Mike Brassfield - The Penny Hoarder

We’ve all been there.

You’re cruising smoothly through life when suddenly, BAM -- something big breaks. Something expensive.

Your transmission needs replacing. Your home’s air conditioner breaks down. You break an ankle and get a pile of medical bills. Your faithful dog Rusty has this weird bumpy thing that might be a tumor or something. And then your phone dies -- or you drop it in the toilet.

You get the idea.

This is one of those How am I going to pay for this? kind of expenses. You wonder if you’ll even have enough cash and/or credit available to cover the cost. Your life slips out of cruise control and starts to drift toward the breakdown lane.

At times like this, you’ll need to use your wits. One way or another, you’ll be paying bills, possibly by drumming up some extra cash.

Here are 10 unexpected expenses we’ve all encountered and strategies for dealing with them.

1. Car Repairs

Your car starts making a funny noise: Ka-chunk, ka-chunk, ka-CHUNK, ka-chunk, ka-CHUNK…

It’ll happen: Sooner or later, your muffler or brakes or transmission will break down.

Or your mechanic will squint at you and say, “It’s your ignition coil and your manifold and your catalytic converter,” and like we all do, you’ll nod like you know exactly what he’s talking about.

Fact: 1 in 3 U.S. drivers can't pay for an unexpected auto repair without going into debt. The average car repair cost is $500 to $600, and major engine or transmission repairs cost a lot more.

What to do: Start an emergency fund, preferably one you can’t touch. A good option is opening an account with Aspiration Summit checking account. Sure, it’s not a traditional “savings” account, but this online-only bank has no fees, no minimum balance, and pays up to 100 times more interest than an average checking account.

2. Home Repairs

I own a house. As a homeowner, one thing I can testify to is this: Just when you think you’re starting to get a little bit ahead financially, something big breaks, whether it’s the roof or a random water pipe.

I live in Florida, and just last week my house’s 18-year-old central air conditioning system finally wheezed its last breath and gave up the ghost. At the beginning of summer. IN FLORIDA. IN SUMMER. It was like living inside a microwave oven inside a sauna inside a jungle. That A/C had to be replaced pronto.   

No wonder homeowners typically spend between 1% and 4% of the value of their home on annual maintenance and repairs.

You can save by doing some repairs on your own. But you also know when it’s time to hire a pro.

How to afford that on short notice? Sometimes you can’t just throw it on a credit card (which probably isn’t the best idea, anyway).

Credible is an online marketplace that offers consumers personalized loan offers. Think of it like Zillow -- but for personal loans. Rates start at 5.99%, and you can check yours by entering a loan amount here ($500 to $40,000) and comparing your personalized options in under 90 seconds.

Odds are you’ll get a better interest rate than you’d get from a credit card.

3. Weddings and Other Unexpected Trips

It’s wedding season! Hurray!

Your best friend/cousin/college roommate is getting hitched. Hurray!

You’re in the wedding party, and you’ll have to fly across the country for this. Hurr-ouch!

Weddings are expensive, and this one will involve vacation days, airfare and hotel rooms. If it involves a lengthy trek, use these tips to save money flying.

Not to mention, you’re also in the wedding party. Now you’re probably on the hook for whatever the bride/groom wants everyone to wear.

And don’t forget the destination bachelor(ette) party...

What to Do: Start an emergency fund with Stash.

The app saves your money without you lifting a finger. Just link it to your checking account and ask the app to automatically pull a few bucks from your account each week. It’ll invest your savings into dozens of different stock options.

And if you sign up for Stash here, you’ll get an extra $5 to invest when you open your account.

You won’t have a fortune overnight, but every bit helps.

4. Pricy Prescriptions

You have a cough. Ehh, you’ll be fine.

A week later, you can’t stop coughing. You can barely get a word in. You need strong medicine.

But you need to take time off work to go to the doctor. And depending on your insurance, you might have to pay for that visit. And you’re going to need that strong medicine -- which definitely isn’t free.

Prescription drugs can be expensive -- and the prices keep increasing. Plus, the high cost of insurance can put them out of reach for many adults.

What to do: Use an app like GoodRX to shop around for the best prescription price.

The app quickly compares prices across pharmacies to see where your meds are cheapest. It also provides coupons, some of which could save you up to 80%. You can either print them out or just show them to the pharmacist on your phone.

5. Medical Bills

Remember that cough? Maybe it develops into something worse. (Hope not…) Or, heaven forbid, you’re running late for work and take a weird step off a curb.

Congratulations! You now have a broken ankle and need an X-ray, cast and crutches (and probably a ride for a few weeks).

Medical bills pile up fast. Americans pay more for medical care than almost any other industrialized nation -- about $10,000 a year per capita, in fact.

Here are 10 ways to save money on your medical bills, including negotiating them. Still, when you see those crazy-high bills, the bottom line can seem insurmountable.

With medical expenses, you can often work out a payment plan with your medical provider. Then you could use a steady source of extra income. Shoot for earning enough extra cash to cover your payment plan.

What to do: List your home or extra room on Airbnb.

Have a spare room? Might as well use Airbnb to make some money by renting it out.

If you’re a good host with a desirable space, you could add hundreds -- even thousands -- of dollars to your savings account with Airbnb.

Taking a few simple steps can make the difference between a great experience and a less-than-satisfactory one.

Here are a few tips:

  • Make your space available during high-demand times in your area. Think: concerts, conventions and sporting events in your area.
  • Be a good host, and make sure your place is stocked with the toiletries you’d expect at a hotel — toilet paper, soap and towels.
  • Be personable. A lot of travelers turn to Airbnb for the personal touch they won’t find at commercial properties.

Here’s the link to sign up as an Airbnb host.

(Hosting laws vary from city to city. Please understand the rules and regulations applicable to your city and listing.)

6. Veterinary Bills

Dogs have this weird idea that they need to put everything in their mouth. It probably tastes good, right?

Nope, it might cause vomiting, and lethargy, and all the other warning signs that mean you’re about to frantically rush to the vet.

Here are 21 ways to save money on pet care, including this key tip: Call the vet before you need one.

The worst time to find an affordable vet is when you have a medical emergency (stupid dog). If you love your pets, you'll pay whatever it costs in the moment. To lower the cost of routine and emergency pet care, choose an affordable vet before you need one.

Use websites like VetRatingz.com to avoid bad vets. Call the acceptable ones and ask what they charge for a basic checkup, vaccinations, teeth cleaning or other procedures.

No matter what, a sudden vet bill may leave you short of cash.

What to do: Drive with Uber.

Uber is all on your own time. Got a few hours to spare? Drive around and make some money.

As an Uber contractor, you set your own schedule and work when you want. Your pay is calculated on a base fare, plus time and distance traveled for each pickup. Uber charges a service fee of 20% to 35%, depending on your city.

