman exercises with dumbbells
goodluz / Shutterstock.com

Joining a gym always seems like a great idea at the time, but then life gets in the way.

When you factor in driving to the club, changing, showering, dressing and driving home, there’s not much time left for working out. Perhaps that’s why Americans waste $1.8 billion on unused gym memberships each year.

Thankfully, there are many ways to burn calories without the gym. Remove a few of the logistical hassles by investing in at-home exercise equipment.

Quality used equipment can often be found on Craigslist, Facebook Marketplace and even secondhand shops for a fraction of the retail price. Short on space? Some machines fold up for easy storage under the bed or in a closet.

22. Dryer sheets

wavebreakmedia / Shutterstock.com

Dryer sheets are coated with stearic acid or other fatty acids, CNET reports. In the heat of the drying cycle, these acids melt and coat the fibers of your clothing to increase softness and decrease static cling.

But dryer sheets have a few unintended consequences. The acids also:

  • Make towels less absorbent over time.
  • Reduce the wicking effect of activewear.
  • Make some pajama fabrics less fire-resistant.

Wool dryer balls are a safe, reusable alternative to dryer sheets. You can find them in many grocery stores and online.

In a pinch, aluminum foil reduces static cling, too. Just crumple a strip of foil into a ball about the size of a tennis ball and toss it into the dryer with your laundry. You’ll be surprised by how well it works.

23. Purebred pets

pet sitting
Josep Suria / Shutterstock.com

Because they lack genetic variation, purebred pets are prone to multiple health challenges. According to the nonprofit PETA, purebred dogs are often susceptible to a wide range of problems, such as skin allergies, heart valve defects and glaucoma.

Besides the higher upfront cost of buying an exclusive breed, owners will likely have to shoulder a hidden cost: expensive vet bills to manage chronic conditions.

Instead of buying a purebred pet, consider adopting a rescue from your local shelter. Generally, adoption fees are nominal when compared with the prices breeders charge.

Though these rescue animals may not have the noble lineage of a purebred, they’re in desperate need of a loving home and, I believe, never forget the second chance they’re given.

24. Checked baggage

Vietnam Stock Images / Shutterstock.com

While technically not something you buy, airline fees for checked baggage are still budget-busters. According to Kayak, some airlines charge up to $80 for a traveler’s first checked bag, and rates may increase for each additional piece checked.

If you’re tired of this “gotcha” fee, invest in a well-designed, small, soft-sided bag and versatile clothing items. You can travel in comfort with only a carry-on.

I’ve been doing it for years, and Money Talks News founder Stacy Johnson details his own secrets in “Ask Stacy: How Can You Go to Europe for 10 Days With Just a Carry-On?”

Besides being a money-saver, single-bag travel is a smart strategy. When you have no luggage to reroute, gate agents might be more likely to work with you on last-minute flight changes. Even better: No more fighting crowds at the baggage carousel.

25. Ringtones

online
pickingpok / Shutterstock.com

Paying for a ringtone? Really? Every purchased ringtone should start with a melodic “cha-ching” — that’s the sound of money leaving your wallet.

My 6-year-old smartphone came with 35 ringtone options. I picked the least offensive option and never thought about it again.

Select a factory ringtone or for more options, download a free ringtone app like Zedge or Audiko.

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

Source: moneytalksnews.com

11 Signs You Have Too Much Credit Card Debt

Woman overwhelmed by debt
Photo by littlenySTOCK / Shutterstock.com

Credit cards can seem like lifesavers when you want or need to make a large purchase. Using a card is so easy — like buying something on someone else’s dime.

That is, until you overextend yourself. Then, you realize that you ultimately will pay an amount far beyond the initial purchase price.

Sound familiar? Following are a slew of signs that might indicate you are carrying too much credit card debt.

If you can relate to any of them, consider seeking help. Stop by our Solutions Center and reach out to a reputable credit counselor. Or, try the DIY method by reading articles like “8 Surefire Ways to Get Rid of Debt ASAP.”

