With the current economic crisis, many people are finding themselves in dire financial straits. I have heard from people who, due to bad mortgage and real estate decisions, find that they now owe more than their home is worth, and balloon payments are coming due.
Other individuals have been living on credit cards, charging more than they make each and every month until they maxed out their credit cards, and now they can't get more credit for living expenses. What is the answer?
Every situation is different. Some situations are not as bad as they may seem, while others may be worse than you think. Before making a decision to declare bankruptcy, which will wipe out most of your debt in most states, but leave you in the poor credit risk category for as much as 10 years, contact a credit counselor to see if debt consolidation is an option for you.
Credit counselors have been well trained to determine how to help you to help yourself. So, do yourself a favor and contact a reputable credit counselor as soon as possible.
Saturday, October 4, 2008
Wednesday, August 20, 2008
Trying to Get Out of Debt?
If you are up to your eyeballs in debt, and don't know where to turn, here are some ideas that may help.
- If you are seriously in debt, and can no longer afford the minimum monthly payments for your bills, go to a not-for-profit credit counseling agency immediately. The credit counselors are trained to help you consolidate debt, and find ways to help.
- Cut up all of your credit cards but one that you can use for emergencies only, and keep paying down your balances until they are paid off.
- Call each and every credit card company and ask for interest rate reductions.
- Get a second job to help pay off the debt. One good way to make extra money is with an online business that you can do in your spare time from home. We like a program called Profit Lance. It is a comprehensive program that teaches you step-by-step how to make money online, and gives you a free website. At only $77 for the lifetime membership (with an impressive 8 -week moneyback guarantee), it's a great place to start. Start making money online. Click Here!
Thursday, July 24, 2008
Clean Up Credit to Get the Best Rate Mortgage
If you are planning to buy a home, or if you need to refinance your current mortgage, take a look at your credit score first. Unless your credit history is spotless, your most likely won't qualify for the lowest mortgage rates.
Whats your score? You are entitled to one free credit report each year from the three major credit agencys. Get your credit report and check it carefully for any inaccuracies, or problems. You may request other reports that include your FiCO credit score.
How is a FICO score calculated? According to Fair Isaac, the follow factors go into creating your credit score:
- Payment History: 35%
- How much owed: 30%
- Length of credit history: 15%
- Applictions for new credit: 10%
- Types of credit used: 10%
Clean up your credit, or face paying much more in interest rates than those people who have bad credit. If you need help, contact a reputable Credit Repair agency such as Lexington Law. IN most cases, they have the experience and resources to help you repair your credit score faster than you may do on your own.
Tuesday, July 22, 2008
It Takes Planning To Get Out From Under Card Debt
Yes, you can get out of credit card debt. If you are determined to get out of credit card debt you surely can get out of credit card debt. Though it’s a bit difficult to get out of credit card debt, it isn’t impossible.
All you need to get out of credit card debt is determination and planning. Both are equally important (or maybe determination is even more important). Determination doesn’t come without proper reason. So, you need to first ask this question to yourself – “What will I get if I am able to get out of credit card debt?”, “What difference will it make”, “What’s in it for me” or “Is it really beneficial to get out of credit card debt”.
Use the answers to build your determination. The fact that all the nagging via mails/phone (by the credit card supplier and/or their collection agent), will be gone, should do good to strengthening your determination and should provide you with a reason on why you should endeavour to get out of credit card debt.
Think about the stress-free life after you get out of credit card debt. Try to link various reasons together and try to see the benefits through them. All these collectively will help in bolstering your determination and prevent it from getting weak at any point in time.
The second thing that you need to get out of credit card debt is planning. The planning to get out of credit card debt will start with making a list of the credit cards that you currently posses and noting the debt and the APR for each of them. The sum total of all these various credit card debts, will give you the total credit card debt.
You also need to check if you have been defaulting on payments on some of these credit cards (and hence incurring a late fee). You will need to avoid that and put it on the plan you have prepared to get out of credit card debt.
The next step in getting out of credit card debt is to check your current financial position and make an assessment of what you expect your future financial position to be. Next comes the research to check the various balance transfer offers available in the market; to see if one of these can prove beneficial to you.
Use all this information to calculate how much time you will require to get out of credit card debt and how you will distribute the debt payment across your various credit cards (ensuring that you payoff the debt that is hitting you the most and also ensuring that you don’t incur late fee on any credit card payments)
Wednesday, May 21, 2008
various
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Wednesday, March 26, 2008
Credit Card Management - The Inside Out Method
Credit Card Management - The Inside Out Method
When the economy or personal issues and problems result in a high credit card debt, we often find our debt spread over three or four or more cards. So you may have a Visa, several MasterCards, and a Discover card with maybe many more each carrying several thousands of dollars of debt. The result is an ugly parade of bills from each company each demanding a minimum payment that pays the interest and takes just a small amount off of your debt.
If it seems that the debt mountain never seems to go down, that’s not an illusion. The situation is not designed to help you get that debt down. It’s a cruel mixed message the credit industry sends us because if you have high credit card debt, your credit rating goes down. But even if you have too much debt, the credit card companies just keep raising your credit ceiling and sending more and more credit card offers to lure you into more debt.
The instinct is to keep taking out more accounts and transferring money to those deceptive zero percent offers that expire in a matter of months and leave you with yet another bill to pay that only makes managing that debt even more impossible. If you do get a little money ahead, the instinct is also to pay more down on the debts that have the highest interest rates to try to slow the erosion of your finances due to high rates.
But there is another approach to handling this debt that goes completely opposite your instincts and gives more control to you to begin seeing headway against those debts. But to use this approach, you will have to think with your head, not your emotions and not panic but think about how to get as much principle paid down as possible. This inside out approach to paying down your credit cards is simple and gives you a roadmap to freedom from debt.
First of all, stop taking out more accounts. That only gives another credit card company access to your money. They can charge you membership fees and try to lure you with credit insurance. If you have three or more credit resources already, that’s plenty.
Second, use short term offers wisely. If one of your existing accounts offers you a zero percent deal for a few months, take it but transfer a small amount to that account. Then you can focus on paying off that transferred amount and see 100% of your payment go against principle which is the fastest way out of debt.
Third, pick a card and pay it off. It might be the card with the lowest balance which is one you might give the least to so you can respond to the higher level debts. But if you pay that card off, that is one less bill coming in each month and it gives you a great feeling to know you are slowly killing off the monster of credit card debt one card at time.
That brings us to the cornerstone of the inside out method. Instead of paying on the card with the highest interest rate, pay them the minimum payment and put your excess funds against the cards with the lowest rate. In this way you are getting the most bang for your buck with the small amount of extra funds you may have to pay on the debt. That debt will go down more quickly and then you can attack the bigger accounts and begin to whittle away at them too. And by using a smart approach to the credit card debt you have, you take control of the problem and put it on a program to go away. And that will be the greatest feeling of them all.
When the economy or personal issues and problems result in a high credit card debt, we often find our debt spread over three or four or more cards. So you may have a Visa, several MasterCards, and a Discover card with maybe many more each carrying several thousands of dollars of debt. The result is an ugly parade of bills from each company each demanding a minimum payment that pays the interest and takes just a small amount off of your debt.
If it seems that the debt mountain never seems to go down, that’s not an illusion. The situation is not designed to help you get that debt down. It’s a cruel mixed message the credit industry sends us because if you have high credit card debt, your credit rating goes down. But even if you have too much debt, the credit card companies just keep raising your credit ceiling and sending more and more credit card offers to lure you into more debt.
The instinct is to keep taking out more accounts and transferring money to those deceptive zero percent offers that expire in a matter of months and leave you with yet another bill to pay that only makes managing that debt even more impossible. If you do get a little money ahead, the instinct is also to pay more down on the debts that have the highest interest rates to try to slow the erosion of your finances due to high rates.
