Ask @TheBudgetnista:

Hi sistar! I applied for a credit card just to see how much of a limit I could get. After seeing some reviews (which I know I should've done first) I feel a little scared about the card. Am I allowed to tell them I no longer want it? What should I do?

Brandy Bower
Hi Brandy!
Yes, you're always allowed to cancel any of your credit cards in good standing. YOU have the power. If you don't like the card, cancel it and use http://www.bankrate.com/ to help you find the best card for you. Make sure to read the reviews 1st this time. ;)
Live richer,
The Budgetnista
http://livericherchallenge.com/

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Hi Tiffany, I am getting ready to purchase a new car and will be applying for an auto loan. My credit score according to credit karma right now is 692, but when i checked freecreditscore.com, it said it was 661. Do you think I'll be able to get pre-approved for an auto loan with a low interest rate?

Hey Hey Hey New- Car Buyer!
I would NOT get my financing from the car dealership. Secure your financing in advance and bring it with you.
Skip the bank and head to a credit union. Why? Banks are for-profit institutions and make some of their money off of charging high fees. Many credit unions are non-profit organizations and are not looking to make extra money off of you, so their fees are lower. Also, credit unions are usually more forgiving and even if you don't have the best credit will try and work with you.
Screeeeech! I hear a new car in your future. :)
Live richer,
The Budgenista
http://www.livericherchallenge.com/

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I would like to buy a used car. How should I borrow the money? Pension, credit union or bank?

Hey Used Car Buyer!
The WORST place to borrow money is your pension. It's never a good idea to rob your future to take care of the present.
Remember, it's your younger Self's job to take care of your older Self.
That means you now, has to be responsible for you later, because when you're older, you may have less options and energy to make money.
I would head to a credit union. Why? Banks are for-profit institutions and make some of their money off of charging high fees. Many credit unions are non-profit organizations and are not looking to make extra money off of you, so their fees are lower. Also, credit unions are usually more forgiving and even if you don't have the best credit will try and work with you.
Vroom! Vroom! I hear a (new-to-you), used car in your future. :)
Live richer,
The Budgenista
http://www.livericherchallenge.com/

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I saw you on pix this morning. Great job HELP! What if I can't pay down my debt to 30 %

Hi HELP!
Just try your best. Paying down debt takes time. Here's a post I wrote to help you create a plan to pay down you debt: Pay Off Debt in 7 Steps and Still Maintain you Lifestyle: http://thebudgetnistablog.com/2013/pay-off-debt/.
I also just launched a FREE resource for you, The LIVE RICHER Challenge. I'm helping 10k women gain control of their money in 36 day. You can sign-up here for free: http://www.livericherchallenge.com/.
I look forward to helping you live a richer life,
Live richer,
The Budgetnista

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Which bank is BETTER for my son to open his account with? He is between jobs and every penny he could save counts. I always remember the story about the bike (You are Wonderful!!!) Wishing you the best adventures for this wonderful season.

Hi "A Better Bank"!
Which bank is beter? It depends. What does your son need the bank to do for him?
1) Checking
2) Savings
3) Investing
If this is his first account, I would look for a bank convenient to where he lives. I would also look for a bank where he can avoid fees.
Here's a great site where you can input your zip code and find the best bank for you:
http://www.findabetterbank.com/New_York/New_York/checking-accounts.html.
Also, I just launched a free resource to help women gain control of their money in 36 days. You can sign-up here: http://www.livericherchallenge.com/
Live richer,
The Budgetnista

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So my question is I finally got my husband to check his credit report and found sooo much stuff either neglected or completely unaware of. There is one delinquent account that will be removed later this year. Do we pay it or wait it out? if we decide to wait it out and not pay what happens then?

