Archives For Debt

Removing the Stress of Debt

Corey —  September 25, 2015 — Leave a comment

Debt is stressful; no one enjoys creditors constantly putting pressure on to pay an outstanding debt. If you have been in this situation or still are then you will all too easily be able to relate to the scenario. The problem is that people under stress sometimes become desperate. They certainly sometimes make decisions out of desperation that they would not make if they were not under pressure and made those decisions with a clear head in the cold light of day. That said, debt will not simply go away; it cannot be ignored. However there is usually more than one solution to a problem. The secret is to select the right one.

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Loans (from anyone) are always difficult to secure when you have a bad credit rating. You may think your only option is to carry on without a loan, but this is not the case. There are still options available to you, and we are going to show you a few of them.

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Life’s little emergencies can often set a family or business behind the eight ball with seemingly no options but bankruptcy or high interest short term loans. Yet there are lots of different options depending on the need of the emergency. The first and foremost thing you need to do is stop any borrowing transaction and look at alternatives first. Short term loans look great until you have to pay back 200% of what you borrowed, doubling the cost of your emergency.

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When you have bad credit, securing a loan for any purpose is a challenge. The more inquiries you have into your credit report, the harder it will be to obtain the loan. It is ideal to try and clear up a few small accounts on your credit report before applying for a loan to aid your chances of approval. There are a few other options discussed below to help you get the funds you need quickly.

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What Are Your Financial Priorities?

Michelle —  September 17, 2012 — 1 Comment

Everyone has some sort of financial priority in their life.  Setting priorities can be very good for a person or a family. If you know what you are striving for, then you most likely will try a little harder and put more effort towards it.

Without priorities, then everything would be all over the place. How would a person even know where to start, where to end, when things are going run, etc.? How will individuals know when to celebrate completing a goal as well?

Maybe you want to eliminate all of your debt, give a higher percentage of your income to charity, go to school, pay off your house, retire early or just have financial freedom. Each person is different in how they value different things in their life, and their different financial priorities. One thing to keep in mind that even if financial priorities are similar, you shouldn’t always compare yourself to others. Different people complete their goals differently of course.

How to set financial priorities for yourself:

1. Decide what you value the most.

Make a list of what’s important to you. You probably have a very long list of things that you want to accomplish. What honestly cannot wait another second? Try to determine what should be done first and what can wait a little while.  You can sort through the rest of the financial things you need to do as well, and maybe you can contribute to the rest equally but put most of your might to your top priorities.

Think about your future and think about where you want to be and what you want to have done. This is the first step!

2. Let people join you.

If there are others, such as family and friends, who might have similar priorities as you, then let them join you. You and them can most likely push each other to achieve your similar goals. Talking about things out loud can also be helpful.

Also, sit down with your family to make sure that everyone is on the same page. If everyone agrees on the financial priority, it will make it much easier, and of course, much less arguments.

3. Make sure your goal or goals are possible and realistic.

Creating a goal of paying off all your debt in one year when you know it’s absolutely not possible, then it’s probably not a SMART goal. A smart goal is specific, measurable, achievable, rewarding and track-able.

If your goal is not possible, then you are most likely spending way too much time (and wasting time) on something that will not work out in the end. And then you are also sidetracking other goals that you should be working on as well.

Instead of trying to pay off your debt right away, plan to make more money this year to begin repaying it. This goal could involve upgrading your education so that you can start applying for more lucrative positions or completely change your career.

For example, if you currently work in the nonprofit sector and would like to advance within the industry, earning a Graduate Certificate in Project Monitoring could be exactly what you need. Once you have this additional education, it will become much easier to reach your other financial goals because you can command a much higher salary.

4. Keep track and always adjust.

You should constantly be keeping track of your goals. Try to set maybe a certain time for when you will track how you are doing. Maybe daily (if you want to be very on track), weekly, monthly or some other amount of time.

This way, if something does happen to be OFF track, then you can try to adjust it. It’s of course much better than waiting to see how you’re doing a year later and figuring out that you are way off track what you wanted to be.

5. Be prepared for things that will throw you off track.

In the end, something will most likely come up. If something sidetracks your goal or priority for a little bit, don’t let it ruin everything. Realize that things will come up and not everything can be scheduled perfectly.

What are your priorities?

What’s on the back-burner for you now?

Many individuals have been stuck in this situation: your friend complains that they have no money, and then they either directly or indirectly ask you if you can lend them any money to help them out. Or maybe your friend or family member is just constantly complaining about their lack of money. So, what do you do? How do you know when or if you should lend money to someone?