If you want to give it a try, you must:

  • Be at least 21 years old
  • Have three years’ driving experience
  • Have an in-state driver’s license and a clean driving record
  • Be able to pass a criminal background check
  • Have a four-door car

Here’s a link to apply with Uber. And here’s our story comparing the basics for drivers with Uber and Lyft, another valid option.

7. Your Phone Bites the Big One

You drop your phone in the toilet. PLUNK. Tell me this isn’t happening, you think.

At least the water is clean.

We live and die by our phones. Let’s face it: At this point, our phones are basically an extension of our bodies. In another decade or so, we’ll all be cyborgs. Bank on it.

Exhibit A: When our smartphones suddenly stop working, we don’t say, “Oh, my phone broke,” or “My phone is busted.”

Instead we say, “My phone died.”

The average new smartphone costs more than $500, while the cost of used ones is all over the map. How can you come up with extra cash fast?

Sell all that extraneous stuff that’s cluttering up your home.

What to do: Use apps to quickly unload all that extraneous stuff that’s cluttering up your home.

Decluttr: This app buys your old CDs, DVDs, Blu-rays and video games, plus tech like cell phones, tablets, game consoles and iPods. Scan the barcode with your phone, and Decluttr will make you an offer. It’ll also send you a shipping label, so you can ship everything free. Plus, enter PENNY10 at checkout to get an extra 10% for your trade-ins.

Letgo: You can sell nearly anything through this app. Just snap a photo of your item, and set up a listing in about 30 seconds. Letgo is 80% free to use.

Bookscouter: Hoarding old textbooks? Someone will probably pay you for them. Just search the book’s ISBN on Bookscouter, and the site will connect you with more than 25 of the best-paying and most reputable online buyback companies.

8. A Death in the Family

The worst emergency of all. We’d trade for any other emergency on this list to avoid this one.

You may have to travel suddenly for a loved one’s funeral. And if it turns out to be your funeral this time, here’s how to plan an affordable one so your family isn’t buried in debt.

No matter what, there will still be expenses.

What to do: Consider a life insurance policy, which could be useful for paying off your funeral, mortgage or car loans. It’s about making sure your loved ones will be okay if you unexpectedly leave them behind.

Companies like Haven Life offer streamlined ways to get life insurance. Unlike traditional life insurance providers, this online-only platform provides instant decisions on applications for coverage.

Some qualified, healthy applicants up to the age of 45 may even get to skip the medical exam that most providers require.

9. Identity Theft

Who’d really want to be you, right? Probably more people than you think.

That’s why they open accounts in your name -- and spend money just like they’re you. Only they buy lots of way cooler, more expensive stuff than you do. But they do this with shiny new credit cards -- with YOUR name on them.

The best part? You don’t even know about it. Until the collections agencies start calling you.

This is definitely an unexpected emergency, and it happens more often than you might think -- nearly 3 million times a year.

When fraudsters hijack your identity for their own purposes, they can grab up lines of credit and rack up significant debt in your name with shocking ease.

A free service like TrueIdentity helps you avoid this situation by keeping a watchful eye your finances. It sends alerts by email, phone or text if someone tries to apply for credit in your name.

10. Traffic and Parking Tickets

There’s nothing worse than watching the meter maid put a fresh parking ticket on your windshield from across a busy intersection.

These days I don’t get as many speeding tickets as I did when I was a kid with a Camaro. I spend a lot of time in our local downtown, though, so I still get parking tickets.

These things are getting expensive. The average cost of a speeding ticket is about $150 these days. Parking tickets can run you $10 to $50.

You may need to drum up some extra cash here.

What to Do: There are a number of sites on the web that will pay you to read advertisers’ emails, sign up for offers, and take surveys. We’ve tried many of them, but there are only a few we'd recommend. One is Survey Junkie.

The surveys are relatively quick to complete, and reward you with points. Once you earn 1,000 points -- or $10 -- you can cash in. Some surveys offers up to 300 points.

Sign up for this at the beginning of the month and promise yourself you’ll log in a few times each week. You’ll have no trouble earning an extra $30 this month.

Another (free) option? Stop getting traffic tickets, dork.

Disclosure: You wouldn’t believe how much coffee The Penny Hoarder team goes through. This post contains affiliate links so we can keep the grinds stocked!

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. His whole life is one long unexpected expense.

The year 2008 called. You remember 2008, right? The year right before the Great Recession?

Well, it called, and it wants its household debt record back.

It’s official: Americans have regained their appetite for debt. We’ve crossed a threshold, because we are now borrowing more money than we did at the peak of the U.S. housing bubble in 2008.

You remember what happened after that, right? Yes, that’s when the entire global financial system collapsed.

Relax. It might not be that bad this time, but you’ll still need to play your cards right. We’ll talk about ways to do that.

First, the news: Total U.S. household debt climbed to $12.73 trillion in early 2017, pushing today’s debt level higher than the $12.68 trillion peak in 2008, according to the Federal Reserve Bank of New York.

Key differences exist between now and 2008, reducing the likelihood of another financial meltdown. The main thing: More of today’s debt is held by older, more creditworthy borrowers compared to 2008, according to the Fed.

“The growing debt level shows that many of the millions of Americans who struggled during the recession have sufficiently repaired their credit to qualify for loans,” The New York Times reports. “It also suggests a rising optimism about economic growth among banks and other lenders.”

While people in 2017 are handling their mortgages and auto loans better -- with fewer foreclosures and defaults -- the fact is that student loans are fueling the rise in debt.

There’s a fear that rising student loan debt could lead to a wave of defaults like the one from 2008’s financial debacle.

“This is not a marker we should be super excited to get back to,” Heather Boushey, director of the Washington Center for Equitable Growth, told the Times. “In the abstract, more debt signals optimism. But in reality, families are using debt as a mechanism to pay for things their incomes don’t support.”

Here’s how to not run afoul of our increasing appetite for debt:

1. Figure Out What You’re Dealing With

Map out exactly what kind of debt you have.

For example, which companies do you owe money to? Are any of your debts in collections? What are your minimum monthly payments on each credit card or loan?

An easy way to do this is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

2. Consolidate Your Debt

If you fall behind on your credit card debt, you may find yourself getting crushed by interest rates north of 20%. You’ll never catch up that way. You’re spending so much on interest, you’ll never pay off your balances.

It might be worth consolidating or refinancing your debt.

By refinancing an existing loan, you’re taking out a totally new loan, which comes with new terms and (ideally) a lower interest rate. Credible is an online marketplace that offers consumers personalized loan offers. Think of it like Zillow -- but for personal loans.

Rates start at 5.99%, and you can check yours by entering a loan amount here ($500 to $40,000) and comparing your personalized options in under 90 seconds.

