Free Debt Management Tips

Find the best ways to manage your credit card debt

This Week’s Free Debt Management Tip: Get A Gig (Or Two)

Sometimes the best way to manage debt is by finding ways to either reduce it or negotiate concessions such as having your interest rates reduced or your payments waived for several moments. But there are other instances where the best way to manage your debt is by finding ways to earn extra money to pay it off. Thanks to today’s sharing economy it’s relatively easy to find gigs or part-time jobs. Depending on your full-time job you might be able to take on more than one gig, which would help you get rid of your debt even faster. Or given your circumstances you might even be able to combine three of the following gigs.

Run out of space in your garage or drive way

If you have extra space in your garage why not turn it into a moneymaker? There are people with classic and exotic automobiles that may be looking for space to garage their “pride and joys.” If you live in the center part of your city you might be able to lease space on your driveway for people to park during business hours when you’re not there anyway. As an example of this we recently saw an ad on Craigslist offering off-street parking near our downtown area for $200 a month.

Drive people around

Maybe you’ve heard of Lyft and Uber. These are the two ride-sharing services where you earn money by picking up people and driving them to their destinations. It’s a pretty simple concept. You register with one of these companies and then download an app to your smart phone. You receive alerts whenever people near you need rides. Lyft claims you can earn $35 a day driving for it. Of course, how much you earn will depend on how many hours you’re willing to work a week and whether you’re willing to drive during prime times. And you’ll need to have an automobile with four doors, at least five seatbelts and that will pass a safety inspection.

Be a friend

This probably never occurred to you but you can get paid for being a friend. All you do is sign up on the website www.rentafriend.com and could soon be earning anywhere from $20 to $50 an hour just by being someone’s friend. And yes, there are people out there willing to pay to have someone attend a concert with them, go to a family outing, travel or take a trip to the beach. The way this works is that people looking for a friend search on their ZIP Code. If they decide to contact you the two of you then negotiate the details. The other person pays you directly depending on whatever hourly amount the two of you agreed on. Rentafriend says there are people that earn as much as $800 a week doing this, which is not small change by anyone’s yardstick.

Rent out that spare bedroom

If you have a spare room in your house you could turn it into a cash cow. Just register with Airbnb, sit back and wait for someone to rent it. How much you can get will be based on several factors, the most important of which is probably location. If you live close to a beach in Florida or California that extra room could be a gold mine in the winter. If you live in Cleveland you should be able to make really good money during next year’s Republican convention. And while you probably won’t rent out your room in a small town like Hershey Nebraska very frequently it could still earn you some extra cash.

Teach a language?

If you can answer yes to this question you could sign up on the site www.italki.com and earn extra money teaching adults in your native language. To get started you will need to create an introductory video and a profile. People interested in learning the language you teach will contact you to schedule online teaching sessions via Skype or VoIP software. Italki takes care of all the marketing, scheduling, payment and student management. This leaves you free to concentrate on teaching. Just as important, it costs you nothing to teach on italki and you could earn anywhere from $25 to $50 an hour.

Write content for websites

If you’re a decent writer you could create content – or articles – for websites. Everything you read on the Internet was written by someone and in many cases that someone was a content writer. You will need to create a portfolio of stuff you’ve written to prove that you can write clearly and logically. You may have to write free initially in order to build a reputation. Two good places to start are by bidding for jobs on Upwork.com and Freelancer.com. Don’t expect to make a lot of money initially because there’s a slew of low-priced competition out there. But if you stick with it and create a good reputation you might be able to earn what the average content writer earns, which is $35,200 — just working evenings and weekends.

6 Simple Debt Management Tips You Probably Didn’t Know

If you would like to do a better job of managing your debts, here’s our weekly update on things that you could do to reduce them.

1. Drop, yes drop, those credit cards. If you’re wallowing in credit card debt it may not be your fault. Maybe you had some unanticipated financial emergency where the only way you could pay for it was by putting it on a credit card. Or maybe it was your fault. You might be one of those people that just can’t resist making impulse purchases. If that was your problem and why you’re facing a mountain of debt, the first thing you need to do is drop those credit cards. By this we mean cutting them up. We don’t mean closing your accounts because that would have a negative impact on your credit score. When you stick to using cash you’ll probably find it’s much harder to make those impulse purchases. It just isn’t as easy to pull $60 out of your wallet to buy that eye-catching sweater, as it is to swipe a credit card.

2. This is going to be painful but you need to determine exactly how much you owe. Have you been letting those credit card statements just pile up on your desk or a table? Or worse yet have you been taking cash advances on one card in order to make a payment on another. The first step in managing your debts is to determine exactly how much you owe. This means sitting down and making a list of all of your debts, interest rates, payments and terms. This could be pretty scary but it’s absolutely necessary.

