Personal Finance Blog


Getting Yourself Debt-Free in a Year!

Getting free of debts is a goal that many millions of Americans today would love to achieve. Unfortunately, very, very few of us actually end up doing that. There’s always something that needs to be taken care of. Whether it’s the television going on the blink or the car giving up the ghost, there will always be something else that will go awry. That’s often what makes it tough to get ahead. Additionally, doing away with debt entirely, and within a year, no less, is for many Americans utterly impossible.

It’s not impossible for everyone, however. First off, let’s get one thing over with. Unless you manage to win the lottery, chances are good you’re not going to be able to pay off your mortgage. Likewise your car, and for many, student loans. Here’s the trick, though. These types of debt don’t necessarily count against you. It’s the bad debt that can really wreak havoc on your finances.

So, what do I mean by “bad debt?” Isn’t all debt bad? The answer is, of course, not quite. Bad debt is debt that gives a strike against you on your credit report. It includes delinquent debts of all sorts, store credit debt that has lapsed into those sky-high interest rates after promotional periods have given out, and general credit card debt. These forms of “revolving credit” usually carry huge interest rates, if not fees as well, and always seem innocuous at first, then hit you at the end with huge interest charges.

Getting yourself out of bad debt isn’t as difficult as some people would have you believe, especially if you aren’t actually delinquent on any of your payments. Following these simple tips will help you get yourself away from bad debt traps, and back on the road to financial wellness in no time!

First off, round up all your credit cards, statements, and financial documents, organize them, and separate them by balance owed. This organization process is critical, since it allows you to see what you owe, and what you can do about it.

Next, check to see if any of your credit cards that have low or no balances have any outstanding refinancing offers. You may be able to take advantage of a low-interest or no-interest promotional period if you transfer balances. This could give you as much as 24 months, but usually close to 12 months of low or no interest depending on what card you have. If you have an offer that will work, use that card to consolidate the cards and/or loans you have outstanding.

Destroy the cards. Now. Don’t spend another dime on them. Don’t question this advice, just do it. Without the temptation to use them, credit cards will begin to lose their power over you, and you’ll begin to be free.

With the loans and balances consolidated, and with the cards destroyed, look at your balance. Chances are good you’re saving around 20% per month with this move. Now, rather than figuring you’ve got an extra 20% to spend, put it toward your balance.

Divide the total balance by 12, and see what you’ve got. If you can swing that monthly payment that’s staring you in the face from your calculator, than you’re in business. Set up an automatic monthly draft of that amount, click the green button, and whatever you do, stick to it! It might mean having to do without that drive to the grocery store for ice cream, but once you’re free of those bad debts, you’ll be able to better understand how to keep yourself away from debts of those sorts. It just takes a few minutes’ time, a little self control, and the ability to see yourself living debt-free by the end of the year!

Posted in:  Budget & Savings, Credit Cards, Financial Planning
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Five Habits of Financially Successfully People

Sometimes, you’ve just “got it.” Call it the lucky touch, or cosmic Karma, there are people in this world that just seem to always have enough money, all the time. Maybe it’s your uncle, or your second cousin twice removed. Maybe it’s that guy at work that always seems to be driving a new car every couple of years, or the old lady down the street who spends more time on the beach in Cancun than she does in her sewing room. Whoever it is, and however much money they might actually have, there’s a simple truth that exists. Regardless of who you are, there’s always someone out there who has more.

Once you get past the relative uselessness of being upset about that situation, you actually stand a pretty good chance of looking at the lives of those people, and coming to understand the little ticks that make them smart with money. More often than not, it just boils down to being in the habit.

Routine is one of the strongest motivators that humanity has ever known. Get into a routine for a few months, and you’ll be surprised what can be accomplished. Think about it this way- If you go for a walk and exercise all summer, then you tend to miss that feeling come winter, right? Put another way, most of us just feel out of sorts when we get out of our routines. Financial habits are just as important to cultivate, and like those trips to the gym, unfortunately get pushed aside at the first sign of discomfort. Not all financial routines need to be painful, though. Rather than dreading them, you should learn to appreciate them, so that eventually, you’ll complete them without even thinking about it!

Check out these tips, and you might just find yourself being one of those people that others think has “got it” financially!

