How To Get Fit On A Budget

14 Apr

It’s that time of year again: we’re on the verge of summer. Thank goodness! Many of us hibernated more than normal this year because this winter was, well…let’s just say less than desirable. If you’re like me, it also took away my usual motivation to exercise because I wanted to just curl up on my couch with a blanket and watch Netflix. However, my health is important to me. So here’s what I did to get out that rut, along with other ideas to exercise and get (or stay) fit on a budget.

Choose a goal

There are many different types of goals you out there. My friend asked me if I wanted to do Grandma’s half marathon with her and at first I thought she was crazy. But I ended up saying yes because I realized if I have an end goal, it motivates me more to work out on a regular basis. Plus, I’ve never done a half marathon, so hopefully I’ll be able to check that one off of the bucket list.

Now a half marathon might be a little too much, especially if you don’t run. But there are a ton of 5k run/walks out there and “couch to 5k” plans. Or think about an event or milestone as a goal. Do you have a class reunion, wedding, birthday, or vacation coming up? It helps to think of something in the future to work toward. Visit Running In The USA to find races in your area.

If you can, find a work out partner

I found over the last 2 months that because I have 4 work out “partners” I am more motivated to eat better and stick to my running plan. Now when I say partner, I’m not saying that I exercise with someone every single time or even once a week. In fact, it’s only been a few times, but even more important are the conversations, texts, or emails about how we’ve all been doing. Even talking about our struggles helps us overcome them. I’ve also found that my dog expects me to take her out on runs now. I can’t let her down, can I?

There are LOTS of cheap or free workout options

Start with the obvious – be active and take advantage of the outdoors. And try to make it fun with friends or your favorite music.

  • Get out during your work day. Go for a walk by yourself or take a co-worker or two with you. Accountability can be huge. Tell each other that you want to get out 3-4 times/week. You’ll find that either you will hound them to get out or vice versa, which is good for not only your physical, but also your mental health to step away from your desk for a while.
  • Take your dog for a walk, jog, and/or run regularly. I’m really not a runner, but you’d be surprised what you can accomplish when you just start. Begin by running for a few minutes and increase it a little every time you go.
  • Get a group of friends together to play basketball or sand volleyball on a regular basis.
  • If you have a smart phone, computer, or other electronic device that has internet access you can pretty much find any work out there is online. And there are a ton of work outs using your own body weight that don’t require purchasing any equipment. YouTube is a great resource for videos, also.
  • Do you have kids? Play games outside, go to the park, or have a dance party.

The key here is do what you can and be realistic

The food we eat also plays a huge factor in our health. Check out ‘How to eat healthy without wasting your money…and saving some money.’

Are you looking for tangible advice to improve your financial health as well? Call LSS Financial Counseling at 888.577.2227 to set up an appointment with a Financial Counselor. We can help you conquer your debt and achieve your financial goals. You can also get started on an online budget counseling session right now. Just click the button below!

Author Elaina Johannessen is a Counseling Supervisor at LSS Financial Counseling.


Savings 101: Emergency Savings vs. Periodic Savings

07 Apr

Everyone knows that having money set aside in savings is important, but either we can’t afford to put away money right now or we choose not to because living in the present is much more enjoyable. When you’re cold and miserable stuck in Minnesota during the coldest winter in years, you would likely rather go on a Caribbean vacation than build up savings. In this case, however, instant gratification is probably not worth it if you’re depleting all of your savings or worse - accruing debt. If you go on that trip and come back to a car that needs a repair, you might not have cash handy to pay for it…which can lead to debt.

So what’s my point? Having different types of savings accounts will allow you to have fun and create a safety net at the same time. The first step is setting up a budget to determine where your money is going and how much you have to set aside in savings.

Emergency Savingsemergency-savings1

This should be automatic monthly or every paycheck. Set aside at least $25-50 per check or per month or whatever is affordable. Your goal should be to have at least 3 months’ worth of your expenses in savings so the more you can afford to set aside, the better. This is your safety net in case of an unexpected event like a job loss. Has something unexpected already come up and you’re not sure what to do? Check out How to pay for the unexpected when you’re broke’.

Periodic Savings

Chances are if you own a car you’ve either had to get it repaired or you will in the near future. If not, then you at least have on-going maintenance. The same goes for our house and even our bodies. People get sick and appliances break. So periodic savings is not an exact science, but the best way to prepare is to determine approximately how much things like car repairs, medical bills, glasses, etc. will cost. Just take the estimated total cost, divide it by 12 and that’s the amount that you should set aside monthly into periodic savings.