3. Protect Your Identity

What if you work hard to pay down all your debt and you’re totally responsible with your credit -- only to take a hit because of identity theft?

A free service like TrueIdentity helps you avoid this situation by keeping a watchful eye on your finances. It sends alerts by email, phone or text if someone tries to apply for credit in your name.

The bottom line: It’s best to have a strategy when we’re talking about household debt levels surpassing those of 2008.

The experts insist 2017’s household debt really is different. For one thing, consumers are currently delinquent on less than 5% of total debt, compared to nearly 12% of debt that was more than a month late in 2009.

Fewer of us are falling behind.

Let’s keep that trend going.

Disclosure: This post contains affiliate links. May we all be a bit richer today.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He remembers 2008 all too well.

We could all use a little financial advice now and then.

That’s why more than 300,000 financial advisers are on the job in the U.S., with tens of thousands more in Canada.

We got to wondering: What would you ask a financial adviser if you had a chance?

So, we posed the question to our Facebook community group, promising to get some answers.

We also asked a bunch of certified financial planners: What question do you get asked most often?

Here’s what we found out:

Reader Question 1: How to Save for Retirement?

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Community group member Fonda McGensy asks, “What is the best way for a 25-year-old to save for retirement?”

Here are some of the best answers we got:

Answer No. 1: “If your employer offers a qualified employer-sponsored plan, make sure you’re taking advantage of this benefit by automatically adding money from each paycheck. If your employer matches the contribution, add the full percentage that can be matched. By not doing so, you are literally leaving money on the table.

Younger investors may also consider opening a Roth IRA. Contributions to a Roth IRA are after-tax, meaning any money you add to the account grows tax-free.” -- Maggie Johndrow, Farmington River Financial Group, Hartford, Connecticut

Answer No. 2: “I strongly believe in investing in low-cost, passive, exchange-traded funds like the ones Wealthfront, Betterment or Wise Banyan are offering.” -- Jeremy Cohen, founder of Simplewealth, Zurich, Switzerland

Answer No. 3: “Once a regular paycheck starts arriving, it’s easy to decide that some things that had to be put off before -- buying the latest phone or barista-prepared drinks -- are now affordable. That may be true, but developing a budget that allows for savings directed toward their needs later in life is a better way to begin. If they ‘pay themselves first,’ then spend some of what’s left on small luxuries, they can accomplish both goals at once -- eventual retirement and some enjoyment now.” -- Warren A. Ward, WWA Planning & Investments, Columbus, Indiana

Answer No. 4: “Start with that 401(k) plan. Every time you get a raise, half of that raise should go directly to increasing your contribution. But don’t forget to get an emergency fund going.” -- Joshua Scheinker, executive vice president of Scheinker Investment Partners, Baltimore, Maryland

Penny Hoarder tip: Consider creating that emergency fund with a high-yield bank account. Online bank Aspiration’s Summit Checking account offers up to a 1% interest rate, almost 100 times higher than the average interest rate at most banks.

Reader Question 2: Where Should I Invest My Money?

Community group member Ciera Rogers asks, “What is the best way to invest money? If I have a couple thousand saved and I want this money to work for me, where should I put it?

Great question, Ciera. Here are some answers:

Answer No. 1: “Lots of people suggest buying an S&P 500 Index fund, Motley Fool would say you can do better with their advice, all brokers promise even more. A Nobel Prize was won in the early ‘90s for saying that most people would be best served by a mixture of 60% stocks and 40% bonds. Vanguard has such a fund: VWELX. It has a $3,000 minimum initial investment, then additions can be made with as little as $1.” -- Warren A. Ward, WWA Planning & Investments, Columbus, Indiana

Answer No. 2: “Once we know how long that money will be invested, for what purpose, and your comfort level and experience with risk, we can provide an appropriate solution. Generally speaking, a low-cost, broadly diversified, passive investment strategy is a good place to start.” -- James M. Matthews, managing director of Blueprint, a financial planning firm in Charlotte, N.C.

Answer No. 3: “Pay yourself first. Start by saving $50, $100 or $250 per check. Save 3, 4, 5, 10% each year into your 401(k) plan. Increase that by 1% per year. You won’t regret it when you retire.” -- Brett Anderson, president, St. Croix Advisors in Hudson, Wisconsin

Answer No. 4: Kerri Moriarty, head of company development for Cinch Financial in Boston, suggests following these steps if you have an extra $100:

  • Do you have at least 1 month of expenses set aside? If not, put the $100 into savings.
  • Do you have high-interest credit card debt? If so, throw the $100 toward your credit card bill.
  • Are you contributing the max to your 401(k) to get the employer match? If not, direct $100 from your next paycheck into your 401(k).
  • Got kiddos gearing up for college? Are you saving for their college expenses? This could be a good spot for the $100.
  • Consider alternative vehicles for your $100: student loan debt, your mortgage, your IRA, your HSA or FSA, and others.  

Penny Hoarder tip: An app like Stash will invest your money in a set of portfolios reflecting your beliefs, interests and goals. It’ll pull a specific amount from your bank account at regular intervals, so you can grow those investments over time.

Stash lets you start investing with as little as $5, and it’ll give you an extra $5 to invest when you sign up through this link.

Reader Question 3: How to Qualify for a Home Loan?

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Community group member Amber Salazar asks, “Is it better to pay off credit card debt in its entirety or to keep that money in the bank (and pay the debt later) when qualifying for the best rate on a home loan?”

Answer No. 1: “In the context of home buying, the bank will look at the payment on credit card debt and include it in the DTI (debt-to-income) ratio when calculating how much mortgage for which you can qualify… Lower (debt) is generally better and can improve your credit score, which may help you get a lower rate on the mortgage. Having some cash set aside is usually a requirement to qualify for a mortgage as well, though. So if you're not sure where to start, a conversation with a financial adviser may be a good place.” -- James M. Matthews

Answer No. 2: “When we pre-qualify potential borrowers for a home loan, two of the key factors that determine if they are going to be approved are their debt-to-income ratio and their down payment ability. Paying down credit card debt will only help an applicant’s debt-to-income ratio. However, the applicant should not deplete their liquid assets so much that they can’t afford the required down payment.” -- Brandon Severino, HomeDirect Mortgage, Overland Park, Kansas

Penny Hoarder tip: To qualify for a good rate on a home loan, you’ll need a good credit score. To improve that score, sign up with a free service like Credit Sesame. It shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

Now it’s the financial advisers’ turn.

We asked them what question they get asked most often, and here are their replies:

The Big Question

Every financial adviser get asked some version of this: Can I afford to retire? When can I retire? Will I have enough saved to retire the way I want?

