• Lower your monthly payments
  • Reduce stress and live your life
  • Avoid personal bankruptcy court

Tips for Paying Off Debts Of Substantial Amounts

Credit cards are great until you find yourself in credit card debt that amounts to more than your yearly income.  A couple from Rochester, Minnesota found themselves in such a situation when the received a letter from one of their credit card companies informing them that their payments would be going up; they could not afford that.

Both of them had good jobs and lived well and had done so through their thirteen year marriage.  When the received the notice they were forced to take a serious look at their situation and realized that they had accumulated $109,000 in credit card debt, but, their yearly combined income was only $100,000.  The needed some information on paying off debts of substantial amounts.

Credit cards are not the only debilitating forms of debt that Americans find themselves in; it can also be contributed to;

  • Mortgages
  • Student Loans
  • Car Loans
  • Personal Loans

No matter how the debt happened the first thing you have to do is step up to the plate and own it; admit that you did it and face it.  Ignoring it will not make it go away and it can definitely get much worse if you don’t approach it head on.  The following tips for paying off debt will help you once you face the reality of the situation.

Cutting Expenses

Nobody likes it, but, once the damage is done you must do whatever is necessary to get you out of debt.  If you take an honest look at your life there are probably ways you can cut back like not going out to dinner so often, cutting out gym memberships, or shopping for clothes you don’t need.  If the situation is really bad you might want to consider moving into a smaller home or moving in with a family member for a while, taking your kid out of an expensive private school and have them attend public school, or sell your sporty car and get something more economical.

Make a Budget and Stick to It

This is a must in any situation where you are trying to pay off debt.  It doesn’t matter if you want to put in down on paper, enter it in a spreadsheet, or use the envelope method; just do it.  If you can also make yourself take the time to write down every dollar you spend for just three weeks; you will probably be very surprised to see exactly where your money is going.

Stop Using the Credit Cards

If you are trying to use the argument that you are getting cash back; think about it this way you are paying 10% in interest (if you are lucky) and you are getting 2% percent back, it’s a loss people.  If you just can’t do without swiping a card; go get a prepaid card while you are paying off debt.

Double Check Any Medical Bills

According to collections agencies about 52% of the bills they try to collect on are medical bills.  You need to sit down and go through any medical bills thoroughly.  Make sure the insurance company has paid their share and determine the exact amount that you owe.  Call the hospital and start negotiating.  You can ask for financial aid, discounts, or a low payment plan.

Get a Counselor

Before you sign on with a debt counseling company to help in paying off debts make certain that they are a non-profit that has been accredited by the National Foundation for Credit Counseling.  You should also check with the Better Business Bureau to see that they have a good standing and have received some positive reviews from previous clients.  Most of these companies will offer a free initial visit and then let you decide if you would like to proceed further with them.

How this usually works is the counseling agency will negotiate with your creditors for lower payments.  They will receive one payment from you and they will pay directly to creditors while paying off debt.  They can also help with mortgage realignments and student loans.

Beware If You Are Offered a Settlement

It is a sad situation but you must be made aware that there are companies out there that will pretend to be on your side and then tack advantage of your circumstances.  These companies work for profit and will stoop to some bad tactics to make their money.  This is not to say that all of them are bad; there are some offers that are legitimate.  Most of them will tell you not to pay the bill in the hopes that you will let it go delinquent and then they can step in and make you an offer to settle.  This sometimes ends up in a lien or a lawsuit because; they have taken your money and then disappear with the debtor not collecting anything.

You now have some tips on how to get out of debt, but, you must commit to the one that is going to work for you or the combination of them.  If you truly want to get out of debt you can.

Great Apps to Use to Save Money on Dining Out

Dining out can make for a very enjoyable experience. You can do it with your family, with your friends, or even by yourself. However, a great experience can turn into one that was very expensive and leave you needing to work double time to make up for the funds that you should not have spent in the first place. No one should ever be forced to never dine out because of being on a budget. Instead, you should consider using ways that can help you to save money on dining out. Continue reading for great apps that you can use to save money on dining out.

