Tips to Keep the Debt Monster at Bay

Ever found yourself saying, ‘It’s really easy to spend money, but difficult to pay it back.’ If so, you’re not alone. Many folks struggle with managing their finances. Consider that Americans typically spend $1.33 for every $1 that they earn. That means the US is a highly indebted society, and these trends are growing. The problem is overspending. Living beyond your means is a sure-fire recipe for disaster, and sound money management is needed to curtail these excesses.

Psychologists attribute overspending to emotional drivers. People routinely spend money to feel better about themselves. We spend money to combat boredom, uplift ourselves, or to alleviate stress. Fortunately, there are many other ways to deal with these anxiety-ridden emotions, notably finding zero-expense activities such as exercising, reading and studying, or simply spending time with friends and family.

Are Credit Cards Lifesavers?

Households must guard against the debt trap at all costs. When debt becomes impossibly difficult to repay, owing to high interest payments, a negative spiral ensues. It’s important to prioritize debt repayments, debt management, and debt alleviation above all else. The problem with debt is that it rapidly accumulates, and the interest repayments become untenable. Topping the list are credit cards. These pieces of plastic, infused with sophisticated chip technology, can be lifesavers in an emergency. However, if managed improperly credit cards have the potential to worsen your financial situation.

Consider some of the fees that you are likely to pay on credit cards: cash advance fees which range from 2% through 4% of the amount that you are withdrawing, in addition to a fixed ATM withdrawal fee. There are also late payment fees to consider, often in the region of $39 +, and if you go over your credit limit, a fee of $35 + may be added on to your bill. Many credit cards offer their services at zero annual charge, but others can charge anywhere from $25 – $400 per year. That’s a significant drain on your finances, given that the APR on credit cards is extortionary to begin with.

Always Read the Fine Print

Your first order of business when trying to get out of debt is to manage your outstanding credit card balance well. Transfer your balance from high interest credit cards to a low interest credit card (be mindful of the transfer fees) and pay it down as quickly as possible. In this vein, it’s important to make more than the minimum monthly payment on your credit cards. Consider that credit card companies can change their interest rates at their discretion.

Read the terms and conditions of your credit card provider carefully – you certainly don’t want to be caught unawares. If you are delinquent in any of your credit card accounts, or other lines of credit, you may be penalized with higher interest rates. Another thing to be careful of is the rewards program on offer. You certainly don’t want to be paying a high annual fee and not recuperating your costs in the form of generous cashback offers, exclusive rewards, and related benefits.

How Can You Live Frugally?

We have already established that spending money you don’t have is a recipe for disaster. Instead, look to other activities that are cost-effective and fun to pass the time. The benefit of low-cost rewarding activities far outweighs that of spending excessively and then having to worry about paying it back. People often confuse wants and needs. Wants are desires, and needs are requirements.

We need food, shelter, medical care, and transportation. We want sushi, palatial homes, Ferraris and the like. It is a fine line to balance our wants and needs, but that’s where living within your means comes into the equation. Frugal living allows you to plan for the unforeseen, put away money for retirement, and prevent the debt trap from ever occurring.

There are many theories on how best to deal with the urge to splurge. Some folks advocate freezing your credit card in blocks of ice and waiting for them to thaw when you feel the urge to spend. Others simply recommend cutting up your credit cards every time you are thinking of making a big purchase. What you are effectively doing in all cases is curbing your desire to spend money. That’s the first step in the right direction!

How to Deal with Debt in Australia

Debt can feel like an avalanche slowly rolling down a snowy hill. Starting as a snowball of one missed credit card payment, it can grow over time into several credit card payments, missed mortgage payments, and then utility payments. With the weight bearing down upon you, it’s easy to feel crushed by the responsibility. However, looking at ways to handle debt can sometimes add to feeling overwhelmed. Below are five

Refinancing with Lower Rates

Sometimes, getting ahead of debt is the best way to deal with debt. Refinancing can help lower payments if you’re able to get a good deal on your origination fees and closing costs. If you’re already feeling the pinch of debt, you can refinance to take out additional cash. One mortgage broker in Perth notes that a cash-out refinance offers a way to borrow at a low interest rate.

