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Debt Reduction


The realist in me recognizes that the best plan for getting out of debt is any plan that allows someone to achieve that goal. The realist is constantly at odds with the optimist in me, the part of me that wants people to be high achievers, to strive for excellence, and to seek an informed level of knowledge and use that knowledge to make the best decisions for their actions.

The concept of the Debt Snowball always bothered me. In general, paying off any amount of debt with cash flow, whether you follow a specific philosophy, involves three steps.

  1. Pay the minimum amount due to all debts to avoid accumulation or capitalization of interest.
  2. Pay any extra cash flow to the one debt you prioritize the highest.
  3. As you find yourself with fewer minimum payments to make through the elimination of a debt, don’t reduce your total debt elimination payments. Just shift to focus even more on the debt of the next priority.

Dave Ramsey, a very popular personal finance guru who has written several books, sells a seminar called “Financial Peace University,” and has a radio show through which he weaves in “Christianity Lite” into his philosophy, coined the “Debt Snowball” term.

The Debt Snowball plan follows the process outlined above and provides a prioritization plan based on size of debt. The most important debts are the smallest accounts; in this manner, the smallest debts are paid off first, theoretically or allegedly giving those on this path an emotional boost of success, which in turn, theoretically or allegedly provides motivation to continue with the payoff plan.

Here is a more in-depth discussion of the Debt Snowball. And be sure to quickly review where the Debt Snowball fails — the purported “advantages” of the reliance on emotional boost is a disadvantage when time comes for people to stay out of debt once they succeed in paying off debt.

Experts often relate getting out of debt to losing weight. And there’s a good analogy here. The Debt Snowball is like a fad diet. It’s a pervasive philosophy, very popular, and is communicated through a best-selling book (and online classes, in-person seminars, and an array of branded multimedia). People connect with fad diets becauses they tell people what they want to hear. You can eat everything you want, barely exercise, and still lose weight! Read our success stories and view our (Photoshopped) before and after photographs! Likewise, The Debt Snowball tells people they don’t have to change their emotional approach to spending in order to get out of debt.

The path to unmanageable debt is diverse. Households wind up in debt because they habitually overspend on unnecessary items, they have an unexpected hospitalization, they’re victims of a crime or of society, they have an issue with self-control, they have a mental or emotional disorder, or a variety of other reasons. And because these reasons differ, the debt payoff prescription might need to differ.

For emotional spenders, the Debt Snowball deals with the symptoms but not the root cause. Emotional spenders, who are only able to get out of debt when they rely on emotional boosts throughout the debt repayment process, would be more inclined to fall back into old habits after the debt is paid off. Why? Because those habits aren’t old at all. The habits haven’t been addressed and the root cause, for these particular individuals, remains.

I’m happy to see that writers continue to address the differences between the Debt Snowball and other approaches to the prioritization of debt. I compared the Snowball with the Debt Avalanche, as well as with a hybrid approach and an approach that weighs importance on “emotional impact.” All of these should be considered, and there’s a solution for everyone somewhere in the mix.

The Debt Avalanche, a term I coined, describes a debt payoff philosophy that’s been around as long as credit has existed. It’s the mathematical approach to paying off debt, and it ensures that someone who abides by the plan will get out of debt as fast as possible for as little expense as possible.

That, right there, should be the most important emotional impact when it comes to any plan related to money.

You can’t eliminate emotions. All human decisions are made based on emotions, even when they seem logical. The Debt Avalanche doesn’t try to remove the emotional aspect of getting out of debt, it reframes the emotional aspect so that people who practice it get in the habit of making better financial decisions.

If you want to get out of debt, you should want to take the approach that not only gets you there via fastest path possible, the approach that costs the least (after all, this is about money at the end of the day), and that guarantees long-term success with handling your finances (unlike fad diets and their effect on long-term weight management). And that approach is the Debt Avalanche, prioritizing debt accounts by interest rate.

Myth: The Debt Snowball method is better because it emphasizes “quick wins.” Relying on motivation through quick wins is inferior to the motivation one can draw from the healthier knowledge that you would be saving valuable time and money by understanding the mathematics behind debt payoff. If you keep believing the safe, feel-good emotions rule your money decisions, you will continue to make emotionally-driven, potentially dangerous choices when you’re later in a better situation.

Also, there is also scientific study that supports the claim that the Debt Snowball method (the prioritization of debts with the lowest balance first) has a higher success rate than any other designed and coached system or plan.