But there is another approach to handling this debt that goes completely opposite your instincts and gives more control to you to begin seeing headway against those debts. But to use this approach, you will have to think with your head, not your emotions and not panic but think about how to get as much principle paid down as possible. This inside out approach to paying down your credit cards is simple and gives you a roadmap to freedom from debt.
First of all, stop taking out more accounts. That only gives another credit card company access to your money. They can charge you membership fees and try to lure you with credit insurance. If you have three or more credit resources already, that’s plenty.
Second, use short term offers wisely. If one of your existing accounts offers you a zero percent deal for a few months, take it but transfer a small amount to that account. Then you can focus on paying off that transferred amount and see 100% of your payment go against principle which is the fastest way out of debt.
Third, pick a card and pay it off. It might be the card with the lowest balance which is one you might give the least to so you can respond to the higher level debts. But if you pay that card off, that is one less bill coming in each month and it gives you a great feeling to know you are slowly killing off the monster of credit card debt one card at time.
That brings us to the cornerstone of the inside out method. Instead of paying on the card with the highest interest rate, pay them the minimum payment and put your excess funds against the cards with the lowest rate. In this way you are getting the most bang for your buck with the small amount of extra funds you may have to pay on the debt. That debt will go down more quickly and then you can attack the bigger accounts and begin to whittle away at them too. And by using a smart approach to the credit card debt you have, you take control of the problem and put it on a program to go away. And that will be the greatest feeling of them all.
Thursday, February 28, 2008
20 Ways College Students Can Avoid Identity Theft
20 Ways College Students Can Avoid Identity Theft
Although our topics are usually about repairing credit, avoiding the need altogether is just as important a topic. One of the major reasons today that peoplle find themselves with the need to recover their identity and repair their credit is due to identity theft. By avoiding identity theft, you can save yourself the time and effort it takes to repair the damage that identity theives can do in a surprisingly short amount of time.
Identity theft is the fastest growing crime in the United States, according to the FTC, and College Students are particularly vulnerable.
"20 Ways College Students Can Avoid Identity Theft
Is it possible for college students to prevent identity theft? The answer to this question is both yes and no. Let's make a comparison between identity theft and somebody who attempts to break into your house. Can you stop somebody who will break into your house? Of course, you will do everything to make it difficult for the thief. You may install alarms, locks and even cameras for security purpose. You may hire the services of armed guards and security experts.
Even with these preparations, is there any possibility that somebody will be able still to house break? Certainly, if that person is determined, armed with sophisticated weapons and outnumbers your guards. This has been shown many times in the movies.
It is really the same thing with identity theft prevention. You will do something to make it more complicated for an identity thief, yet there is no guarantee that you will not be the next victim. However, you can at least minimize your risk. The main object is to be cautious in managing your personal information and to be aware. In this way you will be able to be on guard against identity theft. What is important is to always be prepared and be always on your guard.
There is really a need to be aware of the increasing number of cases on identity theft, especially among college students. According to the Federal Trade Commission (FTC), identity theft is the fastest growing crime in the United States. Prehaps due to the comparatively low risk, high reward to criminals. All they need to get your Social Security Number and some pieces of data which are often taken easily. Then, they will assume your identity and commit credit deception, and other fraudulent crimes. It’s a nightmare for the victims. Victims of identity theft will spend hours over several years trying to recover their identity. having black marks against your credit is only one of the bad things that can happen. Some victims have even been arrested for crimes they did not commit, but rather the identity thief perpetrated. This is a draining ordeal that causes too much stress.
College students who move between addresses frequently, and are just starting to build credit are particularly at risk.
Below are some ways college students can avoid identity theft:
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Tag: college students avoid identity theft
Although our topics are usually about repairing credit, avoiding the need altogether is just as important a topic. One of the major reasons today that peoplle find themselves with the need to recover their identity and repair their credit is due to identity theft. By avoiding identity theft, you can save yourself the time and effort it takes to repair the damage that identity theives can do in a surprisingly short amount of time.
Identity theft is the fastest growing crime in the United States, according to the FTC, and College Students are particularly vulnerable.
"20 Ways College Students Can Avoid Identity Theft
Is it possible for college students to prevent identity theft? The answer to this question is both yes and no. Let's make a comparison between identity theft and somebody who attempts to break into your house. Can you stop somebody who will break into your house? Of course, you will do everything to make it difficult for the thief. You may install alarms, locks and even cameras for security purpose. You may hire the services of armed guards and security experts.
Even with these preparations, is there any possibility that somebody will be able still to house break? Certainly, if that person is determined, armed with sophisticated weapons and outnumbers your guards. This has been shown many times in the movies.
It is really the same thing with identity theft prevention. You will do something to make it more complicated for an identity thief, yet there is no guarantee that you will not be the next victim. However, you can at least minimize your risk. The main object is to be cautious in managing your personal information and to be aware. In this way you will be able to be on guard against identity theft. What is important is to always be prepared and be always on your guard.
There is really a need to be aware of the increasing number of cases on identity theft, especially among college students. According to the Federal Trade Commission (FTC), identity theft is the fastest growing crime in the United States. Prehaps due to the comparatively low risk, high reward to criminals. All they need to get your Social Security Number and some pieces of data which are often taken easily. Then, they will assume your identity and commit credit deception, and other fraudulent crimes. It’s a nightmare for the victims. Victims of identity theft will spend hours over several years trying to recover their identity. having black marks against your credit is only one of the bad things that can happen. Some victims have even been arrested for crimes they did not commit, but rather the identity thief perpetrated. This is a draining ordeal that causes too much stress.
College students who move between addresses frequently, and are just starting to build credit are particularly at risk.
Below are some ways college students can avoid identity theft:
- Always protect your Social Security Number. Do not carry your Social Security Card in your wallet or have it printed on your checks. It is the main object for criminals.
- Be aware of shoulder-surfers. Make sure nobody is looking over your shoulder when you enter a pin number or a credit card number to an ATM machine, or in a phone book, or you're in the library or computer lab working at a computer.
- Invest in a shredder and shred any mail or other documents that contain sensitive personal information, including your name, address, social security number, bank account numbers, school ID numbers, credit card numbers, etc. Keep your identity from being thrown into the garbage can where identity thieves pray on unsuspecting victims.
- Rather than signing the backs of your credit cards, just write “See Photo ID”.
- Be sure to destroy all digital data. Some shredders now come with the option to shred credit cards, CD's and DVD's which may contain sensitive personal information.
- Be diligent in checking statements and bills. Bills and bank statements must be checked carefully for any fraudulent activity.
- Take your mail directly to the post office when paying your bills. Do not drop your bill payments in a local mailbox to be sent out. They may be vulnerable to theft.
- Limit personal information printed on your checks.
- Analyze your credit report at least once every year. It has your Social Security Number, present and prior employers, the list of all your account numbers, including those you have closed and your general credit score.
- Install good virus and spyware protection on any computer you use. Do not use computers at Internet cafes or other public venues to check your bank account, credit accounts, or pay bills.
- When you shop online, be sure to check the website before entering your credit card number or any personal information.
- Do not hesitate to ask questions whenever you are asked about personal information which is not connected to a transaction. If in doubt, do not give up your personal information, especially over the phone.
- Do not be influenced by pre-approved credit offers.
- Do not carry additional credit cards or other important personal identity documents with you unless it is necessary.
- Always carefully examine the charges on your credit card statements before you pay. If you do not recognize a charge, contact your card issuer immediately.
- Don’t ever give your credit card number or any personal information over the phone except when it is a business that you trust and you initiated the phone conversation.
- Subscribe to a credit report monitoring service so that you will be notified in case somebody applies for credit using your name.
