Do you want to pay off your student loans faster?

Paying off student loans can feel like a big challenge. But there’s a way to speed up the process if you’re up for it – and it’s what I did so that I could pay off my $40,000 in student loans in just 7 months.

And, that is starting a side hustle! Starting a side job can give you extra money to put toward your loans.

You can use your free time to make more money and pay off your student debt faster. With some hard work, you can say goodbye to your student debt more quickly than you thought possible.

How I paid off my student loans in 7 months with side hustles

The reason I’m writing this article is because I personally paid off my student loans very quickly, mainly due to side hustles. And thanks to that, I saw a ton of benefits, like financial freedom and no longer having a big monthly debt hanging over my head.

Paying off $40,000 in student loans in just 7 months might sound impossible, but it’s not! Here’s how I did it:

First, I made a clear plan. I wrote down my total debt and broke it into smaller goals. This helped me stay focused.

Next, I cut my expenses. I got roommates, cooked at home, and avoided unnecessary shopping (I didn’t really have any time to spend money anyways, because I was using pretty much every spare minute on side jobs). Every dollar saved went to my loans.

The real game-changer was side hustles. I tried everything (you can see a full list at I’ve Done Over 20 Side Hustles in My Life: Here’s What I Think of Each):

• Starting a blog
• Reselling items on eBay and Craigslist
• Mystery shopping
• Taking online surveys
• Focus groups
• Writing for other websites
• Taking on roommates
• Virtual assisting
• Freelance social media management

And more.

I put all my extra earnings directly toward my student loan debt. Right as the income came in, I would immediately apply it toward my debt. This way, I wasn’t tempted to spend the money on other things.

I also looked for ways to lower my interest rates. By setting up automatic payments, I got a small rate reduction. It wasn’t much, but every bit helped!

The key was staying motivated. I reminded myself of the freedom I’d have once the loans were gone. It wasn’t easy, but the feeling of making that final payment was amazing!

Remember, you can do this too. Start small, be creative with making extra money, and stay committed to your goal. Before you know it, you’ll be celebrating your own debt-free day!

Why you should start a side hustle if you have student loans

If you’re serious about paying off your student loans faster, starting a side hustle can be a game-changer.

It’s a flexible way to earn extra income, reduce your debt, and even save on interest payments. Plus, the skills you gain can open up new opportunities for your career or personal growth.

Extra income to pay off loans

A side hustle gives you more money to put toward your student loans. This extra cash can make a big difference in paying down your debt.

Here are some popular side hustle ideas:

• Freelance writing
• Dog walking
• Online tutoring
• Selling items on eBay
• Virtual assistant work

Even a few hours a week can add up. Put all your side hustle earnings toward your loans to see faster progress.

Less interest

Paying off your loans faster means you’ll pay less interest over time. This can save you hundreds or even thousands of dollars. Let’s look at an example:

Say you have a $30,000 loan with 6% interest over 10 years. Your monthly payment would be about $333. If you added an extra $100 per month from a side hustle, you’d pay off the loan 3 years earlier and save over $3,000 in interest!

More financial freedom

A side hustle can give you more control over your money. You won’t feel as stressed about your monthly loan payments. You might even have some cash left over for savings or fun activities.

Having extra income can also help you:

• Build an emergency fund
• Start investing for the future
• Travel or pursue hobbies

This added freedom can make it easier to stick to your loan repayment plan. You’ll feel more motivated when you see the progress you’re making.

Building skills

Side hustles aren’t just about money. They’re also a chance to learn new skills. These skills can help you in your main job or future career moves. You might realize that you have a passion that turns into a full-time business.

For example, if you start a blog to make extra cash, you’ll learn about:

• Writing
• Web design
• Social media marketing
• Search engine optimization (SEO)

These skills are valuable in many jobs. They can make you stand out to employers or help you start your own business later on.

For me, I started my blog to talk about my personal finance situation and my student loans. I never thought that it would become my full-time career, and it now is! I have learned so much over the years and my life has changed so much ever since I paid off my student loans.

Choosing the Right Side Hustle

Picking a side job that fits you is key to making extra money for student loans. A good side hustle matches what you like and your free time.

1. Match your interests

Look at what you enjoy doing. Are you good with computers? Try an online freelance gig like graphic design, virtual assisting, or freelance writing. Do you love pets? Dog walking could be fun and make money.

Think about your skills too. Can you write well? Blogging might work for you. Are you creative? Selling crafts could be a great option.

When you pick something you like, you’re more likely to stick with it. This means more money to pay off those loans faster.

2. Think about the time commitment

Figure out how much time you can give to a side job. If you’re busy with school, look for quick tasks.

For more free time, you may want to try bigger projects. Starting a blog takes work but could pay off later. Tutoring or freelance work might need set hours each week.

Managing Time Effectively

Juggling a side hustle with your regular job takes skill. You’ll need to plan carefully and set clear goals to make the most of your time.

For me, when I decided to pay off my student loans as quickly as possible, I was working a full-time job as an analyst and I started side hustling anywhere from 20-30+ hours a week on top of that. I was BUSY!

Balancing work and hustle

Start by looking at your weekly schedule. Find pockets of free time you can use for your side gig. Maybe you can wake up an hour earlier or work on weekends. Use a planner or app to keep track of your tasks and deadlines.

Try batching similar tasks together. This can help you stay focused and get more done. For example, set aside one evening to answer emails and make phone calls.

Take breaks to avoid burnout. Even short 5-minute breaks can help you recharge. Remember to eat well and get enough sleep too.

Setting goals

When I first started my journey to pay off my student loans, setting clear goals was one of the most important steps I took.

