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[ad_1] The full article originally appeared on RickOrford.com and this truncated version has been republished with permission. It’s never too early to start thinking about retirement. In fact, the more you do now, the easier retirement will be. Retirement can be a daunting prospect if you don’t have a plan. For example, do you know how much you’ll get from Social Security? And, will your money outlast you?  You can make sure that you have the money you need to live financially independent in retirement by planning ahead.  11 Things to Do before Retirement This article will cover the 11 things to do before retirement. While much of this can be done on your own, a lot of it should be done alongside a professional.  1. Consider Your Housing Needs Those about to retire should start thinking about whether they want to downsize or move to a retirement community. It’s best to consider your options and decide what’s best for you. If you plan on staying in your home, it’s often best to make sure that it’s paid off before you retire. If not, you’ll be stuck with a mortgage payment that could put a damper on your retirement plans.  It might also be a good idea to consider whether you want to move to a retirement community. These communities have many benefits that can make retirement more enjoyable. For one, you’ll be surrounded by people in the same stage of life as you. This can provide companionship and support during retirement. Retirement communities also offer social and recreational activities to keep you active and engaged. 2. Create a “Retired” Budget Once you retire, your income will likely change. You will probably have less income if you’re no longer working. The budget should include all your expected retirement expenses, such as housing, food, transportation, and healthcare. But don’t forget birthday and anniversary gifts, presents during the December global holidays, or even the odd gift to yourself. Also, don’t forget to include a cushion for unexpected expenses. And don’t forget to account for inflation. These days, prices always seem to go up. So, you’ll need to make sure your retirement income can keep pace. 3. Calculate the Expenses You’ll Have to Make Once You Retire One of the things to do before retirement is to calculate the expenses you’ll have once you retire. These expenses include things like housing, food, transportation, and healthcare. Indeed, costs will be different than they are now. Consider the 50-30-20 rule. This rule suggests spending 50% of your income on essential expenses, 30% on non-essential expenses, and 20% on savings and debt repayment. 4. Save like Crazy Retirement planning is all about saving as much money as possible now to have enough money later. The sooner you start saving, the more time your money has to grow. If you’re not already doing so, start contributing to a retirement account as quickly as possible. Social security will only get you so far. So, the earlier you start saving, the less you’ll need to save each month to reach your retirement goals. Suppose your employer offers a retirement savings plan, such as a 401(k), make sure you’re contributing enough to take advantage of any employer matching contributions. Employer matching contributions are free money that can help you reach your retirement goals faster. Even if you can’t contribute a lot each month, every little bit helps. The key is to start saving now and be consistent with your contributions. 5. Top Up Your Emergency Fund An emergency fund is a separate savings account that you can use for unexpected expenses. Experts agree to save 3-6 months’ worth of money for living expenses. This will help you cover unexpected costs, like medical bills or home repairs. You can open an emergency fund account at a bank or credit union. And, be sure to look for an account with low fees and a reasonable interest rate. 6. Keep Adding to Retirement Savings Just because you’re retired doesn’t mean you should stop saving for retirement. If you can do so, keep contributing to your retirement savings. If you have earned income, you can even continue contributing to your traditional and Roth IRAs. Together with your financial advisors, you can determine the best time to start withdrawing from your retirement savings accounts. 7. Get Out of Debt Debt can be a retirement killer. If you’re carrying a lot of debt, it’s essential to get it paid off before retiring. Otherwise, you’ll be stuck with monthly payments that could damage your retirement plans. One of the fastest ways to get out of debt is to start by reducing your credit card usage. Doing so will reduce your monthly expenses and allow you more money to save for retirement. There are a few ways you can reduce your credit card usage. Use cash instead of credit, Transfer your balance to a lower interest rate credit card (To save on interest), and Set up a budget and stick to it. You can use the debt snowball or debt avalanche method to pay off debt. With the debt snowball method, you first focus on paying off your smallest debts. With the debt avalanche method, you first focus on paying off your debts with the highest interest rates. 8. Seek Loan Forgiveness If You Still Have Federal Student Loans If you still have federal student loans, you may be eligible for loan forgiveness. Loan forgiveness is when the government pays off your student loan debt. You may qualify for loan forgiveness if you work in a public service job or are disabled. To learn more about loan forgiveness, visit the Federal Student Aid website. 9. Plan for Changes in Your Medical Insurance If you’re retired or nearing retirement, it’s essential to plan for changes in your medical insurance. You may be eligible for Medicare, but it’s vital to understand your coverage and its cost. Also, be aware of the gaps in Medicare coverage to plan accordingly. You