- Do not be afraid to question the identity of the people and companies who initiate contact with you, whether through the email, mail, telephone or even in person.
- Don’t leave your wallet or purse unattended most especially in class, church, work, restaurants, parties or on the bus.
- Notify your bank or creditors if you do not receive any statement. It could have been stolen from your mail. "
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Even if you are not a college student all of the above advice is good for anyone who wants to avoid having their personal information stolen. Protect your identity and your credit, it's worth it in the long run.Do Your Taxes The EASY Way—For FREE. Use TurboTax Federal Free Edition today. Start Now
Tag: college students avoid identity theft
Sunday, February 3, 2008
Take charge of your debts
Take charge of your debts
The rising cost of living has made people more reliant on loans and credit that most people have been indebted to someone at some point in their lives. A debt is an obligation that should be paid and accounted for no matter how small the amount.
Being in debt is normal considering that no one has a monopoly of money. People will always have the tendency to accumulate debts no matter how rich. In fact, rich people have more debts than poor people because they have more needs and they have more collateral or security.
Being indebted isn't something that you should be ashamed of provided you are a responsible debtor. This means the money was used for a very good cause or purpose and the debtor is religious in looking after his responsibility to pay his debts.
Even a person who is savvy is financial management can get into debt for one reason or another. However, a person who is good in managing his finances should also be good in managing his debts. Managing debts would include the ability to know how much a person owes and from where he would get the money to pay such debts.
The ability to know the total indebtedness is a must in debt management because the person who is in debt is aware of the total amount he has to produce to pay off his debts. There are people who don't practice good debt management and they keep borrowing money without being able to monitor how much they already owe people or the financial institutions.
Debt management means that at the time the loan was made, the borrower knows where he would source the payment for such debt. This makes the debt manageable because it would appear that the person has some source of income and he is just not liquid at the time he borrowed the money.
People who don't have a steady source of income should be discouraged from borrowing because there is a tendency for their debts to pile up without being paid at all. Unemployed people who resort to borrowing for their essential expenses like food and daily subsistence would borrow from another creditor to pay off a debt that is already due and demandable. The same thing happens to the second and the next loans after which it becomes a cycle.
A person who is indebted to someone should take an inventory of his assets that can be used to pay off his debts. There is no problem if the debtor is looking at a possible income that hasn't yet been encashed or paid. Such unpaid income can be considered an asset which can be used to pay his debts.
Debts are easily made but they are difficult to pay. Thus, every person should be careful when borrowing money form others. Make sure that you have something to pay for the debt like an incoming income or check, or assets that can be sold to pay off the debt.
Some people get indebted by virtue of loans which have varying interest rates. This means that aside from the principal amount borrowed, the debtors still have to pay for the interest rate. A person who borrowed $100 at ten percent interest rate per month will have to pay the principal plus the interest rate of $10 per month. Some interest rates are based on the actual balance like if the debtor has already paid $20 then the interest rates would only be pegged on the balance of $80. However, there are some interest rates pegged at the original amount borrowed.
While being in debt is a natural thing, every person should learn how to manage his debt and how to stay out of debt if possible. One of the major factors why most Americans are indebted today is the misuse of credit cards.
Credit cards are those plastic cards that can be used to pay for almost any purchase even if you don't have cash. People find it easier to spend when using their cards because they just swipe it and voila----it works like a genie granting their every wish!
However, most people who fail to use their credit cards wisely become indebted and are faced with legal actions for failing to pay their cards when they become due and demandable.
Go ahead, borrow if you must but always take charge of your debts to make sure they don't lead you to declaring insolvency or bankruptcy.
Tag: debt
The rising cost of living has made people more reliant on loans and credit that most people have been indebted to someone at some point in their lives. A debt is an obligation that should be paid and accounted for no matter how small the amount.
Being in debt is normal considering that no one has a monopoly of money. People will always have the tendency to accumulate debts no matter how rich. In fact, rich people have more debts than poor people because they have more needs and they have more collateral or security.
Being indebted isn't something that you should be ashamed of provided you are a responsible debtor. This means the money was used for a very good cause or purpose and the debtor is religious in looking after his responsibility to pay his debts.
Even a person who is savvy is financial management can get into debt for one reason or another. However, a person who is good in managing his finances should also be good in managing his debts. Managing debts would include the ability to know how much a person owes and from where he would get the money to pay such debts.
The ability to know the total indebtedness is a must in debt management because the person who is in debt is aware of the total amount he has to produce to pay off his debts. There are people who don't practice good debt management and they keep borrowing money without being able to monitor how much they already owe people or the financial institutions.
Debt management means that at the time the loan was made, the borrower knows where he would source the payment for such debt. This makes the debt manageable because it would appear that the person has some source of income and he is just not liquid at the time he borrowed the money.
People who don't have a steady source of income should be discouraged from borrowing because there is a tendency for their debts to pile up without being paid at all. Unemployed people who resort to borrowing for their essential expenses like food and daily subsistence would borrow from another creditor to pay off a debt that is already due and demandable. The same thing happens to the second and the next loans after which it becomes a cycle.
A person who is indebted to someone should take an inventory of his assets that can be used to pay off his debts. There is no problem if the debtor is looking at a possible income that hasn't yet been encashed or paid. Such unpaid income can be considered an asset which can be used to pay his debts.
Debts are easily made but they are difficult to pay. Thus, every person should be careful when borrowing money form others. Make sure that you have something to pay for the debt like an incoming income or check, or assets that can be sold to pay off the debt.
Some people get indebted by virtue of loans which have varying interest rates. This means that aside from the principal amount borrowed, the debtors still have to pay for the interest rate. A person who borrowed $100 at ten percent interest rate per month will have to pay the principal plus the interest rate of $10 per month. Some interest rates are based on the actual balance like if the debtor has already paid $20 then the interest rates would only be pegged on the balance of $80. However, there are some interest rates pegged at the original amount borrowed.
While being in debt is a natural thing, every person should learn how to manage his debt and how to stay out of debt if possible. One of the major factors why most Americans are indebted today is the misuse of credit cards.
Credit cards are those plastic cards that can be used to pay for almost any purchase even if you don't have cash. People find it easier to spend when using their cards because they just swipe it and voila----it works like a genie granting their every wish!
However, most people who fail to use their credit cards wisely become indebted and are faced with legal actions for failing to pay their cards when they become due and demandable.
Go ahead, borrow if you must but always take charge of your debts to make sure they don't lead you to declaring insolvency or bankruptcy.
Tag: debt
Monday, January 28, 2008
How to survive recession
If you have bad credit, with the resulting low FICO credit score, now it is even more imperative than ever to fix your bad credit. More and more knowledgeable economists indicate that we are moving into a recession. Money will be tight. Interest rates will be higher than ever for those people who do not have good credit.
One of the best ways to repair credit is to pay off debt, especially high interest credit card debt. The time has come to tighten your belt, and focus on paying your debts on time, each and every month. If at all possible, do not just pay the minimum amount due - instead pay as much as you can each month to pay down your debt, and improve your credit.
If you are expecting a tax refund, file your taxes now and use your refund to pay down debt. In the long term, you will be glad you did.
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tag: survive recession
One of the best ways to repair credit is to pay off debt, especially high interest credit card debt. The time has come to tighten your belt, and focus on paying your debts on time, each and every month. If at all possible, do not just pay the minimum amount due - instead pay as much as you can each month to pay down your debt, and improve your credit.
If you are expecting a tax refund, file your taxes now and use your refund to pay down debt. In the long term, you will be glad you did.