I didn’t just hope to pay off my loans – I set concrete, specific goals that gave me something to work toward every single day. I broke my total loan amount into smaller, more manageable chunks, and then I made weekly and monthly goals to keep myself on track.

For example, I knew I wanted to pay off $40,000 in less than one year, so I calculated how much extra I needed to earn and save each month to hit that target. Seeing my progress on paper kept me motivated, and each time I hit a smaller goal, it gave me the energy to keep going. I also adjusted my goals along the way – if I had a slower month, I didn’t give up, I just reassessed and kept pushing forward. This made the huge task of paying off my loans feel possible.

Here are my tips:

• Write down what you want to achieve with your side hustle and be specific about how much money you want to make and by when. Break big goals into smaller, weekly targets.
• Use the SMART method: Make your goals Specific, Measurable, Achievable, Relevant, and Time-bound. This helps you stay on track and see your progress.
• Keep your goals visible. Put them on your desk or phone wallpaper and review them often to stay motivated. Celebrate small wins along the way – they add up!
• Adjust your goals as needed. If you’re falling behind, don’t give up. Figure out why and make changes to your plan.

Side Hustle Ideas You Can Start

Looking to make extra cash? Here are 30 side hustle ideas you can start today:

1. Start a blog
2. Take online surveys
3. Become a proofreader
4. Sell items on eBay or Amazon
5. Provide pet sitting services
6. Tutor students online
7. Do freelance writing
8. Become a social media manager
9. Design and sell T-shirts online
10. Teach English online
11. Drive for Uber or Lyft
12. Rent out a room on Airbnb
13. Do yard work for neighbors
14. Provide handyman services
15. Become a virtual assistant
16. Become a personal shopper
17. Start a podcast
18. Sell handmade crafts on Etsy
19. Do data entry work
20. Become a mystery shopper
21. Dog treat bakery business
22. Flip furniture
23. Start a YouTube channel
24. Deliver food with DoorDash
25. Become a freelance photographer
26. Sell house cleaning services
27. Do transcription work
28. Become a virtual bookkeeper
29. Sell graphic design services
30. Become a fitness instructor

Pick one that fits your skills and schedule. You can even start small and see how it goes. You might be surprised at how much extra money you can make!

Frequently Asked Questions

Paying off student loans faster with a side hustle can be a great way to get out of debt. Here are some common questions about how to pay off student loans faster with side hustles.

What are some creative side hustles I can start to pay off my student loans quicker?

Some ideas for creative side hustles that you can start to pay off your student loans quicker include freelance writing or editing, tutoring students online, selling handmade items on Etsy, walking dogs or pet sitting, and selling dog treats. Pick something you enjoy that fits your schedule. Even a few hours a week can add up to extra loan payments.

Is it possible to get rid of my student loans fast even if I don’t make a lot of money?

Yes, you can pay off loans faster even with a lower income. Here are some tips to make it happen:

• Cut your expenses and put the savings toward loans
• Look for income-based repayment plans
• See if you qualify for loan forgiveness programs
• Make extra payments when you can, even small ones
• Find ways to make extra income

The key is to be consistent and put any extra money toward your loans.

Can picking certain jobs help me wipe out my student loans faster?

Some jobs offer student loan repayment help as a benefit. These may include:

• Government jobs
• Nonprofit work
• Teaching in high-need areas
• Healthcare jobs in underserved communities

These roles may give loan forgiveness after a set time. You’ll want to check the terms carefully before choosing a job for this reason.

How can I pay off my student loans in full without getting overwhelmed?

Paying off loans can feel like a big task. Here are some tips:

• Make a budget to see where your money goes
• Set small, doable goals for extra payments
• Celebrate your progress along the way
• Use autopay to make sure you don’t miss payments

Remember, any extra payment helps. Don’t stress if you can’t pay a lot extra right away.

What’s the best plan for tackling student loans with different interest rates?

When you have loans with different rates:

• Pay the minimum on all loans
• Put extra money toward the highest-interest loan first
• Once that’s paid off, move to the next highest rate

This method saves you the most money over time because it helps you pay less in interest overall.

How To Pay Off Student Loans Faster by Starting a Side Hustle – Summary

I hope you enjoyed my article on how to pay off your student loans faster by starting a side hustle.

Paying off student loans can feel overwhelming, but starting a side hustle is a powerful way to speed up the process.

By earning extra income and dedicating it to your loan payments, you can reduce your debt quicker and save on interest in the long run.

Whether it’s freelancing, blogging, reselling items online, or something else, there are many side hustle options that can fit into your schedule.

With a clear plan, specific goals, and consistent effort, you’ll be surprised at how quickly you can make progress on paying off your student loans.

Do you have student loans? What are you doing to pay them off?

Recommended reading:

• How Blogging Paid Off My Student Loans
• How We Paid off $266,329.01 in 33 Months
• How I’ve Paid Off $29,000 In Debt By Living In a Van
• How We Paid Off $28,000 Of Debt In 15 Months

The post How To Pay Off Student Loans Faster by Starting a Side Hustle appeared first on Making Sense Of Cents.

🎙️ Episode #370 – We break down how conventional and DSCR, financing can help you overcome loan caps and credit snags, so you can keep…

The post The Best Ways to Finance & Scale a Rental Portfolio (Even With No Job!) appeared first on Coach Carson.

When aiming to accumulate and conserve wealth, be ready to tackle some tough choices and trade-offs. Your planning should start as early as possible so that you have a reasonable early start on your roadmap to accumulate wealth, have financial flexibility, and retire comfortably. It’s challenging to build wealth if you carry a lot of debt.

