TIP: Two ways to make the biggest impact on your credit score are 1) make your payments on time and 2) keep your balances low.
I recently paid down a balance on one of my credit cards with some savings. It was a tough choice because I know I'm supposed to keep 3 months of expenses in savings (gee, if it only it had been that much), but it seemed useless to have money in savings earning so little when I'm paying so much for credit cards. Anyway, I'll be curious to see how it impacts my credit score. It also reduced my minimum payment, so now I'll continue to make the higher payment and more of my money will go toward paying off the principal balance, lowering my finance charges. (That's called Snowballing, by the way. I should blog about that debt reduction strategy one of these days...)
For more ways to improve your credit score, see this article on our website. It's part of our Balance Financial Fitness program.
Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts
Thursday, April 2, 2009
Friday, February 20, 2009
TIP#51: Brown Bag Lunch saves about $112/mo!
Brown bag your lunch and cut back on eating lunch out. Make it a once-a-week treat on Friday, maybe. (You'll find eating out is much more fun when you only do it occasionally!) You'll save about $112/mo. Assuming the cost of your average lunch out is $10 per day, and it costs about $3 to bring a frozen dinner or a sandwich and chips, you'll save $7 per day. Multiply that by 4 workdays and you'll save $28 per week or $112 per month!
What could you do with an extra $112 per month?
1) Start a rainy day savings account for vacation? Education? A dream?
2) Pay off debt. Add that $112 to pay down the principal on your mortgage or add it to your credit card payment.
3) Have more fun! Stimulate the economy!
The possibilities are endless. All thanks to a little brown bag...
What could you do with an extra $112 per month?
1) Start a rainy day savings account for vacation? Education? A dream?
2) Pay off debt. Add that $112 to pay down the principal on your mortgage or add it to your credit card payment.
3) Have more fun! Stimulate the economy!
The possibilities are endless. All thanks to a little brown bag...
Wednesday, January 2, 2008
New Year’s Resolutions that can help
Your wallet might be looking a little empty after the holiday season and I know that some of you are probably a little stressed about the balance in your bank account. Don’t be afraid to admit if you’re avoiding the mailbox because you know that pretty soon that big credit card statement will arrive.
My holiday shopping this year was a little less painful than usual because of my trusted Hawthorne Christmas Savings Account. I emptied it out already to help cover the bills that have already arrived, but on New Years Day I started getting an early start on my 2008 holiday shopping by depositing $50 into the account.
My Christmas club account is a savings account at Hawthorne that I can deposit money in to throughout year to effortlessly build up a nice gift fund. In November the money automatically gets deposited in to my savings account and I can go shopping without having to worry about paying for everything.
The holidays at my house are usually very stressful with too much going on and out-of-town house guests. However, each year I am trying to find new ways to alleviate some of the tension.
How, you might ask?
You can reward yourself financially by making some of your New Year's resolutions geared toward handling your finances or debt better. You can do it, trust me. This year one of my resolutions is to work on better organization and management of our finances.
Here's a list of seven strategies taken from the Consumer Credit Counseling Service that may help you. Good luck and Happy New Year!
1. Balance your checkbook each time you receive a paycheck so you don't spend more than the amount you make.
2. Have a filing cabinet or a secured box, handy? Well, you will need one to store financial statements. Make separate files for bank statements, tax documents, credit card bills, medical information, mortgage statements and other important records.
3. Create a monthly budget to determine your monthly income and recurring expenses. Focus on items such as rent or mortgage payments, utility bills, food, transportation costs, tuition savings, entertainment and personal grooming.
4. Ok, so once you've set up the budget; prioritize the expenses and spending based on your needs and wants. If you have any funds left after the monthly expenses are paid, split them between paying down your debt, for instance pay high-interest credit card bills and loans, and stash the money away in savings.
5. Create a varied savings plan. Make regular deposits in an interest-bearing account and don't pass up your employee-sponsored benefits like retirement and flexible spending accounts.
6. Stay aware of debt trouble. Problems can occur when you start falling behind on bills like mortgage, rent, or utilities or start using credit to buy items that you should buy with cash.
7. If situations like these occur, don't suffer in silence. Call your creditor and let them know you are having problems. It's possible that you just may be able to reach an agreement with your next payment or negotiate a lower interest rate.
