Save Money To Pay Off Debt

When times are good, it’s easy to fall into the credit trap and build up more debt that has to be paid off. But, whether it’s your everyday living expenses, your car or your home, there are ways you can conserve cash and save money for retirement, regardless of how far in the future your retirement is.

The average adult in the United States has several thousands of dollars of credit card debt, a monthly car payment, rent or mortgage payments, and obligations to pay many other expenses. All this can make things tough and make it much more difficult to think about paying off extra debt and saving for the future.

Even the small things we do every day and often take for granted can add up quickly when it comes to spending money. No one’s going to take care of us when we get older. By keeping track of what we spend our money on now helps us better assess how to save money.

It’s called being thrifty and thrifty spending habits are good lessons to pass down to our children for their future. By setting a good example and paying attention to the money we spend, our children will understand the value of saving for the future and value of a dollar much better.

Fortunately, there are ways you can save money that may seem small but when put together, can add up to real savings over time. Especially when times are good, being vigilant about spending money can do wonders for your wallet. Following a few tips contained in “Power Saving Money Tips”, can mean more money in your wallet at the end of each month.

Most people are amazed to see how much they spend per week when they keep track of their day in and day out spending. If you’re like most people, you stop at the coffee shop every morning and have lunch with your co-workers. A couple of tips to save tons of money. Instead of that $4 latte at your neighborhood coffee shop, try brewing coffee at home and bringing it to work in a travel mug. Bring a sandwich, some chips and maybe a yogurt or pudding to work and skip going out for lunch. You’ll probably eat healthier and find that you’re saving forty to fifty bucks a week!

For some people, it’s the splurges that can break the bank. Going out to the bar with friends or having a steak dinner can be fun, but it can also be quite expensive. Another tip; invite some friends over and have some food on the grill and a few drinks. You could make it a BYOB event and get everyone to bring in their own beer and other beverages. You’ll have just as much fun with your close friends without spending a fortune on dinner check, drinks and tips.

You can take that money and put it into retirement savings, or use it to help downsize other personal debt. No matter what you do with the extra cash, it will no doubt feel great to know that you’re doing something to save cash for something more worthwhile, your future peace of mind.

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The Best Way to Eliminate Your Debts

When you owe debts, especially debts of significant amounts, you seldom feel at ease. Yes, you may be current with your payments, however, there is always that worry in the back of your mind that continually makes you think of worst case scenarios. What happens if you get laid off or lose your job? How about if you are injured and have to miss a lot of work? How can I save for future goals when all of my paychecks are going towards making my minimum payments?

If this sounds familiar, you are not alone. Millions of people are currently living with debts that seem to drain their bank accounts and wallets dry. However, there is hope. It’s not easy and will require a great deal of focus and discipline, but you can eliminate your debts once and for all. Let’s take a look at a plan of action that consists of only three steps and has been proven to be the best method for eliminating debt.

1. An Accurate Current Status

To start off, you need to have an idea of what debts you have, their remaining balances, minimum payments, and their current interest rates. Create a list that contains this information, along with the company you owe the debt to. Once you have that completed, arrange the list in one of two ways.

One way you can arrange your list is by using the remaining balances. Start with the account that you have the highest amount left to pay and work your way down the list to the lowest remaining balance. Another method for creating your list is by using the same procedures but start your list with the account that has the highest interest rate. Continue with your list until you are sure you have not forgotten any debts.

To help you decide which method for creating your list is best for you, ask yourself two questions: Are the amounts of your remaining balances fairly high, and how many payments do you have left to pay? If you have a substantial amount of money left to repay, go with the interest rate method. By eliminating the debt with the highest interest rate, you will save money in the long run. However, if your remaining balances are low to moderate, go with the remaining balances method. Once you eliminate the largest debt you owe, you will have more funds to apply to the smaller debts.

