Help Me Get Out Of Debt

Posted on March 14, 2012 by admin

Help me get out of debt..Please!

This is a plea that many people have had over the past several years.  Debt is with us and it is a burden that weighs us down.  We understand your debt problem. There is relief though, but getting out of debt is not easy and does not happen quickly.  This is what worked for us and how we did it.

I read recently that a Consumer Reports poll indicated that 53 percent of consumers used a credit card to pay for all or some of their holiday gift purchases.  At one time or another, I think all of us have run up our credit card bills and ended up paying exorbitant interest rates to pay for it.

If you’re struggling to pay off credit card debt or other debts you’ve been carrying for some time, don’t despair.  It is possible to pay them off without going consolidating or walking away from them.  The important thing is to recognize the debt, find out what you are spending money for and cut your expenses. Then make a plan, a “Get Out Of Debt Plan”, to pay off your debt and follow the plan.

Believe me, it looks rather simple on paper, but is a little more difficult in practice. We know the pitfalls and we always planned to  get out of debt, but sometimes we need a little more information and guidance to make it happen.  Nothing is a simple as it seems.

If you are not already in default, here are some tips that can help you make a realistic plan to get rid of your credit card debt sooner rather than later.

1. Find out what you really owe and what you are paying.

Guessing about how much you owe and how much you are paying for bills is kind of like shooting with blinders on.  You might get close to the target, but you will never know if you hit it.  And kidding yourself or ignoring your credit card bills won’t make them go away.

Here is what you can do instead.

Get every statement and credit card bill and make a list of everything you owe and everything you pay so you can tally up your debts. Sort this list and identify essential expenses and unsecured (think credit cards) debts.  You want to tackle each category of debt separately to cut your expenses and pay off or down your debt.

Then sort it again to list your credit card debt lowest to highest balance, payment or interest rate.  Sort any way you like.  Personally, I like to sort by the lowest to highest balance.  That way, when it is paid off, the money can be diverted to the next lowest until it is paid off.

2.  Set some attainable goals

Avoid making a general statement or a New Year’s resolution to just “pay off my credit cards” or “get out of debt”.  Generalities are not specific enough and make it hard to devise a plan that will work.  Be very specific about which bills you want to pay off and when you want it to happen.

Your goal might be to pay off a credit card debt by a specific time.  Or pay a certain amount toward a card until it is paid off.   What is really necessary it to devise a plan that will work to cause you to become debt-free. Being very specific about your objectives can help you realize your goals that much faster – and might help you recover from a crushing debt load sooner than you think.

Paying the minimum amount due will not get you out of debt.  But it is a great way to give more money to your credit card company and keep you in debt to them for many years.

Consider this tip: When you set your goal and select your method, try paying the minimum due or a specific amount, plus accrued interest, plus any fees or charges.  This will make the entire minimum payment go toward the principal and you can actually calculate when it should be paid in full.

If you can only afford to do this with one credit card, make it happen.  Pay off your credit card with the lowest balance or highest interest rate, then transfer that money to the next card or debt in your get out of debt plan.

3. Stop buying things with credit cards

As obvious as it seems, some people will try to get out of debt, but continue to use credit.  You cannot get out of debt when you continue to create debt. Yet, that is the way a lot of people choose to eliminate their debt. Consolidation might work, but you should give yourself a chance to get your budget and get out of debt plan on track by stopping the debt cycle dead in its tracks.

Cut off the credit card spending and focus on using cash as much as possible.  This will cause you to question every purchase and help you spend more wisely.  That being said, keep in mind that most people will use credit in an emergency.  But stop all credit card use for everyday expenses.

Whenever you are considering spending money on anything other than essentials or to pay a debt, ask yourself this question, “Is this a want or a need?”  If it is a need, spend the money.  But if it is a want, then you probably do not need to spend the money for it.  What we are asking you to do is to change your spending habits.  Think about what you are buying and why you are buying it.

4. Transfer your balance to a low rate card

Consolidation or borrowing money to pay off debt is not one of my favorite things to do.  But, a lot of banks and credit card companies are making zero or low interest rate offers on balance transfers.  And you might be able to save a considerable amount of money if you can transfer a balance from a high interest credit card to one with a low-interest or zero-percent interest rate. This can help you reduce the total balance much faster.