You may also want to consider a Debt Management Program. If you have over $5,000 in debt then a debt management program may be for you. Hawthorne’s Balance Financial Fitness debt management program can help.
My holiday shopping this year was a little less painful than usual because of my trusted Hawthorne Christmas Savings Account. I emptied it out already to help cover the bills that have already arrived, but on New Years Day I started getting an early start on my 2008 holiday shopping by depositing $50 into the account.
My Christmas club account is a savings account at Hawthorne that I can deposit money in to throughout year to effortlessly build up a nice gift fund. In November the money automatically gets deposited in to my savings account and I can go shopping without having to worry about paying for everything.
The holidays at my house are usually very stressful with too much going on and out-of-town house guests. However, each year I am trying to find new ways to alleviate some of the tension.
How, you might ask?
You can reward yourself financially by making some of your New Year's resolutions geared toward handling your finances or debt better. You can do it, trust me. This year one of my resolutions is to work on better organization and management of our finances.
Here's a list of seven strategies taken from the Consumer Credit Counseling Service that may help you. Good luck and Happy New Year!
1. Balance your checkbook each time you receive a paycheck so you don't spend more than the amount you make.
2. Have a filing cabinet or a secured box, handy? Well, you will need one to store financial statements. Make separate files for bank statements, tax documents, credit card bills, medical information, mortgage statements and other important records.
3. Create a monthly budget to determine your monthly income and recurring expenses. Focus on items such as rent or mortgage payments, utility bills, food, transportation costs, tuition savings, entertainment and personal grooming.
4. Ok, so once you've set up the budget; prioritize the expenses and spending based on your needs and wants. If you have any funds left after the monthly expenses are paid, split them between paying down your debt, for instance pay high-interest credit card bills and loans, and stash the money away in savings.
5. Create a varied savings plan. Make regular deposits in an interest-bearing account and don't pass up your employee-sponsored benefits like retirement and flexible spending accounts.
6. Stay aware of debt trouble. Problems can occur when you start falling behind on bills like mortgage, rent, or utilities or start using credit to buy items that you should buy with cash.
7. If situations like these occur, don't suffer in silence. Call your creditor and let them know you are having problems. It's possible that you just may be able to reach an agreement with your next payment or negotiate a lower interest rate.
You may also want to consider a Debt Management Program. If you have over $5,000 in debt then a debt management program may be for you. Hawthorne’s Balance Financial Fitness debt management program can help.
Thursday, December 27, 2007
Don’t Let Your Holiday Debt Last Longer than it needs to:
With holiday spending over, our debt recovery time may just be starting. Our credit card bills will start arriving in the mail soon. Recent stats by the National Retail Federation show that the 2007 holiday season got off to a record start with “Black Friday” sales by US shoppers rising 8.3% to a record $10.3 billion. Figures for the following “Cyber Monday” shopping holiday, the Monday following Thanksgiving, also showed a healthy increase with a new one-day record of over $700 million in total purchases.
It is too bad that most of the record consumer spending was paid through the use of credit cards. Most consumers, including me, don’t hesitate to place $300 in goods on a credit card but certainly would think twice if they were forced to purchase the same amount of goods solely with cash? Because of this it is no surprise that the average credit card debt per US household is expected to rise again in 2008 as it has every year since the early 1990’s.
What will this increased spending mean for the New Year? According to John Silva, chief economist for Wachovia, “(Consumers) will still be spending money (in 2008) but it will be on credit card interest and minimum payments, not on apparel or eating out.”
So what’s the average consumer with thousands of dollars in credit card debt to do in 2008? Consider these five suggestions to get your debt under control in the New Year:
1. Reduce your card interest rate - Hawthorne members can now qualify for great rates and Reward points when they transfer balances between February 1 and March 31, 2008.
Visa Platinum Reward Cardholders receive 2,500 bonus points on balance transfers .**
Visa Platinum Savers credit card - 3.99% APR* for 9 months on balance transfers.
Visa Classic credit card – 6.99% APR* for 9 months on balance transfers.
Click here for more information.
2. Stop Using the Cards - seems simple enough? Stop using the cards now and stop accumulating more debt on top of the debt you couldn’t afford in the first place.
