Thoughts on Debt

Ban raising rates on existing balances unless you’re at least 30 days late paying the minimum due

“They’re not gonna raise the interest rate if you’ve been less than 30 days late. In the past, if you were three days late (for instance), they would hit you. That’s not gonna happen anymore. So that’s a really, really good thing.” Payments won’t show up on credit reports as late anymore until the 30-day mark is hit.

Eliminate the “universal default policy”
“They’re not gonna increase interest rates if your payment is missed on another card. … If you miss on your phone bill or something like that, the credit card companies see it and raise all your interest rates to across the board. That’s what’s called the ‘universal default clause.’ That one’s gonna be gone, too.”
End “double-cycle billing”
“No (more) retroactive interest. This is what’s called ‘double-cycle billing.’ You’ve paid your bill for the last month, but you’re still paying interest, even though you’ve paid it off in the past. It’s outrageous. So, they’re gonna stop double-cycle billing. That’s a really very, very good thing.”
If you pay more than the minimum due, prohibit banks from applying the extra only to the parts of your balance carrying the lowest interest rate

Improve the readability of monthly statements

“Those things have got all sorts of legalese and (are) very difficult (to read). (Banks are) supposedly gonna make it much easier to read, so you understand the interest rates, you understand the late fees and all that, so that, hopefully, should make things a little bit better.”
There will be more bold-face print, and still be a bunch of legalese, but more plain language. Companies will have to be more forthcoming on their policies.

Most experts feel, although these changes will begin moving the credit card companies in the right direction, that they will still find legal ways to get us to pay more like increasing membership fees and so forth.  For now keep an eye on the changes and on your statements, because you don’t know for sure when the changes will begin or how other areas of your billing may be affected.

This holiday season, as you pack the presents under the tree, listen to Christmas songs, and spend time with family, please think of those who are less fortunate.  With financial struggles plaguing the economy and the world, there are many people suffering and I know first hand that the holidays can be an extremely depressing time if you don’t have any money.

I am not the type of person who needs a lot to be happy, but I am a giver.  You know a person who gets joy out of doing and giving to others.  There is absolutely no enjoyment for me in a holiday where I can’t financially afford not to give.  Being financially strapped can make you feel worthless and desperate.  It can occur without warning and of no fault of your own.

This year, I am not in this circumstance, but I know someone who is and I truly feel for them.  I realize that there is nothing worse than being poor at Christmas time.  Worrying about every dime you spend, going through stores and seeing people spending, and you worrying where your next meal is going to come from and when or if you are ever going to feel whole again.  I am one of the lucky ones, on the rebound, catching up again, and making it work.  This was not by luck, but by hard work.  It is hard to feel motivated when you feel down all the time, but keep holding on to the hope of the future.  You will come through and you will make it work.  And if you know someone who has fallen on some financially difficult times this holiday season, then please reach out to them, and try to do something to make their holiday a little brighter.  It will not only brighten their holiday, but it will make you feel really glad that you did something for someone else this holiday season.

Many people find themselves in hard financial times and are wondering what they can do to dig themselves out of the hole they are in. Well, the key to it all is devising a budget and sticking to it. Many of us believe that we are already living on a budget, however, unless your budget includes a savings, then it is really not a budget. A budget is not scrimping and living paycheck to paycheck paying whatever bills you can each week, it is much more than that. It is a financial plan, the foundation by which you determine how much you can afford to spend on the extras. Built into your budget must be a savings plan that will allow you to put no less than 5% of your income aside for emergencies. I personally prefer a two savings plan, where you divide your savings into 2 separate accounts, one for true savings and one for savings for special things that you would like to do like a vacation, or for a special item you want like a new TV. This is a good way to be able to reward your hard work saving and feel a benefit from it. It will make you feel less deprived in the long run if you reap some benefit from the savings.

In order to create a budget your monthly income must exceed your monthly expenditures. For instance, you can not budget your money if your monthly expenses are $3000 per month and your monthly income is $2400, this will not budget out. If after writing down your expenditures for a month and your income, you find yourself in this boat then it is time to trim the fat off your regular monthly spending and if you still can’t get your expense low enough then it may be time to consider picking up an extra job. The fact is that a budget is a plan by which you spend, and without one you are free falling into a life of poverty.

Keeping your life in balance will allow you the peace and harmony that you seek from life. Having enough money to pay the bills with a little left over will allow you to sleep better at night without worry. Take the time to work out your budget and you will see how easy it is to keep your finances under control.

