Tag: Get Out of Debt

Ways to Earn Extra Money for Paying Off Debt

Debt traps you in a seemingly endless cycle. More debt means more interest and less disposable income, which means you’re constantly fighting against the tide and are always one issue away from complete financial disaster. 

Once you start making repayments on this debt, there will be less interest to compound, which means the grip will loosen, you’ll have more breathing space, and you can look forward to a debt-free future.

In this guide, we’ll look at some of the ways you can earn extra cash to start clearing your debt, from acquiring additional work and responsibilities to making money-saving sacrifices.

Stop Wasting Money

The average American household wastes over $10,000 a year on unnecessary purchases. These purchases all fuel the economy and keep you and your family happy. But if you’re losing sleep because you have so much debt, it’s worth making these sacrifices to give you some peace of mind and build towards a better future.

Save on Grocery Bills

The average family spends between $300 and $500 a month on groceries and as much as 40% of this food goes to waste. The majority is fresh food past its expiration date but we also have a tendency to cook monster-sized meals that end up being thrown away.

To save money on your grocery bill, try the following:

  • Plan your shop carefully. Only buy fresh when you’re confident that the food will be eaten in the next day or two.
  • Reduce your portion sizes when cooking. It’s okay to err on the side of caution and make more than needed, but to cook double or triple what will be eaten is just wasteful.
  • Don’t worry too much about best-before dates. It doesn’t mean the food should be thrown away, just that it’s not at its best. The same applies to lots of fresh fruit and vegetables. In this case, you can rely more on the squeeze and sniff test.
  • Cook food that is about to expire and would otherwise be thrown out. You can freeze the meals for later. You can also try picking, preserving or juicing to reduce waste.

Eating Out

On average, American families spend close to $3,000 a year eating out. It’s a great way to spend time with the family or have a date night with your partner. However, if you have a lot of debt then $3,000 worth of restaurant visits is a little excessive. 

Stop spending so much money eating out and focus on some cheaper alternatives. A picnic is a great alternative. You can use some of that uneaten food and spend time with the family without paying a small fortune for the pleasure.

Stop the Vacations

Big families take one vacation a year on average and this costs them between $4,000 and $5,000. The more children you have, the more expensive it becomes. What’s more, around a third of these families will take as many as three additional, smaller vacations every year, potentially spending over $7,000.

Don’t sacrifice spending some time with your family but look for cheaper options instead. Choose a small cabin instead of a plush hotel. You can go for walks, play games, swim, hike—all free activities that could bring you even closer and cost even less.

Hold the Vices

Thousands are spent on cigarettes and gambling, and much more is spent on shopping sprees. If you have any of these habits, it’s time to put a stop to them. We don’t need to tell you about the benefits of stopping smoking or giving up those shopping sprees, but if you’re still not convinced about the gambling, then spend a few months recording every single dollar that you bet.

Most gamblers think they are breaking even or only losing a little, but when they monitor their activity, they discover they are actually losing a lot.

Check Your Subscriptions

According to a recent survey, most Americans underestimate how much money they spend on subscriptions. We’ve turned into a nation of subscribers, spending hundreds of dollars a month on dozens of services we barely use.

We pay for cable, streaming services, gyms—we convince ourselves that it won’t matter as it’s only a few dollars, but those costs can add up to a lot of wasted cash at the end of the year.

Sell Your Stuff

Many sites can help you offload your unwanted items. There’s a home for all the things you no longer need, from electronics and video games sold on eBay or Amazon, to clothes and furniture sold through sites like Craigslist, Facebook Marketplace, and Swappa. 

It’s time to let go, stop hoarding, and earn some cash from the things you don’t need. Be honest with yourself and get rid before the value of those items depreciates more and you end up with worthless, dust-covered junk that just takes up space.

As an example, let’s imagine that you have a dozen old video games worth just $5 each on average, 10 old school textbooks worth just $2 each, a couple of furniture pieces worth $10, an unwanted guitar worth $50, and a couple of handbags worth $25 each.