If you do like the idea of “quick wins” and other psychological tricks, the Debt Avalanche method still pays off better. You still celebrate when you pay off each debt account, and in most situations, that date you pay off that first account would not be all that distant from when it would have been with the Debt Snowball.

You can create your own “quick wins” by setting midterm goals. Choose $100 total paid off, $1,000 total paid off, or $10,000 total paid off as your goal — any amount that is meaningful to you. Yes, it feels good to cut up a credit card when that particular account is paid off in full, and there’s no scientific evidence that particular action or feeling has any long-term effect on anyone’s finances, but you can still take that approach with the Debt Avalanche if it’s important to you!

Celebrate those milestones! If you want an emotional boost to increase your motivation, make your debt pay-off fun. Just don’t spend money to celebrate that would be better spent paying off more debt.

Focus on the the debt payoff goal. Run a quick calculation to determine how much you’ll be saving by sticking to the Debt Avalanche method rather than the Debt Snowball. The amount of time and money you’ll save may not be much. In fact, the financial advantage of the Avalanche over the Snowball would be zero in one specific and unlikely instance, when the list of your debts, from highest interest rate to lowest interest rate, matches exactly the list of your debts from smallest balance to largest. In that case, add to your projected savings the cost of Dave Ramsey’s books that you don’t need to buy. Put your debt payoff date on a calendar and plan to celebrate it like an anniversary.

Don’t forget the real reason. Money management doesn’t exist solely in a vacuum. There are reasons people want to be debt free and to grow their wealth. Having a big number on the bottom of a balance sheet is not one of these reasons. Looking at an ATM receipt with any particular number is not a reason. People want to build wealth so they can live their lives on their own terms with the freedom to spend time and energy doing something meaningful. Getting out of debt is the first step along this road to financial independence.

The Debt Snowball is popular because of the following reasons.

  • It’s a contrary approach to logic, and people like thinking there’s something better out there than logic.
  • It tells people exactly what they want to hear: you don’t have to change the way your brain works to get out of debt.
  • The Snowball is part of a “philosophy.” Those who accept the philosophy see themselves as insiders with core values that don’t exist outside of the “club.”
  • The philosophy offers a confirmation of pre-existing notions about the nature of money and the financial industry.
  • The movement features an enigmatic leader in Dave Ramsey, a great motivational speaker who earns quite a bit of money from marketing his own brand of math.

The realist in me just wants to see more people get out of debt and understands that any method for doing so is a “net positive.” But when it comes to building financial independence over the long-term, of which getting out of debt is only a part, so much depends on doing more than just the minimum. People must strive for excellence in everything they do in order to see extraordinary results, like financial independence.

The Debt Snowball is a realization of mediocrity. It lets people get away with weak excuses for wasting time and money. That approach says someone doesn’t feel confident enough to take steps towards debt freedom without a “crutch” of quick wins, even though those quick wins aren’t much different emotionally from what you can get out of a superior plan. The quick wins have just been marketed better.

Photo: Flickr

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This is a guest article by Donna Freedman. Donna has been a staff writer for MSN Money and Get Rich Slowly. She now lives and writes the frugal life in Anchorage, Alaska for Money Talks News and her own blog, Surviving and Thriving.

Got debt? Do something about it.

That’s the focus of a new debt management campaign from personal finance guru Mary Hunt and Chase Slate. The “Do Something About Debt” program is a 15-day series of tried-and-true tactics, advice and personal encouragement.

Each year plenty of people resolve -– and fail -– to pay what they owe and to adopt smarter spending habits. Hunt can identify, because she’s always been candid about her own financial low point: more than $100,000 in unsecured debt and interest. It took her and her husband more than 13 years to make good on their obligations.

But pay it back they did, and Hunt vowed to use her newfound knowledge to help keep others from making the same mistakes. She also swore to help those already in debt to recover and learn to live fully and joyously without overspending.

“People need to have a goal: to go on the offense against debt,” says Hunt, author of some two dozen books plus the popular Debt-Proof Living website and Mary Hunt’s Everyday Cheapskate blog.

The new campaign began January 16 and continued through January 30. All the articles are remaining up at the Do Something About Debt site, so you can catch up any time you like.

