Money Management

Are you behind on your mortgage payments and can’t figure out how to get out? Read this article for the solutions you’ve been looking for. [[{“value”:”

As more people take out mortgages that stretch their budgets to a breaking point, we’ll keep seeing these affordability problems turn into mortgages that are in danger of delinquency. According to CoreLogic, 2.8% of mortgages were 30 days or more past due in March 2024, up 0.2% from the year prior, and 0.3% were actively in foreclosure.

These are small numbers, to be sure, but if you’re one of the people who has gotten behind on your mortgage payments, the impact of that small number can be colossal.

Some folks fell behind during the pandemic, and have never managed to really get caught back up. Some have suffered setbacks, illnesses, and tragedies that have turned into massive financial stumbling blocks.

But as a former Realtor, I’m here to tell you that it’s going to be OK and that you can resolve this without losing your home.

What happens when you miss a payment

Some people are really afraid that once they miss that first payment, that’s it, they’re done for. That’s not really how it works, and although the process is very different depending on what state you are in, the first part is always the same.

When you miss your first payment, the bank will reach out to you to find out when you will be making that payment. Don’t ignore its calls. Your bank is trying to help, believe it or not.

When you’ve missed the second payment, it’ll get a lot more aggressive about trying to contact you because your bank doesn’t actually want to foreclose on your house. It costs banks a lot of money to foreclose and the lender has no guarantee that it will be able to sell your home for enough money to cover your remaining mortgage.

Once you’ve missed the third payment and are 90 days past due, that’s when the foreclosure process starts. You’ll start seeing notices appear in the mail, and people may show up at your door. This is functionally your last chance to save your home (you can still redeem yourself after this point, but the bank won’t help you, so it’s going to be tough to accomplish if you don’t have the cash to make your payment).

But you don’t have to go through all of this — there are solutions.

Here’s how you can avoid foreclosure and stay in your home

Your options to avoid foreclosure will largely depend on your mortgage lender, how many payments behind you are, and sometimes how long you’ve had your mortgage, but in general, you have a few options.

If you want to keep your home and stay in it, call your lender as soon as you miss a payment and realize you can’t catch it up. Don’t wait. Time is of the essence if you need help managing your payments.

You will generally have a few options, including the following.

Mortgage forbearance

You can request a mortgage forbearance when you’re experiencing a significant financial hardship, especially if all the earners in the household are unemployed or a serious medical crisis occurs. Your lender may let you skip some payments, or at least pay a lot less, for a few months until you get back on your feet. You’ll need to have a permanent solution to those missed payments, though, so be considering that while you’re working through your current cash flow issue.

Loan modification

Loan modification might be a lender offering a discounted rate for a short period to help reduce the strain on your budget, or allowing you to pay the missed payments at the end of your current note (this happened a lot during COVID-19). Your options will depend on your loan type and servicer.

Partial claim second mortgage

A partial claim second mortgage is an option we didn’t really see when I was an agent leading up to the Great Recession, and one I’m glad is available now. A partial claim second mortgage is a type of loan modification for HUD programs (like FHA mortgages) that allows your lender to take a claim against your mortgage insurance, while leaving your mortgage rate intact. It’ll use those funds to create a second mortgage with zero interest that may be able to be deferred so that no payment is due. Note: if you plan to stay in your home indefinitely, budget to pay against that second mortgage or you’ll just have moved your trouble down the road.

Recovering from a near-miss with foreclosure

If you call your lender and you get help right away, you’ll see that all will be well, even if you have to keep making phone calls and keep filing papers for a while. Your lender really doesn’t want to take your house, I promise you.

But those missed payments are going to hurt you, and it’s not a small hurt. Your credit score will suffer the further behind you get, and you’ll have a record of non-payments for a long time. I know because I’ve been through a foreclosure. It was the Great Recession, my house was significantly underwater, and we had no other way out because my income dropped by 90% overnight.

The good news for you, of course, is that you will have saved your home, and over time, your credit will recover. Your home’s value will also climb while your credit recovers, giving you even more options to deal with a modified loan or a partial claim second mortgage down the road.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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If you’re not shopping at Trader Joe’s yet, you’re missing out. Read on to see why. [[{“value”:”

The folks who write all of those economic reports keep claiming that inflation is cooling. And sure, technically, that’s true.

