Category Archives: History Finance

Merchant Accounts for the Riskiest Industries

Most of the 10 industries that market research firm IBISWorld has identified as the riskiest are in in a constant change and still adjusting to the changing market conditions caused by the recession.

The overall risk score calculation of the mentioned riskiest businesses is based on the risks pertaining to industry structure (structural risk), expected future performance (growth risk), and economic forces (sensitivity risk). 1 represents the lowest risk and 9 represents the highest.

Even if you’re involved in a high risk industry and have a difficult time opening a merchant account, a reputable payment processor that specializes in the field can help you overcome the challenges with ease. With a respectable processor, you can easily get approved for high risk merchant accounts and be able to take your business to new heights.

Recordable Media Manufacturing (Risk Score 7.24)

Risks: Digital media formats and online streaming

The revenue was forecast to fall at an average annual rate of 3.9% to $3.2 billion from 2013 to 2018.

Appliance Repair (Risk score 7.17)

Risks: Strong external competition

The revenue was expected to fall an annualized 1.5% to $3.4 billion from 2013 to 2018.

Leather Tanning and Finishing (Risk score: 6.65)

Risks: Revenue volatility and high import activity

The revenue was expected to fall an annualized 1.9% to $1.7 billion from 2013 to 2018.

Fuel Dealers (Risk score 6.54)

Risks: Revenue volatility

The revenue was anticipated to increase an annualized 2.2% to $51.3 billion from 2013 to 2018.

Commercial Banking (Risk score: 6.33)

Risks: High regulation and increasing external competition

The landscape for commercial banks was projected to significantly improve, with revenue growing an annualized 7.4% to $725.0 billion from 2013 to 2018.

Major Household Appliance Manufacturing (Risk score 6.25)

Risks: High input costs, such as those of steel and plastic, and rising imports.

World steel prices were anticipated to grow an annualized 1.8% from 2013 to 2018.

Business Certification and IT Schools (Risk score 6.16)

Risks: Rising competition from junior colleges, trade schools and universities 

The revenue was forecast to continue declining at an average annual rate of 5.6% to $2.1 billion from 2013 to 2018.

Gasoline and Petroleum Wholesaling (Risk Score 6.05)

Risks: The revenue and risk level depend on global crude oil prices

The revenue was expected to increase at an annualized rate of 2.5% to $439.5 billion from 2013 to 2018.

Apparel Knitting Mills (Risk score: 5.99)

Risks: Most operators are outsourcing labor-intensive production to countries with lower labor costs

The revenue was anticipated to continue falling at an annualized rate of 3.1% to $412.0 million from 2013 to 2018.

Newspaper Publishing (Risk score 5.95)

Risks: High and rising competition from other forms of media, particularly digital outlets 

The revenue was expected to continue falling through 2018, at a slower annualized rate of 3.7%, to $27.7 billion.

Don’t let the risks existing in your industry hold you back from growing your business. Turn to an experienced and reliable payment processor to get the best for your business wants and needs.

Author Bio: Electronic payments expert, Blair Thomas, co-founded eMerchantBroker in 2010. His passions include writing/producing music, and travel. eMerchantBroker is America’s No.1 high risk merchant accounts company, serving both traditional and high-risk merchants.

Steps to Budget Based on Your Values

Are you finding yourself struggling to stick to a budget? Many clients and Millennials that I talk to are always excited once we are done talking about how to budget. I’ve realized that, like myself, we missed out on not just financial literacy but how to view our money. I have four ways that will help you start to think of your money as a tool to create a better life where you spend your money according to what you value. Here are my four steps to start.

What Are Your Values?

Often I’ve found myself in the past spending money on items that I didn’t use for very long or were poor quality. I’ve learned over time that if we develop an understanding of our values we can learn to spend money with a wiser purpose. When we spend wisely, our budgets become easier to manage and we start to control our finances without them controlling us. (For more from this author, see: 5 Ways to Improve Your Finances Throughout Life.)

From Values to Goals

Our values will lead to our goals in life. If you value family, I am guessing you may have a goal of starting a family or spending more time with your family. If you value travel, you may have a dream travel goal. Aligning our spending according to our values will help us reach our goals because we’ll be spending according to the values that help us reach our goals.

