Looking for Financial Advice
 

Just looking to clean up my credit and get my finances in order and clear up some debt. Are there any books or advice some of you can recommend?

Pay off your highest INTEREST charge accounts first... stop any and all charging. Get a second job if necessary to get some extra cash to pay down the debt QUICKLY so you can recover quicker. Call all companies you owe and try to negotiate a lower interest rate. The worst they can say is no.

PS --

Forgot the advice I tell my kids and their friends:

You can not SPEND your way to wealth.

+++++++++++++++++++++++++++++++++++++++++

A little quickie math:

If you're 21 years old and put away $2000 per year - for 10 years - until you're 31 - and from then on you never add another dime to the savings (just letting the interest compound) - you'll have almost ONE MILLION DOLLARS in savings....

HOWEVER....

If you start this savings account at 31 - and put away $2000 every year for the rest of your life - you won't even be close to the million dollar mark...

Send in as much as possible for payments. The minimum payments will NEVER get the cards paid off. Get rid of the charge accounts too. Too many people these days using them to live on, don't. If you can not afford to pay the balance in full each month don't buy it. Keep one with a decent rate for emergencies and dump the rest. Cut them up and close the accounts.
:cheers:

Check out DaveRamsey.com you can also download his podcast if you cannot hear his raido/TV show. Also can go to your local book store he has several books.

If your ready for that life change he can teach you the steps!

That is way to opened ended of a staement, hence I suppose why you are looking for more info. Paying everything down, depending on the situation is NOT always the answer.

But here is a site with a wealth of information. But just like anything, read, read, read.
http://www.creditboards.com/forums/

The awesome thing about credit is that time heals all wounds, but there are things you can do that can reduce, or erase that time to easily prop up your credit outlook.

Careful there...while seemingly good advice...closing accounts will limit your available revolving line of credit and that may drastically lower your credit score.

Good point about the credit score being affected. My bad. Sometimes it is better to use them on a minimal use basis just to keep them active and open.


But again, if you can not pay that balance in full each month the cycle starts all over.

Cut the cards but DON'T close the accounts. Credit score will take a hit if you do.

You might have to play hardball with credit card companies to get a deal...I am sure it can be done...you just need to play the game.

As a loyal Dave Ransey listener he always says to pay off your lowest credit card off first. Meaning if for instance you have three or four cards, which ever card has the lowest amount of money on it pay it off first. He says that if you see balances and cards get payed off you will keep doing what you are doing, if you try to pay off the biggest one first you will get discouraged real fast as the balance never seems to drop. Hope this helps. If you choose to do Daves steps its for sure a life change so be prepared to do what ever needs to be done. Good luck.

Another Ramsey believer.
The problem is, a person (not neccesarily you) who has bad spending habits and a lot of debt is not going to like what Ramsey is going to tell them to do. His system flat works.

Jeff-

I think the underlying theme here is to make some serious changes in spending and focus on a new program of some sort. The key though is that you have to be willing to make those changes and stay commited to them.
Best of luck! And as with anything involving money do your research before you jump on something that might not be the right move for you. :cheers:

Blow every penny, it's not going to do you any good when your in the nursing home crapping you're own pants.

That may of worked back when banks gave intrest, cd's had more then 2% return, and you'd be lucky to not be loosing on 401ks and IRA's. ;)

AMEN!!
:captain:

Mark --

That why you have to have TIME on your side - thus the early start... interest rates don't stay static for 40 or 50 years...

Plus - it's an over simplification of the process - but the message is SAVE SOME MONEY...

Of course Todds version is more fun... But I can tell you from personal experience - I've been poor - and I've been rich - RICH is way way way way more fun... Money isn't everything - but it beats the hell out of whatever's in second place! And it DOES buy happiness. Just look into Charleys eyes! :rofl: :woot:

All I really have other than a mortgage and the usual monthly living expenses are a credit card under $2000 and a car payment with a little more than $10,000 owed. I'm just looking to set myself up a little better with for the future. Whether its by saving, investing or whatever I can do to help secure something for the future. My job pays just enough to cover the bills and little else.

Of course I was kidding to some degree. I wouldn't save every penny waiting for retirement to get killed in a car accident at 42 or think life is going to be at it's high point at 65. Start with making a list of expenses and your average net monthly income. Figure out where you can widdle down your out of pocket cost every month and pay off your worst debt first.

