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The Virgin Consumer and Debt Management 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.
See Also:
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| Surviving Debt Management Do-Overs Debt Management Correcting the Course
Sailing is a wonderful hobby. Those who have ever been sailing know that getting from point A to point B can be a challenge. There are many things to be considered.
Wind speed and wind direction are two of the main concerns. One can begin sailing from point A toward point B and have everything well under control based upon the current wind speed and wind direction. But wind speed and wind direction are not constants...they sometimes change. When that happens, the course must be corrected so that the boat will arrive at the desired destination.
The same thing is true about debt management and financial planning. The financial equivalent of getting from point A to point B isn't based on wind speed and wind direction. It is based upon income and out-go. When either of those two factors changes a course, a correction must be effected so that the destination can be reached.
If you are already sailing the financial sea with a plan (think budget), course adjustments will be much easier. If you have a budget, then you are in control of your financial boat and can see pretty easily what course adjustment will need to be made when unusual circumstances arise and there is some kind of change in either income or out-go. If you budget wisely, then you already have a built-in back-up system that will get you through a rough patch.
If you've been sailing the financial waters without a plan, then you will likely be in deep trouble when there is a change in either income or out-go. You will probably have to get some outside help to get control of your financial boat. But once you do get control, you will have learned some important lessons and you will be better able to weather the next financial storm. |
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| Singing the Debt Management Blues 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. |
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The Traps of Debt Consolidation for Debt Management, Free Programs for Debt Management
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