3. Pay more then the minimum – For example if you have $5,000 in credit card debt with a 16% interest rate and a minimum monthly payment of $110. Did you know that just paying the minimum means it takes 25 years to pay off your debt and that $5000 debt will end up costing you $12,000 in total? This total includes an extra $7,000 that you will have to pay in interest. A good alternative would be to DOUBLE your minimum payment to $210 and pay off the card in 28 months, which will save you about $6,100 in interest.
4. Consider a Debt Management Program - If you have over $5,000 in debt then a debt management program may be for you. Hawthorne’s Balance Financial Fitness debt management program can help.
*APR=Annual Percentage Rate. **Minimum balance transfer of $1,000.00. Also offering 1 bonus point per dollar of balance transfer up to a maximum of $10,000.00.
Sunday, October 28, 2007
Is the Latte Effect Really The Problem?
Shopping malls and retail stores are always packed, and there is a new restaurant on every corner. Everyone seems to be wearing designer shoes, jackets and jeans and sipping $4 lattes. Credit card commercials are constantly promoting splurging and, U.S. consumers have been more than happy comply.
So what's the problem? Why do so many middle class Americans with so much stuff say they feel so squeezed? If they are consumed by debt, isn’t it their own fault? I have always thought that many times we are responsible for the financial situations that we find ourselves in. After doing some reading on the topic I now wonder if our personal needs and consumption choices are really the problem.
Bankruptcy law expert and Harvard University Professor Elizabeth Warren spent a lot of time crunching the consumer spending numbers for her popular books, "The Fragile Middle Class” and “The Two-Income Trap.” In both, she makes this point: Despite all those $200 sneakers you hear about and the long lines at Starbucks, consumers are actually spending less of their income — much less — on discretionary items like clothing, entertainment and food than their parents did. In fact, after taking care of essentials like housing and health care, today’s middle class has about half as much spending money as their parents did in the early 1970s, Warren says.
The basics, our life essentials, now take up close to three-fourths of every family's spending power (it was about 50 percent in 1973), leaving much less left over at the end of the month.
Even though household incomes have risen about 75 percent since 1970, most of that they say, is the result of a second earner, generally a woman, joining the work force. In many cases that added income has been swallowed by rising fixed expenses, such as child care and housing costs, because many people try and buy more house than they can actually afford. The average family now pays at least twice as much for housing compared to what our parents paid in the 1970s.
Four in 10 Americans don't have even one month's worth of savings for use in case of an emergency, according to a survey by HSBC Bank published in 2006. And even with two incomes built into the family budget, the odds of a household getting hit by a layoff have doubled in the last generation. The combination of high housing debt, rising health care costs, lack of savings and greater exposure to unemployment has left many families in a dangerous financial position.
I see the biggest problem being that the largest portion of our budgets are spent on fixed costs like housing, has risen much faster than wages and inflation. That means mortgages, more than lattes, are the source of many of our financial problems.
I now think that the "latte factor" is only being used as a way to distract people from the real changes in the economy.
So what's the problem? Why do so many middle class Americans with so much stuff say they feel so squeezed? If they are consumed by debt, isn’t it their own fault? I have always thought that many times we are responsible for the financial situations that we find ourselves in. After doing some reading on the topic I now wonder if our personal needs and consumption choices are really the problem.
Bankruptcy law expert and Harvard University Professor Elizabeth Warren spent a lot of time crunching the consumer spending numbers for her popular books, "The Fragile Middle Class” and “The Two-Income Trap.” In both, she makes this point: Despite all those $200 sneakers you hear about and the long lines at Starbucks, consumers are actually spending less of their income — much less — on discretionary items like clothing, entertainment and food than their parents did. In fact, after taking care of essentials like housing and health care, today’s middle class has about half as much spending money as their parents did in the early 1970s, Warren says.
The basics, our life essentials, now take up close to three-fourths of every family's spending power (it was about 50 percent in 1973), leaving much less left over at the end of the month.
Even though household incomes have risen about 75 percent since 1970, most of that they say, is the result of a second earner, generally a woman, joining the work force. In many cases that added income has been swallowed by rising fixed expenses, such as child care and housing costs, because many people try and buy more house than they can actually afford. The average family now pays at least twice as much for housing compared to what our parents paid in the 1970s.
Four in 10 Americans don't have even one month's worth of savings for use in case of an emergency, according to a survey by HSBC Bank published in 2006. And even with two incomes built into the family budget, the odds of a household getting hit by a layoff have doubled in the last generation. The combination of high housing debt, rising health care costs, lack of savings and greater exposure to unemployment has left many families in a dangerous financial position.