Work on Filtering Out Distractions

Every minute we are being advertised to – whether online, in Starbucks, on our drive or even during the podcast we are listening to. Ads are everywhere trying to get us to buy something that we probably don’t value and won’t help us reach our goals. Learn to look past these ads and stay focused on items that bring long-term value and move you closer to your goals.

Give Time to Major Purchases

Most goals are large purchases or expenditures of some sort. I encourage you to think through the purchase. Purchasing plane tickets because they are cheap for a trip that wasn’t even on your radar may be filled with regret. Just because an item is on sale doesn’t mean it is the right time. Save for what you expect but you can be ready to take advantage of discounted items if it’s the right time and you’ve been planning on the purchase. Impulse buying is what gets most people into trouble, even myself.

Our everyday decisions cause ripple effects. Make smart purchases that are aligned with your values and you’ll be on your way to achieving your goals in no time. My favorite budgeting tool, YNAB, is based on a budgeting philosophy that most people can resonate with. My wife and I love the tool because it creates better communication in regards to our finances.

U.S. City With High Pay and Low Cost of Living

Many factors influence where we choose to live. While our home’s proximity to friends and family is a crucial deciding factor, ultimately where we decide to live is influenced by our finances. The two major factors influencing where we live are the cost of living and the income potential in a given region. The problem with looking at these two factors individually, however, is that they often are highly influenced by one another and have a strong positive correlation. Fat paychecks in New York City and San Francisco translate into $20 salads, exorbitant rents, and surge-priced Uber rides. (To learn more, read: How the Cost of Living Affects Your Income.)

When we dissect the data, it’s apparent that the most affordable cities to live in while earning an excellent living are in the middle of the country, rather than along the expensive coasts. We’ve compiled a list of the best cities in the U.S. that combine a low cost of living with relatively high per capita income compared with the rest of the nation.

Houston, Texas

The city of Houston benefits from a high domestic migration rate and a high economic growth rate. According to the Census Bureau’s 2015 population estimates, Texas saw the biggest increase in population. The suburb of Harris Country in Houston grew more than any other in the country, increasing by 89,000 people, as opposed to the more than 500,000 people that fled New York City during the same period. (For related content, see: How Much Money Do You Need to Live in NYC?). According to the Department of Numbers, Houston’s median household nominal income was $60,072 last year and real income was $65,910. Houston’s residents income levels typically outpace the cost of living, with a fabulous transportation system, relatively affordable housing and low prices of common consumer goods.

Dallas-Fort Worth, Texas

The Dallas-Forth Worth hub also lies in the Sunbelt. The city benefits from high net domestic migration and a nonexistent state income tax. According to Numbeo’s cost of living comparison between Dallas and Los Angeles, “you would need around $5,066.81 in Los Angeles, CA to maintain the same standard of life that you can have with $4,200 in Dallas, TX.” When the numbers are scaled out, the differences are drastic. The most significant differences between the two cities are rent prices, which are 55.58% lower in Dallas than in Los Angeles.

Charlotte, North Carolina

Charlotte, North Carolina may seem off the beaten path to some, but to North Carolinians and southerners who’ve grown up loving the city, the move seems like a no-brainer. Charlotte is home to many big companies and is the headquarters of Bank of America. The city also now boasts its own football team, the Carolina Panthers. According to the Charlotte Chamber, earning an after-tax income of $100,000 in Manhattan, New York is equivalent to the after-tax income of $43,224.93 in Charlotte, North Carolina. According to a Bureau of Labor Statistics report, workers in the Charlotte-Gastonia-Rock Hill Metropolitan Statistical Area had an average hourly wage of 2% above the national average ($23.22 in May of 2014). Although this may seem small, the difference is amplified by the low cost of living.

Denver, Colorado

Denver, Colorado is a gorgeous, relatively quiet city situated in the mountains. Downtown is a short half hour drive to the University of Colorado at Boulder. Many beautiful, smaller towns are in the region, where people can hike with their dogs and families free of charge. According to the Massachusetts Institute of Technology’s Living Wage Calculator, typical annual salaries in Denver for management jobs are $103,690, whereas business and financial operations typically earn a salary of $67,170. The calculated “living wage” that individuals must earn to support themselves working full time was $10.79 as opposed to $14.37 in San Francisco. In addition to high wages and low costs, Colorado offers a high quality of life which continues to attract lovers of nature and adventure. (For related content, see: World Cities With The Highest Quality Of Life.)