1. You’re hiding the truth from others

Are you lying to your spouse, family and friends, who may be concerned about your outrageous spending habits with the magic plastic? Or maybe you routinely ignore phone calls out of fear that creditors are on the line, wanting to know when you will catch up on those past-due balances.

These are key signs that you are in over your head.

2. You don’t know your outstanding balances

Although you’re aware that your credit card debt exists, maybe you don’t feel obligated to check the outstanding balances — because you can’t pay them off anyway.

3. You can only afford to make the minimum payment

Known as the “minimum-payment trap,” this behavior is a recipe for disaster. By merely meeting your minimum obligation each month, you are simply paying the interest as the balance continues to grow.

This is the sad reality for many, because they cannot afford to pay anything more.

4. No wiggle room exists in your budget

Once all the bills are paid each month, do you have any money left to enjoy the little things in life? Perhaps a night out on the town or even ordering a pizza without using a credit card is not feasible because funds are always low.

Even worse, you may resort to credit cards to cover necessities, such as gas and groceries, because your bank account is overdrawn.

5. You have a hard time saving

For many people, it is impossible to save money because credit card bills quickly absorb any available cash on hand after the household bills are paid.

Unfortunately, not having a savings account in place will only make the debt worse, because you will not be able to handle financial emergencies without resorting to your plastic.

6. Supplementary income is required to pay down debt

It’s a bad sign if you are working overtime or earning money through part-time gigs to make minimum payments — all because your regular income simply isn’t enough.

7. You have maxed out at least one card

Some people max out cards in their arsenal because of high interest rates, while others just feel the need to keep spending until the funds run out.

Regardless of your situation, the balances will more than likely continue to expand beyond the credit limit unless you take action.

8. You can’t stop using your credit cards

Speaking of maxed-out credit cards, is your credit card burning a hole in your pocket? And do you constantly feel the need to make yet another purchase on credit once a debt balance is paid off?

9. You rob Peter to pay Paul

A clear indicator of too much debt is juggling payments between creditors because funds are limited. In some instances, cardholders may even take out a cash advance from one credit card to make the monthly payment on another.

10. You do not qualify for new accounts

Perhaps your debt-to-available-credit ratio is just way too high, barring you from qualifying for additional accounts. If so, take it as a wakeup call that you need to pull back.

11. Late payments are the norm

If you are left with no available resources after working overtime or taking on an extra gig, the monthly due date may simply pass you by. Not only do late payments affect your credit, but it can be difficult to get caught up once you are behind.

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

Source: moneytalksnews.com

15 States With the Most Student Loan Debt

Since 2012, student loans have had the highest delinquency rate of any form of consumer debt. And while recent data from the New York Fed suggests that student loan delinquency rates have declined during COVID-19 pandemic, this data actually reflects the effect of government forbearance programs. While a large share of student loans are currently in forbearance due to COVID-19 aid programs, students—many of whom might struggle to find work in a depressed economy—will be put in a precarious situation when aid programs end. How the new administration tackles the student loan crisis will be critical for many degree holders struggling to make their payments.

Chart1 Student loans had highest delinquency rates prior to COVID 19Chart1 Student loans had highest delinquency rates prior to COVID 19

While forbearance programs keep the rate of delinquencies and the burden of student loan debt suppressed in the short term, the longer term trend shows that student loan debt has been rising steadily. Since 2005, while total household debt rose 56 percent, student loan debt grew by more than 330 percent—reaching a staggering $1.5 trillion in the third quarter of 2019. Apart from mortgages, student loans are now the largest source of consumer debt, accounting for 35 percent of non-mortgage household debt.

Chart2 Student loan debt has grown to nearly 35 of all non mortgage debtChart2 Student loan debt has grown to nearly 35 of all non mortgage debt

Making the situation more challenging for borrowers with student loan debt, these loans can be extremely difficult to discharge, even after filing for bankruptcy. While discharging this type of debt can be challenging, it is not impossible, and student loan debt forgiveness is a growing topic of discussion in Congress and within the Biden administration.

