Deeds done, Sunday, Nov. 27, 2016

Chestnuthill TownshipRelative Assets LLC to John J. and Diane L. Barsuaskas, Lot 12, Oak Hill, $222,000East Stroudsburg BoroughMildred Martha Pilgrim (Est.) Linda Susan Cummings (Exr) to Gerald Arch, Land, "Subdivision of Lands of John Bilock, Lot 2, Tax ID 5-6/3/1/1-1, $200,000Hamilton TownshipJohn D. and Roberta Possinger to Anthony D. and Teresa DiSimone, Parcel, R.D. 2, Stroudsburg, Township Route T-467, [...]

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For some in middle class, Trump plan would mean tax increase

WASHINGTON (AP) — President-elect Donald Trump's proposals would modestly cut income taxes for most middle-class Americans. But for nearly 8 million families — including a majority of single-parent households — the opposite would occur: They'd pay more.Most married couples with three or more children would also pay higher taxes, an analysis by the nonpartisan Tax Policy Center found. And while middle-class families as a whole would receive tax cuts of about 2 [...]

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Alpine Mountain aims to become motorcycle park

Don’t expect to see skis on Alpine Mountain any time soon — look for tires instead. Developers plan to replace the ski resort in Price Township with a multi-functional motorcycle park.“They’re calling it Alpine Moto Park,” said owner Kevin Fabiano. In 2014, he and son Kevin Fabiano Jr. bought Alpine Mountain Resort from Appletree Management.Fabiano filed Chapter 11 bankruptcy on the ski resort in March. Then [...]

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The ugliest time of the year

Retailers thrive on the ugly Christmas sweater trend

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Achieving Financial Success Without Extreme Frugality or a Huge Income

It’s not too hard to find stories in the media about seemingly ordinary people finding great financial success. You hear about what seems like an ordinary guy or gal who worked in what seemed like an ordinary career path and somehow they’ve got a million dollars in the bank. How did they do it?

Unfortunately, many of those stories have additional details that you don’t read about in the headlines. Often, you’ll find that those people practiced a level of frugality that seems like complete misery to you. They live in a very tiny home or they eat a very strange diet or they never leave the house or they homestead for all of their food needs. Sometimes you’ll find that although their job title is ordinary, they’ve actually earned a ton of money through either a higher-than-average salary or some other financial benefit (like receiving an inheritance of some kind).

At that point, the walls come crashing down. Rather than giving the idea that anyone can do this, they again reinforce the idea that financial success is something that only occurs in exceptional circumstances.

I’m here to tell you that it’s actually quite possible to achieve financial success without extreme frugality and without a lot of wealth already in the bank and without a huge salary.

Since the start of our professional lives, my wife and I have never earned more than about 25% above the average American salary with the exception of one year where I almost worked myself into a mental breakdown (never again…). We don’t make a ton of money. We also have three children at home and anyone with children knows that they’re money pits, so it’s not like we’ve got tons of income to spare, either.

At the same time, we’re not extremely frugal. I try different things for experiments in my writing, but in our day to day lives, I don’t consider us to be insanely frugal in any way. We eat normal meals, have normal hobbies, and have normal lives.

Yet, over the past decade, Sarah and I have paid off two car loans that measured in the five figures, then eventually replaced those cars and paid for them in full. We paid off our student loans, which was in the five figures for each of us. We also paid off a ton of credit card debt, also measuring in the five figures. We bought a four bedroom home and then paid off the entire thing in about four years. Right now, we have no debts – not even a mortgage – and are saving for actually retiring early.

How is that even possible? It’s possible thanks to using a handful of very smart strategies along the way. The rest of this article is a basic blueprint for what we did.

Focus Your Frugal Efforts on Things You Don’t Care About (or Barely Care About)

People have this false impression that frugality is all about deprivation. When people think about being frugal, about cutting back on their spending, the first things that their mind flashes to are the expenses in their lives that they really care about.

Think about it yourself. When I suggest cutting back on your spending, what do you think about? It’s incredibly likely that most of your immediate thoughts come down to things that you get a lot of personal pleasure out of (with a few of your worst spending mistakes sprinkled in there for good measure).