But here’s a big misconception a lot of people I know are buying into. They seem to think that just because the pace of inflation is slowing down means consumer products are getting cheaper. That’s not the case at all.

Take groceries, which eat up a huge chunk of my budget. Grocery costs are up 1.1% from a year ago, as per the latest Consumer Price Index. But remember, that’s a 1.1% increase on top of all the other increases in recent years. So no matter how you slice it, I’m still spending way too much money to put food on the table.

If you feel similarly, I highly recommend you do at least some of your grocery shopping at Trader Joe’s. And even if you’re not particularly stressed about your grocery bill, I still think it’s one of the best supermarkets to shop at. Here’s why.

1. You know exactly what you’re going to pay ahead of time

Trader Joe’s does a great job of updating its website with new product information so you can see what’s on shelves month after month. But what I love about Trader Joe’s is its practice of publishing prices on its site and charging the same price at every store.

Take the new Peaches + Cream Cream Cheese Spread. I’m not sure if it’s my cup of tea, but I appreciate knowing ahead of time that Trader Joe’s will charge me $2.79 for an eight-ounce container.

Of course, there is the disclaimer that prices can fluctuate based on market conditions. But in my experience, when Trader Joe’s posts a price, that’s what I’m paying.

2. You can try any product before you buy it

Here’s a little-known fact about Trader Joe’s. If there’s a new item you’ve never tried before and you’re not sure you’ll enjoy it, all you need to do is flag down a store employee and ask to sample it. Someone will open up a box or bag of whatever it is and let you try before you buy.

I took advantage of this years back when my kids and I went to Trader Joe’s in search of the granola bars they loved, only to learn that the store had discontinued them. My kids were heartbroken, so the kind store employee who’d been forced to break the news proceeded to march them into the cereal aisle and start opening various boxes of replacement granola bars for them to try.

When my kids found a few kinds they liked, I offered to pay for the partially eaten boxes they’d sampled from. The store employee refused my money for those boxes. I was floored.

3. You can get a refund for purchases that don’t meet your expectations

Trader Joe’s wants you to be happy with your purchases. So if there’s a quality issue, such as a product that goes bad before its expiration date, or if there’s a new item whose taste you don’t like, you can generally bring it back for a full refund.

Granted, Trader Joe’s isn’t alone in this regard. Costco is also really good at refunding customers who have issues with food products. Only to buy groceries at Costco, you have to pay a $60 fee at a minimum for a basic membership. There’s no budget hit to walk into Trader Joe’s and see what’s in stock.

Look, I’ll admit that I’m a fan of Trader Joe’s first and foremost because of its awesome products, many of which you can’t find anything like elsewhere. But I also really appreciate the way the store does business. So for these reasons, I highly suggest shopping at Trader Joe’s if you have a location near you.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Credit card debt is at an all-time high nationwide. Here’s how to tell if you’re in too deep. [[{“value”:”

In 2023, credit card debt nationwide hit a staggering $1.115 trillion, and the average balance per American sat at $6,501. For some folks, that amount may be manageable, but for others, credit card debt represents a dark hole that can be challenging to climb out of. If you’re carrying credit card debt but aren’t quite sure if what you’re experiencing is “normal,” take a look at the following five signs that credit card debt may be getting in the way of your financial freedom.

1. You’re only able to make the minimum payment

Imagine that you carry a balance of $500 on a credit card with an interest rate of 24% (the current average percentage rate, or APR). If you make a minimum payment of $15 each month, paying the balance in total will take four years and eight months. However, you will have spent $332 on interest along the way. If you increase your monthly payment to $25, the debt would be paid off in two years and two months, and you would pay $145 in interest.

If the most you can come up with is the minimum monthly payment, you could quickly find yourself unable to move forward financially.

2. You’ve been denied credit

If you’ve ever applied for credit and been denied, it may be due to your credit utilization. Credit utilization refers to how much you owe compared to how much credit you can access. Let’s say you have a credit card with a $1,000 spending limit. If you owe $900 on the card, you only have access to $100. However, if you only owe $100, you can access $900. Generally, the more credit you can access, the better lenders feel about trusting you with a loan.

What if your car breaks down for the last time and you need a new one, or the water heater stops working mid-winter? The less you’ve already borrowed, the higher your credit score is likely to be. Creditors don’t look at that and think, “Oh, good. This loan applicant doesn’t need our money.” Instead, they think, “Wow, look how carefully this loan applicant handles debt.”