[ad_1] You probably already know that your credit report and credit score are important—but why? For a few reasons, but here’s the most important: what’s on your credit report can make or break your applications for loans, credit cards and much more. To get approved for those lines of credit, you need to understand your credit report. Did you know you have more than one credit report? Which is the most important credit report? If you’re looking for answers, we’ve got them. Keep reading to learn more. In This Piece: How Many Credit Reports Do You Have? Credit Scores Versus Credit Reports Why Do People Look at Your Credit Report? What Is the Most Important Credit Report? What Is the Most Important Information On Your Credit Report? How Many Credit Reports Do You Have? Everyone has more than one credit report. Each of the three major credit bureaus—Equifax, TransUnion and Experian—has its own credit file for each consumer. Creditors and other businesses aren’t required by law to report to all the bureaus, or even any bureau. So your credit report will vary from bureau to bureau. The type of report that’s pulled also depends on who requests it. For example, when employers pull your credit report for a background check during the hiring process, they receive a report specifically designed for this purpose. It’s scrubbed of information that id not relevant to your employment requirements. On the other hand, lenders evaluating you for a loan will see a completely different type of report. Some people have no credit reports. These individuals are referred to as the credit invisible. They don’t have credit reports or credit scores because they don’t have credit history reported to any of the bureaus.  Where Can You See Your Credit Reports? You can get a free annual credit report from each of the three bureaus at AnnualCreditReport.com. Typically, you can only access your report once a year. But due to the COVID-19 pandemic, the credit bureaus are offering free weekly credit reports for a limited time. You can also get information about your credit report via our free credit report card. Your report card gives you a grade on each of the factors that impact your credit score, so you know where to improve. And if you want a deeper look at all three of your credit reports, you can sign up for ExtraCredit®. Get insight into your reports today! Credit Scores Versus Credit Reports You might think that you’ll see your credit score on your free credit report. But credit scores and reports aren’t the same, and AnnualCreditReport.com doesn’t provide a credit score.   A credit report is a document—digital or hard copy—that details the information a specific credit bureau has on file for you. On the other hand, a credit score is a three-digit number that rates your creditworthiness based on information in your credit report.  How Many Credit Scores Do You Have? Because your credit reports are different from bureau to bureau, your credit scores will be, too. You can have more than two dozen FICO scores, for example. And FICO isn’t the only scoring entity; many creditors also use VantageScore.  Each credit scoring model has a similar approach to rating creditworthiness. However, each puts slightly more importance on different factors or considers information the others may not. So your actual score with each of the models can be different.  Where Can You See Your Credit Scores? You can get one of your credit scores based on Experian data when you sign up for the free credit report card at Credit.com. And paid subscribers to ExtraCredit can see up to 28 of their FICO scores to get a clear picture of their credit. Why Do People Look at Your Credit Report? Your credit report and/or scores can be pulled for a variety of reasons. Here are some of the most common reasons someone might look at your credit: To evaluate you for credit. Most lenders pull your credit report and score to determine whether they want to lend you money and what rates and terms they can offer. Your credit score and history help lenders understand how risky a borrower you might be. Lenders need your permission to pull credit for this reason, and it goes on your report as a hard inquiry. As a background check for employment. Some employers may pull your credit as part of a background check during the hiring process. They need your permission to do so, and the pull shows up as a soft inquiry on your report. To offer you service. Auto insurance companies and even utility agencies may pull your credit before setting up services. Credit history could impact premium costs or whether you have to put up a security deposit. These are typically considered soft inquiries.  