Answer No. 1: “I typically answer that question with another question and that's, ‘What does retirement look like for you?’ It's different for everybody. If you want to relax, read books, spend time with family and not spend too much money, then you're looking at a pretty affordable retirement and it might not be much of an issue for you. However, some people want to travel and buy second homes, etc. The first thing we need to do is drill down and define what type of retirement a client is looking for. From there we would determine through cash flow analysis and other avenues if that's achievable or not.” -- Chuck Mattiucci, senior vice president, Fort Pitt Capital Group, Pittsburgh, Pa.

Answer No. 2: “It depends on how much you’ve saved up, current debt load and the lifestyle you desire in your retirement years. So let’s run the math and see when you can.” -- Brett Anderson

Answer No. 3: “Many advisers will run comprehensive plans which show the probability of successfully funding your retirement both in bull and bear markets. For those that fall short, we assist with budgeting, starting small by initially ensuring that clients are putting at least 10% into retirement savings.” -- Maggie Johndrow

Answer No. 4: “The amount of income you'll need at retirement has a direct impact on how much you need to have saved. If a person has $3 million saved but requires an income of $200K a year, they are worse off than a person who has $1 million and only needs an income of $40K a year.” -- Karen Lee, president, Karen Lee & Associates, Atlanta, Georgia

Other Burning Questions

Financial advisers get asked a lot of other questions too. Here are some highlights:

How much should I be saving for retirement? How much do I need to accumulate before I can retire comfortably?

Answer No. 1: “15% of income, invested over your working years, should provide for a secure retirement.” -- Ben Westerman, senior vice president, HM Capital Management, St. Louis, Missouri

Answer No. 2: “Take what it costs you to live today -- both spending and taxes -- and multiply this amount by 25. This would equate to a planned withdrawal rate of 4% over your lifetime. To this sum, you can add Social Security income which may allow for a lower withdrawal rate or can be a supplement to what you withdraw from your investments. -- Kevin Gahagan, chief investment officer, Mosaic Financial Partners, San Francisco.

What do you think will happen if (insert whatever apocalyptic event the financial media is currently focusing on) happens?

It doesn’t matter because it’s out of our control and we don’t waste time focusing on things we can’t control. Short-term events rarely have a material impact on a long-term financial plan. Time heals everything for the patient investor, so as long as you stay the course and don’t panic, there’s nothing to worry about.” -- Andy Yadro, financial planner with Googins Advisors in Madison, Wisconsin

How can I help my child pay for college?

“This question often comes too late and the answer usually is student debt.” -- Michael P. Griffin, accounting and finance lecturer, University of Massachusetts, Dartmouth.

How much of a down payment should I make on my first home?

“The 20%-down rule is largely outdated, as wages have largely stagnated over the last three decades while general inflation and real estate appreciation have continued upward … Waiting to buy a home until you have a 20% down payment is impractical for many people. If you can save for a 20% down payment within a 5-year period, do it. If not, shoot for 10%, or at least do 5% down.” -- Justin Chidester, owner of Wealth Mode Financial Planning in Logan, Utah.

In what order should I do the things I know I should be doing?

“Organization and prioritization are the biggest questions on people’s minds and serve as an obstacle to people getting help because it feels too big and overwhelming, so they do nothing. By focusing on a process-based planning approach that helps a client get organized first and focus on accomplishing things in the right order, we are able to bring a sense of financial balance to the client’s situation as we help them pursue their goals.” -- James M. Matthews.

Disclaimer: This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He could definitely use some advice.

Fires and lightning and hail, oh my!

If you own a home, you probably have insurance to protect it from threats like these, and from other scary stuff like windstorms, vandalism, explosions, cars running off the road, or airplanes falling from the sky.

And if you have a mortgage on your home, you have no choice here: You’re required to have homeowners insurance.

So here’s one more reason to maintain a decent credit score.

Your credit history is having more and more of an impact on your homeowners insurance rates, according to a new analysis.

If your credit rating is poor, your insurance premium is more than double the rate a homeowner with excellent credit is paying, according to the InsuranceQuotes.com report.

In other words, here’s another way the world isn’t fair.

If you’re broke and your credit rating stinks, you get to pay twice as much as someone who’s NOT broke. Yes, this is how the financial world works.

“Many consumers aren’t even aware that, in most states, credit plays a significant role in determining how much you pay for home insurance,” says Laura Adams, a senior insurance analyst for InsuranceQuotes. “So even if you don’t plan on using credit to borrow money, it still affects your finances.”

Previous studies had come to the same conclusion. The new development here is, the penalty for having lousy credit is getting worse and worse.

People with “fair” credit paid an average of 36% more for homeowners insurance in 2016 than people with excellent credit, according to the study. That’s up from 32% in 2015 and 29% in 2014.

People with poor credit paid 114% more in insurance premiums -- up from 100% more in 2015 and 91% in 2014.

Why does your credit rating have an effect on the price of your homeowners policy?

David Snyder, vice president for policy development and research with the Property Casualty Insurers Association of America, told The New York Times that a homeowner's credit history helped predict the likelihood of filing a claim. Insurers are allowed to base rates on factors that affect risk, he says, “and this is simply one of those.”

What Can You Do?

First of all, if you need homeowners or rental insurance, be sure to shop around.

Insurance companies are notorious for wildly varying rates, so call around and ask for the same coverage from each company to see which one offers the best deal.  

Consider bundling your car and home insurance policies to get a better deal.

More importantly, take concrete steps to improve your credit score.

How exactly do you do that? Here are three ways to get started:

1. Figure Out What You’re Dealing With

Map out exactly what kind of debt you have.

For example, which companies do you owe money to? Are any of your debts in collections? What are your minimum monthly payments on each credit card or loan?

An easy way to do this is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

2. Consolidate Your Debt

Once you fall behind, you may find yourself getting crushed by credit card interest rates north of 20%. You’ll never catch up that way. You’re spending so much on interest, you’ll never pay off your balances.

If you’re financially treading water like this, it might be worth consolidating and refinancing your debt.

By refinancing an existing loan, you’re taking out a totally new loan, which comes with new terms and (ideally) a lower interest rate. By consolidating your existing loans, you lump all your debt into one big payment, so you’re only making one payment and dealing with one interest rate per month.

Make sense but don’t know where to start? Credible is an online marketplace that offers consumers personalized loan offers. Think of it like Zillow -- but for personal loans.

Rates start at 5.99%, and you can check yours by entering a loan amount here ($500 to $40,000) and comparing your personalized options in under 90 seconds.

3. Protect Your Identity

What if you work hard to pay down all your debt and you’re totally responsible with your credit going forward -- only to take a hit because of identity theft?

We know you don’t want to risk all your hard work.

A free service like TrueIdentity helps you avoid this situation by keeping a watchful eye on your finances. It sends alerts by email, phone or text if someone tries to apply for credit in your name.

If you improve your credit score, you won’t have to pay as much to insure your home against fires and lightning and hail.

Not to mention those pesky airplanes falling from the sky.