To find where students have been most impacted by the growing student debt problem, researchers at Smartest Dollar ranked states based on the average student loan debt per borrower using data from the Federal Reserve Bank of New York’s Consumer Credit Panel. Researchers chose to use 2019 data (instead of 2020 data) since reporting changes in 2020 stemming from COVID-19 forbearance programs resulted in substantial drops in delinquency rates that were not the result of individuals paying off their loans. As a result, the 2019 data better reflects the actual state of student loan delinquency rates.

The analysis found that borrowers in coastal states tend to have the most student loan debt. While borrowers in California and Oregon have average student loan debts above $35,000, those in the South and East Coast states like Maryland, New York, Georgia, and Virginia have even higher debt burdens.

Chart3 East Coast residents tend to have more student loan debtChart3 East Coast residents tend to have more student loan debt

Here are the states with the most student loan debt per borrower:

States with the greatest student loan debt per borrower

15 Colorado Denver state capitol PGHMR2

15 Colorado Denver state capitol PGHMR2
Photo Credit: Alamy Stock Photo

15. Colorado

  • Average student loan debt per borrower: $34,800
  • Share of borrowers 90+ days delinquent: 13.0%
  • Total number of borrowers: 824,300
  • Total number of college graduates: 1,768,000
  • Total student loan debt (billions): $28.7

14 Delaware capitol FWBCK3

14 Delaware capitol FWBCK3
Photo Credit: Alamy Stock Photo

14. Delaware

  • Average student loan debt per borrower: $35,000
  • Share of borrowers 90+ days delinquent: 14.1%
  • Total number of borrowers: 132,900
  • Total number of college graduates: 236,461
  • Total student loan debt (billions): $4.7

13 North Carolina Raleigh capitol EM4W1T

13 North Carolina Raleigh capitol EM4W1T
Photo Credit: Alamy Stock Photo

13. North Carolina

  • Average student loan debt per borrower: $35,000
  • Share of borrowers 90+ days delinquent: 16.3%
  • Total number of borrowers: 1,337,200
  • Total number of college graduates: 2,429,699
  • Total student loan debt (billions): $46.8

12 New Jersey capitol CW4X0J

12 New Jersey capitol CW4X0J
Photo Credit: Alamy Stock Photo

12. New Jersey

  • Average student loan debt per borrower: $35,000
  • Share of borrowers 90+ days delinquent: 12.2%
  • Total number of borrowers: 1,366,000
  • Total number of college graduates: 2,692,344
  • Total student loan debt (billions): $47.8

11 Mississippi Jackson capitol JATF7J

11 Mississippi Jackson capitol JATF7J
Photo Credit: Alamy Stock Photo

11. Mississippi

  • Average student loan debt per borrower: $35,200
  • Share of borrowers 90+ days delinquent: 22.1%
  • Total number of borrowers: 417,900
  • Total number of college graduates: 462,014
  • Total student loan debt (billions): $14.7

10 South Carolina capitol CT9FJ9

10 South Carolina capitol CT9FJ9
Photo Credit: Alamy Stock Photo

10. South Carolina

  • Average student loan debt per borrower: $35,500
  • Share of borrowers 90+ days delinquent: 18.7%
  • Total number of borrowers: 738,600
  • Total number of college graduates: 1,099,135
  • Total student loan debt (billions): $26.2

09 Oregon state capitol P6B666

09 Oregon state capitol P6B666
Photo Credit: Alamy Stock Photo

9. Oregon

  • Average student loan debt per borrower: $35,600
  • Share of borrowers 90+ days delinquent: 15.2%
  • Total number of borrowers: 569,800
  • Total number of college graduates: 1,071,504
  • Total student loan debt (billions): $20.3

08 Alabama Montgomery capitol GJ1H39

08 Alabama Montgomery capitol GJ1H39
Photo Credit: Alamy Stock Photo

8. Alabama

  • Average student loan debt per borrower: $35,600
  • Share of borrowers 90+ days delinquent: 19.1%
  • Total number of borrowers: 606,700
  • Total number of college graduates: 920,353
  • Total student loan debt (billions): $21.6

