Archive for the ‘Money Managing’ Category

With an ever-growing number of bills, unexpected expenses, and other financially draining events in your life, it’s time to take your financial life in your own hands and give yourself some debt relief. There are lots of different options out there to help you to help yourself.

The first step is not to try to cut off communication. Open your mail when it arrives – even when you don’t want to – and answer your telephone. Make contact with your creditors and explain your situation to them. You’ll find that in many cases, they have plans and ideas in place that can help you to reduce your debt much more manageably by lowering the interest rate or waiving the late fees or over-the-limit fees.

Your next step is to stop using all of your various credit cards. If you were to go to a credit counseling service, or even if you were to declare bankruptcy, the first thing they’d demand of you is that you stop using your credit cards altogether. Since you’re taking the do-it-yourself route, learn from their experience and stop using all of your credit cards.

Finally, make sure that getting out of debt is an important priority in your life. Pretend that you are your own creditor and that your main purpose is to get the debt paid off. Avoid impulse purchases, and put off what you don’t need to buy. Remember, once your debts are paid off, you won’t be paying interest charges anymore and you’ll have a lot more money available to you.

Though you are not a professional negotiator, credit assistance companies believe that credit card companies will not negotiate the same deal they can. This is untrue. Simply do your homework, know exactly how much you can afford (the maximum amount) and be reasonable in your negotiations. If you’re patient and informed, you can achieve the same deal as a professional negotiator from a debt relief company.

Take the time and make the effort and you will provide your own debt relief much faster than you may have expected.

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Most consumers don’t worry about their finances when the economy is good. But when it starts getting ugly, that’s when they’ll take notice. This article will help you prepare for it and ride it out better.

Step 1:
**Start planning ahead** With talk of an economic recession or downturn looming, you shouldn’t wait until later to decide what to do. Begin planning now for the possibility of things getting worse. Now a recession is an economic term that means 2 consecutive periods of negative growth. In other words, GDP falls twice, one right after the other. Now this hasn’t happened yet! So technically, we’re not in a recession. However, the feeling of a recession, which is a period of economic decline and slowdown is very real. In other words, it feels like a recession and we’re suffering. So I say to forget the technical definition and look at things from your own perspective. If you feel you’re doing all right financially, then plan ahead for the possibility things take a turn for the worse. And if you’re already suffering financially, then start thinking about how to handle it if it lasts longer or gets worse.

Step 2:
**You’re not alone** An economic downturn, slowdown, and recession effect many people! So take some comfort in knowing you are, by far, not alone. The reason I mention this is to help ease your level of stress. If you’re suffering financially, others are too! But to survive, you cannot brood over it and let it take over your life. Why not? Because that will make you even more depressed and does more harm than good. So just look at it from the perspective that others are in the same position and life goes on. The economy goes through ups and down, so we all in our lifetimes go through this.

Step 3:
**Know your income and expenses** There are many of us who know how much we’re bring home in pay and other sources of income. But lots don’t realize how much they’re spending on things. Yes, we know the major expenses like: rent or mortgage payments, utilities, and car and student loans. But the little ones can really eat up your savings and take-home pay! So step 1, make an accurate list of what you take in (income) and exactly what you spend it on(expenses). And track all your expenses, not just the biggies. This means including things like: coffee, pasteries, partying, movies and rentals, gas, etc. As I said before, these are the ones that really add-up and eat into your savings. Most people are shocked at how much they’re really spending when they see this list.

Step 4:
**Debt is the enemy** Debt is money that you owe, meaning bills. Now there “good bills” and “bad ones.” The good ones are those that are necessities, like rent and utilities. In order to live, you have no choice but to spend money on these. But where we get ourselves into trouble is with the bad ones. These are the luxuries and frills. That 50 inch plasma TV, when a 36 inch flat or round screen (regular television) will do. Or a $2000 computer when a $400 one will suffice. And credit card debt is the true evil that gets most of us into major league trouble! We tend to look at is as “free money.” In other words, it’s not our money, it’s the credit card’s! So we’ll very easily overspend and live way beyond our means. So control your credit card debt to the hilt. If the credit card company wants to raise your limit, don’t go out and spend it. Just because you have a $5000 limit doesn’t mean you have to spend it. Only use it when absolutely necessary!