Disclosure: This post contains affiliate links. May we all be a bit richer today.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. Because he lives in Florida, he has homeowners insurance, flood insurance and windstorm insurance.

OMG, we thought we’d seen it all. We really did. But we were wrong. SO WRONG.

There we were, innocently surfing the web looking for Mother’s Day deals, when we chanced upon KFC’s astounding new Mom’s Day giveaway.

It’s …

It’s …

Well, it’s not mild. It’s spicy.

It’s finger-lickin’ good.

It’s “Tender Wings of Desire,” a romance novella featuring Col. Sanders himself as the love interest. Yes, you read that right.

[caption id="attachment_55853" align="alignnone" width="1200"] amazon.com[/caption]

There he is on the cover. The white hair and mustache, the nerd glasses, that weird skinny white beard, the white (sleeveless?) suit -- and his glistening, muscled biceps manfully lifting up our fiery redheaded heroine and carrying her away from all her troubles. (SIGH.)

Mothers -- or anyone, really -- can download this cultural artifact here on Amazon absolutely free for a limited time.

It’s an ebook, which unfortunately means you can’t display it proudly in a prominent place on your bookshelf, and that’s too bad because we totally want to do that. We totally would if we could.

However, KFC says it also plans to surprise 100 fans on Facebook with the chance to win dinner and a hard copy of the book.

As of this writing, the only thing about the novella on KFC’s Facebook page is a link to this YouTube video, which starts out with: “This Mother’s Day, let Col. Sanders take care of dinner -- and Mom’s fantasies.” The video gets even more bat$&%# crazy from there.

“The only thing better than being swept away by the deliciousness of our Extra Crispy Chicken is being swept away by Harland Sanders himself,” said KFC advertising director George Felix, who is clearly embracing this whole thing. “So this Mother's Day, the bucket of chicken I get for my wife will come with a side of steamy romance novella.”

For some reason the Colonel’s love story is not set in Kentucky, but in Victorian England instead. (Guess that’s more romance-y.) With a mix of fascination and self-loathing, we read the plot description on Amazon:

When Lady Madeline Parker runs away from Parker Manor and a loveless betrothal, she finally feels like she is in control of her life. But what happens when she realizes she can’t control how she feels? When she finds herself swept into the arms of Harland, a handsome sailor with a mysterious past, Madeline realizes she must choose between a life of order and a man of passion. Can love overcome lies? What happens in the embrace of destiny, on the Tender Wings of Desire?

So why is KFC doing this -- other than the fact its advertising executives are apparently smoking crystal meth or something? I mean, this is the restaurant chain that gave us fried-chicken-scented sunscreen, secret-spice-scented candles and chicken-flavored edible nail polish.

It turns out that Mother's Day is KFC’s best-selling day of the year. The restaurant chain sees a 40% jump in sales, serving about 380,000 families on that day. For those of you keeping score at home, that’s 6.5 million pieces of chicken, 900,000 servings of mashed potatoes and gravy, and 480,000 helpings of coleslaw.

“Tender Wings of Desire” is KFC’s very first romance novella, just in case you were wondering.

As you read this bodice-ripper, you might embrace it as a fun, free publicity stunt. Or it might leave you deeply disturbed, with emotional scars that will last a lifetime.

But if you ask us, the Colonel makes a natural love interest. After all, women love a man in uniform. And we have no doubt that our hero will bring his secret blend of herbs and spices to the occasion.

No word yet on whether he’s a leg or breast man.

Your Turn: You choose -- Fabio or the Colonel?

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s deeply ashamed for having written this, yet he feels an undeniable craving to eat an entire bucket of chicken by candlelight right now, with a glass of Chianti.

When we shop for groceries, we want the meat and produce to be fresh. We appreciate good customer service. And we like a bargain.

When it comes to customer satisfaction at the supermarket, you’ll see various surveys that rank different grocery stores at the top. Sometimes you’re king of the hill, and sometimes you’re not.

A new survey puts Kroger at the top. Kroger! That’s a different result than some other surveys we’ve seen.

Morning Consult, a public opinion data company, got the opinion of nearly 200,000 consumers on 500 of America's biggest brands.

When it came to grocery stores, 53% had a favorable view toward Kroger. Whole Foods was second with 48%, and Safeway followed at 40%. Regional chains Albertsons and Publix were each at 33%.

If you’re going to check out any these supermarkets to see if you like them as much as other customers do, you should check out our tips on saving. Here are our money-saving secrets for shopping at Kroger, Whole Foods and Publix.

No matter where you’re grabbing your grub, don’t miss our 11 smart changes that'll save you big bucks at any supermarket.

What’s the Best Grocery Store? Depends Who You Ask

So according to this new survey, Kroger is king. Yay, Kroger! But like we mentioned, different surveys have shown us different results.

For instance, the American Customer Satisfaction Index conducts an in-depth survey of customer satisfaction at grocery stores every year. Most recently, the highest-ranking chains in ACSI’s survey were Trader Joe’s, Publix, Aldi, H-E-B, Wegmans and Whole Foods, in that order.

Kroger was in the middle of the pack.

Ranked lowest: Walmart.

Walmart was also at the bottom of Consumer Reports’ grocery store ranking. Consumer Reports surveyed its readers, asking them to rank supermarket chains based on factors like freshness, selection, cleanliness, customer service and prices.

In fact, Walmart is routinely ranked the worst for customer satisfaction among grocery stores, even though more Americans buy their groceries at Walmart than anywhere else.

Time magazine spells out the reason why Walmart has become Americans’ most popular destination for groceries: “For a large portion of shoppers, price simply trumps all when it comes to groceries.”

If you’re shopping for food at Walmart, you’re probably doing it to save money. Here’s how to save even more money there.

Your Turn: Where is your favorite place to shop for groceries?

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. Full disclosure: He personally shops at Aldi, Publix, Winn-Dixie or Walmart, depending on his family’s needs and what’s on sale.

The Force will be with us -- always.

Because "Star Wars" has embedded itself so deeply into our cultural DNA, it continues to shape the way we think about life.

Over eight movies and counting, “Star Wars” has taught us about overcoming obstacles, about dealing with family drama, about friendship, about patience, about beating the odds -- and even about money.

Because this is The Penny Hoarder, we’re especially interested in the part about money.

Even though the epic saga of Luke Skywalker & Co. played out a long time ago in a galaxy far, far away, the financial wisdom we gleaned from it applies to the here and now.

Now, prepare to make the jump to hyperspace! Here’s what we’ve learned:

1. Always Pay Your Debts -- Or Else

Bingo. This is always the first one everyone thinks of.

Han Solo owes money to the giant slug-like crime boss Jabba the Hutt. When he doesn’t pay up, Jabba sends bounty hunter Boba Fett after him -- basically a debt collector with blaster pistols and green Mandalorian armor.

