What is your financial health ?
Where have I been ? Glued to CNBC. The financial meltdown is unravelling in front of us and how are we handling it. Of course the kids are all oblivious to this. They keep asking for toys, books, video games and my oldest – Jordan who is nine years old even asked me where are we going for christmas !
I told them we’re not planning to go anywhere this christmas and he was surprised and insisted that we consider Montana. (he read a book – Robert and the Ski Escape and it was set in Montana) How spoilt the kids are these days ? I still cannot get over how excessive we are with our kids compared to when I was little.
Like I said to many friends, there are many people who have been burdened by credit card debts because of medical bills. Now, for those people, my heart goes out to them. But there are others who simply leverage themselves in order to pay for vacations and other excesses. Ohhh, there can be so many other reasons. But clearly, cheap and easy credit got everyone carried away.
So how are we going to get out of this terrible mess ? That’s the $700 billion question that hopefully the current and next adminstration can answer.
Meanwhile, how can we live debt free ?
1. Breaking up your debt amount into smaller portion.
Experts recommend that you pay off the credit card debts with the highest interest rate first. However, you may want to focus on the smallest balance first if you are overwhelmed.
2. Record every expense.
Cost control is inevitable. Go through expenditure and remove the extras. Reduce eating out and live frugally. Detail record keeping will make you more aware of your expenditure.
3. Pay on time.
It help with your credit score and late payments will only make things worse. Not only will you have higher rates if you pay late, it will impact your loan application. At least pay the minimum by due date to maintain your credit score. Discuss with your lender to move the due date if your payday is different.
4. Supplement your income.
Taking on extra hours or getting a second job to earn more cash which will help you to pay off your debt.
5. Get help asap
Talk to a financial advisor or a credit counselling agency to over haul your financial help and work out a plan overcome your problems. Get enrolled into a debt management program in which the agency can negotiate with your lenders to remove late fees and lower interest rates. Most participants get out of debt in less than 3 years. Find a credit counselling agency at www.nfcc.org or www.aiccca.org