You need to pay off your debt wisely to strengthen your financial health. You will likely accumulate debt in your life, but you need a plan to pay it off so you aren’t carrying a burden you can’t handle. Review your credit report and score ahead of borrowing for a college education, furthering your career, or buying your home for the best interest rates.

Pay Down Your Debt On Time

Jumpstart your children’s college education by investing in 529 savings plans for your child’s education as early as possible. This will lessen your future debt burdens while lessening theirs.

Plan to get federal loans before seeking private loans. Apply for scholarships, grants, and work-study programs. Most importantly, make sure you and your children understand how to repay your obligations on time.

Buying A Home

Before actively looking to buy a home, make sure to check your credit reports first to see what kind of financial shape you are in. Make sure it becomes a regular part of your life to habitually check your credit reports and score. You may be able to raise your credit score and obtain a lower interest rate. Also, it is not uncommon to find errors or issues which can be corrected but it takes time. You should deal with it quickly.

A Shorter Mortgage May Be Beneficial

When buying a home, consider opting for a shorter-term mortgage as your total cost will be lower and ends sooner.

Let’s use an example to illustrate what your mortgage costs will be:

Assume you found an $800,000 single-family home, putting a 20% down payment, or $160,000. In both mortgages, you are borrowing $640,000, the principal amount you will owe. At a recent rate of 6.918%, your monthly payments will be quite different for a 15 year fixed mortgage than a 30 year fixed mortgage.

For example, assuming a 15-year fixed mortgage rate you’ll be making monthly payments (excluding taxes and fees) of $4,222,75 compared to $5,723.20 payments for the 30-year fixed rate.

The total interest cost for your home is even more pronounced on the shorter mortgage, totaling $390,176.11, and including the principal amount of $640,000, your home amounts to $1,030,1756.11. On a 30 year fixed mortgage, your interest costs will be significantly higher at $880,189.67, and adding the $640,000 principal, your home costs are at $1,520,187,67.

While it would be nice to get a price pop on your home, remember you are living in it and hopefully enjoying the house. If you are fortunate to get a low mortgage rate for a shorter timeframe, this will be a  good way to pay off debt.

Good Debt versus Bad Debt

While using debt for student loans and mortgages can be painful to bear, they are helpful for building your future, and often considered good debt.

On the other hand, paying off only the minimum amount of your credit card bills causes your balance to expand significantly with high interest payments (at high teens or more) . Don’t overleverage yourself with credit card debt. Make rules you can keep. Pay off your credit card balances in full every month so  you won’t have any interest charges at all. Paying the roughly 2.5% required minimum on a $3,000 balance can take over 20 years to pay it off.

APR vs APY

A credit card’s interest rate or the annual percentage rate (APR) is the price you pay for borrowing money, and it is usually the highest rate (high teens percentages unless you have great credit) you will pay. Far higher than for mortgages or for student loans. The APR doesn’t include the compound interest rate.

On the other hand, the effective annual rate on the annual percentage yield (APY) does include how often interest is applied to your balance (eg. daily, monthly quarterly, or yearly). This means that when you don’t pay your card’s monthly balance in full, you are paying interest on interest. Here, compound interest is working against you, building up your debt amounts.

Remember these credit cards interest rates are higher than mortgage rates. Depending on your credit score, and whether you are an existing cardholder or a new cardholder your APR could range from 15%- 25+%. If you miss the monthly minimum, you will pay dearly after 30 days of nonpayment.  You will incur a penalty rate upwards of 29.99% monthly until you make six consecutive payments on time. You will also pay flat fees, and your credit score will be impacted negatively.

Ouch!

If you can’t pay your monthly card bill in full each month, cut your spending. When you pay only the minimum balance on your cards, you will be wearing a financial noose around your neck for longer than you want.

Two methods to reduce debt: the Avalanche Method and the Snowball Method

Assuming you have the following debt balances:

• Credit card debt of $3,500 @ 15%
• Student federal loan#1, of $5,000 @ 4.5%
• Student private loan#2,  of $7,000 @ 7.5%
• Car loan of $13,000 @  5%
• Miscellaneous debts of $1,500 @ 4% average rate

Using the avalanche method, your priority would be to pay down your debt that is most costly first. That will likely be your credit card balance by targeting the credit card debt at the higher 15% rate.

If you are only able to pay $1,000 per month, it would take you 3.5 months to bring down your balance to zero.

Mathematically, the avalanche way makes sense to rid yourself of high-cost debt. That debt grows faster and your total interest costs will likely be lower using the avalanche method.

The snowball method is gentler. Here, you begin to pay down your debt, looking for the smallest amounts first, and tackling larger amounts afterward. This should motivate you to get into the habit of paying down debt and feeling accomplishments sooner. Here, you would pay the smaller amounts in the miscellaneous total before challenging yourself with the bigger amounts at higher rates. You will likely be paying more in total borrowing costs.

Which method to use?

Guru Dave Ramsey has been a proponent of the snowball method. Academic studies back this method. The anxiety of having a lot of bills can paralyze debtors from doing anything at all. Tackling bills one at a time can be an accomplishment and is motivating.

One of the most recent studies out of the National University of Singapore by Dr. Ong Oryan suggested that “getting rid of debt clears up cognitive functions, lessens anxiety, and improves impulse control.” The study pointed out that debt impairs psychological functioning and decision-making.

One way to look at debt reduction is to look at it as a trade-off in investments.  When you pay off debt with higher interest rates of over 15%, it is like making a 15% return! That already feels like an easy choice.

For those who are highly motivated, analytical, and ready to take on the task to lower their borrowing costs, the avalanche method is better.