Instead of declaring Chapter 7 bankruptcy, Han ends up frozen in carbonite. Then Princess Leia, Luke, Lando Calrissian, Chewbacca and the iconic droids have to infiltrate Jabba’s lair to save him in a sequel.

Just like with Solo, the longer you don’t pay off your debts, the bigger the problem gets. The interest piles up.

Your first step should be to figure out what you’re dealing with. Map out exactly what kind of debt you have. For example, which companies do you owe money to? Are any of your debts in collections? What are your minimum monthly payments on each credit card or loan?

An easy way to do this is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

2. Used Vehicles Offer the Best Value

The Millennium Falcon takes its share of verbal abuse in multiple "Star Wars" films.

“You came in that thing? You’re braver than I thought,” Princess Leia says upon first seeing the starship. And in “The Force Awakens,” Rey calls the ship “garbage.”

But the Millennium Falcon gets the job done. (Did we mention that it made the Kessel Run in less than 12 parsecs?) Turns out you don’t always need a shiny new vehicle.

Used cars are often a better deal than new ones. Consumer Reports recommends buying a car that’s two or three years old. For tips on buying a used car, go here or here or here.

You’ll need to take care of your ride, though. (The Falcon’s hyperdrive keeps breaking down despite Chewbacca’s best efforts in “The Empire Strikes Back.”)

According to a recent AAA survey, 1 in 3 U.S. drivers can’t pay for an unexpected auto repair. Consider creating an emergency fund with a high-yield bank account.

Online bank Aspiration’s Summit Checking account offers up to a 1% interest rate, almost 100 times higher than the average interest rate at most banks.

3. Negotiate the Best Deal You Can

Early in “A New Hope,” Luke and Uncle Owen are bargaining with some creepy little jawas over the price of some used droids.

When an R2 unit they’d just bought immediately breaks down, Uncle Owen aggressively questions the quality of what the jawas are selling: “Hey, what are you trying to push on us?”

The result: Luke’s family gets the best droid ever, R2-D2.

You might not have any droids, but you probably have a few bills, right? A free app like Clarity Money can automatically negotiate your bills down on your behalf. If Clarity successfully negotiates a bill for you, it charges you 33% of that savings -- but only once, and only after those savings have gone into effect.

Moral of the story: Always look for leverage in negotiations.

4. “Do or Do Not. There is No Try.”

Yoda’s admonition to Luke in “The Empire Strikes Back” is probably the biggest zen moment in any of these movies.

As always, Yoda is right on target. You’re either going to do it, or you’re not. Don’t just try.

If you’re going to make financial changes, commit to them and be consistent. Don't just try once or twice and then forget about it. Sticking to it is the key to success.

For instance, saving money is hard. Consider trying an app like Acorns.

Once you connect it to a debit or credit card, it rounds your purchases up to the nearest dollar and funnels your digital change into a savings or investment account.

Because the money comes out in increments of less than $1, you’re less likely to feel an impact in your bank account.

5. Don’t Let the Little Details Blow Up On You

The Empire spared no expense on the Death Star, don’t you think?

You’ve got to figure that moon-sized battle stations capable of blowing up planets don’t come cheap (especially two of them).

But they overlooked that pesky little design flaw that allowed the Rebel Alliance to destroy the whole thing. Whoops!

Don’t neglect the details like that, because they’ll burn you. Don’t skimp on maintenance and repairs for big-ticket items like your home and car. If you blow that stuff off, you’ll just end up paying more in the end.

Another lesson from the Death Star: Don’t put all your eggs in one basket. The Empire sure had a lot riding on its supercool Death Star, didn’t it?

Don’t depend on just one thing. Diversify your investments. An app like Stash will invest your money in a set of portfolios reflecting your beliefs, interests and goals. It’ll pull a specific amount from your bank account at regular intervals, so you can grow those investments over time.

6. Get Rid of Your Old Stuff

The "Star Wars" universe looks different than Star Trek and other sci-fi settings. "Star Wars" has that “lived-in” look -- there’s junk everywhere. You know, just like your house.

And in the "Star Wars" movies, people make money selling that junk -- just like you should.

In “The Force Awakens,” Rey is a scavenger on the planet Jakku, feeding herself by salvaging parts from ships

On Luke’s home planet of Tatooine, those jawas we mentioned earlier appear to be scavengers, too.

In “The Phantom Menace” -- hey, here’s our first and only mention of the prequels! -- Qui-Gon Jinn and Obi-Wan Kenobi meet young Anakin Skywalker in a junk shop where he fixes things.

Meanwhile, here on our planet, a number of apps are making it easier than ever to sell your old stuff online.

To free up space and earn some extra cash, use the Decluttr app to sell your old CDs, DVDs, Blu-Rays, phones, video games and gaming consoles.

To sell other types of clutter, check out these other free apps:

  • letgo: You can sell almost anything on this app.

7. Beware of Scams. Know What Things are Worth.

Toward the beginning of “The Force Awakens,” a hungry Rey nearly pawns the droid BB-8 in exchange for 60 portions of inflatable food. She’s sorely tempted, but senses something is wrong and backs off.

That’s the surest way to spot a scam: If a deal looks too good to be true, it probably is.

Whether you’re selling a droid or shopping for shoes online, you’ve got to watch out for rip-offs. Here’s how to protect yourself from imposter scams, credit repair scams, identity theft, senior scams and online mobile shopping scams.

Since identity theft remains a huge problem these days, a free service like TrueIdentity will help protect you by keeping a watchful eye on your finances. It sends alerts by email, phone or text if someone tries to apply for credit in your name.

8. Embrace the Gig Economy

When Luke and Obi-Wan need transportation to Alderaan, they basically catch an Uber. A space Uber. They pay for the Millennium Falcon to take them there.

Here on Earth, you can make like Han and Chewie in your Honda or Chevy by driving for Uber or Lyft and make extra money each week on your own schedule.

There are other entry-level ways to make money nowadays that you can do on your own time -- and from your phone -- thanks to the growing gig economy.

Craigslist is an easy place to sell your services under the “Gigs” section. Pay and tasks will vary, of course. And if you don’t trust Craigslist, check out TaskRabbit or Fiverr -- to name just a few.

9. If the Deal Turns to the Dark Side, Cut Your Losses

Here at The Penny Hoarder, we’re always looking for good deals.

We’re always asking, Is this a good deal or not a good deal? And when we hear the words “deal” and “"Star Wars",” we can’t help but think of Lando in “The Empire Strikes Back.”

Lando … Lando did not get a good deal.

When Han, Leia and Chewie first turn up in Cloud City, Lando tells them, “I’ve just made a deal that'll keep the Empire out of here forever.”

Of course, the deal involves betraying his friends. Later, Darth Vader menacingly informs Lando, “I am altering the deal. Pray I don't alter it any further.”