Hey, "Should We Pay?"
What kind of account is it? Credit card? Medical bill?
Every state has it's own statute of limitations on debt. Basically, the statute tells you when debt expires, so I wouldn't pay until I knew whether or not the debt had expired.
FYI: The statue begins it's countdown the last time the debt was active. This means the last time a payment was made or promised to be made or the last time the debt was "used" (ex. swiped his credit card)
You can find the statute of limitations on his debt here: http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml
If it's past the statute, you don't have to do anything. If they contact him before it falls off, request a Debt Verification Letter. The letter will prove that it's past the statute. Once you receive the DV letter you can send a cease and desist letter to stop them from contacting you. (I've a attached a template with both)
7 years after it's reported to his credit report, it will/it's suppose to fall off. I'm guessing by the end of the year, like you said.
Hope this help.
Live richer,
The Budgetnista
(get more FREE help here: http://www.livericherchallenge.com/ )

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I have a question about my credit report. I had a Mandee's card a few years ago and just two weeks ago I noticed it tuned up on my credit report and it said delinquent. It also states that it was since 2005. the balance is also $0. So my question is how can I get this removed from my credit report

Hi "Incorrect Credit Report"!
You'll want to send a dispute letter to the credit bureau you received the report from. Send the letter certified mail and include the copy of your credit report with the item you want changed highlighted.
Here's a dispute letter template that you can use: http://www.myfico.com/crediteducation/rights/sample-credit-report-dispute-letter-of-explanation.aspx.
Live richer,
The Budgetnista
http://www.livericherchallenge.com/

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hi, my main goal is to pay of my CC debt before buying a house. My lowest balance is $481 that card also has the highest APR. should I just take the money out of my savings and pay it off ?

Hi "I want to Pay Off my Debt"!
I'm so glad that you're ready to get rid of your credit card debt. It's definitely a good idea to pay off your lowest debt first, especially if it has the highest interest rate.
Buuuuuut, I would not empty out my savings to do so. Always remember that paying down debt and saving should happen at the same, because being debt-free without savings = debt.
The reason is, even if you pay off your debt, eventually an emergency will arise and if you don't have savings, you'll have to get back into debt (i.e. credit card or borrow money), in order to handle the emergency.
Sooo being debt-free, but not having and savings = debt (eventually)
Maintain at least 3 months of emergency savings and pay off your debt systematically. If you have more that 3 months of savings, you can use the extra to help with debt.
Here's some step-by-step help with paying off credit card debt: http://thebudgetnistablog.com/2013/pay-off-debt/
Live richer,
The Budgetnista
http://www.livericherchallenge.com/

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I have a question for you. Is it smart to refinance your home? I have been living in it for three years.

It depends "Should I Refinance",
You want to make sure what you're saving by refinancing will be more than what you'll spend to refinance.
I would sit down with a lender (preferably a credit union because they have better rates), and crunch the numbers.
Here's an article that might help:chttp://www.bankrate.com/finance/mortgages/when-to-refinance-your-mortgage-1.aspx
Live richer,
The Budgetnista
http://thebudgetnista.com/

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Budgetnista, I'm thinking about going to london from July 2nd - 7th. Do you know of any good and cheap hostels there ? I'll be staying there and the going to amsterdam the following week 7th to the 12th. So I was thinking about taking a multi city flight. Do you know if any deals?

Hey "Travel on the Cheap"!
Here is my fav deal site for Europe deals: http://www.europeandestinations.com/.
I haven't stayed in a hostel in London, but the hostel I stayed in, in Spain was awesome. I found it here: http://www.tripadvisor.com/
Hope this helps.
LIVE RICHER
The Budgetnista
www.thebudgetnista.com

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Hey Wise 1 I follow u a good bit & notice that your advice as really paid off. Question: How do I get more money out of my paycheck & pay less taxes, which will mean a smaller refund at the end of year? Right now I am single & have a hourly job plus a wages plus tips gig. what do I put on my w4?

Hi "I Want a Bigger Paycheck"!
This is a question best asked to a CPA (certified public accountant).
But I'll tell you what my accountant told me (I too have no dependents)...
You can adjust your withholdings to see bigger paychecks throughout the year by entering “1” for yourself if no one else can claim you as a dependent.
Your refund check will be smaller, but your paychecks will be bigger.
I would still ask your accountant, because your situation is a bit more complicated because you earn tips. Tips are not calculated when Uncle Sam takes money from your check for taxes, but you'll still have to pay taxes on the tips you earn.
This means paying less taxes now may have you owing later because you'll have to account for the tips your earned by the end of the year but have yet to pay taxes on. I hope this makes sense.
I found a cool w4 calculator that might help you calculate the best course of action: http://bit.ly/w4calculator
LIVE RICHER
The Budgetnista
www.thebudgetnista.com

