Category Archives: Money Management

How to Write a Goodwill Letter

I never knew you could do this! Get bad line items removed from your credit report with a goodwill letter. This article includes a template and everything.

I first heard of goodwill letters on Personal Find Nancys, a blog that sadly no longer exists.

Essentially,  a goodwill letter is something you write to a past creditor requesting that they remove a blemish on your credit report. Here’s the catch: while you were missing payments, you must have been going through some trying personal circumstances or have some worthy excuse.

Blemishes will be removed after seven years of the report date regardless, but if that’s too long for you to wait, writing one of these letters is a good way to attempt fixing the problem fast.

Before I wrote my own goodwill letter, I had a serious blemish on my report. When I first started going to school, there was some confusion about who was paying.  It resulted in me unknowingly defaulting on a payment plan. As soon as I was aware the money was due under my name, I paid it off.

But apparently that didn’t keep it from creeping up on my credit report. I figured writing a goodwill letter couldn’t hurt.

Good news!  Not only did it not hurt–it worked!

They sent me a return letter confirming that they’d remove the item. I checked my credit report, and it’s no longer on there.

Here’s how to get your credit report for free.

Goodwill Letter Template

Before I wrote the letter, I did a little bit of research. I picked and chose my favorite parts of each example I saw, and created a template. I thought I’d share it with you today since it was successful for me.

It’s not guaranteed to work, but it’s worth the cost of a stamp to try! Keep in mind that you may need to change it up a little depending on your personal situation. If you fail the first time, you can keep trying every six months.

[Your full first and last name]
[Your Address Line 1]
[Your Address Line 2]
[Your phone number]
[Name of month Day#, Year]
Dear Sir or Madam:
This letter is in reference to a paid collection under account number [your account number here].
[State how much the debt was, when it was due, and when you paid it in full.  Point out if you paid it off quickly.]  [State the hardship you were going through and why it kept you from paying your debt.]
[Restate what kept you from paying the debt in a summation/transition.]  [State your regret that you did not pay it on time, mentioning that you strive to be financially responsible and honor all debts.]  [State that this debt, recorded on your credit report, is causing you financial hardship.]  [If the hardship is specific, briefly outline it here.]  I am kindly hoping that [insert creditor here] will consider removing this collection from my credit report as a gesture of goodwill.  [State how much it would mean to you and the opportunities that would open to you if the collection were removed in a professional manner.]  
[leave room to sign your name in cursive here]
[your name printed]

Sample Goodwill Letter

Here’s an example with some Jane Doe data plugged in. Yours should not be italicized.

Jane Doe
123 Main Street

Middleof, Kansas 12345
(555) 555-5555

April 6, 2017

Dear Sir or Madam:

This letter is in reference to a paid collection under account number 948312909832489.

Five hundred seventy-five dollars was owed on my account due October 8, 2016. It was paid in full on November 12, 2016—just over 30 days later. On October 6th of the same year, we had an electrical fire and my house burned down.

In the ensuing chaos, I struggled to keep on top of due dates as we found a new place to live and replaced all our worldly possessions while dealing cooperatively with our renters’ insurance company. I deeply regret that I was so late with my payment, as I am financially responsible and have never been late with a payment since we started our business relationship. My family and I are considering purchasing a new home, but are worried about applying for credit now that this new negative line item is included. I am kindly hoping that Western Pony Bank will consider removing this collection from my credit report as a gesture of goodwill. This gesture would merit our upmost gratitude as we rebuild our lives.




Jane Doe




This article originally went live on July 6, 2012.

ABLE Accounts for People with Autism

In honor of Autism Acceptance Month, Femme Frugality will be hosting a series of Monday articles that focus on the financial challenges and triumphs that people with autism face and achieve. When they are children, these things also tend to affect their family’s finances, as well.

Great way to save money with tax-free growth. ABLE Accounts for adults with autism or families with children with autism.