Savings for Fun Goals

This last one isn’t in the title of this post, but needs to be addressed. We all have certain things that we’d like to do or buy that aren’t necessarily in our monthly budget. So instead of using every penny you have for a new TV or trip, think about it as a goal instead. If you want to get away from the horrible winter weather next January and a trip to the Bahamas will cost you $1,500, then you’d need to save about $150 per month from April through next January. However, you should still keep setting aside money into emergency savings and periodic savings. Therefore, as mentioned before, it’s crucial to make sure this is realistic and fits in your budget.

For more ideas, read ’4 tips to save like a pro’ and if you will be getting a tax refund, check out 7 money smart ways to spend your tax return’.

Not sure how much you can afford to set aside monthly? Call LSS Financial Counseling at 888.577.2227 and schedule a budget counseling session with one of our Financial Counselors. We’re here to help you meet your financial goals and conquer your debt.

Or click HERE to get started online right now!

How to manage credit through different stages in life

04 Apr

People have different views of credit depending on what’s going on in their lives. How good (or bad) our credit is can affect everything from car insurance rates to getting a job to buying a home. Read Why is credit important?for more details about how credit impacts our daily lives.

Establishing and/or improving credit

When you’re just starting out and have no credit or if you’re trying to rebuild your credit after a bankruptcy (for example), a great way to create good credit history is to open up a secured credit card. Do this through your local bank or credit union and make sure that you make payments on time and don’t charge more than 30% of the limit. The most important thing to remember is don’t charge more than what you could pay for with cash right now.

You can even try taking out a small personal (unsecured) loan with your local financial institution. You may not get the greatest interest rate if you have a low credit score or no score, but establishing a good payment history is key. Determine what is affordable and realistic in your situation.

I’m right where I want to be. Why should I worry about my credit?

Because you never know what the future holds. You might think that you’ll stay with the same company until you retire or the same house for the rest of your life, but sometimes the unexpected happens…and that changes our plans. That’s why even though you think your credit is just fine and you don’t need to worry about it, you should maintain good credit and always keep it on your radar. Check out Using credit wisely and ‘Does my credit score really matter if I don’t use credit? for more helpful tips.

Be proactiveCredit_Report small

Pull your FREE credit report from You can pull reports from all 3 credit reporting agencies (TransUnion, Experian, and Equifax) for free once per year – and it’s recommended to do this every year to make sure there are no errors or fraudulent activity.

How do I decipher this thing?

Credit reports can be tricky to read and sometimes it’s hard to determine where to start if you’re looking to rebuild or improve your credit score. Experienced counselors are available at LSS Financial Counseling to assist you. Call us today at 888.577.2227 to schedule your credit report review. We can help you make sure you’re on the path to a bright financial future.

Looking to conquer your debt? Call us or CLICK HERE to get started on your online budget counseling session right now!

Tips to get your Teen to Stop Asking for Money

02 Apr

When my daughter was 15 I started thinking about how to teach her about managing money with real-life tools. I was tired of her always asking me for money to go to the movies or to buy this or that and me usually responding with “no.” It caused stress for me and disappointment for her. So I thought if I gave her an allowance that would cover most of her “extra” expenses in a month (entertainment, clothing, snacks, etc…), that she could learn how to manage it in a safe way, and it would take some stress off of me. I hoped it might even help prepare her for when she found her first part-time job – then she would have at least some skills and planning her spending and maybe even saving.

The Initial Plan

Dual Checking Account

The first step was to open up a dual checking account. This would allow me to deposit her allowance so she could learn to track her spending and manage a checking account. We went to our credit union (where she already had a savings account) to open her first checking account. They happened to have a promotion for new accounts: she could get $75.00 free for opening an account, but she had to use her debit card at least 5 times in a month. It seemed like a good deal – and she has never been one to turn down free money. So we signed her up.

I decided I would give her $100 a month to start. How much more could a 15-year-old need? I made sure to opt-out of “courtesy pay” so that she couldn’t overdraw her account (or get charged Insufficient Funds Fees) and we didn’t order any checks.

The first month went pretty well…she opened her account with $175 and at the end of the month, her balance was $1.12. No savings, but at least she had something left!

The Plan Backfires

The second month was a bit more difficult. She pulled most of her money out in the first week because there was a dance at school. Then, she went out to the movies with a bunch of friends. By the second week she was asking me for money again. And I gave in! After another month of this happening I held my ground and didn’t give her extra money, but her friends fronted her until the next month at which time she would have to repay them…she was actually going into debt!