3. You’re unable to save money

An emergency savings account minimizes the odds that you’ll be forced to cover emergencies with a credit card. If you find saving money impossible due to credit card payments, your credit cards are doing you more harm than good.

Think about the interest you pay toward credit card debt each month, and imagine how much easier it would be to build an emergency fund if those dollars were available to you.

4. You’re taking cash advances

If you’re taking cash advances from your credit card, it’s crucial to understand how much higher the interest rate will be on those funds. For example, as of June 1, 2024, a First Interstate Bank credit card carried an APR of 19.50% for purchases and balance transfers. However, the APR on cash advances was 29.50%.

If difficult-to-pay credit cards represent a hole, a cash advance only makes that hole deeper. If you find yourself taking cash advances, it’s time to devise a debt payoff plan for how you’ll climb out.

5. You use one credit card to pay off another

If you find yourself robbing Peter to pay Paul — or, in this case, taking a cash advance on one credit card to pay another — it’s a clear sign that it’s time to take control of your credit situation. As mentioned, the APR on a cash advance is higher than on a purchase or balance transfer. When you cannot make a credit card payment and must cover it with a cash advance from another card, your financial health could be at stake.

There’s hope

It’s easy to believe your financial situation is worse than anyone else’s. It’s easy to think there’s no way out. But nothing could be further from the truth. Getting out of credit card debt is not something you’ll likely accomplish overnight, but millions of people have done it, and you can, too.

Here are four ideas to get you started:

Stop using your credit cards. Credit cards are great as long as you’re not paying interest. Until you are in a position to pay your credit card bills in full each month, stick with your debit card and cash as much as possible.Pay a little more each month. You owe less interest every time you pay extra toward your credit card.Make a balance transfer. If your credit score remains relatively strong, you may qualify for a credit card with a 0% intro rate. Let’s say you’re approved for a card with a 0% intro APR for 18 months. And, for the sake of this scenario, imagine that you transfer $1,800 in high-interest debt. That gives you 18 months to pay the $1,800 off without paying a penny in interest. Pay the debt off before the introductory period expires so you’re not stuck paying the standard APR.Look into a debt consolidation loan. A debt consolidation loan works like this: You take out a single loan, preferably at a lower interest rate than you currently pay on credit cards. Instead of payments to different lenders, a consolidation loan means you make one fixed-rate payment each month. As long as you make all payments in full and on time, you should be able to pay the loan off faster than credit cards, and more importantly, you should save money.

Finally, if you need help getting started, a nonprofit organization like the National Foundation for Credit Counseling (NFCC) can help. With NFCC, you connect with a certified credit counselor for a private consultation. Your counselor will work with you to learn more about your budget and financial goals. Once they have the information, your counselor will create a personalized financial action plan to help you scrap your credit card debt and take control of your finances.

Figuring out that credit cards stand between you and your financial health is a positive. After all, you have to know there’s a problem before working on a solution. And no matter how daunting it feels, a solution is within reach.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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A small business credit card can be an asset for a new business owner. Keep reading to find out which perks could be most beneficial. [[{“value”:”

Going into business for yourself could well be one of the most rewarding moves you ever make. But starting a small business is about more than just being your own boss — there are a lot of financial considerations to make to ensure you’re set up for success and ready to see money pile up in your business checking account.

For managing your day-to-day expenses when you strike out on your own, it’s worth considering opening a business credit card. Here are a few reasons why, and a few tips to choose the right business credit card for you.

Separate your spending

This is easily the most sensible reason to get a small business credit card, even if your business structure is a sole proprietorship, like mine. Keeping close track of your business spending vs. your personal spending makes tax time far easier, and using a credit card for your expenses offers some of the easiest record-keeping possible. Want to know what you spent on supplies or marketing this month? Log into your credit card account and download a statement. It’s as simple as that.

Benefit from business-centric bonus categories

Personal credit cards often come with bonus rewards categories that are more geared toward the kind of spending you’d do to maintain your life, rather than your business. For example, I have credit cards with high rates for groceries, gas, dining out, and travel expenses.

But bonus categories for business credit cards often work a bit differently. Rather than higher rates on dining or grocery purchases, you might get a higher rewards rate on internet or cellphone service, online advertising, or office supply store purchases. This means you’ll earn more rewards or cash back on business-specific expenses.

