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April 2019

Is Your Credit Card Minimum Payment a Trap?

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When you open a credit card, you’ll also have a minimum payment each month along with it. Many people pay only the minimum on their card, which can in turn make the lifecycle of paying off the credit even longer. When you only make the minimum payment, which credit card companies are relying on you to do, then you won’t be chipping away at the principal interest of the loan that the credit card is accumulating.


It’s recommended you try to pay more than the minimum payment on your credit cards in all cases. Even if it’s just $10 or $20 more each month, it will help you make a dent in the principal interest over time. It’s recommended to pay your balance off in full each month if you can.


For most people, paying just the minimum becomes part of a cycle of only paying the minimum over the course of months or years. You begin to think, “Well, I’m getting by just fine,” instead of taking a hard look at the interest rates and the accumulation of interest over time. Instead, try paying off the full balance each month, minimizing the use of your credit card as much as possible, and only charging what you can afford to your credit card.


Of course, making a minimum payment isn’t always a bad thing. In fact, it’s helpful for the average American because it means that can handle an unexpected expense or an emergency using a credit card if they absolutely have to. But in an everyday sense, it’s better not to rely too much on a credit card and to keep your total balance low.

Common Tax Mistakes

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Filing your taxes is always a little bit confusing. After all, there are so many factors to consider and each year is different, especially if you have equity, own property, or rely on a variety of 10-99s or forms less conventional than the standard W2 to track your annual income.


Not filing on time

This may seem self-explanatory, but you’d be surprised how many people get tripped up by not filing their taxes before the annual April 15th deadline. Not filing your taxes is a surefire way to make sure the IRS will audit you.


Missing information or leaving blanks

Forgetting to put in critical information like your Social Security number or your address can have repercussions on your tax return, and the IRS doesn’t like inaccuracies because it can make you look like you’re hiding something.


Wrong account or routing information

This happens more than you’d think, where self-prepared tax returns are off on one number or digit on their account number. That means your return may not hit your bank account, and the IRS could lose track that they still owe you, or worse, your tax return could hit someone else’s account.


Not double checking your returns

It’s important, especially if you self-file, to review your tax documents carefully before submitting them. If you can, have an extra set of eyes take a look, even if it’s a friend you trust. Or, consider reaching out to a local tax professional to prepare your taxes for you.


Filing taxes can be confusing, but with a careful watch over your work and plenty of supporting documents, it can be easier than you think to catch mistakes early.

Things You Should Buy Second Hand

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Buying items secondhand is growing in popularity every year as thrifted treasure troves and vintage furniture stores grow more and more common. People are starting to value buying clothing, furniture, and other goods used or secondhand. It’s better for the environment because you’re reducing the amount of new materials used to create what you buy, and it tends to be cheaper than buying something new.


If you can, buying used clothes or selling your clothes to others is a good way to save money and a popular side hustle. Many people donate their clothes to Goodwill or consignment stores.  When you buy clothing secondhand, you’ll typically pay a fraction of what it costs new.


Another thing to buy secondhand is furniture, which can save you thousands of dollars and avoids paying extra fees that new furniture stores often tack onto purchases. Of course, you’ll probably have to transport the furniture yourself, which could be a limitation of buying something used. A popular way to find used furniture are websites like Craigslist and Ebay.


If you’re planning a family or having a baby, be sure to ask friends and family to donate their old baby clothes. Because babies grow so quickly, buying brand new clothes for them (except for special occasions) is really hard on the wallet.


Another used purchase that can positively affect your wallet is a used car. New cars instantly depreciate in value, but finding a solid used car with low mileage can save you thousands of dollars that you’d otherwise put toward a new vehicle.

What is a HELOC?

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If you’ve ever heard of the term HELOC, you might be wondering what it even is. A HELOC is a “home equity line of credit,” which means the lender will issue a loan to the borrower where the collateral is the equity of the borrower’s home. Some financial advisors liken this to a second mortgage. People who have owned a home for a few years typically will already be eligible to apply for a HELOC.


HELOCs are known for their flexibility because they provide the borrower with a line of credit, kind of like a credit card, instead of one lump payment that they then must repay over time. With a HELOC, your payments will vary monthly based on how much you borrow that month.

A HELOC can also be a cheaper alternative to a home equity loan, especially if you use your line of credit wisely.


Another popular way to use a HELOC is as a debt consolidation tool, where many people will take several credit card balances and pay them out with the HELOC. If you’re smart and careful, this can be a way to jumpstart paying off those debts, but it’s not as easy as that. If you fall behind on payments, you could lose your home because you’ve turned your unsecured debts into a secured debt with a HELOC.


It’s an important concept for those building equity with their home to understand all the options available for paying off debts. Contact Cain and Daniels today to learn more about a HELOC and if a home equity line of credit could be right for you.

Best Books for Money Advice

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Personal finance is a critically important topic that most people don’t know very much about. Luckily, there’s a ton of reading material on the topic of money advice that people can turn to and use to better understand their financial situations. The best books for money advice are ones that cover complex scenarios in an easy-to-understand way, don’t talk down to their audience, and have helpful tips on navigating debt.


“Women and Money” by Suze Orman is chock-full of financial advice for women in terms of how to invest, how to save, and how to build up an emergency fund and find financial freedom. “The Total Money Makeover Workbook” by Steve Ramsey is another popular book for those who are working to pay off their debts and live debt-free. Steve Ramsey is incredibly popular for those who want to build an emergency fund and stay out of debt long-term.


Another book for those who are interested in learning the basics of investing is “The Little Book of Common Sense Investing,” which helps readers understand the ins and outs of investing and navigating the stock market. “Your Money or Your Life” aims to help you achieve financial independence in nine steps, learn to be frugal, and spend your money with intention.


These are just a few books to get you started in your journey for sound money advice, and can help you understand expert opinion on how to gain financial independence, break out of debt, and become savvy in the world of investments and stocks.