2. Arrange Your Funds

With list in hand, set aside enough money to cover the minimum payments on each debt. With the funds you have remaining, apply an additional payment amount to the debt that is on the top of your list, in other words, make two payments. If the minimum payment is too steep and you do not have enough funds for making an additional payment, move down your list to debt that you can afford to make an additional payment on.

Yes, you could go ahead and apply your remaining funds to the remaining balance on the debt that you have on the top of your list, however, our goal is to pay off your debts, not pay them down. This will all become clearer a little later on.

3. Set’ em Up and Knock’ em Down

Once you have started this plan, keep going until you have the first debt completely paid off. When it is gone, you can take the money from that payment you no longer have and apply it to the next debt on your list. If you had to skip the top debt, go back and see if you now have enough to be able to make two payments. Continue paying off your debts in this manner until you have completely cleared your list. Before long, you will have accomplished what you initially thought would be impossible, you have eliminated your debts.

Does this plan sound familiar? It is commonly referred to as the “debt snowball”. No, I am not saying this little slice of genius is my creation. I am simply saying that it is the best way to eliminate your debts without causing, even more, financial hardships. Just keep in mind that if you are having a hard time making even the minimum payments, you will have to either find an extra source of income to initiate this plan, or look for financial counseling to help via alternative methods.

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4 Common Types of Debt

Unless you are privileged, most Australians will be in debt at some point in their life. From borrowing a high sum to buy a house to running up a credit card bill, living with a debt is just something that most people have to put up with. Here are a few of the most common types of debt:

Tax

One bill that can leave a nasty shock is the tax bill from the Australian Taxation Office (ATO). But at tax time there are plenty of options to pay this bill. There is the option to apply for automated and online payment plans for those with a debt of $100,000 or less, or a personal discussion with the ATO can assist those with a debt that exceeds that amount. In situations where this type of debt will leave you in dire financial hardship, the ATO has the ability to release a certain amount of the debt. Additionally, there is the option of a tax debt loan to give the desired support to clear any outstanding payment due.

Business

Substantial business debt can soon build up while attempting to grow your business, expand into new markets, or buy new stock. This is often seen when it is necessary to borrow money to raise the desired capital. From business credit cards and loans, as well as the wide range of overheads involved in running a business, it is very easy to let things get out of control. In times of a difficult economy this can quickly make things a lot worse. Any difficulties with business debt should be tackled as soon as possible. Prioritize the outstanding payments and look at professional financial advice or seeking other consolidation options.

Home loan

Borrowing money to purchase a home is a must for most people. A home loan is likely to be several hundred-thousand dollars. This makes it the biggest financial responsibility and lasts for a good number of years. Plus, there is the need to consider the interest charges that will be applied over the lifetime of the loan.

Financial discipline is essential when taking out a home loan. There are a few steps that help pay down this debt, such as looking for rates elsewhere every so often and making extra payments if possible to speed up the process.

Credit card

Credit cards give instant gratification and make it easy to spend money that you don’t really have. Many people spend without thinking about the long-term consequences. If it isn’t possible to pay back the money spent before the interest charges come into effect, the debt will soon start to rise. While the credit cards are convenient, they can have very high interest rates, with some rates at 20% or more. Also, if this type of debt is spread across several cards, the risk of the debt getting completely out of control is that much more possible.

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What You Need To Know When Hiring Debt Collectors

Personally recovering debts can be a tedious process whether you are an individual or a company. On the other hand, you really can’t ignore debtors otherwise you stand to make the losses that can cost your financial position. Third party collection agencies are designed to make the debt collection process a lot easier. When you use the professionals, you do not have to face your debtors and experience awkward moments especially if you have close relations. You however, should know what you are getting yourself into when you set out to hire the collectors.

They free up your resources and time. This is one of the advantages of choosing to use professionals to recover your money. Truth is collecting debts can be time consuming, especially for individuals and small businesses. It is something that would need making lots of calls and arranging meetings to try reach payment agreements. Some may even decide to avoid you at all costs. When you get a third party to do the work on your behalf, you end up freeing time and resources and at the end of the day your chances of recovering are high.

