Showing posts with label Debt Free. Show all posts
Showing posts with label Debt Free. Show all posts

Thursday, July 17, 2014

Young Couples Don’t Understand the Meaning of Debt: Lessons Learned

Financial hardship rarely just results in credit ruin and property loss. Overwhelmingly, tough financial times leave individuals with so much stress that they often end up with conditions such as depression and anxiety. However, such situations can quickly become far worse when these individuals rely on bad financial decisions, such as payday loans and other scammy financial practices.

Debt for Young Couples

Fortunately for many people in these situations, the family serves as a safety net and support structure for financial assistance and emotional support. In fact, most of us feel obliged when we learn that a relative has fallen on hard times. Whether we provide a loan or simply offer a place to crash for a few nights, many of us feel that charity is our responsibility when loved ones are at risk financially. 

However, it can be difficult and strain our relationships to continue supporting relatives who seem to “take advantage” of us, or those who always seem to need more no matter how deep out-of-pocket we are. To avoid getting into this kind of relationships, here are three types of financial support that should only be offered to the most trustworthy of friends and relatives in need.

Recurring or large loans

While a small amount here and there may not amount to much, relatives who are dealing with collections agencies and angry debtors might need more to support themselves on a month-by-month basis than your average financially challenged individual. This is also true for relatives who are struggling to keep a business afloat. To these people, an interest-free family loan can be too tempting.
However, these kinds of arrangements leave a great deal to chance – which is never okay when your money is on the line. If your family members seem to always need more money than they or you can manage, it’s important to look past just this month’s bills and figure out what solutions might exist for them to end the vicious cycle. For example, many businesses offer debt consolidation services which can drastically reduce the interest being paid over time.

Cosigning for rent or a loan

For individuals with poor or no credit, it can sometimes be necessary to find someone to cosign their lease or agreement. This provides a “vote of confidence” from someone with better credit and provides you with financial liability. What makes this extremely dangerous to your personal finances is that negligence on their part can cost you severely through your credit. Worst of all, this leaves the individual needing the loan able to get off scot-free if they default and leave you footing the bill.
Nobody wants to assume the worst about someone in need, but this can leave your finances at grave risk. Since you’d be liable for this debt and are agreeing to whatever terms are being laid out, always read them and know what’s between the lines. If you can’t afford to cover the costs if your relative defaults on their loan, don’t think twice about offering this kind of assistance. While nobody wants to say “no” to a relative in need, both of these practices can drag down your finances as well while potentially damaging your relationship with your loved ones. 

Author Bio: Frank McCourt is a student of McCarthy, but applies his hard lessons of the south to the world of finance. It's a wild world out there.

Saturday, July 12, 2014

Financial Coaching Can Help You Get Out From Under Crushing Debt

If you have mounting bills and are getting calls from creditors at all hours you know how stressful debt can be. Many people find themselves under crushing debt through no fault of their own; others may find bad spending and saving habits have caught up with them. No matter how you got there debt is stressful and can make you feel hopeless. But there is a way you can get out from under your debt. Financial coaching by a Certified Public Accountant (CPA) can help identify where you can start to reduce your debt and even start to save money. 

Savings Budget

What is Financial Coaching?

Financial coaching is not a magic wand that can be waved and all of your financial problems will disappear. It is not a bunch of products you buy to cure your debt. Rather it is a way for you to identify your debt, formulate a budget, and learn how to live within your means. Your coach will sit down with you and take an honest and impartial look at your financial situation and help you identify problems and come up with solutions to solve these problems. 

The main goal of a financial coach is to change the way you think about money. They will do this by first identifying the problem, and then formulate a plan to help you improve your financial situation. Once formulated the coach will work with you to set it in motion and keep you on track. Working with you they will help you replace old bad habits with good ones. As you work with your coach you will learn new ways to avoid debt and pay down the debt you have. This will help avoid financial problems in the future.

What Can Financial Coaching Do For Me?

As stated earlier financial coaching will help you learn new ways to handle your money and your current debt as well as formulate a plan to pay off your debts. Some of the areas coaching can help include the following:
  • Household Income Management
  • Budgeting
  • Debt Management
  • Financial Goal Setting
  • Savings Plans andTips
  • Spending Habits
  • Planning for Taxes
  • Emergency Funds
Financial coaching isn’t just for folks in trouble, if you recognize you have mounting debt you should take advantage of this service before you get buried. When you are faced with seemingly impossible debt it is easy to feel hopeless and feel like giving up, but there is an answer and a way out. Consider financial coaching to help you escape mounting debt and get back on your feet again. 