Take advantage of short-term financing

A business credit card can offer a very accessible means of financing big purchases. If you are, say, opening a restaurant, you might need to seek a business loan to fund your equipment purchases. But if you’re getting started as a freelance writer, your equipment needs might only consist of a new computer.

If you don’t have the funds on hand to buy one, you could finance the purchase by opening a business credit card with an intro APR offer that lets you pay off your new computer over time while paying low or no interest. Just be sure you can in fact pay off the purchase out of your checking account within the allotted time — you can do some easy math to find out.

Let’s say you have 12 months to pay off your new computer without interest, and it cost you $1,000. As long as you make payments of at least $83.33 per month, you’ll have it paid off in time.

How do you choose the right credit card for your business?

Since there are so many options out there, use the following quick tips to pick the business credit card best suited to your needs.

Pick a card type: Do you want a card that earns cash back (directly saving you money on credit card bills) or one that earns rewards points or miles you can redeem for travel?Consider the annual fee: While you can get a business credit card that costs nothing to keep in your wallet, some of the options with better perks and higher earning rates have an annual fee.Look for the right rewards: If a card’s highest bonus rate is on office supplies, and you don’t buy any, that’s probably not the right card for you. Target one that matches your spending.Watch out for the APR: Some cards have a higher go-to interest rate than others. If you ever carry a balance, these cards could cost you a ton of money in interest charges.Find employee-friendly features: If you have staff members who will need a card, choose one that offers free cards for employees. Some cards even let you add a spending cap to individual cards so an employee can’t max out your credit line.

For the rundown on your options, check out The Ascent’s list of the best small business credit cards.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Considering retiring abroad? It can come with both benefits and challenges. Read our guide to decide if it’s right for you. [[{“value”:”

One factor that universally impacts everyone’s retirement plans, regardless of their chosen location, is the amount of money they’ve saved. According to New York Life, Americans retiring at 65 can expect an average of 20 years in retirement and will need approximately $987,000 to cover their expenses. Meanwhile, the average cost of living, excluding rent, is nearly 29% lower in some destinations, like Portugal, than in the U.S.

So, retiring overseas might sound like a dream come true — think sunny beaches, quaint European villages, or scenic Asian cities that are better for your personal finances. But before you pack your bags and book that one-way ticket, it’s essential to weigh the pros and cons. Here’s a guide to help you decide if retiring abroad is right for you.

Benefits of retiring overseas

When you imagine your retirement, what do you see? If it’s a life filled with new adventures, diverse cultures, and other benefits, here’s what you can expect.

Cost of living

One of the most significant advantages is the cost of living. In many countries, your retirement savings can stretch much further than they would in the United States. For instance, countries like Mexico and Ecuador offer a high quality of life at a fraction of the cost.

Healthcare

Many popular retirement destinations boast excellent healthcare systems that are both affordable and high quality. Countries like Sweden and Germany are known for their top-notch medical facilities, which often come at a much lower price than in the U.S.

Lifestyle

The lifestyle can be another major draw. Whether it’s the laid-back vibe of a beach town in Panama or the rich cultural experiences found in Italy, the opportunity to immerse yourself in a new environment can be incredibly rewarding.

Challenges to consider

While the benefits are enticing, retiring overseas has its challenges. It’s crucial to consider these factors to ensure a smooth transition.

Language and cultural barriers

Living in a foreign country means navigating a new language and culture. This can be exciting but also daunting. While many expat-friendly countries have communities where English is widely spoken, learning the local language can significantly enhance your experience.

Cultural adaptation

Adapting to a new culture requires patience and flexibility. Everyday activities, from shopping to opening a checking account, might differ from what you’re used to, which can be both an adventure and a challenge.

Financial and legal considerations

Moving overseas can have significant financial and legal implications.

Taxes

You may still have to pay U.S. taxes on your income, even if you live abroad. It’s essential to understand the tax treaties between the U.S. and your new country to avoid double taxation. Consulting a tax professional who specializes in expat finances can save you from pitfalls.

Cost of moving

The initial cost of moving can be substantial. Shipping your belongings, buying property, or setting up a new home all require careful budgeting. Additionally, fluctuating exchange rates can impact your finances.

Healthcare and insurance

While many countries offer affordable healthcare, it’s important to ensure you have adequate coverage.

