Getting Out of Debt
The majority of Americans are currently in debt whether it be because of credit cards, unpaid loans, or other things of the sort. Once you’ve gotten yourself so deep into debt, the only way out seems to be filing bankruptcy. However, this is not your only option. If you can slowly work your way out of debt, this will increase your credit score dramatically and will look better on your credit than if you were to file bankruptcy.
Depending on your level of debt, you might want to consult a credit counselor. They can help you tremendously with getting back on your feet. If you’re not too deep and believe you can do it yourself, more power to you.
The first thing you must do is obtain a copy of your credit report. You can do this for free at freecreditreport.com. Take note of everything that is on your credit score in order from the most money owed to the least amount owed.
Next, start with the largest debt on your record. Contact the company that you owe this money to and try to work out a weekly or even monthly payment plan. Ask them what the minimum payment is that they would be willing to accept (weekly or monthly) and begin payments immediately.
Do this with each of the debts on your credit report and pay off the ones that you can in full. You may run into a company that is not willing to allow you to make monthly payments and instead say that they will only accept full payment. If this problem arises, speak to the manager of the company and see if there is anything you can do. If you’re still in the same prediciment, send a certified letter to their corporate office explaining your situation and exactly how you are willing to fix it.
Once you have begun to make payments on your debts, it should either be removed from your credit report or it should state that you are making payments. This looks much better on your credit than debts that are just sitting there with no action being taken.
The best time to start paying on debt would be after tax returns when you have the money and don’t have to worry about paying off debt using money that will put you back in debt. You’ve got to be smart about it. Another option would be to begin depositing money into your savings account strictly for paying off debts and vow not to touch it.
I completely understand that paying off debt is a stressful thing, and it may cause you to have to sacrifice some things that you want in life, but believe me, once everything is paid off and you start on a clean slate, life will be much, much easier. Just be sure to try and keep it that way.
Hidden Fees Are Lurking Everywhere
As consumers we have to be on alert at all times for hidden fees that cost us lots of money over time. Many people do not notice or question strange fees on bills and so companies will simply get away with more of our money than they are entitled to.
Grocery stores are notorious for hiking up the price of an item, and then offering it to customers at a “discount”. This is called padding. This makes customers think something is on sale, when really it isn’t. That is why it is important to watch pricing trends on items, comparison shop, check competitors ads in the papers, and cut coupons.
Land line phone bills always seem to have vague charges added for things that you have no idea of what they are. It is important to check bills for charges for services that you do not have nor have asked for, such as three way calling and inside wire maintenance. If you find any charges you do not understand, call and ask for an explanation right away.
Read the terms of your 401(k) plans very carefully. This is another item that is often full of hidden and obscure fees.
Cable TV is also another place to watch your bill very carefully. Often the package and deals you signed up for are not necessarily the ones you are paying for on your bill.
Stay alert, read everything, ask questions, and complain if you are being charged fees that are not explained fully and to your satisfaction.
Be Careful With That Tax Rebate Check
What will you be doing with your tax rebate check? Retailers are hoping you’ll be spending it at their stores. Many retailers are planning incentives to get shoppers to bring their checks to their registers to spend. For example, Sears is offering potential shoppers what they hope will be an offer to good to pass up…bring the retailer your tax rebate, and Sears will give you a gift card for the amount of your check plus 10%.
But I say think carefully before opting to accept on of these type of incentives! First, consider that if you take up Sears, for example, on their deal, you are now committed to spending your whole rebate there. This is really only a good deal if you had previously planned to make a purchase(s) there anyway. If you do plan to make a purchase of some particular item with your tax check, then by all means it could be wise to check out all the incentives offered by various retailers, and see where the best deal will be for that purchase.
And secondly, take some time to really think about spending your rebate check at all. This is money that you probably were not expecting, and it could be a great way to get a savings plan going, or boost a sagging savings account you already have. Look down the line six months and ask yourself, would I rather have saved that money or will I be happy with that new refrigerator? Retailers will be trying hard to get you to spend your money at their stores, but do take time to rationalize and make the best decision for you.
And lastly, look at your debt scenario. Should you really spend that money, or should you use at least part of it to pay down some debt, and save the rest? This could be a chance to make some headway with credit card debt and improve your credit score. Think carefully about how this tax rebate can best help you out financially.