Save Money on Dining Out

According to Research

According to a survey conducted by Visa, in 2013 there was an average spending amount of over $900 on Americans spending money on lunch outings. That is a lot of money to be spent on lunch, so it is definitely a huge increase for Americans who have dined out for dinner because dinner time is usually the time restaurants increase serving size as well as the price for those larger dishes. That dollar amount also only includes the main dish and does not include any dining extras like appetizers, drinks, and dessert. The majority of Americans use a mobile device and fortunately, those mobile devices can be the help you need to save money on dining out.

How to Save Money on Dining Out

Mobile devices come with the ability to download mobile applications to be used for your benefit. One of those benefits is to save money on dining out, but what apps should you use? There are many apps available that will claim to help you save money on dining out. Below is a list of the best ones to use to help you to save money on dining out.

Deal News

The first way to save money on dining out is to use the Deal News app. This apps will give you the best local restaurants that offer the best deals for you. Not only will you gain access to great restaurants, but you will also find deals for bars, cafes, and breweries.

Scout Mob

This app is run by big city dwellers that will help you to find any elite restaurant and offer you great deals to enjoy. Not only will you get great deals with this app, but you will also receive restaurant recommendations that are related to your recent searches or your previously used deals.


This app will give you access to a variety of interesting restaurants and great deals that will encourage you to try them out. This app provides you with coupons that will discount a single meal or discount the meals for an entire group. Groupon also gives special deals depending on the length of time that you use the app.


Not only does the Yelp app give you great deals on different restaurants that you can enjoy, it also provides you with unbiased reviews on new restaurants that you have never tried. Most of the deals given by this app will allow you to decrease the cost of your meal by a few dollars.

Living Social

This app is similar to Groupon in that you can access pretty much any restaurant to see if there is a special deal or discount to be used. This app also gives you access to restaurants from different areas which is great to use when you are traveling to a new area.

Bite Hunter 

As its name suggests, this app hunts from the best deals and discounts at restaurants and any other type of dining out establishment. You can even make your dinner purchase with this app and take advantage of any deals before you arrive at the restaurant.


Using this app will get rid of the need to print off coupons. You will have top access to deals and discounts for a number of restaurants. The app can be used on your personal computer or on your mobile device.

A Few More Notes 

Some of the apps listed above are free to download and use. Others may require a small fee in order to take advantage of great deals. Although the free apps may be more appealing, paying a small fee to save money on dining out is worth it. Keep in mind that some restaurants may not acknowledge deals, discounts, and coupons that are uploaded onto an app. It is a good idea to call ahead to ask if the deal will be accepted. It is also recommended to inform you waiter or waitress at the restaurant when you will be using a discount from one of the apps.

Dining out does not have to be expensive if you use one of the available apps that can help you to save money on dining out.

4 Ways You Can Negotiate With Creditors

Credit cards have always been fickle things – you use one for a bit, try to make your payments on time, and soon realize that between rising interest returns and annual fees you’re shelling out more than it looks like is worth it. The bank is the one with the money: you feel powerless. On one hand, it’s only natural to feel weak in the face of a far more powerful body (a bank), but on the other hand you have to remember that you are the consumer. It might not feel it, but you have power, you have rights – and sure enough, you can bring this straight to the bank and negotiate with creditors to try and make your life a little easier.

Negotiate With Creditors

Remember that banks are not unfeeling machines; when you reach out to make contact you’re often speaking to people who can sympathize with you and have probably, at some point or another in life, felt what you’re going through. You can negotiate with creditors by talking to people and keeping yourself well informed on what a bank will and will not change to keep you as a customer.