Two things though:

A. Before you sign up for a zero or low interest card, talk to a real person and make sure you can transfer the entire balance to the new card.  Many times, the new card company will just transfer part of the balance. If you cannot transfer the entire balance, pass on the card.  All this does is spread your total debt over more cards and will not save you any money.

B. Make sure you know what the interest rate will be after the promotional period is over.  The rate could higher than what you are paying now and may make it more difficult to pay off the debt in the long run.

Check out websites like CardRatings.com, a free credit card comparison site, to shop around for the best credit cards offers based on your credit rating and spending patterns.

5.  Overhaul your budget

This could be the second step in the plan.  You may have two goals in mind.  Paying off your credit card debt and reducing your living expenses.  Saving money on living expenses and fixed debts will free up some money and will help you pay off your debt or help you save for unexpected expenses or holidays.

If you want to save money, you should re-evaluate your budget to see if you can reduce some essential expenses, like utilities, insurance and groceries and any non-essential expenses, at least temporarily.  Non-essential means different things to different people, so you have to decide what a non-essential expense is for yourself.  Any expense you can reduce will free up extra cash that can be used to help make your get out of debt plan successful.

If you find it difficult to save enough money by revisiting your essential and non-essential bills, then you might consider taking on a part-time job to increase your income and use the extra money to help pay off your debts.

6.  Keep the basics of the plan in mind:

  • List all your debts and expenses.
  • Prioritize them.  Learn what is essential and non-essential.
  • Eliminate credit card spending so you can shift your focus to cash-based spending and stop the debt cycle in its tracks.
  • Ask “Is this a want or a need?” when you spend money for any non-essential item.

7.  Take time to let the plan work

You did not get in debt overnight and you probably will not get out of debt overnight.  It may take some time, but with a good plan and realistic goals, you will see a big improvement in your financial situation.

Above all, DO NOT be intimidated or discouraged by your debt.  Debt did not happen overnight and will not go away overnight.  But overhauling your budget and your spending priorities can help you get ahead of your finances and pay off your debt forever.

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Working After Retirement

Posted on January 26, 2012 by admin

One of the new rules of retiring is to keep working after retirement.  Many of us will continue to work because we want to.  But a lot of us older folks will have no choice except to keep working to pay the bills.

Look at all the things that we go into debt for, house payments, rent, transportation, utilities and insurance.  Then throw in the volatility of the economy and the uncertainties with our savings plans and we come to the scary realization that we really are not all that secure in our retirement.  It is no wonder that we are stressed out!

One of the real problems is that a bunch of us will retire with a lot of credit card debt and will have no idea about how to fix the situation.  Debt is something that we have learned to live with and also something that wastes a very large chunk of our retirement income.

So, the question is “How do we reduce our debt to increase our standard of living?”

There are millions of websites that have the answers and everybody has an opinion.  But unfortunately, none of the answers are easy and all of them take some sacrifice.  When we tighten our belts to get out of debt, there is always some pain involved.  The trick is to minimize the pain by finding a way that suits our personal situation.

When we start working on debt elimination, we should keep several things in mind.  One is that we should start paying hard cash for things to limit our expenditures and another is that we need to have enough money set aside for living expenses and for emergencies.  The easiest way to get money for emergencies is to use plastic credit cards.  Credit cards are also the most expensive and difficult to pay off.

Credit card debt is usually the one that most people want to pay off or down.  But to do that requires a plan and discipline to work the plan.  Some people have included debt consolidation loans or used the equity in their homes  to reduce debt.  Without discipline, this turns into a  short-term solution and the credit card debt just piles up again.

So, most of us need some help in managing our credit card debt.  Most of all, we need to learn how to manage our debt.  That is something that is usually not taught in school.  Then we need to find out how to make a plan to find out where we are actually save money on our everyday expenses and work the plan to annihilate our credit card debt to break the vicious cycle of debt.

It turns out that most people get into credit card trouble because they were never taught how to manager their credit cards.  For that matter, very few of us get any training on how to manage our finances until  we get to the point where we are in trouble.

Most of us can use a little help and advice when it comes to getting out of debt without going deeper in debt.  I’ve put together a series of e-books called “The Financial Series“, that offer some of the best  tips available to help reduce credit card debt and cut expenses.  If you want some good information at a very low cost, check it out.  Find out how you can get serious results in eliminating credit card debt, cutting expenses and living a better life.

