Money Savvy » Debt Handling

Surviving the economic roller coaster

Author — Wed, 16 Sep 2009 01:23:10 +0000

(ARA) – It twists, it turns, it goes up, it comes down and it even has the uncanny ability to make many of us feel a bit wobbly and nauseous. The economic roller coaster has taken all of us for a wild ride, particularly over the past year. Unfortunately, 2009 has already proven to have even more twists and turns in store for us.

So what can you do now to help gain back some control over your financial life? Thrivent Financial for Lutherans, a not-for-profit financial services organization, offers the following timeless tips to help you survive the ride.

* Pay down your debt, but don’t forget to pay yourself too.
Generally speaking, the sooner you pay off your debt — especially consumer debt like credit cards — the better off you’ll be. However, also set aside money on a regular basis for an emergency cash fund.

* Track, then manage, your cash flow.
It’s impossible to manage your money if you don’t have a feel for what you take in and where your money goes. A budget can be a real lifesaver in terms of ensuring that you have a solid financial foundation.

* Insure the fundamentals (health, property, income and life).
Everything you own is at risk if your fundamental needs of your life are not properly insured.
A financial professional can assist you in determining the appropriate level of insurance for your specific circumstances.

* Grow your job skills.
Perhaps one of the most neglected of our assets is our job skills. Continually seek to grow and enhance your value to your current employer or potential employers by growing your job skills through continuing education, volunteer experiences and more.

* Direct your bonus or raise toward financial priorities.
If you are lucky enough to have received a bonus or raise, put it towards a financial priority, like paying down your debt, creating an emergency savings fund, continuing education or building your retirement account.

* Invest for the long term.
Given the performance of the equity markets, it may be tempting to discontinue participation in your company’s 401(k) account. Don’t. Letting emotions override sound economic decisions could be a big mistake. It is wise to continue to participate in a 401(k) program, especially if your company is matching your contribution.

* Consider time, not timing.
When will you need the money? The strategy of someone 25 years away from retirement versus just one or two is obviously going to be different. Make sure your portfolio is rebalanced and is appropriately diversified for your risk tolerance, but also make sure you are ready to take advantage of a market rebound.

* Build your financial knowledge.
Read financial publications, listen to financial shows, talk to friends and financial professionals. The more you know, the better decisions you will make concerning the financial choices you have.

* Talk with loved ones about location of financial documents.
It is especially important for senior parents and adult children to discuss this matter. Every family will differ regarding their comfort level around discussing specifics of end-of-life and healthcare issues, but all families should, at a minimum, inform their loved ones where specific financial documents can be found (e.g., health care directives; long-term care and life insurance policies; pension and retirement account information).

* Meet with a financial professional and work with a strong company.
A financial professional can be invaluable in helping you create and track a financial program appropriate to your goals. Work with someone you trust; someone who has an excellent reputation and plenty of positive references. Ask the right questions to make sure the company or companies you will be working with are strong and stable.

* Live generously.
It is easy to get caught up in everything going on in our world. Don’t forget to give back. Make financial donations when you can and look for opportunities to volunteer and share.

For more information, go to www.thrivent.com.

Five Simple Steps to Getting Out of Debt

Author — Mon, 29 Sep 2008 17:26:23 +0000

Debt is something that can break even the hardiest person’s back and it is also something that can take over a person’s whole life and leave them staring at ruin. What’s worse is that today getting into debt is a lot easier than it was not so long ago, and worse still, often there seems to be no way out for you from the financial ruin you must be facing. It is thus in your best interests to find out more about the proper steps to getting out of debt and then act on this information.

Pay More Than Minimum Payment

The first step to getting out of debt is making sure that you have enough money with which to pay more than the minimum payment. That way, you can reduce your outstanding amount rather than simply end up paying off just the interest on your debt.