We continued the experiment for another 2 months, at the end of which we both decided to close down the checking account. I was frustrated thinking “she’s just an uncontrollable spender” and started worrying about her future and how much debt she might go into. She was sick of me “encouraging” her (or her words, “nagging” her) to save money and hated being in debt to her friends. I also noticed it didn’t work as far as limiting how much I was spending on her “extras.”

In fact, I had spent more! Undeterred, I started looking for answers to the age-old question:

“how do I teach my teen responsibility with money and have her stop asking me for money all the time?”

Look at your own Relationship with Money

This is something that few people are comfortable doing; it can bring on feelings of shame and embarrassment, or even anxiety attacks – even if you are doing a great job with your money. Believe it or not you are shaping your child’s relationship with money based on how you handle it.

  • Do you overspend?
  • Use credit cards for everything?
  • Make a spending plan every month?
  • What do you say about money?
  • What is your attitude towards money?
  • What messages do you send to your kids about money?
  • What lessons are you teaching them?

Our children observe us with keen eyes: they know when we are stressed, and they see the effect money has on us, our relationships, and the family as a whole. Getting your money house in order will give you the confidence to instill good money habits with them. I had to take a long, hard look at what my attitude toward money was and what messages I was sending to her. I realized it mostly from a state of deprivation: “We can’t afford it” was my main message. I also realized my savings was a bit too low and I had a habit of going over my own spending limits. I am sure she heard me complaining of always being broke as well. Not very positive money messages there.

Learn to Say No

From birth our children know how to get what they need from us. As they grow, they learn to also get what they want from us and they have a hard time understanding the difference…or at the very least hearing the word “no.” Whether it’s in the check-out line at your favorite superstore or during a commercial break in your own living room, most parents have been assaulted with “I want it NOW!” from their children.

Some parents can say no and that’s the end of it. Maybe there is a small whimper, or a pouty-face, but the child knows that no means no. If your child is anything like mine, though, no is just permission to ask again. And again. And again. Throughout her younger years I made the mistake of sometimes caving-in to my daughter’s demands and sometimes holding my ground. It was confusing for her. It wasn’t until I consistently set a limit and stuck to it – no matter what “emotional blackmail” she threw at me – that the asking slowly decreased. It has not completely gone away yet, but I like to focus on progress not perfection.

Include your kids in financial discussions

This may sound risky, or uncomfortable to say the least, but it could help your child learn life-long money management skills – especially in tough times. I’m not saying let them decide what car to buy or how much to spend on groceries, but you could sit down as a family and let them know how much you make and then make a list of your expenses so that they can see that there isn’t always “extra” money to order pizza, go to the movies, or buy a smart phone.

But if your family needs to cut back on some expenses to reach a goal (like saving for vacation) or to make up for lost income due to a job loss, illness, or injury it can be a great time to include older children in the discussion of where to cut back. Do you keep the ultra-primo cable subscription or stream movies through the internet so you can save $150 a month? Or do they want the smart phone enough to give up cable/internet? Can they trade in name-brand cereals for generic? Include them in these discussions and you may be really surprised by the creative solutions they come up with.

I did this with my daughter and it blew her away. She was really surprised to see how much it cost just to cover the basics each month. This was when we adopted our new catch-phrase: instead of saying “we can’t afford it” we started saying “it’s not in the budget.” She actually started asking me to see if we could put something in the budget and bargaining for what she would give up. And I started feeling more in control because “not in the budget” implied I had made a choice.

Teach them “Wants vs. Needs”

A need is defined as that which allows you to live with safety and dignity. It’s pretty clear that needs include housing, food, electricity, basic phone service, transportation, and health care. But is a cell phone a need? Maybe in your family it is, but it isn’t for everyone. Is a car a need? It depends on where you live. Is cable and internet a need? Well you have to decide that one (and if you want some tips, read How to Survive Without Cable). When your kids tell you what they think are wants and needs, ask them how they came to their decisions. Help them understand how their peers, advertising, the entertainment industry, and societal norms can make them feel like their wants are needs. The more they are aware, the more they can think for themselves and make informed decisions when spending their money.

Set Limits and Stick to Them

It can be really hard to set limits with our kids, but if we don’t we are really not doing them any favors and may be dooming them to a life-long battle with living paycheck-to-paycheck and/or struggling with debt. It’s an important money lesson to learn that sometimes things worth having are worth working for and that we can’t always have what we want when we want it. Family resources are finite. Does this mean that you and your child have to feel deprived? Not necessarily. Remind them of the list of expenses you already went over with them so that they understand that other things, like groceries, have to come before a smart phone or even the movies with their friends. Then start brainstorming solutions with them. If they really want something, they will figure out how to get it.