I see the biggest problem being that the largest portion of our budgets are spent on fixed costs like housing, has risen much faster than wages and inflation. That means mortgages, more than lattes, are the source of many of our financial problems.
I now think that the "latte factor" is only being used as a way to distract people from the real changes in the economy.
Friday, May 25, 2007
Get Rich... Slowly
Who wouldn't like to have that one silver bullet to get rich quick. But the fact is, most of us will never find it. Still, we can accumulate wealth slowly over time. One way is to earn more. But another way is to spend less - think smaller, be satisfied with what we have instead of wanting something else.
I recently saw an ad for a credit card that was targeted toward people who have poor credit, over their heads in debt. It showed images of people that looked like clips from "Lifestyles of the Rich and Famous". I thought it must be so appealing to folks who've found themselves in difficult situations that resulted in high debt.
Getting over your head in debt is easy to do - an illness, a job loss, or a divorce and before you know it creditors are calling every day. It's an overwhelming, stifling and oppressive place to be because it's so hard to resolve. Ads like that credit card ad I saw don't help.
Many years ago I had too much debt, and I didn't know how I'd ever get out from under it. It really took years of living simply that made the difference: cutting back, living with less and thinking smaller. And paying off the bills slowly but surely. That's a difficult task in our culture because our society encourages spending more than saving or not spending. I'm grateful to say that my finances are significantly more healthy today.
Even if you're not in debt over your head, I hope you're not, living simply can help you accumulate wealth, too. There are two books that changed the way I think about money and helped me get out of debt:
Voluntary Simplicity, by Duane Elgin (Quill/William Morrow Publishers NY ISBN 0688-12119-5)- This book taught me about living "toward a way of life that is outwardly simple but inwardly rich." It's about learning to appreciate what you have instead of looking outside yourself for happiness. The tenets of Elgin's voluntary simplicity are frugal consumption, ecological awareness and personal growth.
Your Money or Your Life, by Joe Dominguez and Vicki Robin (Penguin Books NY ISBN 014-016715-3) - I learned how to determine what to spend money on by looking at my values and my goals and putting more money into things that propel me toward my goals. The subtitle is called "Transforming Your Relationship With Money and Achieving Financial Independence".
These books are great reads, regardless of your financial health. But if you are over your head in debt, we have a program that can help relieve some of the stress of living with debt every day. Check out Balance Pro on our website or contact Member Services for more information.
I recently saw an ad for a credit card that was targeted toward people who have poor credit, over their heads in debt. It showed images of people that looked like clips from "Lifestyles of the Rich and Famous". I thought it must be so appealing to folks who've found themselves in difficult situations that resulted in high debt.
Getting over your head in debt is easy to do - an illness, a job loss, or a divorce and before you know it creditors are calling every day. It's an overwhelming, stifling and oppressive place to be because it's so hard to resolve. Ads like that credit card ad I saw don't help.
Many years ago I had too much debt, and I didn't know how I'd ever get out from under it. It really took years of living simply that made the difference: cutting back, living with less and thinking smaller. And paying off the bills slowly but surely. That's a difficult task in our culture because our society encourages spending more than saving or not spending. I'm grateful to say that my finances are significantly more healthy today.
Even if you're not in debt over your head, I hope you're not, living simply can help you accumulate wealth, too. There are two books that changed the way I think about money and helped me get out of debt:
Voluntary Simplicity, by Duane Elgin (Quill/William Morrow Publishers NY ISBN 0688-12119-5)- This book taught me about living "toward a way of life that is outwardly simple but inwardly rich." It's about learning to appreciate what you have instead of looking outside yourself for happiness. The tenets of Elgin's voluntary simplicity are frugal consumption, ecological awareness and personal growth.
Your Money or Your Life, by Joe Dominguez and Vicki Robin (Penguin Books NY ISBN 014-016715-3) - I learned how to determine what to spend money on by looking at my values and my goals and putting more money into things that propel me toward my goals. The subtitle is called "Transforming Your Relationship With Money and Achieving Financial Independence".
These books are great reads, regardless of your financial health. But if you are over your head in debt, we have a program that can help relieve some of the stress of living with debt every day. Check out Balance Pro on our website or contact Member Services for more information.
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