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6 Things You Don’t Know About Money That Could Be Keeping You From Getting Rich

May 10, 2017 debtmanagement

John D. Rockefeller once said, “If your only goal is to become rich, you will never achieve it.” The thing about getting rich is that it can’t be pursued directly – just like success and happiness. If all you think about is getting rich, the odds are that once you make the money you will be unhappy.

There are some things about money you probably don’t know. But if you learn them, you’ll have a much better chance at building wealth.

1. Smart money is slow money

The world’s best money managers think slow before taking action. This is because if you want to make better money decisions, you need to take pauses. You may have seen movies like Wall Street where decisions and trades are made in just a matter of minutes but that’s not investing, it’s speculation. It takes time for the best investments to play out. They are not based on a single event or a single product. Take a lesson from Warren Buffett. He is slow to get in and even slower to get out. One of his best quotes is, “Our favorite holding period is forever.”

2. Money by itself is worthless

Money should never be an end in itself. It’s only valuable when it gets you something you want. Money touches many hands. You need to invest it, give it, or save it for a rainy day — assuming you don’t yet have money put aside. Another good way to use your money is to support a company or organization that’s especially meaningful to you. Money was meant to be exchanged, and not kept in one place. Don’t hoard it.

3. Building weath is boring

What we see on the Internet and on television is where someone had some kind of instant financial success story. The reason you see these stories is that they’re unusual. Watching a person earn tons of money over their lifetime is a bit like watching paint dry. There’s nothing exciting about it. The money is earned by a thousand moves, all of which are directed towards a long-term goal. In other words, you save money a little at a time. You invest it. Then, you receive dividends or income. You reinvest your proceeds and your earnings increase – year after year. There’s no drama and no shortcuts.

4. You must study money

Unless you’re a highly unusual person you have a limited attention span. Plus, there are only 24 hours in a day, and they can go by in a flash. If you want to become truly rich, you need to dedicate energy and time to the task. If you’re not interested in learning deeply about money, or if you don’t have time to study it, then you’ll have to automate the steps you’ll need to get there as much as possible. You need to learn the basics of those processes. One of the worst mistakes you can make is to automate a process before you really understand it. Big accidents can happen this way. Don’t press “go” until you’ve read all the fine print.

5. You’ll need to learn to say no

Sometimes, the best thing you can do is nothing. You’ll find yourself tempted by a lot of bright, shiny objects begging for your money. One of the biggest keys to financial success is to say no to almost all those opportunities. The only exception to this is when the investment aligns with your core values like investing in a business you believe in. The critical thing is to understand your truest goals in life, and then align your financial actions with them.

6. Money requires an encouraging environment

You’ve learned the basics, changed your financial habits, and chosen the things you want to support with your money. That’s all well and good but you’ll fail if the people who surround you don’t support your new financial life. They may actually try to tear down what you build up. They’re not terrible people. It’s just that some people hate to see others succeed. If you find yourself surrounded by a bunch of naysayers, you may need to clear the decks. Look for new friends who live life frugally and blow their money sparingly.

In conclusion

The point of becoming wealthy isn’t to magnify you. It’s to provide opportunities – to help someone you love, to contribute more to your favorite charities, or to invest more in your future.

Trapped in a Quagmire of Debt? Take This Tip to Get Out

April 25, 2017 debtmanagement

If you’re faced with an unmanageable amount of debt, It can affect you emotionally and physically. This is due to the stress related to dealing with those debts. A 2009 Associated Press/AOL health poll found that 27% of people stressing out over their debts had ulcers or digestive tract problems. A total of 44% reported they had migraines or other headaches, while 29% suffered from severe anxiety.

If you’re experiencing one of these physical problems, drugs probably won’t help. You need to get to the root of the problem, which is your debts.

Fortunately, a fairly simple path out of your debt exists. It’s called consumer credit counseling.

How to find a good credit counseling agency

Reputable credit counseling agencies generally belong to the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA). Some are actually sponsored by local Better Business Bureaus.

How it works

Reputable, credit counseling agencies are nonprofits. If you go to one of these agencies, you will need to take your household budget (if you have one), and a list of your debts with each one’s interest rate. You will also need to take a list of the debts you are behind on, your assets and what you could sell them for.

The agency will assign you a trained and certified credit counselor who will go over all this information. She or he will review your budget to determine if it’s realistic, and may suggest improvements or additional cuts. Your counselor will also show you a realistic picture of where you stand financially and may suggest you revise your budget to generate more cash flow.