The toughest limit I ever set with my daughter was over getting her driver’s license and driving. When she turned 15 and she started getting excited about learning to drive, we talked about the responsibility and expenses of driving a car. My partner and I firmly believe that driving a car is a privilege, not a right, so it was expected that she would pay for half of her driver’s education course and once she got her license she would have to have enough saved to cover a $500 deductible for insurance in case she crashed the car, and she would be responsible for her portion of insurance and gas. I was hoping this would motivate her to get a part-time job and save money, as well as teaching her about the costs of driving. Unfortunately, it didn’t. Well, at least not at first. We live in the city – it was easy enough for her to take the bus to get where she needed and wanted to go; plus she got bus passes for free through her school. She took the easy way out, but that was her choice.

My daughter is 19 now and she still doesn’t have a driver’s license. She could easily go get her license now without even taking driver’s education, but she decided on her own that she doesn’t want to spend that kind of money on driving. Besides, according to her, there are “too many bad drivers out there” and she doesn’t want to contribute to more traffic and “greenhouse gases”. My partner and I bought her a bike for graduation and she tells everyone that we got her a “new set of wheels”. Bike riding is free, doesn’t require insurance, or gas, and it’s great for her health.

So be honest with your teens and include them in decision making processes (when realistic). Teaching them about finances now will help them better manage money as adults.

Do you have a teenager who is driving you to the poor house? What has worked for you? Leave a comment with your tips.

If you need help putting together your own spending plan or paying down debts our Financial Counselors are here to help you figure it out. Give us a call at 888.577.2227 to schedule a free, confidential appointment. LSS is here to help you reach your financial goals and conquer your debt. So don’t wait, take action today! Visit our website at to get started!

Author Shannon Doyle is a Certified Financial Counselor with LSS Financial Counseling and she specializes in student loans and budget/debt counseling.

4 Credit Tips for Seniors

31 Mar

We all know the importance of fitness for a better quality of life. Just like staying physically fit or keeping our minds sharp, financial fitness is just as important. Even though our physical strength and skills may diminish a bit as we age, we can maintain robust finances throughout our lives. The following four tips are intended for seniors but can be adopted by money-conscious folks at any age.

Don’t Co-Sign any Loans

A word of warning here. With good credit, family members and friends may seek you out to co-sign loans they can’t qualify for on their own. Remember, there’s a good reason they don’t qualify. If you co-sign a loan, you are as liable for the debt as the primary borrower. If they don’t pay, the lender will come after you.

Co-signing loans can also affect your credit score negatively. Even if the primary borrower is making timely monthly payments, the loan balance will be lumped into your total liabilities. And too much debt could affect your eligibility for credit if you need it in the future.

Use Credit Cards Occasionally

Use a credit card once in a while to keep your credit active. But keep balances low and make monthly payments on time. Most importantly, pay the monthly balance in full (more below). Just so you know, consumers who use credit moderately are considered a better risk than those who don’t use credit at all.

Don’t Carry a Balance

By the time I retire, I don’t want any more debts. That includes mortgage payments, car loans and credit cards. If you’re still paying a mortgage, try to pay it off as soon as possible. But before you do, you may want to discuss with your tax advisor how eliminating your mortgage will affect your tax situation.

As far as credit cards go, pay the balances in full each month as suggested above. That way, you never pay interest and never carry balances forward.

Check Credit Reports Each Year

Check your credit report annually for accuracy. Get your credit reports free at www.annualcredit or by calling its’ toll free number (1-877-322-8228). If you received free copies within a year of your request, you must pay a small fee.

When you get your credit reports, review them to make sure your name, address, and other personal information are correct. Then look over the account information carefully. Are account balances and payment amounts stated correctly?

If you find errors on your credit reports, call LSS’ Counselor on Call at 1-888-577-2227 for information about how to correct those mistakes. Better yet, schedule an appointment for a Credit Report Review to have one of our certified financial counselors help you.

Keeping our money in shape is important at any age. LSS can help get your debts under control or teach you how to understand your credit report. Remember, we’re just a phone call or email away!

Author Barbara Miller is a Financial Counselor at LSS Financial Counseling. She specializes in Bankruptcy counseling and education. Have questions about rebuilding after bankruptcy? Email us today at


Identity Theft and Taxes. How To Protect Yourself.

