Take Control of Debt
Remember the definition of net worth (wealth)?
Assets – Liabilities= Net Worth
Liabilities are your debts. Debt reduces net worth. Plus, the interest you pay on debt, including credit card debt, is money that cannot be saved or invested—it’s just gone. Debt is a tool to be used wisely for such things as buying a house. If not used wisely, debt can easily get out of hand. For example, putting day-to-day expenses—like groceries or utility bills—on a credit card and not paying off the balance monthly can lead to debt overload. Lots of people are mired in debt. In some cases, they could not control the causes of their debt. However, in some instances they could have. Many people get into serious debt because they:
· Experienced financial stresses caused by unemployment, medical bills or divorce.
· Could not control spending, did not plan for the future and did not save money.
· Lacked knowledge of financial and credit matters.
Tips for Controlling Debt
· Develop a budget and stick to it.
· Save money so you’re prepared for unforeseen circumstances. You should have at least three to six months of living expenses stashed in your rainy day savings account, because as the poet Longfellow put it, “Into each life some rain must fall.”
· When faced with a choice of financing a purchase, it may be a better financial decision to choose a less expensive model of the same product and save or invest the difference.
· Pay off credit card balances monthly.
· If you must borrow, learn everything about the loan, including interest rate, fees and penalties for late payments or early repayment.
I owe, I owe, so it’s off to work I go.
New Years Debt Resolution
Get Yourself Into Financial Shape Many of us make a New Year’s resolution to improve our physical condition. But how about your financial shape? These are sure signs that you need to revamp your finances:
Your credit cards are maxed out and you’re only paying the minimum. Failing to settle your bill in full can lead to whopping finance charges. And if you skip a payment you can be on staggering late fees in addition to the interest.
An increasing amount of income goes to paying your debts. Only 10 - 15 percent of take-home pay should be spent on fulfilling credit obligations.
You’re using one card to pay off another. Don’t fool yourself into thinking you squaring away your debts. All you’re doing is borrowing more money.
You decide that your next trip to the doctor will have to wait. If you’re jeopardizing you health because of a lack of money, it’s time to reevaluate your credit situation. (more…)
Debt is The Master of Souls
Wholeness requires separation. In order for you to experience yourself as being whole, you spend most of your live experiencing being separated, trying to get back to wholeness.
One of your most creative ways of moving away from happiness has been through consumer debt. Your fixation with spending, gives you little time to contemplate being whole, until it hits you in the face with a debt load that you can no longer manage.
The Black Plague of the industrialized world is debt for consumer goods and services. No matter how you may reason it, going into debt to buy a big screen TV or stereo system, a new boat, or lawn furniture, just is not necessary. You have been taught that all of these things are necessary to be happy and successful. You have moved away from happiness in order to feel it again by learning how to be miserable. Now that you are up to your ears in bills, you think that you would be happy again, if only you did not owe all this money. (more…)
How much credit card debt do you have?
The average American family is now over $7000 in debt just on their credit cards. That debt generates an interest charge of over $105 each month if your card charges the average 18%. If you have missed a payment or made a late payment (even by one day!), you may be paying up to 27% interest or over $157 each month. Most credit card companies require a modest payment towards the card balance. Modest meaning from $10 to $20 a month. To pay off a $7000 debt at $20 a month you will not pay off this debt for 29 years. (more…)
Figuring Out Your Debt Problems
Do you live with high levels of stress every day because of your debt problems? You are just like the majority of other American consumers. Debt problems can be burdensome on an entire family. The good news is that there are ways you can eliminate your debt sooner than you ever thought possible.
Choosing a Credit Counselor
Living paycheck to paycheck? Worried about debt collectors? Can’t seem to develop a workable budget, let alone save money for retirement? If this sounds familiar, you may want to consider the services of a credit counselor. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware — just because an organization says it is “nonprofit” doesn’t guarantee that its services are free or affordable, or that its services are legitimate. In fact, some credit counseling organizations charge high fees, some of which may be hidden, or urge consumers to make “voluntary” contributions that cause them to fall deeper into debt.Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
Credit Counseling and Debt Management Plans
Credit Counseling: If you’re not disciplined enough to create a workable budget and stick to it, can’t work out a repayment plan with your creditors, or can’t keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But be aware that, just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling organizations charge high fees, which may be hidden, or urge consumers to make “voluntary” contributions that can cause more debt.
Knee Deep in Debt
Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?
You’re not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn’t have to go from bad to worse.
If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy. Debt negotiation is yet another option. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.