That’s a completely backwards approach to frugality. That’s an approach that’s virtually guaranteed to be miserable and guaranteed to fail. You’re simply not going to succeed in terms of cutting your spending if your image of cutting your spending is taking away the things you most enjoy in life.

The truth is that the actual success of frugality comes from cutting away things you barely notice and then not spending that money you save but instead using it for something financially positive. It comes from doing things like air sealing your home so that you’re not wasting warm air during the winter months. It comes from things like buying store brand hand soap and store brand laundry soap. It comes from things like making a grocery list before you go to the grocery store. It comes from negotiating for a better insurance package. It comes from moving closer to work so you don’t have to drive each day.

It doesn’t come from eliminating a stop at a coffee shop if you truly love that perfect morning coffee. It doesn’t come from completely abandoning your favorite hobby. It doesn’t come from sitting at home by yourself while your friends have fun. Those are unrealistic visions rooted in a fear of change, a change that has nothing to do with an effective approach to frugality that will actually earn dividends.

Use this approach when you look through big lists of money saving tips. Don’t do the ones that sound like they’d make your life substantially less enjoyable. Instead, focus on the ones that seem like they’d feel almost effortless and the ones that, when you think about it for a second, you realize that it wouldn’t be much of a change. Focus on ones that involve doing one big thing up front and then having it permanently reduce a bill. That’s effective frugality. That’s the kind that will last. And, honestly, it’s pretty fun, because you realize you’re making a low-impact change to your life that will have better long-term results.

Learn How to Cook Well Enough So That It’s More Convenient to Eat at Home

Food is such an enormous drain on the budgets of so many families simply because of the huge cost difference between restaurant food and meals prepared at home. The difference between the two is astronomical, and when you keep repeating that cost difference several times a week, it really adds up.

Believe it or not, the average American family eats out more today than they eat at home, even with that huge price difference. Why? There’s this perception that eating out is simply way more convenient than preparing food and eating at home.

In my experience, that perception is borne out of a lack of comfort that many people have in the kitchen. Cooking a decent meal seems intimidating. Even cooking a simple meal can seem intimidating. When you’re intimidated, your mind amplifies the challenge of the work involved, and when your mind starts to amplify the work involved, it makes eating out seem so much easier that it makes up for the cost difference.

How do you beat that perception? You beat it by actually getting experienced in the kitchen, and you do that by actually making yourself cook lots of meals at home.

Every time you cook a meal at home that you would have otherwise consumed at a restaurant (or takeout or delivery), you’re going to save a little money, but more importantly, you’re going to become a little more skilled in the kitchen.

Something like poaching eggs and making coffee, which might have seemed like an enormous chore in the morning, becomes something you can whip out while getting ready for the day. Something like beef stew might have seemed like a huge challenge, but soon you begin to realize that you can just chop up the ingredients the night before in about ten minutes, dump them all in a slow cooker in the morning, and come home to finished beef stew after work.

As that transition occurs, the intimidation factor of cooking at home will become lower and lower. It won’t seem overwhelming to come home and make even a fairly complicated meal. And, believe it or not, it will actually seem easier to just go home and make something simple like a pot of pasta and sauce than it will to go out to a restaurant.

Doing this transforms eating out (a relatively expensive endeavor) from a crutch that you have to rely on to get through the week to an occasional treat that you use to enjoy an unusual meal.

Don’t Waste Food

I’m often stunned at how much food many households simply waste. They’ll buy something at the store, let it sit in the fridge or on the counter until it goes bad, and then toss it. They’ll buy a food item, stick it in the pantry, and then when they discover it again they judge it to have “gone bad” and just toss it. They’ll pack up leftovers from a meal, stick them in the fridge, and discover them several days later with a thick coating of mold.

All of that is wasteful.