Debt Consolidation

Debt consolidation involves taking out a new loan to pay off existing debts. A cash-out refinance as discussed above is one way to do this. By putting all your debts in one place, you can streamline your payments into one bill. When interest rates are low, you’ll be able to get a lower interest rate through the loan than through the individual payments which can help lower your monthly bills. For example, if you’re paying off multiple credit cards and paying high rates one each one because you fell behind in your payments, consolidating your debt into one lower interest payment can help you climb out from under the payments.

Debt Management

Debt management, although often confused with debt settlement, negotiates old payments with new payment plans instead of taking out a loan to cancel previous debts. The process usually takes 3 to 6 years to complete. First, you will work with a credit counselor to review your overall finances to create a monthly budget. Then you will plan how to pay off the debt based on your monthly payment abilities and number of accounts that need payment. Finally, you may be asked to use a direct deposit program to pay your monthly amount and then cancel all your credit cards.

Debt Settlement

Debt settlement essentially creates a way for you to negotiate dollars owed to your creditors. This is a fairly extreme option since it will hurt your credit score. While you can attempt to negotiate your debts on your own, Quantum Finance offers resources to help you find a settlement agent. Settlement agents will work with you to review your debt, income, and savings to help you determine what can be used to pay your debt. Then they will have you sign a contract for you to pay the settlement agent instead of your creditors. The money is put into escrow until you have enough to pay off the negotiated amount. After that, they attempt to negotiate a new amount with your creditors where you pay a lump sum the comes from the escrow. It’s important to have a legitimate settlement agent otherwise they may not be able to settle for you. Keep in mind, that they will take a fee from a percentage of the escrow account. If they do not negotiate well, then you are worse off because you will be further behind in your payments since you paid your money to the escrow account not the creditors.

Bankruptcy

In Australia, you have the option to present a declaration of intention to present a debtor’s petition. This gives a 21-day protection period where unsecured creditors can’t act. This acts as a probationary period pending bankruptcy. If you then want to file for bankruptcy, you can. Filing for bankruptcy covers most unsecured debts such as credit and store cards, utility bills, and medical, legal and accounting fees. Before assuming it releases all debt, make sure to check with your creditor to see if it will erase Centrelink Debts, Australian Taxation Office debts, victim of crime debts, and toll fines.

Keep in mind that there are also several debts including court imposed penalties and fines, child support and maintenance, HECS & HELP debts, and unliquidated debts.

Financial Priorities.

First things first, apparently I’m a little late to the game, but I made a Facebook fan page last night for Punch Debt In The Face (See the new widget in the sidebar on the right?). I don’t really get why that’s better than my Facebook profile page, but for some reason people tell me it is. I also don’t know why likes are important on a page, but again, someone told me they were. Would you take a moment to head on over to my new fan page and gimme a little Likey Likey. If you do, I will…well… do absolutely nothing for you. Sorry, just being honest.

Alright, on to the content…

Do you have an income? Do you have expenses? If you answered yes to either of those questions, you darn well better have some financial priorities in place.

While there are a million different things we could talk about in regards to financial priorities, I want to focus on just one. Which comes first: investing or paying down debt? Hey, speaking of…

Which came first, the chicken or the egg?

Answer: Chuck Norris.

In all seriousness, I think financial priorities are something most of us think we have figured out, but don’t always truly understand. Today I’m going to show you why investing in your 401K is often a better option than paying down high interest credit card debt.

Let’s look at an example:

Jane, makes $50,000 year. She’s 30 years old and her employer fully matches 5% of any contributions she makes to her 401K plan. Jane also has $5,000 in credit card debt, at 15%. What should Jane do, pay down the card as quick as possible, or start building up a nice little nest egg for retirement?