TurboTax Is The Easy Way To Do Your Taxes. Do your taxes for free with TurboTax Online Free Edition - Start Now.
tag: survive recession
Friday, January 25, 2008
Manage Your Expenses to Get Out of Debt
Manage Your Expenses to Get Out of Debt
One of the ways to improve your credit rating is to manage expenses to get out of debt. Much of your credit score depends on your ratio of debt to available credit. The higher the ratio, the lower your credit score.
It’s very easy to get out of debt; it’s doing what needs to be done, however, that’s the difficult part.
The Problem is How You Feel about Saving Money
Many people find it hard to save money. Don’t make the mistake of thinking that it’s impossible to save. Once you start feeling that your situation’s hopeless, you’ll never be able to pay off your debts. The trick is to think positive; it’s simple but it works.
Be Realistic about Creating a Budget
Don’t eliminate expenditures like there’s no tomorrow. Forcing yourself to live a Spartan existence will only stress you out more and make you less able to pay off your expenses. You need to have your budget work on the first try because it will give you exactly the motivation you need for the succeeding months.
Be Practical about the Budget
It’s okay to leave a little space for personal expenses in your budget if you can afford it. Don’t however overindulge yourself as that will just get you back to square one and with even more creditors pounding on your door.
Focus on the Credit Card with the Highest Interest Rate First
The card with the highest rate is always accompanied by the most demanding creditor. So, for your own sake, it’s better to get rid of the creditor with the most at stake. Then, proceed on eliminating credit card debt until you end up with only the credit cards that have low interest rates and well-mannered creditors.
Cash, Please
Leave your credit cards behind. If you feel that you’re absolutely unsafe without plastic money, take just one credit card with you and no more than that. Credit card purchases are always more expensive than cash purchases. Even if you don’t see or feel it, you’ll save lots of money on interest alone just by paying cash.
Lowering Credit Limits
If possible, ask for your credit card and phone company to lower your credit limit. This will ensure that you won’t go over the budget no matter what you do.
Know the Right Places to Shop
When you’re on your penny-saving days, it’s time to say a temporary farewell to your favorite designer boutiques and your other expensive fancy pursuits. It’s time to cut back on the good life and make use of all the discount coupons you can cut out off magazines.
If you still don’t think you can save money and lessen your expenditures, you still have one more option left to get rid of debt: find ways to earn more money!
Tag: manage expenses get out of debt
One of the ways to improve your credit rating is to manage expenses to get out of debt. Much of your credit score depends on your ratio of debt to available credit. The higher the ratio, the lower your credit score.
It’s very easy to get out of debt; it’s doing what needs to be done, however, that’s the difficult part.
The Problem is How You Feel about Saving Money
Many people find it hard to save money. Don’t make the mistake of thinking that it’s impossible to save. Once you start feeling that your situation’s hopeless, you’ll never be able to pay off your debts. The trick is to think positive; it’s simple but it works.
Be Realistic about Creating a Budget
Don’t eliminate expenditures like there’s no tomorrow. Forcing yourself to live a Spartan existence will only stress you out more and make you less able to pay off your expenses. You need to have your budget work on the first try because it will give you exactly the motivation you need for the succeeding months.
Be Practical about the Budget
It’s okay to leave a little space for personal expenses in your budget if you can afford it. Don’t however overindulge yourself as that will just get you back to square one and with even more creditors pounding on your door.
Focus on the Credit Card with the Highest Interest Rate First
The card with the highest rate is always accompanied by the most demanding creditor. So, for your own sake, it’s better to get rid of the creditor with the most at stake. Then, proceed on eliminating credit card debt until you end up with only the credit cards that have low interest rates and well-mannered creditors.
Cash, Please
Leave your credit cards behind. If you feel that you’re absolutely unsafe without plastic money, take just one credit card with you and no more than that. Credit card purchases are always more expensive than cash purchases. Even if you don’t see or feel it, you’ll save lots of money on interest alone just by paying cash.
Lowering Credit Limits
If possible, ask for your credit card and phone company to lower your credit limit. This will ensure that you won’t go over the budget no matter what you do.
Know the Right Places to Shop
When you’re on your penny-saving days, it’s time to say a temporary farewell to your favorite designer boutiques and your other expensive fancy pursuits. It’s time to cut back on the good life and make use of all the discount coupons you can cut out off magazines.
If you still don’t think you can save money and lessen your expenditures, you still have one more option left to get rid of debt: find ways to earn more money!
Tag: manage expenses get out of debt
Wednesday, January 23, 2008
Personal Loans for Bad Credit
Personal Loans for Bad Credit
Personal loans are easy to obtain. They can be used for a variety of financial needs. However, the worse your credit is the harder time you will have getting a personal loan with decent rates. There are two types of personal loans, secured and unsecured. Unsecured personal loans mean no collateral is needed to secure the loan. If you have bad credit, you will only be approved for a secured loan because you are considered high risk. The forms of collateral accepted include vehicles, property, and other tangible items. The collateral has to have a value sufficient to cover the balance due on the loan.
There are many reasons people have bad credit. It can be that they have been reckless with their money and finances. For most people this isn’t the case. Back credit can be the result of a death in the family resulting in loss of income. Layoffs or getting fired from a job often come without warning. Medical emergencies also lead to bad credit as can divorce. Regardless of the reason a person has bad credit; they are still going to need to apply for a personal loan at one point or another.
There are many lenders out there that understand bad credit can happen to good, responsible people. Therefore, they may be willing to give you the chance to prove you will be responsible again and repay the personal loan. You will likely have a high interest rate associated with your personal loan, and that can leave a bitter taste in your mouth. Take it in stride and look at the positive side of things. Getting a personal loan at any interest rate can help you rebuild your credit. Make sure you pay the payments on time. To save on the interest you pay, consider sending extra payments whenever you can.
Be cautious when applying for a personal loan online. There are scam artists out there who prey on those in need of a personal loan, especially if they have bad credit. Never agree to pay any processing fees or other types of payments. It is against the law under the Federal Trade Commission for any lender of personal loan funds to ask for processing fees. Many individuals with bad credit are sucked into these scams because they need the loan so bad. It is important to check out the lender with the Better Business Bureau. If you are suspicious of anything, do not move forward with the loan process.
Don’t forget to check with the smaller lending companies. Most large lenders are very impersonal and base your eligibility on a computer generated decision. Smaller lending companies are more likely to take the reasons for your bad credit into consideration along with other factors. If you can establish that you are responsible and that you have income sufficient to repay the loan, then this may be the opportunity you have been hoping for.
Personal loans can be a godsend, especially if you have poor credit. Make sure to take your time before committing to any personal loan offered. Be prepared to provide collateral and to pay a high interest rate as a penalty for your poor credit. Try to view the circumstances as an opportunity rather than as a punishment.
Tag: personal loans for bad credit
Personal loans are easy to obtain. They can be used for a variety of financial needs. However, the worse your credit is the harder time you will have getting a personal loan with decent rates. There are two types of personal loans, secured and unsecured. Unsecured personal loans mean no collateral is needed to secure the loan. If you have bad credit, you will only be approved for a secured loan because you are considered high risk. The forms of collateral accepted include vehicles, property, and other tangible items. The collateral has to have a value sufficient to cover the balance due on the loan.
There are many reasons people have bad credit. It can be that they have been reckless with their money and finances. For most people this isn’t the case. Back credit can be the result of a death in the family resulting in loss of income. Layoffs or getting fired from a job often come without warning. Medical emergencies also lead to bad credit as can divorce. Regardless of the reason a person has bad credit; they are still going to need to apply for a personal loan at one point or another.
There are many lenders out there that understand bad credit can happen to good, responsible people. Therefore, they may be willing to give you the chance to prove you will be responsible again and repay the personal loan. You will likely have a high interest rate associated with your personal loan, and that can leave a bitter taste in your mouth. Take it in stride and look at the positive side of things. Getting a personal loan at any interest rate can help you rebuild your credit. Make sure you pay the payments on time. To save on the interest you pay, consider sending extra payments whenever you can.