Author Bio: Kathryn McDowell is a freelance writer and uses her knowledge of finance to educate her readers on smart ways to manage their money. She recommends the services of a CPA to help you get and stay out of debt through financial coaching.

Thursday, May 1, 2014

Most Payday Loan Borrowers Fight their Life to Come Out of the Debt

The CFPB or the Consumer Financial Protection Bureau, a government body aimed to look into the functioning of the lending organisations and protect the right of the consumers, has revealed that 80% of the people who take short term payday loans either get their loans roll over or they take more of payday loans to meet other requirements which come their way.

Payday Loan Borrowers

Most of the lenders who take the payday loans out of compulsion belong to the lower income group. With already stressed financial conditions, these new loans are taken simply because they are available easily and can be had within the same day of application. Moreover, since they do not require any credit checks, borrowers can qualify for them even if they have defaulted on other loans in the past or even had bankruptcy in their records.

Emergencies do come and they often strike them the most who are financially weak. Those who already have a payday loan in their kitty, when have another emergency situation to be dealt with, conveniently take another loan. This means that their coming pay check is used to the payday loan they had already taken , the next pay check is booked for the payment of the next payday loan taken by them.

It is thus evident that once you get into the habit of taking a payday loan, there is no respite from the situation. You will end up into a vicious cycle of loans which becomes impossible to come out from.
Reports by the CFPB indicate that almost 25% of the borrowers were found to go for the rollover of the payday loans. This means that they paid a much higher sum that they had originally taken and much of their payments went towards the fees and the penalties.

All this has definitely caught the eyes of the government which is trying to bring in new rules and guidelines for the payday loans and ways to curb the high interest rates and the tough repayment plan. However, with no alternatives available for the people taking to these loans to meet their urgent requirements, the government is going slow on implementing or enforcing any of these policies.

These loans are cash advances which are offered to the consumers against their pay checks . These are offered for a period of two weeks and the interest charged on them is a flat 15%. For such a small time period the interest rate does not get on the nerves of the people. In fact the lenders deliberately project the interest rates which show a lower value. If they would talk about the APR on the payday loans they would have to show the consumers a figure which would scare them away from taking the payday loans.

Payday loans have always been in the news for the wrong reasons. These are extremely popular bad credit installment loans amongst the consumers for the urgent needs they fulfil of theirs. However, there are a series of complaints against these lenders on account of higher interest rates charged from the consumers.

It was recession which pushed a lot of people into financial crisis and there it was, the pay day loans demand surged and reached the levels where it attracted most of the lenders into the business.
All is not good with the payday lenders. Several regulations and ban on payday loans in several US states has seen a lot of established lenders getting out of the business. However, Wells Fargo rules the market with maximum share today.

Wednesday, January 15, 2014

Recovering From Holiday Debt - Get Back to Normal Life

All your New Year guests have gone and the leftovers have been either stored or eaten. Even the holiday bloat has dwindled. Life after holidays should be peaceful, nom and calm until you get your credit card bills in your mail. During December and January, when everyone is engaged in unwrapping gifts and exchanging food, who thinks about their credit card bills. Instead of worrying about their bills, they make the mistake of whipping their plastics during every single purchase only to dig their own grave. If you too have done the same and now you’re being subject to holiday debt, you should be aware of the ways in which you should get out of the same. Here are some effective steps that you can take in order to recover from your holiday debt and get back to normalcy.

Holiday Debt

1. Missed payments hurt your bottomline: You might feel that missing a payment here and there won’t harm your financial records during the holiday lull, but you should be aware of that missed payments actually hurt your bottomline. Not only will you be stung with a hefty late fee for every missed payment, your credit rating will also take a hit. After repeated missed payments and below-minimum payments, there will be a major blow to your credit rating. Therefore, you should avoid skipping payments when you have a burden of credit card payments on your shoulder.

2. Stop additional charging with your plastics: We all know that we should avoid adding on more weight to your low-riding financial boat. Stop charging as soon as possible and take out your credit cards from your wallet and keep them back at home in order to motivate yourself into saving your dollars. Carry cash in your wallet and keep some extra cash so that even if you wish to buy something that is out of your budget list, you can still buy it with cash.

3. Exchange unwanted things into cash: Before the store time limits run out, you can return the unwanted gifts in order to get back cash. The sooner you approach them, the more likely you will be to receive cash instead of getting back store credit. If you weren’t aware of the fact that you can sell off unwanted gift cards in lieu of cash, you can check out the web as there are some reputable websites that are easily found online. Leverage such opportunities in order to save your dollars.