Here’s a new approach. At the start of each day, look in the fridge and see if there are any leftovers you can eat today instead of prepping a meal. Doing that turns one of your meals into a freebie and guarantees you won’t be tossing food in the trash. At the start of each week, when you’re planning meals (something we’ll get back to in a minute), look in your pantry and freezer and use that stuff as the basis for your meal plans. That way, you really don’t have to buy all that much at the grocery store. If you’re looking for a snack, look at what’s in the fresh food areas of your home – are there fresh fruits in the fruit bowl? Are there fresh veggies in the crisper?

Those steps alone take care of a lot of the food waste that a family undergoes. Remember, whenever you toss food in the trash, you’re literally throwing away money. That food cost something to get it into your home and now you’re just tossing it. Try to avoid doing that.

Scale Back Treats Until They Become Treats Again

Humans are routine-oriented creatures. We often fall into daily routines and weekly routines that we just repeat over and over again. Usually, we do them without thinking or feeling – they’re just the norm.

Every time you spend money as part of that daily routine or that weekly routine, you should be questioning whether or not it’s worth it. Are you really getting real value from that expense?

What you might notice if you ask that question seriously is that there are many things in people’s daily routines that aren’t really necessities at all. They’re basically treats. Think of a morning cup of coffee from Starbucks instead of from the coffee pot at work. Think of a regular stop at a store that caters to your hobby.

When you repeat such a thing often enough, it ceases to be a treat. It becomes routine. When something becomes routine, not only does it become a required expense in your life, it also loses a lot of the pleasure. It ceases to be a treat and just becomes “normal.”

One of the best “frugality secrets” out there is that life is actually much more enjoyable if you make your “normal” routine as inexpensive as possible and then spice it with treats with enough intervals in between so that they really feel like treats.

So take your daily stop at Starbucks and spread it out to become a weekly thing or even an every-other-week thing. Instead, get your morning coffee from the shared pot at work.

Here’s the weird part: you’ll actually start to find that drinking it once every week or two reinstitutes it as a treat. It will make the cup much more of a pleasure than before, when it had become a dull routine.

Make your routine bare-bones, then add treats sparingly so that they’re actual treats instead of just a boring routine. You’ll spend a lot less money and the treats will actually bring you more joy and pleasure than before.

Be Organized in Your Thinking and Planning Every Time You Would Spend Money

This one’s simple: whenever you are thinking of spending money, give it some advance thought and plan for it a little bit.

When you go to the grocery store, make a meal plan first and make a grocery list from that plan. That way, when you do go to the store, you have a list to follow.

When you go to the bookstore, give it some advance thought and decide on what exactly you’re looking for as precisely as you can. That way, when you go there, you’re not just wandering around.

Don’t put yourself in situations where you would spend money without thinking about it in advance, and that means far enough in advance that you’re not caught up in the moment of the purchase. Think about your grocery list at home and write it down rather than thinking about what you’ll buy on your way into the store.

This doesn’t mean that you can’t ever be spontaneous with your money. It just means that, if you’re going to be in a position to be spontaneous, you’ve already put some reasonable boundaries on it so that you’re not wrecking your finances by doing so.

For example, if I’m going out with friends on an unplanned evening, I’ll think about that evening in advance and take only enough cash to handle a reasonable evening out on the town rather than a credit card which can open the door to a huge amount of impulsive spending, far beyond what I can reasonably afford. If I take $40, that means I’ve thought about it in advance and I know that I can feel completely fine spending that $40 however I please and still know that everything in my life is still right on track.

Intentionally Move Your Hobby Time Away from Accumulating and Towards Doing Instead

When you’re passionate about a particular hobby, it’s easy to fall into the trap of accumulating stuff related to that hobby rather than actually doing things within that hobby.

For example, if you’re an avid book lover, you can often find yourself building up a huge book collection rather than actually, say, reading books.

This is a reflexive trap that many people fall into as their lives become busy. They begin to get a sense that they don’t have time for hobbies that they once loved, so to fight off that perception, they buy items instead as a substitute for that hobby time.

Here’s a much better approach: schedule blocks of time to actually practice your hobbies. Put them in your calendar first, before other appointments, and actually keep that time sacred.