27 Mar

According to the Internal Revenue Service, 20-25 percent of Americans wait until the last two weeks before the deadline to prepare their returns. And at that late date, there are only two things you can do: File your taxes asap, or request an extension.

There are many reasons why people procrastinate on filing their returns and really there’s nothing wrong with waiting. Maybe you owe money this year and you don’t have the cash to pay it yet. Or maybe you’ve been busy or maybe you just forgot.

Whatever the reason, protecting your identity information is as important as ever. Especially if you’re scrambling at the last minute. Identity theft is an extremely frustrating process for the victims and occurs when someone uses your personal information such as your name, social security number or other identifying information, without your permission, to commit fraud or other crimes.

Be alert to possible identity theft if you receive an IRS notice or letter that states one of the following:

  • More than one tax return was filed in for you.
  • You have a balance due, refund offset or have had collection actions taken against you for a year you did not file a tax return,
  • IRS records indicate you received wages from an employer unknown to you.

Here are 3 tips to avoid Identity Theft this tax season:

1. Choose a safe and reputable tax preparer.

This sounds like a no-brainer, right? But we’ve all heard stories about people that were taken to the cleaners by a ‘safe’ tax preparer. Do your research. Go online and make sure they are a legitimate company.

Do you know about the “You Earned It You Claim It” campaign? The “You Earned it You Claim it” campaign is bringing information about free tax preparation and the Earned Income Tax Credit to Minnesota residents. There are 250 free tax preparation sites across the state that serve families based on income and family size. Taxes are prepared at these sites by IRS-certified volunteers trained to help you maximize your refund. In addition E-file is available and when used with direct deposit you will get your refund quickly. Click HERE to learn more.

2. Protect your valuable documents

I am going to go out on a limb here and say that every single document you use to prepare your tax return as personal information on it. Be safe with it. Start a folder (or a shoebox) and keep all of the information in one place. If you are like me and my husband you will want to keep last years tax return (if not more) for reference. We file them in a cabinet in our office. If you have a document you no longer need please shred it or burn it. Don’t risk your identity by throwing it in the garbage.

If you have to mail anything with confidential information it is best to go to the post office yourself.

3. Be alert to scams

Tax scams happen every year and are going to continue on for many to come. You may receive an email or phone call from someone claiming to represent the IRS or other federal agency. Keep in mind that when it comes to your taxes, only one federal agency is ever involved and that’s the IRS. On its website, the IRS plainly states that it contacts taxpayers via U.S. Post – and never by email, text messages or phone calls. Want more information? Visit the Taxpayers Guide to Identity Theft on the IRS website.

If you have questions about any of this, other financial topics, or just want to create a personalized spending plan, call LSS Financial Counseling at 888-577-2227. To get started on a budget quickly and easily, you can BEGIN ONLINE now. It’s efficient and just as effective as in-person or phone financial counseling. Our Certified Financial Counselors are always here to help!

Author Kate Swenson is a Project Manager at LSS Financial Counseling. Want more from LSS? Sign up for our E-Newsletter.


Divorce and Mortgage. Know Your Options.

17 Mar

No doubt, love rocks… but sadly it doesn’t always last forever. Stuff can get weird, hearts can change – marriages end. However, mortgages taken out jointly, when your union of love was stronger than an 80’s power ballad, live on to be each other’s responsibility, at least until the person keeping the home can manage to divorce the loan itself.

It is important to conceptualize that a divorce decree doesn’t supersede your mortgage contract. Therefore, it is not generally as easy as contacting the mortgage company who services your loan and asking them to “remove” your ex’s name.

Traditionally, you would need to refinance the loan which means having to qualify for the loan as you originally did by having:

  • Sufficient credit worthiness;
  • Income in conjunction with other debt and
  • Having a favorable equity situation.

It is key to speak to local lenders or mortgage bankers about the possibility of qualifying for a replacement mortgage before waging battle for the house.

Typically, divorce decrees provide the party getting the home with a short time period in which they would need to refinance and the person is at risk of contempt of court if they are unable to comply. Even if you can qualify for a new mortgage, you would want to quantify the cost of doing so (typical closing costs are 3% to 6% of the loan amount) into whether or not it is best to keep the home and further equate the changes with the mortgage (if it is an older mortgage, then chances are the rate could improve however, if the loan was refinanced already in the last 2 years, there is a chance you could refinance into a higher rate). If the house has equity and you’d have to pay your ex off a portion of that equity and don’t have other assets to draw from, refinancing is unavoidable regardless of what it costs and what the terms would be.

