What’s Keeping You Up at Night? Tips to Help You Weather Economic Storms

What’s Keeping You Up at Night? Tips to Help You Weather Economic Storms

Sometimes it could be all too much wars and threats of war, effect of global warming, ongoing political unrest, pandemics and the resulting fallout.

If you're like me, you want to stay in bed with your cover's over your head, keep the blinds closed, shut off the TV and not open the mail.

There's a lot to be said for that.

Unfortunately, not all of it is good hiding from uncertainty now can just make the future more bleak.

I equate the current state of life on earth as walking through a minefield.

It's manmade and this threat has always been there.

Although we think we have been made immune to the traps, we have only adapted and somewhat blindly taken the path of least resistance.

Thinking however foolishly, that we will make it to the other side intact.

We have simply refused or did not understand that our own individual feet in the minefield would ultimately lead us to where we are now, not only as an individual, but also a nation of nations.

When we thought we had successfully navigated the minefields, we neglected to look back at what was happening behind us.

More landmines have been set, and now you have to stop to consider more thoroughly your path and the risk to you.

Your path needs to change.

The path is never the same, even though we expected it to be.

Doing your best to weather these threats require a concerted effort to take a dive into your foundation of security, find the cracks, understanding they are weaknesses and shoring them up to weather the next storm.

That will certainly come.

That means looking at your finances and how they have changed and maybe not to the good because of inflation.

How can you mitigate the stress cracks now while keeping an eye on your future security?

What's most important to you?

What are the costs of achieving or keeping that secure?

Don't just plan for next week or next month or next year.

Plan now for the rest of your life.

Match your financial goals, including savings with your values.

And don't forget to anticipate negative influences that you cannot control your financial health, including unexpected illnesses so you can better alleviate a financial crisis.

Areas of finances you need to review.

Review everything in your monthly budget.

Get rid of everything you don't need, Such as those subscriptions that renew yearly even if you aren't using them.

How about the gym membership you have that you're not using as well as media subscriptions.

Resist the temptation to eat out often.

Many people don't realize exactly how much they are spending on lunches, take outs, restaurant dinners and entertainment.

I know it's great to be out of the home post-COVID, but you also don't want to create or exacerbate financial ills as well.

Be prudent in your spending.

Review your insurance portfolio.

Life insurance can be a life saver for those with a chronic illness.

Insurance isn't just for inheritances.

Consider disability insurance.

If you don't have disability insurance, protect your income in the event of illness, whether it be short term or long term illness, you are putting yourself and your family at risk.

Don't forget auto, homeowners and rental insurance.

You may be surprised to learn that you can change insurers prior to the policy renewal.

If you have a homeowner's insurance included in your mortgage, it's even more timely to review it, especially if it's been five or more years since your loan origination.

Many, if not all, insurance companies increase their rates based on anticipated value of homes.

Beware of other increases that make you over insured that give you absolutely zero benefit.

I was able to save several thousand dollars a year.

You may recognize this when the mortgage company does an annual reamortization.

Hint, it always increases.

Many times is it a result of the increase in your insurance, sometimes at the tune of automatically increase the value of your home 15 to 25% every year.

How realistic is that?

Even down real estate markets?

Additionally, they are using multipliers that were in effect at the time you originated your mortgage.

They may have decreased a lot since then.

If your house has lost value, review your insurance as well as tax bill, they can be corrected as well, saving you money.

You'd like to increase your returns on savings accounts, consider reviewing your account types as well as online banking accounts.

Sometimes they offer higher interest rates.

If you have credit card debt, work with a financial counselor or go online to a reputable provider to review best practices to pay this debt down or eliminate it.

With interest rates rising, the interest rates on these credit lines are bound to increase as well.

And as tempting as it may be, don't ignore your investment statements.

Right now is a good time to review it.

Take advantage of opportunities, speaks with a financial advisor who is also a fiduciary to help you.

And even if you are managing your health care expenses, make sure you are paying only what you legitimately owe.

Review your bills for errors.

Look for financial assistance plans that can help you pay for expensive medications.

These are challenging times that everyone is facing worldwide.

I can't stress the need to review your health now.

Prepare for the worst while expecting the best.

 

Negotiating Debt, Managing Your Finances and Gaining Financial Security

Debt can be crushing.

It can cause people to delay marriages,

purchasing of a home, and even decline or delay needed medical treatment.

In fact, one of the leading causes of bankruptcy is medical debt.

Many people are unaware that they can negotiate their debt with many creditors.

It pays to be aware of the options you may have.

I'm going to review some of these negotiation options with you.

This list is not exhaustive.

If you have bills that you're having a hard time managing,

don't be afraid to ask your creditor.

Understand how debt default can affect your credit.

It can lead to legal action, including the seizure of property.

Don't let this happen to you.

If you have outstanding debt with the IRS, talk to them.

It's important to understand

that interest and penalties will continue to accrue on any outstanding balances.

The sooner you speak to them, the better off you'll be.