You could get a debt management plan

If your counselor finds that your finances are in really bad shape, he, or she may suggest you pay them off via a debt management plan (DMP. If this happens, he or she will explain how a DMP works and will discuss its pluses and minuses. You should also be given a general idea of how much you will be required to pay on your debts each month.

It will work with your lenders

Your counselor will figure out exactly how much you can afford to pay your unsecured creditors each month to eliminate your debts over a three- to five-year timeframe. She or he will then contact your lenders to see if they will agree to let you pay those amounts. Your counselor will likely ask your lenders for other concessions like lowering your interest rates, and waiving or reducing any fees you owe.

Before signing off on your DMP

When your counselor has prepared the final version of your debt management plan, be sure to get a copy. Don’t sign your DMP until you have read it very carefully, understand it all, and are sure you can live up to it.

Paying the credit counseling agency

Once you sign off on your DMP, you will be required to pay the credit counseling agency each month, and it will then distribute the appropriate amounts of money to your lenders. You will get regular monthly updates as to the status of your DMP, and this should include confirmation that your creditors were all paid per the terms of your plan.

What consumer credit counseling agencies cost

The advice and counsel you’ll get from your credit counselor will be free. However, if you sign up for a debt management plan, the agency may charge you a small monthly fee of $25 or $35 to administer your plan. Or, it may do it free. This varies among credit counseling agencies. Be sure to ask if you will be charged anything to administer your plan before you sign off on it.

Alternatives to consumer credit counseling

Good alternatives to consumer credit counseling exist but whether they would make sense will depend on your financial situation. For example, if most or all of your debt is credit card debts, you might consolidate them by transferring all of their balances to a new card with a lower interest rate. Or, if you qualify, you could transfer them to a 0% interest balance transfer card, where you would have as many as 18 months interest-free.

Other options for debt consolidation include a home equity loan and a homeowner equity line of credit. Of course, you would need to have equity in your home to qualify for either of these loans.

Debt settlement

Finally, there is the alternative of debt settlement. It’s grown a lot in popularity as it represents the only way to pay off debts for less than what you owe. The trustworthy debt settlement firms such as National Debt Relief are usually able to get debts cut by as much as 50% or even 60%. Of course, they are for-profit firms and charge for their services. However, if you owe more than $10,000, then using a debt settlement firm could still save you money.

The Best Debt Management Tips of 2017

April 18, 2017 debtmanagement

Being deeply in debt can skew your entire financial life. If your problem with debt becomes serious enough, it will affect your credit score. In turn, this can mean higher interest rates, higher insurance premiums, and even problems renting a house or apartment. What debt amounts to is borrowing from your future self, and your future self could end up being very disgusted with you due to all that debt you now have to pay off.

Ignoring your debts won’t make them go away any more than ignoring a bad tooth will make it go away. You need to take steps now to do a better job of managing your debts, and here are eight tips that could help.

1. Pay down your debts sooner

The easiest way to get out of debt is to pay down your debts quicker. Are you making just the minimum payments on your credit card debts or other revolving debts? Try doubling down on as many of them as you can, or at least paying significantly more than the minimum. In addition, if you pay half your monthly bill every two weeks, you’ll be making one extra payment over a year, which will help you pay off that debt sooner.

2. Set up automatic payments

You should be able to set up automatic bill pay through your bank. If not, you will need to go to your individual lenders, and arrange automatic payments through them. Automatic bill paying accomplishes two things. First, it eliminates the possibility of missing a payment. And second, it relieves you of the burden of having to remember when your payments are due.

3. Make a budget

Trying to manage your finances without a budget is like trying to assemble an IKEA desk without the instructions. You may get the job done but only by luck. If you truly want to do a better job of managing your finances, you need to create a budget or at least a spending plan. One of the simplest ways to budget is to divide your net income into three categories. The first should be your essential expenses (think utilities, rent, or mortgage payment, etc.). This should be 40% of your net income. The next 30% should be your savings. The final 30% is for your discretionary spending or the fun things in life.

4. Pay off the debt with the lowest balance

This is called the snowball method. The financial guru Dave Ramsey introduced it.. The psychology behind this is that you should be able to pay off the debt with the lowest balance very quickly. This will give you momentum (as well as more money) to pay off the debt with the second lowest balance, and so on. It’s like how a snowball rolling downhill gathers momentum.