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Good Morning Now that I have the loan Mod I want to be done with the house but I owe more than it's worth. I heard about Equity Optimization. It doesn't sound bad. What are your thoughts? I think I can hang in there for another 6 or 7 yrs if the equity opt really works. Thx in advance

TheBlessedWest
Hey TheBlessesWest!
There are 3 things you need to make Equity Optimization work:
1) You have to have equity in your house. You can't be underwater.
2) You have to be able to qualify for a HELOC (home equity line of credit) 680+ credit score
3) You have to have positive cashflow. That means you have more money going in than going out during the month.
This is a great video further explaining how Equity Optimization works: https://www.youtube.com/watch?v=pZU5kPfiMeI <<MAKE SURE TO WATCH
AFTER watching the video, the following below will make more sense... I promise. :)
How Equity OptimizationREALLY works:
You dump your entire paycheck into the HELOC account (home equity line of credit), then pay all your bills using the HELOC.
As far as I can tell, the real trick is simply that you pay more than the scheduled payment. If you have $200 leftover after your expenses at the end of each month, then that $200 would normally set in your checking account.
After a year, you'd end up with $2400 more in your checking account when you started. By using a HELOC as your checking account, that $2400 ends up as extra payments on the HELOC rather than in your checking account. If you take that $2400 and spend it, though, you're at the exact same point you'd be if you were just paying the scheduled payment.
One flaw is that a HELOC usually only has a limited time "draw" period (the time you can take out your money whenever you want). Five years seems typical. After that, your balance is locked down and you can't take anything out.
So, the whole process breaks down at that point. If you dump your entire paycheck in you've just made a nice big payment. But you can't pay the rest of your bills and that's baaaaad news. :/
My suggestion? If you don't want the house, look into a short sale (when you sell it for less than it's worth), or a deed-in-lieu of foreclosure. That's basically when you sign the house back over to the lender.
I'm not a mortgage professional, but I have had my home go underwater and explored both options. Make sure to sit with a pro to discuss your options as well. These are merely my opinions and should not replace professional advice. :)
LIVE RICHER
The Budgetnista
www.thebudgetnista.com

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Tiffany what do you know about this before I finish the process I wanted to run it by you. It's a loan forgiveness program and based on my income it's suppose to let me pay a certain percent a month. Is this legit? http://www.actionfinancial.com the web link

Hi "Loan Forgiveness"!
I'm unfamiliar with Action Financial, but after reviewing the site, it looks like a company that's claiming it helps you apply for help with your student loans. It also appears to be a debt consolidation company.
I good friend of mine is a debt lawyer and warned me that most debt consolidation companies are scams. I would be very careful. If you need help with managing your student loans, the best place to seek help is your student loan lender.
Also remember, no one can forgive your student loans except the organization that gave you the student loan i.e the government (federal loans), a bank (private loans). So it's best to work with them vs. a 3rd party.
LIVE RICHER
The Budgetnista
www.thebudgetnista.com

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Hi I need your advice I had to take a 8,000 pay cut. Can you recommend a good book to help me get to grips with major cut?

Hi "Major Cut",
The best way to handle a major cut to your income is to re-work your budget.
I wrote a #1 bestselling book on Amazon called, The One Week Budget. It will help you to deal with the loss of income.
You can find it here: http://amzn.to/1tjHOPF
LIVE RICHER
The Budgetnista
www.thebudgetnista.com

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Hello! My credit score is currently 613. I am trying to raise it. I have $45,000 in student loan debt & $1100 in credit card debt that will be paid off by August. These are my only open accounts. Besides paying my card balance fully every month, how else can I dramatically increase my score?