4. Opt for balance transfers: You can even opt for balance transfers as this can help you reap benefits of low monthly payments throughout a certain period of time. The balance transfer cards carry nominal rates (often 0%) for a specific period of time, known as the introductory period. Once this period ends, the interest rates are subject to a hike and therefore you should ensure transferring the entire balance within the introductory period so that you can reap the benefits of lower monthly payments.

5. Consider getting an unsecured personal loan: If you don’t get a balance transfer credit card, you can easily take out an unsecured personal loan. Such loans should be equal to the amount of holiday debt that you owe. Once you get the proceeds in your bank account, you can use them to repay your creditors and then start repaying your debts. The loan will carry low interest rates and will also be stretched throughout a longer period of time.

Therefore, when you’re wondering about the ways in which you can bid goodbye to your holiday debt, you can take into account any of the above mentioned options. Live a debt free life and safeguard your credit score accordingly.

Monday, January 13, 2014

Financial Independence and Paying Debt on Time

Living well is often related to freedom from financial restraint. It is important to be organised and prepared for all circumstances to ensure this. Bank accounts and debts can be managed well and you can fully maximize them to the extent which can serve your business goals.

Debt Repayment

What’s the worst that can happen?

You’ll end up avoiding every meeting with debt collectors. As a company, you won’t want your chosen contact points to be an annoyance to affiliate organisations. It could be a turn off for other suppliers to chase after your Finance Department for payments and this can reflect badly on your corporate brand.

If you’re not bogged down enough by the list of payments you’ll have to fulfill  the worst scenario you can experience is filing for bankruptcy. The inability to pay off all your financial debts will result in the loss of assets. Your properties will inevitably be recovered to pay off what you owe lending entities. It’s restricting to consider newer ventures and other companies will refuse to affiliate themselves with an organisation on the losing end.

Get Out of the Rut

Financial troubles are an opportunity for you to get your act together. It’s all a matter of working your way out of the messy hole and towards financial freedom. Don’t let your debts dictate the way you want to direct your company.

Here are a few tips to ensure you are debt free as soon as possible:

  • Seek Help and Advice

Your board of advisers will know your company best in regard to investment and operational patterns. If you know you’re having difficulties with scheduling your payments, ask your trustees to have a self-imposed intervention. Be ready to hear out their thoughts and try to be as objective as possible. You’ll be surprised with the varied insights these stakeholders may bring and how much the company may need to redirect its ventures.

After listing your main areas for improvement, you can gather expert contacts and seek their advice. There are different debt agreements whenever a contract is drafted with service providers. Know the best way to strike a deal with them to render your payments. You can also commit to an installment plan, as manageable payments can aid you in acquiring financial freedom.
  • Be More Prudent with Your Investment Choices
Know your goals for being debt-free and figure out the best strategies to fully settle your account. Eventually, your company can focus on its core business operations, and be agile enough to explore ventures for expansion. It’s a matter of balancing out risks and knowing how to priorities investments to earn a considerable amount of profit.

The ability to manage one’s debts also contributes to goodwill among your financial partners and associates. Debt is a concept which can be handled and managed well. In fact, you can use your debt-paying records to show your financial performance as a company. If you have good debt records, this can contribute to your entity’s overall financial standing. For more advice, contact specialists in the area.

This article was written by Seanie Buffton - Took Banking and Finance, an ex-Financial Planner turned Writer based in Australia. He also does consulting with a debt collection agency specializing on debt recovery issues in Brisbane, Melbourne and Sydney.

Friday, January 10, 2014

Debt and Saving - Looking at Cutting Expenses

If you’re in debt and trying to get out, you’re probably looking at cutting expenses. Indeed, cutting back on eating out, unnecessary shopping sprees and “extras” such as cable and magazine subscriptions are all great financial choices. Some people focus so much on paying off their debt though, that they let it get in the way of other aspects of life.

Debt and Saving

Savings

For example, it has long been a debate whether or not you should contribute to your savings while paying off debt. If you do, then you won’t be able to pay off your debt as quickly, and the longer you’re in debt, the more interest accumulates.