5. Understand your limits

Maxing out your credit limits can do serious damage to your credit score. Keep the balances on your credit cards as low as possible. If you can keep their total below 30% of the total amount of credit you have available, your credit score will improve. And, of course, always make your payments on time.

6. Check your credit reports

You can get your credit reports free once a year from the credit reporting bureaus – TransUnion, Experian, and Equifax. Or you could get all three simultaneously on the site www.annualcreditreport.com. The reason to keep an eye on your credit reports is to spot errors that could be dragging down your credit score. Many people choose to get a free credit report every four months. This is a way to kind of monitor credit year-round, without having to pay a credit monitoring service.

7. Create an emergency fund

You can never know when you’ll run into a financial emergency, but you can bet you’ll have one. You could lose your job, your automobile could require an expensive repair, or you could suffer a serious illness. The only way to buffer yourself against one of these emergencies is to have an emergency fund. While many experts feel your fund should be the equivalent of six months’ of your living expenses, most people find this undoable. If you fall into this category, try for at least three months’ worth.

8. Stop using your credit cards

Unless you’re paying off your balances at the end of every month, using your credit cards means piling on more debt. So, stop using them. Try to pay cash for all your purchases. If you don’t have enough cash to pay for something, don’t buy it. We understand that takes a serious amount of self-control, but it’s the only way to keep from adding on debt. When you stop using your credit cards be sure continue making your monthly payments, This will improve your credit utilization rate, and will help your credit score.

In summary

Here were eight tips that could help you better manage your debts. If you don’t feel you can implement all of them this month, at least pick a couple and try to use them. Doing something is better than doing nothing – especially when it comes to your debts.

Free Debt Management Tips: Six Bills You Could Easily Get Cut

March 27, 2017 debtmanagement

If you think your bills are fixed and can’t be cut, you have another think coming. According to the bill negotiating service, BillShark, we consumers could save as much as $50 billion a year just by haggling over certain bills. Cell phones are where you can currently get the best deals, as the cell phone companies are currently engaged in a price war. The founder of BuildFixers, Ben Kurland, has noted that if your cell plan is more than six months old, this might not be the most efficient plan for you.
If you think your bill fixed and can’t because you have another think coming according to the building associating service bills we consumers could save as much as 50 billion a year just by handling over certain bills cell phone bills are where the biggest savings can currently be found as a cell phone companies are engaged in a price war. Billfixers founder, Ben Kurland, has noted that if your cell phone plan is more than six months old, it may not be your most efficient plan.

Six other bills you could get cut in without working out much of a sweat are:

Pay television

Of course, when we say pay television, we basically mean cable TV. If you have more than one cable company in your area, you can probably get a better deal simply by changing providers. We have two cable TV companies where we live, and they are currently slugging it out to attract new customers. If you have only one cable TV provider where you live, consider cutting the cable entirely. You should be able to get all your local channels with an indoor HDTV antenna. Then, there’s Netflix, Hulu, and Amazon Prime for catching up on old programs and for movies.

Alarm systems

If you have an alarm system in your home, it’s almost certain you can cut your bill. If you have a long-term contract, try haggling with your provider. If you can’t get a better deal, Vivant Home Alarm is currently offering free installation and says it charges less than two dollars a day. You could do even better with SimpliSafe. It uses a fast cellular connection, so you can monitor your home 24 hours a day no matter where you are. SimpliSafe also includes 24/7 professional monitoring and police dispatch, and costs just $14.99 a month – with no contract.

Storage units

If you have a lot of stuff in a storage unit, you may not want to consider moving it to a new unit just to save money. But if you haven’t yet rented a unit, there’s a website, SelfStorage.com, where you can find the best storage units close to you at the best prices. The site allows you to view and compare storage options nearest to you, and without the hassle of calling around for prices. When you find one, you can then book the unit free in just a few minutes – either online or on the phone.

Gym membership

Want to get in shape on the cheap? Joining a gym can get expensive. In fact, one source says belonging to a gym costs an average of $58 a month. You can beat this by using free passes. Some health clubs offer free one-day passes, while others have week-long passes, or even two week passes. If you work for a large employer, it probably offers some kind of workplace wellness program, which would be like a gym membership except for free. And some cities have discount gyms that cost as little as $10 a month.