In a rental background check. Landlords may pull your credit when considering you as a potential tenant—and they need your permission. To check your information. You may pull your credit reports yourself to check whether the information on them is accurate. If it isn’t, you can dispute it. These are considered soft inquiries and shouldn’t impact your credit score. To prepare a preapproval offer. Companies can do a soft pull on credit reports before sending a preapproval offer for credit. If you’ve ever received a “You’re preapproved!” offer from a credit card company, this may have happened. Companies don’t need your permission for these types of soft inquiries, but you can opt out of them. What Is the Most Important Credit Report? The most important credit report is the one that’s most accurate and up-to-date. That gives you the best indication of your credit history and credit score. Which Credit Bureau Is the Most Important? No credit bureau is better than the others. However, lenders, landlords and others may not check all three credit reports when evaluating you as a potential borrower or tenant. In those cases, the most important credit bureau is the one they’re pulling information from. Since you can’t predict which

[ad_1] Whether you’re a parent proudly financing higher education for your child or a student signing on the dotted line for your own student loans, it’s important to understand how those debts can impact your future. Do parent PLUS loans affect getting a mortgage, for example? The short answer? Yes, any student loan you’re responsible for can impact your chances of getting approved for a mortgage. Find out more below. In This Piece: Do Student Loans Impact Getting a Mortgage? How Do Student Loans Impact Your Ability to Get a Mortgage? Does Applying with FAFSA Effect Buying a House? Tips for Ensuring a Successful Mortgage Application Learn More About Mortgages Today Do Student Loans Impact Getting a Mortgage? Student loans are a type of debt. So if they’re in your name, they can impact your chance of getting a mortgage in the future. Luckily they can have a positive impact in some situations, especially if you have good financial habits.  It’s important to note that student loans only impact your ability to get a house if you’re the one who’s responsible for paying the loan. Parent PLUS loans affect getting a mortgage if you’re the parent who’s signed as the responsible party, for example, but they wouldn’t impact your child’s chances at a mortgage.  But if a student took out a loan with the parent as a cosigner, the loan impacts both people’s credit. It might impact the chances of getting a mortgage for either party. How Do Student Loans Impact Your Ability To Get a Mortgage? Student loans are often pretty hefty. The average cost of attending a four-year college or university is $35,331, so you’re looking at total loans that are tens of thousands of dollars. That’s nothing to scoff at, nor is it a small mark on your credit report. Find out how it impacts your mortgage application below. Student Loans Reduce How Much You Can Save for a Down Payment You may not have to start paying back your student loans until you’re out of college or a forbearance period has passed. But the time will come when you’ll need to make those monthly payments. Depending on how much you borrowed and what your terms were, student loan payments can be a big hit to your monthly budget. That hit makes it harder to save money quickly for a down payment. While options do exist for mortgage loans with a lower down payment or even no down payment, not being able to save limits your choices.  Mitigate this impact by: Asking your mortgage broker for information about options with low down payment requirements. Applying for down payment assistance to help you cover the costs of down payments. Working to increase your income so you can save more money. Keeping other types of debts and expenses low to facilitate savings. They Increase Your Debt-to-Income Ratio Any amount of debt you have to pay back increases your debt-to-income ratio (DTI). Mortgage lenders look at DTI to understand whether you can afford the payments on any loan you take out. There’s not a single hard-and-fast rule for where your DTI needs to be to get a mortgage, but the Consumer Financial Protection Bureau notes that 43% is a good number to consider. That means your total debt payments monthly, including any prospective mortgage, should be no more than 43% of your total monthly income. Some lending programs may have stricter DTI requirements. Here’s an example to demonstrate how a student loan can change DTI. If you have student loan payments of $500 a month, a car loan of $500 a month and credit card payments totaling $300 per month, you have $1,300 in debt. If you want to get a loan to pay for a home and the loan would result in a $1,200 a month mortgage, that’s a total of $2,500 per month. If you only make $5,000 a month, your debt-to-income ratio would be 50%. That may be too high for a favorable mortgage loan to be approved. If you take out the student loan and keep all the other factors the same and the DTI is now 40%. That’s a better DTI for most mortgage loans. Offset the impact of student loans by reducing your other debts. For example, in the above example, you could work to pay off the credit card debt before you apply for a mortgage. You might also refinance the car loan, bringing your monthly payment down to $300. That would leave you with a 40% DTI. Student Loans Impact Your Credit Score Most lenders do report student loans to one or more of the credit bureaus. This is actually good news, because paying your student loans on time can help you build credit and have a positive impact on your credit score. On the flip side, if you miss payments or end up defaulting on your student loans, the negative impact on your credit can bring your score down and keep you from getting approved for a mortgage.  Keep this from being a problem by paying your student loans on time every month. Consider setting up auto bill pay so you don’t have to worry about accidentally missing a payment. You may also want to find out more about the required credit score to buy a house so you know what you’re shooting for. Does Applying with FAFSA Effect Buying a House? No, completing FAFSA doesn’t impact your credit at all. And it doesn’t mean you’re taking out a student loan. FAFSA simply lets you apply for any potential student financial aid that might be available for you. You’re then offered aid that you can choose from.  More Tips for Ensuring a Successful Mortgage Application Doing a bit of homework before you apply for a mortgage can increase your chances of success. Here are some things to do related to your student loans: Consolidate multiple student loans into one if possible, which will reduce the total amount you have to

[ad_1] This article originally appeared on The Avocado Toast Budget. This post is sponsored by Credit.com. Here at the ATB, we are all about budgeting in a way that works for you and finding realistic ways to feel more confident with your money. Now that 2020 is (finally) over, here are ways that you can start to take hold of your finances and build confidence with your money in 2021. Write down your short, medium and long term financial goals I’m a big believer that you don’t need to stress over how to maximize the value of every dollar you come across. Much of personal finance is behavioral and relies on us finding value in how we navigate our money! Because of this, I found it incredibly helpful to sit down and brainstorm short, medium and long-term financial goals to decide what I wanted my money to do for me. Write down your short, medium and long term financial goals Here’s how I break it up: Short-term goals – less than two years Medium-term goals – 2 – 10 years Long-term goals – 10+ years Feel free to dream big! We want to make realistic and attainable goals, but we also want to allow ourselves to dream about what we really want our lives to look like, and how our money plays a role in that. Get to know your credit score Wanna know a secret? I avoided my credit score for the longest time. Turns out, once I finally faced my credit score, I became more empowered to understand how my credit score affects my finances and what I could do to change it. While free resources can give you a ballpark estimate of your credit score, that score isn’t very useful and certainly isn’t what creditors see! Knowing your true score, and seeing your credit reports from all three major credit bureaus, gives you security and control over how to navigate your credit score going forward. While it can be daunting, credit plays an important role in our lives from renting, to car insurance, to mortgages, to career opportunities and more. That’s why it’s important that you stay informed of what your credit actually looks like that’s why I signed up for ExtraCredit’s free trial!  Start your ExtraCredit FREE trial here! Set up automatic savings Automating your savings is LIFE CHANGING. Setting up automatic savings is often referred to as “paying yourself first” because you are prioritizing saving money for Future You. There are tons of different savings goals that you can put this money toward, but the important part right now is to set up automatic savings so you can set it and forget it. Trust me—you miss that money a lot less if you never see it in your account in the first place. If you have automatic deposits at work, it’s super easy to add a savings account and have a certain % or dollar amount go into that account every month without it EVER hitting your checking. In my opinion, this is the best way to go. Out of sight, out of mind. You’re way less likely to touch this money, and you’ll be shocked at how much it grows over time! If this isn’t an option for you, you’re not out of luck. You can set up automatic savings transfers into your savings account from your checking account through your bank. Find a budget that works for you Here at the ATB, we are all