If you are on the autism spectrum, or your child is on the spectrum, it’s likely that you incur some costs that neurotypical people simply don’t. There may be therapies, adaptive equipment, nutritional supplements or even legal fees related to autism that end up in your budget.

Fortunately, in recent years these financial burdens have been acknowledged. With the passage of the ABLE Act, people with qualified “disabilities” or their guardians now have the ability to open an account built specifically to deal with these added expenses.

I was incredibly psyched when an advisor let me know Pennsylvania was rolling out theirs recently. Since PA is the state I’m most familiar with, the PA ABLE account will be the one we dissect today, but other states have similar options. You can view them at the end of this article.

What is an ABLE account?

An ABLE account is a tax-advantaged investment account. It serves as a way for those with “disabilities” to save for expenses related to their condition–in this case, autism. Families are also able to save for their minor children in this way, or through a power of attorney if their child is an adult in need of assistance.

It’s a 529 account, which means the money you put in there is invested. If you’re familiar with these accounts for college savings, it’s a very similar thing except the scope of qualified expenses extends beyond just post-secondary education.

ABLE accounts are also advantageous because they don’t count against many state or federal programs that require asset tests, allowing people on the spectrum to save for future costs without worrying about losing their healthcare or other necessities.

How do you qualify for an ABLE account?

If you live in Pennsylvania, you’ve likely gone through the rigamarole of applying for SSI so you can get on Medicaid. If your income is low enough, you get SSI payments. If it’s too high, you don’t get the SSI payments, but SSI confirms that you have a disability so you can get state-sponsored insurance.

If your autism has been confirmed by SSI, you qualify. Other ways you can qualify are through entitlement to SSDI or a signed confirmation of disability from a physician. They must also certify that you had autism before age 26, which shouldn’t be difficult.

Invest in an ABLE account for your child's autism expenses and watch your savings grow tax-free.

What is a qualified expense for an ABLE account?

In Pennsylvania, qualified expenses are any expense related to the “disability.” That includes:

  • Tuition for school–Pre-K through post-secondary
  • Books and other supplies related to education
  • Mass transit expenses
  • Purchase of a vehicle
  • Modification of a vehicle
  • Moving expenses
  • Job training
  • Expenses related to gaining/maintaining employment
  • Health expenses across the realms of mental, physical, vision and dental
  • Health insurance premiums
  • Durable medical equipment
  • Respite care
  • Therapies
  • Communication services/devices
  • Personal assistance
  • Nutrition management
  • Financial management
  • Legal fees
  • Funeral and burial expenses

In addition, you can use it for these housing-related expenses tax free, though withdrawing money for any of the below may impact your SSI benefits:

  • Primary residence expenses
  • Rent
  • Mortgage payments
  • Property taxes
  • Home improvements or modifications
  • Utilities

This is by no means an exhaustive list. You can use the money for anything related to the associated “disability,” and it doesn’t necessarily have to be deemed medically necessary. Just remember to keep good documentation about what you’ve spent the money on. If the IRS ever audits you, they’re going to want to see receipts.

Check out other qualified expenses under PA ABLE.

How much can I save in an ABLE account?

You can save $14,000 per year. If you have family or friends that want to contribute, their generosity counts towards that $14,000.

The max amount you can have in an ABLE account at any given time is $511,758 in the state of Pennsylvania. This max number will vary from state to state. If you are a parent or guardian who is saving for a child, once you reach this point you may want to talk to a professional about a trust or even a special needs trust.

What are the tax advantages of saving in an ABLE account?

You contribute money after you’ve already paid taxes, so contributions won’t lower your AGI on your taxes. However, the money is allowed to grow tax-free, and as long as your withdrawals are made for qualified expenses, you won’t have to pay taxes when you take the money out.

If you spend the money on an unqualified expense, though, you will be hit with a penalty.