But if you don’t put money in savings, what will happen if an emergency occurs? You’ll probably have to use credit to pay it off, increasing your debt even more. While it may not be realistic or even wise to focus on putting away a large sum before paying off debt, it is a good practice to save at least a small sum every month even while paying loans, so that you’re in the habit of saving, and you won’t be left out to dry if the unexpected occurs. Dave Ramsey suggests a $1,000 emergency fund. You’ll also be able to rest easier knowing that you have a backup plan. Don’t let paying off debt stress you out and negatively affect your health.

Planning for the Future

Investments and Insurance are other areas that people could ignore in order to pay off debt. Is it wise to stop contributing to your retirement fund? Should you cash out your life insurance in order to pay off your loans?

Every situation is different. The first rule of getting out of debt though is that it means nothing without learning better spending habits. You’re in debt for a reason. Maybe its student loans or unexpected health expenses. Maybe you have tendency to use retail therapy instead of dealing with your emotions. Whatever the case, if you’re dedicated to getting out of debt, you want to make sure you can stay out of debt in the future. If you liquidate your future assets, this might be less likely.

Look at your finances with a holistic, long term view. Here are some things to consider:
  • If you don’t have life insurance, but are still in debt, than if anything should happen to you, your relatives or dependents might get saddled with those payments.
  • If you don’t contribute to your retirement fund, will the savings on debt interest make up for the loss on savings interest (often it does, since savings interest rates are generally much lower than those on lines of credit)
  • If you stop investing now, could the money freed up once you’re done making loan payments be used for future investments?
  • Do you need life insurance? If you don’t have dependents, you may think the answer is no, but that’s not necessarily the case. Compare insurance options at Suncorp.com.au or other trustworthy providers to ensure that you’re informed of all your options
  • Do you have the knowledge necessary to make the decision? There are a lot of free financial advice websites that can help you out, and you might even be able to sit down with a financial advisor for a free consultation. Just always remember that your situation is unique, and general advice on the internet needs to be taken with a grain of salt. Also, if it sounds like someone’s just telling you what you want to hear so they can sell you something, they probably are.
Whatever you decide, make sure you’re not only focusing on the present, but planning for the future. You most likely want to get out of debt so you can lead a free-er life. You can only maintain that with healthy spending habits and a good amount of foresight. 

Monday, May 20, 2013

How To Win The Battle Of Credit Card Debt With Credit Card Debt Relief

Are your credit card debts keeping you awake at night? If so you are one of millions of people that are experiencing this same nightmare. Almost everyone has credit card debt in today’s world. The economy is not allowing for people to pay off their debts off every month. When this happens the interest trap begins. The interest will increase your debt by hundreds if not thousands of dollars and makes it almost impossible to get out of debt and get those credit cards paid off.The good news is that there is help to give you the credit card debt relief that you are dreaming of.

Credit Card Debt

Eliminate Your Credit Card Balances

When you get your credit card bill every month you will usually find yourself paying the minimum payment due which is the amount of the interest and maybe a little of the principal amount. There may also be some hidden fees and late charges depending on if you paid your bill on time. You are not alone in this situation. Many people are living off of their credit cards because there is not enough money left at the end of the month for groceries, gas for the car, rent or many other things. This is where you should consider debt consolidation and maybe even get help through a debt consolidation lender.

Consolidate Your Credit Card Debt

When you are considering help through a credit card debt relief program you should consider seeking help through a lender who specializes with debt consolidation. Debt consolidation loans are unsecured loans that can help to pay off your credit cards with one payment and usually a much lower interest rate. This will help to reduce your monthly payments and help you to pay the credit cards off much quicker.

Debt Settlement

There is also a service available to help you consolidate your credit card loans. This is called a debt settlement service. This is where you hire a service to help you negotiate new terms on your credit cards. Most of the time this will help to reduce the total amount owed and will lower your interest rates at the same time. This will help you to get back on the road to a stable financial situation and will also help you to save money every month.

Where To Find Help

With the technology that is available today help is just a click away. Just by searching the Internet you can find hundreds of debt relief companies to help you. Often times you are even able to apply for the help over the telephone or even over the Internet and get answers back almost immediately.

Conclusion

Do not allow your credit card debt to rob you from a good night’s sleep. It is easy to find help and get yourself started on the road to financial freedom. Most of the debt relief companies that are available will give you an offer with no charge. This will show you the best way they can help. Do not be ashamed of your debt get out of it by asking for help.

Wednesday, March 6, 2013

How To Negotiate With Your Debt

Financial crisis if not dealt with properly can get you into serious problems at the later stage. If you are undergoing a mounting debt crisis it is high time that you do something about it right now than dragging it. When the debt amount is huge you need to look for a debt relief option which can resolve such lump sum debt issues. In such circumstances the best way to fix your debt problem is to negotiate your debt with creditors through a debt negotiation program.

