If you’re in debt, you may find yourself trying to balance bills, debt repayment, and miscellaneous expenses. A great way to start paying off your debt is to create a bare bones budget. This budget will show you how to live on less, and get your financial life back in order.
Go Through Your Current Budget
The first step to creating your bare bones budget is to evaluate your current budget. If you don’t have a budget, it’s time to create one. Go through your income and expenses from the last few months, and write everything down in categories. Once your current budget has been assessed, it’s time to determine your wants vs. needs.
Wants vs. Needs
Looking at your current budget, are there ways that you can cut back? A bare bones budget is exactly what it’s called...bare. It involves your needs only, with very little room for wants.
Could you be spending less on food? Could you live in a smaller or cheaper place? What about current bills? If you are trying to pay off debt a little faster, it’s best to cut bills like cable and phones until you can really afford them. There are other ways to enjoy TV for free, and you could always get a to-go phone. ...continue reading →
Taxes can get confusing — just looking at the names of some of the forms you have to fill out can be enough to get your head spinning. Like the 1099-C, for example. What is that, and why is it in your mailbox? Well, we’re here to help and answer all your 1099-C questions.
What Is a 1099-C?
“A 1099-C is a document sent by a bank when they have canceled a debt,” Craig W. Smalley, EA, founder and CEO of CWSEAPA, LLP and Tax Crisis Center, LLC, said. “For instance, if you have negotiated with your credit card company to pay them a lesser amount than you owe them, the difference would be reported on this form.”
Bruce McClary, the vice president of communications at the National Foundation for Credit Counseling, said this is an important reason to “be familiar with the tax consequences when considering debt settlement as an option. You don’t want to be blindsided by a costly IRS bill when you may already be struggling financially.”
Why Did I Get a 1099-C?
If you have had a canceled debt, expect to see a 1099-C arrive in your mail, as “the bank is required to send this form, because it is taxable income,” Smalley said.
According to the IRS, lenders file a 1099-C if you have $600 or more of debt that is canceled. Here are four common reasons that may be the case. ...continue reading →
From bacon- and stationery-of-the-month clubs to gym memberships and credit monitoring services, automatically renewed subscriptions that may start out as a free trial can easily end up as automatic renewals that bleed your bank account.
You don't notice your money slowly dripping away, and you could be forced to pay overdraft fees if your bank account balance drops to zero. Or you're stuck with charges on a credit card bill that you rarely look at for services you don't use.
The easiest solution is to monitor your bank and credit card statements, and to cancel subscriptions you no longer use. But that habit isn't common among millennials, says David Callis, co-founder and CEO of Hiatus, a new app that cancels auto-renewed subscriptions for free.
"A lot of times people aren't paying much attention to it," Callis said in a phone interview about reviewing credit card bills.
The average consumer wastes more than $500 per year in subscriptions and services they don't want because they forget or don't get around to cancelling, according to Hiatus.
In a survey it did this year, the company found that almost two-thirds of consumers paid for unwanted subscriptions because they didn't cancel the auto-renewal feature. It found that most people forgot about it, but 20 percent said it was too much of a hassle to cancel. ...continue reading →