CLICK HERE and check it out.  It does not cost much and your results could be priceless.

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The New Retirement Rules

Posted on December 26, 2011 by admin

Welcome to the New Retirement Rules.

Times have changed, and how we look at retirement have changed along with them.  Remember when people retired and just stopped working?  I can.  I know people who spent a lifetime working for companies like NCR, IBM or Purina and retired from that company.  They enjoyed and expected job security for life.

But, job security is a thing of the past.  Anyway, I don’t know anyone who has retired in the past ten to twelve years and stopped working at something.  It may not be the same work they did before retirement, but it is work never the less.

If you are thinking about retiring, the old rules don’t apply to you. There are not many companies that offer a defined benefit retirement plan now and few people that will work for a company long enough to qualify if one is offered.

The days when a person would spend his entire working life with one company are long gone.  Politics, the economy, business globalization and a whole raft of poor business decisions may be to blame.  But the fact is change has arrived and we have to deal with it.

For better or for worse – mostly for better (my opinion) – the retirement game has changed. It’s time to start playing by the new rules.  It’s time to start winning!  But we need to know what the rules are.

The Old Retirement Rules:

>·    People could count on Social Security making up most or part of their retirement income.
>·    Some large companies offered lifelong company pensions for a lifetime of service.
>·    Retirement meant kicking back on the porch or going fishing.
>·    The defined benefit plans and Social Security meant letting someone dictate your financial future.

The New Retirement Rules:

>·    Planning and investing for your future is in your hands.  Social Security is no not a certainty anymore and most company retirement plans are in the toilet.
>·    Congress has given us a lot of tools (401(k)s, 403(b)s, IRAs, etc) to help build our retirement streams.
>·    People are living longer and staying engaged in life.  We are looking for ways to stay active, involved and busy.  For most of us that means changing careers, not just quitting work.
>·    Retirement is a time for taking control of your personal, professional and financial destiny.   For many of us, that means continuing to work at things that we love to do and earn and income at the same time.  The internet offers endless opportunities for engagement and earning.  Or we move into consulting or doing contract work or make a favorite hobby a new career.  The sky is the limit.

There’s More to Retirement Than Money.

And money cannot buy happiness.  But not having enough money in retirement can bring a whole lot of anxiety, stress and misery.  I know several people who retired years ago, but for one reason or another, have re-entered the work force mostly because of money issues.

So, rather than just make do with what you have.  If you are retired, or you are thinking about retirement, take your future into your own hands and look closely at the New Retirement Rules.  Do your research, make a plan and follow your plan.

Once you make a plan and take control, you will have a blast at whatever you are doing.

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Make Your Retirement Plan

Posted on March 4, 2011 by admin

I want to retire now

I have heard these words a lot lately but getting ready for retirement is not something that  just happens.  Some of us will wait until the last minute to start planning our retirement and we will be unprepared for the changes that retirement brings with it.   No plan makes it more difficult to avoid some of the retirement pitfalls.

When I hear those words, I usually ask “What are you going to do when you finally retire?”.  Sometimes the answer leads to a discussion about what retirement is and how does a person avoid the pitfalls of boredom and depression.

Everyone who is enjoying retirement today and living a leisurely life are where they are because they planned for it. The first question that comes to mind is “when the right time to start planning for retirement?”. The answer is that if you need to ask the question, it’s the right time for you.

Planning for retirement can’t start too soon. Building a comfortable nest egg takes a lifetime of work and with the current state of our economy, a bit of luck. If you could start saving money for retirement right out of high school, that would be just that much more time you have to build up a really comfortable retirement nest egg that will last the rest of your life.

Humans are prone to procrastinate.  And, unfortunately, most of us start thinking about retirement late in our adult life.  But sometimes a big life event such as getting married or having a baby will jump-start the planning process.

A word of advice here, if you have been thinking about making a retirement plan, stop thinking about it and take action. Waiting just makes it harder to achieve your retirement goals. If you make the subject something for you and your spouse to look at, you both will be glad you got stopped thinking about it and got moving on a plan.

For some of us, the trouble with making a retirement plan is not knowing where to start. Many people join their employers 401K plan, dump some money into it and count on Social Security to be there for retirement. That’s the retirement plan. It is a plan, but it might not be enough later on.