Another step to getting out of debt that is also worth trying out is drastically cutting down on your expenses and whatever you save through this means, can be put into paying off your debt. You need to closely monitor your budget and find out ways by which you can scrimp an extra dollar here and there and thus add to the amount available for paying off your debts.

Still another step to getting out of debt is selling off your belongings, especially those that are not absolutely necessary and then use the money earned to pay off your debts. There are sure to be many things that you can dispense with and by holding a garage sale, you should be able to make a little extra cash which can then be used to pay off your debts.

Yet another step to getting out of debt is taking up a second job and thus earning enough money with which to reduce your debt. This is a very effective means by which you can knock off part of your debt and thus get back on the road to becoming debt free.

Finally, another useful step to getting out of debt is consolidating all of your debts into a single debt. This will then attract a lower rate of interest and thus bring down your outstanding amount and which also will mean having to pay a lower minimum amount.

Another aspect which you will need to pay special heed to when it concerns steps to getting out of debt is having a proper mindset with regard to getting out of debt. With some modifications here and there; you will be pleasantly surprised at how easy it is to regain your financial independence once more.

Easy Ways of Reducing Debts in This Time of Economic Crisis

Author — Sat, 27 Sep 2008 17:25:36 +0000

A lot of people are worried that the worsening economic crisis in the country will affect their ability to pay off their loans. To some extent, these fears are well founded. Reducing debts is not easy when you have to contend with other things like the rising cost of basic commodities, higher interest rates and others.

However, the good news is that reducing debts is not really impossible even if the cost of gas has already breached the record mark. According to experts, there are easy way of reducing debts and if you are careful with your money, you can still be relatively debt free. To help you reduce your debt load, here are some tips for you.

Save on Your Monthly Bills

A lot of us waste so much money on things that we don’t really need. If you are one of those people who have not really been paying close attention to your monthly expenses, now is the best time for you to evaluate your monthly spending and put a cap on things. The savings that you generate from cutting on your monthly overhead expenses can greatly help in reducing your debts.

To get an idea of how much money you actually spend on things, gather all your bills for the month. Take a closer look on your utility bills and find out if you are spending more than you should. Most Americans spend too much money on electricity and gas so you can look in that direction and then calculate how much money you can save if you cut back on this area. You should also take a close look into your credit card expenses. You will be surprised at how much money you can save from your monthly utility bills.

Change Your Lifestyle

Changing your lifestyle is very helpful in reducing debts. If you are one of those people who spend hundreds of dollars in entertainment, consider reducing your entertainment cost. Instead of going out almost every night, you can just dine out and have some fun with your friends once a week or even twice a month.

If you really love to socialize a lot and cannot live with the idea of cutting back on your nightly activities, consider entertaining your friends and family members at home instead of going out to fancy places. If you really want to go somewhere, find an inexpensive place where you and your friends can hangout.

The Smart Way to Reduce Your Debt

Author — Thu, 25 Sep 2008 17:24:22 +0000

If you have decided to reduce your debt, take a moment to congratulate yourself. Sadly, many individuals today have taken advantage of no interest or low interest for a specified period of time, only to find excessively high interest rates kick in if they are late in a payment, or after an introductory period ends.

Similarly, too many homeowners have given in to the temptation to treat their homes like an ATM, withdrawing cash against a home equity line of credit to pay for transient luxuries like travel and vacations. It is time for this nation to stop going in to debt and start looking for ways to reduce debt.

Take Stock of Your Situation

As silly as it sounds, many adults are afraid to add up all their debt and face the amount they owe. But you must do this if you are going to reduce your debt. Get out all your credit card bills and a notebook or electronic spreadsheet, and start adding them up.

For each debt, make a note of the balance and the interest rate. Be sure to include any sums you have borrowed from friends and family members as you plunged yourself into debt. Don’t bother noting the minimum monthly payment; you’re never going to pay that again.

Next, find the debt with the lowest balance. If the balance is under $500, pay that debt off right away. Even if it is not the debt with the highest interest rate, paying one creditor off completely, down to a zero balance, will give you a valuable sense of accomplishment and confidence you will need as you reduce your debt even further.

