Connect with us

Market Insider

What To Do If You’re Not Getting Paid Due To The Government Shutdown




The government shutdown, which is already the second-longest in history, is a double-whammy for federal workers’ incomes.

Federal employees are already paid about 32 percent less than private-sector employees for doing the same work, according to the Federal Salary Council. Now, about 380,000 are on furlough while another 420,000 are being pressed into working without pay. And though government employees have received back pay for every previous shutdown, it’s not guaranteed that they will this time. And contractors working for the government have never been approved for back pay.

President Donald Trump has said he’s willing to let the shutdown continue for years if Democrats don’t bend to his demands to fund a wall along the U.S. southern border. If you’re one of the Americans affected by the shutdown, there’s no denying it’s an incredibly difficult position to be in. However, there might be a few steps you can take to stay afloat.

1. Apply for Unemployment

If you were sent home on furlough, the first thing you should do is apply for unemployment benefits. In general, furloughed government employees ― including contractors ― are eligible under the Unemployment Compensation for Federal Employees Program. Eligibility varies by state; you can look up your state’s contact information here. Most states pay out a maximum of 26 weeks of regular benefits.

Keep in mind that if you do end up receiving back pay, you’ll need to repay your unemployment funds to the state. In most cases, you can take care of it online.

2. Prioritize your bills

Whether you’re furloughed or working without pay, you’ll need to determine which bills have to be paid now and which can be put on the back burner.

For example, you might want to prioritize payments for utility services such as electricity and gas. However, you should call your service providers and let them know about your situation ― it might be possible to work out a deal so that your service goes uninterrupted during the shutdown while you defer payments.

Another priority should be payments on any collateral loans, such as your home or car, since you could lose them if you fall behind. Plus, your credit will take a hit for any payments late by 30 days or more. Again, you might be able to temporarily pause payments by informing your lenders of the situation (more on that below).

Food is another major expense that you can’t simply eliminate from your budget. However, there may be community programs you can take advantage of from food banks and churches. As of now, the federal Women, Infant and Children nutritional assistance program can be utilized by those who might temporarily qualify for it during the shutdown. But WIC also may have to stop its operations if the funding standoff drags on through February.

As for other expenses, consider freezing or cutting off services that aren’t essential, such as cable or streaming services, gym memberships, internet, cell phone data, etc.

3. Call your loan providers

If you have outstanding debt, your lenders may be willing to work with you during the shutdown. Call your lenders, explain your situation and ask about any financial hardship programs. Some lenders might temporarily modify the loan or allow you to defer payments.

The federal Office of Personnel Management provides letter templates you can send to creditors, lenders and landlords to inform them of your employment and income status during the shutdown and document the terms of any changes to your payments. However, OPM suggests speaking with letter recipients first, since it may take some time for them to see your correspondence. You should also make sure you have all the necessary information in your letter, including contact information and account numbers. Keep copies for your records.

4. Deal with your credit cards

You might have started off the shutdown with existing credit card debt, or racked up a balance trying to keep up with expenses since the shutdown began. Either way, those payments are one more cost it’s tough to cover with no income. And if you’re only able to make the minimum payments, credit card interest will add up fast.

Try asking your card issuer about extended grace periods or a temporary reduction in the minimum payment. Alternatively, you might want to try a fairly simple solution if your credit is in decent shape: Perform a balance transfer.

Credit card companies will often entice new customers by offering promotional interest rates on balances transferred from competitors. If you can qualify for a balance transfer credit card, you can enjoy 0 percent APR on that balance for about 12 months in most cases ― maybe longer. Usually, there is a balance transfer fee of around 3 to 5 percent, but that is likely worth the interest savings.

5. Seek out low-interest loans

The longer you go without pay, the more difficult it is to stay on top of basic living expenses. But unless you’re able to score a 0 percent APR deal, adding to your credit card debt will probably create a bigger mess for you to deal with later.

Fortunately, many banks and credit unions across the country are offering low-interest loans to borrowers affected by the shutdown. For instance, Launch Federal Credit Union is offering 12-month loans of up to $3,000 at 0 percent interest. Navy Federal Credit Union is also offering interest-free loans of up to $6,000.

If you need to borrow money to make ends meet, this could be a more affordable way to do it. Contact your local banks and credit unions to find out what options you have.

Source link

قالب وردپرس

Market Insider

4 things kids need to know about money





(NC) Responsible spending includes knowing the difference between wants and needs. Back-to-school season, with added expenses and expectations around spending, is the perfect time to not only build your own budget for the year ahead, but also to introduce your own children to the concept of budgeting.