All of us know that our security in our golden years is too important to not take more seriously than that. Set aside some time each week for you and your spouse to sit down and talk about how to create a retirement fund and how to build a retirement plan that you can grow into and one that will work. The plan must be flexible and the temptation to take part of it for other purposes must be avoided. The first step is the hardest and always begins with you.

You are reading this article so the planning has already started. If you don’t know where to start, there is lots of material available to get ideas from. There is a lot of information available on the internet, from insurance companies, banks and the government. There are a lot of good books on retirement planning from Amazon that can help with the planning process. I suggest getting information from a few good sources and implement ideas that you like and that apply to your situation.

Most states have a retirement section on their official website. There are some great books on retirement planning. Take the time to find and read them. Do the research. You will start out with no ideas and end up an expert in retirement planning.

Keep plenty of notes during the research and learning phases so you have a road map of ideas to build into a plan for building a retirement fund. After you have a simple plan in place or some concrete ideas, it may be time to talk to a financial advisor. If you trust your bank or insurance company, see what they can do for you. Some banks offer free financial planning. Talk to a trusted friend or someone in your community who may be able to steer you toward building a retirement fund properly structured to protect your retirement savings from taxes and provide safety to be there for you when you need it when you are old and grey.

Now it is time to kick the plan up to the next level. Once you have a plan and perhaps are seeing it start to take off, you should start learning about investments. There are a lot of places you can put your retirement funds that will give you a nice yield that can make that fund grow more quickly. You can divert money to real estate, the stock market, mutual funds or other well known investments. Diversify where you put your money so no one financial reversal can whip out your retirement fund.

Above all stay on top of your retirement fund and your retirement plan. Review it with your significant other frequently to see if your retirement goals are still the same and your investments and plans for building your retirement fund line up with your plan. By making retirement planning as big a part of your thinking as planning your family or your career, you will give it serious attention over the years. The result will be a strong financial plan that will give you good resources to enjoy a happy and worry free retirement life.

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Avoid Retirement Shock

Posted on February 3, 2011 by admin

Have you ever talked to someone who was thinking of retiring.  Some people act like retirement is like accepting a death sentence.  For some people, the work ethic is so strong that the idea of not working  is frightening and causes a lot of stress.  A big part of planning for retirement involves getting emotionally ready for the change in lifestyle.  Hopefully, there won’t be a shock when you become a person of leisure and don’t have to go to work.

If we don’t want a lot of shock when we leave the high pressure world of work for the low pressure world of retirement we need to make a plan and the work the plan.  Being prepared will eliminate a lot of the shock of retirement.

You should start well before the retirement party.  The worst thing you can do is wake up on the first day of your retired life with nothing to do.  It’s natural for a feeling of emptiness and loneliness  to set in because you miss going to work if you have made no plans for filling the hours and days that lay ahead when you become a retired person.

Another way to cope with the shock of retirement is to ease into it slowly.  Continue to work in your profession, but at a reduced pace.  It may be possible to work part-time or do some consulting that may make your transition out of the work force and into retirement a success.

Retirement is a time when you can travel and spend more time with family and friends or doing whatever you want.   A lot of us want to be able to spend more time with family.  You can enjoy getting to know your grandchildren better and maybe being a kid with them for an afternoon as well.

Another way to cope with retirement shock is to volunteer your time or service. Volunteerism is on the rise again and can be a great way to fill some of the time you now have on your hands.  By  helping other people or working on causes you like, you can make a real difference in the lives of others. You can meet many wonderful people and make new friends while volunteering.  This should help keep you young and overcome stress that can be a big problem when you enter your retirement years unprepared.

Another thing that can help reduce retirement shock is a hobby that occupies your mind and keeps your hands busy. Everyone has something that they enjoy doing. Woodworking, building models, gardening, crocheting, and knitting are examples of hobbies that work and can lead to extra money that may be needed as retirement income.

If you’re interested in finding out more ways to relieve stress, check out the e-book called “Conquering Stress – Get Your Life Back”. It’s a cheap way to get insight into what causes stress and how to cope with it. It worked for me.

What ever you do, get excited about this new phase of life and the things that lie ahead of you in retirement.  The journey makes the trip worthwhile.

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