So just what can you bring up to try and cut back on costs? Well…

Change Your Payment Date

Your paycheck is late, you’ve had an emergency and aren’t sure if you’ll be able to make this payment on time, or maybe you want to change your payment date to a time of the month that’s better for you and not for your bank. This is one of those things you can take to negotiate with creditors, and it’s one of the easiest. Try and do this right after you’ve made a payment on your card so that you have funds on hand to make a payment if you have to, and so that you aren’t already in waiting for a payment that might make them think twice. One of the best cards you can have up your sleeve when negotiating with creditors is the one where you’re a responsible card user.

Change Your Interest Rate

The worst part of a credit card is the interest rate – and unfortunately, it’s what makes credit cards valuable for banks. Without it we just wouldn’t have a credit card! But how does that help you? Maybe you got a card that started with a high interest rate and things have changed, maybe you missed a payment a few months back and your interest went up – and maybe you want to change that. Give your credit card company a call and make a bluff (or maybe you don’t have to bluff at all). Credit companies are in a constant competition to get more consumers from one another and tend to offer low interest cards left and right. Chances are you have an offer for a low interest credit card already – if you do, don’t be afraid to tell the bank that you have an offer on the table, and you want to negotiate with creditors for a lower rate of interest.

Trying to Reduce Your Debt

Debt reduction is a trickier one – because it comes with a downside. Something might have happened in life that sucked up a lot of funds, or maybe something is happening now (a divorce, you’re sending a child to school, you’re going back to school yourself) that’s taking up most of your finances. You can try to negotiate with your creditors to get your debt completely reduced – you pay off a portion of it and are forgiven the rest. Sounds great, doesn’t it?

… well — it has a huge downside. The credit company obviously won’t enjoy that you aren’t paying back all of your debt, and that will reflect on your credit score. This is one of the tricks you want to avoid when negotiating with creditors.

Getting a Suspension of Payment

This isn’t as bad as the previous, but it’s still not your first option. You can speak to your bank or creditor in an attempt to get them to suspend payments for a few months while you get everything in check: if you normally make enough money to make your payments on time with some to spare, you might consider this. The downside is that your interest will still accrue on the balance for the time the payments are suspended, so you’ll be paying even more when they reactivate – and while you can keep negotiating with creditors, this is not the sort of thing you want to make a habit of doing.

A Few Final Tips…

  • Know when you should negotiate. Timing is a big part of it: you want some leverage one way or the other, whether that’s from normally on-time payments to absolute financial hardship.
  • Remember you need to talk to the right people: while customer service can do some things, you’ll want to speak to a manager for interest rates or debt reduction.
  • Know that you, as a customer, have rights.
  • Finally, know when you need to get help, and how to get it. If you seriously are looking at debt reduction, consider hiring a lawyer; but always be careful, and always look for federally approved counsel if you do go this route.

How to Get Rid of Bad Marks on Your Credit Report

In America, there seems to be an obsession with having a high credit score, which is brought about with good reason: a credit score determines your eligibility for home ownership, loans, and credit cards.  While most people do keep track of their financial doings, there are always a few who, by one way or another, fall between the cracks.

If you are one of those people, if you have been faced with bad marks on your credit score, then take the time to read the information below.  You will not only find the culprit, but also how to rid yourself of it as soon as you are able.

Things That Can Lower Your Credit Score

  • Bankruptcy

Simply put, bankruptcies are outright statements that declare you are unable to repay your debts.  Chapter 13 bankruptcies are typically removed in seven years, while Chapter 7 and Chapter 11 bankruptcies can take ten years or more.  Even if you repay your dues, there is no certainty these bad marks will be taken from your credit report.

  • Foreclosure

When you foreclose on a house, it means you have given the bank free reign of your property due to an inability to pay.  This bad mark on your credit score lasts about seven years, whether or not your property is resold.  It can also lead to difficulties qualifying for future home purchases, as well as credit cards.

  • Tax Liens

Tax liens are government documents that give all ownership of your assets to the government, until your debts are paid.  Many of these are due to the failure to pay property or income taxes.  While your debts may be forgiven through a bankruptcy court, the tax lien will continue to haunt your credit report for another seven years, after it is paid.