Austin, Texas

Dubbed “The Live Music Capital of the World” and the capital of the Lone Star State, Austin has a population growth of about 3%-4%, which is the highest growth rate of metropolitan areas with a population over one million. The knowledge hub of Austin is home to a new wave of workers who vary from “hippy types” to tech-savvy Millennials and corporate employees. The influence of the University of Texas has turned the city into a tech hub with a lively downtown full of theaters, art galleries, and restaurants. According to PayScale, a software engineer in Austin will earn a medium salary of $76,998, and a senior software engineer will earn $106,434.

The Bottom Line

Career mobility rises due to the advent of technology, transportation and communication systems, allowing the U.S. population to move from city to city quite easily. Often, high salaries coincide with a relatively high cost of living. This list of cities highlights a few of the outliers. Cities in the middle of the country, particularly in Texas, place workers in an optimal financial situation. This is due to the net migration, economic boom, and high salary growth rates in these particular hubs. These cities offer a high quality of life due to low prices and decreased financial stresses while providing an opportunity to find a lucrative career. (Read more on the topic


How to Find a Cheap, Last-Minute Vacation

Maybe you’ve been extra busy this year, but suddenly you look up from the computer screen and notice summer slipping away. Can you still find a cheap (OK, cheapish) last-minute vacation? You can and it won’t take all that much work on your end. What will help: flexibility.

1. First, Find a Cheap Itinerary

There are cheaper days and cheaper dates to fly. Experiment with itineraries as you shop to find the best prices. Not surprisingly, you’ll notice that sometimes the more inconvenient the travel days and times are, the cheaper the airfare.

  • Fly these days: Tuesday, Wednesday and Saturday are usually the cheapest days for domestic travel. Weekdays are usually cheaper than weekends for international travel.
  • Fly this date: Delay your vacation or getaway trip until around Aug. 22 (or beyond) and you will likely see prices drop from peak summer pricing to cheaper fall fares.
  • Suggested itineraries: For week-long vacations, try flying Saturday to Saturday. For a shorter break, try Wednesday to Saturday or Saturday to Tuesday. As you shop, move the dates around, plus/minus three days and see what works best.

2. Look at Cheaper Destinations

One of the biggest reasons one destination is cheaper than another? Competition, competition, competition.

Cheap cities: These cities are famous for the number of airlines vying for your business and they include a significant discount airline presence: Boston, Denver, Ft. Lauderdale/Miami and Seattle.

Cheap routes: You can often find a deal on hub-to-hub flights that last about 90 minutes (give or take). These routes are also immune to the big price swings during expensive holiday periods. Some examples: Los Angeles/San Francisco; Dallas/Houston; Boston/New York.

3. Use a Cheap Destination-Finder Tool

If you’re not sure what’s cheap from your hometown, use an interactive deal finder; there’s one on my site but there are plenty of others out there and they’re easy to use. Just type in your hometown and the month or time of year you want to fly and – voilà – a bunch of cites and prices pop up, from nearby tourist magnets to Caribbean beaches and even global destinations. I’m confident you’ll find something cheap and charming. Here are some round-trip fares for travel in August, found July 11: Boston-Baltimore, $95; Los Angeles-Orlando, $183; New York-London, $456.

By the way, all those nice prices are for non-stop flights – but connecting flights can sometimes be cheaper, another instance of inconvenience making a trip cost a little less. Compare non-stops to flights with one or more stops and see if the savings are worth it to you. The Cheapest Way to Buy Two or More Airline Tickets will also help you save if you’re booking the family.

4. Find Ways to Shed Fees

Remember, you don’t know the total cost of your airfare until you add in all the fees and for most folks that means baggage. In most cases, you’ll avoid the $50 round-trip checked bag fee by using a carry-on. And since you’re the one hanging on to it, the airline won’t be able to lose it. Before you ding your credit card, figure out all fees you might need to pay and add them to the airfare; only then can you tell which carrier truly has the right deal for you. Airline Baggage Policies: What’s New, How to Save has more tips.

Now that you’ve got your deal, make the most of it. And don’t bring the laptop.

Great Ideas for Your Summer Staycation

As the kids finish school and the weather heats up, many people are getting excited about long-awaited summer vacations. Summer vacations are a time to relax, unwind and spend some quality time with loved ones. Big vacations, however, do require quite a bit of planning and, of course, can end up costing some serious cash, especially with a whole family in tow.