07 California Sacramento state capitol F5F97B

07 California Sacramento state capitol F5F97B
Photo Credit: Alamy Stock Photo

7. California

  • Average student loan debt per borrower: $35,600
  • Share of borrowers 90+ days delinquent: 14.1%
  • Total number of borrowers: 4,115,000
  • Total number of college graduates: 9,855,894
  • Total student loan debt (billions): $146.5

06 Illinois capitol DYN12C

06 Illinois capitol DYN12C
Photo Credit: Alamy Stock Photo

6. Illinois

  • Average student loan debt per borrower: $35,900
  • Share of borrowers 90+ days delinquent: 12.8%
  • Total number of borrowers: 1,757,500
  • Total number of college graduates: 3,280,283
  • Total student loan debt (billions): $63.1

05 New York capitol JP4Y32

05 New York capitol JP4Y32
Photo Credit: Alamy Stock Photo

5. New York

  • Average student loan debt per borrower: $36,200
  • Share of borrowers 90+ days delinquent: 11.1%
  • Total number of borrowers: 2,710,400
  • Total number of college graduates: 5,490,898
  • Total student loan debt (billions): $98.1

04 Virginia capitol EP425M

04 Virginia capitol EP425M
Photo Credit: Alamy Stock Photo

4. Virginia

  • Average student loan debt per borrower: $36,600
  • Share of borrowers 90+ days delinquent: 13.3%
  • Total number of borrowers: 1,176,400
  • Total number of college graduates: 2,430,864
  • Total student loan debt (billions): $43.1

03 Florida capitol FD6431

03 Florida capitol FD6431
Photo Credit: Alamy Stock Photo

3. Florida

  • Average student loan debt per borrower: $36,700
  • Share of borrowers 90+ days delinquent: 17.3%
  • Total number of borrowers: 2,617,700
  • Total number of college graduates: 4,941,169
  • Total student loan debt (billions): $96.1

02 Georgia Atlanta capitol E9G2J1

02 Georgia Atlanta capitol E9G2J1
Photo Credit: Alamy Stock Photo

2. Georgia

  • Average student loan debt per borrower: $39,700
  • Share of borrowers 90+ days delinquent: 18.2%
  • Total number of borrowers: 1,603,900
  • Total number of college graduates: 2,404,931
  • Total student loan debt (billions): $63.7

01 Maryland Annapolis capitol AE5A2N

01 Maryland Annapolis capitol AE5A2N
Photo Credit: Alamy Stock Photo

1. Maryland

  • Average student loan debt per borrower: $41,000
  • Share of borrowers 90+ days delinquent: 14.1%
  • Total number of borrowers: 887,400
  • Total number of college graduates: 1,795,205
  • Total student loan debt (billions): $36.4

Methodology & detailed findings

The student loan debt data used in this study is from the Federal Reserve Bank of New York’s Consumer Credit Panel. Researchers chose to use 2019 data (instead of 2020 data) since reporting changes in 2020 stemming from COVID-19 forbearance programs resulted in substantial drops in delinquency rates that were not the result of individuals paying off their loans. As a result, it was determined that the 2019 numbers better reflected the actual state of student loan delinquency rates.

States were ordered based on the average student loan debt per borrower. In the event of a tie, the state with the greater amount of total student loan debt was ranked higher. Data on the number of college graduates by state is from the 2019 American Community Survey.

Source: smartestdollar.com

Where Are Millennials Buying Homes?

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

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 / Shutterstock.com
  • 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

Indianapolis
f11photo / Shutterstock.com
  • 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

Oklahoma
4kclips / Shutterstock.com
  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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

Pittsburgh
esb-professional / Shutterstock.com
  • 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

photos.us / Shutterstock.com

  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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 / Shutterstock.com
  • 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.

Source: moneytalksnews.com

12 Ways to Maximize Your Social Security Checks

Happy retirees at home
Dragana Gordic / Shutterstock.com

If you have focused all retirement planning energy on your 401(k), you may be missing a key piece of the puzzle: Social Security.

You can influence your eventual payout from this old-age safety net to a surprising degree by making some adjustments, or by making changes in retirement planning.