Be cautious when applying for a personal loan online. There are scam artists out there who prey on those in need of a personal loan, especially if they have bad credit. Never agree to pay any processing fees or other types of payments. It is against the law under the Federal Trade Commission for any lender of personal loan funds to ask for processing fees. Many individuals with bad credit are sucked into these scams because they need the loan so bad. It is important to check out the lender with the Better Business Bureau. If you are suspicious of anything, do not move forward with the loan process.
Don’t forget to check with the smaller lending companies. Most large lenders are very impersonal and base your eligibility on a computer generated decision. Smaller lending companies are more likely to take the reasons for your bad credit into consideration along with other factors. If you can establish that you are responsible and that you have income sufficient to repay the loan, then this may be the opportunity you have been hoping for.
Personal loans can be a godsend, especially if you have poor credit. Make sure to take your time before committing to any personal loan offered. Be prepared to provide collateral and to pay a high interest rate as a penalty for your poor credit. Try to view the circumstances as an opportunity rather than as a punishment.
Tag: personal loans for bad credit
Monday, January 21, 2008
Bad Credit Home Equity Loans
Bad credit can increase the difficulty that a homeowner encounters when seeking a home equity line of credit. Bad credit leads to a poor credit score, and the lower the score the more difficult it is to obtain credit.
What is a credit score? The credit score varies between the values of 300 and 850. The credit score is the creation of the Fair Isaac Corporation. Lenders who arrange for a home equity line of credit use the credit score in order to set the interest rate that will be charged the homeowner.
Homeowners with a low credit score will need to pay higher interest payments. A score above 700 is assurance of good interest rates. The credit score also serves as an indicator of whether or not a lender should accept a homeowner’s application for credit. Decisions on credit limits for the homeowner are likewise based on the homeowner’s credit score.
The credit score is a function of the homeowner’s past line of credit. In the U.S., three different agencies keep a record of each consumer’s line of credit. Those agencies are Experian, TransUnion and Equifax. If a homeowner with a low credit score wants to raise that score, then the homeowner must contact each of those three agencies.
The effort to overcome a record of bad credit and to raise a credit score requires the contesting of false claims that money is owed. If the homeowner can prove that the claim for money is spurious then the homeowner has an opportunity to raise his credit score. This action should be taken if the homeowner who plans to seek a home equity line of credit has a score less than 640. Such a score would be a sign of bad credit.
The contesting of a credit score is not like a shot in the dark. A survey of credit reports in the U.S. showed that 80% of such reports contained mistakes. Thus, a homeowner could have good reason to question the credit score that is being used to determine the interest rate on a home equity line of credit.
The credit score for a couple, a pair that are joint homeowners, is based on three credit scores from the person with the most sizable income. This is the score that the homeowner needs to make correct. Such correction may require a written statement to each of the above-mentioned agencies. Those agencies will then contact the homeowner and indicate if more information is necessary. If the homeowner is lucky, then the credit score will be increased and the interest rate for the desired home equity line of credit will be lowered.
Once the homeowner has a good credit score then he will want to avoid slipping back into that region of bad credit. This means that the homeowners must avoid the sort of spending that carries them to the borders of their credit limits.
Tag:
Equity Loan Bad Credit
What is a credit score? The credit score varies between the values of 300 and 850. The credit score is the creation of the Fair Isaac Corporation. Lenders who arrange for a home equity line of credit use the credit score in order to set the interest rate that will be charged the homeowner.
Homeowners with a low credit score will need to pay higher interest payments. A score above 700 is assurance of good interest rates. The credit score also serves as an indicator of whether or not a lender should accept a homeowner’s application for credit. Decisions on credit limits for the homeowner are likewise based on the homeowner’s credit score.
The credit score is a function of the homeowner’s past line of credit. In the U.S., three different agencies keep a record of each consumer’s line of credit. Those agencies are Experian, TransUnion and Equifax. If a homeowner with a low credit score wants to raise that score, then the homeowner must contact each of those three agencies.
The effort to overcome a record of bad credit and to raise a credit score requires the contesting of false claims that money is owed. If the homeowner can prove that the claim for money is spurious then the homeowner has an opportunity to raise his credit score. This action should be taken if the homeowner who plans to seek a home equity line of credit has a score less than 640. Such a score would be a sign of bad credit.
The contesting of a credit score is not like a shot in the dark. A survey of credit reports in the U.S. showed that 80% of such reports contained mistakes. Thus, a homeowner could have good reason to question the credit score that is being used to determine the interest rate on a home equity line of credit.
The credit score for a couple, a pair that are joint homeowners, is based on three credit scores from the person with the most sizable income. This is the score that the homeowner needs to make correct. Such correction may require a written statement to each of the above-mentioned agencies. Those agencies will then contact the homeowner and indicate if more information is necessary. If the homeowner is lucky, then the credit score will be increased and the interest rate for the desired home equity line of credit will be lowered.
Once the homeowner has a good credit score then he will want to avoid slipping back into that region of bad credit. This means that the homeowners must avoid the sort of spending that carries them to the borders of their credit limits.
Tag:
Equity Loan Bad Credit
Thursday, January 17, 2008
Credit card debt management
Credit card debt management
Credit cards that are used in moderation could be helpful in managing your finances. This means that splurging through the use of credit cards is almost financial suicide.
Here are few tips to manage the way you use your credit card to prevent you from acquiring debts that could lead to your financial death (excuse the pun).
Tag: Credit card debt management
Credit cards that are used in moderation could be helpful in managing your finances. This means that splurging through the use of credit cards is almost financial suicide.
Here are few tips to manage the way you use your credit card to prevent you from acquiring debts that could lead to your financial death (excuse the pun).
- Planning. Before purchasing any product using your credit card, make sure to provide yourself with a plan on how you will be able to pay for your credit card bills. Prioritize your needs before your wants. Purchasing grand items that you don't really need might give you that temporary high that impulsive buyers are addicted to. But that temporary high would eventually turn to long-term down feeling due to your piled up debts.
- Limit. For you to be able to manage your debts and payments, never go overboard when it comes to your credit limit. If it's possible, it will help a lot if you just use about two-thirds of your limit.
- Statement of account. Keep a record of all your credit card transactions for future reference. In order to prevent inaccuracies of bills and fraud, always remember to check the list of your purchase for the month. If your list and the statement of account do not match, report this to your bank.
- Piled up debt remedies. There are a number of steps you have to do in order to escape these financial problems.
- Determine the amount you need to pay and provide yourself with a plan that would fix your finances without pressure.
- Consider paying the minimum amount to be paid. Then, ask for debt consolidation options that would make it a lot easier for you to pay your debts. If you don’t know how to solve your financial problems, there are financial advisers that could help you with your credit card management. They might offer you financial assistance through bank loans that would allow you more time to pay aside from the debt consolidation method. But of course, remember to research on the agency before getting involved with them. Don't just go saying amen to whatever they offer since there is a possibility that they could cause the situation to aggravate.
- Self-control is the best way to prevent getting debts that you won't be able to pay immediately. But if you're already in the pits, considering the abovementioned suggestions won't hurt.
Tag: Credit card debt management
Tuesday, January 15, 2008
Dealing with Credit Card Debt
Dealing with Credit Card Debt
Do you have a hard time paying your credit card bills? Starting to get notices from waiting creditors to pay? Worried that you might lose your properties like your house because of credit debt? 
Here are some tips to help you cope with your credit card debt:
- Make a Budget. If you want to have a grab of your financial situation before you lose everything, making a budget is what you should do first. Assess how much do you get from your income or other means and your expenditures. For example, if getting that posh apartment means you have to limit your meals to once a day, then it is not a great and sound budgeting decision. Your goal is ensure that you can answer for all the basic necessities: food, housing, clothes, health-related costs, among others.