If you haven’t gotten around to making summer vacation plans, or it’s just not in the cards this year, you might be the perfect candidate for a summer staycation. (A staycation can be just as enjoyable as a vacation, and can enrich your life for the whole year. Check out Affordable Staycation Ideas for Families.)

A staycation is like a vacation, only you spend it at home. Instead of spending lots of money on airfare and expensive hotels, you can take advantage of the attractions your area has to offer that you never get a chance to enjoy. This includes your house – when was the last time you relaxed at home? A few ground rules will help ensure you have a successful staycation:

  • Put it on the calendar  with a start date and an end date – so everyone knows when you’re on staycation.
  • Get a visitor’s guide. Check out your local Chamber of Commerce’s website or stop by for a visitor’s guide. You might be surprised to find great activities that you didn’t know about. (Keep the kids out of your hair and wallet by saving on summer camps, sports leagues, day trips and more. Learn how in Budget-Friendly Summer Fun.)
  • Limit the chores. Plan ahead and try to get as many chores out of the way so that you don’t spend your staycation doing laundry and mopping the floor.
  • Write it down. Your staycation doesn’t have to be scripted, but it is helpful to write down the things you want to do, and then have fun crossing the activities off the list.

Whether you live in a bustling city or off the beaten path, you should be able to find plenty of activities to keep you busy. To get you started, here are eight great ideas for your summer staycation.

Get Out

Outside, that is. National parks, state parks, county parks, metro parks and nature centers all provide a place to run around and enjoy nature. As an added bonus, many are free. You can easily spend a day hiking, swimming and picnicking in your local park. Visit to find a national park or to find a state park.

Stay In

A rainy day during your staycation is a terrific opportunity to visit a local museum or two. Art museums, aquariums, planetariums, science museums and natural history museums can be enjoyable and interesting. You can search for museums at the American Association of Museum’s website at (click “Museum Resources” tab”); or search the Association of Zoos & Aquariums’ website at

Get Active

Take advantage of the local swimming pool, tennis courts, golf course or skating rink. Go for a bike ride, a walk, or try a new sport. Dust off the old baseball mitts, soccer balls and Frisbees and have fun.

Get Festive

Summertime is usually ripe with festivals in one form or another. Your local newspaper or Chamber of Commerce can keep you up to date with goings on. In addition to daytime festivals, many locales host free music nights during the summer months.

Learn Something New

Have you always wanted to learn how to throw pottery or paint with watercolors? How about cooking Cuban food or home-brewing beer? Your local recreation department or community college probably has a great choice of classes to get you started. Many of them will be one-day introductory classes that won’t require a huge investment.

Be Pampered

With all the money you’re saving on your staycation, you just might be entitled to a trip to the local spa for a massage and facial. Most spas do require advance reservations, and many offer specials and packages so be sure to ask. Try to find a spa in your area.

Tell Ghost Stories

Pitch the tent and build a small fire – in your back yard. Camping in the backyard is a fun and easy way to camp. You can chase fireflies, sing songs, look at the stars and roast marshmallows (or make s’mores: roast a marshmallow until golden brown, place between two graham crackers with a piece of chocolate and squeeze together).

Ways to Stunt a Child’s Financial Growth

Financial knowledge isn’t built into our DNA. It has to be learned. Unlike long division and gymnastics, personal finance is not properly covered in school (if covered at all). So it falls upon parents to impart financial knowledge to their children. Unfortunately it’s easy to slip up and make mistakes. In this article, we’ll look at five ways you may be stunting your child’s financial growth.

The Vow of Silence

A lot of funding has been put into researching why kids fall into particular traps. Teen pregnancy, drug use, underage drinking and many other early problems have been traced back to a lack of communication – hence, the “if you’re not teaching your kids about ____, then who is?” campaigns. A lack of financial education doesn’t seem as serious as a drug addiction, but its long-term consequences are quite severe. Remaining mum on financial matters sends the message that either money is not important, or it’s something to fear and never mention. Neither of these are lessons that help with the financial realities children will face as they grow up.

If you’re not willing to teach good financial habits to your children, the school system and the media are the main information sources by default. If you need motivation to take your child’s financial guidance upon yourself, watch TV with your child and consciously try to spot the image of personal finance they might be getting from both the shows and the commercials they see – it is, quite frankly, terrifying.