Hi "613"!
There are a few things you can do to raise your score:
1) Pay down debt (30% of your score). So once you pay off your credit card debt, your score will jump.
2) Pay your bills on time (35% of your score). Continue to make your monthly payments on time
I know you think you can't do this one, but it's the FASTEST way to dramatically raise your credit score...
3) Auto-pay off a small debt aka bring it’s balance to $0 EVERY month. FYI: This is where the magic happens. Doing this will make your credit score jump like Jordan.
I would consider going to your bank as requesting a secured credit card. Go to your bank and apply for a secured credit card. A secured credit card is "secured" by your own money. You deposit money in an account and that money becomes your line of credit. It's much easier to get a secured card because it's no risk to the bank.
Make sure that:
- You’re cautious of anyone that asks you for outrageous start-up fees (some places try to charge up to $200) or for you to call a 1-900 number that will charge you money.
-You're sure to ask if your transactions will be reported to all three major credit bureaus. You want them to see that you're paying off your debts so your score can begin to improve.
- You get a secured card at a bank you want to continue to use for a while. You'll eventually want to ask if you can switch to an unsecured card with the same bank, so choose wisely.
- You automate the use of the card. Do this by placing a small automatic payment on the card each month (ie: magazine subscription, gym membership, phone bill). That bill should be the ONLY thing your secured card is used for. Then, sign-up for automatic, bill-pay at your bank (this is a free service), and instruct the bank to send the full payment of your bill, from your checking account to your secured card every month. This will create a payment loop effect that eliminates the flawed human element….you. I suggest you
leave your secured card at home and allow the loop to work for you without interference.
- Pay off your balance every month: Something magically happens when you pay a debt off in full each month. Your credit score does a happy-dance and jumps up. It doesn’t matter if the debt you paid off was $5000 or $5, same happy dance occurs. You can encourage your credit score to do a happy dance 12 times a year, by paying off your secured credit card in full every month.
4) Once you pay off your card, consistently keep your credit card balances below 30% of your credit limits, this will help to tremendously raise your score too. This means if your limit is $1000, keep your balance below $300.
5) Clean-up your credit report by asking that old negative items be removed.
Hope this helps!
LIVE RICHER
The Budgetnista
www.thebudgetnista.com

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Hello Tiffany, I recently bought your book and am trying to take advantage of Credit Karma. I see that they offer the opportunity to "Consolidating Your Credit Card Balances". Is this something you think that I could more into or just stick to paying down the regular way?

Hi "Consolidating Credit Cards"!
Consolidating your credit cards with a credit consolidation companies can be more trouble than it’s worth.
Although you may end up paying for only a fraction of what you really owed, you often have to pay a high upfront fee and your credit score will take a nose dive. On top of all of that, the companies you originally owed may still be able to sue you for the balance of the money.
In addition, Uncle Sam can ask you to pay taxes on the portion of the debt you did not have to pay! If you truly need help with a mountain of debt, choose a reputable debt management organization instead.
The National Foundation for Credit Counseling (NFCC) offers such services (www.nfcc.org). This nonprofit organization can connect you to a number of member agencies that are accredited by the NFCC.
They can help educate you about your credit, and work with you to set up a plan. NFCC and it’s member agencies can also negotiate with the credit card companies and banks to lower your interest rates, and consolidate all your payments.
Let me know how it goes. :)
LIVE RICHER
The Budgetnista
www.thebudgetnista.com

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I have a whole life insur policy that I just realized is crap and looking for a new policy. A primamerica financial planner is offering term life and investment in a retirement fund.Can you tell me if life insur and a retirement plan is the best way to save and plan for the future. Primamerica good?

Hi "Whole Life Insurance Regret"!
I agree. I don't like whole life policies. They cost too much and offer less coverage. I also don't believe that an insurance policy and savings should be mixed.
I think that insurance is insurance and savings is saving. My car or health insurance doesn't have a saving account attached and neither should your life insurance.
I actually have a term life policy with Primerica. I was able to get 300k worth of coverage for less than the monthly cost of my gym membership.
Some people don't like term life because once it expires you "lose" the money you put in. But the same goes for your car insurance. If you never get in an accident and you don't renew it, you don't get your payments back. That's the way insurance works.
I think that it would be better to get term life insurance, get a bigger policy for less and use the excess money you're saving by not having whole life, to invest with via a retirement account.
This is just my opinion. You'll want to sit with a certified financial advisor to review your options.
Live richer,
The Budgetnista
www.thebudgetnista.com

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Had some bill show up on my credit report sent to collections for $54 and it dropped my score 20 points. I never got a bill for this account but I am willing to pay the debt. I also want to ask if i can get it off my report & raise my score. What should I say?