  • Consumer Debt

Consumer debts are accrued through the use of credit cards and, if not paid monthly, will make an appearance on you credit report for seven years.  This is why it is crucial you know whether or not you can afford to pay for something, before you swipe your card.

  • Lawsuits and Convictions

Lawsuits that involve debt tend to stay on your credit report for seven years, however criminal convictions are bad marks that will stay on your record for an indefinite amount of time.  They can also disqualify you for certain careers, home ownership, and custody of your children.

  • Late Payments

While missing a payment here and there is not bad, being frequently truant will spell trouble for you and your credit score.  Late payments, while typically not reported until they are a month or more past due, will remain as a black mark on your credit score for seven or more years.

  • Credit Inquiries

Credit inquiries can remain on your credit score for one or two years, depending on whether they are a “hard pull” or a “soft pull.”  “Hard pull” credit inquiries, which last two years, are initiated by you and can act as a bad mark on your credit score.  “Soft pull” inquiries, on the other hand, only show up for one year and do nothing to your monetary reputation.

How to Deal

Many people are shocked, frustrated, and sad when they come to find a monetary mistake documented on their credit report.  If you are like most people, you work to fix the problem as quickly as you can.  Should you be curious as to what your efforts hold in store for you, see if your collector is one that does a periodical update on the status of his or her debtors.  This way, you will see if you can get your name off the “hit list” even quicker than before.

Another effective solution is to take a step back, breathe, and know the situation is temporary.  As long as you are working to make amends with your errors, you will never have to worry about them rearing their ugly heads, in the future.

Things You Can Do

If you see a bad mark on your annual credit report, the best decision you could make is to ensure the debt is paid as soon as possible.  As a result, you will have less likelihood of seeing it for another seven-to-ten years.  You might also want to meet with a financial advisor or a credit counselor, to make sure you don’t make the same mistakes in the future.

When looking back, know that everyone has made a financial error at one time or another, whether these errors turned into crippling debt, however, is entirely up to the individual.  Even if you are in a rough place right now, it is never too late to seek help and resources that will aid you in repaying your dues.  While the effort may be exhausting and full of sadness, confusion, and anger, it is better than having your owings following you for the rest of your days.

Requesting a Validation of Debt Letter

Most of the phone calls that we receive are an enjoyable experience. But occasionally, bad news comes in the form of a call from a debt collector. What you do or do not do at that moment can affect you financially for years.  We’ll talk about the right steps to take and how to request a validation of debt letter.

Validation of Debt Letter

So, exactly what is a validation of debt letter? Per the federal government and the FDCPA (Fair Debt Collection Practices Act), any debt collector that contacts you must supply you with a written validation of debt letter within the five days following the initial contact. You may find that you have to request it if they do not. The federal guidelines for the content of the letter are:

  • Amount of debt
  • Company or institution debt is owed to
  • Section that states you have thirty days for dispute of the debt
  • Section stating that in the case of a dispute, you will receive a verification of debt or the judgment
  • Section that states you can request the contact information of the creditor by letter

Should you file a written dispute, debt collection attempts must cease until the agency has mailed the verification of debt or the judgment. Otherwise, they have the right to assume you owe the debt, and can continue collection attempts. An important point to note: not filing a dispute is not the equivalent of admission of owing the debt.

Requesting a Validation of Debt Letter

The first step you should take when you are contacted by a debt collector is to determine that you are speaking to a legitimate agency.  A mistake many people make is to quickly agree or assume that the debt is actually theirs. Experts caution against immediately claiming ownership of any debt. Collect all information on the agency including company name, address and phone information, then prepare your request for the validation of debt letter, following these guidelines:

  • Send the letter by certified mail with return receipt
  • Include the account number that was given to you.
  • Include the date and method of contact
  • Include a short statement requesting the validation of debt letter

It’s important that you understand that federal law does not give the collection agency a time limitation to send the letter as requested. It may take some time for you to receive it. However, if they don’t have adequate information to prove that you owe the debt, it may not be sent. Stay vigilant and on top of the situation until it is resolved.

