Articles by Miranda Marquit

3 Signs You Need Help with Your Debt

One of the most difficult issues to overcome is debt. If you have a lot of debt, it can be difficult to move forward with your finances. The interest payments suck away your disposable income, and once you are stuck in the cycle, it can take serious effort to get out.

In some cases, you might even need help dealing with your debt. You can get help from a legitimate counselor with the National Foundation for Credit Counseling, or get help from a fee-only financial planner.

Here are 3 signs that you might need to seek professional help with your debt:

sign you need help with debt

1. You Only Have Enough for Minimum Payments

When you only have enough money to make minimum payments, that's a huge red flag. It means that you aren't in a position to actually make a solid dent in your debt. Paying only the minimum basically covers your interest, and then maybe a few extra dollars toward principal. It means that you will be in debt for years to come.

If you find that you just can't make more than the minimum payments on your debts each month, you might need professional help to identify strategies you can use to change the situation.

2. You Feel Overwhelmed and Constantly Overlook Bills

If you have so many bills that you can't keep track of them all, that could be a sign that you need professional help with your finances, and with creating a debt pay down plan. Sometimes, you don't miss bills on purpose; you just have so many it's hard to remember what you've already paid, and other bills slip through the cracks.

You might be able to use various tactics and strategies to consolidate some of your bills so that there aren't so many. At the very least, a professional can help you work out a schedule that works with your cash flow reality, and get you on track to stop missing payments or forgetting about some of your bills.

3. You've Tried Before, But Nothing Seems to Work

One of the most frustrating things about debt is that it can be a cycle. If you've tried on your own to beat the cycle of debt, and you keep failing, it might be time to bring in a professional. Sometimes, it's hard to complete overwhelming tasks without support and accountability.

A credit or financial professional can help you work out a path that is likely to “stick” for you, and then help hold you accountable for your progress. Look for someone who can be supportive and helpful, and create a plan that makes sense for your situation.

Bottom Line

You don't have to do everything alone. It's tempting to try to beat debt on your own, and in some cases it's even possible to put together your own debt pay down plan. However, for many of us, a little support and help is needed. Getting professional help can be one way to change your current debt dynamic. Look around to figure out your options, and then choose a professional that truly can help you get back on your feet.

What Do You Do With Your Savings?

By Miranda Marquit 3 Comments

One of the basic pieces of advice that we are often given about money is to save more.

But where do you put that money? And what should you do with it?

Create Goals for Your Savings

While saving money just to save money does make sense in some ways, the reality is that few of us are willing to keep doing something “just because.” As a result, it makes sense to carefully consider your desired outcomes and figure out what you hope to accomplish with the money you are saving.

First off, really think about what you hope to have happen with your money.

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Do you want some of it to go toward creating a comfortable retirement? Do you hope to save up enough money for an emergency fund? Are there other goals, such as putting a down payment on a house or going on a family vacation that you are interested in reaching?

Understanding these goals can motivate you to keep setting aside money, and keep saving, as you plan your finances. It's too easy to lose sight of what you are trying to accomplish when you don't have clear goals for your money. Take the time to really stop and think about why you are saving, and then go from there. Once you have the proper motivation, you will be better able to to keep moving forward.

Where Should You Keep the Money?

Many savers are disappointed with the current low-rate environment. It means that they won't receive much of a return on their money. Part of feeling better about the situation, however, is understanding that the primary goal of some of your savings isn't to earn interest.

If you are saving up money for a down payment, or if you are looking for the liquidity and safety that comes with an emergency fund, it doesn't make sense to become fixated on interest rate. While it's depressing to earn so little on your money, the reality is that you have to keep the purpose in mind.

On the other hand, there are some goals that warrant keeping your money in an account with greater potential. If you are planning to build a significant retirement nest egg, you don't want to rely on a low-rate savings account. Instead, you should consider using an investment account. There are ways to limit your exposure to risk when investing. Using index mutual funds or index ETFs can help you take advantage of the potential for higher growth so that your retirement goals can be met.

I also like to keep some of my extra savings in an investment account. While I keep about three weeks' worth of expenses in a low-rate account, where it's accessible if I need it, the bulk of my emergency fund is earning in an account with an index ETF and dividend paying investments. That way, it has the potential to earn more, and I can access it if I really need it.

Combining my savings strategies helps me maximize my money, while still keep some of it safe and accessible.

What do you do with your savings?

