Debt Education Alliance Your Guide to Debt Relief

The point of bankruptcy is to have a new financial beginning. A similar idea is usually part of the motivation behind getting out of debt before having to resort to bankruptcy. When making the effort to get out of debt, the thought of having a financial situation at the end of the struggle that is stable and free from the stress and difficulties of debt is like a light at the end of the tunnel. After reestablishing your financial stability and after pulling yourself out of the stifling problems of debt, you have a brand new start on financial responsibility and monetary well-being.

For most people, when they get to the end of their dark tunnels of debt, they are disappointed by the cold receptions they get from their credit reports. A fresh, new start means that you really are starting over. After debt problems, you can count on finding that you have poor credit if any credit at all. After overcoming bad debt or bankruptcy, you are starting out almost like a teenager who is trying to get his first credit card and has to have mom co-sign in order to be approved. This situation may be difficult and limiting for you at first, but, like that teenager, you can build and repair your credit over time and, through some effort, put yourself in the same place if not in a better financial situation than when you first began accumulating debt.

Repairing your finances takes time, but, more importantly, requires effort on your part. If you want to achieve good credit, you have to take steps to gain that better credit for yourself. Sitting back and letting the memory of your financial difficulties fade in your own mind will do nothing to make your former money problems fade away from your credit report or from the memories of your creditors. Even before you are completely out of your debt problem, start to plan and carry out as many credit-repair options as possible. The sooner you repair your credit and the more you do to improve your credit, the better off your financial situation will be.

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In today’s fast pace world it is hard to find time to do anything besides work or errands.  Unfortunately our personal finances get pushed to the back burner.  For those who are single managing your finances might come easier due to less distractions but for those who are are married and have kids, it can be a nightmare just to find time.

It is crucial for married couples and their financial long-term well-being that they put into place certain steps that will cover all the basics, so in the end they are only spending a couple of hours a week managing their money.  Here is the plan.

Communication is key - In week one you and your spouse need to sit down for 45 minutes and discuss what your financial goals are.  Each person should make note of what goals are important to them and share with their partner.  Any overlapping goals should be pulled out and placed in the order if importance.  From there the top three survive.

Be prepared for an economic downturn - It is very well know that each person or family should have cash reserved just in case of an emergency.  Who knows, illness might strike or a job might be lost.  If this were the case it is vital you have enough cash to survive the following months.  It is disputed on much you should keep stashed away.  I recommend 6 months especially in an economic downturn.  I feel safe to say that is what we are currently experiencing.

Your life has a price - it is important to review your life insurance policy.  Your benefit should equal 5 to 10 times your salary.  The more kids you have the better off you are being the higher end of the number.  So as your salary increases so should your life insurance.  You could always check for qoutes at insure.com.

Paying Bills Online - There is no better way to reduce the time needed to pay bills then to set them up on autopilot.  This can be done by signing up with your bank for online bill pay.  No more late fees and better yet no more $.42 stamps.  If you cannot set up a certain bill with your bank then I am sure if you logged onto the companies website you would be able to pay there.   This seems so simple & painless, it is shocking to me that only 24% of Americans pay this way.  Let’s wake up people.

Keep it simple stupid with your 401K - Why would you want to manage two dozen funds in your 401k?  Not many people so why not reduce down to a one target-date fund.  You get to keep the luxury of having a diversified portfolio while while knowing you have a hands-off investment.  If your 401k does not offer a target fund, then only carry three index funds.  Money magazine recommends one total domestic stock market, one total foreign and one bond.

Create a direct deposit with your other investments - Lets think about this.  You automatically contribute to your 401k and most likely save more than you would by manually contributing.  You don’t have to worry about it.  Same can be said with your other investments.  All you need to do is set up a recurring transfer each month to the specified accounts and saving gets that much easier.  It might take some thought at first since you will need to decide on what allocation is best for your situation but in the end it will be a timer saver.

Shred the plastic - Finally, the not so fun part.  Time to cut up the plastic.  Do not worry, you are allowed to keep one credit card.  I might have been a little harsh with saying you need to cut the plastic.  Actually I meant store the credit cards away in a safe place.  Keep the card with the lowest interest rate to use.  By keeping the accounts open it will not hurt your credit score.  Closing the accounts will hurt your credit score.  Pay off the balances on the card you choose not to use and enjoy a life of fewer bills.

By following these steps managing your finances will be a breeze.  The bills pay by themselves, your 401k grows out of control and you now have enough cash to withstand the worst economic downturn of our lives.

When it comes to getting out of debt it is crucial that you know how to save.  I recently came across this post at MyTwoDollars.com and it gave me a good laugh.  Who in this day in age would not have a savings account.