The experts at Capital One break down four basic things that every child should know about money, along with tips for bringing real-life examples into the conversation.

What money is. There’s no need for a full economic lesson,but knowing that money can be exchanged for goods and services, and that the government backs its value, is a great start.
How to earn money. Once your child understands what money is, use this foundational knowledge to connect the concepts of money and work. Start with the simple concept that people go to work in exchange for an income, and explain how it may take time (and work) to save for that new pair of sneakers or backpack. This can help kids develop patience and alleviate the pressure to purchase new items right away that might not be in your budget.
The many ways to pay. While there is a myriad of methods to pay for something in today’s digital age, you can start by explaining the difference between cash, debit and credit. When teaching your kids about credit, real examples help. For instance, if your child insists on a grocery store treat, offer to buy it for them as long as they pay you back from their allowance in a timely manner. If you need a refresher, tools like Capital One’s Credit Keeper can help you better understand your own credit score and the importance of that score to overall financial health.
How to build and follow a budget. This is where earning, spending, saving and sharing all come together. Build a budget that is realistic based on your income and spending needs and take advantage of banking apps to keep tabs on your spending in real-time. Have your kids think about how they might split their allowance into saving, spending and giving back to help them better understand money management.

Continue Reading

Market Insider

20 Percent Of Americans In Relationships Are Committing Financial Infidelity





Nearly 30 million Americans are hiding a checking, savings, or credit card account from their spouse or live in partner, according to a new survey from That’s roughly 1 in 5 that currently have a live in partner or a spouse.

Around 5 million people — or 3 percent — used to commit “financial infidelity,” but no longer do.

Of all the respondents, millennials were more likely than other age groups to hide financial information from their partner. While 15 percent of older generations hid accounts from their partner, 28 percent of millennials were financially dishonest.

Regionally, Americans living in the South and the West were more likely to financially “cheat” than those living in the Northeast and Midwest.

Insecurity about earning and spending could drive some of this infidelity, according to industry analyst Ted Rossman.

When it comes to millennials, witnessing divorce could have caused those aged 18-37 to try and squirrel away from Rossman calls a “freedom fund”.

“They’ve got this safety net,” Rossman said. They’re asking: “What if this relationship doesn’t work out?”

As bad as physical infidelity

More than half (55 percent) of those surveyed believed that financial infidelity was just as bad as physically cheating. That’s including some 20 percent who believed that financially cheating was worse.

But despite this, most didn’t find this to be a deal breaker.

Over 80 percent surveyed said they would be upset, but wouldn’t end the relationship. Only 2 percent of those asked would end the relationship if they discovered their spouse or partner was hiding $5,000 or more in credit card debt. That number however is highest among those lower middle class households ($30,000-$49,999 income bracket): Nearly 10 percent would break things off as a result.

Roughly 15 percent said they wouldn’t care at all. Studies do show however that money troubles is the leading cause of stress in a relationship.

That’s why, Rossman says, it’s important to share that information with your partner.

“Talking about money with your spouse isn’t always easy, but it has to be done,” he said. “You can still maintain some privacy over your finances, and even keep separate accounts if you and your spouse agree, but you need to get on the same page regarding your general direction, otherwise your financial union is doomed to fail.”

With credit card rates hovering at an average of 19.24 percent APR, hiding financial information from a partner could be financially devastating.

But, Rossman adds, it’s not just about the economic impact but also the erosion of trust.

“More than the dollars and cents is that trust factor,” he said. “I think losing that trust is so hard to regain. That could be a long lasting wedge.”

Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.

Source link

قالب وردپرس

Continue Reading

Market Insider

7 Examples Of Terrible Financial Advice We’ve Heard





Between television, radio, the internet and well-meaning but presumptuous friends and family, we’re inundated with unsolicited advice on a daily basis. And when it comes to money, there’s a ton of terrible advice out there. Even so-called experts can lead us astray sometimes.

Have you been duped? Here are a few examples of the worst money advice advisers, bloggers and other personal finance pros have heard.

1. Carry a balance to increase your credit score.

Ben Luthi, a money and travel writer, said that a friend once told him that his mortgage loan officer advised him to carry a balance on his credit card in order to improve his credit score. In fact, the loan officer recommended keeping the balance at around 50 percent of his credit limit.

“This is the absolute worst financial advice I’ve ever heard for several reasons,” Luthi said. For one, carrying a credit card balance doesn’t have any effect on your credit at all. “What it does do is ensure that you pay a high interest rate on your balance every month, neutralizing any other benefits you might get from the card,” Luthi explained. “Also, keeping a 50 percent credit utilization is a surefire way to hurt your credit score, not help it.”