about budgeting in a way that makes sense for you and your life. Budgeting doesn’t have to be stressful and restrictive. It should actually be freeing and allow you to feel more confident and in control of your money! There’s no one right way to budget, and there are TONS of different types of budgets depending on your income and financial goals. Personally, I use a zero-based budget which allows me to track and decide where every single dollar I have is going. If you have big savings goals, low income or high debt, I definitely recommend checking out a zero-based budget. Learn how to increase your credit score Your credit score has a bigger impact on your life than just determining your eligibility for loans. Credit can impact your ability to rent, job opportunities, car insurance rates and more. Once you know what your credit score is, it’s important to understand what makes up your credit score, and what steps you can take to increase it. There are five factors that influence your credit score: Payment History Amounts Owed Length of Credit History New Credit Credit Mix Payment History makes up 35% of your credit score, so it is the most important factor. ExtraCredit gives you the ability to report rent and utility payments, adding new tradelines to your credit profile. Adding payment history to your credit file.  And if you need help working to repair your credit, you can also use the Restore It feature to get an exclusive discount from a leading credit repair company. Remember: your best credit score is an accurate one. Understanding how to increase your credit can take a lot of stress out of your finances and help you feel more in control of your credit future.  Make a debt payoff plan I paid off $20k in CC debt in less than a year, and in order to do that, I needed a concrete plan of how I was going to tackle my debt. Prior to that point, I had just been throwing a little bit here and there, hoping that my balance would eventually decrease. Shockingly, that never happened. Once I decided to use the debt avalanche to tackle my credit card debt, I was able to calculate how much extra money I could throw at my debt every month in order to make progress toward my debt free goal. With this method, I paid the minimum payments on all of my debt except for the one with the highest interest. With the highest interest debt, I put any extra

[ad_1] This article originally appeared on Radical FIRE and has been republished here with permission. Do you want to save money when flying with a low-cost airline, but you’re wondering: are low-cost airlines really worth it? Here is my experience and tips for flying on a budget with low-cost airlines. When we went on our mini-retirement in September (2019), we booked some last-minute deals just before we went. Of course, we went looking for low-cost airlines since other airlines were extremely expensive.  We decided to find cheap plane tickets and go with a low-cost airline to save costs. I have some experience with low-cost airlines from my years as a student, so my experience came in handy. Finding the cheapest available tickets or the best low-cost flight deals in your travel search can be a rush in itself. This is because you’re looking for the best airfare deals that will be beneficial for your plans. In my experience, budget airlines are worth it in saving money and time. Often, the premium airlines don’t have direct flights to places you want to visit, making you need to take an indirect flight that costs a lot more time. Obviously, the low-cost airlines offer the cheap flights and the cheap airline tickets most of the time.  For example, I flew for $250 from Copenhagen to Los Angeles in January 2017 with Norwegian airlines. I flew for $40 from Bogota to Cartagena (within Colombia). I flew for $80 from Los Angeles to New Orleans with Spirit Airlines.  But, what’s the catch? There has to be a catch with these kinds of prices. How can different airlines offer different travel deals and how do I truly find the cheapest flights and deals to fit my budget? Yes, budget airlines do have other ways to make money, which is different from other airlines. They charge you extra for everything, which can be very frustrating when you don’t know this.  I always check beforehand the restrictions on the flight, making sure that what we’re booking is the best time versus money tradeoff. This helps you save money on flights and gets you to your holiday destination without stress.  Related Reads: How To Negotiate A Mini-Retirement 50 Ways to Travel Without Overspending How To Travel Cheap: 15 Unique Budget Hacks 6 Surprising Travel Expenses to Watch Out For 5 Cheap Easy Meal Ideas For Vacation Let’s go into my experience: how can you travel on a budget with low-cost airlines? What kinds of things do you need to keep in the back of your mind? Low-Cost Airlines Are Safe! There are often a lot of people skeptical about budget airlines. There’s this conception that flying with them can be a terrible experience? And that they’re very unsafe when choosing them for your next trip? I want to start by stressing that budget airlines are just as safe–no need to worry about that. This article states that the latest industry figures show that departure LOCATION is the determinant of airplane safety–NOT airline.  