Individually, those items aren’t worth much and you might think they’re not even worth your time trying to sell them, But combined, you’ll get $200 and if you put that towards a high-interest credit card debt, it could save you twice that in interest over the term. You will also free up some space in the process.

Get Another Job

You know you can make more money by asking for a pay rise. It goes without saying. The problem is, life isn’t quite that easy and, in most cases, asking for a pay rise will elicit little more than a short, sharp laugh from your employer. 

However, there are many ways you can earn money from a side hustle, taking advantage of the gig economy and swapping a little talent, a little time, and a lot of hard work for some cash.

Get a Part-Time Job

There is a multitude of ways you can earn some extra cash these days. The pay isn’t always great, but if you’re working towards clearing your debts and have some free time, every dollar helps.

Uber and Lyft are always looking for new drivers; retailers need shelf-stackers and greeters, and there is no shortage of delivery jobs. Review your free time, calculate when you can work, and see what’s available. 

Teach a Skill

Can you play a musical instrument or speak a second language? Do you have some other teachable skill? It has never been easier to make money as a part-time teacher, as sites like Preply.com, Udemy.com, Tutor.com, Noodle.com, TakeLessons.com, and many more bring all of these opportunities to you. 

You can visit the student’s house, invite them to yours or simply conduct the lessons via Skype or the site’s built-in conferencing software.

Freelance

Upwork.com, Guru.com, Fiverr.com—these sites and more have created a world of possibilities for skilled writers, designers, coders, and other experts. But they offer so much more than that. 

You don’t need to be particularly skilled to work on these sites as the pay is scaled based on ability and experience. If you have a little free time and some competent language skills, you can hire yourself as a virtual assistant to do basic admin work.

There are countless entrepreneurs seeking individuals to complete basic tasks such as transferring data, reviewing images, and answering emails. The pay isn’t great if your skills are limited, but you get to work from home on your own time. 

Cover the Basics

Freelancing and teaching may be out of the question if you don’t have any skills and are not computer literate. But there are still a few other options, including dog walker, lawn mower, babysitter, and general handyman. 

Ask your neighbors, friends, and family if they need any work; check Craigslist and local classifieds. Everyone can do something and there are always odd jobs available if you’re willing to work.

Try Some Other Methods

When the ordinary fails, it’s time for the extraordinary. There are some weird and wonderful ways you can make extra cash when needed.

Sell Your Hair

If your hair is long and untreated, you could make a tidy sum by selling it. Good quality human hair is used to make premium wigs and some companies are willing to pay thousands for the right locks. However, there are some strict conditions, such as the fact that it must be untreated and very well looked after.

House Sit

Sites like Thumbtack can connect you to homeowners looking for skilled workers, as well as people willing to look after their homes and belongings. They will pay you to stay in their homes and perform some basic chores while they’re away, such as watering plants, feeding pets, and mowing the lawn.

Make Something

If your skills are practical and not creative, turn your hand to making things and sell them through sites like Etsy, Facebook or your own online store. The world has been obsessed with single-use plastics for many years and it’s now waking up to the damage that has been done. Many consumers are willing to pay extra for something that has been handmade and is unique, especially if the money supports an independent creator.

Grow Your Own

If you have a yard and some free time, start growing some produce. Crops like potatoes, carrots, greens, and even some fruits are easy to grow and can give you a bumper crop every year. You’ll pay a few cents for the seeds and simply need to devote some time to digging, watering, and harvesting.

Think about how much money you’ll save if you have your own supply of vegetables and fruits and can just pick fresh from the yard whenever you’re cooking. If your family eats a lot of cheese or drinks a lot of wine or beer, you can also start producing your own supply. 

Cheese can be made with a lot of milk, a little rennet, and a few simple steps. Beer can be made using some do-it-yourself kits. 