They have tools you may not have to make the process more efficient. It is easy for you to lose touch with your debtors. The professionals have advanced tools you may not have to help them locate and also communicate with the debtors. They can easily be granted access to debtor information from third party sources and use advanced telephone technologies to find them.

They know how to collect where you can’t. The professionals know how to approach the debtors so they hook them and compel them to start repaying what they owe you. Even though delinquent debtors may not be responsive to your efforts, when a third party interjects and remains assertive and consistent it is highly likely that they will feel obligated to do what it right. The professionals have what it takes to deal with even the most stubborn of debtors and will keep insisting until they start giving in.

They could affect client relations. This is especially the case when you choose a collector who does not have good communication skills and does whatever it takes to recover the debts. Considering that some debtors may have genuine financial reasons making it harder for them to repay, they may end up looking for business elsewhere when they are harassed or rudely handled by your representative once they pay up. It is therefore important to choose debt collectors who are professional enough to maintain your client relations even as they try to help you recover what is owed to you.

They may charge hefty fees. Most collection agencies will charge a considerable percentage of what gets recovered. The percent can be quite high depending on the type of debt they are dealing with. It helps to look at references, referrals and return on investment as well when choosing your agency so you still enjoy great value from the services offered.

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7 Things To Know When Dealing With a Debt Collector

Debt collection calls are never fun, not even in the best case scenario. It can be a real headache knowing that you have outstanding debt that can’t be paid and nowhere to turn because the debt collectors are only offering the bare minimum in terms of options. Most debt collectors believe that use of abusive language, threats and scare tactics will frighten you into paying them. Not only does this breed unnecessary tension it can make the situation become (or at least feel) a lot more dire. But knowledge is a superpower when it comes to dealing with a debt collector in any shape or form.

Here are 7 things To Know When Dealing With a Debt Collector

1. Familiarize yourself with the Fair Credit Reporting Act – Google it if necessary and print out. You have rights. Yes, a debt collector has every right to collect on a debt you legitimately owe, but there are rules and restrictions – formally known as the Fair Debt Collection Practices Act (FDCPA) – that govern how they can go about their business. Under any circumstances to you have to tolerate abusive behavior. It’s not legal. The Fair Debt Collection Practices Act prohibits this kind of conduct. The Fair Debt Collection Practices Act (FDCPA) was created for the sole purpose of protecting consumers from debt collector harassment by prohibiting certain debt collector behavior. If a debt collector exhibits such behavior, be sure to document the behavior. Keep a log of all harassment. Your next move is to file a complaint with the Federal Trade Commission. You may request forms from the Federal Trade Commission, or you can write a letter yourself. Send it to 6th and Pennsylvania Ave. NW, Washington, DC 20580, or visit them online. Be sure to include in your complaint the collection agency’s name and address, the name of the original creditor, the dates and times of all communications, the names of any witnesses, and copies of any other material (written communications, tapes of conversations, your debt collector harassment log, etc.)

2. Negotiate a Settlement On Your Terms, Not Theirs – Go over your income and expenses with a fine-tooth comb, figure out what you can afford, and only agree to pay a realistic amount. Payment plans are not always necessary and usually by the time your debt reaches third party collectors, it’s at last end before being written off. If you agree to a payment plan, you will likely pay more over time. Avoid this if you can. If you do agree to a payment plan, make sure you fully understand the total amount you will pay.

3. Zombie Debts Still Exist – A Zombie debt is an old debt that just won’t die. To piggyback off of Number 2, Collection accounts get resold all the time, and it’s not uncommon for someone to get a call about a debt that’s outside the statue of limitations or no longer owed. The latter is illegal, but the former may not be: The statue of limitations applies to how long a collector has to sue you over a debt, but, in many cases, they can still try to get you to pay. Do not pay it right away. Get the collector to validate the debt before even acknowledging that it exists. People unknowingly restart the clock on old debts by paying part or even agreeing over the phone that it’s yours. The key to defend yourself against Zombie Debts is to do your due diligence. Look at your credit reports to see if the debt is latched on. Dispute the debt, with the credit bureaus. Get all details necessary to fight it. That’s how you get it off your credit report.