Well, here are the to 10 reasons not to have a checking account:

10. Mattresses are more comfortable with a stack of ones underneath them. Have you ever slept on a mattress with no money under it? Ugh. How uncomfortable!

9. I do not ever want to retire. Ever. Working gives me time away from my wife, ya know? Besides, I enjoy being hunched over at work at 94 because I refused to save any money.

8. Did you SEE my new 72 inch flat-screen? The Apprentice looks fantastic doesn’t it? Oh, and sorry you have to sit on the floor and eat dirt, as we cannot afford chairs or food yet.

7. Though the idea of saving sounds nice, I am not comfortable with allowing the bank to hold all my money in their drawers. I mean, what if they get robbed or something? Then all my money is gone!

You will need to visit MyTwoDollars to read the rest of the list.  Click here to do so.  Enjoy!

Chase is offering a $50 bonus for those who open up a checking account.  It is a good little promotion and if you are in need of a new checking account this could be an option.  A $100 minimum deposit is required.  Just click on this banner to get started.

Offer Details

To qualify for the reward you must open a new Chase Checking(SM) account with a $100 minimum opening deposit of new money (money not currently held by Chase or its affiliates). Also, within 60 calendar days of account opening, you must initiate a monthly direct deposit such as payroll, pension or Social Security, or other government benefits. The reward will be deposited into your new account within 10 days after the initial direct deposit has posted to your account. Limit one personal checking account-related reward/premium per customer, per calendar year.

What’s hot in today’s news that affects you and your money

• Retail Sales Plummet - Retail sales, excluding automobiles, dropped 5.5% in November and 8% in December through Christmas.  Looks like the price slashing that retailers undertook during this holiday season did not have the effect intended as consumer spending has crawled to a halt.

• Chrysler Restructuring - In an attempt to show the federal government it is serious about becoming viable again, Chrysler is aggressively restructuring in order to cut costs.  Maybe this should have been the plan from the beginning.

• Madoff’s family tied in with his scandal? - The SEC is widening its investigation into Bernard Madoff’s $50 billion fraud to his family.  His two sons claim to have known nothing about his scheme until earlier this month when Madoff confessed to them but it is hard to believe that they did not know.  Their father stole $50 billion!

• The Dow industrials finally end up - In some good news, the Dow industrials finally ended its losing streak.  The Dow finished up 48.99 points on Wednesday heading into Christmas.

• Natural Gas Woes - No sector is immune to what is happening in this economy.  Natural-gas is in a slumpa and will remain there until this economy turns for the better.  with lower production from manufaturers demand has for natural-gas has been cut significantly.

If you would like to $75 worth of free gas just visit a nearby US Bank and open a checking account.  It is that simple and who these days does not want free gas.  Not sure if it is available in all states.  Check out US Bank’s advertisement for more info.

The offer expired on 10/31/08

When it comes to you FICO score, no number is more important to you and how it will affect you financial life.  In these tough times when the economy has been hit hard by the credit crunch, obtaining loans will be more difficult than ever.  Every point on your FICO score is critical in getting you the most competitive interest rates available.

Since your FICO score is sort of like your credit report card, back in 2006 Fair Isaac started to work on a new system of evaluating credit to better reward those responsible credit holders.  The new system that they finally put in place can easily gain you up to 25 points with very little effort.  The main goal is to become what they call a  “good risk borrower”.

These subtle changes is what everyone should read and learn about.

Isolated Delinquency - Believe it or not, there are a lot of responsible individuals who manage their finances quite well and take their credit history seriously.  Like us all of though, they might be a time when we forget to pay a bill.  Either it got lost or overlooked.  With the new system a one time late payment of more than 90 days will not affect you as much as before.  This oversight is now referred to as an “Isolated Delinquency”  Do not get this confused with late payments under 90 days.  If you continue to pay late you will regret the consequences.  Paying bills on time is still needed to maintain that outstanding credit score.

Become Diverse - It was often critiziced if you had to much credit.  In that I mean, mutilple credit cards, auto loans & mortgages.  This thinking has changed and it is now encouraged to hold a combination of revolving debt & installment loans.  Revolving debt being credit cards and installment debt being your auto loan(s) and mortgage.  This gives the impression that you are capable of managing multiple accounts.

Be careful though.  With multiple accounts, lenders do not want to see the balances near the max.  As a matter of fact, even if you only have one loan account it should not be near the max.  There needs to be some wiggle room so you do not come off looking like someone who cannot manage their debt.  If you do have multiple accounts spread the balances over these cards.