Prioritize

Identify which of your remaining debts has the highest interest rate. Those are the debts that you must pay off first. You must dedicate yourself to reducing you debt. Every little windfall – every tax refund and holiday bonus – must go toward debt reduction. Similarly, the debts that have a low interest rate can be paid off last. Debts like low-rate home mortgages and student loans fall into this category.

Stop Charging

It seems obvious, but it is so important that it is worth saying, and repeating: stop going into debt. While you are concentrating on debt reduction, do not continue to incur new debt. Don’t take cash advances on your home equity line of credit. Don’t take cash advances on your credit cards. Don’t charge consumer merchandise on your department store cards. Don’t use a gas card to pay for gas.

Don’t fall into the trap of thinking you are coming out ahead by using a credit card for airline miles or other rewards. The reward is rarely worth the high interest you will pay for the credit card balance.

Paying Current Bills While Paying Your Debt

Author — Tue, 23 Sep 2008 17:23:42 +0000

Anyone who is in debt knows the tension it can put on getting their current bills paid. Most of the time, there just isn’t enough money to go around. So when it comes to paying debt, many people have no choice but to try and forget about it while ditching the harassing phone calls and putting the notices straight into the trash.

The only problem with this is the fact that the debt builds up and checkers your credit if you ignore it. This can put you in a very tricky situation when it comes time to purchasing a new home or vehicle.

Although it may seem useless to even think of a solution to paying your debt when it’s hard enough to make ends meet at the present time, but the truth is that you do have options.

Debt Consolidation

Using a debt consolidation service can save you money (as the service will most likely settle an agreement for payment that is less than the outstanding balance) and time when it comes to paying debt. The outcome is less money worries and no more guilt or stress of past owed debts.

You can find a debt consolidator in most cities, where you can meet and discuss with the service providers what your goals are. If you look online for debt consolidators, locate a service that is driving distance from your home as you’ll want to personally meet with the people you’ll be working with to change your life.

Make a Budget

Make a budget for yourself, and stick with it. Plan for your monthly expenses and splurges and make sure you don’t over spend. This will allow for more money for paying your debts off and more money to save for the future.

You should also document every thing you purchase including gas groceries, stops at the convenience store, coffee purchases, and anything else at all that you spend money on. This will help to keep you in check and control your spending. In fact, documenting your budget, expenses and purchases will greatly improve your chances of becoming and remaining free of having to pay for debts.

Invest

Use your extra money to make small investments that you are sure will gain you a return. In order to do this, you’ll probably only make a very small profit in your investments. But if you invest an initial amount of money and keep turning it over while taking the profits off the top as you go, you can be paying your debts and saving for a fabulous future at the same time.

Easy Ways to Help You Pay Off Your Debts

Author — Fri, 19 Sep 2008 17:22:56 +0000

It is not always easy to pay off debt these days. The worsening economic problems of the country make it more and more difficult for people to set aside enough money for monthly debt payments. If you are one of those people who are feeling the economic pinch brought about by the rising cost of living in the country, do not despair. With good debt management skills, you will still be able to pay off your debts and keep your credit ratings high.

Make a Debt Inventory and Set Your Priorities

The first thing that you need to do to pay off your debts is to make an inventory of everything that you owe to your creditors. Gather all your bills and put them in one file. Make a list of all your monthly payables and rank these payables according to urgency. You need to set your priorities.

For instance, if you have been behind in your home payments, you should put home payments as your top priority to avoid foreclosure. Loans with high interest rates should also be on top of your list. Note that high interest rates can make your loans grow so fast so be sure to pay close attention to these loans with high interest rates. If you can consolidate your high interest loans with the rest of your loans with lower interest rates, do so.