The usual personal finance tools are included, such as creating a budget, understanding interest rates, the pros and cons of credit, planning for irregular expenses, avoiding certain financial missteps and examining your money attitudes. But Hunt is adding a new weapon to her arsenal: the Chase Slate card, with a zero-percent APR on balance transfers.

Those who qualify will be able to pay off existing credit card debt without interest for 15 months. In addition, there’s no fee for balance transfers taken out within 60 days of obtaining the card.
Not everyone who falls into debt has been out joyriding with the family card. Illness, layoff and natural disasters can send even the most responsible person into the red. Or maybe you truly don’t understand how it all happened. Maybe no one ever talked with you about debt except to say, “Sign here for your car loan/credit card/student loan.”

The bad news is you’re still on the hook for what you owe. The good news? Using Hunt’s tips and, maybe, consolidating current debt onto a Chase Slate card will help you work your way back onto firm financial footing.

“This is not some kind of a freebie. You’re going to have to come up with a plan to pay,” Hunt says. “But sometimes we just need an extra break. (Debt) is not ideal –- but that tree falling on your house wasn’t ideal, either.”

While optimistic in tone, the program is tempered by a strong dose of realism: There are no quick fixes but there are sure fixes –- if you’re willing to do the work.

“That’s a powerful message: that you can do something about it,” Hunt says.

Curtis Arnold, senior editor at CardRatings.com, included Chase Slate on his best balance transfer credit cards list, saying the card is an example of “what can happen when banks build long-term partnerships with customers who want to become debt-free.”

Photo: Flickr/reynermedia

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When Capital One purchased ING Direct and ultimately rebranded the bank as ” Capital One 360,” long-time customers of the online bank asked the same questions. Would Capital One continue ING Direct’s tradition of competitive rates and excellent customer service?

Not everyone’s experience with ING Direct has been perfect, but overall, the bank was as beloved as any financial institution could be. The interest rates weren’t the highest among the competition, but the reputation remained positive. For three years in a row, expert financial bloggers voted ING Direct as Best Overall Bank in the Plutus Awards and awarded the bank almost all other banking awards.

Along with savings accounts and online checking, Capital One also took over ING Direct’s mortgages. One customer’s experience with Capital One involving his mortgage did not turn out how he expected.

I have been a client of ING, with $30,000 to $50,000 between ING Direct and ShareBuilder accounts, since 2003. This is a majority of my cash, with some more in my primary checking account at Chase. I also opened up a Capital One bank and credit card when their rates became more attractive, before Capital One purchased ING Direct.

In 2006 I bought a condo and financed the purchase with a mortgage through ING. With ING, I never had customer service issues, and the company was great. They were proactive even to the point of offering me a rate adjustment on my mortgage without the hassle of a complete refinance. When Capital One acquired ING I was a little concerned, but I didn’t want to be a jaded consumer. I wanted to give the company a chance.

I am now contemplating switching away from Capital One 360 because of a customer service issue.

After waiting a long time for the market to recover, I recently refinanced my mortgage. Chase now owns my loan. In order to complete the refinance, I had to call Capital One 360 for a payoff statement. When I spoke with the representative, he assured me that my automatic payments each month would be canceled immediately.

After my refinance was complete, I was unable to access my mortgage through my Capital One online profile because, rightly so, they didn’t own my loan anymore and shouldn’t be servicing it — or so I thought.

The day of my loan funding I noticed a regular mortgage ACH debit pending in my Chase checking account, a transfer from Chase to Capital One. This payment, for a mortgage that was no longer with Capital One, should not have been made. It was still pending as of Sunday, July 7 when I noticed the transaction. I called Capital One and the representative told me that no one was available from the mortgage department and that I should call back on Monday morning, the next day.

I called on Monday and after a ridiculous hold time I was connected with a customer service representative who said that there was nothing they could do to stop the pending transaction even though it was initiated on their end. I explained to her that I don’t have access to the old mortgage either because it was paid off and taken off my Capital One profile.

She kept saying that they cannot control an auto pay that was done through Chase. It was impossible to get her to understand that my automatic payments were initiated on the ING/Capital One side since 2006 and Chase had nothing to do with it. She said that they require ten days notice to stop automatic transfers from their end: a contradictory statement since she initially said Chase was responsible. (Apparently, my payoff request 9 business days ago, along with the confirmation from the rep I spoke with was not notice enough.