Still later, when Vader threatens Lando further and mistreats his friends, Lando fumes, “This deal is getting worse all the time!”

That’s when he switches sides.

If you make a deal and the reality doesn’t match what you were promised, be prepared to walk away. Cut your losses and move on.

10. Sand People Always Walk in Single File to Hide Their Numbers

You see, from this we can learn that … no, no, wait. That’s not a good example at all. We learn no financial truths from that.

We’ve got nothing for you here.

Let’s try this instead. One of the most important lessons we learned from "Star Wars" is:

10. Make Sure You Have a Long-Term Plan

The heroes and villains of the "Star Wars" universe are seriously into some long-term planning.

Emperor Palpatine’s master plan takes several movies to unfold. After he reveals himself to be Darth Sidious and strikes, Yoda and Obi-Wan lay low for a couple of decades after the prequels, waiting for their chance to return the favor.

Of course, when we first meet Obi-Wan and Yoda, they’re chilling in a cave and a swamp, respectively. Apparently the Jedi Council didn’t have much of a 401(k) match.

The sooner you start saving, investing, and paying down your debt,  the better off you’ll be.

A confession here: We can’t come up with any financial lessons from “Rogue One.” All we remember right now are the cool space battles.

All told, that’s everything that "Star Wars" has taught us about money over eight-movies-and-counting. Take it as you will.

Do, or do not.

There is no try.

Your turn: What money management tips have you learned from "Star Wars"

Disclosure: This post contains affiliate links. May we all be a bit richer today.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. His "Star Wars"-loving co-workers helped out with this post.

Holy guacamole!

Avocado prices are skyrocketing. That tasty bowl of guac for your tortilla chips on Cinco de Mayo is going to be pricy.

Avocados cost more than twice what they did a year ago, according to Bloomberg. Prices are higher than they’ve been going back nearly 20 years.

What’s more, they’re expected to stay that way all summer.

What’s the deal with expensive avocados all of a sudden?

As usual, you can blame those wacky, unpredictable market forces: supply and demand. Oh, those crazy kids supply and demand, always causing mischief.

Here are two reasons the supply of avocados is down:

  • A growers’ strike in Mexico, which supplies more than 80 percent of the avocados eaten in the U.S.

  • A drought in California, which supplies the rest of America’s avocados. California production is expected to drop 44% this year.

Meanwhile, here are two reasons the demand for avocados is up:

  • They’re so doggone healthy. Avocados contain healthy oils and fats as well as the highest protein content of any fruit -- catnip to health-conscious Americans. The average American consumed nearly 7 pounds of avocados in 2015 compared to just half that amount in 2006, according to the U.S. government.
  • China. Suddenly, China loves this creamy green fruit. Exports of avocados from Latin America to China have been growing by about 250% a year, according to the Financial Times.

What Can We Do About This Civilization-Threatening Crisis?

“But I want my guacamole!” we hear you saying.

We understand, believe us. Nothing compliments a nice salty tortilla chip or a crisp baby carrot like a generous helping of fresh guac.

Maybe with a margarita on the side?

You can taste it right now, can’t you? Yeah, so can we.

Here are two articles that can help.

First, get your money’s worth with these five affordable avocado recipes. (This article is titled “5 Avocado Recipes for Less Than $5,” but with the surging cost of avocados, we can’t guarantee that price range is 100% accurate anymore.)

Second, don’t let your avocados go to waste. Those things are getting expensive, man. If your avocadoes get a little mushy, don’t throw them away. Instead, try these 11 yummy recipes for overripe avocados.

Happy Cinco de Mayo!

Your Turn: Will you do without avocados, or will you pay extra for guac?

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He loves him some fresh guac.

You’ve probably seen this bumper sticker somewhere: I Owe, I Owe, So Off To Work I Go.

Yup, we owe.

An eye-opening new study painfully details just how much debt Americans are carrying around, and the results are nothing short of astonishing.

If you look at its findings, you might have one of the following reactions:

  • Man, we all have a ton of debt.
  • Wow, I thought I had debt, but apparently a lot of my neighbors are REALLY in debt. Like, up-to-their-eyeballs in debt.
  • Jeez, we sure don’t deny ourselves when it comes to extras like hobbies or travel or entertainment, do we?
  • Ugh, I really do need to get out of debt.

Never fear. We’re here to help you with No. 4.

The new report, commissioned by financial services company Northwestern Mutual, studied the finances of nearly 3,000 people. It paints a picture of Americans who are deep in the red but keep on spending like there’s no tomorrow.

Here are some of the scariest tidbits:

  • 1 in 10 Americans have more than $100,000 in debt, not including their mortgages.
  • Nearly half the country owes at least $25,000.
  • The average American borrower owes $37,000.
  • 4 in 10 say debt causes them anxiety and impacts their financial well-being.
  • 1 in 10 have so much debt, they’re pretty sure they’ll die in debt.

So! Now that we’ve cheered you up with these fun facts and figures, there’s also this to think about:

After paying for basic necessities like food and housing, Americans spend 40% of their income on fun things like travel, entertainment and hobbies. Meanwhile, just 33% goes to pay off debt.

Experts say that’s a no-no.

“Building financial security while saddled with high debt is like running a race with a weight around your ankle,” says Rebekah Barsch, Northwestern Mutual’s vice president of planning. “We are carrying around this debt that is getting more expensive the longer we hold onto it, and then spending on things that are not essential.”

It doesn’t have to be this way.

Trying to figure out how to get out of debt? Here are three ways to get started:

1. Map Out What You’re Dealing With

Figure out exactly what kind of debt you have.

For example, which companies do you owe money to? Are any of your debts in collections? What are your minimum monthly payments on each credit card or loan?

An easy way to do this is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

2. Consolidate Your Debt

Once you fall behind, you may find yourself getting crushed by credit card interest rates north of 20%. You’ll never catch up that way. You’re spending so much on interest, you’ll never pay off your balances.

If you’re financially treading water like this, it might be worth consolidating and refinancing your debt.

By refinancing an existing loan, you’re taking out a totally new loan, which comes with new terms and (ideally) a lower interest rate. By consolidating your existing loans, you lump all your debt into one big payment, so you’re only making one payment and dealing with one interest rate per month.

Make sense but don’t know where to start? Even is an online marketplace that offers consumers personalized loan offers. Think of it like Zillow -- but for personal loans.

Rates start at 4.83%, and you can check yours by entering a loan amount here (up to$35,000) and comparing your personalized options in under 90 seconds.

3. Protect Your Identity

What if you work hard to pay down all your debt and you’re totally responsible with your credit going forward -- only to take a hit because of identity theft?

We know you don’t want to risk all your hard work.