Health insurance

Some countries require expatriates to have private health insurance, which can vary widely in cost and coverage. Researching and purchasing the right health insurance plan is crucial to avoid unexpected medical expenses.

Medicare

U.S. Medicare typically doesn’t cover healthcare costs overseas. You’ll need to look into alternative options for medical coverage in your new country.

Social and emotional aspects

Retiring overseas isn’t just a financial decision; it’s also a deeply personal one. Establishing a new social network is essential for your emotional well-being, as many retirees find comfort in expat communities, which can offer a sense of familiarity and support. However, integrating with locals and embracing the culture can enrich your experience further.

Being far from family and friends can be challenging. While technology makes it easier to stay in touch, the physical distance might be difficult to cope with, especially during significant life events.

Making the decision

Deciding to retire overseas is a significant life choice that requires thorough research and planning. Here are some steps to help you make an informed decision.

Visit first: Spend extended time in your chosen destination before making the move. This will give you a realistic sense of what living there will be like.Consult experts: Speak with financial advisors, tax professionals, and current expatriates to get a well-rounded view of what to expect.Plan for the long term: Consider your long-term needs, including healthcare, legal matters, and potential changes in your financial situation.

Retiring overseas can be a fulfilling adventure, offering lower living costs, new cultural experiences, and potentially better healthcare. However, it’s not without its challenges. Thorough research, careful planning, and a willingness to adapt are key to making your overseas retirement successful. Take your time to weigh the pros and cons, and make sure your decision aligns with your long-term goals and lifestyle preferences.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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A small business credit card can be a real asset to your company. Keep reading to learn how. [[{“value”:”

If you’re an entrepreneur, business owner, or even just a freelancer or gig worker, opening a credit card account for your business could offer a lot of benefits. First and foremost, it gives you the chance to easily separate your business and personal expenses, which will absolutely improve your life come tax time. And business credit cards also come with perks that you might have a harder time finding on personal credit cards.

Let’s take a closer look at a few of these features and discuss how the right small business credit card can make managing your business cheaper and easier.

Bonus earnings on business-specific spending

You’d be hard-pressed to find a personal credit card that pays you extra cash back or points on your trips to the office supply store. But business-specific bonus categories can be found on business credit cards (no surprise there!). You might see 5% back on spending for office supplies or internet service, for example.

Depending on the nature of your business, you might also benefit from categories also found on personal cards, like gas fill-ups. Let’s say you drive for a ride-hailing service or you’ve started a small local transport or delivery company in your area. A business credit card with bonus rewards for gas could really save you a lot of money — and good news, they are available.

Higher credit limits — or no preset limits at all

Your personal credit cards might not have super high limits, and this is for good reason — it’s not likely that you’ll be putting $25,000 or $50,000 worth of purchases at once on a personal credit card. For a big personal purchase, there are often better ways to pay, like a personal loan.

But small businesses might regularly spend this kind of money on a credit card, between paying for equipment and sourcing inventory and materials. So you’re likely to find a higher credit limit on a business credit card. And for some card options, you might not have any preset spending limit at all.

Additional cards for employees

If you have staff members who make purchases on behalf of your business, you can choose a business credit card that gives you free cards for employees. In some cases, you’ll be able to set a lower spending limit on employee cards, which will keep any staff member from maxing out the account (which would be terrible for your bottom line and could even impact your personal credit score).

International spending and travel perks

Finally, if your business has contacts (such as vendors) in other countries, you’ll be happy to know that a lot of the best options for business credit cards come without foreign transaction fees. These typically amount to 3% of transactions made in other countries or in currencies other than U.S. dollars. And if your business operates internationally, using a card that charges those fees will only serve to make everything you buy more expensive. Plus, if you travel abroad for business, you’ll be able to use the card to cover expenses while you’re out of the country without having those extra fees tacked on.

Speaking of travel, some business credit cards earn travel points or miles rather than straight cash back. Like with a consumer travel rewards card, you can then turn these rewards into free or lower-cost hotel stays and airline tickets. Plus, these travel-focused cards sometimes also include credits for TSA PreCheck or Global Entry and airport lounge access. These features can make your business travel more relaxing and less stressful.

Top business credit cards have a lot of features that can make running your business smoother and more rewarding. So why not have a gander at our list of the best business credit cards and pick a winner?

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Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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