4. Beware of Scammers – Always get the debt collector to identify themselves with their name, company, street address, telephone number and if your state licenses debt collectors, a professional license number,” according to the Consumer Financial Protection Bureau (CFPB), which has more tips for spotting a debt-collection scam on its website. By law, you are entitled to verification.

5. Do Not Fall For The “Just Pay Something” Trap – Once you pay anything, especially giving payment over the phone. You are back to restarting the clock as debt gets bumped right up on your credit report based on how least or more often you pay. Always ask the collector to send you something in writing. Debt collectors must investigate a debt so long as you file a dispute in writing within 30 days of their initial contact – and they’re to cease contact until they verify (again in writing) that you owe the amount in question.

6. Too Many Calls Are Illegal – Another facet of FDCPA: Collectors can’t call you too early in the morning (before 8 a.m.), too late at night (after 9 p.m.), too many times a day or at work once you tell them not to. They’re also not allowed to use abusive language – no cuss words or name-calling. You can also ask them to stop calling. It is your right! Per FDCPA, a collector must cease contact if you send a letter requesting they do so. Keep a copy of your letter for your files. You can also send the original by certified mail, and pay for a “return receipt” so you’ll be able to document what the collector received. That letter won’t absolve you of the actual legitimate debt, but it can curb incessant and nonstop heated phones calls.

7. Collectors Can’t Just Inflate What You Owe – Regarding the amount: owed A debt collector can charge interest, but only up to the amount stipulated in your contract with the original creditor or what is permitted by law. Most states also cap the amount of interest and fees a debt collector can charge.

Debt is something nobody likes to have but you don’t have to become prisoner to the warden that are debt collection calls. You have rights. Exercising your rights helps you to take better control of your situation.

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Dealing With a Judgment on Your Credit Report

When trying to move about in the land of credit, those among us with checkered repayment histories will often find their travels to be rather arduous. There are many components to a credit file, and whenever one of those falls into disrepair, it behooves the individual to see what he might be able to do in order to rehabilitate that item and resume functional access to all that good credit provides. As this column has noted before, in addition to the more obvious benefits well-served by having good credit, it can now make the difference in what rates you pay for insurance, and even if you can land that job for which you’ve been desperately vying. The fact is that one’s credit history has, over time, become a yardstick by which to measure personal integrity, fair or not, so it is essential that you do everything you can to ensure that yours is as “pure” as it can be.

This said, there is one type of credit report entry that can prove especially troublesome to address – the judgment. Although the presence of judgments are generally subject to a seven-year time limitation, they are severe enough in appearance that many people would like to find a way to make them disappear more quickly; plus, because judgments can typically be renewed by creditors (the specifics of this will vary by state), there is always the chance that a judgment will re-appear on your credit after the original seven-year clock has wound down. Although there are things that can be done more readily to directly mitigate, even remove, other kinds of items on a credit report, judgments are a particular nuisance… so is there anything that can be done?

What differentiates judgments from “garden-variety” collection items on a credit report is that a judgment is representative of a court action, which means that the judgment becomes a part of one’s file not out of deference to the creditor who initiated legal action, but at the behest of the court. Once a collection matter moves from being a two-party issue (the debtor and the creditor) to a three-party issue (with the court added), the court becomes the 800-pound gorilla in the room. The only way to get a judgment removed from a credit report is to go through the legal process necessary to have it vacated, and that takes the help of an attorney, which also means time and money – plus, having a judgment vacated is simply a tall order.

