Saving for the Future While Paying Off Debt

How can you save for the future when you're still paying off the past?

3 Tips for Eliminating Credit Card Debt

3 Tips for Eliminating Credit Card Debt

Healthy financial habits will have you sleeping like a baby

If you’ve ever woken up in the middle of the night panic-stricken about the amount of debt you have racked up, you’re not alone. Credit card debt is the second-most-common type of debt after mortgage debt (and I’m going to assume we all know that your house is not an asset and therefore your mortgage is not considered good debt, right?). In fact, the average American family owes $8,377 in credit card debt, according to personal finance site WalletHub, which analyzed credit card debt trends in 2016. That’s certainly enough to keep someone up at night.

As a reminder, there is good debt and bad debt. Good debt is debt you use to acquire assets. Bad debt keeps you trapped, pulling you back instead of moving you ahead. In most cases, credit card debt is bad debt. And that’s why you must get rid of it, because it’s serving no positive purpose in your life. Here are some suggestions for obliterating your credit card debt once and for all:

1. Pay off new credit card charges every month

Credit cards have their advantages so don’t cut them into pieces or put them in the freezer. Instead, use them as a convenience, as a record-keeping tool, and as a way to verify to other creditors your ability to be financially responsible.

From this day forward, if you so agree, do not accumulate additional credit card debt. If you charge an item to your credit card, then pay that amount off when the statement arrives. If you have credit card debt that is more than 30 days old, then pay off all newly acquired debt and put a plan in place to pay off the old credit card debt. Why?

Credit card interest is always compounding, and over time it quickly adds up. Let’s say you have $100 in debt and it accrues 20% interest every month. In your first month, you will be charged $20, which gets added to your original debt. The next month, you are again charged 20%, which now comes out to $24. So after only two months your debt has gone from $100 to $144. Yikes. That’s literally throwing money away and nobody can afford to do that.

2. Don’t charge the small stuff

It’s astounding how quickly all of our minor daily purchases add up—from your daily coffee fix to a magazine at a convenience store. And it’s becomes very easy to justify all those small purchase at the moment. Only $3 for a lip balm because I accidentally left mine at home? No problem! But at the end of the month, those purchases really do add up.

Using physical paper money creates tangible awareness of how much you’re dolling out each day. It might even cause you to reconsider some of those small purchases when you find yourself running out of cash too quickly. Starting today, try using cash for any purchases under $20 and see how your spending habits adapt.

3. Pay off existing credit card debt

Robert and I were in a great amount of bad debt years ago—around $400,000. It was incredibly stressful. Talk about sleepless nights! But we paid off all of our debt in less than 10 years, including credit cards, car loans and home mortgages.

For our credit cards, we came up with an extra $100 in income per month. How? By getting creative. We then applied that additional $100 to our monthly payment on only one of the credit cards and paid the minimum payment plus the extra money on that one credit card. While we were focused on that, we paid only the minimum amount due on all other credit cards.

Once the first card was paid off, we applied the total amount we were paying each month on that card to our next credit card. This mean we were paying the minimum amount due on the second card plus the total monthly payment we were paying on our first credit card.

Continue this process with all your credit cards—with each debt you pay off, apply the full amount you were paying on that debt to the minimum payment of your next debt. As you pay off each debt, the monthly amount you are paying on the next debt will escalate.

It is possibly to become debt-free—often within five-to- seven years—but you must make the decision to do so and start today.

Source:http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/April-2018/3-Tips-for-Eliminating-Credit-Card-Debt.aspx 

Getting Quick Money Without Diving Into Shark Infested Waters

Every household does their best to be financially responsible. Even though the prospect of raising a child in the 21st century, we do our best to be frugal while still ensuring that our kids get all the benefits we had in our own upbringings along with some of the luxuries and experiences that we didn’t. Thus, every family walks a financial tightrope, week in week out. In the UK, while other economies have weathered the storm of the economic crisis of 2007-2008 pretty well, we still seem to be struggling a full ten years later.  Aside from debt ravaged Greece, we’ve had the most sluggish post-crisis recovery rate in Europe. In real terms this means that while the cost of living (especially rent) inflates, many of us are experiencing the most prolonged wage repression in history, so our wages fail to meet the rising cost of living. And that’s before we even take into account life’s little emergencies.

