Payday Loan Companies Remain Unregulated

We have discussed how payday loans hurt your financial situation more than help in the past in this blog. And during President Obama’s last term, a bill was passed that would regulate the predatory aspects of payday loan companies. However, the Consumer Financial Protection Bureau (CFPB) has announced that they plan to rollback these regulations. The regulations were supposed to be in place in January 2018 but have been delayed. It is now even more important for consumers to understand the risks associated with payday loans.

One major aspect that the CFPB intends to rollback is the requirement for payday loan companies to verify that a consumer can pay back the loan. According to CNBC, payday loan companies charge an average annual percentage rate of 400 percent. (A credit card company generally charges 11%-23%). CNBC also states that borrowers end up taking out multiple payday loans in order to repay their original loan and end up paying an average of $520 in finance charges. Therefore, even if you are able to get out of the cycle of continually taking out payday loans to pay off previous loans, you still end up paying exorbitant fees which may total more than your original loan.

So, how do you avoid needing to take out a payday loan? The best plan is to save each month to prepare for unexpected emergencies. Even if you are only able to invest $20 into a savings account each payday, that money will gain interest and can help you make ends meet when money gets tight. If you haven’t saved money and find yourself considering a payday loan, be sure to explore all your other options first (a personal loan from a bank or family or friend, lines of credit, credit cards, etc.). And, most importantly, before borrowing money from any source, make a plan of how to repay the money borrowed and stick to it to avoid paying even more fees and getting buried in a vicious cycle of debt!

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How to Avoid a Medical Bankruptcy

One of the most common reasons that someone declares bankruptcy is due to overwhelming medical bills. Even just one accident or unexpected illness can create thousands of dollars of medical bills. Unless you are prepared for such a situation, you can easily find yourself drowning in debt. So how do you prepare for the unexpected? First, get insurance. Medical insurance can be expensive and seem unnecessary especially if you are healthy, but it will save you hundreds of dollars (maybe even thousands) if you need to have any major medical procedure or even just have a trip to the emergency room. If you are generally healthy, you can consider purchasing a high deductible plan which has lower monthly premiums. With a high deductible plan, you may also be able to set up a FSA or HSA account in which you can save money for medical expenses tax-free. Just be sure to read all the terms and conditions of these accounts (funds in FSA accounts generally must be spent within the year or you lose them, but HSA accounts typically can accumulate funds year to year).

Second, start saving now. Even if you are only able to save $20 a month, start saving immediately. Every little bit that you are able to save will help in an emergency. It may seem difficult to save money at first, but it will gradually get easier especially as you see your balance grow. A great way to make sure that you save at least a little money each month is to set up an automatic transfer from your checking account to your savings account or have part of your paycheck directly deposited into your savings account.  Once you have enough savings to cover 3-6 months of expenses, you can feel a little more at ease knowing that you are financially prepared for an emergency.

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The “Just Pay Shipping” Lie

There are advertisements everywhere online (email, Facebook, websites, etc.) for items that look and seem expensive but are “free” if you just pay shipping. But is this item really free? Most times, no. There are companies that offer quality products for “free” in hopes that by trying their product, you will become return customer. However, the shipping costs are generally inflated for these products.  Even with the inflated shipping cost, you may still be getting a good deal on the product, but it wasn’t free.

The more common scenario, however, is that it is a scam. The products offered are of very poor quality or never arrive. In most cases, the company will not respond to customers’ inquiries or requests for refunds. Additionally, the company will give extended shipping estimates (6-8 weeks) making it difficult for you to contest the charge with your credit card company (you must contest the charge within 60 days of it appearing on your billing statement and “prove” that you never received the product). So how do you know if it is a legitimate company trying to get new customers or a scam? Be a smart consumer by avoiding impulse spending and by researching the company before you enter your credit card information. You can quickly access customer reviews by doing an online search or visit the Better Business Bureau’s website and search for the company. If you are unable to find any reviews or find many negative reviews, don’t be fooled into paying shipping for their “free” item.  You are better off paying for the item from a reputable seller.