The best solution she could offer me was for me to provide her with proof that the money was taken out of my account, and they would send me a check after a mandatory ten-day waiting period. The fact that the transaction was still pending meant I’d have to wait for the transaction to actually hit my Chase account, and I would then need a monthly statement or a letter from Chase.

Here’s my problem. I have enough funds to cover a mortgage payment. On principle, a bank that operates online should not be sending me a check for a problem they caused. They should stop the transaction and refund or credit my account immediately. I was completely polite and reasonable throughout my phone call and saw no reason for the stonewalling.

Many banks seem to respond better on Twitter, so I tried contacting Capital One 360′s Twitter account for a better resolution. The bank on Twitter offered a generic response, something to the effect of, “Customer service is our number one priority.” When I replied saying that I had spoken to a representative and hit a roadblock, there was no response.

I am happy to report that Chase managed to fix the issue within twelve hours and credited my account. I do not have to wait for a check in the mail for money that is rightfully mine.

I will definitely consider moving all my funds to Chase or another bank instead of Capital One. I am very sad that the old ING is no longer. I was a huge fan and miss them dearly.

Kudos to Chase for resolving this customer’s issue without a fuss. It’s hard to know exactly how this situation would have played out had ING still been the company behind the mortgage prior to the Chase refinance. Is this customer’s experience an example of other customers’ experiences with Capital One and Capital One 360? Today, Capital One offers mortgages through both the “Capital One” brand and “Capital One 360″ brand, the latter being the continuation of ING mortgages. Perhaps there is some difference between customer service between the two departments.

The core of the issue is this: Once the mortgage was paid off, Capital One should have suspended all automatic payments — automatically. Even if the next payment was scheduled within the ten-day window, the bank had enough time to mark the account as closed. The problems with customer service just escalated the issue to a potentially damaging situation for the customer’s finances.

What I would like to know is if this example is representative of more people’s customer service. If you’ve had any experiences with Capital One’s mortgage customer service, positive or negative, please share by contributing to the conversation on Consumerism Commentary. Feel free to also share any experiences you’ve had with Capital One’s banking products, like online checking or savings.

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In his latest Naked With Cash update, participant JW discussed his student loans. Due to his income, which happens to be at a low level, the amount he owes each month to pay back his education loan is zero. How is this possible? He enrolled in a feature for low-income households with certain types of federal loans: the income-based repayment plan.

In general, paying off student loans within ten years is a good target. Earlier is better, of course, but sometimes it just doesn’t seem possible. I won’t suggest what others often provide as “advice:” Don’t borrow so much to pay for college, particularly if your target career is not a highly lucrative one. If you’re having trouble paying down your loan, you can’t go back and change how much you borrowed. You can only move forward. That suggestion offers no real help.

College GraduateRather than paying off the full loan within ten years, an income-based repayment plan can stretch the life of the loan up to twenty-five years total, lowering your monthly payment. As your income grows over the years following your graduation, your minimum payments will also grow, so as you are able to pay more (purely from an income perspective), you will shorten the life of the loan.

These plans will generally come with a cost. While there are limitations on how interest is added to your balance (capitalized) under income-based repayment plans, you’ll likely end up paying more interest over a longer period of time. If you extend your loan, it keep your credit score lower for that same period of time, affecting interest rates. For example, you might not qualify for the best interest rate on a mortgage if you are trying to buy a house while still paying off your student loan debt. That’s true even if you’re no longer on the income-based repayment plan.

Once you’ve weighed the advantages and disadvantages — and the advantage might simply be avoiding default on your student loans — there are several different types of income-based repayment plans to choose from.

Pay As You Earn Plan: Introduced by President Obama

The Pay As You Earn Plan is new this year. To qualify, you must have no loans originating before October 1, 2007 and you must have received at least one disbursement after October 1, 2011. The loan types covered are subsidized and unsubsidized Federal Stafford Loans, Direct subsidized and unsubsidized loans, Federal PLUS Loans for graduate students, and some Federal Consolidation Loans. By qualifying for the Pay As You Earn Program, your monthly payment will be reduced to 10 percent of your discretionary income.

Your discretionary income is considered your income minus the the poverty guidelines for your family size. For a household of two people in 2013 living in any state other than Alaska and Hawaii, the poverty level is $15,510. With a household income of $20,000, the discretionary income is $4,490, limiting a monthly bill to $449. As you can see, even under an income-based repayment plan, the monthly cost of the loan could be high.