- Contacting Your Creditors. Remember: Running away from your creditors is not the answer. It is not a solution, and may in fact lead you to bigger problems. If you are having trouble paying off your debts, address this immediately with your creditors. State to them sincerely and fully the reason why it has become hard for you to pay these debts, and check if they could give you a revised payment arrangement that will put you at ease on your payment terms. Do not let creditors turn over your situation to someone or an agency to do the collecting for them, as this means that they have given up on you.
- How to address Debt Collectors. There is a law that gives certain conditions for debt collectors as to when and how they should ask you to pay. The federal law, Fair Debt Collection Practices Act, clearly states that those collecting debts may not bug you, give false assertions, or do practices that are not fair when they are getting to collect money from you.
- Credit Counseling. You could also consider getting the aid of groups or institutions that will help you in your problems. If you managed to have an improved payment arrangement of your debt with a good credit counseling organization, creditors may approve of your proposition and accept your modified arrangement plan.
- Bankruptcy. Generally, personal bankruptcy is known as the last choice to fix your ballooning credit debt. A bankruptcy unfortunately stays on your financial information report for years. Getting additional credit, buying a house, sometimes even getting a job might be hard for you. Technically, however, it is a legal way of addressing your credit debt.
Tag: Dealing with Credit Card Debt
How to Recover Your Stolen Identity
How to Recover Your Identity
"How to Recover Your Identity
Recently, a co-worker of mine mentioned that one of his friends recently recovered his stolen identity. Astonished, I asked how long the recovery process took. "Only two years" he replied.
Compared to my own six year nightmare "only" maybe appropriate. However, like most victims of identity theft, he probably thought "when". As in, "when will this nightmare end, and when will I get my life back?"
Privacy Rights Clearinghouse is a consumer nonprofit organization. They have reported that victims spend on average 175 hours while attempting to recover their identity, often over a period of several years. Then, factor in out of pocket expenses, (usually over $1,500 according to the FTC) and recovery gets even more painful.
LifeLock Identity Theft Prevention - Save 10%
How do you restore a stolen identity? What are the steps involved?
Generally, you start by filing a police report. At the same time you are at the police station, go ahead and obtain a police report on yourself. That report doesn't mean other law enforcement agencies have been contacted - you should do a complete search of local and federal law enforcement databases too find out if anything else, including criminal activity exists on your identity. Many unsuspecting victims have been arrested for crimes they didn't commit!
You're also going to need the police report you filed to contact all of the different agencies and organizations, including the Social Security Administration, The Federal Trade Commission, all of your financial institutions, the 3 major credit bureaus, the Passport Office,The Department of Motor Vehicles, and the Post Office . All of these places must be sent a fraud notification alert. Regarding your financial institutions, notify all of them to cancel your credit cards and close your bank accounts. Determine from your bank if there has been any suspicious activity, such as accounts tampered with or opened fraudulently. Open new bank accounts with password verification, and any other fraud protection your particular bank may offer.
Know your rights. Obtain a credit report from each of the 3 major credit bureaus. According to the Fair Credit Reporting Act of 1992, you must be told not only what's in your file but if that information is being used against you. The Federal Trade Commission recently expanded the rights available to victims of identity theft, including your right to get negative information due to fraud blocked from your records.
Make sure that your credit report at each of the 3 major credit bureaus reflects the identity theft and gets flagged with a fraud alert. Many victims have received assurances that the matter would be resolved, however months and sometimes years later, the credit bureaus have not cleared their records. Once a negative gets put on your record, it seems very difficult to get the credit bureaus to remove it, in spite of the countless documentation you provide to them. As a victim myself, I sent documentation including police reports to all three credit bureaus every month over a period of several years! But it must be done. Negative entries can affect you well into the future when buying a house, car or any other big ticket item. Constant follow up is critical. That goes for all the organizations but especially the credit bureaus. Be diligent until the matter gets resolved. Getting a lawyer isn't a bad idea if your problem is particularly difficult.
Avoid "credit repair companies". No matter what they advertise, there's usually nothing they can do to help you with identity theft. Some agencies even offer to help you apply for credit under a new identity. Hello? When trying to eliminate fraud from your record you don't want to create more fraud!
Advise the utility companies of the theft. It's not just bank accounts and credit cards. Many identity thieves commit fraud by opening telephone accounts, purchasing cable television or establishing credit with the gas & electric companies, in the hopes it will go unnoticed for as long as possible.
Identity theft can be a shattering experience mentally and emotionally - a total nightmare. Victims often feel violated. Often victims discover that the thief was a family member or close friend. It's not the victim's fault of course but the feelings remain. A network of support groups and counselors exists if you need it. If necessary get counseling. Don't let this crime ruin your life!
LifeLock Identity Theft Prevention - Save 10%
The road back from identity theft can take years, be costly, and cause victims much stress and pain. But follow the steps laid out here, and believe that the nightmare will end...the nightmare WILL end."
Tag: How to Recover Your Stolen Identity
"How to Recover Your Identity
Recently, a co-worker of mine mentioned that one of his friends recently recovered his stolen identity. Astonished, I asked how long the recovery process took. "Only two years" he replied.
Compared to my own six year nightmare "only" maybe appropriate. However, like most victims of identity theft, he probably thought "when". As in, "when will this nightmare end, and when will I get my life back?"
Privacy Rights Clearinghouse is a consumer nonprofit organization. They have reported that victims spend on average 175 hours while attempting to recover their identity, often over a period of several years. Then, factor in out of pocket expenses, (usually over $1,500 according to the FTC) and recovery gets even more painful.
LifeLock Identity Theft Prevention - Save 10%
How do you restore a stolen identity? What are the steps involved?
Generally, you start by filing a police report. At the same time you are at the police station, go ahead and obtain a police report on yourself. That report doesn't mean other law enforcement agencies have been contacted - you should do a complete search of local and federal law enforcement databases too find out if anything else, including criminal activity exists on your identity. Many unsuspecting victims have been arrested for crimes they didn't commit!
You're also going to need the police report you filed to contact all of the different agencies and organizations, including the Social Security Administration, The Federal Trade Commission, all of your financial institutions, the 3 major credit bureaus, the Passport Office,The Department of Motor Vehicles, and the Post Office . All of these places must be sent a fraud notification alert. Regarding your financial institutions, notify all of them to cancel your credit cards and close your bank accounts. Determine from your bank if there has been any suspicious activity, such as accounts tampered with or opened fraudulently. Open new bank accounts with password verification, and any other fraud protection your particular bank may offer.
Know your rights. Obtain a credit report from each of the 3 major credit bureaus. According to the Fair Credit Reporting Act of 1992, you must be told not only what's in your file but if that information is being used against you. The Federal Trade Commission recently expanded the rights available to victims of identity theft, including your right to get negative information due to fraud blocked from your records.
Make sure that your credit report at each of the 3 major credit bureaus reflects the identity theft and gets flagged with a fraud alert. Many victims have received assurances that the matter would be resolved, however months and sometimes years later, the credit bureaus have not cleared their records. Once a negative gets put on your record, it seems very difficult to get the credit bureaus to remove it, in spite of the countless documentation you provide to them. As a victim myself, I sent documentation including police reports to all three credit bureaus every month over a period of several years! But it must be done. Negative entries can affect you well into the future when buying a house, car or any other big ticket item. Constant follow up is critical. That goes for all the organizations but especially the credit bureaus. Be diligent until the matter gets resolved. Getting a lawyer isn't a bad idea if your problem is particularly difficult.