The time to get started pumping up your Social Security checks is now, even if you’ve got decades to go before retirement. Following are some of the best ways to do just that.

1. Raise your income

standret / Shutterstock.com

Because the amount of your Social Security checks is based partly on your earnings, doing what you can do now to grow your income will fatten your Social Security checks in the future.

Some ways to boost your income:

  • Focus on regular raises. Assess your value at work and approach your employer the smart way.
  • Consider changing jobs if your salary has topped out in your current job.
  • Plan for professional growth, including evaluating whether more schooling would be worth the cost, or whether you should enter a new line of work.

2. Avoid claiming benefits too early

Still Life Photography / Shutterstock.com

The age at which you start collecting Social Security makes a big difference in the size of your checks.

You generally can start claiming benefits as early as age 62. But your benefits checks will be smaller if you claim any time before you reach what the Social Security Administration calls your “full retirement age.”

For example, if you start receiving benefits immediately, at age 62, your checks will be forever 20% to 30% smaller than if you had waited until you reached your full retirement age. Here are “7 Reasons You Should Not Claim Social Security Early.”

Some people have no choice, though. Many retirees stop working earlier than planned because of illness or unemployment, or to be caregivers for a family member, for example. If this is the case for you, try using other sources of income if possible, so you can hold off claiming benefits until you’re older.

On the other hand, if you don’t expect to live to a very old age, it may be a good idea to claim that money now. It depends on your circumstances. Here are “5 Reasons You Should Claim Social Security ASAP.”

3. Hold on until age 70

Lucky Business / Shutterstock.com

Just as claiming Social Security before your full retirement age can lead to a smaller check, delaying claiming until after reaching full retirement age can lead to a bigger check.

The Social Security administration gives these examples to illustrate the value of waiting:

  • “67, you’ll get 108% of the monthly benefit because you delayed getting benefits for 12 months.
  • 70, you’ll get 132% of the monthly benefit because you delayed getting benefits for 48 months.”

After age 70, however, there is no more benefit to waiting. At that point, you’ve maxed out the value of waiting. Don’t hold off claiming benefits beyond your 70th birthday.

4. Get professional help

Social Security advisor
Iakov Filimonov / Shutterstock.com

In many instances, an informed decision about when to claim which Social Security benefits can boost benefits by tens of thousands of dollars over your lifetime, especially for couples.

Various companies will prepare a customized analysis revealing exactly when to claim Social Security benefits to receive the maximum lifetime payout.

Social Security Choices sells one such product for $39.99 and, in partnership with Money Talks News, offers a $10 discount. Use coupon code “moneytalks” when buying a report. Stop by our Solutions Center and read “A Simple Way to Maximize Your Social Security” to learn more.

5. Look into spousal benefits

Rawpixel.com / Shutterstock.com

Married people have an advantage in the Social Security system. A married person may be able to receive up to half the amount of his or her spouse’s full retirement benefit. Even a spouse who never worked may be able to claim benefits.

A divorced person who was married 10 years or longer may also qualify for spousal benefits.

6. Pump up your spouse’s survivor’s benefits

Older couple practicing yoga
wavebreakmedia / Shutterstock.com

When you die, your Social Security benefits end, but your widow or widower may be eligible to receive survivor’s benefits on your Social Security record.

The amount of survivors benefits that your spouse would be eligible to receive depends in part on your earnings history. So, do all you can now to increase your earnings.

7. Weigh the cost of working while claiming benefits

PointImages / Shutterstock.com

If you claim Social Security benefits before reaching full retirement age and also work, it can cost you. The government could reduce your Social Security checks by as much as $1 for every $2 in earnings over a certain amount, up until you reach full retirement age.

The amount you are dinged, however, eventually will be paid back to you, the SSA says.

Once you reach full retirement age, your monthly benefit will increase to account for the withheld benefits. You just have to live without it for the period during which you are still working but have yet to reach full retirement age.

We explain this in detail in “The Danger of Working While Collecting Social Security.”

8. Pay off debts

bacho / Shutterstock.com

Social Security checks can be garnished for certain debts and other financial obligations. These can include:

  • Child support
  • Alimony
  • Overdue federal taxes
  • Federal student loans

If possible, pay these off before retirement so you can keep your entire benefit check.

