How to Survive 10 Financial Horrors

What’s scary about Halloween? How much we’re willing to pay for one day of the year. Americans will spend a record $10 billion this Halloween – $2 billion more than last year.

All the ghouls, goblins, ghosts and spooky creatures make October the time for fears and frights. But some horrors follow us year-round – like terrifying financial nightmares that will make you sleep with one eye open.

Is there a financial boogeyman haunting you? Here are 10 financial horrors, and how to conquer them…

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1. Running from a boulder of student loan debt

What it means: You’re graduating from college and face a massive student loan tab you have to pay back.

No wonder you’re worried:

44 million student loan borrowers who owe a collective $1.5 trillion

The average student loan debt per borrower = $39,400

How to survive:

1. Consolidate federal student loan debt.
2. Settle with private lenders.

Learn more at Student Loan Debt Consolidation.

2. Zombie debt collectors

What it means: Your debts are like the living dead. They keep coming back no matter what you do.

No wonder you’re worried:

Debt collection is CFPB’s No. 1 complaint

30 million Americans have at least one debt in collections

Average amount in collection = $1,000

How to survive:

1. Find the right debt relief option – consolidation, settlement, etc.
2. Stop collection calls and file suit for harassment.

Learn more at Fair Debt Collection Practices Act.

3. Falling off a corporate high-rise

What it means: You’re losing a battle with credit card debt and you feel like your financial life is in jeopardy.

No wonder you’re worried:

Average balance on credit cards = $6,354

Average number of credit cards: 3

Average interest rate available: 17.07 percent

How to survive:

1. Take out a personal debt consolidation loan.
2. Pay off your debt at a much lower interest rate.

4. Teeth fall out during a loan application

What it means: Your credit score isn’t good enough so you’ll be judged and rejected by your creditors.

No wonder you’re worried:

Average FICO score = 695 (700 or better is good)

1 in 5 credit reports contain a damaging error

How to survive:

1. Correct your credit report to ensure it is error-free.
2. Use credit monitoring as you build your credit score.

Learn more at Get the Credit Score You’ve Always Wanted.

5. Armageddon in April

What it means: You’re worried about owing money to the IRS and being unable to pay your income taxes.

No wonder you’re worried:

An extension doesn’t stop interest charges

Net tax gap for the IRS= $458 billion – $52 billion in late payments

How to survive:

1. Find a state licensed tax attorney.
2. Explore options for tax debt relief – OIC, CNC, installment agreement.

Learn more at Finding the Best Tax Debt Relief Solution.

6. Trapped under a paper mountain

What it means: You have too many debts, too many bills and no way to escape – you’re suffocating.

No wonder you’re worried:

U.S. consumers owe $3.9 trillion, in total

796,037 people went bankrupt in 2017 alone

How to survive:

1. Call a credit counselor to find solutions.
2. If no path is open, declare bankruptcy – it’s not the end of the world!

7. Bleeding out from monetary paper cuts

What it means: You aren’t prepared for medical debt and even small issues are killing your budget.

No wonder you’re worried:

Medical debt is the No. 1 reason why Americans go bankrupt

Nearly 43 million Americans have medical debt

How to survive:

1. Review your policies to identify coverage gaps.
2. Create a budget that allocates savings for emergencies, like a trip to the ER.

8. You call the bank, but no one answers

What it means: You aren’t good enough to qualify for credit – you aren’t creditworthy, so you’re ignored.

No wonder you’re worried:

You’ll need at least a 580 credit score to qualify for an FHA loan with the lowest down payment (3.5 percent)

How to survive:

1. Take strategic action to build your credit score.
2. Use comprehensive credit restoration before loan applications.

9. Financial Horror No. 9: Partner leaves you for the landlord

What it means: You’re not ready to buy a home, so your significant other will find stability elsewhere.

No wonder you’re worried:

The median price for a home in the U.S. is now $275,000

You’ll need at least a 580 credit score or higher to get approved for a 3.5 percent loan

How to survive:

1. Use debt consolidation to reduce debt-to-income (DTI) ratio.
2. Budget your money to save for a higher down payment.
3. Build your credit score with credit monitoring.

10. Financial Horror No. 10: Doppelganger takes over your life

What it means: You’re scared your information and data will be stolen and you’ll become a victim of ID theft.

No wonder you’re worried:

16.7 million people were victims of identity theft in 2017

Financial losses for ID theft totaled $16.8 billion

How to survive:

1. Review your credit reports to identify potential fraud.
2. Use credit monitoring to set up fraud alerts.

Learn more at How to Prevent Identity Theft.