Why I’d Rather Pay $10,000 to Unload My House Than Become a Landlord

By Miranda Marquit 9 Comments

There are people out there who are made to be landlords. They like the idea of having someone else pay the mortgage on a home or apartment building and enjoying the ability to build equity on the property without using their own money. Once the property is paid off, the monthly rent is income (offset by the cost of taxes, insurance, and keeping the property up).

I totally get why some people love the idea of getting into real estate and renting out property. I even get why many people who, upon moving, decide that they would rather rent out the old home than sell it.

I am not one of those people. I am getting ready to move across the country, and my husband and I have no desire to try to rent out the house. In fact, in the worst case scenario put forth by our real estate agent, we will have to pay $10,000 to unload our house.

But I'd rather do that than become a landlord. Here's why:

pay to sell house

I Don't Want to Worry About Damage to the Property

We've taken good care of the house. When we were tenants, we took good care of the rentals we lived in. I expect, now that we are moving into a rental again, we will once again take good care of our living space. However, not everyone is as conscientious as we are. We have one (well-behaved) child and no pets. I've seen what others have done to rentals in the past. We wouldn't want to allow pets, and, while we could technically say no to someone with lots of rowdy kids, we'd feel bad.

The other issue is that of tenants who might not pay rent on time, or who might have a history of damaging apartments. It's true we can vet our tenants with credit checks, background checks, and reference checks. However, these things take time and money. And I don't want to mess with it. Properly vetting a tenant is more work than I want to do, and even then you still run the risk of having problems with the tenant.

Managing Long Distance Is Too Much Work

Another issue is that of management. I don't want to manage a property in Utah from Pennsylvania. From maintenance needs and repair issues to checking up on the tenants, doing so from 2,000 miles away just doesn't appeal to me. Yes, I could hire someone to manage the rental for me, but that requires that I go through a vetting process to find a suitable candidate, and I am not interested in doing so.

Plus, it's one thing to hire a manager or management company for an apartment building, or to help you with multiple properties. It's quite another to hire someone to manage a single home. None of it seems worth it.

Hopefully we'll be able to break even on our home sale, but even if we're not, it's worth it to me to avoid the hassle and inconvenience of being a landlord. It's just not my thing.

What about you? Would you consider becoming a landlord? If you are a landlord, what do you like about it?

Watch Out for Interest-Only Home Loans

By Miranda Marquit 2 Comments

Now that the economy has picked up some, the housing market is recovering a little, and memories of the financial crisis are fading, some lenders are re-introducing a few “creative” financing methods. It's possible to get an interest-only mortgage again, or get a loan with a low, low rate at the beginning.

An interest-only loan is tempting because the borrower only pays the interest each month. This state of affairs can last from five to 10 years. When you only pay the interest, it feels like you can “afford” more house. You aren't paying the principal, so you are only paying one part of the loan, and it seems like a good idea. However, you could actually end up in big trouble.

While some lenders are re-thinking interest-only home equity lines of credit, others are comfortable offering these types of options to those looking to buy a home. Before you go for an interest-only loan, though, it's important to understand what you are getting into — and to reconsider.

interest-only-home-loans

Building Equity Slowly

One of the biggest problems with an interest-only loan is how it hampers your ability to build equity in your home. An amortization calculator can help you see how fast your mortgage balance is decreasing. With an interest only loan, you're not paying down the principal, so you really aren't making much headway.

If you have to sell your house, you might find that there isn't enough equity in your home to leave anything left over for you after the sale goes through. It also makes it practically impossible to refinance your home, since you don't have the equity needed to put lenders at ease.

A home bought with an interest-only mortgage seems affordable at first, but it quickly becomes apparent that it's not affordable in the long run.

Paying the Cost Later

The biggest problem with getting an interest-only mortgage is that you end up paying a lot more later. Once you start paying on the principal (something that happens after the initial period is over), payments can skyrocket. It's vital that you understand this reality of interest-only home loans.

Many homebuyers who took the plunge with interest-only mortgages prior to the housing crash and financial crisis did so expecting to make more money in a few years. They thought of a higher income, able to handle the payments.

Other homebuyers assumed they would be able to refinance. Even though they weren't paying down principal, the assumption was that housing costs would keep climbing, so equity would be built, even without mortgage principal payments. They could refinance before the higher payments hit, and things would work out.

We all know how that went.

Unfortunately, the fact that these types of loans are starting to become available again means that there could be more problems down the road. And, of course, analysts are on the watch for what is going to happen in the next little while, since there are still interest-only loans from the past that still haven't worked their way through the system.