It is truly a personal choice. The best choice is to get started on addressing your debt so you can move on to better financial health.

Ways to find the cash to pay down your debt: 

• Annual tax refunds
• Sale of an investment earning lower returns than what you are paying
• Your annual bonus
• Spending below your earnings and resultant savings can help

Managing your money requires financial discipline. High debt levels disrupt our plans for wealth accumulation and need to be dealt with firmly.

 

Updated November 2024. That space in your wallet or purse is valuable, and you should be the one to get that value. By being smart and picky, you can find offers worth $500+ for a single card, all to encourage you to apply and try it out. This adds up to thousands of dollars in extra income (over $5,000 in 2023). These are the top 10 credit card offers that I would personally apply for right now (or have already). Notable recent changes:

• Added JetBlue 80k, United 60k, BarcAA 70k, Alaska 75k, IHG 100k w/NoAF, Air Canada 100k, Hilton 100k+noAF, British Airways 85k
• Removed CitiAA 75k, Sapphire 60k+$300, Amex Gold 60k+$100, Delta Gold 80k, Bonvoy 185k, Venture 75k+$250, IHG 5FreeNights

This is a companion post to my Top 10 Best Business Card Offers. Small business bonuses are on average even higher than those on consumer cards.

Aeroplan® Credit Card

• Up to 100,000 Aeroplan points. 75,000 bonus points after $4,000 in purchases in the first 3 months. Plus, 25,000 bonus points after $20,000 in purchases in the first 12 months. 100,000 points are redeemable for $1,250 against any travel purchased with Pay Yourself Back. See link for details.
• Free first checked bags on Air Canada flights: one free checked bag for the primary cardmember and up to eight other travelers on the same itinerary.
• Aeroplan 25K Elite Status benefits for the remainder of the first calendar year, plus the following calendar year.
• Up to $100 credit for Global Entry/NEXUS/TSA PreCheck.
• $95 annual fee.
• Subject to 5/24 rule.

British Airways Visa Signature® Card

• 85,000 Avios after $5,000 in purchases within first 3 months. See link for details and redemption tips.
• 10% off British Airways flights starting in the US when you book through the website provided in your welcome materials.
• Free Travel Together companion ticket when you spend $30,000 in a calendar year.
• $95 annual fee.

Hilton Honors American Express Card

• 100,000 Hilton Honors Bonus Points after $2,000 in purchases in the first 6 months Limited-time offer. See link for details.
• No annual fee.
• Terms Apply.

Southwest Rapid Rewards® Plus Credit Card

• $400 statement credit + 40,000 bonus Rapid Rewards points after $3,000 on purchases in the first 4 months. See link for details.
• Southwest still gives everyone two free checked bags.
• Timing for Companion Pass. If you can sign up for this one and perhaps also the small business version, and time the points to post in 2025, you can qualify for a Companion Pass for 2025 and 2026.
• $69 annual fee.
• Subject to 5/24 rule.*

JetBlue Plus Card

• 80,000 bonus TrueBlue points after $1,000 on purchases and paying the $99 annual fee in full, both within the first 90 days. See link for details.
• First checked bag free for the primary cardmember and up to 3 companions when tickets are purchased with your JetBlue Plus Card.
• $99 annual fee.

Chase Sapphire Preferred® Card

• 60,000 Ultimate Rewards points (worth $750 towards travel or transferrable to miles/points) after $4,000 in purchases within the first 3 months. See link for details.
• $50 annual Ultimate Rewards Hotel Credit, 5x on travel purchased through Chase Travel^SM, 3x on dining and 2x on all other travel purchases.
• $95 annual fee.
• Subject to 5/24 rule.*
• Upgrade pick: Chase Sapphire Reserve® Card. Higher travel perks including airport lounge access, higher annual fee.

IHG One Rewards Traveler Credit Card

• 100,000 IHG Rewards club points after $2,000 in purchases within the first 3 months. See link for details.
• 4th Award Night Free (Book 3 nights in a row with points, 4th is free)
• No annual fee.
• Subject to 5/24 rule.*

Barclays AAdvantage Aviator Red Mastercard

• 70,000 American Airlines miles after any single purchase and paying the $99 annual fee in full, both within the first 90 days. See link for details.
• First checked bag free on domestic AA flights ($80 value per roundtrip, per person).
• $99 annual fee.

IHG One Rewards Premier Credit Card

• 140,000 Bonus Points after $3,000 in purchases in the first 3 months. See link for details.
• Free Night after each account anniversary year (valued up to 40,000 IHG points).
• $99 annual fee.
• Subject to 5/24 rule.
• Don’t like annual fees? The no-annual fee Traveler version also has a competitive offer with no annual fee.

Citi AAdvantage Platinum Select Card

• 50,000 American Airlines miles after $2,500 in purchases in first 4 months. See link for details.
• First checked bag free on domestic AA flights ($80 value per roundtrip, per person).
• $0 annual fee for the first year, then $99.

The Platinum Card from American Express

• 80,000 Membership Rewards(R) points after $8,000 in purchases in the first 6 months.
• Up to $200 Hotel Credits, up to $240 Streaming Credits, $200 Airline Fee Credits, $200 Uber Cash, $199 CLEAR Plus credit, $300 Equinox credit, up to $155 Walmart+ credit and more annually! Enrollment is required.
• Up to $120 Global Entry or $85 TSA PreCheck fee credit.
• Premium airport lounge access through the American Express Global Lounge Collection®.
• $695 annual fee.
• Terms Apply.