A free service like TrueIdentity helps you avoid this situation by keeping a watchful eye on your finances. It sends alerts by email, phone or text if someone tries to apply for credit in your name.

Now is the time to start tackling your debt in earnest.

You don’t want to be one of the 1 in 10 Americans who are sure they’ll be in debt ‘til they die.

That’s no way to live.

Your turn: How much debt do you have?

Disclosure: This post contains affiliate links. May we all be a bit richer today.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s quite familiar with debt, based on personal experience.

[caption id="attachment_55099" align="alignnone" width="1200"]jimmy john’s jimmyjohns.com[/caption]

As food deals go, it’s hard to beat a $1 sub.

So mark this one on your calendar: On Tuesday evening, Jimmy John’s is serving up $1 subs to celebrate the chain’s Customer Appreciation Day.

This deal will be available at participating locations nationwide from 4 p.m. to 8 p.m. Tuesday, May 2. If you’re planning to hit up your local Jimmy John’s for a $1 sub, check this page to confirm it’s participating.

A few things to keep in mind:

  • This is for in-store purchases only. No deliveries, you lazy bums.
  • This deal is getting some publicity, so you may have to wait in line at some locations.
  • There’s a limit of one sub per customer, but Jimmy John’s FAQ says you can go back through the line for more orders if the store is OK with it.
  • Some locations may charge extra for wheat bread.

There’s one other thing you should know beforehand. The $1 deal only applies to the chain’s BLT sandwich and six Plain Slim sandwiches:

  • Double provolone cheese
  • Ham and provolone cheese
  • Roast beef
  • Salami, capicola and provolone cheese
  • Tuna salad
  • Turkey breast

Your Turn: You hungry for a $1 sub?

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He likes a good ham and provolone sub.

For just a minute, forget all the bad news we get dumped on us every day.

Here’s an honest-to-goodness, real-life, genuine, bonafide bit of good news. Actual good news. Scout’s honor.

Next time you apply for a car loan, new credit card or an apartment lease, your credit score might be more forgiving -- even if you’re carrying some debt.

Why’s that? Because one of the major credit scoring models is dramatically changing the way it looks at your debt.

VantageScore is a credit scoring model developed by the three major credit reporting bureaus -- TransUnion, Equifax and Experian.

Beginning this fall, VantageScore will look more at “the big picture.”

That means it will evaluate the overall trends of your credit use over time, instead of simply judging how creditworthy you are based on one particular snapshot in time.

Here’s the upshot, according to the Washington Post: It will calculate whether you’ve been actually paying off your debt or just racking up more of it.

The website Lifehacker put it another way: “This could be a drawback for some consumers, but it’s good news for consumers who are actively working to pay down their debt.”

This is more good news for consumers. As we reported in April, 12 million Americans might see a credit score bump in July because the major reporting agencies are dropping tax liens and civil judgements from creditworthiness evaluations.

How to Make This Work For You

Of course, in order to make this change work in your favor, you have to actually be trying to pay off your debts.

When it comes to buying a house, most mortgage lenders use your FICO credit score, which is calculated differently.

However, many other lenders will be checking out your VantageScore before extending you credit.

Now more than ever, it’s important to tackle your debt. The conditions have never been riper to raise your credit score. Your chances of getting a favorable interest rate on your next auto loan or credit card depend on it.

How exactly do you do that? Here are three ways to get started:

1. Figure Out What You’re Dealing With

Map out exactly what kind of debt you have.

For example, which companies do you owe money to? Are any of your debts in collections? What are your minimum monthly payments on each credit card or loan?

An easy way to do this is to sign up with a free service like Credit Sesame. This tool shows your balance on any unpaid bills, credit cards or loans. It also offers tips on reducing your debt and raising your credit score.

2. Consolidate Your Debt

Once you fall behind, you may find yourself getting crushed by credit card interest rates north of 20%. You’ll never catch up that way. You’re spending so much on interest, you’ll never pay off your balances.

If you’re financially treading water like this, it might be worth consolidating and refinancing your debt.

By refinancing an existing loan, you’re taking out a totally new loan, which comes with new terms and (ideally) a lower interest rate. By consolidating your existing loans, you lump all your debt into one big payment, so you’re only making one payment and dealing with one interest rate per month.

Make sense but don’t know where to start? Even is an online marketplace that offers consumers personalized loan offers. Think of it like Zillow -- but for personal loans.

Rates start at 4.83%, and you can check yours by entering a loan amount here (up to$35,000) and comparing your personalized options in under 90 seconds.

3. Protect Your Identity

What if you work hard to pay down all your debt and you’re totally responsible with your credit going forward -- only to take a hit because of identity theft?

We know you don’t want to risk all your hard work.

A free service like TrueIdentity helps you avoid this situation by keeping a watchful eye on your finances. It sends alerts by email, phone or text if someone tries to apply for credit in your name.

Again, now is the time to be doing all this. Since credit rating agencies are going to be evaluating the “big picture” of how you use credit over time, this is your opportunity to paint a prettier one.

Your turn: Do you know your credit score?

Disclosure: This post contains affiliate links. May we all be a bit richer today.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. Frankly, his credit score could be better.

With the cost of cable staying north of $1,100 per year, the cord-cutting trend is gaining serious momentum. It looks like a whole lot of cords are getting cut these days -- more and more every year.

Here’s an eye-opening statistic: By the end of this year, nearly a quarter of Americans will no longer have a traditional cable or satellite TV subscription.

Nearly 1 in 4!

That’s the prediction according to consulting firm Convergence Research Group’s new report. This report is flatteringly titled, “The Battle for the American Couch Potato.” (C’mon, strategic consulting guys, don’t try so hard to butter us up.)

The group shows the acceleration of the cord-cutting trend:

  • The number of TV subscribers in the U.S. dropped by an estimated 2.05 million in 2016.
  • That followed a decline of 1.16 million in 2015.
  • This year, the analysts are forecasting a 2.11 million decrease in subscribers.
  • That will result in 24.6% of U.S. households being without a TV subscription from a cable, satellite or telecom company.
  • For the traditional TV industry, it’s not the end of the world yet. The industry’s revenue grew 3% to $107.3 billion in 2016, and the study predicts revenue will hit nearly $109.6 billion in 2017.
  • However, streaming services like Netflix, Hulu and Amazon Prime -- which we compared here -- are growing way faster.
  • Streaming services’ revenue shot up 32% to $8.3 billion last year. It’s expected to reach $11.2 billion in 2017 and $14.7 billion in 2018.

If you’re thinking about cutting the cord, here are a few places to get more information:

Cord Cutting 101: Here’s how to watch your favorite shows without cable.

How to figure out if cutting the cord is right for your household.

Streaming Service Smackdown: Hulu vs. Netflix vs. Amazon Prime.

Your Turn: Do you still have cable or satellite TV?

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He is uncool and still has cable.