As for wine, it’s one of the easiest things you can make yourself. You don’t even need grape juice as wine can be made from a multitude of fruit juices, vegetable juices, and more. You can even make a strong, fragrant white wine with a handful of fruit teabags. The only expense is the sugar, which means you can make several dozen bottles worth of wine for less than $10.

Join a Clinical Trial

Although it’s not a method we would recommend, it’s one that’s worth including. If you join a clinical trial, you’ll be paid to act as a guinea pig. The good news is that the majority of these trials run without incident and most subjects are as healthy at the end as they were at the beginning. The bad news is that there is always a risk and there’s no telling what will happen.

You can search for available trials on the Clinical Trials website run by the US National Library of Medicine. 

Summary: Paying Off Your Debt with Extra Money

Your first priority is to meet your minimum payment obligations and avoid any missed payments. Once you meet this obligation every month, you can put any extra cash you have towards clearing those debts. Every little helps, even if it’s just $50 or $100 here and there.

As an example, if you have a credit card debt of $10,000 with an APR of 25% and a minimum payment of $300, you’ll repay $17,251 in total over 58 months. Add just $100 a month and you’ll reduce the term by a whole 12 months and the balance by a massive $3,000. Take a look at our guides to the Debt Snowball Method and the Debt Avalanche Method to find the right payoff strategy for you. Both methods rely on you earning some extra cash and now that you’ve made it to the end of this article, you’ll know just how to do that!

Ways to Earn Extra Money for Paying Off Debt is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

10 Ways to Stay Motivated When Paying Off Debt

The post 10 Ways to Stay Motivated When Paying Off Debt appeared first on Penny Pinchin' Mom.

It is easy to lose your focus any time you are working towards a goal.  It takes dedication, but even then you may lose your desire to keep going.   This is especially true when trying to reach your financial goals, such as getting out of debt.

get out of debt and stay motivated

Paying off debt is not easy. You start out with great determination and willpower to make it happen. But, as time goes on, you may find yourself loving motivation to pay off your debt.

If your debt balances are high, the balances may not drop as quickly as you would like.  It can make you lowe your desire to keep going. In fact, you might just feel like quitting.

I’m here to say don’t.  Don’t give up.  The key to is to find the motivation to pay to get out of debt, even when it isn’t easy.  These tips will help.

 

STAYING MOTIVATED TO PAY OFF DEBT

MY EXPERIENCE

When my husband and I were trying to get out of debt, there were times when we wanted to quit.  However, we were both determined to stick with it and not give up.

Sadly, that is not true for many.  People get excited at the idea of getting out of debt, but they never follow through.  For one reason or another, they lose the motivation to continue.

This means that they go back to their old habits and often times, end up even further in debt.  It is sad, but it is true.  They lost the will to stay the course.

 

 

WHERE DO YOU START?

First of all, you have to be willing and fully committed to wanting to be debt free.  If you aren’t willing to make sacrifices, that means you are not quite ready to start.  If you try, you will probably fail.

However, if you are ready and willing to put in the hard work involved you might be ready.  You need to fully understand that this process is going to take some time.  It took my husband and I more than 2 years to get out of our debt.  It may take a while – but it will happen.

 

FINDING THE MOTIVATION TO PAY OFF DEBT

1. Cheat once in a while

When you are trying to pay off your debt with laser focus, you might start to feel a bit of resentment towards it.  After all, that is your money and you see none of it.  Instead, it moves right over to your debtor.  You never get to enjoy it.

You need to spend money.

When you allow yourself a chance to go out to dinner or buy that new pair of shoes, you will continue to stay motivated.  It allows you to take the focus off of your debt for a short time and put it on yourself.

For example, when my husband and I were in paying off our debt, we did not eat out at restaurants.  We gave that up completely.  However, each time that we paid off a creditor we were able to go out to dinner. It allowed us to celebrate.  We had one cheat night, and then we were ready to get back on track again.

Just don’t do this very often, or you’ll end up quitting and up spending more than you should.