I'm in a similar situation right now. I'm trying to get rid of every bill I can. Mainly so I don't have to work so hard and can take off even more time from the old grind. Luckily I don't have any credit card debt and all my toys are paid for. I recently refinanced my house from a 15 to a 30 after 5 years of paying down the note. That cut it down 1k by itself. Could I have kept making those payments? Yep, but I don't plan to be here forever and I may decide to lease this property instead of sell it down the road. That wouldn't make sense with a 15 year note. I also was able to lock in a 5% 30 year note and the rent would be much more than my payment. I've leased a brand new car for 10 years. 6 years of that being BMW's. I'm done with that crap too. I'm paying cash for my next car. It will be 2 years old with a warranty and I'll get a deal like I just scored on the Tundra I bought for Kelli. My goal is to have my montly nut down to under 2k a month by July. That will allow me to spend more time doing things I want to do than beating the pavement trying to make a sale. Let's face it, the gravy train is over for a while. Life's to short to work all the time. Business expenses are a whole different deal.

:rofl: :rofl: My buddies call and ask me what I'm doing today.... my response... "whatever I feel like"....

Ya know -- Todd has it right - it doesn't take that much "income" if you don't have any "outgo".... and that's the key.

:woot:

Money is an excellent servant, but a most tyrannical master.

Happy New Year!
Bill

After going without a job for nearly a year, I find myself in the same boat. Now that I am back to earning a pay check and can attack the debt that has built up. My plan is to go after the items that have the highest interest rate first. Also when I pay off one item I add the amount I was paying on it to the next one on my list. It starts slow at first, but soon it's like dropping a nuke and balances are dropping like crazy. It won't be long and I'll be debt free...with the exception of our house. I still take 10% of every check and toss it into a savings account that is my emergency fund and I set aside a little for going out with. If you put your self under to much pressure or to tight of a budget, you'll break.

Don't know if that helps you any, but I wish you the best of luck. Having a lot of debt hanging over your head can be very stressful. Hey...it's a short term sacrifice for long term gain.

:cheers:

[QUOTE=
Having a lot of debt hanging over your head can be very stressful. Hey...it's a short term sacrifice for long term gain.

:cheers:[/QUOTE]


Yes it is....well said Curtis.

The plan of adding the payment from the paid off balance to the next one is great advice, those balances will drop in no time at all and the credit score goes up like crazy. Never as fast as the card, but it will catch up and be looking good very soon after those are paid.

:cheers:

Curtis --

Good for you -- that's the way it's done buddy!
:cheers:

I have a very good friend - that I "help" him with his investments... the couple combined has never earned 80K a year... BUT he was ALWAYS a saver - and "debt adverse"... Now that he's near retirement - they have well over ONE MILLION DOLLARS in the bank (stocks / bonds / CD's) - ZERO debt including no mortgage. A pretty good "space" to come into retirement I'd day. The only reason they can do this - is because they always saved first.

So here's the problem that I argue with them about all the time --- he's saved for so long - and never splurged on anything - always used the old tv until it died - ditto cars - always used and paid cash etc... They've lived this way for SO LONG that now they can afford to "live a little", they WON'T... So they've done everything right - and now are frozen like deer in a headlight. They can't stand parting with a dime... That kills me!
:rofl:

But the one thing they do not have is any bit of financial worry. They don't have to worry if they can afford to fix something if it breaks. They don't have to worry about whether or not they will have the money to buy a new water heater, or a new furnace. They don't have to worry about money to pay for health insurance, or for a medication.

You say they don't know how to live, perhaps they don't know how to live for their stuff.

Check out anything written by Dr. Thomas J. Stanley, very interesting.

Happy New Year!
Bill

Oh I totally agree with you Bill... They have ZERO worries! But I'd still like to see them buy a new truck and trailer and go for a nice long trip... and they just have trouble even doing something like that - and yet they can afford to and deserve to.

That's what kills me... BTW - they have no children either -- probably why their hair isn't gray and they have money! :rofl: :rofl: Nobody to bail out - and nobody to leave a red cent to!

Another big Dave Ramsey fan and follower here. He says you should pay the lowest amount off first because it gives to mental accomplisment. As soon as the first one is paid off you go to the next and so on. The interest rate has very little to do with it when you are knocking out principle.

If you PM me your address I will set you his book Finacial Peace on the condition you pass it on to someone else in need when you are done.

Become adopted by Greg Weld:rofl:

Hey I'm all for getting the most for my money and making things last. Part of that is buying quality item that will stand the test of time. I could buy a new truck and very much so would like to, but my 2000 F-150 looks and runs awesome. Best part is...it's paid for. So I'll drive it till it dies and then get another one.

Dave Ramsey is 100% correct on the mental accomplishment thing, however I like my way a little better. It's really all in how you see it I suppose. For me the first one is always the hardest, but I take it in small doses and enjoy seeing the numbers ticking down. I figure the bigger the interest rate, the more it's costing me in the end. It might be a small amount in the big picture, but I want this gone...like now, so I'll take every advantage I can to knock it out. At the end of the day, I'm happy and that's all that matters.

You'd better become adopted by GWEN Weld.... Greg just sponges off of her!

LOL

I have to also add to this fun little thread... since I live in a land of AWE... It is estimated there are some 70,000 MILLIONAIRES in the greater Seattle area... and I can tell you that no matter how much you "make" --- you can spend more.