Step 5:
**Debit cards** As opposed to credit cards, debit cards work a bit differently. The major difference is that they aren’t loans like credit cards! When you use a debit card, money it taken out directly from your bank account. So if you don’t have it in your account, it’s unavailable. This gives people a huge dose of reality and helps control spending. Why? Because you won’t spend it if you don’t have it. And you’ll very easily see your balance dropping when you do use it. With credit cards, you don’t have to worry about money being taken out of your bank account immediately. Nor do you have to pay the full amount when the bill comes. You can pay the minimum–a measely $10-20 for example. And that’s how you get yourself into financial trouble. Because you look at it this way! And of course, credit card companies will raise your limit even if you have lousy credit and way overspend. Why? Because you’ll pay the minimum and drag it out for 100 years of outrageous interest rates! So you’re like gold to them. Don’t fall for it and cater to them! And if you have a debit card with the Visa or Mastercard logo, then they work just like credit cards in the sense that stores can swipe them as they would a credit card. In addition, you can withdraw money from ATM machines without the cash advance fees associated with credit cards. And many banks don’t charge ATM fees if you use your debit card at their branches. This helps save you even more money!

Step 6:
**Pay down debt** Let’s say you have $10,000 in credit card debt and pay $35 a month towards it. If you increase your payment, even a little bit, you’ll save lots of money in the end! And that’s because the interest you’re accruing is being reduced. You see, it’s not the $10,000 that’s the trouble. It the never-ending interest being added to it that really gets most people. And even with a low interest, you’re still accruing it and paying on it every single time you send in a partial payment. So increasing your payment amounts by a little or a lot more will cut your interest and get you paid off much sooner! And this same principle applies to all forms of debt: car loans, student loans, personal loans, etc. With debit cards, you don’t have to worry about this because no interest is accruing! When you use the card, the full amount is immediately deducted. So if you spend $100, then $100 is taken out.

Step 7:
**Eat in and cook at home** You’d be surprised at how much you can save by eating in! It’s far less expensive to buy food at the store and cook it at home than to eat out. Now by buying food, I don’t mean a meal and then reheating it home. I mean buying packaged goods that you’ll cook. In other words, things like: soups, pasta, meat, fish, veggies, etc. And if you buy in bulk the things you really like, that will save you even more money. For example, at my local Safeway, I can get 4 packages of 6 pasta noodles for just $5. With each pasta noodle being a meal, 24 meals for 5 bucks! And even though hamburger meat might seem expensive, it’s less costly than going to McDonalds, Burger King, or other restaurants (fast-food and non fast-food)! So you’ll save a good deal of money by eating more at home. Now I’m not saying to eat in all the time, unless you want to. Just swapping 1 home-cooked meal for a non-home-cooked one will save you money. You can do the same with work. Instead of eating out every day, bring your food once in a while or each day.

Step 8:
**Reduce drinks** Instead of buying sodas or juices, try water. And like step 7, you can do this once in a while or each time. Either way, you’ll save money by drinking water instead of having to spend for soda or juice. As an alternative, use tea or coffee instead if you want more flavor. With coffee, you get lots of drinks out of one container. And with tea, you can get more than one cup of tea out of a teabag. Some have gotten 4 or more cups of tea from a single bag! Another thing you can do is reduce the size of your drink. If you normally drink a large, try a small. This is especially helpful for those of you who like Starbucks and other cofeehouses where drinks are expensive. You can even reduce the number of shots of coffee or expresso they put in. Instead of getting 2 or 3 shots, ask for 1. One more alternative is to swap a less expensive drink for a more expensive one. So instead of buying a triple grande mocha, get a latte which may be cheaper. Or pass on a syrup flavoring that adds extra to your drink’s cost. An example of this would be a rasberry mocha. Get a mocha without the rasberry to lower the cost. And one last alternative is to pass on buying a drink from time to time. In other words, if you’re getting something every day, don’t do it one day. In other words, there are many ways to cut down the amount you spend on drinks. And every little bit you save helps you ride out the economic hard times! Remember, it’s the little bit you save here and there that really adds-up to lots!

Tips & Warnings:

Start planning now

  • Track your expenses
  • Find ways to lower costs and expenses
  • Understand that you are not alone
  • Don’t panic and overreact! Remain calm and think about things carefully
  • Bridges to HopeFoundation Newsletter and Blog


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