 

2. Be accountable

Whether you are a relationship or not, you need to find someone to whom you can be accountable.  Call them an accountability partner. The journey to being debt free can be a long and lonely adventure. Finding the right person to support you along the way can be vital to reaching your goals.

This person could be a friend or family member. While you might want to use a spouse or partner, they may not be the best person.  You really should find someone who has been on this path themselves and reached the end.  Someone who is debt free and battled to make it happen can provide much more support than someone drowning in debt.

 

3. Dream

Sit down and look at your finances.  Imagine all of the things you could do if you were not living with looming debt.  Perhaps you could afford that car you want. It might even mean being able to quit your job and stay home with the kids.

Read More:  Setting Your Financial Goals

 

4. Change your habits

Look at your debt.  What caused you to end up there. If was due to spending too much at Target, it means you need to stop.

You have to change your habits by creating a budget and a debt plan.  Take it further and change the way you spend your free time.  It won’t be easy, but no one said getting out of debt was going to be simple.

It is not an easy thing to do, but find a way to focus your energy on the things that created the debt to other things you enjoy.  Try to find the joy in the simple things, which cost no money at all.

Looking beyond the debt and definitely help you stay motivated when getting out of debt.

Read More: Why Your Debt Plan Will Fail

 

5. Get angry

One of the simplest ways to stay motivated is to hate your debt.  Review your bills and add up the money you are wasting on interest payments every month.  Just seeing the money you waste will make you angry. Heck, it might even make you nauseated.  Good.

Hate the debt and you’ll want to make it go away.

 

6. Daily reminder 

Put the total of your debt on your mirror. As you pay them down, update it with the new amount. Every day you will see that you are making progress. You will see where you were and where you have to go.

 

7. Continue to learn

Just because you read one article about how to get out of debt, doesn’t mean you are an expert. If you were, you would probably have never gotten into debt in the first place.

Keep reading and learning. Follow your favorite bloggers and read their tips for getting out of debt.

Read More: How to Get out of Debt on a Lower Income

 

8. Be patient

“Rome wasn’t built in a day.” Your debt didn’t accumulate in just a month. It took time. That means it will take time to pay it off.

If you are doing all you can to do get out of debt, then there no more you can do. Just look forward to the day you get to scream that you are debt free!

 

9. Connect with others

I mentioned an accountability partner above and that is great, but what do you do if you can’t find one? Easy. Look to others who understand.

With social media, it is easy to find people who are in your situation. They may be on Facebook or Twitter. You might find them in the comments of personal finance blogs. Look around for those who are making progress and network with them.

We all need help with this journey. There is no rule that says you have to be best friends with them to get the motivation and support you need.

 

10.  Read success stories

There is nothing more motivating than reading about others who have accomplished their goals. Reading about ordinary people who have paid down thousands of dollars of debt can be inspiring.

Read More: My Debt Free Journey to Paying Off $35,000+ in Debt

 

 

how to get help paying off debt

The post 10 Ways to Stay Motivated When Paying Off Debt appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

Ask the Readers: What Are Your Goals for 2020?

Woman writing down goals for 2020

Happy New Year! With the fresh new year ahead of us, now is the perfect time to take stock of your goals for 2020.

What are your goals for 2020? Why these goals? What steps will you be taking to achieve these goals?

Tell us about about your goals for 2020 and we’ll enter you in a drawing to win a $20 Amazon Gift Card!

Win 1 of 3 $20 Amazon Gift Cards

We’re doing three giveaways — here’s how you can win:

  • Follow us on Twitter
  • Tweet about our giveaway for an entry.
  • Visit our Facebook page for an entry.
  • Follow @janetonthemoney on Twitter.

Use our Rafflecopter widget for your chance to win one of three Amazon Gift Cards:

a Rafflecopter giveaway

Giveaway Rules:

  • Contest ends Monday, January 6th at 11:59 p.m. Pacific. Winners will be announced after January 6th on the original post. Winners will also be contacted via email.
     