Capital One Venture X Rewards Card

• 75,000 miles (worth $750 towards travel, or transferrable to airline miles) after $4,000 in purchases within the first 3 months. See link for details.
• $300 annual travel credit. Get up to $300 in statement credits when booking through Capital One Travel.
• Additional 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary.
• Priority Pass + Capital One airport lounge access. Additional cardholders are free, and also get their own Priority Pass!
• Up to a $120 credit for Global Entry or TSA PreCheck(R).
• $395 annual fee.

United^SM Explorer Card

• 60,000 miles after $3,000 in purchases within 3 months. See link for details.
• Free first checked bag for both you and a companion (a savings of up to $160 per roundtrip) when you use your Card to purchase your United ticket.
• Up to $100 credit for Global Entry/NEXUS/TSA PreCheck.
• $0 intro annual fee for the first year, then $95.
• Subject to 5/24 rule.

Citi Strata Premier Card

• 75,000 points (worth $750 in gift cards, or transferrable to miles/points) after $4,000 in purchases in the first 3 months. See link for details.
• 3X points for every $1 spent on Hotel purchases, Air Travel, Restaurants, Supermarkets, Gas Stations, EV Charging.
• Must not have gotten bonus from or closed a Citi Premier or Strata Premier card in the past 48 months.
• $95 annual fee.

Capital One Venture Rewards Card

• 75,000 miles (worth $750 to offset travel purchases, or transferrable to miles) after $4,000 in purchases within the first 3 months. See link for details.
• 2 Miles per dollar on all purchases.
• Up to a $120 credit for Global Entry or TSA PreCheck(R).
• $95 annual fee.

Bank of America Premium Rewards Card

• 60,000 points (worth $600) after $4,000 in purchases within the first 90 days. See link for details.
• $100 annual Airline Incidental Statement Credit.
• Up to $100 credit towards TSA PreCheck or Global Entry application fee.
• $95 annual fee.

Wells Fargo Autograph Journey Card

• 60,000 points (worth $600 towards travel) after $4,000 in purchases within the first 90 days. See link for details.
• $50 annual statement credit with $50 minimum airline purchase.
• $95 annual fee.

Hawaiian Airlines MasterCard

• 70,000 Hawaiian miles after any purchase (of any amount) within the first 90 days. Any 6-digit code will work, like “000000”. The normal offer has a higher spending requirement. See link for details.
• Two free checked bags for primary cardmember when you use your card to purchase tickets directly from Hawaiian Airlines.
• One-time 50% off companion discount for roundtrip coach travel between Hawaii and The Mainland on Hawaiian Airlines.
• $99 annual fee.

Alaska Airlines Visa Card (Bank of America)

• 75,000 bonus miles + Companion Fare voucher after $3,000 in purchases within first 90 days. See link for details.
• Companion fare voucher is “Buy one ticket, get one from $23” ($0 fare plus taxes and fees from just $23).
• Free first checked bag on Alaska flights for you and up to six other passengers on the same reservation (worth $70 roundtrip per person).
• $95 annual fee.

Delta SkyMiles® Gold American Express Card

• 50,000 Delta Skymiles after $2,000 in purchases within the first 6 months. See link for details.
• 50,000 Skymiles are worth at least $500 in Delta airfare with “Pay with Miles” option.
• $200 Delta flight credit after $10,000 in purchases on your card in a calendar year.
• First checked bag free on Delta flights ($70 value per roundtrip, per person).
• $0 annual fee for the first year, then $150.
• There is also a 60k bonus miles offer on the Platinum version.
• Terms Apply.

Marriott Bonvoy Brilliant® American Express® Card

• 95,000 Marriott Bonvoy(R) points after $6,000 in purchases in the first 6 months. See link for details.
• $300 in Annual Dining Credits, valid at restaurants worldwide.
• Priority Pass Select airport lounge membership.
• Automatic Marriott Bonvoy Platinum Elite status.
• Free Night Award upon card anniversary (worth up to 85,000 Bonvoy points).
• $650 annual fee.
• Terms Apply.

American Express® Gold Card

• 60,000 Membership Rewards(R) points after $6,000 in purchases in the first 6 months. See link for details.
• $84 Dunkin’ Credit. Up to $7 in monthly statement credits after you enroll and pay with the American Express(R) Gold Card at US Dunkin’ locations. Enrollment is required.
• $100 Resy Credit. Get up to $100 in statement credits each calendar year after you pay with the American Express(R) Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. Broken down into up to $50 in statement credits semi-annually. Enrollment is required.
• $120 in Uber Cash annually (good towards Uber Eats or Uber rides in the US). Effective 11/8/2024, an Amex Card must be selected as the payment method for your Uber or Uber Eats transaction to redeem the Amex Uber Cash benefit.
• Up to $120 in annual dining credit at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment is required.
• 4X points at restaurants on up to $50,000 per calendar year.
• 4X points at US supermarkets on up to $25,000 per calendar year.
• $325 annual fee.
• Terms Apply.

If you pay off your balances every month, then you can join me and many others in funding a huge chunk of your annual travel budget with cash credits, points, and miles. I mostly use my rewards points on family trips – domestic economy flights, mid-range hotels, and cheap car rentals. If you have credit card debt, you should focus on paying that off first as the interest charges could offset most of the perks.

* 5/24 Rule? Certain Chase cards have a “5/24 rule” which is an unofficial rule that they will automatically deny approval on new credit cards if you have 5 or more new credit cards from any issuer on your credit report within the past 24 months (2 years). This rule applies on a per-person basis, so if you are new, you might want to start with those Chase cards.

Dealing with debt during divorce is often more complex than dividing assets. While you may agree on who will pay what debts in your divorce agreement, your creditors may have different ideas. Understanding how debt affects your divorce, and vice versa is crucial for protecting your financial future.