Some credit experts recommend keeping your balance below 30 percent of the card limit, but even that’s not a hard-and-fast rule. Keeping your balance as low as possible and paying the bill on time each month is how you improve your score.

2. Avoid credit cards ― period.

Credit cards can be a slippery slope for some people; overspending can lead to a cycle of debt that’s tough to escape.

But avoiding credit cards on principle, something personal finance gurus like Dave Ramsey push hard, robs you of all their potential benefits.

“Credit cards are a good tool for building credit and earning rewards,” explained personal finance writer Kim Porter. “Plus, there are lots of ways to avoid debt, like using the card only for monthly bills, paying off the card every month and tracking your spending.”

If you struggle with debt, a credit card is probably not for you. At least not right now. But if you are on top of your finances and want to leverage debt in a strategic way, a credit card can help you do just that.

3. The mortgage you’re approved for is what you can afford.

“The worst financial advice I hear is to buy as much house as you can afford,” said R.J. Weiss, a certified financial planner who founded the blog The Ways to Wealth. He explained that most lenders use the 28/36 rule to determine how much you can afford to borrow: Up to 28 percent of your monthly gross income can go toward your home, as long as the payments don’t exceed 36 percent of your total monthly debt payments. For example, if you had a credit card, student loan and car loan payment that together totaled $640 a month, your mortgage payment should be no more than $360 (36 percent of $1,000 in total debt payments).

“What homeowners don’t realize is this rule was invented by banks to maximize their bottom line ― not the homeowner’s financial well-being,” Weiss said. “Banks have figured out that this is the largest amount of debt one can take on with a reasonable chance of paying it back, even if that means you have to forego saving for retirement, college or short-term goals.”

4. An expensive house is worth it because of the tax write-off.

Scott Vance, owner of, said a real estate agent told him when he was younger that it made sense to buy a more expensive house because he had the advantage of writing off the mortgage interest on his taxes.

But let’s stop and think about that for a moment. A deduction simply decreases your taxable income ― it’s not a dollar-for-dollar reduction of your tax bill. So committing to a larger mortgage payment to take a bigger tax deduction still means paying more in the long run. And if that high mortgage payment compromises your ability to keep up on other bills or save money, it’s definitely not worth it.

“Now, as a financial planner focusing on taxes, I see the folly in such advice,” he said, noting that he always advises his client to consider the source of advice before following it. ”Taking tax advice from a Realtor is … like taking medical procedure advice from your hairdresser.”

5. You need a six-month emergency fund.

One thing is true: You need an emergency fund. But when it comes to how much you should save in that fund, it’s different for each person. There’s no cookie-cutter answer that applies to everyone. And yet many experts claim that six months’ worth of expenses is exactly how much you should have socked away in a savings account.

“I work with a lot of Hollywood actors, and six months won’t cut it for these folks,” said Eric D. Matthews, CEO and wealth adviser at EDM Capital. “I also work with executives in the same industry where six months is overkill. You need to strike a balance for your work, industry and craft.”

If you have too little saved, a major financial blow can leave you in debt regardless. And if you set aside too much, you lose returns by leaving the money in a liquid, low-interest savings account. “The generic six months is a nice catch-all, but nowhere near the specific need of the individual’s unique situation… and aren’t we all unique?”

6. You should accept your entire student loan package.

Aside from a house, a college education is often one of the biggest purchases people make in their lifetimes. Often loans are needed to bridge the gap between college savings and that final tuition bill. But just because you’re offered a certain amount doesn’t mean you need to take it all.

“The worst financial advice I received was that I had to accept my entire student loan package and that I had no other options,” said Gina Zakaria, founder of The Frugal Convert. “It cost me a lot in student loan debt. Now I tell everyone that you never have to accept any part of a college financial package that you don’t want to accept.” There are always other options, she said.

7. Only invest in what you know.

Even the great Warren Buffett, considered by many to be the best investor of all time, gets it wrong sometimes. One of his most famous pieces of advice is to only invest in what you know, but that might not be the right guidance for the average investor.

In theory, it makes sense. After all, you don’t want to tie up your money in overly complicated investments you don’t understand. The problem is, most of us are not business experts, and it’s nearly impossible to have deep knowledge of hundreds of securities. “Diversification is key to a good portfolio, and investing in what you know leads to a very un-diversified portfolio,” said Britton Gregory, a certified financial planner and principal of Seaborn Financial. “Instead, invest in a well-diversified portfolio that includes many companies, even ones you’ve never heard of.”

That might mean enlisting the help of a professional, so make sure it’s one who has your best interests at heart.

Source link

قالب وردپرس

Continue Reading