You may not be able to completely

eliminate your debt, but you may be able to get it

reduced or set up payment arrangements that will make it more manageable.

Most creditors from the mortgage company to hospitals to loan

companies are willing to discuss your situation.

For many people who delayed or did not filed 2022 tax return

penalties can accrue at a 5% rate of the unpaid taxes

for every month until reach the 25% cap.

Additionally, interest will compound daily at a current rate of 7%.

This interest rate may go higher if the Federal Reserve raises rates.

There is also a late filing payment penalty of 0.05%

of the unpaid taxes, an amount that accrues monthly.

You can see how your outstanding debt can increase significantly.

Unpaid taxes can lead to garnishment of wages.

Money can be taken from your checking and savings accounts.

And the IRS can seize real estate and vehicles.

If you owe delinquent taxes, contact the IRS and set up a payment plan.

If you don't have the income or resources to pay taxes,

taxpayers can apply for an offer of compromise

which can reduce the overall tax liability.

Another option is to ask the IRS report the debt as currently not collectible.

This will temporarily suspend

certain collection actions as a seizure of property.

This action does not erase debt and it will also continue to accrue interest.

I would caution taxpayers to be of scammers that say they offer

assistance with the IRS.

Do your due diligence.

The collections process and penalties assessed

vary greatly depending on circumstances.

Many people are unaware that if you live in a federally declared disaster area

or are a member of the military serving in a combat zone, exceptions can be made.

Mortgage Debt.

Many people remember that many homeowners have found themselves

upside down on their mortgages in 2008, 2009.

Consequently, many lost their homes.

According to the New York Federal Reserve Board in the last quarter,

0.57% of all mortgages were seriously delinquent.

There is a concern that with the rising interest rates, along with higher house

payments, delinquency levels may rise in the coming years.

Homeowners who are significantly behind on their mortgage

payments should contact their mortgage servicer immediately.

Describe your situation and how you're planning to repay what is owed.

Missing mortgage payments will hurt your credit score.

So consider asking your loan service for a loan forbearance

which will pause or reduce your mortgage payments.

The missed payments, which are due at the end of the term,

will include interest during the forbearance period.

You can also ask for a repayment plan arrangement.

Also, some workers will offer a payment deferment

in which the missed payments are added to the end of the home loan.

The homeowner must be aware that if the mortgage debt continues to accrue,

the loan servicer may push the homeowner to sell the property

Credit card debt.

In an environment where interest rates are rising,

credit card holders can find themselves in trouble

when their purchases and interest charges snowball to the point

where they can't make the minimum payments.

It may pay to seek help from the National Foundation for Credit Counseling.

It’s a collection of nonprofit member agencies that help consumers develop

a plan to both reduce their living expenses and pay outstanding debt.

The counselors work

with your credit card company to make the payments more affordable.

The payments are made to the agency which disperses the money to the creditors.

The credit card companies may vary in their assistance.

Consumers will need to provide documentation

of the extenuating circumstances that led to the debt.

You can also reach a credit card company yourself and save money on fees

and negotiate with them directly.

Student loan debt.

Many older people are finding that they're holding student loan debt

for adult children.

Also, student loan holders find themselves in limbo, waiting for the Supreme Court

to rule on the legality of President

Biden's plan to forgive up to $10,000 per person in federal loans and up

to $20,000 in federal loans to borrowers who also received Pell Grants.

Borrowers can assess whether their monthly payments

are still manageable once the policy ends.

If not, contact the loan services and inquire about deferment

and or forbearance options, as well as other repayment plans.

Medical debt.

Almost a quarter of all U.S.

adults say they have passed new medical bills, including bills they can't afford to pay

according to the Kaiser Family Foundation.

There are options to help manage the burden of medical debt.

One of the first things a person can do is prepare for the cost of a procedure.

Ask about the cost as soon as possible.

Also, sure you understand your insurance and what it will and will not pay.

Thirdly, make sure your medical bills are accurate.

Upwards of 80% of medical bills are incorrect.

Don't a bill unless you've verified

the itemized expenses with the evidence of benefits statement.

If there are errors, you can file an appeal.

Many hospitals have charitable programs to help patients cover medical bills.

They can also help you establish a payment plan to pay your outstanding bills.

You can ask if the bill could be reduced to an amount you can afford to pay.

It doesn't hurt to ask.

Be prepared to provide documentation such as proof of income,

insurance, disability, and even your proximity to the facility

if travel expenses significant.

Patients can apply for grants to

the Patient Advocate Foundation and other nonprofit organizations.

Funding comes mostly from private donations and health related

non-profits devoted to specific ailments such as Leukemia Lymphoma Foundation.

Some health care providers offer medical credit cards to their clients

that come with no or low

interest introductory rates that will later reset to a high rate.

Consumers should be aware that these rates may be higher than that

of the regular credit card rates.

It pays to take this into consideration before signing on the dotted line.

Don't be afraid to ask for help with any of your creditors.

Getting control of your finances will reduce financial stress

and allow you to focus on more important things in your life.