Are You Responsible For Your Spouse’s Debt in Divorce?

You are not legally responsible for your spouse’s debts unless you have taken them on jointly as a co-borrower or co-signer on the account. This applies whether you are legally married or in a common-law relationship.

For any joint debts where both spouses’ names appear on the account, you are “jointly and severally liable.” This means each spouse is 100% responsible for the total amount, regardless of who made the purchases or why. Creditors can pursue either spouse for the entire balance, even if your divorce agreement assigns the debt repayment to your ex-spouse.

Individual debts remain separate by law. Debts in your partner’s name remain their responsibility. Common examples include student loans, bank loans, and credit cards, which are in their name only.

Can a Divorce Agreement Divide Debts?

The concept of marital or family debt can complicate matters during divorce proceedings.

Debts incurred during your marriage might be considered marital debt, even if they’re only in one partner’s name. This could include various types of debt like credit cards used for household expenses, lines of credit for home renovations, or car loans for a family vehicle. Your divorce agreement might divide family debt between you, but this doesn’t change creditors’ rights to collect. This is because, legally, debts are either joint or individual.

The obligation to repay debt cannot be legally transferred through a divorce or separation agreement without the consent of your creditors.

If your ex-spouse fails to pay joint debts assigned to them in the divorce agreement:

• Creditors can still pursue either spouse for joint debts
• You may need to pay the debt and then seek reimbursement through family court
• Your credit rating can be affected even if the agreement says your ex is responsible

Your divorce agreement might divide debt repayment responsibilities between you, but this doesn’t change creditors’ rights to collect. You are getting divorced from your spouse but not your bank.  They are not a party to the divorce, so just because your separation agreement says that your ex-spouse is assuming the joint debt unless the lender agrees to it, it’s not legally binding.

Who is Responsible for Credit Card Debt in a Divorce?

In a divorce, the obligation to repay credit card debts and lines of credit you owe cannot be legally assigned by a divorce agreement like assets. Who is responsible to pay credit card debt after a divorce depends on the type of card:

Supplementary Cards: These are cards where one spouse is the primary cardholder, and the other is an authorized user. Generally, only the primary cardholder is legally responsible for the debt. Responsibility for payment cannot be transferred in a divorce decree. It is better to remove secondary cardholders from your accounts during separation.

Joint Credit Cards: If both names appear on the statement or you were co-applicants, both spouses are fully responsible for the entire balance. This includes charges made by either spouse. Cancelling the card doesn’t eliminate responsibility for existing debt. Even if your divorce agreement assigns the debt to your ex-spouse, the credit card company can still pursue you for payment. It is wise to cancel joint credit cards as soon as you separate and get new cards in your individual name.

Remember: Credit card companies aren’t bound by your divorce agreement. If you have a joint credit card and your ex-spouse fails to make debt payments as agreed in your divorce, the credit card company can still demand payment from you if you are the primary cardholder or if it is a joint card.

What Happens to Secured Debts in a Divorce?

Secured debts like mortgages and car loans present unique challenges during divorce because they’re tied to specific assets. Both the debt and the asset must be dealt with together. Even if one spouse keeps the asset, both remain responsible for the loan until it’s refinanced. The lender can seize the asset if mortgage or loan payments aren’t made, regardless of who’s living there.

If you transfer secured assets in a divorce, try to remove your name from any secured loans for assets your ex-spouse is keeping. Get the asset refinanced in one name only if possible. If you can’t refinance, consider selling the asset and splitting the proceeds.

Remember: Until a secured loan is refinanced or paid off, both spouses remain legally responsible for the debt – even if your divorce agreement says otherwise. Missing payments could result in asset seizure.

What Happens to Tax Debt in a Divorce?

Tax debt in divorce can be complicated when more than simple employment income is involved. Generally, you’re not responsible for your spouse’s personal tax debt to the Canada Revenue Agency (CRA), even during marriage or divorce. However, there are important exceptions you need to understand.

• Be cautious when transferring assets during separation. Under Section 160 of Canada’s Income Tax Act, if your spouse transfers property to you at less than fair market value to avoid paying taxes, the CRA can hold you responsible for their tax debt.
• If you own property jointly with a spouse who has tax debt, the CRA may place a lien on the property. However, this lien only affects your spouse’s share of the equity – your portion remains protected.
• Finally, while the CRA considers tax debt to be individual, family law may view it differently. If tax debt arose during your marriage from income or decisions that benefited your family – like tax deductions that reduced family tax payments or business income that supported household expenses – your divorce court might consider this a family debt to be divided between spouses. This doesn’t change your relationship with the CRA, but it could affect how the value of assets and debts are divided in your divorce settlement.

How Are Business Debts Handled?

Business debts affect divorce differently depending on how the business is structured. For sole proprietorships, business debts are considered personal debts. Corporate debts generally remain with the corporation unless you personally guarantee the loans. While you may not be liable, these debts will affect the value of the business.

Be particularly careful with personal guarantees on business loans. If you signed as a guarantor on your spouse’s business debt, you remain responsible for this debt even after divorce unless the lender agrees to remove your guarantee. This obligation continues even if you have no ownership interest in the business after divorce.

Managing Bank Accounts During Divorce

Joint bank accounts require special attention during a divorce. Even after separation, both parties have full access to joint accounts until they are closed. You’re both responsible for overdraft repayment, regardless of who spent the money.

It may be a good idea to freeze shared bank accounts to prevent unauthorized withdrawals and open new individual accounts at a different bank.

What About Debts Acquired During Separation?

Any new credit cards, loans, or lines of credit opened after separation typically remain the responsibility of the borrowing spouse.