Any airline knows that having a history of crashes or reputation damage is extremely bad for business. This will cost a lot more money than can ever be saved on safety procedures.  9 Tips for Flying on a Budget with Low-Cost Airlines Here are the 9 tips for flying on a budget with low-cost airlines! 1. Compare Flights The first step is to go to a website like Skyscanner or Kayak and compare the prices of the airline.  You need to make sure you’ve collected the flights that are cheap and have little layover time. Except when you want to have a couple of days to explore a specific area, layovers are just additional time spent traveling that can be spent more efficiently.  Once you’ve found a couple, go to the specific carrier’s website and check if it’s available there cheaper. And more often than not, it’s really cheaper.  2. Check the Luggage Policy The first thing that I do when looking into specific flights that I’ve preselected is if the luggage is included, yes or no. When you’re using SkyScanner, which is my personal go-to, you can see if the flight has baggage included or not.  Nowadays, many airlines don’t have luggage included in the price. With low-cost airlines, even a carry-on can be paid at times. Be sure to check what is included, so you can purchase anything that’s missing.  Because airlines charge extra for luggage or carry-ons, be sure to pack as light as possible to avoid those fees and fly on a budget. If you want to include extra luggage, you want to include that when you’re buying your ticket. This is often cheaper than booking your luggage at the airport, where you’ll often be charged double.  For example, with Spirit, you pay $30 for your first checked back during booking. If you want to add this bag before or during online check-in, you spend $40. But if you wait until the airport desk, you need to pay $50.  Travel light and arrange your baggage the moment you book your flight.  3. Check the Weight of Your Bag Double-check that you’re not over-packing and your bag is under the maximum allowed weight. Otherwise, additional charges apply. Especially when you fly with carry-on only, it’ll be a hard pill to swallow when your bag has too much weight, and you need to check it in.  You can do this with an electronic luggage scale or be creative with your own scale. Put yourself on the scale with luggage and compare the weight to putting yourself on the scale with luggage.  I did it this way for years, but have to admit that luggage scales come in handy.  4. Be Aware of Additional Fees Besides luggage, there are a lot of different additional fees. These fees are often low, to make it more tempting for you to pay for the additional services. Be aware of them and decide beforehand if you need them.  If

[ad_1] This article originally appeared on ThatsBriannaB.com. This post is sponsored by credit.com. Credit (gasp). It’s a word that elicits so many feelings…namely pride or embarrassment. For that reason, many people categorize it as a taboo topic of conversation. Much like a person’s salary, it’s something people don’t really talk about. #sponsored Knowledge is power and taking one’s credit and score seriously is a crucial part of navigating an independent and flexible adulthood. Good credit can afford you lower interest rates, lower loan payments, and more overall financial opportunities. I’ve teamed up with Credit.com’s new credit coverage program, ExtraCredit, to highlight it’s unmatched tools to help you work build, guard, track, reward, and restore your credit profile! I recently started a free monthly trial of the service and I feel empowered to take control of my financial health and build it—and you can too! Sign up for ExtraCredit Signing up for ExtraCredit is quick and easy and you can find the free trial sign up link by clicking here. After filling out the required info, your one month trial begins and your calculated credit scores appear. ExtraCredit shows you the scores that lenders actually use to make credit decisions, unlike free credit score sites. You can track your credit using 28 FICO® scores, all 3 bureau reports, and credit monitoring. I especially loved the fact that you can build your credit profile simply by adding rent, utilities and even your phone bill as credit tradelines. If you pay rent, add it to your credit profile to get the credit you deserve. ExtraCredit covers all aspects of your credit. Instead of paying for credit and dark web monitoring, $1M in ID theft insurance, rent and utility reporting separately, you can save a lot of money by signing up for ExtraCredit, which has 5 features for one low monthly fee. It’s never too late or too early to take your credit seriously. As a #Credit.comPartner, I’m confident that I can go to any lender and see the credit scores they are seeing. Sign up today for ExtraCredit’s FREE TRIAL by clicking here! No other product is as fully loaded as ExtraCredit. The post ExtraCredit® – Let’s Get Serious about our Financial Health appeared first on Credit.com. [ad_2]