You wouldn't believe the amount of "epic fails" going on around here... and the houses that are for sale - and the cars... etc.

On topic a little more -- and I haven't done the math to back up my statement I'm going to make - but I think the math would back me up...

Some of these credit card companies are charging near 25% interest... so while you might feel better paying off the smallest amounts first -- the INTEREST is going to eat you alive while you're doing that.... which is why most advisors recommend you pay off the highest interest balances first.

Just "because".... I searched the net for a Credit Card Interest Rate calculator... and plugged in some numbers. I used a 1000.00 balance - an interest rate of 24.99% - with 2% per month payback - Monthly payment of $50... This would take you 27 payments (2.25 years) and you'd pay $306 of interest.

So if you just made a $75 a month payment instead. You'd cut your time down to 1.33 years and the interest to $184 (16 payments instead of 27)

For comparison - I'll use 1000 owed and 12% interest - same $50 payment vs $75

$1000 owed at 12% paying $50 a month takes 1.9 years (23 payments) and costs $121 in interest

$1000 owed at 12% paying $75 a months takes 1.25 years (15 payments) and costs $79 in interest

Very good advice Greg.:cheers:
I've never been in debt, but if I had been, I would attack the higher interest rates first as those seem to only GROW if you do not pay them down. Send in as much as you can to pay it off asap. If not, you are not even putting a dent into the principal amount.
GOOD LUCK!!:thumbsup:

The only thing minimum payments do is make the card company more money. They do ALMOST nothing to actually pay the balance down.

I am currently in debt, but working to pay it off, but like dave ramsey says, credit scores don't mean anything. he says his score is zero b/c he pays cash for everything. i try to explain to my wife when she wants to go out and try and finance this or that, that we'll just save up and pay cash, we don't get the item right away, but we don't have that debt hanging over our heads. no one ever taught me the value of a dollar, or credit or anything like that, i learned, am learning, the hardway. my new years resolution was to become debt free, and I am going to stick to it, I am really tired of missing opportunities to get a killer deal on something because I don't have any money!!
(sorry, i didn't mean to get off track)

I disagree with Ramsey or you, credit does mean something. That is, until you don't need it anymore. Anybody that has done it the hardway has borrowed money to get to the point of paying cash for everything. The saying is, credit means nothing if you have cash.

Agreed! This is the use it or lose it type of thing. There is a simple trick that gives you the best of both worlds...or at least I think so. I use a credit cards to pay for most everything, but I pay off the balance every month. One card gets things like the cell phone bill and cable tv charged to it and the other I use for gas and groceries type of things. Not going over the budget is the hard part. I check my credit report bi-monthly and my accounts always show a balance, yet I paid my accounts off even before the bill was due. Best part is...my credit score is rockin!

:captain:

if you have the cash, why do u need credit? suppose you have something unexpected happen, and you had 5 grand out on credit cards, and you were unable to pay it, what then? if you had just paid cash, then no worries right? I mean, how many people now have to worry about paying for the christmas gifts that they bought? I guess from my p.o.v, after seeing how hard it is to crawl out of the hole credit can put you in, i just as soon not need the burden or credit cards.

I see your point, but say you want to buy a house...do you really have that much free money that you can just buy it? Those types of big ticket items you need credit to get and the better your credit the better the interest rate, etc. If you can go out and pay cash for a car or daily items that's awesome. A lot of people seem to see a lot of credit as good credit, which just isn't true. You can make small accounts work really well for you if you play your cards right.

Your sword cuts both ways. What if you suddenly had to spend 5 grand for something you could not do without, to repair plumbing you could not repair yourself, as an example, and you did not have the money because you only pay cash and had no means to gain any sort of time payment?

We use our one credit card, and always pay it off, this has given us very good credit. It has also enabled us to get a Lowe's "project card" when we needed it to finish our home in order to put it on the market. We have no way of extending the date we put it on the market as we need to have it sold and closed by April. Without credit, made accessible to us because we pay everything off and thus can both afford the "loan" as well as the payments if everything were to go south and our home did not sell.

Credit is a tool. Like any tool, if used recklessly, or if abused, it can cause serious damage or injury to the user.

Happy New Year!
Bill

people that aren't rich NEED credit. there is no such thing as not needing credit. I learned (am still learning) the hard way. I have about 6 or 7 credit cards. I use them all (some too much at times), but only carry a constant balance on one of them.

I make a decent wage, but I am far from affording a very comfortable living. I'm not one of those people that live paycheck to paycheck, but I have to watch my pennies now and again.

I am in the process of buying a house right now, and I can only afford a small downpayment, so no one can tell me that your credit score doesn't mean anything. I just found out my credit score and it's just a touch over 800, so you mean to tell me that someone with no credit is going to come close to getting the same interest rates that I get? That isn't going to happen. no way.... no how...