Fair-Weather Finance

Ranking second only to remaining silent about financial matters is the tendency for people only to talk about them when things are going well. Personal finance and the financial world as a whole is not a Disney movie where cats and birds break out in spontaneous songs of joy – it is fraught with problems. It’s far better to be honest about problems – late bills, flat stocks, bad decisions, etc. – and engage the family in solving them. Looking at financial matters as a problem-solving exercise for the family will also lessen the stress traditionally felt by people trying to “keep the household budget (or portfolio)” all by themselves. It will also teach your child to approach financial problems as just that – problems. Problems can be challenging, but there are always solutions if you’re creatively searching for them.

One of the greatest investing minds of all time, Benjamin Graham, was introduced to the world of stocks and bonds through a mistake in his family’s finances. Graham’s widowed mother put a significant portion of the family’s savings into U.S. Steel at its overvalued peak. Graham charted the stocks decline, and that of his family’s wealth, from the quotes in the newspaper. The poor performance of the stock compounded the family’s woes and Graham spent many of his formative years in a struggle against poverty. This experience turned him from the common belief in investing in blue chips for the long-term and eventually led to his formulation of value investing summed up in his book “The Intelligent Investor.”

The Money Tree

“Money doesn’t grow on trees,” is one of those clichés that has somehow grafted itself to the national consciousness. Although we often have this gem ready when asked for cash, our actions often contradict it. Many people are inconsistent when they hand over cash to their children, whether in the form of earned allowance or a simple gift.

Wanting to give money to your kids is natural, you want them to enjoy childhood and not feel that anything was withheld, but easy money policies can be as damaging to families as they are to world economies. Learning to earn money via an allowance given over for extra chores is a good way to introduce your child to how money is traditionally made. Small gifts of cash are also is fine as long as it’s framed correctly – again, communication is key.

The easiest way to send a consistent message is to write out ground rules such as, “I will only pay an allowance on work beyond regular responsibilities like a clean room” or “I will never buy something on short notice in a store. Any purchases have to be talked about before going in.” You can then sit down and discuss the rules with your children and adapt them as necessary.

Birds and Bees Before Stocks and Bonds

At what age are children ready for investing? The sooner, the better – as with investing itself. Although stocks and bonds seem daunting when you look at the pages of stock quotes or the calculations behind operating cash flow and profit margins, the basic concepts can be presented simply. Children pick up on branding quite early and the concept of one company,

Walt Disney Company DIS 101.99 + 0.63% ), making products ranging from movies, magazines, books, video games, toys, and apparel isn’t hard to grasp. Remember to try to cover all types of investments, real estate, business ownership, collectibles and so on. Although you may prefer bond investing, there’s no guarantee your child will gravitate to that versus something like business ownership. You don’t have to be an authority on every type of investment; eventually, your child will begin to seek out information on his or her own. Your job is to catch their interest and encourage them along.

Monkey See, Monkey Do

While attempting to teach positive financial lessons to your children is laudable, the message will be drowned out if you don’t practice good financial habits yourself. In many ways, the best thing you can do to help your child financially is to help yourself. Fixing your own financial weakness puts you in a better state to teach your kids about finances, and it will certainly lend authority to your words because you’ll be practicing what you preach.

The Bottom Line

Until a nationwide financial literacy course is instituted, you are the only teacher your child will have in the area of personal finance. It’s a big responsibility, but you can make it easier by communicating with your child, reinforcing good habits and following your own advice. In the era of boomerang kids, seeing your child grow into a financially independent adult is as much a financial victory as a moral one.

The Beauty of Budgeting

Can you name a Fortune 500 company that doesn’t have a budget? Don’t spend too much time thinking about it – there aren’t any. Successful businesses around the world have one thing in common: they budget their money. And they do it because it works.

But although making money and making a budget appear to go hand-in-hand, a 2013 Gallup poll found that only one in three Americans prepared a detailed written or computerized household budget. Things may be improving somewhat: A survey in 2015 found a much higher number said they budgeted (36% on paper and 26% on a computer or smartphone app). On the other hand, another 18% didn’t budget and a matching number answered “yes” to keeping the information “all in your head.”

If you’re one of the non-budgeters (or sketchy budgeters), we’ll show you how to get a better idea of how you spend your money by putting together – and sticking to – a personal budget.