Debt Negotiation

However the negotiation process is not that easy. You need to be wise while handling your creditors as the creditors may not agree on a settlement program. This article provides you with certain tips that you can consider if you want to settle your debts successfully:
  1. Decide on A Budget: The first thing that you need to do is to decide on a budget before you start negotiation with your creditors. Know your financial condition well before you inform you creditors that you want to settle your debts. Make note of all your monthly expenses to know where you stand with your finances. Check out the debts that you can afford to pay and those debts that you need to pay in the beginning. After you have analyzed your finances you can know how much you can pay as the minimum amount due on your debt. Follow the budget to save as little money as you can. This will help you to speed up your debt repayment.
  2. Take the Calls of your Creditors: If you ignore the calls from your creditors, they can get more irritated. They will keep on calling till you do not pick up the calls. This behavior gives them an idea that you are not interested in paying off the debt. This can lead to the creditors taking serious actions against you. Talk to them so that they get the message clear that you are interested in paying off the debts but are unable to do so due to your financial condition. If you do not have the money at present to pay them off make it clear. If you hide facts it can make the situation worse. If you maintain honesty it can have a positive impact as your creditors will support you to get your condition.
  3. Do not Act under Pressure: If your creditors are pressurizing you to agree on a deal, do not do that. Take your time to understand the details and then arrive at a decision. If you are dealing with the original creditor, then things might not be that bad. They will know about your condition from the beginning so they will be much more supportive. There are collection agencies that may pester you for countering offer. Remember to clear out the details beforehand so you do not have to face problems later.
  4. Have Everything Written Down Clearly: Do not believe in just verbal sayings. Do not assume anything when negotiating a debt. If it is a collection agency, inform them by sending letters or requesting them to send you a return in return. Having everything in writing saves you from any legal complications later on. When negotiating your debts send your negotiation offer and ask for a duly signed letter mentioning the details.
  5. Ask them to Remove your Negative Markings: After your debts have been settled ask your creditors to report it to the credit bureau. Also request them to remove all negative markings from your credit report. If there are any mistakes ask the bureau or your creditors to remove them as they affect your report negatively.

Friday, March 1, 2013

Smart Ways To Settle Your Credit Card Debt

Are you facing problems with unmanageable credit card debt? Is it becoming difficult to cope up with the harassment and abuses of the creditors? Then it is high time that you do something about your financial state to get it on right track.

Credit card debts are a part and parcel of life and you cannot get rid of them just like that. You need to plan out your financial life well if you want to fix your debt crisis. If there are late payments or penalties associated with your bills your debts can increase. Thus you should be careful while handling your credit cards so they are not hampered to the extent of filing bankruptcy.

Credit Card Debt
But if your cards have incurred certain negative markings at present, here are some smart ways to fix your credit card debt issues:
  • Credit card debt settlement can be a great way to get rid of your huge debts. Negotiating your debts yourself can help reduce your debts to a considerable extent. You can also save the money that would have else gone for hiring a debt settlement company. If you enroll in a debt settlement program you can expect to reduce your debts till 40-60%. You can also get rid of all creditor harassment issues with professional help. Thus from the time you realize that your debts are moving out of control, monitor your finances and get them back on track.
  • If your debt account is closed or restricted, you will not be charged off the amount you owe on your income statement. When your bad debts increase, the stocks in banks drops. With mortgages where your loans are backed up by collateral, the risk is less. Credit cards fall under unsecured debts and it depends upon your ability to pay back. Always keep note of your debts so you can avoid the risk of bankruptcy filing.
  • Convince your creditors for debt settlement by explaining your weak financial situation. Ask them for reduction in your debt amount and interest rates. You can tell them that you are considering bankruptcy filing. It is likely that your creditors will opt for a settlement rather than losing out on the whole amount.
  • Offer lump sum amount to the creditors as the initial settlement sum. This may offer motivation to creditors to opt for debt settlement as they can get back the major part of their lend amount.
  • Suggest a repayment plan if you are unable to offer a lump sum amount. You can sort out this plan in consultation with your creditor. It will help you to pay back your debts with affordable installments without increasing the negative impacts on your credit score.
If you are still confused about the ways to go about it, consider asking help from a debt settlement attorney in your state. Credit card debt settlement is a great way to fix your finances. But you need to be prudent while handling your debts in order to settle them successfully.