9. Check for errors

WAYHOME studio / Shutterstock.com

Monitor your Social Security statements, looking them over to ensure your income is reported correctly. Getting credit for every penny you’ve earned will boost your eventual benefit checks.

You can do this all online by creating a SSA.gov account.

Also, creating an account is the best way to guard your Social Security from thieves.

10. Collect benefits for minor children

Karunyapas / Shutterstock.com

Once you start collecting Social Security benefits, your unmarried dependent children may be eligible for benefits also.

The definition of “children” here can include biological and adopted children, stepchildren and dependent grandchildren, depending on the child’s age and other circumstances.

11. Work more years

Poznyakov / Shutterstock.com

The size of your Social Security benefit checks is generally decided by a formula that is effectively based on your 35 highest-earning years of work. If you work for fewer than 35 years, the formula uses zeros for the missing years’ earnings.

Years of zero earnings will lower your benefits. So, at least work for 35 years before you stop working.

12. Watch out for taxes

Christian Delbert / Shutterstock.com

If your only income in retirement will be from Social Security, you probably won’t have to worry about paying income taxes. But if you have income from other sources, you can be taxed on up to 85% of your benefits.

Federal taxes on Social Security benefits are based on your tax filing status and, if you are married, on what the SSA calls your “combined income.” Combined income comprises your adjusted gross income, half your Social Security benefits and any nontaxable interest.

Some ways of reducing your federal income tax bill in retirement might be to choose investments that would lower your tax liability or reduce your spending to draw less income from your retirement savings each year.

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

Source: moneytalksnews.com

Senior Home Equity Booms: Should You Get a Reverse Mortgage?

Senior couple at home
Photo by wavebreakmedia / Shutterstock.com

Homeowners who are 62 or older are sitting on a record amount of home equity, according to new figures from the National Reverse Mortgage Lenders Association.

From the first quarter of this year to the second quarter, housing wealth among those 62 and older grew by 1.8% — or $134 billion — and now totals $7.7 trillion.

All of that locked-up wealth may tempt some seniors into considering a reverse mortgage, particularly during these tough times brought on by the coronavirus pandemic.

What is a reverse mortgage?

A reverse mortgage is like the home loans we all are familiar with, but with an important twist. With this type of mortgage, you borrow money against your house and get cash every month.

Other types of reverse mortgages give you money as a lump sum or let you use the mortgage to establish a line of credit.

To get a reverse mortgage, you must be 62 or older. But is a reverse mortgage a good idea?

Advantages of reverse mortgages

Money Talks News founder Stacy Johnson says reverse mortgages can make sense for some homeowners. As he has written:

“If you’ve got a lot of equity in your house and Social Security just isn’t doing it for you, well, maybe this is a great way for you to increase your monthly income by tapping your home equity without leaving your home.”

Stacy notes that people who take out reverse mortgages generally plan to stay in their homes until they die. After a homeowner with a reverse mortgage dies, the home is sold to pay off the loan, or simply turned over to the lender.

Drawbacks of reverse mortgages

A reverse mortgage does not always make sense. That is especially true if you have heirs who would like to own your home after you die. As Stacy explains:

“Remember, the mortgage is getting bigger and bigger. When you die, or when you move to a nursing home, etc., someone will have to pay off that mortgage if you want to keep the house in the family.”

Should you get a reverse mortgage?

It can be difficult to decide whether a reverse mortgage is right for you.

Stacy recommends sitting down with an expert at a nonprofit credit counseling agency and discussing your options. Such counseling is not free — Stacy estimates it will cost between $100 and $125. However, paying that fee is a lot less costly than making a big mistake.

Additionally, counseling is required before you can close on a reverse mortgage. So, even if you decide to go ahead with a reverse mortgage, the counseling cost will not be money wasted.

If you decide a reverse mortgage is not right for you, consider any of the “10 Alternatives to a Reverse Mortgage.”