Give yourself time to read if reading is your passion. Give yourself time to play board games if tabletop gaming is your passion.

That way, when you’re tempted to make a purchase, instead you can look at that block of time and think about the activities you’re actually going to do instead of the things you’re just accumulating.

You’ll find that when you do this, your desire to accumulate stuff actually melts away. For example, that time you might have spent thinking about all of the books you wish you had time to read instead becomes time you spend thinking about that book you’re going to read this weekend. Actually owning that book becomes secondary, and that makes things like stopping at the library much more appealing because the library is focused around using rather than accumulating.

Always Question Every Purchase

The last few entries are actually just specific instances of this overall strategy, which really sums up what a frugal mindset really is. You just question every single purchase.

That doesn’t mean that you cease spending money. It just means that when you’re about to spend money, you ask yourself critically whether this purchase really makes sense, and after you’ve made a purchase, you again reflect on that purchase critically and see whether it really made sense looking back on it.

A financially responsible mindset takes those situations and constantly runs them through their head. When you’re driving or sitting at the doctor’s office or whenever idle thoughts are running through your head, you just parse through a few recent buying decisions or some buying decisions that might be coming up. Do they make sense? Is there a better way to do it? Can I just borrow that item? Can I buy the store brand instead?

What you find is that you start to whittle away a lot of your expenses. You start to see unnecessary expenses as being unnecessary.

At the same time, what you find is that you’re not cutting away at the things that are really important to you. If you spend time considering a purchase, it really becomes clear after a bit which purchases really bring value into your life (and you don’t cut them) and which purchases do not.

That’s the purpose of such reflection. It cuts your spending down to the stuff that really matters.

Automate As Many Bills As You Can, Including Your Savings Plans

When you start paying down your debts and saving for the future, it’s easy to do it at first. You’re excited about the changes and if you’re being frugal, you have money to make those changes happen.

After a while, though, the newness wears off and when you’re making that choice to make a double debt payment or to put $100 away in savings, it becomes a lot harder to manually do that. It’s easy to put it off or justify not doing it.

The best way around that is to just automate it. Automate your large debt payment so that it happens automatically each month. Automate a transfer from your checking to your savings to build up an emergency fund.

That way, you don’t have to repeatedly think about your financial moves. It just happens. You don’t even give yourself a real opportunity to talk yourself out of them. It just happens, automatically.

Treat Your Career as an Opportunity, Not an Obstacle

Many people look at their career as drudgery. It’s something that life forces them to do and they hate every minute of it. They try to avoid actually doing much work and try to get by doing the minimun needed to keep their job.

That’s the wrong perspective, and it’s one that needs to be thoroughly replaced if you want to see lasting financial success.

Instead, see your job as an opportunity. Don’t live to work, work to live. The time you spend at work is time invested so that you can do the things you want in the other areas of your life. The time and energy you invest there is returned to you in terms of financial security and the ability to do all kinds of things in life.

Not only that, it’s an opportunity to open up even more freedom.

Look, if you’re going to be at work for eight hours anyway, why not use that time intentionally to maximize every possible dollar you can earn from your job? You can do that by simply taking on the difficult tasks. Look for situations to challenge yourself at work. Look for opportunities to get free education. Look for things that can bolster your resume and produce a great work review.

If those things aren’t appreciated in your workplace in terms of better pay, so what? They make for great resume material and you can always look for a job elsewhere when your resume starts to look really good. You may even find opportunities for independent work, like taking on a gig as a freelancer in your spare time or setting up a small business.

Just look at those hours you’re investing in your career as, at worst, an exchange for the things you have in life and, ideally, as an opportunity to improve your income and make your path to financial success move along that much faster.

Treat These Changes as Your New Normal

All of those changes seem doable on their own, but for most people, they’re different than the habits and routines that they currently have. These things represent a behavioral shift, a different way of approaching day-to-day life.

The thing is, it requires a permanent shift to these kinds of behaviors in order to make them work. These aren’t things that you try on when you think of them. These need to become statements that describe normal life for you – to do things differently than this needs to become the “strange” or unusual pattern.