You don’t necessarily have to live in a state to purchase its plan. For example, PA ABLE is available to people in all 50 states–not just Pennsylvania. On this particular plan, you might end up paying state taxes on your gains if you’re from out of state. Pennsylvania residents are exempt, and also won’t pay state taxes upon a qualified withdrawal.

Pennsylvania residents also benefit from exemption from the PA inheritance tax. Check with your state to see what benefits may be available.

Stop worry about asset tests and start building savings with an ABLE account.

Will an ABLE account mess up my state or federal benefits?

ABLE accounts are not considered for SNAP benefits or any other federally-distributed benefits with means-based tests, save for SSI.

Typically, SSI limits your assets to $2,000, but ABLE accounts are a little different. They won’t count the first $100,000 in your ABLE account against you for SSI qualification or the determination of your dollar-amount benefits.

Separately, the state of Pennsylvania has passed legislation that prohibits your ABLE balance from being used in any asset tests related to health or disability. They’re also not allowed to use it for SNAP per the USDA’s issued guidelines.

What about financial aid for college?

In the state of Pennsylvania, PA ABLE savings will not count on applications for state-based financial aid.

Because ABLE accounts are not supposed to be counted on federal means-based tests, the general assumption is that these savings should not be included on the FAFSA. However, as far as can be told the US Department of Education has not issued any guidance on this to date. You may want to call the Federal Student Aid Information Center to get the most up-to-date information.

Do not count ABLE savings on other children’s FAFSA applications.

What are the fees?

You can avoid all administrative fees by getting your documents delivered electronically. Investment fees are between 0.34% and 0.38% depending on which option you pick.

Picking an option–from conservative to agressive–is something we’ll be tackling in a future post. Saving for college with a 529 is one thing, but saving for expenses related to autism that come up as a part of your daily life is quite another all together.

Rent isn’t something you’ll be paying in 30 years–it’s something that’s due now. If you need an iPad to communicate,  you’re not going to wait for 15 years of appreciation on your investment before you start to exchange information with the world.

But that isn’t to say the most conservative option is the best choice each and every time. It’s complex, and something we brought an expert in to cover.

functional fashion modern frugal mom

Are ABLE accounts worth it?

While the fees may not be the lowest, the account is tax-advantaged and allows you to use your money before retirement age. It also allows you to save for future expenses without disqualifying yourself from certain federal and state means-tested benefits.

If you’re a parent, you may not be sure if your child will go to college or not. An ABLE account gives them the flexibility to pursue whatever occupational or educational path they want and are able to when they get to that point in their life.

Or, if you come up against a financial emergency between now and then because of your child’s medical, communication or educational needs, you have the money there to save you from financial distress while still providing the best for your kid.

Overall, it’s a much-needed solution that many individuals and families will be able to use to their advantage. With so many frustrating lines of red tape around every corner, it’s good to see that this issue is getting some recognition and legislation.

Other states with ABLE accounts

Note that not all state plans are created equally. Don’t pick a plan simply because it is based in your state or think that because your state doesn’t offer a plan, you’re not eligible. Fees, residency requirements and state tax advantages are all going to vary. Do further research before opening any financial account.

Cheap and Free Tax Preparation Options

Totally surprised! I qualify for the third option on here and I think most of my friends do, too! So many free tax preparation options...

This year, taxes are due on April 18, 2017. That seems like it’s far away, but it definitely sneaks up on you quicker than you’d think!

Beside avoiding procrastination, filing your taxes earlier helps you reduce the odds that you’ll be a victim of tax identity theft. That’s because the IRS only accepts one return for each social security number, so if an identity thief files a fake return before you get to your real one, you’ll have more than a headache on your hands.

If you’re looking to file and don’t want to do it yourself, but also don’t want to drop a ton of cash, check out these four cheap and/or free tax preparation options.


VITA is a free tax preparation service for low- and middle-income Americans. Trained volunteers help you get your information straight in person, and then run it by the supervising volunteer, who has even more training. Once you’ve made it through all of your interviews, which can take about one to three hours depending, they e-File your return for you, and you’re good to go!