  • This promotion is in no way sponsored, endorsed or administered, or associated with Facebook or Twitter.
     
  • You must be 18 and U.S. resident to enter. Void where prohibited.

Good Luck!

Tell us about about your goals for 2020 and we'll enter you in a drawing to win a $20 Amazon Gift Card!


Source: feeds.killeraces.com

The Baby Steps Explained, And Why They Work!

These are the steps that introduced me and my husband to what financial independence is and for that I am eternally grateful. But a lot of important considerations get looked over if you just find a list of the steps…

The post The Baby Steps Explained, And Why They Work! appeared first on Modern Frugality.

Source: modernfrugality.com

What Are the Best Debt Relief Options?

What is debt relief? Debt relief is any strategy you take to get out of debt or to manage your debt so that you can function normally and keep up with your bills and living…

The post What Are the Best Debt Relief Options? appeared first on Crediful.

Source: crediful.com

Debt Settlement vs Bankruptcy: Which is Best?

You’ve tried debt payoff strategies, balance transfers, consolidation, and even debt management; you’ve begged your creditors, liquidated your assets, and pestered your friends and families for any money they can afford, but after all of that, you still have more debt than you can handle.

Now what?

Once you reach the end of your rope, the options that remain are not as forgiving as debt management and they’ll do much more damage to your credit score than debt payoff strategies. However, if you’ve tried other forms of debt relief and nothing seems to work, all that remains is to consider debt settlement and bankruptcy.

Debt settlement is a very good way to clear your debt. It’s one of the cheapest and most complete ways to eradicate credit card debt and can help with most other forms of unsecured debt as well. Bankruptcy, on the other hand, is a last resort option for debtors who can’t meet those monthly payments and have exhausted all other possibilities.

But which option is right for you, should you be looking for a debt settlement company or a bankruptcy attorney?

Similarities Between Bankruptcy and Debt Settlement

Firstly, let’s look at the similarities between bankruptcy and debt settlement, which are actually few and far between. In fact, beyond the fact that they are both debt relief options that can clear your debt, there are very few similarities, with the main one being that they both impact your credit score quite heavily.

A bankruptcy can stay on your credit report for up to 10 years and do a lot of damage when it is applied. It may take several years before you can successfully apply for loans and high credit lines again, and it will continue to impact your score for years to come.

Debt settlement is not quite as destructive, but it can reduce your credit score in a similar way and last for up to 7 years. Accounts do not disappear in the same way as when you pay them in full, so future creditors will know that the accounts were settled for less than the balance and this may scare them away.

In both cases, you could lose a couple hundred points off your credit score, but it all depends on how high your score is to begin with, as well as how many accounts you have on your credit report and how extensive the settlement/bankruptcy process is.

Differences Between Bankruptcy and Debt Settlement

The main two types of bankruptcy are Chapter 7 and Chapter 13. The former liquidates assets and uses the funds generated from this liquidation to pay creditors. The latter creates a repayment plan with a goal of repaying all debts within a fixed period of time using an installment plan that suits the filer.

Debt settlement, on the other hand, is more of a personal process, the goal of which is to offer a reduced settlement sum to creditors and debt collectors, clearing the debts with a lump sum payment that is significantly less than the balance.

Chapter 7 Bankruptcy and Chapter 13 Bankruptcy

When people think of bankruptcy, it’s often a Chapter 7 that they have in mind. With a Chapter 7 bankruptcy, all non-exempt assets will be sold, and the money then used to pay lenders. There are filing costs and it’s advised that you hire a bankruptcy attorney to ensure the process runs smoothly.

Chapter 7 bankruptcy is quick and complete, typically finishing in 6 months and clearing most unsecured debts in this time. There is no repayment plan to follow and no lawsuits or wage garnishment to worry about.