Get Rid Of Your Credit Cards

If you want to pay off your debts and get back into the right financial track, get rid of most of your credit cards. Two credit cards are enough for you so if you have more cards than that, get rid of the others. Credit cards a notorious when it comes to burying you in debts so as early as possible, pay off your debts and then retire most of your credit cards.

No, rolling over balances from your credits cards will not help you pay off your debts. At most, rolling over your credit card balances will only delay the inevitable. To help you get out of a potential financial problem, pay your credit card bills and stop using your cards. As soon as you have finished paying your credit card bills, call the credit card company and tell them that you want to cancel your cards.

Come up with a Spending Plan

You should always have a monthly spending plan. Make a list of the things that you need for the month and then buy only the things that you need. Having a good spending plan will help you avoid economic pitfalls.

Follow These Simple Tips for Getting Out of Debt

Author — Wed, 17 Sep 2008 17:26:56 +0000

Being in debt means having to carry a very heavy burden and the stress too will wreak emotional and financial havoc in your life. If you are feeling angered, lonely, depressed and helpless and at your wit’s end because of your poor financial condition, and then you should check out a few tips for getting out of debt.

No Further Debts

To begin with, the simplest tip for getting out of debt is making a conscious decision to not incur any further debt. In addition, you should must also refrain from using your credit card and also foreswear taking out any new loans and even go as far as destroying your existing credit cards to make sure that you are not tempted to live a life of debt.

The second simple tip for getting out of debt is to start keeping track of all your money including all your sources of income as well as outgoing so that you know just how much you can afford to spend without incurring fresh debts. This process should be gone over each month because it will help ensure that you keep strict control over how much you spend in relation to your earning capacity.

If you can, (and there is no reason why you cannot) you should also enter into negotiations with your creditors to try and get lower interest rates on your current debt and also try and get a more favorable time limit to make your repayment. This is a simple tip for getting out of debt which will help you bring down the amount of your outstanding and which has a good chance of succeeding because most creditors will be amenable to negotiating better terms if they are convinced that that would help them recover their outstanding monies.

Another tip for getting out of debt is making your own system with which to repay your debts. Actually, this step can be made a lot easier once you have ascertained exactly your true financial situation with regard to how much you owe each of your creditors. In addition, if you make it a point to scrimp and save, you will be able to find spare cash with which to pay off each of your creditors and soon you could even become free of debt.

The bottom line is that there is no reason why you should not be able to continue living your normal life once more provided you just follow these tips for getting out of debt, which should help you regain your financial freedom a lot sooner than you might expect. All you need to do is make an immediate beginning and not wait till the situation turns truly critical.

Need Help Getting Out of Debt? Know What to Do

Author — Mon, 15 Sep 2008 17:20:53 +0000

Need help getting out of debt? After all those days of endless and seemingly “sky-is-the-limit” sprees, your balances come knocking on your door. There will be no problem if you can easily pay the debt you have acquired. Unfortunately, for those who do not find enough gusto in monitoring their credit history, they definitely need help getting out of debt. Fortunately, there is a gamut of tips that can help those who are in dire distress and seriously need help getting out of debt.

If you think that debt consolidation or credit counseling is the answer, then you are handling things way easily. These solutions should not be the first stop but rather your last resort. They might be tempting and if you are planning to get your act together, doing the consolidation procedures on your own might even help you learn skills you will need to fix your problem and avoid the same situation where you need help getting out of debt again.

If you find yourself in a situation where creditors are harassing you and you have grown terrified or anxious of answering phone calls or reading your mail, all you need to do is stop and take a deep breath. You must know that everything will be fine and develop the courage to call them yourself. There are creditors who would want to work with you in sorting everything and even provide ways if you need help getting out of debt. All you need to do is to explain yourself and this might even cause them to willingly help you get the debt back under control.

If you seriously need help getting out of debt, then you might want to reflect on your current income and assess if you have the capability to earn more. There are people who can easily figure out ways to bring home that extra bacon relatively painlessly. You need to know more about yourself and realize if you have skills or hobbies that can be instrumental in providing extra income. If so, the money you will earn from those talents would help you pay the debts you have. This can even build an entirely new stream of income potential over time.