So what are the options? Other than waiting for the judgment to eventually fall off of the report (and hope that it does not reappear), you might want to see about settling it… or paying the amount due outright, if that’s small enough… in exchange for a satisfaction of judgment. It is up to the creditor to file the satisfaction with the court, so before paying anything, be sure you have the creditor agree in writing that the satisfaction will be filed as a condition of your payment. In the case of paying a judgment, even a small one, it is smart to involve an attorney – even though it is not necessary, and will cost you some additional bucks to have one help you with the process, the benefit and weight of legal representation in the creation and review of the settlement agreement, as well as in pressuring the creditor to live up to the terms of the agreement, if necessary, can certainly be worth the money.

The information contained here is for general information purposes only. Bob Yetman disclaims responsibility for any liability or loss incurred as a consequence of the use or application, either directly or indirectly, of any information presented herein. Nothing contained in this article should be construed as a solicitation or recommendation to engage in any financial transaction. You should seek the advice of a qualified professional before making any changes to your personal financial profile.

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Credit Card Debt – How to Manage It

Before you can really start to make real money, you will have to deal with the debt you might have accrued through earlier borrowings. Most people get themselves into financial difficulties through, borrowings made on credit cards. This is the primary product used by the banks to create debt in peoples lives, the interest on the capital borrowed that this creates for the banks, can keep people in debt for their whole life. Injudicious use of credit cards is promoted by a constant bombardment through the media of a buy now pay later philosophy, A constant call to our egos, that stokes discontent within lives. If you don’t have money you cannot have respect, without these material possessions, the money,the girls, the cars, you are nobody. With this continual disparagement, we compare ourselves to others and begin to believe, that we deserve all sorts of things that others may have had to pay a heavy price to obtain.

To break this cycle of ever increasing debt the first thing that has to change is your mindset. You must believe you are worth something, that you are valuable, and are a special and unique person. This is not an easy thing to perceive, especially if you have had a life full of people telling you something other than this. To have an identity, to know who you are, is a place of contentment, If you are content, you will stop striving for things, if you are happy, it does not matter what you have or do not have. You are created in the image of God, allow Him to define you, God say’s you are fearfully and wonderfully made, he took his time putting you together, He thought about what your purpose was and gave you the tools to achieve that purpose. This God sent His Son who we killed, but that was part of the plan, because without His death the Comforter could not come, If you need some financial comfort, know that godliness with contentment is great gain, and that without a credit card, you immediately rid yourself of a source of credit card debt within your life, get the scissors out cut up all your credit cards and you put your self in a place where the debt generated by the credit cards cannot get any bigger. Freed from debt you are now free to earn money from the Internet.

You can start to address the debt outstanding, by changing the way you make purchases. Pay for all purchases with Cash or by Debit Card. This will give you a much greater appreciation of what you are spending, this takes a bit of getting used to, but the first thing you will feel is empowered, this will make you feel good about yourself, and will also give you a sense of control over where the money is being spent and what for.

To get an even tighter grip on the debt situation you will need to make a budget, fill out a budget planner, and begin to forecast future spending, but more importantly look to find areas where you can begin to save money. Once you are saving money, this frees you up to spend time earning money on the Internet. I told you this was not a get rich quick scheme, but do not bail out, all you need is an attitude adjustment, a new mindset, and I can help you with that.

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Pay For Delete – Does It Really Work?

When you read the forums on personal finance, debt and credit help, lots of people advise you should demand the collection agency remove your account from your credit report as part of the negotiation. This is called “Pay For Delete”.

In theory this sounds great. Pay less than what you owe and have all traces of this debt removed from your credit report. There are even dozens of sample letters available online to help you work the magic and make the collections account disappear. But how often does it really occur?

It occurs much less frequently than those forum posters make it sound like! According to Allie Johnson at CreditCards.com, only about 10% of collection agencies will agree to a Pay For Delete. So for every successful story of a Pay For Delete there are nine other stories of rejection.

Why such a small percentage of success? Let’s look at this from the standpoint of the credit bureaus and the collection agencies. The collection agencies are paid members of the three credit bureaus (Equifax, Experian and TransUnion). All members of the credit bureaus promise contractually to report accurate credit information. Whether positive or negative data.