For Debt that Isn’t Yours

Keep in mind that you are under time limitations when dealing with debt collection attempts. Whether you receive the validation of debt letter or not, if you are firmly sure that you do not own the debt, file a dispute promptly. In order to have a debt expunged from a credit report, you must take this first step. This is the most time sensitive step. You must send the dispute in a written letter within the first thirty days of contact. This process may take several weeks, or it may take several years. Starting immediately will save you some frustration and grief down the road.

If the Debt is Yours

If you are certain that the debt is something you owe, you could be searching for the best steps to take. First of all, be assured that you can reach a resolution and protect yourself financially. You will need to gather some vital information.

  • Confirmation of who you will be paying the debt to. You will need all contact information for the agency that contacted you, and then you will need to phone them back to determine their legitimacy and if they have your information or if it has been forwarded to another agency.
  • Determine if your debt is still in the collectable time frame, or if the statute of limitations has passed. If it is outside the time frame, you should send a cease and desist letter.
  • If you are able to pay the amount owed and have the intent, request a payment plan or restoration of the debt to a current status.
  • If you don’t have the resources to pay the amount in full, attempt to negotiate for a settlement. A word of caution: this will only be effective if you can pay the full settlement immediately. Otherwise, try to delay until you can save an amount to apply toward the debt. Be certain that you obtain the settlement terms in written form to avoid issues later.
  • In the case of inability to pay at all, consider consulting with a bankruptcy lawyer. This may be your best option over debt management and consolidation services.

By following these steps and assuring that you receive a validation of debt letter, you will tackle the problem head on and avoid unnecessary stress and financial issues in the future.

Refinancing and Debt Consolidation Checklist

If you choose to refinance your mortgage in order to consolidate debt, then this option is tempting. Conversely, if you want refinancing and debt consolidation to work for you, it is important you are familiar with the potential drawbacks. Read on and discover the different factors involved in this as well the advantages and disadvantages, which will all help you in making the decision.

Refinancing And Debt-Consolidation

Mortgage rates

The obvious demand is mortgage rates, which are generally lower than interest rates on debts. If you are someone with equity on your home and choose to refinance, then you can borrow this equity in order to pay off debts, such as personal loans and credit card debts. The Federal Reserve states that credit cards were charged 13.14 percent during the times the 30-year mortgage rate was at 4.20 percent, which was just recently. This means the likelihood of lowering interest on your debt is clear. If you choose refinancing and debt consolidation, multiple payments will be replaced with a single mortgage payment, which simplifies your finances.


The problems with refinancing and debt consolidation are the fact stakes are raised. The mortgage debt openly puts your house at risk even though credit card debt along with other obligations usually cannot lead to claims against your home. Another problem is you could be lengthening the period of your obligation by adapting short-term consumer debt to mortgage debt.

One thing you must do is focus on refinancing and debt consolidation, which is why the list below helps to outweigh the potential problems and gives you a list of the matters you must observe.


  • 15 year and 30 year options
  • Prepayment penalties and closing costs
  • Comparing mortgage quotes
  • Meeting the new payment schedule
  • Interest cost
  • Mastering budget issues

When you look into your equity for refinancing and debt consolidation that is only when you will know how much you have. If you have a large amount, then this obviously means you are into numerous years into your mortgage. If you do find yourself in this situation, then you may want to consider getting a low refinance rate, which happens by refinancing to a 15-year loan.

When it comes to refinancing and debt consolidation, the most compelling part is comparing the interest rate. One thing you need to ensure is the interest rate gap covers the costs that are part of refinancing. This includes prepayment penalties on your loans and mortgage.

We all know that refinance rates tend to be lower than usual, but this does not mean they are all the same. The best way to go into refinancing and debt consolidation is to shop around for mortgage quotes.