Maybe you should avoid all newspaper ads for a week or so after you get your tax rebate and steer clear of temptation, until you have decided what to do with your money!
Feeling bad about yourself won’t help your situation
One of the first things that happens when you stop avoiding your debt and look it head on in an effort to fix it is an overwhelming feeling of guilt.
You feel like you should have started sooner, done more when you could, wasted less money on worthless stuff when you were younger. You feel like you should have never gotten yourself into this mess and it can be very, very overwhelming.
Those feelings are natural, but until you get over them they are just as paralyzing as avoiding your debt altogether. If you do not forgive yourself for your past mistakes (that can’t be changed, because they’re in the past) you are going to just feel bad and still be in debt.
Once you’ve come to forgive yourself, you can make real, positive decisions about how to chisel away at your debt little by little. From looking at getting a second job to looking at getting rid of cable television, there is always something you can do to make a little more money or spend a little less. Even if, in the beginning, you can only pay an extra $20 toward a past-due bill or credit-card debt, do it!
You won’t be able to go from a financial wreck to a financial superstar overnight, so don’t judge yourself harshly for taking baby steps. Everyone has to take baby steps, how else you learn to walk. Eventually it will go faster, but it requires patience in the beginning to lay the groundwork.
Dealing with Repossession
If you have a car that’s on loan and are having financial troubles, beware of the banks! You don’t want them coming after you for your car. Cars can easily be taken from you if you don’t have your loan paid off - even without a fore-warning that it is going to be taken.
If you can get out of a car loan when you are buying a car - do it. This way, you will ensure that you will at least have a set of wheels to last you for a while. Remember that no matter what type of car you get, it’s instantly devalued once you start driving it. This means that if it is something that can get you from point A to point B, it’s good enough.
If you are in a car loan and are behind in payments - know the rules. Every bank will be a little different with how they deal with you. Most likely, you will have the option of falling behind by an average of 3 months before repossession starts to sink in and to be monitored by the banks. Before this, you will probably have some calls to get the situation sorted out.
If you receive a notice saying that you have a certain amount of time to pay off the car before it is repossessed, consider yourself to have the next 2-3 weeks to try and make a minimum payment. This will offset the payment by another 30 days. While it will keep you hanging on a thread, it will allow you to keep your car until you can start catching up.
If your car is this far behind, pay the minimum as soon as you can and call the bank. As long as you are making some sort of payment, they will work with you (hopefully). You can ask for an extension for the next two months, especially if you let them know that you are having financial difficulties. If you do this, don’t just call once, call every week. Sometimes, banks and the customer service individuals won’t notate what they are supposed to and will take the car anyway. You have to be overly responsible for others who are sitting on the other side - just to make sure you keep your car.
With these steps, you will at least have a safety net of some sort to fall back on. If your car does get repossessed, you still have 10 days to pay and catch up. However, remember that you will have to pay the amount for 3 months, plus a ton of extra charges. If you really want your car back, you can pay partial payments and get extensions until you can catch up.
If this isn’t an option, never fear! Repossession may drive your credit partially down for a while, but car dealerships will work with you to get a new car. Repossessions actually help, because it shows that you are ready to make a new commitment for a loan that you are willing to pay.
If you need a set of wheels, but are in a financial crisis, you can work around the system in order to help get you out of the situation. With some consistent communication and a little bit of effort, you can keep your car around and pay off your loan while keeping the car.
Three Ways to Save Money Today
There are some easy to do things you can do today that will save you some money. Try taking the money that you do save with these ideas into a savings account each week, and watch your account grow. Maybe it will grow slowly, but some savings is better than no savings every week, right?
Cook a meatless meal tonight.
Make a yummy veggie meal and save! ake a pasta sns meat, throw in a salad and garlic bread. Skipping the meatballs should save you at least $2.00-$3.00. Make a meatless meal three times a week could be an extra $12.00 for your savings account!
Skip The Starbucks Kick!
Or whichever coffee house you visit. Make your own coffee at home in the morning before leaving for work or errands. Use a reusable coffee container that fits in your car’s cup holder. Don’t forget to put the cash you would have spent at your usual coffee stop into your savings account at the end of the week!