Don’t be afraid to shop around - I never understood this with FICO scores.  Why is it a penalty on your credit every time multiple credit inquiries are performed?  With all the credit card offers that you find in the mail how do they expect your credit not to be investigated.  Fair Isaac realized this and now credit inquiries will no longer weigh as heavily on you score.  This only makes sense since we have far more accounts today that in the past.

Benefits of using a Debt Consolidation Calculator

The last couple of weeks has not been good for the economy of the United States or the citizens who reside here like myself.  During these times everyone is trying to save more and spend less but what ends up happening is spending slowing increases before you are even able to realize your credit card balances have grown to unmanageable limits.  Solution: cut up your credit cards.

You think I am joking but I am not.  Having plastic can be and is the downfall for many Americans struggling with debt.  So pull out the scissors and start cutting.

You can be the most disciplined manager of your finances by paying your bills in full each month but if you have credit cards you could be spending much more than you ever intended to.  Studies have shown that by using credit cards when shopping you can become less worried or price sensitive when you do not have to worry about the bill for 30 days.  You see an extravagant outfit or a plasma TV and you think, hey why not, I can pay for it later.  This is how spending increases.

Not only paying with cash or with debit card will curb your spending it will relieve you of your worries that you will be late on the next payment.  This will only save you those $39 late fees and 25% penalty interest rates.  With the extinction of you plastic you can become more focused on keeping a sharper eye on your bank balances.  With this focus you can retire early or go on more vacations.  This radical proposal seems to be the obvious thing to do.

Reasons to dump you plastic

1. Lenders are getting stricter.  You can be considered a deadbeat if you pay balance in full every month which leads to lower grace periods subjecting you to late fees.

2. Using credit can increase your spending without even realizing it.  You buy more stuff and you are willing to pay a higher price for these goods.

3.  You get to switch to using debit cards.  This will give you the incentive to check your bank account balances more often.  Monitoring your money is always a good thing.

Giving up credit cards takes effort

Giving up your credit cards will be an inconvenience at first.  You will need to go dig though that pile of papers piled up in home and find your bank account number.  Stopping at the ATM will now become a regular occurrence (this annoys me the most).  You will need to become a planner.  This will take discipline and a little time.  With this self control who knows, you might be able to muster up the energy and funds to actually take on an activity that is fun to you.

There is no doubt that giving up credit cards with help you live a happier more stress free life.

With a new President taking office in a short time many changes have
been promised and hopefully these promises are kept.  One issue that
faces us as Americans is the dependency we have on foreign oil.  For a
country that makes up 4% of the worlds population we use make up 25% of
the worlds oil demand.

85 million barrels of oil is produced in the world and the cold hard
facts show that oil is becoming harder to find and more expensive to
produce.  This does not bode well for us Americans looking for relief
at the pump.  As it stands, the United States imports 70% of its oil.
I might not understand the full economics of the oil trade but to me
that seems excessive and think about the money going oversees to
countries like Saudi Arabia and China, who we borrow money from, to
purchase oil from Saudi Arabia.  We borrow money from China to buy oil
from Saudi Arabia??  Hmm, interesting.

The Pickens Plan outlines the following as a means to reduce our oil dependence.

What is the solution?

Well, this all seems discouraging but there are solutions to the problem.  The solutions are wind power, natural gas & nuclear power.

Wind Power - Studies have been conducted throughought the Great Plains and it has been concluded that 20% of America’s electricity can come from wind.

Wind power currently accounts for 48 billion kWh of electricity a year
in the United States — enough to serve more than 4.5 million
households.  The potential is there, no question.

The skeptics say what if you cannot capture enough wind to produce the proper amount of electricity.  Even if 20% of the wind is captured worldwide wind power can generate electricity which would satisfy the global demand 7 times over.

Natural Gas - Natural gas is one the cleanest forms of energy in the world.  Not only is it the cleanest but it is cheaper than gasoline or diesel.  The cost is slightly lower than $1 a gallon.  Why is natural gas such an afterthought here in the states?

It only makes sense to bring natural gas to the forefront.  Cheaper, cleaner & accessible right here in North America.  98% of the natural gas used in the United States is from North America and the reserves are twice that of petroleum.  Unfortunately only 1% of natural gas is currently used for transportation.

Natural gas however does produce 22% of our electricity.  If we could increase electricity generation through wind power we could then free up the natural gas to be used on transportation fuel.

……………..

“The Pickens Plan is a bridge to the future — a blueprint to reduce
foreign oil dependence by harnessing domestic energy alternatives, and
buy us time to develop even greater new technologies.”

If you can start helping by supporting the Pickens Plan here..