Avoid "credit repair companies". No matter what they advertise, there's usually nothing they can do to help you with identity theft. Some agencies even offer to help you apply for credit under a new identity. Hello? When trying to eliminate fraud from your record you don't want to create more fraud!
Advise the utility companies of the theft. It's not just bank accounts and credit cards. Many identity thieves commit fraud by opening telephone accounts, purchasing cable television or establishing credit with the gas & electric companies, in the hopes it will go unnoticed for as long as possible.
Identity theft can be a shattering experience mentally and emotionally - a total nightmare. Victims often feel violated. Often victims discover that the thief was a family member or close friend. It's not the victim's fault of course but the feelings remain. A network of support groups and counselors exists if you need it. If necessary get counseling. Don't let this crime ruin your life!
LifeLock Identity Theft Prevention - Save 10%
The road back from identity theft can take years, be costly, and cause victims much stress and pain. But follow the steps laid out here, and believe that the nightmare will end...the nightmare WILL end."
Tag: How to Recover Your Stolen Identity
Sunday, January 13, 2008
Avoid Credit Card Pitfalls
Avoid credit card pitfalls
Most people use credit cards to buy just about everything these days. It's not uncommon to see people buying food or shopping for clothes using credit cards - it's commonplace these days. "Charge it!" has become the favorite expression of card users, and is heard in shops, dining places, and just about anywhere purchases are being made.
Why not? Who does not want to use credit cards? Easy to use, these sleekly-designed cards can be used to buy practically everything in commercial establishments regardless of how much (or little) money one has in his or her wallet. Short of cash and hungry? No groceries? Going to a party but have no money to buy that dress you've been dying to have?
No problem! Your good ol' credit card can care of that for you.
Credit Cards: Not Free Money
But wait. A credit card shopping spree may be fun, but that doesn't free you from the responsibility of paying the expenses you incurred from using your credit card. Credit cards, after all, are interest loans in disguise - they are not free money. Typical credit cards charge a number of fees for the right to use the card, including:
Tag: avoid credit card problems and pitfalls
Most people use credit cards to buy just about everything these days. It's not uncommon to see people buying food or shopping for clothes using credit cards - it's commonplace these days. "Charge it!" has become the favorite expression of card users, and is heard in shops, dining places, and just about anywhere purchases are being made.
Why not? Who does not want to use credit cards? Easy to use, these sleekly-designed cards can be used to buy practically everything in commercial establishments regardless of how much (or little) money one has in his or her wallet. Short of cash and hungry? No groceries? Going to a party but have no money to buy that dress you've been dying to have?
No problem! Your good ol' credit card can care of that for you.
Credit Cards: Not Free Money
But wait. A credit card shopping spree may be fun, but that doesn't free you from the responsibility of paying the expenses you incurred from using your credit card. Credit cards, after all, are interest loans in disguise - they are not free money. Typical credit cards charge a number of fees for the right to use the card, including:
- A finance charge, which is an interest charge for any unpaid portion of your monthly bill;
- An annual membership fee in many cases;
- Or if you're paying after the deadline, there is also a late payment fee which could have a higher interest rate.
It is a fact that many credit-card holders face credit-related problems. Poor purchasing decisions, lack of information on credit card fees, and disregard for upcoming credit card payments are among the reasons why many credit-card users are often hard-pressed to pay their debts. Some are not even able to pay for the actual purchases they made, just barely managing to pay minimum payments on their credit card purchases.
Don't get drowned in a sea of debt, here are some tips to help you manage your credit:
- Be credit savvy. Applying for a credit card means you are ready to assume the responsibility for paying your credit. You, as the credit card holder, and only you - not your parents, spouse, or whoever - is responsible for that.
- Use your credit cards wisely and sparingly. Remember: Paying for purchases using credit cards are more expensive than using cash or checks, unless you pay your balance in full each month. Credit payments include interest and other fees, if you carry a balance. Use credit cards only when necessary. If you really need to use credit cards, carry only the cards that you will actually use.
- Use credit only if you are sure you can repay it. Paying your debt on a credit card using another credit card does not count.
- Avoid impulse shopping on your credit card. It's not free money!
- Use credit for money emergencies only, or for major purchases that will last a long time.
- Seek credit counseling if you see financial problems on the horizon.
Tag: avoid credit card problems and pitfalls
Saturday, January 12, 2008
Monday, January 7, 2008
Keeping Your Money Resolutions in the New Year
If you have made New Year's resolutions regarding your finances and money, you must read this article that offers strategies to help you meet your financial goals in 2008. You can get out of debt, start a savings program, improve your credit score, and more.
Keep your money resolutions
Nine strategies can help you reach goals
07:40 AM CST on Monday, January 7, 2008
By PAMELA YIP / The Dallas Morning News pyip@dallasnews.com
"Now it's time to get down to business. What do you really want to accomplish financially for 2008? Pay off debt? Save more money?
Whatever your goals are, how you lay them out and work toward them will determine whether you will succeed.
"There's no substitute for self-discipline," said Greg McBride, senior financial analyst at Bankrate.com, a personal-finance information Web site. "At the end of the day, your effort to improve your financial standing will only work if you can stick with those strategies throughout the year."
Here are the most important things you should do to make 2008 a financially successful year:
1. Make sure your goals are realistic. "Start small," said Rick Salmeron, certified financial planner at the Salmeron Financial Network Inc. in Dallas. "One reason many money-conscious resolutions fail is because we bite off more than we can chew. Don't try to do too much at first."
Write down your goals because seeing them on paper makes them more concrete and gives you a higher chance of success.
2. Be specific about your goals. "You might be planning on setting a goal related to investing, which is important but very vague and easy to forget about," said Casey Kupper, a certified financial planner at Quest Capital Management in Dallas. "Instead, state that you're going to invest a certain amount each month. Take your resolution of 'I'm going to invest this year' to 'I'm going to invest $250 a paycheck into my 401(k) this year.' "
Tell your friends and family of your goals because they will help hold you accountable.
3. Pay off or pay down your consumer debt. Whatever your goals are, you will be seriously blocked from achieving them if you're shouldering mountains of credit card debt.
To get rid of your debt, reduce your spending or increase your income. The ideal is to do both, but the more important component is to cut your spending.
No amount of additional income will be effective if you continue to spend more than you make. You'll constantly be behind.
Stop using credit cards for anything other than necessities. Use them only in an emergency or in a situation where you have to use one to reserve a hotel room, rental car and the like.
Even then, use the card only if you know you can pay the bill off on time and in full.
Before you make any purchase, ask yourself whether you really need it, and whether you can pay for it with cash. If your answer is no to both questions, skip the purchase.
Don't expect instant relief from debt.
"If you have debt, realize that it took you a while to get into debt, and it will probably take you longer to get out," said Bill Hardekopf, chief executive of LowCards.com, a credit card information Web site. "Do not get discouraged, no matter how much you can pay off or how long it takes. Being debt-free is worth the effort."
4. Start a savings program, no matter the amount you're able to put away. Getting rid of your credit card debt will enable you to save more, but there's no shame in saving $20 to $30 each paycheck if that's all you can afford. The key is to continue saving consistently and let that money grow.
Make it easy on yourself by signing up for an automatic savings plan that enables you to have a fixed amount of money transferred regularly to a high-interest savings account.
"The biggest obstacle to saving is not being in the habit of saving," Mr. McBride said.
As you see your account grow, "that becomes self-reinforcing," he said.
"As the amounts result in a larger and larger balance, you become less reliant on debt to cover the next unplanned expense," Mr. McBride said.
5. Boost your retirement savings. Sign up for your employer's tax-deferred 401(k) retirement plan and have the money automatically deducted from your paycheck.
"That money will be taken out before you even have a chance to spend it," Mr. McBride said.
If your employer matches your contribution, at the very least, make sure you're contributing enough to get the match. If you don't, you're leaving free money on the table.
