If you have a take-home of $5,000 a month, plan how much of that you want to save and then you will know how much you have to spend. For example, if you are going to save $1,000 a month, that will leave you with $4,000 to spend on everything else. That is an example of your savings dictating your[Read More…]
Get Out of Debt
A reader who had a weight problem and a spending problem told us that a therapist he was seeing suggested that he say no to himself once a day. He described it as dreadfully painful at first. When he went into Starbucks to buy a coffee, he said “no” to himself about adding the five teaspoons of sugar he normally[Read More…]
Canceling a credit card that you are not using can actually hurt your credit score. What you want to do is retire it to a safe place where you keep your other financial records? Why? When your credit score is being calculated, one of the things that the three credit reporting agencies look for is your total available credit. If[Read More…]
If you have already been hit with some of the consequences of poor credit, like losing your credit cards and being closed off to most lending, one thing you might be able to do to improve yourself going forward is to get a secured credit card and then carefully pay that bill on time. The secured credit card is reported[Read More…]
Often when debt begins to close in on a person the tendency is to seek out new sources of credit as a backup, which means typically applying for every credit card offer that can be found. Don’t do it if you can possibly avoid it because it can and will hurt your credit score. When the three credit reporting agencies[Read More…]
Life is iffy, that’s why we all need an emergency fund: an amount to see us through tough times. But how much? How to we save it if we are spending almost everything we bring in, or worse, spending more than we are bringing it? As a rule of thumb, financial advisers suggest a enough money in an emergency fund[Read More…]
Taking a second or third job to reduce your debt load sounds completely unappetizing to all of us, but it is something to consider to get your debts down to zero fast and keep them there. Some of the best sites to find jobs, to fit in with your day job, include Indeed.com, Glassdoor.com, simplyhired.com, Ziprecruiter.com, Linkedin.com and others. Oftentimes,[Read More…]
Use barter wherever you can to save time and money. You are skilled at certain things, others are skilled at other things. If you are an accountant, trade doing someone’s taxes with a painter or plumber for their services.
With the increased banking regulations today, banks are hemmed in on where they can make money and are just waiting for you to make late payments so that they can tighten the interest screws on you. Don’t let them. Start automatic payments on all of your credit cards and loans for the minimum monthly payment. We don’t recommend that you[Read More…]
(48) When You Borrow Money, Understand the Terms and Conditions of the Loan; Get into the Fine Print
When you borrow money, and that includes using a credit card, be sure you understand all of the terms and conditions of all your loans so that you do not run afoul of the lender.
Everyone has overspending triggers and if you want to get debt under control and build credit, you need to find and eliminate them. It could be the people who you shop with, the mood you are in, anything. You have to figure out what makes you spend money and stop or change it. One debt-ridden reader told us that she[Read More…]
If you have money flowing out in every direction, get control of it by making a list of where your money is going, then readjust where you are spending it. If you are an entrepreneur, the above advice goes doubly for you because a small business can be an endless money pit of leased equipment, employees, expense accounts, etc.
Take 20 percent of your monthly disposable income to pay down all debts until they disappear, then use that money to build up your emergency fund and then retirement savings.
Anytime you get in a windfall of cash, use it to pay down debt rather than buying a present for yourself. This includes tax returns, bonuses at work and, yes, your increased salary from finding and taking a better job. Most people, when they get a better, higher paying job, will crank up spending and debt. Be smart, use the[Read More…]
If you are charging various purchases, writing out checks, paying cash, withdrawing money from the ATM and not accounting for it, stop! Money is sailing out and you do not really know where it is going. Figure out one or two ways to spend your money and stick to it. For example, pay for everything through your checking account and[Read More…]
Once you have made the decision to commit yourself to getting out of debt and rebuilding your credit, you will see ways to begin freeing up money in many areas of your life to focus on reducing that debt. One way to do this is to always use price comparison sites before buying anything. Take it a step further and[Read More…]
Don’t try to hide from creditors if you have fallen behind on your payments. Contact them and determine what can be done to work out a new payment schedule. Nothing makes a lender more nervous than having someone with late payments who they are unable to reach. If you contact them early enough in the process and show a willingness[Read More…]
If cash seems to fly through your fingers and you struggle to get a handle on debt and build credit, leave your credit cards at home and get your paycheck deposited directly into your checking account and set withdrawal limits of how much you can take out from an ATM in one day.
If you are considering debt settlement or debt consolidation as two potential ways to relieve the debt you are carrying, make sure that you understand the difference between the two and the pros and cons of each. In its most simple form, debt settlement reduces the amount of debt you have, while debt consolidation reduces the number of creditors you[Read More…]
If you are overwhelmed with your debt and looking for a quick fix to get out of debt and get on with your life and you are looking at a debt settlement program, tread carefully and seek advice from a qualified financial adviser or a lawyer steeped in knowledge about bankruptcy and debt settlement.
Minimum monthly payments on credit cards is like someone with their hands around your neck and squeezing you…not enough to choke you to death, but certainly enough to make it hard to breathe. The only thing banks like more than you making a minimum monthly payment is for you to be late on a couple of payments so they can[Read More…]
Yes, there is good and bad debt relatively speaking and you need to appreciate the difference between the two in order to reduce debt and build credit. Good debt is “investment debt” so that when you borrow money, you expect to make money on the borrowed funds. What are examples of good debt? Home mortgages, loan for a college education,[Read More…]
One quick way to get your spending under control in a debt situation is to leave all of your credit cards at home and spend only cash. It will focus your spending and do away with all of those “lost transactions” you do, like $20 on a credit card here, $40 on another and $60 on another. If you use[Read More…]
Use student loans only to pay for college that you cannot afford to pay for right now. Using student loan money as if it were cash income will come back to haunt you later and impact you for years. Need income? Get a job!
While you may need to cut costs in order to see you through your debt crisis, don’t be penny wise and dollar foolish by not having adequate insurance for both your property and yourself. Without the right insurance, you have a disaster waiting to happen.
Create a paper file and keep it in a safe place of all of your important documents.
Create a long-term financial plan and include where you want to be in a year, five years, 20 years. Things happen to change the best laid plans, but you need a plan to begin with and then adjust it as the reality changes.
If you have been getting those promotion checks in the mail that offer you low or no interest rate charges on sums that you transfer within a specific period of time, consider them, but remember, they are not without risk or impact on your credit score. Plus they can cost a little money to make the transfer, even if the[Read More…]
Going shopping is an easy way to throw you off your best laid plans for getting out of debt. If shopping is a hobby of yours, find a new past time that doesn’t cost so much money.
If you are older and drowning in debt and have whole life insurance, consider cashing in the policy or the the cash-value portion of it to get that big debt paid off to give you financial peace of mind.