When the Diesel Particulate filter gets clogged in the car, the plumbing springs a leak or the washing machine breaks down, we need to lay our money on cash quickly. This can cause us to react in desperate ways, and unfortunately there are a great many less than scrupulous businesses that are happy to capitalise on your desperation. In panic we may run headlong into the arms of payday loan companies or less reputable credit card companies. These may be able to offer quick credit, but this inevitably comes at the cost of high interest and hefty monthly repayments. This can be ruinous to your carefully balanced household finances. Here we’ve come up with some ideas to help you lay your hands on quick money without swimming with the sharks…

As we and our loved ones walk the path of life, we find ourselves picking up a lot of stuff on the way. A lot of stuff. So much so that we don’t realise just how much surplus stuff we have until we move house. Some of this stuff brings us joy and enriches our lives… But a lot of it doesn’t. Wander from room to room and do an audit of what you can’t live without and what can go. If you put the effort into cataloging and listing your wares, you’d be astonished at what you can make within a week. Instead of trading in your old phones for an upgrade you can make a lot more selling them on Rapid Phone Buyer. Not only will you get a same day payment, you will get a whole lot more money. If your home is cluttered with too much furniture, stick some of it on Gumtree. Moreover, if your drawers and cabinets are full of unwatched movies, unplayed games, and CDs that haven’t seen the light of day since 1998 (in fact, do you even own a CD player anymore) Amazon Marketplace, eBay or MusicMagpie are great places to get rid of them quickly and for a reasonable price.

Box clever with credit cards

Credit cards can be a helping hand or utterly ruinous. It all depends on your ability to box clever with them. Many cards have low or 0% interest introductory rates and some have instant approval, giving you the number straight away so that you can start using them before the physical card even arrives. Just bear in mind that these rates do not last forever and it’s important that you manage your monthly repayments to clear your debt before this introductory rate expires. If you still haven’t paid it off by the end of the introductory rate, it’s not a huge problem per se, it just means that you’ll have to move the debt onto another card with another 0% interest rate until you’ve cleared it.

Use money making apps

The wonderful thing about living in the digital age is that there are no shortage of side hustles that virtually anyone can adopt and make money from. Unfortunately, however, many of these take time and startup costs to establish, but you can still make money on the side to supplement your income using apps.

Help out your friends and neighbours

Making money in the digital realm is all well and good, but sometimes the old school methods are the best. What did you do when you were a kid and you needed money? You hustled your friends and neighbours. You asked if anyone needed their car washing, their dog walked, their cats fed or their kids babysat while they enjoy a night out. There’s absolutely no reason why you can’t approach these in your free time as an adult. Indeed, there are many freelancers in a wide range of fields who supplement their income doing exactly that which great success.

Collaborative Post

Source: https://blog.themoneyshed.co.uk/getting-quick-money-without-diving-into-shark-infested-waters/

How to Use Credit Cards in a Smart Way- Cardone Zone

Most of us have or have used credit cards at some point in our lives - but how many of us know how to use them in a smart way?

Check out these top tips from the Cardone Zone!

How To Get Out Of Credit Card Debt

Have your credit cards run away with you, leaving you facing a massive monthly bill that just about covers the interest? We feel you.

Check out these tops tips for paying down your credit cards so you can be free from them once and for all!

Tips to Effectively Pay Off Your Debts

Outstanding debts can inflict severe dents in even the best retirement plans which have been carefully crafted over a lifetime. Incurring a debt is seemingly unavoidable in the modern age, as a result of both higher cost of living and consumerism.

With each passing year, more and more Singaporeans are diving into the debt pool as they struggle to cover their daily expenses and make ends meet. As of December 2016, the average Singaporean household incurs an estimated $55,000 of debt, which is a 3% increase over 2015. Easily 75% of this household debt stems from unresolved mortgage loans. Some of this unsettled debt may even force retirees to expend their assets to cover their debt rather than passing it on to their beneficiaries.

However, there are several ways to effectively settle outstanding debts to ensure it doesn't put a crimp on some of those best retirement plans you've come up with.

1. Establish a Budget and Track It

Creating a proper budget is a great way to analyse and plan finances. By allocating a set amount of money towards a specific expense per month, the amount of expenses can be monitored more stringently and precautionary steps can be swiftly undertaken if the expenses overshoot the stipulated budget. It is only through proper budgeting can individuals or households create the necessary surpluses to pay off any existing debts.

Certain financial tools, such as Excel spreadsheets or even Mint.com, are particularly useful in keeping track of a personal or household budget.

The main problem for an individual who does not keep track of his/her monthly expenditure is that he/she does not know if he/she ends the month with a net reduction in savings, i.e., spending exceeds income and eats into savings. Knowing the amount of leftover balance is crucial since a continuous negative balance might lead to the creation of new debts. It is this type of debt that is the most dangerous as it rolls over at seemingly manageable interest rates month after month. Before the individual knows it, he/she would have made hefty payments on interest alone.