Part of America’s aversion to budgeting may be rooted in language. The word “budget” – much like the word “diet” – has negative connotations. Budgets and diets are viewed as restrictive reminders of things we cannot have. This is linguistic nonsense. A budget and a diet are both tools. If the tools are used properly, they lead to a desired outcome. Nobody dislikes the word “shovel,” even though the use of the shovel requires effort. People use a shovel to dig a hole; they use a diet to develop a healthy body; and they use a budget to develop a fiscally responsible lifestyle. If it makes you feel better about the process, drop the word “budget” and call it a “spending plan.” Instead of viewing the plan as restrictive, think about the things it allows you to buy. After all, a budget is nothing more than a plan for how you will spend your money.

Start with Your Bills

Many people complain that they can’t create a budget because they don’t know exactly how much money they will earn in a given week. While it is true that workers earning an hourly wage or working on commission might not get the exact same dollar figure in each paycheck, the amount that you earn has much less to do with the basics of budgeting than the amount you spend. Instead of focusing on whether you earn enough each month, focus on your monthly spending. The question is simple: where does your money go?


Student Loan Forgiveness: How Does it Work?

For decades, educators have encouraged young people to get increasingly expensive post-secondary degrees that provide arguably decreasing real returns in the labor market, and to take out large subsidized loans, regardless of their career choices.

In 2016, the average college graduate borrowed between $26,450 and $31,200. Fortunately, some borrowers may find relief. There are many programs in place, some old and some new, through which debt forgiveness is possible, and we should expect more programs to surface in the near future, as untenable student debt burdens become a larger political topic.

Using Debt Forgiveness

Debt forgiveness programs are exactly what they sound like. In a student loan forgiveness program, qualifying borrowers may have some or all of their public student debt forgiven, either immediately or over a period of time. Unfortunately, none of these programs forgive private loans. The only known methods of discharging or removing private loan amounts is through bankruptcy or a one-off restructuring with the borrower’s private lender.

Currently, there are four major programs and several other minor programs that might cancel or significantly reduce your federal student loan balance. The major ones are Public Service Loan Forgiveness, Perkins loan cancellation, income-based repayment and Teacher Loan Forgiveness. The catch is these may not apply if the debtor is in default status, meaning the loan has gone unpaid for more than nine months.

Each plan has very strict requirements which must be met before student loans may be forgiven. Many require annual submission of official paperwork to student loan servicers, and any missteps might disqualify an otherwise eligible borrower. If you are considering or currently in the process of trying to have your loans forgiven, it is crucial that you understand the necessary steps and follow them diligently.

Most Common Loan Forgiveness Options

Depending on the state in which you reside, there may be occupation-based forgiveness programs available. These are typically designed for doctors, attorneys or other professionals who pay above-average amounts for advanced degrees. Borrowers who used Perkins loans may actually have their entire debt forgiven after just five years. This mostly depends on your occupation, especially for those who serve full-time in a public or non-profit school. This program is used to entice teachers to work in low-income schools and in states where there are shortages of qualified teachers in a given field. Potential specialties range from speech pathologists and preschool teachers to high school math and science teachers.

Nationwide, however, the most common are the Public Service and Teacher Loan Forgiveness plans. Full-time public servants can have their entire federal loan balances forgiven within 10 years. Teachers at qualifying low-income schools may receive partial forgiveness ranging between $5,000 and $17,500, excluding those who only have PLUS loans.

Obama Student Loan Forgiveness

There is a fifth option, popularly referred to as the Obama Student Loan Forgiveness Plan, which came into existence after the Health Care and Education Reconciliation Act of 2010. It might be identified more correctly as a debt restructuring program with possible forgiveness in the future.

Borrowers who qualify may consolidate all of their federal student loans into one single loan, at which point the borrower may choose from five different repayment options. These options — standard, graduated, income-contingent, income-based and Pay As You Earn (PAYE) — offer a wide range of attractive reconstructions.

The graduated repayment plan, for example, allows the borrower to make lower-than-standard payments at first, and every two years, the monthly payment amount increases. This is designed to spread more of the loan amount into the future, when the borrower would ostensibly earn a higher income. The PAYE plan typically offers the lowest monthly payment, including payments as low as $0, though many borrowers have a difficult time qualifying for these plans.