A 15% APR, on a $5,000 balance, means Jane will be paying about $62/month in interest. If she made nothing, but minimum payments, it would take her a little over 22 years to pay that sucker off. She’d also pay $5,729 in interest over that time resulting in a total payment just shy of $11,000. Yikes, that $5,000 original bill became a whole lot more expensive. Better pay that sucker off ASAP, right?

Now let’s examine the investing route.

Jane would be investing $208/month in her 401K if she contributed 5%. Her employer matches that and gives her another $208. If she earned a doable 6% return on this money, and never got a raise in her life, she would end up retiring at age 67 with $683,030 in her 401K. Not bad at all.

If Jane decided to postpone contributing to her 401K, she could use that $208 to make accelerated debt payments each month. But let’s not forget, that 208 number is pretax, so in reality she’d have about $175 extra to throw at her credit card. With the additional payment, Jane will now be credit card debt free in 20 months and will have only paid about $673 in interest. Sounds a heck of a lot better than the 22 years it was going to take in the first example.

Here’s where it gets interesting.

Wanna know what Jane’s 401k would look like if she didn’t start investing until after she became CC debt free? She lost nearly two years of company matching and compound interest, resulting in $596,388 in her 401K. That’s $86,642 less then if she started investing at age 30.

Guys and girls, this point is SOOOO important it can not be overlooked. It is absolutely in Jane’s best interest to start investing in her companies 401K, even though she is not debt free. If she waits until she has her credit card paid off, she loses a crap load of money. I know this seems to go against the grain. Credit card debt is evil, don’t get me wrong, but that doesn’t mean it should always be at the top of our financial priorities.

Obviously, in a perfect world you will have enough discretionary income that you can not only contribute to your retirement, but also pay down your debt quickly. I always have been, and always will be a DEBT PUNCHER, but only when it is in your best interest.

Does your employer offer a 401K match? (I’d like as many people as possible to answer this question since I’ve heard a lot of the retirement benefits in the private sector have been getting cut left and right). Are you taking full advantage of that match? If not, you’re stupid. I’m sorry, you just are. You are literally giving up FREE money. In Jane’s situation would you go the way of Dave Ramsey and still pay down your credit card first, or would you let number’s guide you and start contributing to your retirement?

p.s. Like me on Facebook, I’m desperate 🙂

Simple Steps to Manage Debt this Year

Accumulating debt is something many people do at some point in their lives. This can be a result of purchasing a house by taking out a mortgage or getting an auto loan to buy a new car. College debt is another increasingly common factor in the US.

Even small purchases can put people into debt. Using any type of credit card to make purchases of any kind can cause debt to accumulate, so anyone with any amount of debt needs to know how to manage it so that it does not get out of control. If a person has too much debt, they may spend more time juggling payments than actually paying them off. A few simple tips can go a long way to help manage your personal finances.

Make a list of what you owe.

This list will include the creditor (like a bank, a mortgage company or other lender), the total owed, required monthly payment, and the date the payment is due. Cross reference the information on your list with a statement or by logging into your account online. Analyze your list every couple of months to see where you are with any particular debts.

Pay your monthly bill on time.

The late fee for missing a payment is easily avoidable and will only add to your existing debt. You will also likely end up with higher interest payments, adding to your debt. Create a reminder or an alert on a tablet or your smartphone of when payments are due. A reminder should be at a few days before the payment is due and not on the due date. Remember to take into account when your payment will be sent and when it will be received. If you are sending a payment on a Friday night, it may not be received until Monday.

Something you may want to do is sync your smartphone and tablet so a reminder or an alert will be displayed on both devices. You may also want to schedule your payments in advance if you have this option.

Create a payment calendar for bills.

If you have certain bills that will be paid at different time of the month, a payment calendar can help to keep you on track and manage personal finances in a simple, organized way. Indicate on your calendar which bills you will need to pay with each paycheck or expected payment. Sometimes due dates for bills can possibly get changed. This might mean you need to try and adjust your payment calendar so that you do not run short of funds.

Pay more than the minimum when you can.

Paying more than the minimum payment for bills like credit cards helps keep your balance in check; if you only make the minimum payment, interest will add to the balance in time. Keep in mind that when you charge more than you pay each month, your debt will grow.