3. Consider getting professional help. There is some good, nonprofit credit counseling agencies out there that would be happy to help you get out of your financial straightjacket. Pick one, give it a call and you’ll be assigned a debt counselor that will spend 45 minutes to an hour reviewing your debts, payments and earnings and then help you develop a budget that would make it possible for you to pay your bills on time. If it turns out that no budget could accomplish this your counselor will probably suggest a debt management plan (DMP) built around the payments you actually could afford to make. She or he will then present this to your creditors and will probably try to negotiate lower interest rates on your debts. If all or the overwhelming majority of your creditors agree to your DMP you will no longer be required to pay them. Instead, you will send one check a month to the credit-counseling agency and it will take responsibility for paying your creditors.

4. Get rid of the fat. Here’s an exercise that could really open your eyes. Track your spending for at least 30 days. Do you buy a specialty coffee every day during the workweek at $3.95 each? Make that coffee at home and you’ll save almost $80 a month. What about your groceries, gas, gifts, clothing and utilities? Those are all areas where you could probably trim the fat. If you could cut each of these categories by just $10 a month that would be $50 you could save or invest. Also take a hard look at any habits you have that are costly such as playing the lottery or smoking. Is there a gym membership you never use? Cancel it. Cell phones are another area where you should be able to save money, as is cable or satellite TV. If you’ve watched any TV at all recently you’ve probably seen the commercials where one of the cell phone providers says it will cut your monthly bill in half. So why not take advantage of this?

5. Utilize carrots as well as sticks. Don’t beat up on yourself over your debts nonstop. Use a carrot – or be kind to yourself – periodically. You could treat yourself to a nice meal and a movie out once in awhile, save for a vacation, take a weekend trip or buy yourself that printer you’ve been eyeing. What experts say is that a debt diet can be much like a food diet. If you diet too much, you’re almost bound to go off it.

6. Find creative ways to earn more money. Do you have a bunch of stuff sitting around in your attic or basement that’s just gathering cobwebs? Sell it on Craigslist or have a yard sale. Could you take on an additional shift at work? If not, think about getting a part-time job. If you have good skills such as accounting, computer programming or graphic design you might be able to earn $20 or more an hour. Work just 20 hours a week and you would net somewhere around $1200 a month. Wouldn’t that go a long way towards helping you pay down your debts? If you don’t possess these types of skills you should still be able to get a part-time job paying $10 an hour which would net you somewhere around $700 a month. Apply that money to paying off your credit card debts and you might be amazed at how quickly you would be free of those debts.

5 Credit Card Management Tips That Could Help You Unstress

Apparently there is no such word as unstress. But there should be. If you’re stressing out over your finances, we’re pretty sure you’d like to unstress. When you’re constantly feeling stressed out over credit card debt, it can even cause physical symptoms such as headaches, heart disease, asthma (yes, asthma) and even obesity.

If you’re really seriously in debt, the following tips may not totally cure your credit card management problems but they definitely could help you, yes, unstress.

#1. When you can’t make a monthly payment on time, let your creditor know in advance

One of the bad things you can do is miss a credit card payment due date. No one knows for sure how much this will ding your credit score but it’s known that it will damage it considerably. However, most credit card companies are willing to help if you let them know before hand that you’re going to miss a payment. Just call the credit card issuer, explain the situation briefly and ask that it waive any late fees.

#2. Buy only what you need and not what you want

Before you pull out a credit card to buy something it’s important to make a smart decision. Try to buy only those things that you need and not just what you want. We’ve all made the mistake of using the word “need” to describe something we really don’t need but just wanted very badly. If you want to use your credit cards sensibly, it means recognizing which things you need and those that you just want and buying the former but not the latter.

#3. Negotiate lower interest rates

If you find you’re having a hard time making payments on your credit cards it might be because they have interest rates of 15%, 19% or even higher. Watch those credit card offers you get in the mail and you could find one with a lower interest than those you’re currently being charged. This could give you ammunition to talk your current credit card issuers into lowering your interest rates. Also, review the interest rate on your credit cards periodically to make sure you’re getting the best possible deal.

#4: Keep your credit to 30% or less of your credit limit

Your credit score is based on five factors. The most important of these is your credit history or how you’ve used credit in the past. Clearly there’s nothing you can do about that because, well, the past is the past. However, your debt-to-credit ratio is the second most important factor in your credit score as it accounts for 30%. This is a very easy thing to figure out because all you need to do is divide the total amount of credit you have available by the amount you’ve used up or your total balances. For example, if your total credit limit was $5000 and your balances totaled $1000, your debt-to-credit would be 20% which would be considered very good. On the other hand, if you’re balances total $3000 your debt-to-credit ratio would be 60% and that would have a very negative impact on your credit score. If you can either keep your balances low or pay them down you will maintain a good credit score. Not only that but lower balances are much easier to manage than higher ones.