Recently I was appalled to find out that the company I hold my student loans with, Sallie Mae, would no longer allow me to consolidate my student loans.  By doing this, they are in effect forcing people’s loans into repayment, and with the economy being so unstable, there are a lot of people who will be unable to make the payments on their student loans.  This can seem a very desperate situation, and I think that perhaps this new rule was made in effect to get more people paying off their Federal Student Loans, because after all we all know that the government is in some serious need of funds.

If you find yourself in this situation, there are other options available to you that you must be aware of.  One of which is to consolidate your loans with an independent company.  This would allow you more forbearance and economic hardship time while also allowing you to consolidate your loans at a lower interest rate, and this option can also allow you to extend out your repayment period from 10 years to 30 years, thus significantly reducing your monthly payments.

There is also another option to pay on the interest of your loan for 4 years, with then an option that if you still can’t afford to pay it off, then there is some type of option to free you from your loans, but I am not really clear on the terms and conditions, and would need to look into further before I could recommend this as a workable alternative.

It is my opinion that consolidation is the way to go and finding a company with a reasonable fixed rate that can extend out your payment terms and reduce your monthly payments is probably the best way to go.  Just be sure that the company you are dealing with will allow you to keep your loans federal status, turning them into private loans can be a big hassle and can cause you to lose a lot of the benefits you have from Federal Student Loans.

Officially now in a recession, and looking down the path at a possible depression makes a lot of the nation’s elderly reflect back on their younger days.  One man spoke of his experiences from being a child during the Great Depression.  He told of the bread lines and the pan handling.  He said that people would go door to door looking for food, and no matter how hard the times were, his mother would always provide food for anyone that asked.  He said if someone came to the door needing food, his mother would prepare them a sandwich and usually they would eat it right there.  When they would leave they would put a mark on the curb, letting others that came by in need know that this house provided him with food.  He says that the tough financial times of his youth made it extremely difficult for him to spend any money, even after the Great Depression was over.  Now he worries for his kids and grandkids as he can see the trend moving towards another Great Depression, and wonders about the impact that this will have on the future of his family.

Although, our government is working very diligently trying to avoid another Great Depression, I am afraid that it is only a matter of time before the bread lines begin to form.  With more and more people facing unemployment and no new jobs on the horizon, we can only hope as we move forward that the changing political climate, can bring some new hope to our failing economy.

Today it was announced that Bush and the government are bailing out Citibank or Citicorp, because they are in debt and in danger of going under.  I just need to ask one question, how far in debt is Bush going to leave us when his reign of terror is over.  Seriously, I can’t really understand why they are continuing to allow these bailouts over and over again.  What is going to happen is that we are going to crash harder than ever before with the way he is going, and then there is going to be no one to bail us out.  We can’t keep pretending that there is not a problem here, nor can we keep pretending like these companies didn’t put this on themselves.  After years and years of giving too much credit to people, now they are surprised that they can’t pay it back? I think that was probably foreseeable.

I guess my biggest concern, which I think is a genuine one is being with how simple it is to get Bush to give out money, how many more companies are going to jump on this band wagon before January, and how many more bailouts are we going to let him do?

My fear is that all these bailouts are just holding off the inevitable depression we are heading for and are going to make it worse in the long run.  I really think that all Bush is trying to accomplish is to save face and hold off the depression in this country until after he leaves office.  Then that will make the Democrats look like they are the ones who did it and will more than likely guarantee that the Republicans will be back in control in four years.

These days I think that everyone is becoming more conscious about how they are spending their money.  The companies who have the necessity items and have them for less are about the only one’s that are profiting, as a matter of fact, it seems that overall most companies are really hurting and reports show that we are not buying anything extra these days.  This includes items like clothing, jewelry, electronics and so forth.  We are instead, looking for new and better ways to hang on to our money, and miscellaneous spending is becoming a thing of the past.  There are some very simple ways to go about saving some money, and so here are just a few of the ways that cutting back a little can save you a lot in the long run:

1. Make coffee at home rather than buy it every day. You’ll save about $2 a day or $40 a month. This is $480 a year, and that can be money in the bank.  Depending on where you go, it could be a lot more. 

2. Bring in lunch from home instead of buying it. You’ll end up with at least $5 - $7 dollars a day in your pocket.  That is a $25 per week savings at least, and a savings of $1300 per year.  Now that would make a nice vacation don’t you think?

3. Stop getting delivery of magazines and newspapers at home. Most of the content is available online and you can read it everyday—for free!

4. Shop around for credit card interest rates and consolidate credit cards, if you keep a balance.

5. Use cash or debit cards instead of credit cards and incurring interest charges.  Not only will this save you more money on the interest charges, but you will also be more aware of what you are spending your money on, and how fast it goes.