Those enrolled in the income-contingent, income-based or PAYE plans must pay their loans during a term lasting between 20 to 25 years. If, at the end of the term, the borrower still has an outstanding balance, such a balance could be forgiven. Anyone who makes payments in one of these three plans and who also works in the public sector can count his or her Obama Loan Forgiveness payments as qualifying payments for their Public Service or Teacher forgiveness programs.

Total & Permanent Disability Discharge

The Department of Education (DoE) also offers relief to those who have significant physical or mental impairments and are unable to engage in “substantial gainful activity,” which is the official government term for a real job. Those individuals interested in applying for permanent disability status must work through the DoE process to prove their disability. To prove that you have a disability, you need a letter from a qualified physician and other required supporting documentation. Applications typically take between three and six months before a decision is rendered. If your application is accepted, you’re unable to apply for any other student loans until you receive another letter that deems you able to engage in gainful activity.

Should You Pay in Cash?

Articles and books on personal finance generally pack in as many tips as possible in an effort to make at least a couple essential ones stick. This shotgun approach is worth it if it helps readers learn to pay themselves first, spend less than they make, and so on, but saying too much sometimes means explaining too little.

In this article we’ll focus on just one technique to improve your finances, by taking a close at how making purchases with cash can contribute to your ability to budget, save and invest.

A Plastic Paradise

With the proliferation of plastic alternatives to hard currency, some people consider carrying cash a throwback.

To be fair, plastic is much sexier than a piece of colored paper with a dead president staring vaguely into the distance. Some banks even allow you to customize the graphics that appear on the credit card/debit card or choose from a range of designs and colors the company is marketing.

There is also the security advantage with debit and credit cards. Debit cards are protected by your personal identification number (PIN) and credit cards by your signature (and for some cards, a PIN number too). Cash is only protected by your ability to defend it should someone else want to take it from you.

Moreover, cards are as widely accepted as cash – with the exception of a few mom and pop shops. And yet, from a personal finance view, cash is almost always the better choice for making a purchase. Here’s why:


One of the drawbacks of credit and debit cards is that they encourage you to spend more than you intend to by giving you easy access to more capital. With cash, spending more than you intended requires going to a bank or ATM to get more and then going back to the store to complete the purchase. While some businesses have in-store ATMs, all charge fees, in addition to whatever fees your bank charges. For most people, these factors will cause them to reconsider whether their budgets can handle any extra strain.

Generally speaking, only carrying the cash you are prepared to pay for a given product will prevent you from buying the next level up and paying for features you don’t need. This works for small-scale purchases, but buying a computer or a car can involve large amounts of cash that probably shouldn’t be carried around. If a check can’t be used, a debit card is better than a credit card because you are spending money you have rather than money you don’t.


Just as cards encourage overpaying for one item, they also allow you to buy more items than you mean to. Stores are set up to make products appealing in order to persuade shoppers to buy more. Sometimes a shopping list isn’t enough to protect you from impulse buys.

According to the article “Cards Encourage You to Overspend” on, people will spend more with a credit card compared to cash. In fact, a Dunn & Bradstreet study found that people spend 12% to 18% more when using credit cards than when using cash. And McDonald’s found that the average transaction rose from $4.50 to $7 when customers used plastic instead of cash.

So what can you do to avoid this? Only carrying enough cash to buy the things on your list can limit the damage. This is the best way to keep shopping within your budget. If you are motivated, you will find discounts or cheaper alternatives to your regular brands to make that cash go further and maybe earn yourself a luxury item.

Cash Vs. Credit Cards

Cash, for the purposes of this article, is strictly limited to money you have already earned and is sitting there for you to use. Using your Visa to take a cash advance and then carrying the cash with you will not solve the essential problem of using high-interest debt to cover your expenses.

Cash has one very clear advantage over using a credit card: If you buy something on your credit card and end up carrying a balance, or only make the minimum payment each month, you will incur interest at a rate of 15% or more of your purchase (which can have you paying $15 or more for every $100 you spend). If you save up enough cash for the same purchase, you are giving yourself the equivalent of a 15% discount by not using your card. Before you even sign up for a card, make sure you know what you’re getting into.

Cash Vs. Debit Cards

If this article were only dealing with cash as a better alternative to credit cards, no one would dispute it. In contrast, debit cards seem to enjoy a protected status despite the overkill on ATM fees and foreign ATM fees. Forgetting the fees, a debit card’s main failure is that is trivializes purchases. Being a square of plastic, it is hard to tell how much of your money is flowing through your debit card.