You do have to make less than $54,000 to qualify for this program for the 2016 tax year. Those income limits change based on your geographic location, and specific life circumstances. You’ll have to run all of your family’s specifics by the organization that runs VITA in your area before being granted an appointment.

Free File

Free File is another IRS-sponsored way to get free tax preparation. They’ve partnered up with some tax preparation software companies to allow households with income under $64,000 to use that software for free. In many states, you can even file your state return for free using this method. Just be sure to check out this wizard tool that will show you which software is best for your specific situation.

Transparent Software Options

If you don’t meet those income requirements, you can still file your taxes affordably with guidance from tax software. There are really expensive options that come with a big price tag and hidden fees, and then there are affordable, transparent options like FreeTaxUSA.

The Federal returns you file with them are always free. Even if you’re self-employed or own a small business. Even if you’re a homeowner. State returns are $12.95, and, if you want, you can pay an extra $6.99 to file amended returns, get audit assistance or access their live chat with front-of-the-line privileges. Right now you can get 10% off your entire order using promo code FREETAXUSA10.

Big Box Tax Preparation

This is my least favorite option. The biggest reason is that in my experience, I haven’t found it to be affordable at all.

One year, I took my taxes into a big box store. I had multiple state returns because of frequent moves. Income tax for one state was supposed to be waived because of military status and state law, but this guy refused to listen to me, and wanted me to pay additional taxes erroneously. And then pay him $300+ just for doing a bad job.

I walked out the door. These people aren’t CPAs. They’re seasonal workers who receive some seasonal training. I called up my state to make sure I wasn’t totally screwing up, and they confirmed that the big box store guy was wrong.

In my opinion, the best way to use big box tax preparation is as a free consult if you’re preparing your taxes yourself. Otherwise, especially if you’re a contractor and have lot of schedules and forms to attach to your 1040, they can be a big money suck.

Cheap and Free Tax Preparation Exists

If you’ve been putting off filing your taxes because of cost, worry no more. There are ways to get your return filed for free or moderate costs, without taking the risk of DIYing it.

Affordable Small Business Accounting Software

Did you know that as of 2016 there were 11.3 million women-owned businesses in the United States?

True story. Since 2007, the economy at large has only seen an increase of 9% for the establishment of new businesses. But women-owned businesses? Forty-five percent growth.

Not all of this growth is for positive reasons. One reason people leave the W-2 grind and head out on their own is unequal pay and marginalization in the workplace. It stands to reason that women would start working for themselves or taking charge and employing others.

This is especially true for black women, who are the fastest growing group of entrepreneurs in our country. When you consider the added barriers that racism imposes, it’s not surprising that so many women are taking control of their own destiny.

While the reasons behind these trends may be messed up, there’s no reason to feel any kind of pity. Businesses run by women have seen a 37% increase in revenue since 2007–ten percentage points higher than the economy at large.

Women aren’t just quietly leaving, establishing new businesses in lieu of being someone else’s employee.

They’re rocking it once they head off on their own.

Today’s post goes out to all the ladies out there. Full of ambition. Capable. And driven.

Who also want a little bit of help keeping their finances straight along the journey.

Taking Care of Your Money as a Small Business Owner

When you’re a small business owner, you have to take care of everything yourself–or hire someone to take care of it for you. When it comes to business finances, the person you’ll be hiring or contracting with is an accountant.

Here’s the thing, though: you can’t just hand your accountant a shoe box of receipts at the end of the year along with your bank account number.

You have to stay organized so they can do their job effectively. Not only will it help you stay on good terms with your CPA, but staying organized will help you measure the health of your business on days that don’t rhyme with “April 18th.”

A great way to do this is through accounting software. Typically, the best programs are going to be pseudo pricey. But recently, I got turned on to one that’s pretty darn comprehensive at an affordable price. Because you shouldn’t go broke trying to take care of your money.