Prioritize your existing debts.

Certain debts need to be paid before others. The debt with the highest priority is typically the payment for a credit card. The credit card with the highest interest rate should be paid first (while still making at least minimum payments on all other cards, of course). A trick you can use to help decrease interest charges is to transfer balances to a lower rate card. This may be a good option for anyone who has multiple credit cards with payments at different times of the month. Another option could include making a payment on a credit card that has the highest balance.

Create an emergency fund.

Unexpected events can happen at any time, and you never know when you might need funds for something unplanned. These events could include getting let go from a job or maybe an accident that has damaged your vehicle. Try putting something like $25 or more every week into an account at any bank or credit union. After a year you will have $1300 to use as an emergency fund. If you keep adding to this fund, you will have a solid cushion for three to six months of living expenses.

Create a monthly budget.

Knowing how to set up a budget is a great way to know what you can spend each month. If this is done at an early age, managing money in the future will become that much easier. The best thing about setting a budget is that any funds left over each month can be saved or even used to make an additional debt payment.

Breathe.

Debt will not go away overnight. But having a system in place and keeping on track will allow you the joy of watching your debt decrease. Once you’re out of debt, it’s important to keep the system going to ensure that you can live without the fear of debt and can eventually achieve the financial freedom that everyone looks for.

 

 

Cut To Hecuba With A Quick Cash Advance

Has running from pillar to post just to get information on the cash advances that financial institutions give people dissuaded you from getting one? Want an incomparable financial product that can be availed just by comparing it with the others without the need to run around? Such valuable information can be easily available at the click of a mouse button but all you need to do is give it a chance, to begin with.

smiling-with-money

Quick on the uptake? Get quick info

Are you the kind that grasps concepts fast? Then, there are resources like lainaaege.fi for people like you in the virtual world. Neither will you need to borrow money from loan sharks, who would chase after you later on nor will you need to worry about repaying it once you make an educated decision by comparing the variegated financial institutions online. Back in the day, you may have had to struggle just to get a loan from the bank but now, it is not difficult to get one and fast at all. With information readily available at your disposal, there is nothing to be worried about. Besides, being well armed with the right information at your fingertips can prepare you for any situation.

Need help? Get a true friend

Not everyone in this world readily helps another and this is more so the case when someone needs financial assistance. In case your near and dear ones do not help you out in times of need, you can always approach an organization that lets people avail cash credits without the hassles and tassels. Don’t want the bells and whistles because you are scared of the terms and conditions in small print? You can always go for an unsecured cash credit that does not need you to produce a guarantor or even collateral. Not sure still that there are no other hidden conditions that maybe imposed on you all of a sudden when you are least expecting them? Fret not. The Finnish government has made it impossible for banks to do so anymore.

The Aurora Borealis of monetary info

Don’t like the fact that most people beat around the bush? Then, let virtual resources such as lainaaege.fi guide you without making you wait for the actual point to be made. Consider such virtual resources to be like an Aurora Borealis that lights up Finland and gives the people light and new hope even in darkness. While not every bank will give you loans at low or zero interest rates, some are ready to do so and it depends on their policies too. Even if you don’t want to repay those cash credits later on due to your inability to do so at that time, you can always get it waived off well in advance. Don’t avail cash advances just because you are awed by the amount of money the financial institution is ready to lend you but go by the interest rates they will charge you. On the other hand, if you are already neck deep in debts, consider going for an alternate source of finances.

Thaw Your Frozen Financial Options With Hot Loans

Giving the choices you have in front of you a cold look is not going to be of much help to you. When you need money and quickly to take care of an emergency, you don’t need a summary of your finances that look bleak lying in front of you on your desk but a friend, who can get you out of the situation sportingly.

money-fan

The new Finnish lifeline

Own a small farm but have very little money to continue being the country’s lifeline? Then, you need someone as reliable as a reputable Finnish fast loan provider to be your lifeline. During the past few years, some people have been highly skeptical of the very thought of borrowing money but change their minds when they realize that they need not always repay the loan or can pay it back in installments. Plus, the chances that they may have to repay the loan with an astronomically high interest rate dissuade them from looking at the big picture. On the other hand, if they compare the products and services of one bank with another all at the click of a mouse button to see which one is more feasible, they stand a chance of getting a new lease of life.