6. Save your stamps and pay bills online, usually for free.  Most companies will allow you to make payments right on their web site, either using a check or debit card, and most banks offer online bill pay services for nothing as well.  This is a very convenient way to pay your bills, and you can also put them on automatic payment, which is great because this way your bills will get paid on time, without missing payments and accruing late charges.

These days every little bit of savings helps.  It is nice to see the gas prices come down, but who knows when they will go back up again and grocery prices are still high.  So be sure to keep a good handle on your spending the rough economic times are not gone yet.

Well, the government has been on this band wagon for years.  They have been looking to rid themselves of the payday loan industry claiming that they are ripping people off.  Don’t get me wrong they do charge exorbitant rates on their loans, there is no doubt that this is true, however I can’t help but wonder if they really are just angry because that is money that they are losing each year, and they don’t want the competition.  Think about it, you can pay $15.00 per hundred to borrow from a payday loan place, or you can possibly bounce a check and be charged $35.00 so really is that so unreasonable.  Plus many of the people who choose to take out payday advances are people who can’t get approved for government loans with lower interest rates, so what are they really losing, if they aren’t providing services to these people.

Now many states have completely banned payday loans making them illegal, but many more states are trying not to completely do away with them, but merely limit the terms, interest rates, and number of loans a person can take out.  One such reform in the state of VA has a lot of payday loan companies scrambling to find new services to provide and new ways to get around the coming laws.  With many people paying them millions in interest every year, they are not sure how they will make it, and many people are worried because a new database will not allow you to have more than one loan at a time.  The concerns are great, but the best advice I can give to you is if you currently hold a payday loan, find out about the changes in your area, and be sure to get the facts.  It is a good idea to begin paying your loan or loans back now, so that you don’t get stuck after the first of the year.  Some companies will change the game in 2009 and others may have to close their doors completely, so be sure you get out of this system before it is too late!

Many people are faced with debt and are doing what they can to get there heads above water.  With the economic trials people just can’t afford to spend the way they used to.  Hanging on and trying to put aside a few dollars here and there has become near impossible, so how do you address this, especially with the holidays quickly approaching.  Honestly, the best way to approach this is to try and buy now.  I know that sounds difficult to do, but for many people who are in this spot, what happens is you hold off on spending the money for the holidays until the very last minute.  Unfortunately, what happens in this case, is that you wind up spending way more this way on everything and leave yourself in a financial hole.  Last minute shopping leaves you settling for what is left and paying full price.  Spending a little bit each week towards Christmas is a great way to chop through that Christmas list in a hurry, while coming up with some really cute and creative ideas.

Look on the internet and try to come up with cute homemade ideas for holiday gifts.  For instance, the older relatives in the family always love something with a picture on it, or artwork done by their grandkids, so put some thought into it.  Make a picture collage, Holiday Ornaments, or a tee shirt with the kids hand prints.  All of these gifts will provide treasured memories for the family for years to come, and even better yet, they can be made for under $10 each. Make gifts for the neighbors and teachers at school. Try some homemade cookies in a cute cookie tin.  It is a great way to let people know that you are thinking about them this holiday season, without spending a fortune.

Being creative and smart will help you to shop the sales and clearances, get some great inexpensive ideas, and in the long run not only reduce your amount of holiday debt, but also reduce your stress going into the holidays.

The DOW Jones is up and then it’s down, so what should you do, should you take your money out now or wait.  Well recently while listening to a financial analyst he said some things that really made quite a bit of good sense to me.  First, he said that if you have money in the stock market and you can afford to leave it in there for the next 5 years, without drawing any of it out, then you should be fine, as this is the period of time that market analysts predict that it will take for the market to completely recover.  However, he said that if you have money in the market that you will need either for a child’s college education or for retirement during the next 5 years, then you should probably take it out now, while there is still some money in there.

I thought this was some really sound advice, especially since we have learned from past experiences in this country that pulling every dime out of the market will only cause it to further decline, so that really doesn’t benefit anyone.  Pulling out just what you think you will need during the next 5 years, makes some good sense.  After that if things improve you could have a much larger sum of money available to you.  Also, investing in the market now, while the cost of stocks remains low, is a great opportunity to buy in low and make a bundle in the long run.

It is not advisable to watch your stocks everyday, especially during the next few months it will be up and then down.  It is still working on balancing out, however it will get back on level ground before long, and wouldn’t you like to be one of the one’s who come out of this mess making a bundle? I know I would.