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Re-entering the Workforce After a Long Absence

Whether you stopped working to be a stay-at-home parent, had an injury or illness, or personal tragedy, re-entering the workforce can be difficult and intimidating. There are some things, however, that you can do to make it a little easier. First, carefully evaluate what type of position you are looking for and make sure it is the right fit. The job that you held before your absence may no longer be the right job for you because of changes in technology or personal changes. Second, make sure that your skills are relevant. Is there new technology that you need to learn? Are you up to date on the challenges currently facing those working in your chosen field? Do you need to get re-certified? Taking classes and reading relevant books can be a great way to help you prepare yourself for your future job. Third, talk to others about your job hunt. Networking is a vital part of finding a job. Fourth, be sure to know how to properly apply for a job and write a cover and letter and resume that will get noticed. Do you apply for the job through an online website or email? Is the application, cover letter, and resume reviewed by a computer program looking for key words? Fifth, be honest, open, and confident about your absence. Prepare a brief explanation for the absence from the workplace and practice it before your interview. Do not shy away from it or lie about why you stopped working; employers will see that you are uncomfortable and insincere and may not hire you for that reason. It is also a good idea to make a note about your absence on your resume instead of hoping that it will go unnoticed. Sixth, be open to all job opportunities that are presented to you even if it isn’t the exact job that you were hoping for. It may a stepping stone to your dream job or it may even turn out to be better than the job you thought you wanted. Either way, it is a way for you to break into the workforce and start gaining new experience.

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Credit Freezes and Fraud Alerts

In September 2018, a new federal law was passed extending fraud alerts to one year and making it free to put on a credit freeze. The Federal Trade Commission’s website has more information about the new law and also a helpful FAQ page. This new law is a positive change to the previous 90-day fraud alerts and $30+ credit freeze charge especially considering that there are new security breaches almost every week. If you are concerned that your personal information may have been compromised, you may want to consider using a fraud alert or freeze to help protect your identity. A fraud alert will stay on your report for a full year and you only have to contact one of the credit bureaus (and they contact the other two). A credit freeze will stay on your report until you remove it. It is your responsibility to contact each bureau separately to apply the freeze.

Even if you have a fraud alert or credit freeze in place, it is still important to be vigilant about monitoring your credit and personal information. Never enter credit card information on a website that isn’t secure and review your credit card and bank statements in detail. If you use online banking, it is a good idea to check your charges online frequently (at least once a week) to verify that all charges are legitimate. Also, remember that you can obtain a free credit report from each bureau once a year.

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Job Posting: Customer Service Representative

Our company, Sage Personal Finance, currently has a job opening for a customer service representative.

  • Looking for a conscientious, preferably bilingual individual (English/Spanish speaker) to work remotely as a customer service provider for an on-line educational company.
  • Individual would need to work as an independent contractor for about 15 to 20 hours a week, including some half days on weekends.
  • Tasks include: answering clients’ questions over email, phone, and live chat (in English and Spanish); reviewing reports; filing documents electronically; and testing website functionality.
  • Candidate should have strong verbal and written skills in English and Spanish, strong attention to detail, a desire to get the job done right, and experience with Excel, Word, internet search engines, and email programs.
  • Candidate should have either a BA/BS degree or equivalent work experience.

If interested, please email a cover letter and resume to: ageving@sagepf.com.

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Are Meal Kits Worth It?

The ready to cook meal kit delivery business is booming and experts predict that it is going to continue to grow. But is this new trend worth it? As with any service, there are pros and cons, and depending on your specific situation, it may be worth the money to you. However, here are some things to consider before signing up for any meal kit service.

Meal kits are convenient. Having everything you need for a meal delivered right to your doorstep with clear instructions on how to prepare the meal is a time saver. You don’t have to come up with an idea of what to make, search for a recipe or go grocery shopping. It also introduces people to new recipes and foods that they may have never considered trying on their own. This can also be a con to the service, however. Your meals are decided for you and if you don’t like a meal, you have already paid for it. Also, you can’t take advantage of promotions at the grocery store. For example, if pork chops are on sale, you typically would purchase extra and freeze what you didn’t use immediately. Or, buy and cook extra chicken to use for a lunch the following day.  Since the meal kit only includes the food for that meal and have predetermined portion sizes, you don’t have the option of using the left overs. Depending on your lifestyle and eating habits, it may be too small for you and you have to cook more of your own food to round out the meal. Additionally, many people have compared the price for the meal kit to buying all the ingredients at the grocery store. The consensus is that it comes out roughly the same. Except that you don’t typically buy a teaspoon of cumin; you would buy the more expensive container but then have it for many more meals in the future. The average price for a meal kit for two is $20 or $10/meal. This isn’t a terrible price for a meal and you would pay a similar price if not more at a restaurant. At a restaurant, however, you wouldn’t have to cook or clean up your food and dishes.

If you’re looking to try a meal kit service to save time and try new foods, it may be worth it. If you are trying to save money, however, it most likely will end up costing you the same or even a little more. If you decide to give it a try or just want to take advantage of the many coupons available, remember that they are all subscription services and you must cancel your subscription if you decide it isn’t for you; otherwise they will keep billing you for an unwanted service.

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