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Here’s How to Redeem Your Old Saving Bonds

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how to cash savings bonds

Today, a surprising number of people may have old savings bonds lying around. Many Millennials received them as gifts when they were children. Many often tucking them away and forgetting about them until digging into a file much later. Luckily, forgetting about these savings bonds wasn’t a bad thing. As there’s a good chance they are now mature. If so, redeeming that old savings bond becomes an option. If you’re trying to figure out how to cash savings bonds that you’ve found. Here’s what you need to know.

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Money Anxiety

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Money Anxiety

Money anxiety is not an official mental disorder but is often treated. It manifests itself in a variety of ways, but I want to explain how anxiety and money affect my own life.

As I’ve mentioned here before, I have been diagnosed with anxiety so my feelings and experiences may be amplified to what you feel.

When it comes to money anxiety, I experience it in a few different scenarios.

Pleasing people

Your willingness or ability to spend money in a relationship should not determine the strength of that relationship. If that’s the case, is that a relationship really worth having?

In my case, it’s directly correlated with my former spouse. She got dealt a few bad hands in life, so I was willing to spend beyond my means to make her happy. Not that the spending inherently would make her happy, it was more of a reluctance to say no due to financial constraints.

That inability to say no stuck me with debt that set me back on my personal finance journey. Obviously, there are other personal factors that resulted in these circumstances, but that’s the gist.

Fitting in

I’ll echo what I said in the first section, your willingness or ability to spend money in a relationship should not determine the strength or quality of that relationship.

Thankfully, I’ve learned from/outgrown this, but it used to be a real challenge for me. Growing up, I never really felt like I fit into a particular friend group. So I developed relationships that I’m thankful for now but otherwise appeared destructive.

Destructive from a personal and financial perspective. As I said, I’ve since outgrown that tendency, but it’s something to be aware of for yourself.

Long-term thinking

This section will specifically talk about my house. The one I’m currently renting. Before we bought that one, we were two years into a mortgage in a different city. The plan was to live there until my son was school-age, and then we’d move to a city with better schools.

The house we ended up buying, I found on a whim. We looked at it, loved it, and put in an offer. It stretched us SUPER thin from a financial perspective. I mean, exhausted all of our savings (including retirement), and we were incredibly close to being negative on our budget.

I knew in my heart that it was the right long-term decision, and I was willing to go through the pain/struggle in the short term for it.

Little did I know that circumstances would change dramatically in the next year or two. Plan for the long term, but also plan for short-term variances (even the dramatic ones).

What I know

Because of my profession, my training, and what I’ve read, I’ve seen what happens when you make poor decisions.

That said, many (if not all) of my financial choices are heavily scrutinized. When I say “financial choices” I mean the larger ones. Day-to-day spending and bills are factored into my budget, though I do a review (as you should) regularly to see where I can trim excess spending.

When I make a financial decision, my money anxiety kicks into gear, as I always second guess myself. I run through the possible scenarios that could play out.

Tim Ferriss calls it fear-setting. The Stoics call it premeditatio morum. It’s a practice of expecting the worst and planning for them as they will happen. Expect the worst, hope for the best. Not a bad thing to do, in money and in life.

My Last Reflection

The Importance of Being Handy

Related reading:

The Psychology of Money

My House and What Brought Me Here

Living with Anxiety and Depression

How Long Does Bankruptcy Stay on Credit Report?

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Filing for bankruptcy is a tough decision to make. It can provide relief when you’re drowning in debt, but it does have consequences when it comes to your credit. How long does bankruptcy stay on your credit report?

We’re going to explore the answer to that question, as well as a few other items, in this article.

What is bankruptcy?

It’s a legal proceeding when an individual or an entity is relieved from some or all of their debts. Whether it’s all or some, and how that process takes place depends on the type of bankruptcy that’s filed.

  • Chapter 7 – Liquidable assets are sold in order to pay off debts. When those assets are exhausted, the remaining debt is discharged.
  • Chapter 11 – The most expensive option, which is usually used by companies (General Motors and J.C. Penny, for example). This is a reorganization plan that enables companies to remain open while getting their financial obligations situated.
  • Chapter 13 – Only available to individuals. The person filing implements a payment plan and is typically able to keep their assets (house, car, etc.). The debt must be paid off in 3 to 5 years.

