Debt And Your Personal Finance Plan

The consequences of the economy are forcing many individuals and to serious difficulties in meeting their financial obligations on a day to day basis, and month by month. Economic stress and frustration can lead to a hopeless and helpless situation. However, if you are like most people you continue to try to find a way to meet your obligations. There are more options available than perhaps you realize in overcoming a mountain of debt that you have established. The options for managing your debt range from managing your debt yourself to debt consolidation loans or perhaps debt consolidation services. Before you commit to any service or loan make sure that you have exhausted all resources for managing the debt yourself. Here are a few things you can do.

While many of these suggestions may seem very basic and elementary sometimes refreshing your self with a few financial fundamentals can get you on the road to financial recovery.

First of all any plan to relieve or restructure your debt must begin with an honest evaluation of where you are presently. Your goal is to relieve your debt and that is somewhere down the road. You can see the ending point which you must have a beginning. Where are you now with your debt?  Where is it you want to go with your debt?  How will you reach your goals?  Do You need help with taxes ?  That is the basic formula for overcoming a debt spiral that you may be experiencing.

Compare your monthly income with your monthly financial obligations, your bills. It’s very simple. Do you have more month at the end of the money? If you do you may need outside help to relieve your debt. Let’s look further. Once you have established your expenses and your income, look for ways to reduce your expenses. What can you cut out of your monthly expenses? Some areas that you may look first will include your cable TV expense or perhaps you’re dining expenses. Everyone enjoys the benefits of cable TV and going out on the town for a nice dinner, but, you may be in a position where you need to exclude these expenses to gain control of your monthly budget.

You must be able to examine your spending habits honestly. If you have a partner, a wife or a husband, this evaluation must include absolute transparency. For example, in a recent discussion of my own family finances I discovered that my wife spends about four dollars each day on coffee. Doesn’t sound like a lot of money right? She works five days a week. That equates to around $80 per month in coffee! Needless to say we arrived at the decision simultaneously to change that particular spending habit. $80 per month will buy a few groceries, which are a necessity.

How much are your utility bills? Understand that you will save money at the end of each month by the decisions that you make at the beginning of the month. No matter what you set your thermostat at in your home either winter or summer, try changing the temperature 3°. The savings you will experience at the end of the month will be worth it.

So let’s say you’ve analyzed your monthly expenses and you have made all the necessary cuts that are possible. You are still upside down in relation to your monthly income, what do you do? You may consider a debt consolidation loan or else you might prefer to use the services of debt consolidation services or credit counselors.

Whichever of these options you choose will still require a measure of discipline for your family to maintain. Choosing a debt consolidation loan will still require a monthly payment. However, the major benefit to choosing this option is relieving stress and anxiety from the pressure of not being able to meet your financial obligations. Your payment to your debt consolidation loan will be substantially lower than the combined payments were. Before choosing a debt consolidation loan make sure that you understand all the benefits and all the possible consequences that a loan of this type brings.

Other options include debt consolidation services or credit counseling services. Both of these choices may negatively affect your credit rating and you may want to get a free credit report to start. A service or company will negotiate with your creditors on your behalf in order to settle your debt for an amount less than what you owe. Qualifying for this type of service sounds easier than it is.

If you have not sure financial condition evolved into a situation where you are living beyond your means, do not despair. There is hope for you to change the course of your financial future.

Which Financial Services To Avoid

Nearly everyone can say that they wish they had a little extra cash around.  Maybe you have a family holiday coming up or a series of birthdays and you could use some extra spending money.  This is especially true in tough economic times.  Often one can find themselves considering financial services they would have never given a second thought to otherwise.  There is a saying that says, “There’s no such thing as a free lunch” and this can be true of financial services as well.

Payday loans seem like a good idea when you need one.  All you have to do is walk in, hand them your pay stub and walk out with cash.  Get $200 today and pay $225 in a few weeks.  Sounds easy doesn’t it?  It is, unless you don’t have the money come pay day and have to pay the $50 to advance that $200, then add more interest of $20.  And the cycle begins.  Then you will reach a point where the company won’t extend the loan anymore and you end up paying $500 that you didn’t have in the first place.  Then what?  You can get another payday loan, or just deal with the empty wallet.  Payday loan companies charge an interest of 300-400% per year.  That is outrageous just to get a little extra cash.