Affordable Small Business Accounting Software from Xero

Let’s start with the basics: Xero is an online accounting software program that services companies with up to one hundred employees. If you don’t employ that many people, or only employ yourself, you don’t have to pay the same price as the larger small businesses. Prices are tiered:

Starter Plan

Best for solopreneurs with minimal invoicing needs.

Comes with:

  • Ability to send five invoices/quotes per month.
  • Capability to enter five bills to remind yourself when to pay and to make sure you have an accurate perception of your cash flow.
  • Ability to reconcile 20 bank transactions.

Cost per month: $9

Standard Plan

Best for companies with >6 employees, or solopreneurs with higher monthly invoice volumes.

Comes with:

  • Unlimited invoicing and quotes.
  • Unlimited bill tracking.
  • Unlimited bank transaction reconciliation.
  • Payroll for up to 5 people.

Cost per month: $30

Premium Plan

Best for companies with 6-100 employees on payroll.

Comes with:

  • Unlimited invoicing and quotes.
  • Unlimited bill tracking.
  • Unlimited bank transaction reconciliation.
  • Payroll for up to 10, 20 or 100 people.
  • Multi-currency capabilities.

Cost per month:  $70 for 10 employees, $90 for 20, and $180 for 100.

Free Trial

No matter which plan best suits your needs, you can get a 30-day free trial here–no credit card required.

Evergreen Nonprofit Pricing

Run a nonprofit? Then you can get 25% off the prices you see above at the end of your free trial.

Xero’s Functionality

Affordable payroll software for small business owners.

Xero is super simple to use. The larger your business is, the longer it will take to set up, but that’s only because you have more information. No hair pulling. Everything is streamlined. Even the most complex accounting maneuvers are navigable with Xero’s guidance. Your CPA will be impressed when she looks things over.

The biggest bump in the road is the payroll availability. This is no problem if the only person you employ is yourself, but if you do have employees, you should know that currently Xero only offers full payroll capabilities, including electronic services, for the following states:

  • California
  • Florida
  • Illinois
  • New Jersey
  • New York
  • Pennsylvania
  • Texas
  • Utah
  • Virginia

It does offer payroll for these states, as well–you just won’t be able to execute every last thing for your employees electronically:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • Colorado
  • Georgia
  • Hawaii
  • Indiana
  • Kentucky
  • Louisiana
  • Maryland
  • Michigan
  • Minnesota
  • Mississippi
  • Nebraska
  • Nevada
  • New Hampshire
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • South Carolina
  • South Dakota
  • Tennessee
  • Washington
  • Wisconsin
  • Wyoming

They keep adding states all the time, so if you don’t see yours, be sure to scroll down on this page to check Xero’s most recent list.

Simplicity and Affordability

While Xero is simple and affordable, it’s also comprehensive. After that initial setup, upkeep is a breeze. That gives you more time to get back to running the world.

Shoot...this is pretty much half the price of the small business accounting software I'm paying for now...



*I have been compensated for the writing of this post. Regardless, all opinions are honest and my own.*

Personal Finance Insights from Self-Employed Women

Some insights I wouldn't have thought of, and some great questions posed. Personal finance from self-employed women.

Yesterday I had the privilege of organizing an event in honor of Women’s Money Week at Whetstone Workgroup. Since the patrons at Whetstone are self-employed, we set up a discussion with financial counselor Katharine Perry on saving for retirement when you’re self-employed (and female.)

I learned a ton, including the fact that the state of Pennsylvania just rolled out a 529 for special needs individuals. More on that another day, but essentially, the money can be used for needs beyond education at any time.

I also learned a lot about what self-employed women are worried about when it comes to personal finance, and also got some insights from those who have done this freelancing gig for a lot longer than I have. I wanted to share some of that with you here today.