Without that change in your sense of normal behavior, these changes won’t stick. They won’t become permanent alterations in your behavior and without that permanent change, they won’t bring about the financial results that you desire.

It’s like the old adage goes: the definition of insanity is to keep doing the same thing and expect different results. If you don’t change something – and by change, I mean change it permanently and establish it as the new normal in your life – then you’re going to keep getting the same results in life. There’s no way around it.

For some people, adopting a lot of changes at once is the best approach. For those people, making all of these changes in one swoop is what they need to do. For others, gradual change works best and they should focus on adopting new changes one at a time and letting them settle.

Remember, the key is to be on guard with these life changes until they truly become normal and the old way of doing things becomes strange. It isn’t until you wake up one morning and realize that your sense of normal now includes those things that financial success will really start pouring into your life with little apparent effort.

Final Thoughts

Here’s the take-home message from this article: the key changes that a person needs to make from the “typical American” lifestyle to one that builds wealth are not really radical changes. More than anything, they simply require introspection. They require reflecting on the choices we’re making and asking ourselves whether there’s a better way of doing things on decisions both big and small.

The path to financial success doesn’t begin with a bunch of misery. It begins with asking questions about why you’re spending each dollar that you’re spending. It begins with figuring out which things really matter to you and which things don’t matter as much. It begins with trying and discovering new things. It begins with building a few new skills that will make you more comfortable doing ordinary things like preparing a meal.

Those things come together over time to raise you up from living paycheck to paycheck. They raise you up so that you can pay off your debts surprisingly fast without giving up things you genuinely enjoy (and, believe it or not, often finding more space for doing things you enjoy).

It’s a path that begins not with radical change, but with asking lots of questions.

Are you ready? Let’s go.

The post Achieving Financial Success Without Extreme Frugality or a Huge Income appeared first on The Simple Dollar.

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5 Ways to Earn Back Your Cyber Monday Splurge… Without Leaving the Couch

It’s incredibly easy to spend money sitting in front of a computer screen, especially on Cyber Monday. No Black Friday lines, no painful exchange of actual cash — not even the depressing sound of swiping your credit card.

But it can be even easier to make some of that money back in the same sitting!

Passive income is a great way to bolster your discretionary funds any time of year, but particularly during the winter holidays, when Americans spend an annual $600 billion.

Here are some effortless ways to generate a little bit of extra padding for your wallet while you’re shopping on Cyber Monday.

1. Watch Videos on Swagbucks

I just earned one Swag Buck (SB) — equal to about one cent — by learning how to use a muffin tin to make prosciutto egg cups on Swagbucks.

I’ll even save money on brunch this weekend and get fancy at home without facing perturbed looks from the waiter when I order a mimosa, minus the orange juice.

Swagbucks’ video topics range from food to celebrity gossip and comedy. And, you don’t necessarily need to watch the videos — just run them in a background tab while you go about your Cyber Monday business.

You can even mute them if you’re not interested in lipstick color recommendations or what to make for dinner.

You can earn about 2 SB every 10 minutes. Once you accrue 100 SB, you’ve earned a $1 gift card to Amazon, Walmart or Target (though you can only redeem rewards once you’ve banked at least 300 SB).

It doesn’t sound like much, but think about how much time you spend in front of your computer. Free money is free money — and it adds up.

I even ran two Swagbucks videos in two different background tabs — and doubled my earnings! Just make sure your computer can keep up, and be sure to click over into the tab from time to time to ensure the videos are still playing.

You usually have to watch a collection of three to four videos to earn an SB or two; I had some issues with getting them to play automatically.

Swagbucks can save you money in lots of other ways, too. Check out our primer on all the ways to put Swagbucks to work for you, and be sure to shop through Swagbucks on Cyber Monday!

2. Share Your Surfing Info With Market Research Panels

Free cash? There’s an app for that. Several, actually.

If you’re willing to share anonymous information about the way you use your computer and mobile devices, you could earn some significant rewards for absolutely no effort.

