Financial Series #4 Consolidation and Forgiveness Clean Up Student Loans

Financial Series #4   Consolidation and Forgiveness Clean Up Student Loans

By, Afua Serwah Osei-Bonsu

 

Perhaps in your 40’s you become something that solidifies.  You clean up tattoos, you clean up credit.

One way to clean up credit and raise your score is to enter into many, many payment arrangements to get to the finish line of each debt one has incurred. Chop it up.  A good idea is to consolidate all your student loans, more than once if you take out more.  When you take out more loans several loans show up on your credit report, but when you consolidate, all the loans shrink down to one single loan and make your score go up.

The next thing to do is to see to the end of that student loan.  There is such a thing as “Public Service Loan Forgiveness” and after you make 120 consecutive payments while working in a non-profit, or a federal or government position or for the Police Dept. or Fire Dept.  or for Peace Corps or AmeriCorps-they will forgive the balance after approximately 10 years of payments.  It’s good to get on an Income Driven Plan that is doable and pursue a service option if looking for a job and having high debt in student loans 100,000+ think about those practical options.  You will breathe easier when you have all finish lines and your score will go up the more arrangements you have, for post-dated payments, the better your score.  Don’t let debts linger or fester see them to the finish.

 

 

 

 

 

Financial Series #3: Becoming a Financial Guru

Financial Series #3

Becoming a Financial Guru

By Afua Serwah Osei-Bonsu

There are many basic ideas one may eventually come to realize that make up financial literacy.  There is a basic scaffolding that is true for all beings that could have been initiated in high schools which seems to include things like taxes, career, businesses, assets, housing investments, retirement and perhaps the investments in one’s family or future generations as well as ones insured life.

It dawned on this writer that mastering one’s taxes may be a good part of financial literacy and creating ones financial profile or tax transcripts.  Things like publication 17 are available from the government printing office (bookstore.gpo.gov) give a good overview of personal income taxes and help one to achieve greater mastery in one’s financial profile.  It is as if there are key themes in taxes like housing, retirement, health, education, investments and stocks, dependents, and a variety of other credit bearing areas.  Things like the Homestead Property Tax Credit in Michigan lead many Michigander’s to have a return.   There are other details to look for like depreciation, or charitable contributions or key changes in one’s personal life and how that may impact how they file.  Even death may have several forms or adoption a credit or something like the Premium Tax  Credit for carrying certain health insurance.  Governors and Presidents have stashed a variety of credits and grants around at the IRS and grants at places like Michigan Works just in case people are wondering what and where those things are. Still lingering around are grants from the Obama era.  It is in ones best interest if for example they purchased a car or went to school to investigate which forms or areas correspond to those things.  There are credits for going to school like with forms 8863 and 8917.

A leader or government can utilize taxes to shape the economy, increase in one area and decrease it in another.  Another key idea in taxes may be how well you make itemized deductions with a variety of things such as health and dental etc., the general idea is to reduce your tax and increase your credits and end up with something as well as create in life your financial profile with the US Government that is your tax transcript.  It’s possible to also pre-select to increase your tax by adjusting your withholding allowance with the IRS to ensure a better financial outcome at year end.

A variety of things surprisingly can be written off like use of your home for business purposes or even fuel expenses may carry a credit.  There are three basic forms for personal income taxes that include the long form 1040 and the short form 1040 A and 1040 EZ.  What this writer recommends and what some venues are doing already which is making yourself a “worksheet” and documenting your annual key themes, your housing status, even renting can receive Homestead Property Tax, figuring out what your large expenses were and gathering receipts for those things especially out of pocket health care or dental expenses can be noted in a 1040 Schedule A.  One needs to start the year before,  gathering and figuring out what they will claim in the coming year and create perhaps an expanding file to place their specific receipts-not random receipts but key themes with key applications.

Mastering credit and loans can also be an achievement that increases long term wealth.  What this writer finds effective is to disassemble debt scaffolding and assemble wealth scaffolding.  How this can be achieved is by simply noting all ones debt and to reduce it, the key is to see it’s “end,” then cut it up into 2, 4 or 6 pieces to reach that end.  Interest is often so high people who pay minimum debts never get out debt.  Divide it by 4 into manageable pieces and “see the end”-it will dissolve by this date and it will disappear every time.  What is really good is to do the reciprocal and open a series of savings accounts as your bank will allow and start to stash for a large purchase or have a house fund, an emergency fund and a main savings then nickname them online which can be cute and rewarding.  Disassemble one and assemble the other and like magic one’s debt disappears and ones wealth appears!

What is good when building your emergency fund is to include enough to cover auto insurance deductibles and think through an accident and a need for a new car or time off work what would be your recourse and build up your emergency fund with those things in mind.

Other things one can do to achieve more respect that may improve one’s financial picture is to use ones last name.  Dress for example womanly and perhaps don’t choose the younger trendier look but a more refined mature profile.  It’s also good to give reverence to receive reverence or respect.  It’s good to work on one’s penmanship and hire an expert.  Lots of little touches can impact one’s bottom line and ultimate quality of life.

When one is building for example their career it is good to navigate how one will afford the most degrees they possibly can get.  There are many angles for getting degrees like military fellowships or working at Starbucks even offers tuition or many jobs offer tuition reimbursement.  The more education, the more money you can command so it is in ones best interest to investigate every way of getting degrees.  Even graduation parties or coming of age parties can contribute or get one a degree.

Planning your retirement can ensure your “good life.”  Many lives can be led in phase one and phase two when one is accessing retirement accounts and perhaps has saved a million dollar stash to retire with.  Very often people are looking for opportunities like stores or franchises or restaurants to retire into and make their stash “revolve.”  It’s good to have a long term plan for those things as well.  There are also places that still offer pensions which can also be nice, its good to look in places like government, auto industry and skilled trades for pensions.

If perhaps one publishes books or has self-employment things like Sep Ira from Merrill Lynch Edge can be good to save in retirement accounts or start one for your small business staff.  The more retirement accounts one has the better they accrue something like 12% and are government backed and are one of the best saving options out there, they are wonderful.  Outfits like “Bankers Life,” offer many financial products like 529 accounts, insurance, mutual funds, life insurance, and 401 K’s.

The other good thing this writer will say is she heard a proverb about how you plan so you don’t have to wait.

This writer also recommends talking to your bank.  Very often there are tiers in savings that reap certain interest rewards.  If you bring in $5,000 then perhaps the APR is a .5 %, if you bring in $25,000 then the APR may be 1.5%.  Graduate into those levels of savings for greater rewards in interest.  Find out what your bank offers.

In  your career “everything pays,” is the general rule whether it be laundry or mail or drinks or hot drinks or cars or health or hamburgers or education or security or engineering or the justice system-they all have their trajectories that all pay the more obscure the better.  One can get creative with many different areas and still have a very high income.

Another good thing to have is enough insurance to be okay or at least break even  and start over with things like “gap insurance” for financed vehicles.  Or a good renter’s policy because rentals get abused and uncared for and one can get into devastating situations with older uncared for homes with foundation problems and sewage backups-so renters policies are about $35 from State Farm and worth it.