Why Women’s Rate of Savings is So Low

Three out of every five women over the age of 65 cannot pay for her basic needs. We live longer than men, but when we set our retirement goals we aim 50% lower. (See these and other alarming stats here.)

It was interesting to hear some of the reasons why this happens. In our group here in Pittsburgh, there were a couple of points that were brought up:

  1. Women, in general, tend to take care of everyone else before they take care of themselves. This thought process goes beyond day-to-day care taking and extends to finances. When you make your own well-being the last priority, your retirement savings is going to suffer—or be nonexistent.
  2. We undervalue ourselves. When we don’t charge enough for our services, it becomes more difficult to set larger dollar amounts aside for tomorrow.

Retirement Savings When You are Self-Employed

Automation is an awesome way to make sure you’re saving enough for retirement. But that becomes a little bit difficult when you have a variable income.

There are several ways to tackle this issue. One is to treat your retirement savings like a bill—just as important as your rent or cell phone bill. If you automate those bills, you should be able to automate your retirement contributions for the month if you’ve made paying yourself first a priority.

Another way you could approach it is by contributing a certain percentage of each paycheck. This method can’t be used in conjunction with automation when your pay is variable, but if you get disciplined about it the habit could become just as routine.

The Worst Can Happen

When you’re self-employed, you have to worry about what happens when you can’t work because that’s the moment money stops coming in. There are no such things as sick days when you work for yourself.

There are also major concerns around disability and finding a good policy that won’t cost you an arm and a leg. These policies are arguably just as if not more important than life insurance during your working years.

Another big concern was long-term care and its accompanying insurance. This wasn’t just a concern for ourselves. People are living longer. If your parents don’t have this type of coverage, you, their child, will in all likelihood end up footing part if not all of the bill.

These situations can cause temporary financial strife or even eat into the money you’ve been saving for your own golden years. It can really mess with your head, too, because the financial hell doesn’t end until your loved one does, and that’s not something you want to see happen–money be damned.

What if I’m starting late?

This was a major concern. It’s all well and good to tell twenty-five year olds that compound interest is their friend. Time is on their side, and moderate savings today could lead to major returns in the future.

But what if you’re just getting started at 60? Or even 50?

We landed here:

It’s best to sit down with a trusted financial advisor in these situations. Every individual’s situation is so unique, and when you don’t have time on your side, blanket advice is rarely going to apply.

Diversify your income.

Remember when that money mentor told me you don’t want to keep all of your eggs in one basket?

There was a lot of agreement with that sentiment yesterday. Whether you’re diversifying your income streams within your freelancing business or diversifying your skills in multiple fields, having something to fall back on when one stream of revenue falls through can be a lifesaver.

The Unemployment Rule

This is totally unrelated to self-employment, but I did learn a new financial rule of thumb during the event. Apparently, for every $10,000 you make in salary, you will be out of work for one month should you become unemployed.

Maybe that’s why CEO’s get such generous severance packages while entry-level workers often get—unemployment?


How do we spread this message to others?

At the end of our event, I was thrilled to hear that everyone was energized to take this message to the women in their lives.

There was just one question.

“How do we get them to engage?”

My answer?

Actively combat Cyber Balkanism.

Cyber Balkanism is the phenomenon of all of us staying in our own little corner of the internet. We don’t actually spread ideas, because we’re talking to the people who are already listening.

Go where other people are. If you enjoy reading mommy blogs, go there and engage. Into fashion? Same deal. NES games? Seriously, there’s a corner of the internet for everything.

When you engage with people, they have a way of engaging back.

That’s true online, but it’s true in real life, too. There is still such a taboo around money discussions, and I personally feel this silence is especially detrimental to women. We, who want to close the gender wage gap, are uncomfortable discussing ways to increase income. We, who want to combat sexism in finance, but may be uncomfortable bringing up the subject of higher-level finances with friends.

Go where other people are. Get outside your bubble. Meaningfully engage, and then don’t be afraid to bring up money.

Also, share this post. Post haste.

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