#5. Read your credit card statements carefully every month

If you’re typical you probably tear open your credit card statement, glance at the balance and then file it away until you’re ready to make a payment. This can be a serious mistake. Not everything on your credit card statement may be accurate. You’ve probably heard of the massive data breaches that occurred recently where the personal information of Target shoppers and members of Anthem Blue Cross/Blue Shield were stolen. It’s most likely that these will turn into identity theft and you could be a victim. Read every transaction on your credit card statements to make sure they are correct. Also, check to see if your last payment was applied correctly and you were charged the right amount for all of your purchases. If you find an error you need to dispute it with your credit card company within 60 days. Even more important is to look for unauthorized transactions on your credit card. If you find unauthorized charges you need to report them immediately. Most credit cards restrict your liability to $50 for unauthorized charges and some will even waive that. But if you fail to report an unauthorized charge within 60 days you could find yourself stuck for it.

Check your credit reports carefully

This may not be one of the five credit card management tips but it’s still something you need to do regularly. And for the same reason that it’s important to review your credit card statements – which is due to the possibility of identity theft. The three credit reporting bureaus (Experian, Equifax and TransUnion) are required to give you your credit report free once a year. There is also the website www.annualcreditreport.com where you can get your credit reports individually or all at once. Most financial experts say it’s better to get them one at a time at four-month intervals so that you can be monitoring your credit year round. Whichever you choose, do get your credit reports and review them carefully to make sure you aren’t being victimized.

The 4 Most Important Steps To Debt Management

When you were a kid did you ever have one of those clown bop bags where no matter how many times you hit the clown it just popped right back up? Does fighting with debt feel a lot like this to you? Do you keep punching away at your debts but they just keep popping back up? If this is the case it’s possible that you need to forget about struggling to pay off individual bills and think more in terms of debt management or how to get your debts under control and ultimately gone for good.

Where it all starts

The first step to effective debt management is to evaluate your debts. You may have never thought of it this way but there are actually good debts and bad debts. Good debts are those that have low interest rates and represent things that will increase in value over the years. The best example of good debt is a home mortgage. Your mortgage loan probably has a low interest rate and your house will grow in value over the years to come. Your automobile loan could also be considered good debt because it was used to finance something useful and probably has a decent interest rate. Credit card debts are bad debts because they will just basically suck money out of you without providing anything in return. Plus, credit cards will cost you more money as they generally have interest rates that can be as high as 19% or even higher.

Why is it important to know the two different kinds of debt? It’s because you can take your time paying off good debts but you should do everything possible to pay off bad debts as quickly as you can.

A second part in evaluating your debts is to calculate your debt-to-income ratio. This is a simple piece of math as all you have to do is divide your total monthly debt payments by your monthly income. For example, if your monthly debt payments totaled $2000 and you monthly income was $4000, your debt-to-income ratio would be 50%. Most experts say your debt-to-income ratio should be 20% or less. So if you were to learn it was 40% or 50%, you can see that you have some hard work ahead of you.

Choose a repayment program

The second step in debt management is to choose a repayment program. If you calculated your debt-to-income ratio and it was above 30%, your best option might be to go to a credit-counseling agency for help. When you do this, you will be assigned a counselor who will review all of your debts and expenses and help you find ways to cut your spending. If you are able to reduce your spending to the point where you have something of a cushion you could then choose either the ladder or the snowball method for repaying your debts. The ladder method is where you stack your debts from the one with the highest interest rate down to the one with the lowest and then focus all of your efforts on paying off the highest interest debt first. The snowball method means organizing your debts from the one with the lowest balance down to the one with the highest and then focusing on paying off that debt with the lowest balance. The advantage of the ladder method is that it will save you the most money though it will take you longer to pay off that first debt. In comparison, with the snowball method you should be able to get the debt with the lowest balance paid off fairly quickly, which will give you the incentive and momentum to start paying off the debt with the second lowest balance and so on. Of course, whichever of these you choose it’s important to continue making at least the minimum payments on your other debts.

Get organized

Step three means organizing all of your bills and any other important financial documents. The easiest way to do this is by creating separate file folders for categories such as utilities, mortgage, credit cards, auto loan or loans, insurance and so forth. This will make it much easier for you to keep track of your debts and to keep on top of how much you owe. This should not take you much time and will save you a lot of brain damage in the future. Wherever you keep all those folders you should also have a calculator handy.

Next, create a spreadsheet of your debts. You will then have all of your debts, interest rates, minimum payments and due dates altogether in one place, which will make it much easier to begin repaying your debts whether you choose the ladder or snowball method. You adjust these numbers each month as this will help you visualize where you stand and see the progress you’re making.

Talk among yourselves

Debt management shouldn’t be a one man or one woman task. If you have a spouse or partner it’s important that the two of you communicate so that the both of you will understand your debt management program and any changes you will need to make in order for you to become debt free. It can be challenging if you have a spouse or partner with whom you will need to deal. You will need to work together to determine one another’s financial strengths and weaknesses. This can help you avoid conflict and disagreement so that your journey to becoming debt-free is one that you both share.