The risk usually arises with meeting the new payment schedule. Once the terms and principals of your new loan have been worked out, it is important you look into the payment schedule that will be the outcome.

You need to ensure that refinancing is not costing you more, even if you are lowering your interest rate. This can happen because you may be paying less interest, but at the same time, this could lengthen your repayment period, which is why you need to check.

If you choose refinancing, this does not mean you can easily take on more debt. You need to start mastering your budget and live within your means. Refinancing and debt consolidation is a good idea, but does have its pros and cons.


The main reasons to why people consolidate debts are to:

  • Reduce monthly payments.
  • Cope with a single payment instead of multiple payments.
  • To save money in the time costs and interests are low than that of the old loan arrangement.


In the short term, this may be a good idea; however, some of the cons include:

  • In order to get out of loans you already have, you may have to pay exit fees.
  • The charges and fees of maintaining and setting up the new loan can be more expensive.
  • Changing your debt from unsecured to secure over your home, will decrease the equity of your home, which makes everything more expensive, as you will be paying off debt for longer.


Before you consider this option, it is important you seek some help and advice from a reliable service. Some lenders are better than others are, as they are all not the same. One thing you do not want is to become victim to a fraud-type lender. You will know this if they charge you with higher interest, which will ruin your current situation, making it worse. This is why you should seek help from a trustworthy service, especially if your home is security. Some lenders may only refinance on an interest only term, which is usually for one or two years. Under this arrangement, the individual usually has a corresponding level of debt at the end of the loan, even though they have made all the necessary payments.

Putting a Halt to the Overspending Habit

In America today, it is easier than ever to spend money.  The average American, when all is said and done, spends thirty-three percent more than what they make.  This is a scary statistic: regularly spending more than they earn, citizens of the United States pull their country into even more debt.

Of course, some debts are unavoidable.  College and medical expenses, which make up the bulk of American dues, are just a few examples.  However overspending, the simple act of buying what you cannot afford, comprises a percentage that is nearly as large as its predecessors.  While expensive items might make you feel good for a while, they are no substitute for genuine happiness.

Stop The Overspending Habit

Live Skinny, Smile Fat

Studies have shown that people who live frugally are happier, have lower blood pressure, and tend to “want” less than the average spender.  Some solutions to putting a stop to your overspending and living a happier life are:

Finding frugal fun

It is no secret that people who wish to save cash tend to go out less, at least in the traditional sense.  However, their social lives can still blossom: with all of the entertainment options that can be accessed from a home, private gatherings with family and friends become an ideal choice.  There is also a wide selection of outdoor activities that can be passed for little to no funds, such as biking or walking on a local nature trail, swimming in a lake, and having a picnic in the park.  While the above might still require some dough, it is far less than you would pay for dinner at a restaurant and a movie.

Knowing what you need

It is common for individuals who overspend to have a blurred conception of what they want and what they truly need.  If you are trying to stop overspending, it would be best to write out the desires that are currently on your mind, and deciding what you can and cannot live without.  In decreasing spending through the eradication of useless impulse buys, you can de-clutter your house, your bills, and your mind.

Plucking the plastic from your purse

Most historic overspenders are customers who, at all times, have a credit card or some other form of “instant cash” on hand.  The slide of the plastic, reassuring for some, can create surprises at the end of the month.  It has been proven that if you, before making a purchase, decide to delay your decision by a few days, you will be less likely to spend unnecessary cash.  If you are apt to overspending at the grocery or at local retailers, try stopping by the bank or an ATM so you can pay with real, old-fashioned, paper dollars.