If the amount you need to pay each month under Pay As You Earn doesn’t cover your entire interest earned that month, the government will pay that accrued interested if it is within a subsidized student loan. Your interest will not be capitalized (added to the balance of your loan so you would owe further interest on that interest) while you have a partial financial hardship and qualify for the repayment plan.

After 20 years, if you still qualify for Pay As You Earn, the government will forgive the remaining balance of your loan. That means you no longer have to make payments, but there is a significant disadvantage to loan forgiveness: any amount forgiven will be added to your taxable income. So while you’ll no longer need to pay your student loans, you’ll have to come up with the money to pay the tax bill.

And rather than having a smaller monthly bill, the IRS will be looking for its tax payment right away.

And at that point you may need to begin applying for an installment plan for your new IRS tax debt. Loan forgiveness isn’t always a great benefit.

Income-Based Repayment Plan: More borrowers qualify

The Pay As You Earn plan is only one type of income-based repayment plans. Although I call all of these options income-based repayment plans, there is one plan whose official name is the Income-Based Repayment Plan (IBR). This plan is less restrictive than the Pay As You Earn Plan. More borrowers qualify because more loans qualify. There is no date limitation to the loans that qualify, so those with student loans originating prior to 2007 can apply for this type of plan.

Under IBR, the most you would need to pay each month is 15% of your discretionary income.

Income-Contingent Repayment Plan and Income-Sensitive Repayment Plan

The Income-Contingent Repayment Plan (ICR) is available for borrowers who do not qualify for either of the above repayment plans. Monthly payments under ICR last a maximum of 25 years before the loan is forgiven, are based on your adjusted gross income and family size, up to the lesser of 20 percent of your discretionary income or “the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that changes with your annual income.”

This loan type has an income capitalization benefit like the others, but it doesn’t kick in until your capitalized loan balance is 10% higher than your original balance.

The final repayment plan is the Income-Sensitive Repayment Plan (ISR). This is available to borrowers who have Federal Family Education Loan (FFEL) Program loans. They’re also available for subsidized and unsubsidized Federal Stafford loans. Federal Direct Loans won’t qualify because these plans are only available through the companies that service the loans. The amount you pay each month under ISR is determined by your annual income and change as your income changes.

Cash flow is important. Whether you’re a new graduate dealing with the expenses of living on your own for the first time or five years after graduation finding yourself unemployed and having a difficult time finding a position that isn’t flipping burgers, you need to find a way to survive with what you have. The first step before looking into these benefits is reducing your expenses to the minimum.

“Living like a college student” isn’t just for dorm life, it’s a good approach to living while you still have student loan debt. But applying and qualifying for an income-based repayment plan may improve your cash flow so that you don’t need to default on your loans while still finding extra each month to invest in your retirement. Being able to save for retirement as soon as possible is important because you can never get that time, and the financial benefit of the growth of your money, back once it’s gone.

Visit the government’s loan repayment website to calculate your monthly payments under one of these repayment plans. It should be the first step you take when you conclude that you cannot afford your monthly student loan bill.

Photo: Flickr

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Time-Barred Debts: Statute of Limitations

by John Ulzheimer
Time-Barred debts: statute of limitations

When you take on a credit obligation, or liability, you normally sign an agreement or promissory note requiring pay back of the debt. What you’ve just done is incurred what’s referred to as “contract debt.” If you default on a contract debt, such as a credit card, the creditor can and likely will vigorously pursue ... Continue reading this article…

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8 Rules for Borrowing Money From Friends and Family

by Luke Landes
Money

I’ve written about lending money to friends and family. I addressed this topic a few years ago because as my personal financial situation improved, I was in a position to help. Not so long before that time in my life, however, I was in the opposite situation. I didn’t have my financial situation stabilized, and ... Continue reading this article…

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Robert Kiyosaki, Financial Guru, Declares Bankruptcy

by Luke Landes
Robert Kiyosaki Bankruptcy

Robert Kiyosaki has been in the business of selling books and seminars, taking advantage of the Amway pyramid scheme and endorsements from Oprah Winfrey, and built his way to wealth selling his ideas about investing. A few years ago, he teamed up with perennial mogul Donald Trump to sell more books. Kiyosaki and one of ... Continue reading this article…

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Going Into Debt Gives Away Your Power

by Luke Landes

Debt fuels the financial industry. Without the profit that lenders of all types earn by collecting interest and other fees, the economy wouldn’t be able to hum along. When the economy struggles, the industry does what it can to maximize what it earns from its borrowers, and some companies seem to be more comfortable than ... Continue reading this article…