Smart Panel

Once you take a three-minute survey to ensure you qualify, you can download Smart Panel’s app, which runs quietly in the background of your PC, tablet or smartphone, collecting anonymous information about your surfing habits.

You’ll earn $5 for qualifying, $10 once you’ve had the app installed for two weeks, and then $5 for every month installed thereafter. You can choose to redeem your rewards for Amazon gift cards — or just get cold, hard cash via Paypal.

Nielsen Mobile Panel

The Nielsen mobile app works similarly to Smart Panel, and is available for both Android and Apple mobile devices.

Once you qualify, install the app on your phone. You’ll earn up to $50 per year in rewards — some of which are Amazon and Starbucks gift cards.

Cross Media Panel

Formerly known as Google Screenwise Panel, this one pays out varying amounts depending on how many devices you link.

If you regularly use a computer and a smartphone, you’ll get $4 to sign up, then $2 each week you use your device afterward. As long as you’re over the age of 13, you just need a Google account and can use Chrome, Internet Explorer or Firefox.

Got a tablet, too? Lucky you! You get a $6 sign-up bonus and $3 in passive income every week.

Click here to get started. When you’re ready to cash out, you can choose from a number of super-useable gift cards, from Visa to Domino’s (which I might totally go for. Sometimes pizza is worth more than cash.)

Media Insiders Panel

Here’s another! With Media Insiders Panel, you’ll earn $5 per month, per device — and you can link up to three. Plus, you’ll get loyalty bonuses up to four times per year if you leave it installed.

MobileXpression

Take the survey to find out if you qualify for this market research panel. It’s available for iPhones, Android devices and other devices, including tablets.

If you qualify and install it, you’re guaranteed to earn prizes, and you’ll be automatically entered in the “Weekly Winners” sweepstakes. Goodies given out include iPads, Kindles, digital cameras and more.

3. Let Viggle Listen In

Do you play music or watch TV in the background while you do your Cyber Monday shopping?

If you’re willing to share your info, Viggle pays you points when you allow it to listen in to your music or TV show. The app’s available for Android and Apple devices.

Users have cashed in their points for over $14 million in rewards to date, according to Viggle’s website. Choose from best-seller gift cards like Amazon, Best Buy and Sephora, or even once-in-a-lifetime experiences like a trip to see the finale of “The Voice”!

4. View Beautiful Ads on Your Android Lock Screen

Hey Android users: If you let any of these apps display ads on your smartphone, you’ll earn cash rewards just for using your phone. (Sorry, Apple fans; you can’t use any of these apps yet.)

They all work in about the same way: Install the app, let it populate your lock screen with visually appealing ads relevant to your interests, and rake in the cash.

Although your earnings are tied to unlocking your phone, these apps have algorithms to detect fraudulent usage — so locking and unlocking your phone all day won’t magically make you a millionaire.

Adme

Once you rack up $10, you can request your rewards deposit through Paypal. Check out the app here.

Fronto

This app rewards you in points, which you trade for cash — about 2,500 points for $1.

The app store description says Fronto is trying to pay $20 to each user each month — not bad for something you literally just set and forget!

Slidejoy

One hundred Slidejoy Carats equals $1, and you can get paid after you hit just 200 Carats. You can even choose to donate them directly to charity!

5. Search With Bing

Bing will pay you to use its web search, instead of a particularly doodly one you may use by default.

So when you’re scouring the Internet for the best Cyber Monday deals, make sure to do it through Bing Rewards. You can get $5 gift cards to vendors like Amazon, Chipotle and Starbucks.

Your Turn: Do you know any awesome ways to earn passive income on Cyber Monday?

Disclosure: We have a serious Taco Bell addiction around here. The affiliate links in this post help us order off the dollar menu. Thanks for your support!

Jamie Cattanach is a junior writer at The Penny Hoarder and a native Floridian. She’s passionate about learning, literature, chocolate and finding ways to live the good life as cost-effectively as possible. You can wave hi to @jamiecattanach on Twitter.