Federal student loans are often excluded from being discharged, so you’ll be on the hook for that.

Let’s take a look at how bankruptcy affects your credit report.

How it affects credit

I’ll state the obvious by telling you that bankruptcy negatively affects your credit. Typically, you can expect your score to drop by 20-25%. This also depends on your current credit score and credit strength.

Discharges on more accounts and/or accounts with higher balances will affect your score more than discharges on a small number of accounts and/or low balances.

Delinquency usually proceeds bankruptcy and those stay on your report for 7 years. Chapter 7 bankruptcy stays on your credit report for 10 years, while chapter 13 stays on for 7 years.

What to do after

Inspect your credit report with a fine-toothed comb. Make sure that the debts discharged were actually discharged. If you find errors, go through the proper channels to get those corrected.

Once you’ve filed, you can immediately start building your credit back up. The first step is to ALWAYS pay your bills on time. I’ve stated before that on-time payment history is the number one factor when calculating your credit score.

The next step is to open a credit account. This should be something small and manageable. I often suggest a secured credit card. With this type of account, you make a deposit and that deposit acts as your credit limit.

Establish a positive payment history and keep your utilization well below 30%.

Bankruptcy on your report

You don’t have to do anything to remove the bankruptcy from your credit report. It will fall off on its own.

Review your credit report once the 7 or 10 year period ends. At that point, depending which type you filed, the bankruptcy should come off.

Give it a few months as your credit report often lags a little after the activity actually took place.

Stay diligent. Bankruptcy is not a death sentence, it’s a fresh start. Pay on time, keep your utilization low, and keep your spending in check.

Related reading:

How to Answer a Civil Summons for a Credit Card

What You Need to Know About Bankruptcy

What Affects Your Credit Score

The Importance of Being Handy

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The Importance of Being Handy

Perhaps it is just within my circle, but it seems that the character trait or the skill of being handy has lost its value.

People seem unable to fix simple things. Around their house, their car, what have you.

I’m curious if the majority of people know the difference between a Phillips head screwdriver and a flathead screwdriver.

At no time was the importance of being handy more clear than during the last few months, when the entire country went into lockdown. You never know when that service you rely on will be unable to help you.

My Experience

My dad taught me from an early age the importance of being able to fix things yourself and the value of a strong work ethic. Those may seem unrelated, but I believe they are directly correlated.

I watched him and helped him with all of his projects. Plumbing, changing the oil on his car, renovations, replacing his brakes, you name it.

Not only did it save him and us, as a family, money, but it was quality time I got to spend with him. There were valuable lessons taught in those experiences.

Now, I can fix almost anything. It gives me a sense of pride, it saves me money, and now, it’s making me money.

At my last apartment, I was the go-to handyman for our complex. They took a small chunk off my rent and paid me by the hour when I was on a job. Saving and earning at the same time.

Now that I’ve moved, I no longer am the go-to for that complex. Instead, I’m the go-to for all rental units owned by that investor in my city. That’s an incredible opportunity for me to make money outside of my normal 9-5.

Growing up, did I think this kind of circumstance would come upon me? Of course not. But that’s the thing. No matter how you think your life will turn out, it hardly goes that way.

You have to vary your knowledge and competencies across a range of industries. You truly never know what will fall into your lap.

From there, we’re going to take a hard right turn into a different topic

Consumer Math

This is something that should have been on my radar, but it wasn’t. Until this morning. My cousin is taking a consumer math course, and after learning about what it was, I have to promote it.

You can find a consumer math course anywhere, and they all teach the same thing.

Math for real-world situations.

It’s basically a personal finance course. It teaches things like budgeting, taxes, loans, buying a car, wages, deductions, spending, and transportation.

These are topics that everyone should be knowledgeable about, as they lay the foundation for your financial life. Ace these, and you’re steadfastly in the driver’s seat of your finances.