How To Stop Feeling Pessimistic About Retirement

By Miranda Marquit 3 Comments

When many Americans think about retirement, they are pessimistic — and for good reason. According to a recent COUNTRY Financial Security Index survey, 25 percent of Americans say that they are not saving for retirement at all. If you aren't saving toward your retirement, it's hard to be optimistic about it.

Additionally, there is a great deal of pessimism among people in my own age group (age 30 to 39) about the ability to have a comfortable retirement. In fact, 47 percent of adults in my age group think that it's impossible for a middle-income family to save for a secure retirement.

When you look to those 40 and older, 47 percent of them regret that they didn't start saving for retirement earlier, reports COUNTRY.

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However, you don't have to feel pessimistic about retirement, especially if you are in my age group or younger. Take action now, and you can start to feel better about your chances for a comfortable retirement.

Plan a Retirement Needs Assessment

Much of the time, people are pessimistic because they don't actually know what they will need in retirement. Take the time to sit down and estimate what you will need. That will give you a starting point.

Then, break it down. If you look at the final number, chances are that you will be discouraged by the amount you will have to save. Instead, look at things in terms of monthly income, and in terms of what you can set aside each month for the future. Open an account at a brokerage like Betterment, and you can also get a projection of what your current savings plan will yield you by your retirement age. I began feeling better about my own retirement when I looked at the projection. Compound interest is more powerful than you think, and running a calculation that can help you prepare for your needs can be a great way to move forward.

Start Investing for Retirement RIGHT NOW

Another way to feel better about your situation is to take action. You can start investing for retirement right now. Betterment is a great place to start. If you can put in $100 a month, you can get started with an IRA that will help you invest better for the future. One of the great things about Betterment is that it keeps you on track, and helps you stay in automatically.

But you don't have to start there if you don't want to. You can also start by contributing to your employer's 401(k) plan. Have the money taken out of your paycheck. At the very least, open an account at a discount brokerage with $25 and make regular contributions to purchase shares of an index fund. Anything is better than nothing when you plan for the long-term. Over time, as your financial circumstance change, add more to your regular retirement account contributions. But getting started now will help you overcome some of your fears about retirement.

One of the worst things you can do is nothing. Take action and start investing for retirement today. You'll feel better, and you'll be motivated to make a plan to better secure your financial future.

3 Tips for Keeping Your Summer Budget Under Control

By Miranda Marquit 4 Comments

For me, summer is time of shifting financial priorities. First of all, there is a lot to do, and from summer camps for my son to camping trips to summer holiday celebrations for the whole family, the demands on our bank account are different.

It's hard to keep the summer budget under control, but it is important that you attempt to do so. After all, you don't want to be paying for this summer years from now due to debt. If you are looking to keep your summer finances in proper order, Ryan Bailey, the Executive Vice President of Deposits and Payments at TD Bank, has 3 tips to help you keep things under control:

tips for summer budgeting

1. Consider Your Travel Costs

First of all, you want to make sure that you are getting the best deal for travel. Now is the time to use loyalty rewards and credit card points to save money. You can also look for deals and discounts at your destination. Bailey also suggest that you consider how to minimize fees as you travel. If you take your debit card, Bailey recommends that you look accounts that will accommodate you. “Some banks offer accounts that reimburse out-of-network ATM fees — even internationally,” he says.

Look for ways to save money on travel, and plan ahead of time to stay within budget.

2. Find a Better Bank Account

Are you still using the account you had when you were in college, or when you first married? Over time, people's needs change, and their bank accounts should change as well. Bailey points out that it can be a big mistake to have the “wrong” account, especially as you gear up for summer. If you are saving up for a vacation, you want to keep your money in a high-yield account that offers you more bang for your savings buck. You also need an account that doesn't charge you fee. “Find a bank account that meets your current needs by doing research online and asking questions at your local bank,” Bailey suggests.

3. Assess Your Wedding Plans

The summer is a popular time to get married. However, you don't want your wedding to ruin your summer budget. Re-assess your needs, and consider ways to save money. You can do this by simplifying matters, and also by looking for deals and discounts. Consider making part of your wedding do-it-yourself.

You will also need to look at your partner financial situation. “Can merging finances help gain access to a premium account?” says Bailey. These accounts might be able to help you and your significant other better finance your wedding. Bailey also points out that you need to organize your finances and make a plan so that your shared finances don't run into problems as you both draw on accounts. You need to have a plan for that money so that you both know what is happening.

Summer can be a tricky time for your money, and it's vital that you plan ahead and look for ways to save if you want to avoid breaking the bank.

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