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

Source: moneytalksnews.com

5 Home Improvements That Help You ‘Age in Place’

Senior couple at home
Monkey Business Images / Shutterstock.com

More than three-quarters of Americans age 50 or older want to retire in their current community, preferably in the home they now own, according to AARP.

However, staying could require homeowners to make some changes to maintain their quality of life. Following are some practical upgrades to consider if you’re planning on aging in place.

Add accessible door handles

home security
Andrey_Popov / Shutterstock.com

Doorknobs: They may look like a simple aesthetic choice at first glance, but they also can matter a lot when you’re aging.

Traditional knobs require tight grasping and a twisting motion, which can pose a challenge to people with arthritis or poor balance. This is why you rarely if ever see public buildings with traditional doorknobs, which don’t meet the accessibility requirements of the Americans With Disabilities Act.

Lever door handles are easier to grip. They function more simply, opening a door with the weight of your hand. What’s more, stylish levers update the look of your home.

At Amazon, door levers start at less than $20.

Improve storage and shelving

Kitchen shelf utensils white
Didecs / Shutterstock.com

You shouldn’t need to strain to use or put away everyday items. Particularly in the kitchen, evaluate the height and placement of the counter, cabinets, drawers, storage racks and shelving. A few ideas:

  • Lazy Susans keep things organized, compact and easy to access.
  • Use dowels or racks to store cookware instead of stacking them, to avoid moving heavy pots and pans.
  • Well-mounted wall hooks make things easier to reach.
  • Slide-out shelving is more accessible than cabinets that require you to crouch or reach.
  • Fix or replace sticky drawers, and add accessible touch or push latches or lever handles.
  • Add a kitchen island or prep table at a comfortable height.

Install a curbless shower or walk-in tub

handicapped accessible bathroom disabled senior elderly
Prasit Rodphan / Shutterstock.com

As we age, navigating our home can be, literally, a balancing act. More than 1 in 4 older people suffer a fall each year, according to the U.S. Centers for Disease Control and Prevention. Among the risks: broken bones, hip fractures and head injuries.

When you have a slippery-when-wet bathroom, the appeal of this renovation is obvious. There are two main options:

  • Walk-in tub: Generally taller than a traditional bathtub, with a watertight door and usually a seat, some walk-in tubs are made with people transferring from wheelchairs in mind. Safety features can include nonslip flooring, handrails and anti-scald valves.
  • Curbless shower: More open than a conventional shower, this design may not involve a door at all — like a gym shower. There is no lip to step or trip over, and the floor slopes slightly toward the drain. You may want to add safety features like grab bars and nonslip mats.

The price varies, depending on size, design, materials and local labor costs. You’ll spend extra to reinforce the floor and drain beneath a curbless shower.

At Home Depot, the cost of walk-in tubs ranges from around $1,500 to more than $7,000.

Fall-proof steps and stairs

Elder Senior Woman Stair Lift Home Mobility
Daisy Daisy / Shutterstock.com

The health risks of falling — and the preventive steps you can take — are hard to overstate. Anything you can do to reduce your risk and dependence on others is worth considering.

The options include:

  • Where changes in height are minimal, one or two steps can be replaced with a ramp or improved with a railing.
  • Longer staircases are more difficult. Add bright lighting, solid railings on each side of a staircase and anti-slip strips on stair edges.
  • A stair lift (shown above) also may be a solution.

Adding a stair lift can run from $2,000 with used equipment to more than $10,000, Bill Owens, an Ohio contractor and founder of Better Living Design Institute, tells Next Avenue.

Create a home office or hobby room

goodluz / Shutterstock.com

As you transition out of the workforce, you might find value in setting up a quiet, tidy place in your home to enjoy a hobby or to organize paperwork and manage your financial affairs. This is especially true if you will continue consulting or working remotely after leaving a full-time job.

Or, perhaps you want to find a new use for a spare bedroom or the kids’ room. If you’ll be spending more time at home, it’s natural to start using more of it.

Costs vary, depending on your plans, how much work you’ll do yourself and local costs for labor and supplies. Get several detailed bids from contractors and compare them.

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

Source: moneytalksnews.com