If you were a member of a credit bureau and you were considering loaning money to someone, wouldn’t you want to know the whole story about the person wanting to borrow your money?

The credit bureaus expect 100% honest reporting from their members. When a collection agency deletes negative information falsely (technically a Pay For Delete is a lie) it risks its membership being terminated by the credit bureaus. No collection agency wants that to happen.

Then why do some Pay For Deletes occur? The agency needs to collect money to remain in business. They either are splitting whatever they collect with the original creditor (an assigned debt) or they paid money and bought the debt from the original creditor (a purchased debt). In either case money needs to come in to keep the doors open!

So if you have a large debt (say $2000), the agency might risk an angry call from the credit bureaus if you were to pay them $1000. After all, cash talks! But if you have a $100 debt, it is doubtful that any agency would risk its membership if you offer $50 for the Pay For Delete.

Your chance for a successful Pay For Delete can increase if you can prove that you never got the bill. For example if you have a medical bill which was mailed to an old address and you can prove you were at a new address when the bills were sent out, then there is a legitimate reason for the collection agency to delete your account from the credit bureaus once you pay.

Pay For Delete was a popular trade many years ago but is very rarely accepted today. Collection agencies and creditors are required to remove inaccurate data from credit reports. But they are not required to remove accurate, negative data from credit reports.

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Climb Your Debt Mountain One Step at a Time

Charlie Linville lives here in Boise. He is a US Marine Corps veteran who lost his right leg in 2012 when he stepped on an IED in Afghanistan. He returned home last night after becoming the first combat amputee to climb to the top of Mount Everest.

This was his THIRD attempt to scale the mountain. An avalanche shut down his attempt in 2014. An earthquake shut the mountain down in 2015.

He succeeded this time, but still had to fight the battler against freezing temperatures and 60 mph winds.

Mr. Linville did not just wake up one morning, catch a plane to Nepal, throw a backpack on and start hiking. His successful ascent in 2016 took him away from his family for FOUR MONTHS. So on top of all the training he did here in the USA before leaving, he had to plan, adapt, change plans, etc to complete his dream. It was not a one day shot!

When we look at a mountain of debt in front of us, it can appear to be as tall as Mount Everest. Most people believe they have to climb it in one straight shot. So few start the climb and even fewer make it to the top. The majority quit after a short time.

You have my permission to take your time to climb your debt mountain! Making it to the top is infinitely more important than how you get to the top. We all have different paths to get to the top.

Each of us has unique circumstances to work with. Single or married. Kids or no kids. Where you live and the cost of living. So making a statement like “spend less than you earn” is meaningless without putting it into the context of your life.

I have two “tools” for you to put into your climbing backpack. These are the compass and map for you to use on your ascent. Without these you may fall into a crevasse!

You cannot climb without a map or a guide. Your credit report will show you what debts are delinquent, which are in collections, if you have any judgments against you and if you have any errors reporting which need to be fixed.

Order one free report from Free Annual Credit Report. You get one from each credit bureau free annually so I would save the other two freebies for later in case you need them.

The credit report will also show you your delinquency dates which you will need for your next tool.

If you have some old debts, they might be too old for you to be taken to court for. This is where the statute of limitations comes in. Your debts are always collectible but each state has a law setting the maximum time for which you can be sued over them.

Go to¬†NerdWallet¬†and see what your state’s SOL is.

A compass tells you which direction you are heading. If a debt is too old to go to court, you may direct your attention to pay a newer one first. You have control over your plan!

Once you have these two tools, then you can create your plan and timetable to pay off those debts. You will know how to allocate your income and determine if you can trim any expenses.

Retired Staff Sergeant Linville demonstrated the awesome task of climbing Mount Everest could be accomplished despite numerous setbacks and months away from home. You can successfully conquer your debt mountain if you climb it one planned step at a time.

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