Quick Wrap-Up

Above, we covered two things. Being handy and having a wide range of knowledge can help you later in life, and how having a foundational understanding of consumer math puts you in control of your finances.

Both of these are vitally important but dramatically undervalued by the masses.

Related Reading:

My Life and How I Manage Stress

How to Teach Your Kids About Money

Why Financial Literacy is Important

5 Surprising Things Not Covered By Homeowners Insurance

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5 Surprising Things Not Covered By Homeowners Insurance

Overall, homeowner’s insurance is fairly comprehensive. It financially protects you from the burden associated with a variety of potential events. This ensures that you can move forward with repairs or replace stolen or damaged belongings. However, homeowners insurance doesn’t cover everything. In fact, there are some gaps that many don’t expect. These gaps can lead to a rude awakening if certain kinds of events occur. If you are wondering what is not covered by homeowners insurance. Here are five things that usually aren’t.

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How to Answer a Civil Summons for Credit Card Debt

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How to Answer a Civil Summons for Credit Card Debt

You do what you can, but sometimes debt gets out of control. If you get far enough behind on your credit card payments, eventually, the lender or a debt collector will file a suit against you to get what they’re owed. In this article, we’ll explore what a civil summons is and what to do when you’re faced with one.

What is a civil summons?

Generally speaking, a civil summons is when a governing body, individual, or organization files a lawsuit or judgment against another individual or organization.

The document indicates the reason for the suit or administrative action. It also listed pertinent information, such as the time and date of the first hearing, details about the plaintiff and defendant, and the amount of time the defendant has to respond.

A civil summons with regard to credit card debt usually occurs when the account reaches “charge off” status. Charge-off status usually happens between 120 and 180 days.

With that said, here are the steps you need to take.

Don’t ignore it

This is the worst thing you can do. The suit will continue, whether or not you respond. If you don’t respond, the court will issue a ruling in favor of the lender.

That means you will be forced to pay what’s owed. They may also tack on attorney fees, court fees, and interest to your balance.

Negotiate

Get in touch with the lender/collector that filed the suit, and see if they will accept a lower amount.

The filer may ask for a lump sum or a series of payments. The negotiated amount can range from 40% to 80% of the original balance.

Who filed the suit also makes a difference in negotiation. If the lender is after you, they will be less willing to negotiate a lower amount than a debt collector that bought the debt at a discount.

Research

If negotiation doesn’t work, it’s time to build your defense. Get a hold of the lender or collector again and gather information.

  • Check through your records to confirm if the debt owed belongs to you – do the amount and the original lender match up? Is it yours?
  • Get a chain of custody records – does the filer have the legal right to do so?
  • How long have you owed the debt – the statute of limitations could forbid the suit based on how long you’ve owed it
  • Get proof from the filer – are their records accurate? Is the information listed correctly? If the filer has missing or incorrect information, this can work in your favor.
  • Get copies of everything – accurate and complete documentation is very important

Talk with a professional

Get a consultation. Often, these are free. At the very least, it’ll help get a better understanding of what you’re up against and what you should do.

If money is tight, there are organizations, like lawhelp.org, that will provide an attorney that volunteers their time.

If money isn’t as tight, vet and hire an attorney to help your cause.

Go to court

If negotiation and settling outside of court don’t work, then it’s time to go to court. Here’s what you have to do.

  • Formally answer the summons with the court. This has to be in writing and generally, you have to answer within 20 to 30 days of receiving the summons.
  • In your reply, you have three answer options: admit, deny, or lack of knowledge. Admit it’s your debt, deny it’s your debt (only if you’re 100% sure), or attest that you don’t have enough information to say otherwise.

Options after court

If the ruling goes your way, there’s not much else to do. However, there may be terms you need to settle on, depending on what the judgment was, so you may not be completely out of the woods yet.

If the ruling doesn’t go your way, you have a few options.

  1. Try negotiating with the lender/collector again.
  2. Pay the amount mandated by the court
  3. Argue the ruling by filing an appeal
  4. File for bankruptcy
    1. This is the last resort and should only be used if there’s no way to pay back what you owe.