Credit card cash advance can also seem like a good idea.  Simply swipe your card at the ATM and there you have it, cash.  First, you will likely get charged a fee for using the ATM.  And there is no grace period on cash advances so it starts earning interest right that second.  Usually a cash advance interest rate is about double your normal interest rate, this is really not a situation you need to get yourself into.

Title loans are not a very common type of loan, but when things are really bleak there is always someone who will offer it.  Basically this is just like a normal loan, but you’re using your car as collateral.  Just based on statistics this is a bad idea, a large majority of people taking out title loans end up losing their car.  The loan amount is normally far less than what the car is worth and the fees and interest only make this an even worse deal.  And if you do lose your car, they will sell it at full price and keep the profit entirely for themselves.  Should the car not cover the full amount of the loan, the company may then take you to court for the rest.  It’s best to just say no.

Free Lunch Financial Seminars , Not Really Free

Perhaps you have heard the expression, in life there is no free lunch. I know my mother you to tell me that regularly. As is turns out she and other were right. The investing world has many snake oil salespersons that offer a free lunch, literally, and many people disregard the old time wisdom and accept. Step one for reliving you of your money is in place.

Free lunch financial seminars are all the rage in some circles with promises “lucrative careers” in anything from investing in stock options to prospecting for mortgage leads. What they have is a captive audience and most listen to the sales pitch without much resistance. It is easier than cold calling, door knocking and highly more successful than either.

There are not many people who do not need to make more money so the market for free lunch seminar participants is never ending. Make no mistake, these hucksters may not rob you of your life savings, but be sure they will make a pitch for you to buy something , sell something or tell your friends about next weeks free lunch.

Often products and service that are promoted are overpriced and overrated. Many a multi- level marketing proposal is born out of these free lunches. Your free lunch has turned into you writing a check for $399.00 for the right so to a fool proof system to make more money.

Bottom line. If you are invited to make money with a system and selling that system makes you more money that the “product “ it is selling, step away from the lunch room and buy your own meal. You will save money in the long run and that means you will make money simply by not giving it away

Personal Finance, Spend, Save or Sacrifice

Buy the lie long enough and you start to live the lie. Most people don’t want to make changes; they just want to get to the next day without losing what they have. The economy is trying to reset, but many of our leaders will not let it do so. We have lost our sense of priorities and compromised our own belief systems in the name on financial security.

Subscribing to the theory of borrowing more money to get you through until things get better is a recipe for financial disaster and always has been. Yet we still buy the lie, live the lie, and ultimately suffer the consequences of the deception. What we need is an economic pruning of our personal financial management. Personal finance requires sometimes-sacrificial personal decisions on how you will spend your money.

The goal of any advertising agency is to convince consumers that their lives or the welfare of their families is dependent on purchasing their product. Seems our government has adopted the same philosophy with the new and improved GM ( Government Motors) In other words “buy my new car and your family will be safer and our country will be stronger” or “We can put you in that new home, you deserve, for no money down and no proof of income”.

The lie being propagated across this country is if we spend more money the economy will recover and all will be right in the world. Every chance that is provided, we are told to spend more, borrow more, and things will be just fine. The edict is “sell the “S” word to them. Spend more. The truth is, “Saving” is the “S” word more people need to be practicing

Improving your personal finance situation may require some personal sacrifice and requires sometimes-sacrificial personal decisions on how you will spend your money.

Are you willing to do that? Can you pay for a repair on your car instead of trading it in on the new one that is going to make your life better? Can you renovate your present home in lieu of buying something bigger and better just because you can?

The bottom line is every dollar borrowed has to be repaid at some point. For our economy that may be 5 generations from now or it may be closer than any of us realize, but eventually the debt has to be paid. The same is true for personal financial decisions you make for your family. There are multitudes of families across this country that are losing homes to foreclosure because they bought the lie. The lie that you never lose money on real estate, remember that one?

We have financed, refinanced and refinanced again because we could and we were told to use that equity in our homes to make our lives better. Mortgage companies, financial institutions and lenders have approved loans with no proof of income, no docs and moved on to the next loan. They reeled in unprecedented profits, and there was no accountability. Now our country is faced with a foreclosure epidemic and homeowners are literally fleeing from their homes.The answer is not shop and spend your money until you drop. The answer is live within your means and save your money. Warning, some sacrifice may be required