Tracking tools are thus crucial in identifying areas of weakness in one's monthly spending habits, but an individual must take affirmative action to reverse the negative balance situation. This can be done via listing out the monthly expenses and employing necessary cut backs on certain expenditures. Discipline is the key.

2. Laddering Debts by Interest Rate

Laddering debts is another technique used in settling outstanding debt. It involves listing out all current debts by interest rate, starting from the highest interest rate to the lowest interest rate. The debt with the highest interest rate costs the most money, so this debt needs to be settled first.

By paying off the most expensive debt first, the overall debt will be reduced significantly faster. Some individuals who incur multiple debts per month and employ laddering in their finances usually settle the minimum payment required for each debt, and use the balance cash from their payments to settle more of the debt with the highest interest rate.

For example, let's compare two debt instruments: one, a credit card with an outstanding balance of $4,000 with an interest rate of 24% and another, a credit line with an outstanding balance of $8,000 with an interest rate of 16%. Ideally, the minimum monthly payment required to settle each debt would first be made, and any leftover finances would be funneled to repaying more of the credit card debt even though the amount owed may be lower.

Laddering is especially useful in tackling multiple debts while avoiding the accidental creation of another new debt. Laddering also instills a sense of financial discipline that is good in tackling unresolved debts and preventing those debts from inflicting too much harm on those retirement plans you've kept in mind.

3. Balance Transfers

Balance transfers is another tool used to cut back on interest expenses whilst settling an attempt to pay off a debt over several months.

For example, given the competitive nature of the unsecured credit market, banks often provide very low teaser rates for clients who transfer their existing unsecured debt from other banks. The effective interest rates could be as low as 4% p.a. versus the normal 24% p.a. one pays on credit card balances. However, the catch is such promotional rates lasts only for a certain period, for example 6 months. Nevertheless, balance transfers can lower the interest costs of an existing debt.

Balance transfers do carry their own risks. Individuals transferring balances must remember to either settle the debt after the transfer or look for another such opportunity before the lower interest on the account to which the balance is transferred expires, otherwise he/she risks paying an even higher interest rate.

Individuals using the balance transfers may also fail to address the continuous build-up of debt, thus wiping out any benefit from such a strategy. In the end, despite this cost-saving strategy, individuals end up with even more debts that impinge on savings, not to mention any future retirement plans.

4. Contacting Consumer Credit Counseling Services

If a person is having immense trouble settling their debts or even coming up with the minimum monthly payments, they should consider engaging a consumer credit counseling service. In Singapore, this service is aptly named as the Credit Counseling Singapore ("CCS") and offers solution-based credit counseling for individuals beleaguered by financial debt.

The CCS's debt management services only cost $130 and pairs up debt-laden individuals with a credit counsellor. The credit counsellor will assess the indebtedness of an individual's situation and assist him/her by making a financial estimate of the debts owed, identify available resources which can be used to cover the debts and even plan a monthly budget which incorporates all living expenses. Solutions to tackle the debt problem and monthly negative balances will be meted out to alleviate the burden of debt.

If one is concerned over how his/her debt would affect his/her retirement plans, contacting the CCS would be the right way to go. If the retirement plan has already taken the old debt into account, proper financial restructuring could reduce the interest and installment payments that need to be made.

Even the best retirement plans may be in jeopardy in the face of unresolved debts. By adopting better financial habits such as establishing a budget, laddering debts and transferring balances, an unsettled debt situation might become easier to handle. If a debt problem persists, the CCS can be engaged to work out a solution to stave off unresolved debts. Financial advisers may also be consulted to better streamline finances and handle monthly expenses, thus ensuring a more secure and better retirement in the future.

Financial Alliance is an independent financial advisory firm that provides its clients with sound and objective financial advice to protect and grow their wealth. Providing top-notch services to both corporations and individuals, Financial Alliance is a trusted brand in Singapore and has been navigating its clients' financial future for 15 years. For more information about Financial Alliance, click on the link: http://www.fa.com.sg/.

"Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs."

Article Source: https://EzineArticles.com/expert/Janet_Smith/2461821

Article Source: http://EzineArticles.com/9793362

Credit Ratings - The Money Advice Service

Do you know what your credit rating says about you? Do you understand why it's important and what effect it can have on your life? Almost a million people have watched this great video by the Money Advice Service explaining just that!

Did this video help you understand your credit rating better?

The Cost of Christmas - Money Advice Service

Cute and a little bit of fun - what do your kids think the price of Christmas is? Have you asked? Share what they say in the comments below!