Hey "I Owe $54"!
Sorry to hear about you score being lowered. :/
- Call the collection agency and offer to pay the debt off in full immediately.
- Ask that in exchange for doing so, that they agree to "erase the tradelines". That's bill collector talk for the credit history of that particular bill.
- Ask them to email you the agreement in WRITING before paying the bill
- Send the payment
- If the tradeline isn't erased, you now have proof via the email they sent. Use the proof and send it to the credit reporting agencies and dispute its appearance on your credit report.
Let me know how it goes!
LIVE RICHER
The Budgetnista
http://thebudgetnista.com/

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I'm 42, borrowed from my 401a several years ago. My loan defaulted and I thought I could repay at anytime, without penalty. I have 165k and owe 10k with 6.5 int. Ive been with same investor for 13yrs and want to change, but I need to pay the loan.Do I go with a new investor and pay loan when I exit?

Hi "401k Loan"!
The consequences of a 401k loan default (not paying back the money you borrowed in about 5 years), is a 10% penalty payable against the amount that was loaned plus having to pay income taxes on the amount you took out. If the loan has not been paid back by the time the you leave your job, then the loan amount in due back in full immediately to the 401k.
I'm not certain what you mean by wanting to switch investors. Do you want to switch companies and roll over your 401k into a new retirement account with a different company, or do you just want to switch the actual person you've been working with for 13 yrs and try a new advisor within the same company?
It's ok to work with a different person within the same company, but what you DO NOT want to do is rollover your 401k while in default. There a serious financial consequences for doing so. Reach out to the company that manages your 401k and sit down (in person), with your new (or old) advisor and work out a strategy for paying off your 10k loan.
Please keep me updated.
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The Budgetnista
http://thebudgetnista.com/

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Thank You, "New Money" Uncle Sam paid! Also, I am 35 and have $9500 in deferred comp and $100,000 in a 401K, so I can put a little more towards CC debt. I didn't think of the Emerg. fund or donating, but I will now be doing those things. Hoping my score goes up and I can get my CC's to a lower rate.

Hey "New Money!!
Thank you for the update.
Glad to hear that Uncle Sam is paid. I'm also glad to hear that you have some retirement money set aside. I would still allocate 10% ($1500), of the 15k to retirement. Remember that at least 10% of ALL of your income should ALWAYS go to retirement, no matter how much or little you receive. This should be a steadfast, financial rule that you don't break.
I'm doing the happy-dance because you're now considering giving and saving in your emergency fund. Yay!
So yes, set aside the extra funds for your credit card; the one you're going to stop using..... *hint, hint*
You can also use some of the excess to beef-up your emergency fund as well.
Congratulations "New Money"! You're making great financial choices. :)
LIVE RICHER
The Budgetnista
http://thebudgetnista.com/

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Paying down cards. Should you pay the higher interest cards first, or the highest balance or start from lower balance so you can start seeing zero balances.

Hey Hey Hey "Paying Down Cards"!
I believe that debt is caused by emotions, so you should use your emotions in your favor to pay them down.
I advise my clients transfer their high-interest balances to lower interest credit cards, or to a lower interest, personal loan from a credit union.
Then I advise them to pay off the lowest balances first. Paying off smaller balances means early success. Early success will trigger an emotional reaction; a feeling of accomplishment. The sooner you feel good, the more likely you are to stick with your debt-pay-down-plan.
It's like exercising with a goal of losing 1 pound vs 10 pounds. You can lose 1 pound in a week. Doing so means you'll feel more motivated to go back to the gym vs. waiting a whole month to lose 10 pounds. You might give up before then.
Here's a great article that will help you: Pay Off Debt in 8 Steps and Still Maintain Your Lifestyle: http://thebudgetnistablog.com/2013/pay-off-debt/
Thoughts?
LIVE RICHER
The Budgetnista
http://thebudgetnista.com/

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