Satellite radio

Since there’s only one satellite radio provider, SiriusXM, you can’t comparison shop. However, you can save money with SiriusXM. It doesn’t talk about this much but it actually offers three pricing tiers. The first is titled Mostly Music, and offers 80 channels of great music. It’s priced at just $10.95 a month. While this tier does not include online streaming, you could add it for just $4 a month. The next tier is called the Select Package, which costs $14.99 a month and includes more than 150 channels of sports, music, and comedy – though you cannot add Internet streaming to this plan. Finally, there is the top tier, All Access that provides all of the 160+ channels, as well as online streaming from your tablet, phone or computer.

The Internet

You may be able to get a better deal from your current Internet provider just by threatening to switch to a different company. It’s also possible to save money by reducing your usage. Think about how you use the Internet. If it’s just for general web surfing, email and social media, you only need a speed of 1 Mbps (megabyte per second). But if you’re an online gamer, you’ll need 1-3 Mbps, and if you’re into high-definition video streaming (think HDTV movies), you’ll need 5-8 Mbps.

In summary

Write a list of all your bills. Then, ask yourself how many you might be able to cut. We’re willing to bet you’ll find more than just the six mentioned here. The fact is, it only takes a little time and effort to get a lost of your bills reduced.

The Best Apps for Debt Management

March 15, 2017 debtmanagement

It’s hard to believe that the iPhone is just a bit more than 10 years old. Who would have thought we could have a computer in our pockets that would also let us make phone calls and write text messages.

It’s clear that practically all of us now take our smartphones for granted. If you don’t believe how important these little devices have become just go sit in a waiting room somewhere. We’d be willing to bet several dollars that at least 80% of the people will be doing something with their smartphones.

What are your most popular apps?

Is the camera your most popular app? Is itGoogle, Chrome or Safari, ESPN, Twitter, or your music app. We love all of these. We also love our bank app that now allows us to make deposits. All we have to do is take a picture of the front of a check and it’s back and presto! The money is immediately deposited in our account.

Financial apps

There are now almost more financial apps than you can count. One of the most popular is Prosper Daily (formally known as BillGuard), which will not only track your spending but also protect your credit cards from fraud and mistakes. There’s also Level Money that acts kind of like a mobile money meter and helps track your daily cash flow. LearnVest will monitor your money, and Level Money will tell you how much you can afford to spend on a day-to-day basis. Qapital will entice you to save through gamification and small actions you take every day. If you have trouble saving money, there’s Digit, which will save money for you, and Acorns that utilizes a smart system called “round-ups” that will help you save money practically painlessly.

Good and bad debt

The above-mentioned apps can help a lot with your finances, but what if your problem is that old demon debt?

Some experts believe there is such a thing as good debt and bad debt. Good debt to them is where you use the money to do or buy something that will increase in value. The number one example of good debt to them is a mortgage, as the house is almost certain to increase in value over the years. They think that borrowing money for educational purposes can also be good debt.

Just about everything else is bad debt, and at the top of this list is variable debt, and especially credit card debt.

A personal loan is generally considered to be bad debt as is a personal line of credit. However, these loans usually have fixed interest rates. This means their interest rates remain the same throughout the life of the loan. They also normally have a fixed term. For example, a personal loan might have an interest rate of 9% and a term of three years. At the end of those three years, the loan has been paid off and the borrower owes nothing more.

Credit card debt is very bad debt for two reasons. First, it usually has variable interest so that the credit card issuer can change the interest rate just about whatever it wants to. Second, credit cards are based compound interest. What does this mean? Here’s an example. Let’s suppose you owe $1000 on a credit card at 12% interest. The next month you will owe $1012 and will then pay 12% interest on it.

Apps for debt management

There are debt management apps that can help you with your struggle. One of the most popular of these is Ready for Zero. It’s designed to help you pay off your debts and build your wealth. Other popular apps for managing debt are Pay Off Debt, which has been around since 2009, and Debt Manager, which can help you track and pay off all your debts using the fastest and cheapest way possible.

There is also Debt Tracker Pro, which has a very simple user interface that allows you to focus directly on paying off your debts. It’s built around the debt snowball system, where you would be encouraged to first pay off the debt with the lowest balance.

Debt Payoff Assistant also uses the snowball method for getting out of debt. It will track multiple debts, and has built-in calculators and charts that showing your progress towards becoming debt-free.

In conclusion

If your finances are a mess, and if you’re seriously in debt, take heart. As you have read, there are apps available that could help you get your finances under control, and more importantly, to get your debts paid off in a timely fashion. Spend a few minutes online reading about these apps, and then choose one. You’ll be glad you did.