A Credit Conundrum

As we saw above, most overspending comes from credit and debit card use.  The fact that you cannot see what you’re spending is a large contributor to the dilemma, as you have no physical basis for your debts.  While using cash-only is a guaranteed method of spending less, it can make some feel insecure that their money is “out there in the open.”  If you are dead-set on using your credit card or checking account, some wise pointers for ending your overspending are:

Limiting your budget

If you’re using a debit card, make sure that you only have enough money for your trip to the grocery or night on the town.  Knowing that your funds are not endless is a great way to keep your spending in check, even if you do intend to use them.  Being aware of your money can, when your bills show up in your postbox or email, give you the satisfaction of lower balances and reduced debt.

Sharing your goals

Since social media is now a prime mode of communication for anyone over the age of ten, it would not be a bad idea to post a status update or Tweet that you are trying to reduce your overspending.  It is surprising how much support you can receive, even for something as personal as patching that hole in your credit.  Also, please be assured that admitting your errors is not shameful: it is a step in the right direction.

Steering clear of the store

Another easy way to prevent overspending is to get away from the shops and begin spending time in places where you are not tempted to engage in bank-breaking habits.  Take yourself off of retailer mailing lists, as well as websites that send you that “monthly deal.”  New clothes can be essential for change every one in a while, however meaningful friendships have the potential to lift your mood more than that pair of jeans everyone is dying to buy.


Now, you hopefully have a guide that can help you stop your overspending habits and give you the worry-free life you are seeking.

Some Tips on How to Create a Great Budget

Picture this, you have decided to set some sturdy financial goals; you have created a strict budget that allows for your rent and Mister Noodles. Then after a couple of days you come to the conclusion that you cannot live off of Mister Noodles alone; you start to miss things like meat and potatoes, the next thing you know you are sitting down to a steak dinner and ….wham…. your budget is broken. Sometimes people need to create a great budget in order to cover every aspect of their financial needs, no matter if they think they are doing all right with saving their money; there can be emergencies that pop up that they are not prepared for.

Create a Great Budget

Using Your Goals to Set a Budget

Many people do not know where to start when they want to create a great budget; it is very simple, start with your goals and continue from there. Some examples of goals that could be used to create a great budget are the following:

  • Pay off mortgage
  • Pay off car loan
  • Pay off credit card debt
  • Save for emergencies
  • Pay off student loan
  • Save for a vacation
  • Save for my children’s education

When you want to create a great budget, you must first budget in your needs; then you can distribute the rest of your income to your wants and goals.

A Realistic Budget

Many people tend to spend more than they can afford too, others tend to save more then they should. They usually realize this when they are standing in line and they cannot get what they want because their transaction was not approved, or the dreaded overdraft on their bank account…yikes! For some people this happens a few times before they realize that they need to create a great budget, or any budget for that matter. Even those people who have a healthy income have to realize they are not the richest people on earth and should not spend their money as if they are.

Having a ‘Budge’ in Your Budget

Creating a super strict budget is a huge mistake that is commonly made by people. The determination to get to your financial goals is there, but creating a budget that is tighter than a pair of spanks is not ideal; nor will it allow you to have some fun, and who does not like a little fun in their life!

We all have times in our lives that we look at something and think ‘oh…… I want that so much.’ This is where the budge in budget comes in; if you plan a splurge, or save for something you really want then it will avoid the overspending and destruction of your plan.

Know the Areas That Are Problems

You need to know where all your money goes, and for some people they can pick out where their problem areas are. Places such as a used clothing store, the large supermarket that has everything but the kitchen sink, or bulk discount stores, could be considered problem areas because people tend to overspend in these places. Sometimes it can be the small amounts spent here and there that are problem areas too. There are people who go from store to store for the sales, and while spending more money on gas to get there it is not ideal for their budget in the long run. In order to create a great budget you need to determine what expenses are really needed or not, too many problem areas can bust your budget wide open and ruin your goal you have set for yourself.

Thinking beyond the Month

For most people their budget is done from a monthly basis, but they also need to remember their annual payments in their budget as well. Yearly memberships and insurance premiums are payments that often get forgotten until they are due. For some the holidays are the budget busters because they are not a part of the budget or saved for. In order to create a great budget you need to factor in all of these expenses as well as any other expense that is not monthly.