Need Help Getting Out of Debt? Here are Some Warnings
If you really need help getting out of debt, then stay away from the temptation of a payday loan. This is a quick fix to the monetary issue but can cause the ramification of an entirely new set of problems. There are still outside factors that can help you get out of the debt, i.e. family, friends, counseling, home equity.

Also, avoid chronic spending as this can only accrue the debt you have. This is a common addiction to some people and can provide a way to escape or be used to mask an even deeper issue. If you think you have the problem, it is really best to get advice from others and acquire the best possible solution if you need help getting out of debt due to chronic shopping.

Five Steps to Help Lower Debt

Author — Sat, 13 Sep 2008 17:20:07 +0000

If you want to lower debt, there are a few things that you are going to want to keep in mind, a few steps you are going to want to take in order to not only lower your debt but also manage it properly and keep it low.

Understand Your Credit Rating

The first and most important thing you are going to want to do is take a look at your credit rating. You will want to see where you stand here and make sure that there are no mistakes. If there is anything wrong on your credit rating and you know it, you need to take care of this immediately.

Budget

The next step to lower debt is to set out a budget for yourself. You may think that you are budgeting properly right now, but chances are that you are not. You want to make sure that you are aware of how much money you are presently taking in and how much is going out each month.

This is the only way that you are going to be able to pay all your bills on time and hopefully have money to save as well.

Pay Credit Cards

To lower debt one of the first things you have to do is pay off all your credit cards. Credit card debt is one of the most significant causes of debt, and no lender is going to be willing to lend to you again if you are in debt with your credit cards.

Okay, so you do not have to pay off all cards at once, but these are the first debts that you are going to want to start making payments towards. Not only because they are going to have the most negative impact on your credit rating, but also because whenever you are owning money there is interest adding up on the bill that you are also going to end up having to pay for.

Keep an Eye on Your Money

These tips are going to help you lower debt and keep it that way, as long as you make sure you keep an eye on your money and how you are spending it.

If you find that you are having troubles and are not able to lower debt, then you may want to speak to a financial aid or even an accountant, who will be able to take a close look at your situation and figure out what is going to work best and get you out of debt fast, and for the long term.

Learn How to Get Yourself Out of Debt for the Long Term

Author — Thu, 11 Sep 2008 17:17:16 +0000

If you are in debt then no doubt you are frustrated and worried about what your future holds. To most people it seems as though there is nothing they will ever be able to do to get out of debt and this can create a very helpless feeling situation.

There are things that you can do however, and you can learn how to get yourself out of debt, not just for now but for the long term.

No Miracles

The first thing you need to realize is that although you may wish it were true, unfortunately there is no miracle way to get out of debt, unless you are lucky and win the lottery. Instead, it is going to take some time, money, and patience, to get yourself out of the hole that you have dug for yourself.

If you want to learn how to get yourself out of debt then you are first going to have to be aware of this and make sure that you are prepared for the long road that lies ahead.

Pay it Off

You are going to have to budget your money if you want to learn how to get yourself out of debt, and start paying your bills off. Make a list of your debts in priority sequence, so you can get the most important bills paid off first and then make your way down.

If you want to know how to get yourself out of debt, then know that your credit card bills are always going to be the most important. When you owe money on a credit card your credit rating is affected significantly and not only that but you will also have interest on each card that you are going to owe as well.

Credit card companies do not let you go long periods of time without paying off debt out of the kindness of their hearts. They allow it because this is how they make their money, off the interest that you are charged the entire time that you owe them money.

If you want to know how to get yourself out of debt then you are also going to want to start taking advantage of the resources that are available to you. This includes books and other media, and also financial aids, accountants and other financial advisors who will be able to offer you helpful advice and help you dig yourself out of debt.