Usually when you’re on the outside of the situation and someone is telling you this, your instant gut reaction is “NO! Don’t lend anyone money!”

However, when you’re on the spot and someone is asking you, then it’s much, much harder to decide. It is especially hard to say no when you know that the person truly needs the money and that you can actually help by lending them what you can.

Helping people out with their money situations isn’t always a horrible idea. Recently, someone drained my sister’s bank account.  Her bank said they would put all the money back since it was identity theft. However, it would take a couple of weeks. I lent my sister money for gas and everything else. I had faith that she would pay me back, so I was not worried.

Also recently, my friend bought a house at an auction. He wanted the house before it went to auction, and submitted a bid, but the bank said it was going to auction soon so they rejected it. He was able to secure that house at around $30,000 less than the bid he put in. But the catch was that he needed cash for this. His family all gathered money for him and he bought the house with cash. He now has a contract with them through the bank to pay them all back with a 4% interest rate.

In this case, his family is extremely trusting him with their money, but they have were smart with obtaining a lot of paperwork and also going through the bank as well to make sure that nothing would fall through.

However, there are times when you should say no also. If your gut instinct is that this is a horrible idea, then don’t do it! You don’t want to risk a relationship that you have over money.

Things to Do Before Lending Money

There are many things that you need to think about when you lend money:

1. Think. Think about all of the possible positives and negatives that could potentially happen from this lending situation. Also, give yourself time to think it over. There is no need to rush to the ATM as soon as your family or family member asks you for help.

You need to really think over and make sure that this is a good idea.

2. If you don’t get the money back, then what will happen? Are you willing to lose the relationship over money, or will you forgive and forget? This is tough because the person might continue to ask you to lend more money.

Also, there is the potential that it could create a rift in many relationships that you have. People might choose sides. Is this worth it?

3. Don’t lend what you can’t afford. You would think this would be an easy concept, but many lend much more than they can afford. There is the probability that the person won’t pay you back.

Would you be alright if they didn’t pay you back? Or are you financially dependent on getting the money back in a certain amount of time?

4. Discuss the terms of the arrangement and get it in writing. Yes, getting the arrangement and terms in writing might seem too formal and the person will think that you don’t trust them, but this is a smart idea. This will help everyone understand what is happening, and if anyone forgets what was agreed upon in the future, then you are able to look back on your agreement and terms.

5. Talk about it. Understand what the money is for. If you don’t agree with it right in the beginning, then you will want to say no now instead of bugging them about their money choices later when they are trying to pay you back. Talk about payment terms, interest rates, schedules, etc.

Have you ever lent money to a friend or family member? How did it go?

Choosing the most adequate credit card for your needs has never been an easy task, given the large number of options available and the difficulty understanding the exact terms and conditions of each product. In the current climate of economic uncertainty, making the right decision is more important than ever, so as to avoid getting into further financial difficulties.

To help consumers with that decision, we have listed the four main points to consider when choosing a credit card.

1- Consider your spending habits

This is a basic element to consider, as overlooking this point could result in being stuck with the wrong credit card. It is essential to have a clear idea of the amount of money that you will be charging to your credit card every month. Determining this point will prevent you from choosing a credit card that has the right level of spending limits.

2- Take into account your previous credit history

Having a less-than-perfect credit history does not mean you cannot have access to a credit card. In fact, there are cards specifically designed for consumers in these circumstances. If this is your case, choose a credit card with the lowest standard interest rate possible (although APR rates in these particular cards tend to stand at 30 – 40 per cent), or go for a “bottom-up card”, which allows you to gradually increase your credit limit.

Alternatively, consumers who already have an existing debt may benefit from 0 per cent credit card deals, which allow them to transfer balances from other cards at no extra cost.

3- Low APR rates are not always the best deal

Some consumers are attracted by cards that advertise a low standard interest rate. However, and depending on your individual situation, these cards may not be the best option. Consumers who are able to pay their balance in full every month will not benefit from low APR rates and should not choose a credit card solely on that basis. Additionally, beware of the expression “typical APR rates”, as this means that rates can be modified (and increased) depending on your particular circumstances.

4- What if you can’t pay?

Due to unexpected events, there is a possibility that you might be late paying your monthly balance or that you exceed your credit limit. Credit card providers charge a fee in these cases, so it is important to go for the provider with the lowest fees. Also, ensure that the advertised APR rate will not increase in the event of late payment.