The post 5 Ways to Earn Back Your Cyber Monday Splurge… Without Leaving the Couch appeared first on The Penny Hoarder.

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Can a CD Loan Help You Build Credit or Tap Emergency Cash?

Here’s an approach to establishing, building, or repairing credit that few people are likely aware of: a CD loan.

More specifically, the process usually involves opening a secured credit card with a bank or credit union, which is backed by your certificate of deposit (CD). But that’s just one of the potential uses for what’s often referred to as a CD loan.

Such loans are also an option to consider when you need to tap some quick cash, and other sources of funding, such as a traditional loan or credit card, are simply not available.

The downside, however, is that fewer and fewer banks offer CD loans these days because the financial institution typically does not make much money on them. Not to mention that, in the age of low interest rates and high-yield online savings accounts, very few people even have CDs anymore, according to financial experts. What’s more, such loans are capped by the amount of cash in the CD.

“There’s a lot of limitations to them,” says Scott Vance, of North Carolina-based Trisuli Financial Advising. “But this is one of the possible tools you could consider if you need funding for something.”

Here are the key things to know about CD loans.

What Is a CD Loan?

First, for those who may be unclear, a CD is a time deposit account that involves tying up a sum of money for a fixed term, during which the money earns interest. Typically, the longer you agree not to touch the money, the higher the interest rate you’ll earn.

CD terms can be a month, three months, six months, or as long as three to five years. And here’s the key point – there’s a penalty for removing the money before that term has expired.

A CD loan however, allows you to borrow against the money you’ve deposited, without penalty.

Why Use a CD Loan?

There are various reasons to consider this approach to obtaining quick cash. Vance says he has seen clients opt for a CD loan when a sudden, unexpected need for money arises.

“When a client has a large amount of cash tied up in a CD, rather then totally cash out the CD and pay penalties, they can take a loan against that CD,” he explains.

This approach avoids the early withdrawal fees associated with a CD, yet still provides you with the emergency cash needed.

However, it’s important to note that the bank will charge interest on the CD loan. So it’s a good idea to be clear regarding how much interest you’ll be paying and whether this approach really makes the most financial sense.

“I had one client who had a lot of money tied up in three- to five-year CDs. And the roof on their house got damaged and needed to be repaired. They needed more cash to pay for the repairs then they had on hand,” explains Vance. “The interest rate for the CD loan in that case was less then a signature loan, or even a credit card.”

Using a CD Loan to Build Credit

Yet another use for CDs is building or repairing your credit. In this scenario, the money in the CD is used as collateral for a secured credit card or line of credit from a bank or credit union.

Ronit Rogoszinksi, a New York-based certified financial planner and founder of Women & Wealth Solutions, used a CD loan to help her college-bound son open his first credit card and establish credit. She describes it as a simple process that made sense for a teen who did not yet have any credit history.

“When he went off to college, we wanted him to have a credit card,” explains Rogoszinksi. “He applied for a major credit card and was declined.”

Rogoszinksi took matters into her own hands by opening a $500 CD at a small, regional bank that offered secured credit cards. The bank put the money into an 18-month CD, which was used as collateral for the secured credit card provided to her son.

This approach served several purposes, says Rogoszinksi. It allowed her son to establish a credit record, while also teaching him that there would be a penalty if the credit card was used inappropriately – in the form of his parents losing their $500.

“If you either have no credit or you have a child going off to college, and you don’t want them getting a regular credit card, this is a good option,” says Rogoszinksi.

Like other financial advisors, Rogoszinksi notes that few banks offer CD loans or lines of credit anymore. The most likely places to find them, she says, is regional banks and credit unions.

But the bottom line is that you still must come up with the money to put into the bank as collateral, if you don’t already have a CD established. And before taking this approach, make sure a CD loan is your best option.

“Good luck finding a bank still does them,” says Rogoszinksi. “And if you do find one, make sure to read the terms of the loan very, very carefully… A CD might earn 1% on a good day. If you’re going to borrow against it, find out what the fees are. And if it ends up being a loan that charges 10%, don’t do it. It’s not worth it.”

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