Chapter 13, on the other hand, focuses on a repayment plan that typically spans up to 5 years. The debts are not wiped clear but are instead restructured in a way that the debtor can handle. This method of bankruptcy is typically more expensive, but only worthwhile for debtors who can afford to repay their debts.

Filing for bankruptcy is not easy and there is no guarantee you will be successful. There are strict bankruptcy laws to follow and the bankruptcy court must determine that you have exhausted all other options and have no choice but to file.

Bankruptcy will require you to see a credit counselor, which helps to ensure that you don’t make the same mistakes in the future. This can feel like a pointless and demeaning requirement, as many debtors understand the rights and wrongs and got into a mess because of uncontrollable circumstances and not reckless spending, but sessions are short, cheap, and shouldn’t cause much stress.

How Debt Settlement Works

The goal of debt settlement is to get creditors to agree to a settlement offer. This can be performed by the debtor directly, but it’s often done with help from a debt settlement company.

The debt specialist may request that you stop making payments on your debts every month. This has two big benefits:

1. More Money

You will have more money in your account every month, which means you’ll have more funds to go towards debt settlement offers. 

The idea of making large lump sum payments can seem alien to someone who has a lot of debt. After all, if you’re struggling to make $400 debt payments every month on over $20,000 worth of debt, how can you ever hope to get the $5,000 to $15,000 you need to clear those debts in full?

But if you stop making all payments and instead move that money to a secured account, you’ll have $4,800 extra at the end of the year, which should be enough to start making those offers and getting those debts cleared.

2. Creditor Panic

Another aspect of the debt settlement process that confuses debtors is the idea that creditors would be willing to accept reduced offers. If you have a debt worth $20,000 and are paying large amounts of interest every month, why would they accept a lump sum and potentially take a loss overall?

The truth is, if you keep making monthly payments, creditors will be reluctant to accept a settled debt offer. But as soon as you start missing those payments, the risk increases, and the creditor faces the very real possibility that they will need to sell that debt to a collection agency. If you have a debt of $20,000, it may be sold for as little as $20 to $200, so if you come in with an offer of $10,000 before it reaches that point, they’ll snap your hand off!

Types of Debt

A debt settlement program works best when dealing with credit card debt, but it can also help to clear loan debt, medical bills, and more. Providing it’s not government debt or secured debt, it will work. 

With government debt, you need specific tax relief services, and, in most cases, there is no way to avoid it. With secured debt, the lender will simply take your asset as soon as you default.

Debt settlement companies may place some demanding restrictions on you, and in the short term, this will increase your total debt and worsen your financial situation. In addition to requesting that you stop making monthly payments, they may ask that you place yourself on a budget, stop spending money on luxuries, stop acquiring new debt, and start putting every penny you have towards the settlement.

It can have a negative impact on your life, but the end goal is usually worth it, as you’ll be debt-free within 5 years.

Pros and Cons of Debt Settlement and Bankruptcy

Neither of these processes are free or easy. With bankruptcy, you may pay up to $2,000 for Chapter 7 and $4,000 for Chapter 13 (including filing fees and legal fees) while debt settlement is charged as a fixed percentage of the debt or the money saved. 

As mentioned already, both methods can also damage your credit score. But ultimately, they will clear your debts and the responsibilities that go with them. If you’ve been losing sleep because of your debt, this can feel like a godsend—a massive weight lifted off your shoulders.

It’s also worth noting that scams exist for both options, so whether you’re filing bankruptcy or choosing a debt settlement plan, make sure you’re dealing with a reputable company/lawyer and are not being asked to pay unreasonable upfront fees. Reputable debt settlement companies will provide you with a free consultation in the first instance, and you can use the NACBA directory to find a suitable lawyer.

Bankruptcy and Debt Settlement: The End Goal

For all the ways that these two options differ, there is one important similarity: They give you a chance to make a fresh start. You can never underestimate the benefits of this, even if it comes with a reduced credit score and a derogatory mark that will remain on your credit report for years to come.