Release of Liability

Though the expectation should be that you would need to refinance the loan in order to get the ex’s name of the mortgage, it might after all be as easy as just asking. Though this practice is somewhat rare, some loans can be considered for a simple process called Release of Liability subject to investor permission. In this, the servicer would look at the individual’s situation regarding credit, income, equity and confirm that there are not secondary liens against the property that would require subordination – and if the homeowner would otherwise qualify for a refinance, the investor may agree to just remove the former spouses name saving them the hassle. Though it is worth asking for due to simplicity and cost effectiveness, a lender agreeing to release liability is rare since usually it benefits investors to leave both people on the mortgage for as long as they can as in the event the person keeping the home runs into a circumstance where they can’t continue paying, the other would need to consider making the payments in their place in order to preserve credit.

Loan Assumption

Another easier and more cost effective alternative to refinancing though again, statistically inferior in occurrence, would be loan assumption. Some mortgages, most common recently FHA loans, are “assumable” meaning that the terms and payment schedule may be passed to another homeowner if they independently qualifies. Divorce or no divorce, it is wise to look back at the initial paperwork to see if your loan is assumable as if market rates increase with time, the ability to pass advantageous financing to a future owner could directly influence the sales price in a positive light.

Mortgage Modification

Modification serves as sort of a wild card option on our menu. A mortgage modification is a lender strategy to help delinquent homeowners catch up and also in some cases potentially restructure slightly unaffordable mortgages. Since divorce is and for 30+ years has been the perennial number one precursor to mortgage delinquency and foreclosure, it’s worth discussing here. The problem however with modifications in this context is that they are terribly unpredictable. Just like they may or may not be approved and may or may not improve the terms of the mortgage, they may remove an ex-spouses name or it may rather emerge post modification unchanged.

By definition, modifications are provided by a lender in response to a homeowner’s declaration (by way of not paying as agreed) that the loan is at risk of foreclosure, therefore the homeowner is more or less at the mercy of the lender and smaller details are not often negotiable. The reality is that sometimes a servicer on behalf of a certain investor pool will elect to correct the names on the mortgage if a modification is approved however, many times the names on the loan go unchanged with newer contributors not getting added and long gone


Much easier than removing a name off the mortgage, is removing the name off title via quitclaim. A quitclaim is just a simple notarized agreement filed locally in which one owner agrees to opt out of their ownership claim, now allowing the remaining owners access to financing or sales options without them. Quitclaiming your ex-off title may be supervised as part of the divorce process or could be up to you to work out on your own once it is over. It is key to foresee if this would be an issue due to communicative problems or conditional acceptance as it will be impossible to sell or restructure financing without it. For instance, if you ex will not quitclaim off until you pay the amount you agreed to pay to offset your keeping the house (equity buyout) and you don’t have the money so it’s a standstill, it’s better to understand before investing personal funds and considerable time on something difficult to get off the ground.

Protect Yourself

If you are not keeping the home, there are some steps you can take to protect yourself even if the reality is you will be sharing the mortgage for a while still.

  1. Pull a copy of credit at the point where the divorce is finalized and keep it safe with a copy of the divorce decree.
  2. If you are not renting through a property management company, make sure you pay rent through a documentable method (canceled checks that populate on bank statements) and pay every single month on time and in full.
  3. 3.Close other joint accounts and manage debt with extreme care and diligence.

I have had a few clients throughout the years who took these proactive steps and were able to qualify for new mortgages EVEN THOUGH their ex let a mortgage they were party to go through foreclosure. They were able to clearly isolate the issues with non-payment as taking place after they were no longer legally responsible and worked with a local lender on an in-house mortgage. We can help you with this.

Call us at 888.577.2227 and ask to speak with a Foreclosure Prevention Counselor Today!

Author Tim Fischer is a Foreclosure Prevention Counselor at LSS Financial Counseling. Have a question about Divorce and Mortgages? Leave a comment!

The Benefits of a 529 College Savings Plan

12 Mar

In the first installment about 529 College Saving Plans, I discussed the basics about those plans to give you an idea what they’re all about. This post focuses on the best features such plans have to offer.