Credit score

Your credit score will take a big hit throughout this process.

  • Prior to 30 days late, it won’t affect your credit score, but you will be charged late fees (most likely).
  • After 30 days, a late payment will show on your report. On-time payment is the number 1 factor when calculating your score, so expect a significant drop.
  • The impact late payment has on your credit gets worse as you pass 60 and 90 days.
  • As stated, a suit normally isn’t brought against you until 180 days late. At that point, the account is listed in “charge off” status and that will really hurt your score.

Obviously, you want to do everything possible to prevent being served a summons for your being behind on your credit card bills, but if you get there, these are the steps you need to take.

Related reading:

What Happens When You Fall Behind On a Mortgage?

What You Need To Know About Bankruptcy

Ways Debt Can Hurt You

What Affects Your Credit Score

How To Pay Off Credit Card Debt

Here’s Why Refinancing Your Car Is A Bad Idea

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Here's Why Refinancing Your Car Is A Bad Idea

If your budget is tight and you are struggling to keep up with your monthly obligations, finding a way to lower your auto loan payment might seem like a smart move. Usually, car payments are one of the largest expenses in a household for those with an auto loan. The average new vehicle loan payment comes in at $554, while the average for used cars sits at $391. If refinancing lets you lower that amount, going through with it may be enticing. But refinancing a car isn’t always the best way to go. In fact, it can get you into some financial trouble if you aren’t careful. If you are considering an auto loan refinance, here’s why refinancing is a bad idea.

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Down Payment or Investment Opportunities?

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Down Payment or Investment Opportunities

The current dilemma I am having is whether to stash my savings for a down payment on a house or contribute to my Roth so I have cash available for buying opportunities.

I’m pinching pennies, and I’m saving money wherever I can so that cash is accessible when I need it. I just don’t know what to do with it.

Do I put it towards a down payment or set it aside for investment opportunities. Like most things in life, the answer will lie somewhere in the middle.

Down payment

I’ve mentioned in prior reflections that I’m renting right now.

I’m renting because I got divorced and exhausted all of my savings on the down payment for my house. That house is currently being rented by another family, and my ex-wife and I still own it.

That’ll help build equity into the house so we receive more if/when we decide to sell, which is good.

I’m happy with my current living arrangements. I like the place. I like the neighborhood. My commute to work is 2 minutes, and I’m close to all of my family and friends. All good things.

The only bad part is I have no outdoor space to call my own. I have no yard.

I’m trying to frame it positively by saying that I’m not spending my time on yard work, and instead, have more time to spend with my son/work on myself when he’s not here. These are both very good things.

However, I want to give my son a space to play. A place to put a jungle gym and a sandbox. A place where he can just run around and have fun.

I want to give him that because he deserves it. I want to use my savings for a down payment on a house so we can have a place to call our own. 

Investment opportunities

Here’s the second part of my dilemma. I see a lot of chances to put my money to work in the market.

I’m able to play the long game because of my investment philosophy and my training. The best investors I have long-term time horizons.

What I mean to say is I can see past the present and I have an idea of what my investments can do over the long term, and the [possible] reward for investing now can’t be ignored.

That’s why I’m having a difficult time deciding what to do.

What will I do?

As a parent, you want to give your kids everything. I want to have a place we can call our own.

At the same time, I know how valuable it is to start saving and investing early so I can take advantage of compounding returns.

So here’s what I’m thinking. I’m going to develop a “savings plan”. I’ll take the dollar amount for an ideal down payment and how far in the future (in terms of years) when I’ll want to use it.

I’m thinking of $25,000 for a down payment and four years until I’ll use it. I’ll, then, divide $25k by 48 to get my monthly savings goal. Anything over that number I’ll put in my Roth.

That’ll take care of saving for a house and for retirement.

My Last Reflection:

My Experience with Life Insurance

Related reading:

Your Go-To Budget Guide

What is Time Horizon and Risk Tolerance?

My Life and How I Manage Stress

My House and What Brought Me Here