If you’re heavily in debt, it can feel like your money isn’t your own, your life isn’t secure, and your future is not certain. With bankruptcy and debt settlement, your credit score and finances may suffer temporarily, but it gives you a chance to wipe the slate clean and start again.

What’s more, this process may take several years to complete and in the case of bankruptcy, it comes with credit counseling. Once you make it through all of this, you’ll be more knowledgeable about debt, you’ll have a better grip on your finances, and your impulse control. 

And even if you don’t, you’ll be forced to adopt a little restraint after the process ends as your credit score will be too low for you to apply for new personal loans and high limit cards.

Other Options for Last Ditch Debt Relief

Many debtors preparing for debt settlement or bankruptcy may actually have more options than they think. For instance, bankruptcy is often seen as a get-out-of-jail-free card, an easy escape that you can use to your advantage whenever you have debts you don’t want to pay.

But that’s simply not the case and unless you have tried all other options and can prove that none of them have worked, your case may be thrown out. If that happens, you’ll waste money on legal and filing fees and will be sent back to the drawing board.

So, regardless of the amount of debt you have, make sure you’ve looked into the following debt relief options before you focus on debt settlement or bankruptcy. 

Debt Consolidation

A debt consolidation loan is provided by a specialized lender. They pay off all your existing debts and give you a single large loan in return, one that has a lower interest rate and a lower monthly payment. 

Your debt-to-income ratio will improve, and you’ll have more money in your pocket at the end of the month. However, in exchange, you’ll be given a much longer-term, which means you’ll pay more interest over the life of the loan.

A Debt Management Plan

Debt management combines counseling services with debt consolidation. A debt management plan requires you to continue making your monthly payment, only this will go to the debt management company and not directly to the creditors. They will then distribute the money to your creditors.

You’ll be given a monthly payment that you can manage, along with the budgeting advice you need to keep meeting those payments. In exchange, however, you’ll be asked to close all but one credit card (which can hurt your credit score) and if you miss a payment then your creditors may back out of the agreement.

Balance Transfer Card

If all your debts are tied into credit cards, you can use a balance transfer credit card to make everything more manageable. With a balance transfer credit card, you move one or more debts onto a new card, one that offers a 0% APR for a fixed period. 

The idea is that you continue making your monthly payment, only because there is no interest, all the money goes towards the principal.

Home Equity Loans

If you have built substantial equity in your home then you can look into home equity loans and lines of credit. These are secured loans, which means there is a risk of repossession if you fail to keep up your payments, but for this, you’ll get a greatly reduced interest rate and a sum large enough to clear your debts.

Bottom Line: The Best Option

Debt settlement and bankruptcy are both considered to be last resort debt-relief options, but they couldn’t be more different from one another. Generally speaking, we would always recommend debt settlement first, especially if you have a lot of money tied up in credit card debt.

If not, and you can’t bear the idea of spending several months ignoring your creditors, missing payments, and accumulating late fees, it might be time to consider bankruptcy. In any case, make sure you exhaust all other possibilities first.

Debt Settlement vs Bankruptcy: Which is Best? is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

How to Stop Using Credit Cards

The post How to Stop Using Credit Cards appeared first on Penny Pinchin' Mom.

The reason most people are in debt is due to credit cards. These little pieces of plastic tempt you with high limits and low payments.  They are simple to use and often a hard habit to break.  You have to teach yourself how to stop using credit cards and end the cycle of more debt.

credit card debt

According to the Federal Reserve, Americans have accumulated $992 billion in credit card debt (as of November 2016).  While many people pay them off every month, there are thousands of others who do not.

They just pay the minimum and then continue to use the cards, resulting in increasing debt. If you are serious about wanting to get out of debt, you have to take steps to stop using your credit cards and racking up more debt.

