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Debt Management Agreements-The Pitfalls Credit Card Debt Management
Many times people will look at a credit card and see only the ease and convenience with which they can painlessly get the things that they want. When asked to list their debts, people will list their mortgage payments, their car payments, and other installment loans, and not list their credit cards.
The fact is that the balance on a credit card is the amount of the debt (NOT THE MINIMUM MONTHLY PAYMENT)...and that debt only increases each time an interest charge or a late charge is added. Paying only the minimum on a credit card balance will mean that it will be many years before that debt is paid off.
It is astounding, but a great many people have no idea what the interest rate that is charged by their credit card companies or whether that interest rate is simple or compound interest. (It's compound...and it is well above the national interest rate.)
Too many households in America carry far too much credit card debt. Seventy-five percent of households, in a recent study of American spending habits, are carrying a substantial amount of credit card debt. (Only 41% of American households have saving accounts.)
Now, don't misunderstand me...I am not knocking credit cards. I have a few of my own and I use them almost every month. Credit cards are practically as essential as an automobile in today's world, and if one does business or shops on the Internet, a credit card is indispensable. I also pay the balance before the credit card companies can charge a penny of interest.
Paying interest means that everything that you buy on a credit card cost you more than it would have cost if you had simply paid cash or written a check for it.
The best rule is to pay as you go. Use your credit cards, but pay balances before interest is added.
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| Free Programs for Debt Management Debt Management for the Future
We can't foresee the future and I'm pretty sure that's a good thing. Although we can't see the future or what it holds for us, we do need to be prepared financially to deal with it. If you spend like there will be no tomorrow, when tomorrow does get here, you're going to be in deep trouble.
The trick in debt management is to live as well as you can today while preparing to live even better in the future. Just because you live in a financially responsible manner doesn't mean that you always have to do without everything that you want right now. You do, however, have to choose.
There are three important factors in successful debt management today that will prepare for the unseen future.
The first of these three ingredients is saving. It will never work to save what is left at the end of a pay period. There will never be anything left. You must save before you spend. The most painless way to save is to never get the money that you will save at all. Go by the payroll office where you work and sign a form that instructs your employer to deduct some money from your paycheck and save it for you.
The second ingredient is to prepare yourself for debt. Before you make a purchase for which you will have to make a monthly installment payment, save the amount of the monthly installment for three months before you make the purchase to see if you can comfortably live with that much less in disposable income every month.
The third ingredient is a little trickier. You must know yourself. You must make choices based upon your own set of priorities. Would you rather buy that new car, or would it really make you happier to do with the car you have and buy a boat? You really can't have both if you are going to prepare for the future. |
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| Debt Management-Getting the Picture Debt Management When Starting a Business
Starting a new business is a heady time. There are all of those dreams and plans just sitting there waiting to be realized. You KNOW your plan will work and you have the utmost confidence in yourself and your abilities to make your plan work. Ambition, energy, and enthusiasm are not the problems -- but money might be.
Within your business model, you need to have a debt management plan in place before you begin. Starting a business...any business...takes money, and don't let anybody ever tell you any different. Think about it. Your expenses for living are going to keep on adding up every day and every month even if your income isnt keeping up with the demand.
And that isn't all. When you make your business plan, you need a financial plan to go with it. You are going to have living expenses, but you will also have business expenses. Getting any business off the ground takes a financial investment of some kind.
Maybe you are thinking about starting a business from your own home and you believe that since you won't have to be paying for renting a building, paying extra utility bills, etc., you won't have any business expenses. You couldn't be more wrong.
You are going to have to buy various software, and you are going to have to subscribe to specific services. If you are working at home for
yourself, you are going to be responsible for paying self-employment tax every quarter. You will likely have to advertise your new business. The world probably isn't waiting with bated breath for you to come on the business scene. Everything that you bring in is not going to be profit.
A business plan needs to include a financial and debt management plan. Don't leap before you look. |
Related Topics: Debt Management Wiggle Room,
Budgeting for Debt Management, Good Debt Management Advice
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