Even if your employer doesn't match your contribution, it's still a good idea to contribute.
That not only gives you a head start on retirement saving, it also saves you money on your tax bill. Since your contributions are made with pre-tax dollars, your current taxable income is lowered.
Fund your Individual Retirement Account, too.
"March toward retirement security in double-time," Mr. McBride said. "You have until April 15 to make your 2007 IRA contribution, and then start working toward that 2008 contribution. A little bit can mean a whole lot later."
6. Develop a spending plan or budget.
"A budget is like a roadmap," Mr. McBride said. "Decide on a destination, determine the route to get there and monitor your progress along the way."
Until you know where your money is going every month, you don't have control over your finances, and you will be unable to consistently save for the future or make headway on your debt.
Consider tracking expenses for two weeks, so you can identify areas where you can cut back, said experts at Consumer Credit Counseling Services of Greater Fort Worth.
A budget will help you determine whether you're meeting your goals.
"If you figure out that you're able to throw an additional $250 month toward debt repayment, you then you have to hold yourself accountable to make sure that you are indeed throwing an extra $250 a month toward your debts," Mr. McBride said.
7. Check on whether you've covered your insurance needs. Do you have enough life insurance to cover your family, should you die unexpectedly?
Also important but often overlooked: Do you have enough disability insurance to cover you if you can no longer earn a living? That ability is your greatest asset.
Are your health insurance and your coverage for auto and home adequate? What about long-term care needs?
8. Make day-by-day money resolutions. You can say something like, " 'Today, I will not use my credit cards. Today, I will place all of my loose change in a mason jar,' " Mr. Salmeron said.
"Most people know what is good for them and what is not, so use this method to try to reduce the bad things, and enhance the good things one day at a time," he said.
9. Don't let an occasional setback discourage you from achieving your goals.
"Expect a challenge when trying to achieve new goals, but don't give up," said Marianne Gray D'Aquila, president of Consumer Credit Counseling Services of Greater Fort Worth. "Once you have decided what you want to accomplish, be confident. A little discipline can help you enjoy a happy and prosperous New Year."
Take it one step at a time. You can improve your financial situation and meet your goals for the New Year. Don't give up! Keep trying and you can make it.
tags: keep money resolutions
Keep your money resolutions
Nine strategies can help you reach goals
07:40 AM CST on Monday, January 7, 2008
By PAMELA YIP / The Dallas Morning News pyip@dallasnews.com
"Now it's time to get down to business. What do you really want to accomplish financially for 2008? Pay off debt? Save more money?
Whatever your goals are, how you lay them out and work toward them will determine whether you will succeed.
"There's no substitute for self-discipline," said Greg McBride, senior financial analyst at Bankrate.com, a personal-finance information Web site. "At the end of the day, your effort to improve your financial standing will only work if you can stick with those strategies throughout the year."
Here are the most important things you should do to make 2008 a financially successful year:
1. Make sure your goals are realistic. "Start small," said Rick Salmeron, certified financial planner at the Salmeron Financial Network Inc. in Dallas. "One reason many money-conscious resolutions fail is because we bite off more than we can chew. Don't try to do too much at first."
Write down your goals because seeing them on paper makes them more concrete and gives you a higher chance of success.
2. Be specific about your goals. "You might be planning on setting a goal related to investing, which is important but very vague and easy to forget about," said Casey Kupper, a certified financial planner at Quest Capital Management in Dallas. "Instead, state that you're going to invest a certain amount each month. Take your resolution of 'I'm going to invest this year' to 'I'm going to invest $250 a paycheck into my 401(k) this year.' "
Tell your friends and family of your goals because they will help hold you accountable.
3. Pay off or pay down your consumer debt. Whatever your goals are, you will be seriously blocked from achieving them if you're shouldering mountains of credit card debt.
To get rid of your debt, reduce your spending or increase your income. The ideal is to do both, but the more important component is to cut your spending.
No amount of additional income will be effective if you continue to spend more than you make. You'll constantly be behind.
Stop using credit cards for anything other than necessities. Use them only in an emergency or in a situation where you have to use one to reserve a hotel room, rental car and the like.
Even then, use the card only if you know you can pay the bill off on time and in full.
Before you make any purchase, ask yourself whether you really need it, and whether you can pay for it with cash. If your answer is no to both questions, skip the purchase.
Don't expect instant relief from debt.
"If you have debt, realize that it took you a while to get into debt, and it will probably take you longer to get out," said Bill Hardekopf, chief executive of LowCards.com, a credit card information Web site. "Do not get discouraged, no matter how much you can pay off or how long it takes. Being debt-free is worth the effort."
4. Start a savings program, no matter the amount you're able to put away. Getting rid of your credit card debt will enable you to save more, but there's no shame in saving $20 to $30 each paycheck if that's all you can afford. The key is to continue saving consistently and let that money grow.
Make it easy on yourself by signing up for an automatic savings plan that enables you to have a fixed amount of money transferred regularly to a high-interest savings account.
"The biggest obstacle to saving is not being in the habit of saving," Mr. McBride said.
As you see your account grow, "that becomes self-reinforcing," he said.
"As the amounts result in a larger and larger balance, you become less reliant on debt to cover the next unplanned expense," Mr. McBride said.
5. Boost your retirement savings. Sign up for your employer's tax-deferred 401(k) retirement plan and have the money automatically deducted from your paycheck.
"That money will be taken out before you even have a chance to spend it," Mr. McBride said.
If your employer matches your contribution, at the very least, make sure you're contributing enough to get the match. If you don't, you're leaving free money on the table.
Even if your employer doesn't match your contribution, it's still a good idea to contribute.
That not only gives you a head start on retirement saving, it also saves you money on your tax bill. Since your contributions are made with pre-tax dollars, your current taxable income is lowered.
Fund your Individual Retirement Account, too.
"March toward retirement security in double-time," Mr. McBride said. "You have until April 15 to make your 2007 IRA contribution, and then start working toward that 2008 contribution. A little bit can mean a whole lot later."
6. Develop a spending plan or budget.
"A budget is like a roadmap," Mr. McBride said. "Decide on a destination, determine the route to get there and monitor your progress along the way."
Until you know where your money is going every month, you don't have control over your finances, and you will be unable to consistently save for the future or make headway on your debt.
Consider tracking expenses for two weeks, so you can identify areas where you can cut back, said experts at Consumer Credit Counseling Services of Greater Fort Worth.
A budget will help you determine whether you're meeting your goals.
"If you figure out that you're able to throw an additional $250 month toward debt repayment, you then you have to hold yourself accountable to make sure that you are indeed throwing an extra $250 a month toward your debts," Mr. McBride said.
7. Check on whether you've covered your insurance needs. Do you have enough life insurance to cover your family, should you die unexpectedly?
Also important but often overlooked: Do you have enough disability insurance to cover you if you can no longer earn a living? That ability is your greatest asset.
Are your health insurance and your coverage for auto and home adequate? What about long-term care needs?
8. Make day-by-day money resolutions. You can say something like, " 'Today, I will not use my credit cards. Today, I will place all of my loose change in a mason jar,' " Mr. Salmeron said.
"Most people know what is good for them and what is not, so use this method to try to reduce the bad things, and enhance the good things one day at a time," he said.
9. Don't let an occasional setback discourage you from achieving your goals.
"Expect a challenge when trying to achieve new goals, but don't give up," said Marianne Gray D'Aquila, president of Consumer Credit Counseling Services of Greater Fort Worth. "Once you have decided what you want to accomplish, be confident. A little discipline can help you enjoy a happy and prosperous New Year."
Take it one step at a time. You can improve your financial situation and meet your goals for the New Year. Don't give up! Keep trying and you can make it.
tags: keep money resolutions
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