If one spouse continues to use joint debt credit accounts after separation, you will still be responsible for any new balances. That is why all joint debts should be cancelled upon separation to ensure one spouse does not rack up balances without the other’s consent or knowledge.

Can You Remove Your Name From Debt Accounts?

If you are getting divorced with debt, you can talk to your bank before you sign the separation agreement about getting two separate loans in each of your names to pay off the old joint debt. Your bank probably won’t remove your name from the account if there is an existing balance. They will want to be sure they can collect despite your divorce. If you have good credit, you can each borrow your share to pay off the full balance.  Once the old accounts have been paid off and balances transferred, close the pre-divorce credit accounts.

Managing Joint Accounts During Divorce

Good debt management practices are important before, during and after divorce. Take these steps to protect your personal finances during divorce:

1. Make a list of every joint account, credit card, and loan
2. Consider freezing or closing joint credit cards
3. Consider refinancing secured loans if the assets are transferred to one spouse
4. Set up bank accounts and apply for new credit in your name only
5. Monitor your credit report regularly
6. Keep detailed records of all account activity
7. Notify creditors of your separation in writing, change your address
8. Ask about options to remove your name from joint accounts

Remember: Your credit score doesn’t care about your divorce agreement. Late payments or defaults will affect both parties on joint accounts. If your ex-spouse stops paying debts they agreed to pay, you may need to make the payments yourself to protect your credit rating and seek reimbursement through family court.

Bankruptcy and Divorce

Bankruptcy and divorce add another layer of complexity to an already challenging financial situation. If your ex-spouse files for bankruptcy, any joint debts you share become your full responsibility.

The timing of bankruptcy versus divorce matters significantly. Filing for bankruptcy before finalizing your divorce can impact how assets are divided and which debts remain. Conversely, if your divorce agreement is already in place when your ex-spouse files for bankruptcy, you might find yourself responsible for joint debts that were originally assigned to them.

It is also important to know that support payments, including child support and alimony, cannot be discharged by a bankruptcy or consumer proposal.

What To Do When Divorce Causes Debt Problems

If your financial situation makes debt repayment difficult, you may need to explore debt relief options like consolidation, a consumer proposal or bankruptcy. Given these complexities, it’s crucial to speak with a Licensed Insolvency Trustee before finalizing your divorce.

Debt problems during divorce can feel overwhelming, but you don’t have to face them alone. At Hoyes Michalos, our Licensed Insolvency Trustees can help you understand your options and make informed decisions about your financial future. Contact us today for a free consultation to discuss your situation and learn about solutions that could work for you.

The post What Happens to Debt When You Divorce? appeared first on Hoyes, Michalos & Associates Inc..

Last month was a wash since I paid off a credit card, but then turned around and used it for Princess’ wisdom teeth extraction.

However, this month, we are getting back on track.

Debt Description	October, 2023 Total	Interest Rate	Minimum Payment	Current Total	Payoff Date (Est)
CC – Frontier	$3,857	29.99%	$130	$2,718	December, 2024
Dad – New Furnace	$2,600	0%	$0	$2,600	January, 2025
CC – USAA	$5,000	19.15%	$135	$2,723	March, 2025
Student Loans	$22,121	2.875%	deferrment	$22,850	September, 2025?
CC – Apple**	$500		Paid off every month	$0
CC – AMEX	$894	29.24%	$0	$0	Mar, 2024 – Closed
CC – Sams	$1,106	29.99%	$0	$0	April, 2024
Personal Loan #1	$2,500	0%	$0	$0	July, 2024
Personal Loan #2	$2,500	0%	$0	$0	August, 2024
CC – Wander	$1,630	29.24%	$0	$0	August, 2024 – Closed
CC – Amazon	$1,497	29.99%	$0	$0	September, 2024
Total	$44,206		$265	$30,891

After paying all the monthly obligations (bills plus transfers to savings, investments) and debt payments, I have $586 left. I’m anticipating that will cover the Texas trip. This will allow my savings to remain in tact which gives me a great deal of comfort.

Christmas on the Brain

I am already struggling with the idea of Christmas. This next week I will break out the remaining $5 for my Christmas budget and figure out how to use it. Thankfully, the kids are all great and I know they will be thrilled with anything. I truly do have great kids. The goal is to have Christmas done especially for the 3 boys and Texas family so I can avoid any shipping charges. Crossing my fingers. I’ve got to weeks to wrap it up.

Next Milestone Goal

I anticipate that my next credit card will be paid off in January at latest. The Frontier card, that is. Then I have to decide whether to focus on the final CC or pay off my dad. I feel like it should be my final personal loan. But my dad has made it clear that he is fine waiting. So I’m leaning toward the credit card. No promises, but I am sticking with the plan of paying off the credit card debt first.

I’ve also got to re-evaluate my tax plan for the new year since my annual income will be significantly higher than this year. (I’m also hoping for a bonus this year. Can’t plan for it, but I’m hoping.)

 

 

The post Hope’s Debt Update – November, 2024 appeared first on Blogging Away Debt.

“I owe $20,000 in debt at a 28% interest rate, paying just above the minimum payments, and am not sure whether I should consolidate into a new (hopefully) lower interest rate loan or use debt settlement with a reputable company. Can you help me decide which is best for me?” Let’s look at the true […]

The post Consolidation Loan vs. Debt Settlement – Which Do I Choose? appeared first on CuraDebt.

Managing family finances can feel like juggling with one hand tied behind your back. Between household bills, groceries, and extracurricular activities, it’s easy to feel overwhelmed. But with a few clever tricks, you can take control of your money and find room to breathe. These family finance hacks are here to help parents make the most of their hard-earned cash and keep stress levels low.