Benefits of 529 Saving Plans:

529 plans are designed to encourage early and consistent savings by offering an affordable and convenient way for families to save for college. While the tax advantages are one of the primary benefits, states also offer a variety of additional benefits to help families reach their college savings goals. These benefits include:

  • All money grows federal and state income-tax free
  • All withdrawals used for “qualified higher education” expenses are exempt from federal income tax
  • Many states also exempt withdrawals from state income-tax for “qualified higher education” expenses (so check your state’s specific plans)
  • The account holder retains control of the assets
  • Many plans have low minimum monthly contribution limits so there are options for families regardless of income level
  • Money can be used at most accredited colleges across the country
  • Money can be used for tuition, fees, room, board, books, supplies and required equipment (depending on the type of plan – see chart below)
  • Contributions can be made conveniently through payroll deduction or automatic transfers from a bank account
  • Many states offer maximum contribution limits of $300,000 or more
  • Assets within 529 plans are protected from bankruptcy
  • Most states offer a low cost option that can be opened by contacting the plan directly
  • 529 plans are also offered through professional financial advisors who can help you choose a 529 plan and an investment strategy to meet all your needs (see more at

To give credit where it is due, you should know that the summary above and the chart below were found at

This SEC chart outlines some of the differences between the Prepaid Tuition Plan and the College Savings Plan for easy comparison:

Remember, all funds must be used for qualified education expenses to be eligible for the tax benefits associated with 529 plan. If you withdraw funds for any other reason, you will be subject to tax consequences that may be significant. Best to plan on using the funds for college costs only. If you have other financial goals or priorities, this may not be the time to invest in a 529 college savings plan.

In next week’s post, I will discuss this as well as other considerations to think about before investing in a 529 plan.

Give us a call at 888.577.2227 and ask to schedule a Student Loan Appointment. The counseling is a free and confidential. A student loan expert can take a look at what’s really going on with your loans and get you on your way to successful repayment.

Author Barbara Miller is a Bankruptcy Specialist and Financial Counselor at LSS Financial Counseling.

Steps to Improve your Credit Fast

10 Mar

Do you have collection debt, judgments, a foreclosure, or even bankruptcy on your record? If so, rebuilding your credit might seem like an impossible task. Many consumers just assume they will suffer the consequences of bad credit for the next 7-10 years until negative items are removed from their credit reports. Maybe you figure “good credit” is so far out of reach, you can forget about qualifying for a mortgage or any other loan with a decent interest rate any time in this decade at least. What if I told you it is actually possible to rebuild your credit score after a blunder or two (or following multiple past mistakes) within a few years?

Obtain a free, safe copy of your credit report

First things first, obtain a FREE copy of your credit report. LSS Financial Counseling recommends Annual Credit Report as a safe way to access your credit report. At your request, the three major credit reporting bureaus (Equifax, Experian and Trans Union) are required to provide you with a free copy of your credit report once every 12 months. Click HERE to learn more about Annual Credit Report. Need help understanding your credit report? Get a review.Start making an impact on your credit score. Today.

It really doesn’t matter how much you messed it up in the past, you can still regain control and improve your score much faster than you think.

The actions you take, both good and bad, within the most recent 2 years of time, have the biggest impact on your credit score. This means that your credit suffers the most immediately after a negative item is reported. For example a credit score will most likely immediately drop after filing for bankruptcy, but as time passes, the negative mark won’t be such a big factor when calculating your score. Bigger factors are recent positive activity where you show that you can use a credit card responsibly on a consistent basis.

Establish a healthy credit history.

You need credit history in order to improve your score. So, to improve your score quickly, the most important thing you can do is establish a healthy revolving credit history going forward.

Don’t expect time alone to heal past credit wounds. If you’ve made credit mistakes in the past and you want to improve your credit score, then start using credit responsibly as soon as possible. For example, if you obtain a secured credit card immediately following a bankruptcy and you use that credit card responsibly, you will re-establish a healthy credit history and your score will continue to improve over time. This is assuming you always pay on time every month and keep revolving debt balances below 30% of the available credit limit.

Credit scores are complex.

Simply paying off bad/old debts will not give you good credit.

Recent positive credit history is a MUST in order to improve your score. If you clean up past mistakes without being proactive about the present, your credit score will not reap the benefits of your efforts. In fact, paying off old collections or satisfying judgments could lower your score initially, but it’s still important to satisfy old collection balances, if possible. It isn’t the best idea to ignore old debt in hopes they will eventually fall off your record. Even with recent positive credit history, what lender is going to give you a loan if you have outstanding collections listed on your report?

Be proactive.

Remember, it doesn’t matter how bad you’ve messed up your credit in the past, you can always bounce back within a few years if you take steps to establish a healthy credit history going forward, clean up the past, and check your reports regularly for errors.

