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Category — Debt Reduction

Personal Finance Management – Beating Your Credit Card Debt Blues

This following is a guest post from Neil Williams of DebtConsolidationCare.com

Managing your personal finances can be tough especially when you make barely enough. However, with some good personal finance management skills, you can make sure that you leave behind debt and stay financially fit. Good habits regarding your personal finances need to be started early when you’re young so that you need not resort to consolidation every now and then when you rack huge amounts on your credit cards. Credit cards are the root of all financial problems in the US and if you can get a grip on your personal spending behavior, it is not very tough for you to lead a safe fiscal life. Read on to get yourself familiarized with the few personal finance tips that can help you beat your credit card debt blues.

  1. Setting your financial priorities: It is nearly impossible to achieve every financial goal that you’ve dreamt of. Therefore, you need to identify a few goals and also determine why they matter to you. Try to focus on your goals and be prepared to meet conflicts on your way to achieving them. Put time by your side and check how you can make your money grow and multiply. Stash your money in interest-earning savings account and invest it in stocks and bonds. If you’re young, take greater risks to gain maximum returns in the long run.
  2. Crafting a frugal budget: How to bring your spending under control must be your next initiative. They’re the only practical way to get back a grip on your spending behavior and make sure that you spend less than what you make each month. Identify your present spending level, your gross monthly income and craft a frugal budget. Frugal does not mean pinching your pennies but it means eliminating all the unnecessary expenses and making the most of money.
  3. Learning the basics of banking and saving: Money kept in a bank account is always safe and in order to save money and let it grow, you need to have an inkling of the basics of banking and saving. Open a savings account with your bank and become a financially responsible person. Save at least 10% of your monthly income and drop it in your savings account. You can also tie your checking account with your salary account so that you stay sure about the amount that is being deposited in the savings account.
  4. Planning your retirement: With the present economic conditions in the US, you must spend more time in planning your retirement than in planning your vacations. If your employer offers a 401 (k) account, make sure you contribute money to this account irrespective of the matching contributions of your employer. This is just another way of investing money and you can easily get tax benefits through this account.
  5. Checking your health insurance coverage: Check the health, auto and life insurance policy so that you do not pay more than what you need. If you have an auto insurance comprehensive coverage and your car mostly stays inside the garage, you can easily cancel this coverage to save money. This way you can contact your insurance company and cancel all such coverage that you feel in unnecessary.

Ineffective personal finance management will provide you with nothing but financial trouble. You may find yourself accumulating huge amount of debt and running to consolidation companies for seeking debt help. Follow the above mentioned steps to manage your finances and beat the financial hangover.

May 5, 2011   No Comments

7 Ways To Reduce Debt Quickly

Reduce debt todayEveryone wants to reduce debt, right? Sure, but good things never come easy. Becoming financially free takes hard work. But, if you want to reduce debt, I’ve got 7 ways to free up enough cash to start on the debt snowball.

If you’re not familiar with the debt snowball, I’ll give you a quick tutorial. The basic concept of the debt snowball is to take an extra $200 per month and apply it to the debt with the lowest balance. After the first debt is paid off, you then take the $200 plus the amount that you were paying on the first debt to conquer the second debt. Then one day you find that you are debt free!

Some of these ideas are a little crazy, but getting out of debt is a crazy thing to do (at lease that’s what the American culture will tell you.) To Achieve something crazy, you have to get crazy.

So without further ado, I present 7 ways to financial freedom:

Quit Smoking
I know you love smelling like charcoal, but cigarettes are expensive. Smoking a pack a day at $4 bucks a pop adds up to a tidy $120 a month.

Cut The Cable
Cable can be a big expense. My cable bill, which includes phone, internet and television, is nearly $130 per month. Cutting cable will get you well on your way to having an extra $200 per month.

Eat At Home
Even cheap restaurants can be expensive for a family of 4. You’ll be doing well to get out of there for under $40. Cut that weekly trip out and you’ll save a nice $120 per month.

Loose Your Cell Phone
Do you really need it? Your gut reaction is yes, but unless you were born after 1985, you’ve probably lived the majority of your life without a cell phone.

Skip Starbucks
This one hurts me. I love my grande mocha lattes which come in at $3.34 with tax. One of those a day adds up to just over $100 per month. In my book, that’s a lot of money for coffee.

Drop The Paper
Do you really need your morning paper? You can watch the news for free on television and you can read it online at Google News.

Take a Second Job
Who wants a second job? Well you do if you aren’t willing to cut some expenses to find your $200. If you can’t cut expenses you have to increase your income. Look for something small and simple. Try delivering papers (it’s not just for kids on bicycles,) doing some yard work for neighbors, or getting a part-time job at McDonald’s. You may have to suck up some pride, but it will be worth it in the end.

There are literally hundreds of ideas to reduce expenses. If you’re really serious about becoming debt free then either use one of these ideas or think up your own and get started on the debt snowball!

January 4, 2007   No Comments

How Credit Card Debt Can Kill You

reducing credit card debt easily

Do you like your [tag]credit cards[/tag]? Do you use them for a lot of your [tag]spending[/tag]? Do you carry a [tag]balance[/tag] on your cards each month?

Let’s just start with some numbers to get our brains in gear. The average American has around $9,312 in credit card [tag]debt[/tag] (USA Today.)

It doesn’t take long to accumulate that. Some holiday shopping, a few nice restaurants and a family vacation will rack up the credit card debt quickly. Doesn’t seem like much?

Now what if we only pay the [tag]minimum payment[/tag]? The minimum payment on most cards is typically 2% of the total balance. That puts our starting payment right around $185 per month. Keep in mind that this amount will decline as the balance declines. For our calculations we’ll use an average credit card rate of 13%.

Alright, if we were to only pay the minimum payment on our credit card, we would pay the last bill 291 months from today. That’s 24 years and 3 months away! Our final [tag]interest[/tag] charge? $10,087.94. So our vacation just doubled in cost!

Now it really gets extreme if you have a high interest rate on your credit card. [Read more →]

December 13, 2006   5 Comments