1. Budget. Financially successful people have a budget, and they stick to it. Often, the hardest part of budgeting is the actual creation of the budget. Once you’ve got it down, and it’s one that isn’t too hard on you personally, it will actually feel more natural than spending yourself into a corner every month.

2. Save. Sometimes, this is known as “paying yourself first.” It’s part of the budget, and is put aside before you pay any bills. It’s money you can put toward a down payment on a car or house, a new television, or retirement. Whatever you use it for, it keeps you from having to rely on short-term credit for things you want to buy, saving you money in the long term.

3. Monitor your Credit History. Your credit report might be the end-all of your financial life, but don’t expect it to be a perfect indication of your actual credit history. You should check all three credit bureaus at least once per year, but especially if you plan to make a major purchase in the near future.

4. Ask for the Pay you Deserve. Your pay shouldn’t be derived by what your co-workers make. While the market for your job gives a broad pay range that is acceptable, other factors should be taken into account. If you work conspicuously harder than your co-workers, or if you provide your workplace an additional service, you should be paid commensurate with that level of work.

5. Don’t spend too much time worrying about what you don’t have. While it’s healthy to always keep your eye on the prize, so to speak, it isn’t healthy to obsess over what you can’t afford. It can drive people to distraction, and could lead you to make awful purchasing decisions, such as overextending your credit!

If you think about these few little tips, you’ll soon catch yourself with some good financial habits that will always serve you well, and help ensure that you’re one of those people that other folks look up to financially!

Posted in:  Budget & Savings, Financial Planning
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How Young is Too Young To Get Work?

These days, it seems that every dime you can get scraped together is helpful. Family budgets are stretched thin as can be, and more often than not, kids today have to rely on student loans and part-time jobs to get into (and maintain) college careers. Since most kids can only get jobs after the age of 16, that doesn’t leave much time for them to save some money toward college before they get out of high school. Additionally, with the advent of common core standards, students are working harder than ever to make good grades so that they might earn scholarships that will help with schooling. Obviously, that leaves minimal time for students to find work that is actually worth their time when teenagers’ free time is so limited to begin with.

While sitting in my local cafe a few days ago, I happened to overhear a mother who was questioning a barrista about how old her child needed to be to work at this particular establishment. She was genuinely chagrined to learn that kids needed to be at least 18 here, and a discussion was promptly begun that revolved around the question of where might a 14-year-old find work? Now, I know that it’s a matter largely of personal discretion, but I couldn’t help but wonder what would drive someone to want to get work so young. Between homework and extracurricular activities, family time and genuine relaxation, it seemed silly to me that anyone would be of the opinion that a 14-year-old would have any time at all for a part-time job.

How young is too young to hold a job? One would think that the industrial revolution would have taught us a valuable lesson about child labor in the United States. Really, who doesn’t remember the pictures in our history books with all the little girls working in the textile factories? How about the stories that went along with those pictures about kids losing limbs to those machines? Those stories were remarkably common when the industrial revolution was kicking off. Strangely, though, there appears to be more of a sentiment to keep these kids working (and by extension, out of trouble) these days, than letting them be kids. For many families today, home chores often begin as early as possible. Kids might earn an allowance for emptying the dishwasher, for instance, or raking leaves, cutting grass or vacuuming. All this is well and good, but to try to pigeonhole kids into a part-time job so soon? What’s the point?

It could be argued that starting early could potentially help a kid save up for college, an increasingly expensive option these days, but certainly the best route to really getting into a “dream job” that exists. After all, those Advertising Executive jobs don’t just fall out of trees! The reverse of this, though, is the contention that no part-time job and its paltry minimum-wage paycheck could possibly cover college expenses. Loans would still be required to get through. Others might say that its a character-building exercise to prepare kids for college. That, however, is simply bunk.

High school is tough enough these days without expecting kids to do their homework in the wee hours of the night after a shift at the local burger joint. Sixteen to Eighteen is a good age to begin to find their way in the work force. Until then, the best thing for kids to do (particularly if they are planning on going to college,) is to study hard, involve themselves in extracurricular activities, and put together plenty of educational resume-builders: Good grades, Good Attendance, and Good Attitude. With these in place, it will be far less likely that your ‘tween will need to worry much about getting a job before they’re actually in college.

Posted in:  jobs, Kids
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