Make a Dinner of Leftovers.
One night a week, at least, use all the leftovers in your refrigerator to make dinner. Don’t buy anything, just use whatever you find. Make it a smorgasbord type meal…. your kids will enjoy picking and choosing their items!
Get creative and think of money-saving tricks you can do each week. A few pennies here and there will add up if you save them!
How Often Do You Check our Credit Scores?
Since it’s not free to get your credit score you don’t want to be wasting your money checking it every other week — that’s money you could use towards paying down your debt. So just how often should you check your score without it being a waste of time and money?
Your credit score is based on the information that makes up your credit report, so any changes in your report will reflect in your score as well. The FICO website says that your score from a month ago is probably different than what your score would be today. But I would probably wait a few extra weeks for adjustments to be made to your score.
Another thing to remember is that your score may vary between the three agencies because the information they have may be different at each of them. So, if you’re carefully monitoring your credit score and want to get an idea of how much it’s going up or down, you may want to consistently use the same agency a few times, consecutively.
Also, if you do check your score and find erroneous information on your report, notify the bureau right away.
Mortgages
I was reading that it may not be in everyone’s best interest to pay off their mortgage loans. For example if you have $50000 left to pay and you have the $50000 I read that it would be better to invest your money into something else. Personally, I think the home you have is the best investment you can make. You will not have to worry about those monthly mortgage payments anymore. Why invest in something that may just lose your money! If you are going to invest in something then fix up your house. Personally, if I could pay off my home I would do so immediately. Less monthly payments just makes for a little peace of mind. I wouldn’t have to worry about quite so many monthly bills!
A Couple of Things to Consider Next Time Your Unemployed
Pay up expenses for a few months if possible. What I mean by this is that take a certain amount of money up for each of your major expenses such as lights, phone, and housing and pay those expenses up for a period of time. I have been in a situation where I was being laid off and I took either some savings or severance and paid up expenses for a while. While this may seem like a quick drain on resources, it will help to alleviate pressure of having to come up with those expenses right away and will give you some breathing room to find a new job.
Consider taking a lower paying job or some different type of job to help pay the bills. People are accustomed to living a certain lifestyle and they usually want to move into a similar type job once they leave an old job. Sit down and figure out what your true monthly expenses are, minus things such as cable, internet access, entertainment, etc. That is the amount you need to survive. Afterward, you may want to think about taking a lower paying job, some short term contracts, or a different type of job while you’re looking for the job you want. There is a certain company in my area that is my “backup plan” whenever I am unemployed. If the job market is particularly slow or I don’t have a lot of backup cash, I go there and get a job. I have worked for this place on four separate occasions and they always take me back because they always need workers. Its simple customer service work and pay is enough to keep things going while I look.
The above tips may not be an option for you, but it’s at least something to consider the next time your unemployed.
Temp Agencies for Professional Careers?
You’re a Network Technician for one of the largest companies in your area and have been for about 3 years now. Monday you head into work for the announcement that your company has been sold and that your job will be terminated immediately. A few weeks pass after your termination and your still looking for work. You have put in resumes at all the places locally and have answered several help wanted ads but still no luck. What else can you do? Have you ever thought about temp agencies or contract agencies? Yes, I am talking about places like Manpower, Adecco, and Apex Systems.
Why would someone in IT or any other professional career even think about a temp agency for a professional position? From my past experience, I found out that a lot of temp agencies get contracted to provide a lot of companies with project work or short term contract work, even for professional careers. My first job in the IT field was actually a job that I found through Manpower Technical. It was supposed to be a 3 month job. After one month, I was hired at $35,500 a year. For my area, that was a fantastic starting salary back in 1999.
When I have been in between jobs, I have been very fortunate to find short term contracts with different companies. Some jobs are very simple, such as basic pc installing work, but the contracts wound up paying very well. There were some cases that I would work for a week or a couple of weekends and make enough to cover my basic living expenses for a month. It is not the most glamorous way to make a living, but in a pinch it is an option.
Next time you’re between jobs and you’re an IT professional or any type of professional, check the temp agencies. You might be surprised what you find.