In The End

Budgeting is a constant learning experience, on one hand you do not want to be strict, but on the other hand you do not want to be spending all ‘willy-nilly’ either. You should always make sure that you have an emergency fund set up because just like the term ‘emergency’ suggests there are always unexpected things that pop up; like the tow you needed because your tire broke in the middle of nowhere. We all make mistakes that we have to learn from, financial mistakes are no exception, it is ok to get frustrated with your mistakes, just hang in there, and do give up you will make it work.

5 Debts You Must Dump Before You Retire

Don’t take your debts with you into retirement.  Your retirement lifestyle must fit the income that you will have once all of your debts are gone.

Debt to Dump Before You Retire

Many people are not hopeful when it comes to retirement and feel like they are sinking into quicksand with consumer debt.  Declaring bankruptcy looks like an option for some folks.  The prospect of retirement forces us to think about the debts that remain and how to get rid of them once and for all.

Debt stops a lot of people in their tracks when it comes to retirement planning. Many baby boomers face debt problems in addition to the standard mortgage that needs to get paid off.  Now there are other debts that have been acquired.  For generations to come, the signs of being able to manage debts are not looking better.

Five types of debt, in particular, must be carefully avoided.   But if you cannot avoid them, then your top priority must be dumping these debts before you retire.  Here are those five debts and what you can do to get rid of them:
Do not cosign a loan for your grown child

If at all possible, avoid doing this completely.
By cosigning on a loan for your child, you put your credit score at risk and you stand to lose any kind of emergency fund that you may need to draw upon later.

If you have already cosigned for the loan, you might want to consider helping to pay down the balance of the loan to a level where the loan can be refinanced and you will no longer be responsible for it.

Do not borrow from your 401(k) or any other retirement account

Borrowing from your own 401(k) can come back to bite you pretty severely and it is not worth the risk.  If you quit your job or lose it, you will have to pay back the full borrowed amount immediately. There is a steady increase in people who are borrowing from their retirement accounts and getting themselves into financial trouble as a result. They often end up drawing from their emergency funds or going into credit card debt, making their situation even worse.

Do not pay off the student loan debt of your child

Let your child take responsibility for their student loans by handling them on their own.  You can advise them as they consider how much they can manageably afford to take out, but do not make yourself responsible for their loans.  Your children should know what they are getting themselves into when they take out their student loans.  They are the ones obligated to pay them back.  Your money needs to be going into retirement savings.  Paying off other loans is something you cannot afford to do if remaining debts are standing in the way of retirement.

Get a handle on real estate debt

Do not assume that the mortgage on your home can be offset with tax deductions.  Factors affecting these deductions are likely to change and may rid you of expected tax breaks you used to rely upon.  If you have a house, your first goal should be to own your home completely.  Do not delay paying off your home by taking out home equity loans and making home improvements.  Get your home paid off as quickly as possible.

Deal with unsecured debts such as credit cards and car loans before it is too late

You should not retire while still owing money.  Your retirement lifestyle needs to be compatible with the amount of income you will actually have once all debts are gone.  Start to live frugally if you have to.  Try to see what it would be like to live on your retirement income for a month or two and get a feel for the adjustments you will have to make.  Get an idea of what you will have and what you will actually be able to do.  By adjusting your lifestyle and changing some of your habits, you can begin to make your retirement a reality.  With the money you save before retirement, you can get rid of those lingering unsecured debts as well.

Dump any loan that you are cosigning right now before you retire.  Dump your real estate debt before you retire.  Avoid going into more credit card debt.  Avoid paying off loans that are not yours.  Think about your retirement and give it the priority that it deserves.  Take your money and dump it into your retirement accounts and create a storehouse for the future.  By living within your means, dumping your debts before you retire, and scaling back to accomplish these things, you can retire with the security of knowing that everything is going to be just fine.  The path to retirement may require some hard decisions but the path is relatively simple and straightforward.