For most people it becomes a matter of $2 here, $6 there, another $4 over here and so on until they give up keeping track of how much has been spent in a day – let alone a month. Then it’s a shock to their systems when the monthly statement comes and it’s far too late to do any good. With cash, you can see the damage as it is done and hopefully curtail your spending before it gets out of control.

The Bottom Line

Using a credit or debit card offers more security than cash in most cases. For large purchases, carrying cash is often not an option and writing a check or getting a bank draft may be more trouble than it is worth for some. Furthermore, if a debit card is used responsibly, it is an ideal replacement for cash. A credit card can also be a convenient tool, but it’s only a fair substitute for cash when the balance is paid in full at the end of each month. Otherwise, your ultimate reward for paying with your credit card will be paying off an even bigger debt.


Ways to Save a Buck With Destination Weddings

Ah yes, a destination wedding. Who hasn’t seen those beautiful pictures? White-sand beaches, lush coconut trees leaning over emerald waters, the silhouette of the beautiful bride and groom kissing against a gorgeous sunset…you can literally breathe in the love in the air.

Until this week, as a guy who’s never been married, I always thought destination weddings were really expensive. First of all, everyone has to fly to the destination and the newlyweds are probably flipping the bill. Having heard countless complaints about how expensive wedding venues are here in California I can’t even imagine how much more it is at a resort on an island. Then there is the reception, the flowers, the rehearsals…all seems to cost a bundle.

All this changed when I got invited to a destination wedding at a beautiful resort in Punta Cana, the Dominican Republic. I realized my understanding of this topic was almost entirely wrong. (For related reading, see: Have a Charming (and Cheap) Wedding.)

How Destination Weddings Can Save You Money

  1. Paying for your guests’ travel is optional: Many of us plan to travel to the tropics sometimes in the future—Mexico, Belize, Virgin Islands, Bahamas, etc. If you plan far enough ahead of time, people will just treat your wedding as their vacation and they will pay for their own travel arrangements, saving you a bundle.
  2. Deals of the season: The Caribbean, South America and many parts of Mexico are vacation destinations for “snow birds.” U.S. and Canadian vacationers who crowd the beaches during winter season are nowhere to be seen during late spring and summer months. When we were there, the beaches and restaurants were nearly empty. Competition among the resorts meant prices were very reasonable. Some of the wedding guests booked their all-inclusive stay for two for about $1600 where the regular price runs about $4200 for the week.   (For related reading, see: Shoulder Season: Your Ticket to the Perfect Vacation.)
  3. Location matters: New resorts in over-developed areas use low prices to attract newlyweds. When they have vacancies you’ll get a deal. Do some research and talk to a travel agent. She’ll know where to go.
  4. Leverage your party: At our resort, a minimum three-night stay will get you a basic wedding package, including a gazebo on the beach, some simple flower arrangements, champagne for everyone, an audio guy who rolls out the speakers and plays anything from your iPod and a full support staff for free. From there you can add fancier options such as a poolside private dinner, excursions, party boats, DJs and photographers. Now remember, you are bringing a party of guests to stay at the resort and that means good business. I bet if you just ask you’ll get more stuff for free.
  5. You don’t have to pay for everyone: The other great thing about being in an all-inclusive resort is that you’ll never have to pay for the food and drinks for your guests. We ran into another wedding party from LA and the young couple told us they had 11 guests. Instead of paying for a reception they simply made a reservation at one of the nicer restaurants, ate for free and had a great time!
  6. Bring American dollars and research currency exchanges: All the resorts will exchange for you but the rates are very different. Call them and your local bank ahead to see who gives you a better rate. Airports are the worst deals. Tipping your service staff and shopping with American dollars will get you very good service and much better deals overall.
  7. Vote with your dollars: The Dominican Republic seems to be a country that has brought the economic benefits of tourism to her people. We saw tax dollars supporting a new airport terminal being built, new four-lane interstates, hospitals, apartment buildings, schools and countless other basic infrastructure projects. Compared to neighboring Haiti, which continues to be marred by natural and governmental disasters, I genuinely believe in the Dominican Republic’s effort to improve their economy. For all you social activists out there, this can be a great option.