Do you need help reading and understanding your credit reports? Give LSS Financial Counseling a call at 888.577.2227 to schedule a free credit report review session with one of our Certified Financial Counselors. We can help you create an action plan to get your credit back on track.

Want more from LSS? Subscribe to our blog and read more posts like this one.

What Is A 529 College Savings Plan?

06 Mar

Let’s face it . . . raising kids today is an expensive affair. Making sure they have adequate food, shelter, and clothing may sound simple. But as we all know prices continue to soar at the pump, the grocery store, and so forth. Kids engage in activities that require paying fees as well as equipment or uniform costs. They may need braces or other expensive medical care. And the list goes on and on.

On top of everything else, the thought of trying to save money for your kids’ college educations can be daunting. Sometimes, parents may still be repaying their own student loans. Or, trying to save something for retirement.

The purpose of this post is to discuss the basics of 529 College Savings Plans that can help parents pave the way for their children’s educational journey. In future posts, I will cover the benefits in greater detail, and things to consider before participating in such plans.

Why save for college?

College is an investment in your child’s future. The gift of a college education can open doors to many opportunities for kids. Saving a little at a time can make a big difference when it matters. With the cost of a college education continuing to rise, the key is to start saving early and regularly (just like any other savings goal). Need help making your financial goals? Click below to get started.And consider that saving for college now eliminates (or at least reduces) reliance on other student aid in the future, particularly loans. While many parents and students rely primarily on student loans to finance an education, studies show that large student loan debt can cripple a borrower’s future financial goals like buying a home or starting a family. In addition, defaults on student loan repayment is at an all-time high today.

What is a 529 Plan?

A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code.

A significant benefit is all withdrawals from 529 plans for qualified education expenses will remain free from federal income tax. Many states mirror the federal tax advantages for 529 plans by offering state tax-deferred growth and tax-free withdrawals for qualified college expenses.

Types of 529 Plans

There are two types of 529 plans: prepaid tuition plans and savings plans.

  • Prepaid Tuition Plans (sometimes called guaranteed savings plans) allow for the pre-purchase of tuition based on today’s rates which is then paid out at the future cost when the beneficiary is in college. Performance is often based upon tuition inflation. Prepaid plans may be administered by states or higher education institutions.
  • Savings Plans are different in that your account earnings are based upon the market performance of the underlying investments, which typically consist of mutual funds. Savings plans may only be administered by states. Most 529 savings plans offer a variety of age-based investment options so the investments become more conservative as the beneficiary gets closer to college-age. They also offer risk-based investment options where the underlying investments remain in the same fund regardless of the age of the beneficiary. In addition, many savings plans offer an FDIC/NCUA insured, money market or guaranteed option designed to protect an investor’s principal while providing for some investment growth. Others may offer investments in certificates of deposit.
  • State Plans Will Differ. Each state that offers a 529 plan determines how its plan is structured and which investment options are offered. While most plans allow investors from out of state, there can be significant state tax advantages and other benefits, such as a state tax deduction, a matching grant, and scholarship opportunities, protection from creditors and exemption from state financial aid calculations, for investors who invest in 529 plans offered by the state where parents live. Click here to Compare 529 Plans by State (from CSPL or College Savings Plans Network).

529 plan restrictions

Withdrawal restrictions apply to both college savings plans and pre-paid tuition plans. With limited exceptions, you can only withdraw money that you invest in a 529 plan for eligible college expenses without incurring taxes and penalties. In addition, participants in college savings plans have limited investment options and are not permitted to switch freely among available investment options. Under current tax law, an account holder is only permitted to change his or her investment option one time per year. Additional limitations will likely apply to any 529 plan you may be considering. Before you invest in a 529 plan, you should read the plan’s offer information to make sure you fully understand and are comfortable with any plan limitations.

Will a 529 plan affect financial aid eligibility?

While each educational institution may treat assets held in a 529 plan differently, investing in a 529 plan will generally reduce a student’s eligibility to participate in need-based financial aid. Assets held in pre-paid tuition plans and college savings plans will be treated as parental assets in the calculation of the expected family contribution toward higher education costs.

In the next 2 posts, I’ll highlight the numerous benefits related to 529 College Savings Plans and things to consider before investing. Want to learn more about Student Loans? Give us a call at 888.577.2227 or visit our website at We can help you understand your options with student loans and make a plan for the future.

Author Barbara Miller is a Certified Counselor at LSS and specializes in Bankruptcy Education.




Sense and Centsibility

Your debt-free future awaits