10 Strategies to Master Your Money

Whether it is too much debt, damaged credit, lack of savings, or not having enough income, financial challenges can be very stressful and discouraging. It is critical to your success strategy to focus on building a firm financial foundation to support your goals. In fact, it is a strong foundation in every area of your life that empowers you to build the life you truly want more easily.

Ask yourself, "What are the three worst financial choices I have made in the past?" and "How could I avoid making similar choices in the future?" It is easy to beat yourself up for mistakes, but a better approach is to simply acknowledge poor choices and seek to make healthier choices starting today. Here are 10 smart choices that will help you create a stronger financial foundation, less financial stress, and the freedom to enjoy your life more fully:

1. Identify past choices that have led to financial frustration or stress, and stop making those choices, starting today

One of the most important choices you can make with your money is to learn from your past choices. Use failure and frustration as a learning tool for future success.

2. Pay Off Credit Cards Before Other Debt

High balances on revolving debt, such as credit card debt, negatively impact your credit score more than loans that are scheduled to be paid off in a set number of months or years such as a car loan, student loan, or mortgage. One of the fastest ways to improve your credit is to pay down or pay off your credit cards.

3. Stop using your credit cards unless you can trust yourself to pay them in full each month

The average American household carries more than $8,000 in credit card debt with no hope of paying it off in the next 60 days, according to the most recent statistics. Make a decision to live within your means, using the money you have rather than money you have to borrow.

4. Change Your Lifestyle If Necessary

Sometimes building a strong financial foundation requires sacrifice. If you need to "downsize" your lifestyle so that you can become more financially strong, do it! When you have a purpose and vision, and understand the importance of a firm financial foundation, it is empowering to make tough choices such as keeping your old car for a while longer, waiting to buy a bigger house, or curbing the shopping sprees while you save to buy your own home.

5. Get insurance (health, life, home or renters, auto, and disability) that you feel confident will meet your needs in the event you need to use it

No one ever expects a crisis, but it is comforting to know that in the event of one, your finances won't be completely destroyed. An illness, fire, or accident is stressful enough. Make sure you are covered in the event of unfortunate circumstances.

6. Establish A Financial Cushion of Six to 12 Months of Expenses 

Make this a priority goal and begin saving toward it, even if it takes you five years or more to reach your goal. Knowing that financial ruin is not a couple of paychecks away is a very empowering feeling. It will often keep you from making decisions out of fear and empower you to make decisions based on your purpose and vision.

7. Invest Time In Your Own Financial Education

One of the main causes of financial problems is what I call "financial illiteracy." Some companies make a great deal of money off of the financial ignorance of otherwise intelligent people. Spend two hours or more per month learning about wealth building, debt elimination, investing, and real estate. Read books or articles. Attend a seminar. Learn from those who handle their money well. The more financially literate you become, the better off you will be.

8. Refuse To Be An Emotional Spender

Have you ever spent money on your children out of guilt? Or in an effort to win the affection or admiration of others? Do you shop when you are feeling down? Do you buy things you can't afford because they make you feel better about yourself? Have you co-signed on credit cards or loans, even though your intuition told you not to? If so, you have engaged in "emotional spending," an expensive habit. Recognise your propensity to spend emotionally and make a decision to change your behaviour. Wait 72 hours before making a decision about an impulse purchase. Question your motives before spending money. And make sure you spend your money in a way that reflects your vision and purpose.

9. Have A Vision. Set Goals! 

Last week, I challenged you to create a vision for the five key areas of your life. One of those areas is your finances. One of the reasons it is important to have a vision is because it serves as a reference point for where you are headed. When you are building toward something specific, it is easier to tell when you get off track. If you have no vision or goals, you often don't even realise you are on the wrong path until something goes terribly wrong!

10. Put Money Into Proper Perspective

Having money can certainly make life easier, more convenient, and less stressful. But always remember this: If your biggest problems are money-related, consider yourself VERY blessed. Money problems can be fixed. There are other more important things in your life – your relationship with God and the people you care about, your health, and your integrity, to name a few. Don't allow financial frustrations to ruin your relationships, cause you to be angry with God, do things that compromise your integrity, or stress you out to the point of causing high blood pressure, panic attacks, or other health problems. Count your blessings and remember that life's richest rewards will never be found in material things.

Journaling assignment:

What past choices have led to financial stress or frustration in your life? What could you do differently to eliminate this stress and frustration in the future?

My challenge to you this week:

Re-read these 10 smart choices. Then decide what changes you need to make to build a stronger financial foundation for your life. Write them down and take action!

Click HERE for the source!

Link to the original article: http://www1.cbn.com/finance/10-strategies-to-master-your-money

Link to writer profile: http://www1.cbn.com/profiles/burton-valorie