Speedy cash for seed money

If you are just getting started out as a farmer, you can bank on one of those banks that provide speedy cash against absolutely no collateral. What’s more, you need not have a person to sign the papers as a guarantor either. Of course, this is what most banks and financial institutions in the Land of a Thousand Lakes have to offer but you would stand to lose nothing if you compare the policies of each institution online with the others just to ensure that you are not really under an obligation to repay a loan in case you should find yourself in financial trouble on the day your repayment deadline approaches. Nothing that is going to happen in the future can be predicted accurately. Mere speculations can be made but they are not necessarily going to help anyone. So, apply to get some speedy cash before it is too late.

Look at the big picture

Even if you are living in a country where the conditions can become extreme during the winter season, you know that you have sworn to yourself that you will work hard to improve the agricultural production. Nonetheless, you need a strong shoulder such as that offered by a Finnish fast loan provider to cry upon along with some help to let you soldier on by providing you information on quick loans at a click when you need them the most. Now, you can freely look at the big picture without any worries. Don’t get ready to hit the Finnish line yet just because you are worried about the possibility of being unable to pay up your debts in the future. If you begin sowing the seeds of a better future right now after acquiring a loan by making an informed decision, nothing can stop you from achieving your goals. Not even the cold winter.

 

The Best Ways to Avoid Building up an Overwhelming Student Loan Debt

Many graduates today, acquire their degrees alongside high-debt burden from unsettled student loans which can be tens of thousands of pounds. However, with a strategic approach, consistency and commitment, you can pay off your student loans faster, lower your monthly payments or avoid surplus borrowing in the first place. Below are definite ways to avoid a huge student debt profile.

Look for varsities that help you rely less on loans

Besides excellent teaching, research facilities and reputation, one critical factor that you should consider when looking for admission at colleges is the load of student debt encouraged- choosing one that does not overload their students with debts.

One way to do this is to check the statistics. Avoid schools with high default rates, which forces students to take up debts that they can’t afford. However, note that default rates may be an average stat and may not reflect the personalised financial package of individual colleges.

Make a budget

Having worked out your monthly repayment sum, the next step is to create a budget. Make sure to treat it strictly with the same commitment and discipline that you would treat other monthly bills like rent, utilities and insurance.

Pay off the loan upfront

Always pay off your minimum balance and avoid excessive default or late fee penalties. It’s a good thing that student loans don’t count on credit ratings and so don’t impact a person’s capacity to borrow in the future after graduation. However, lenders factor them in when considering a mortgage application.

Reduce your principal

Some of us might be lucky enough to find that we have some money lying around. Rather than put it towards the repayment of your student loan; pay it as part of your initial debt capital and lower the original amount. Make sure you notify your lender of this approach so that they know how to credit the extra payment.

Reduce your rate

If you have a consistent job with a fair income that is considerably higher than your total monthly repayment rate, you can refinance the high-interest student loan into a lower one and help you to pay off your debt more quickly. Be sure to have an understanding of the personal loan market before perusing this option to ensure you get the best possible deal.

Automate your payments

In addition to the peace of mind that comes with knowing that your debt profile dwindles further at the end of every month, some lenders offer extra incentives for people who want to put their repayment plans on automatic deductions from their bank accounts.

Get a job that pays your loans

You can as well look for a job that offers help in cancelling student loans. Many of the professions that have the highest loans like law, medicine and veterinary also provide students with opportunities to pay off their debts by working certain jobs.

Opportunities also exist in other fields and professions as well, like law enforcement, qualified charity organisations, social work and education. Even if it is not strictly a loan forgiveness plan, some employers offer student workers debt repayment as one of the incentives in their employment package.