Read More:

  • Why Your Credit Score Matters and How to Increase It
  • How to Pay off Credit Card Debt
  • The Five Mistake People Make When Getting Out of Debt

HOW TO STOP USING CREDIT CARDS

UNDERSTAND WHY YOU SHOP

It is so easy for someone on the outside looking in to tell you to stop spending. However, if it were that simple, you would have quit long ago, right? Before you can stop spending, you have to know why you are doing it.

Your reason could be to replace something missing in your life. It might be the high you get from spending. Your logic is not wrong. It is your own.

Once you understand why you shop, you can then start to work on that, and in turn, your desire to buy as much can slowly fade as well.  Knowing the reason why is one of the first things you must do finally break the cycle of credit card debt.

Read more:  Why you continue to overspend

 

CUT UP THE CARDS

I know that this is pretty extreme, but the truth is that it works.  If you do not have cards to use, you can’t rack up additional debt.

If you are nervous about getting rid of them altogether, put them on ice.  Literally. Put your credit card in a bowl of water and freeze it.  When you feel you need your card, it will be more challenging to get to, and the urge to use it may pass more quickly.

 

USE ONLY CASH

One thing that goes hand-in-hand with cutting up the credit cards is sticking with cash.  That doesn’t mean a debit card.  It is using paper money.

When you use cash, you have to think twice about what everything costs.  When the money is gone, you can’t spend any more.

When you use a debit card, you can still spend more than you intend.  That is never the case with cash.

If you have $100 to spend with cash, you can not make a purchase that is $105.  But, with a debit card, you still can.

It is far to easy to swipe plastic.

Read more:  Setting up and using a cash budget

 

SET UP REWARDS

A simple trick to sticking to not using your cards is to set up milestone rewards.  For instance, if you can go one week without using your card, allow yourself an extra coffee the following week.

As you reach more and more milestones, such as paying off a card, going six months without using plastic, etc., set up small rewards for yourself.  Just make sure that you never cover the cost of your reward by using your credit card!!

 

CREATE A VISION BOARD

If you want to stop using credit cards and pay off your debt, it is helpful to have a goal in mind.  It may be to afford the new car you want or buy a home. It might even be to live without feeling so much stress.

Whatever your reason, create a vision board.  When you have a clear vision of what will happen when you reach your goal, the more likely you are to stay on track.

 

GET AN ACCOUNTABILITY PARTNER

The best way to stop is to have someone to help keep you on track.  An accountability partner can do just that.

If you are in a relationship, you will be accountable to your partner (of course).  However, if you both have a difficult time not using credit, you might want to look beyond yourselves.  Find another couple who is in the same situation as you are and become accountable to one another.

However, if you are single, then it may be a bit more challenging to find someone.  Reach out to friends and family to find someone with whom you can connect and help one another.

 

TRACK EVERY PURCHASE

When you have a cash budget, you get into the habit of doing this.  However, if you are not ready to make that leap, start tracking every purchase you make.

Sometimes, seeing where you spend your money can be enough to make you want to throw the credit cards away for good.

Read more:  How to track your spending

 

MAKE SURE YOU BUDGET WORKS

You absolutely must have a budget.  There is no way to get around it.  But, more than just a budget, it needs to be a budget that works.  Sit down and go back over your budget to see where you may be spending too much and see if you can find ways to make improvements.

Also look carefully at how much money you spend on credit card debt each month.  Imagine what you could do with that money if you did not have to send it away to someone else.

Read more:  How to create a budget that works

 

Put some simple strategies to work and you’ll stop using credit cards and can get in control or your money.  Finally.

stop using credit cards

The post How to Stop Using Credit Cards appeared first on Penny Pinchin' Mom.

Source: pennypinchinmom.com

The Repercussions Of A Temporary Income Drop And Ways To Minimize The Damage

Many of us suffer from a temporary income drop at one point or another. What we don’t consider is how long it may take to bounce back from such a situation.

The post The Repercussions Of A Temporary Income Drop And Ways To Minimize The Damage appeared first on Bible Money Matters and was written by Melissa. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.

Source: biblemoneymatters.com