Automate Your Savings

Setting up automatic transfers to your savings account can be a game-changer for family finance. By automating the process, you save money without even thinking about it. Even if it’s just a small amount each week, it adds up faster than you’d expect. This approach makes saving feel less like a chore and more like a smart financial move for your family’s future.

Plan Meals and Stick to a Grocery List

One of the easiest ways to improve family finance is by meal planning and shopping with a list. Creating a weekly meal plan helps you avoid last-minute takeout, which can be a budget killer. When you go to the store with a clear list, you’re less likely to be tempted by unnecessary items. This small habit can lead to big savings over time, freeing up money for other family needs.

Use Cashback Apps and Rewards Programs

Taking advantage of cashback apps and loyalty programs is a simple way to stretch your family finance budget. Apps like Rakuten or Ibotta offer rewards for everyday purchases, putting money back in your pocket. It might seem like small change, but it adds up quickly, especially if you’re consistent. Plus, you can often use these rewards for special treats or savings goals without dipping into your main budget.

Set Up a Family Budget Meeting

Communication is key to managing family finance effectively. Setting aside time each month for a family budget meeting can help everyone get on the same page. It’s a chance to discuss upcoming expenses, set goals, and address any financial concerns. By involving the whole family, you create a team mentality that can make sticking to a budget easier and more rewarding.

Buy in Bulk for Household Staples

Purchasing household staples like toilet paper, cleaning supplies, and snacks in bulk can be a great family finance hack. Bulk items tend to be cheaper per unit, saving you money in the long run. Plus, having these essentials on hand means fewer last-minute trips to the store, reducing impulse purchases. It’s a simple strategy that can lead to significant savings over time.

Teach Kids About Money Early

Educating your children about money is one of the best long-term investments you can make in family finance. Teaching kids the basics of budgeting, saving, and spending helps them develop good financial habits early on. You can start with simple tasks, like saving for a toy or understanding how to compare prices. The lessons they learn now will set them up for financial success in the future, making your job as a parent easier too.

Take Control of Your Family Finances Today

By incorporating these family finance hacks into your routine, you can reduce stress and make the most of your money. It’s all about making smart, simple changes that add up over time. With a little effort and some teamwork, you can achieve financial peace of mind for your entire family.

The post What Are 6 Family Finance Hacks Every Parent Should Know? appeared first on The Free Financial Advisor.

Three Accounts and the 3-Fund Portfolio   Simplicity is a 3-fund portfolio. US and International equity funds and a bond fund are baked together in a set asset allocation. There is much more to consider when you have different account […]

A secondary credit card holder’s responsibility for credit card debt depends entirely on how the card was set up and the specific terms of the credit card agreement. While some supplementary cardholders may not be liable for any charges, others could be fully responsible for all debt on the account. Understanding these differences is crucial before accepting or adding someone as a secondary cardholder.

Primary vs Supplementary Cardholders

Credit card accounts have distinct roles, and the distinction is very important in determining who is responsible for credit card charges. Let’s begin with an explanation of the differences between primary, secondary or supplementary cardholders and joint credit cards.

Primary Cardholder: This person opens the account, manages payments, and is fully responsible for any debts on the account.

As a primary cardholder, you:

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• Are responsible for managing the account
• Can add or remove supplementary cardholders
• Must make payments on the account
• Are legally responsible for the debt

Supplementary Cardholder: Credit card companies often allow an additional cardholder to become an authorized user on a credit card. It is common, for example, to add a spouse or child as a secondary cardholder. 

Secondary cardholders generally:

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• Can make purchases using the card
• Shares the full available credit limit
• Don’t have authority to make account changes
• Are not responsible for debt payments
• Cannot add other cardholders

Joint Credit Cards or Co-borrowers: While rare, it is possible to be a co-applicant or co-borrower on a credit card. This differs from a supplemental card in terms of card management and responsibility.

As joint cardholders, both parties:

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• Share full account management rights
• Have both their names on the credit card statement
• Can make changes to the account independently
• Are legally responsible for the entire balance
• Cannot be removed without both parties’ consent
• Will have the account appear on both credit reports

Who Pays the Debt? Understanding Cardholder Liability

A primary cardholder is liable for all charges and debts on an account, whether charged with the primary or secondary card.

A secondary or additional cardholder is not responsible for paying back money owed on a credit card. Even though a supplemental cardholder can see the account in their individual online banking information, that does not mean they are liable.

If you have a joint credit card, you are fully responsible for the entire debt.

Impact on Credit Reports and Scores

Most Canadian credit card issuers report only primary user accounts to the credit bureaus, TransUnion and Equifax. Being a supplementary credit card holder will not impact your credit rating in Canada.

If you are a joint credit card holder or co-signer on a credit card, late payments or high balances on the primary account can negatively affect your credit score.

What Happens If the Primary Holder Defaults?

If the primary cardholder defaults, creditors cannot pursue a secondary cardholder unless they are co-borrowers.

In cases of significant default, a secondary cardholder may lose access to the account.

If one cardholder files a bankruptcy or consumer proposal, this does not affect a supplementary cardholder unless the debt is joint.

If you are concerned you cannot repay your credit card debt, we encourage you to talk with a Licensed Insolvency Trustee like Hoyes Michalos. This is a complicated area. We can help you review your credit card agreements and help either the primary or secondary cardholder, or both, find options to eliminate credit card debt. Your trustee can also explain how bankruptcy will affect your spouse and help you develop a plan together, such as filing a joint consumer proposal or bankruptcy if your combined debts are significant.

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