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Where Dave Ramsey’s Debt Snowball Fails

by Luke Landes
Snowball

I’ve written extensively about how Dave Ramsey’s “Debt Snowball” does a disservice to families and individuals struggling to get out of debt. By acquiescing to the emotions of money, those who most need to separate emotions from their financial decisions don’t. Not everyone who is in debt are in that position due to emotionally-driven decision ... Continue reading this article…

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Debt Reduction Methods and Philosophies: Snowball, Avalanche and More

by Luke Landes
snowball3

When someone who has accumulated debt across a number of credit cards embarks on the journey to rid himself or herself of this debt, and when that person is generating enough monthly income to cover all expenses and the minimum payments due on all cards with additional funds left over, there are two main philosophies ... Continue reading this article…

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Should the Government Ban Banks’ Payday Loans?

by Luke Landes
Check

When we think of predatory lending practices, the first thought that often comes to mind is the payday loan industry, catering to people barely, if at all, living paycheck to paycheck. Payday loans service communities with an aversion or without a need for or trust of the mainstream financial industry. Offering short-term loans designed to ... Continue reading this article…

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Credit Card Debt Consolidation

by Luke Landes
Credit card debt consolidation

According to the Federal Reserve’s research published last week, overall American credit card debt increased at an annual rate of 7.5 percent during the final quarter of last year. This could mean that consumers are feeling more confident about the economy and are willing to take the risk that they will have money in the future ... Continue reading this article…

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Debt Collections: Do You Have To Pay?

by Luke Landes
Clock - time-barred debt

People who borrow money generally understand that they will eventually need to pay borrowed money back to the lender. This understanding, whether codified in a contract or not in any particular case, makes lending and borrowing money work as an economic mechanism. It’s interesting that regardless of what’s written in a contract, most debt can ... Continue reading this article…

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Good Debt and Bad Debt

by Luke Landes
See-saw

Misuse of credit can destroy a family’s financial life. A household can crumble under the weight of debt, whether it has increased from a poor house-purchasing decision, a drastic change in the real estate market, a shopping addiction, an unexpected medical bill, or the lack of preparedness for an emergency. It’s no surprise people consider ... Continue reading this article…

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Under-reporting Personal Household Debt

by Luke Landes

If you want to know how much credit card debt Americans have, don’t ask the borrowers. For years, economists have sought debt data from both borrowers and lenders for credit card debt and four other debt categories. Borrowers report their debt balances by responding to household surveys, like the Survey of Consumer Finances. Lenders report ... Continue reading this article…

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Smithee Update: Six Months in San Diego

by Smithee

This article is by Consumerism Commentary staff writer Smithee, who is juggling about a dozen clients and creative projects as a freelancer. It’s been a year since I was laid off and decided to become a full-time freelancer, and it’s been six months since my wife and I made a risky decision to move the ... Continue reading this article…

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Should You Stop Saving and Investing When Paying Off Debt?

by Luke Landes

The concept of multitasking, for a person, is a myth. When someone says they are multitasking, they are quick task shifting. We can move our attention quickly from one task to the next, and shift back again, but it’s practically impossible to focus on two different things at the same time. To excel at anything ... Continue reading this article…

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The Debt Snowball

by Luke Landes
Debt Snowball

The “Debt Snowball” is one of the most popular methods for approaching a variety of debts, with the intention of paying them off. The process has existed for as long as debt has been around, but the method has been commoditized, packaged, and popularized by a variety of personal finance experts, gurus, and speakers. Dave ... Continue reading this article…

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Don’t Take Out a Loan From Your 401(k)

by Luke Landes

As a very last resort, employees with active 401(k) retirement accounts have an option to take out a loan against their future. Borrowing money is never a good position to be in, but if you’re borrowing money from yourself, you ease the pain. 401(k) plans permit borrowing at interest, and paying interest to yourself can ... Continue reading this article…

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Pay Down Debt or Build an Emergency Fund?

by Luke Landes
San Diego

Although I’m not a financial professional and I don’t normally give advice, I’m relatively comfortable offering some opinions when it comes to strategy. A reader presented this question to me recently. I’m open to answering questions as long as the answers don’t involve giving stock picks or legal advice. My wife and I recently moved ... Continue reading this article…

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