Is that dream home really just a nightmare loan in disguise?
So now you know why you are in a bad credit situation, and that’s that you’ve given away all of your cash flow to other people. Let’s discuss how to get some of it back and start digging out of the hole you’re in.
First, take out all of your credit cards right this second and get a big pair of scissors and go to work. All of them, debit cards included. No cards of any kind whatsoever. Until you get a real firm grip on your finances, plastic is a poison that will kill you over and over again. Get rid of it. Read more »
Think more money is all you need to get out of debt? Think again. A windfall of cash may not be the answer.
Let’s say you bring home four thousand dollars a month. That’s a pretty good income to a lot of people, but it’s not going to buy you six cars and a mansion. There just isn’t enough cash flow there. There are some expenses that are unavoidable — like taxes, which is why we said “bring home, as in income after taxes. Let’s assume that these types of basic needs expenses should consume no more than 30% or so of your income, and the smaller that percentage is, the better. So in our example, that would mean that we need to budget no more than around $1,200.00 a month for unavoidable expenses, leaving us with $2,800.00 for everything else.
We still don’t have a car or a house yet, or any furniture for that matter, so let’s see where the rest of it goes. Read more »
Some things are harder to do than others. It’s pretty easy to fall down when you begin to surf for the first time, for instance. It’s not hard to keep from falling down walking across the street – at least, not if you’re older than about three. Unfortunately, most people enter their adult lives completely unprepared from a financial standpoint and end up having to go through the process of learning to surf through the currents and massive waves in the ocean of money issues that await them. Falling down is pretty normal in that case, and unfortunately fixing bad credit is a little bit tougher than just getting wet and crawling back up on your board again. Read more »
Once you’ve got your cash flow under control by spending a lot less on housing, then you can begin hammering away at getting out of debt. Downsizing means downsizing everything. You’re ultimate goal is to live on 50% of your take home income. If you do that, you can retire at 100% of your lifestyle and never have to take a pay cut to yourself – until you die. That means you shouldn’t spend more than 25% of your income on your house, and it also means (this is going to hurt) you should never ever finance a car. Read more »
Previously on All Out of Debt, we’ve talked about what needs to be included in a hardship letter. This article covers the next step to negotiating to reduce your credit card debt. What comes after you’ve gotten your letter written? Next, you will send the letter, along with a request to settle for $x amount (where again, x is a dollar amount, 35-50% of the current balance).
To recap: While you can also talk about your hardships on the phone with the collectors when requesting a settlement offer, try to focus on financial hardships over personal issues. Be sincere when you tell them about this stuff. You might just find that acting embarrassed by the situation will go further than being a “woe is me” victim with no personal responsibility. But remember we ALWAYS want an offer IN WRITING! Read more »
You know what it’s like to sit down at your desk with a pile of bills that seems 6 inches thick. Every single dime in your paycheck is gone and spoken for well before you put it in your bank account. While the idea of living debt free sounds fantastic, you may not know how to get there, or if it is even possible for you. The good news is that living debt free is absolutely possible for anyone, it’s just going to take some dedication and patience.
The key to living debt free lies in financial discipline. Read more »
Photo by Jon Page
According to the Wall Street Journal, a baby born in 2009 will cost its parents $222,360 to raise until the ripe age of 18. Clearly, becoming a parent is far less stressful (and far more enjoyable) when you have the financial means to comfortably support your family.
Whether you plan on being a frugal momma or fully intend on spoiling your child rotten, here are a few points to consider before taking the leap into the wonderful, yet costly, world of parenthood. Read more »
Photo by redjar
Debt can pile up quickly, becoming overwhelming before you know what to do with it. Fortunately, there are strategies you can employ to pare down your debts so you can pay them off without going broke or insane in the process.
The snowball effect is an easy and convenient method of paying down debts, regardless of how much debt you have.
Can you imagine what it would be like to live without debt? Your money would really be yours to do with as you please, instead of feeding the wallets of those rich finance companies. You’ll look forward to enjoying guilt-free vacations – paid for with cash – and buying your next car with cash, instead of credit. Read more »
Photo by Ho John Lee
Most people relocate because the move will increase their quality of life in some way or another. But, if your finances aren’t quite prepared to carry you through the move and beyond, the negatives of relocating can more than outweigh the good.
Use these strategies to get prepared financially for your move: Read more »
Photo by Chris Devers
There are two basic options when you need a new vehicle: Lease or buy. You can purchase a vehicle with cash or through financing, or strike up a lease agreement with an auto retailer. Leasing a vehicle provides you with short-term benefits without ownership, while buying a car is a much more serious commitment, but with greater long-term value.
Lease Vs. Buy: Research Your Options
To get the most out of either financing option, become familiar with the benefits and drawbacks associated with each option. Both options are viable when the right conditions are met, so leasing might be best for you at some point in time while buying is best during another point in your life. Read more »