Archive for: October 2013

Understanding the Current U.S. Federal Debt and Its Effect on You

debt and its effect

“Debt” is one of the most frightening words in the English language, conjuring up visions of peonage, deprivation, and prison. Caricatures of debt collectors, such as the mafia shark who breaks the legs of delinquent borrowers, or Shylock, the moneylender of the “Merchant of Venice” who required a “pound of flesh” as security on a loan, haunt our dreams and reinforce Benjamin Franklin’s advice that one should “rather go to bed without dinner than to rise in debt.”

The idea of the United States Federal Government borrowing is particularly scary, triggering images of “foreigners” taking over the country and foreclosing on valuable assets.


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Banks Are Making It Harder For You To Buy A Home

Life is complicated for homebuyers these days. There can be lots of competition with other homebuyers — too much, in some cities. And the selection of homes for sale in many cities is skimpy. Add in rising home prices and jumpy interest rates and you’ve got a lot of stress. If you want to buy a home, you don’t need one more headache. And yet, here it is: Banks no longer want to pre-approve customers for a home loan.

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4 Things to Consider When Taking Out a Car Loan

car loan

If you are in the process of shopping for a new or used car or car loan, you may be very excited about the possibilities. However, many consumers are so excited about buying a car that they overlook some important factors, and this can cause them to take out a loan that they can’t afford. Here are some considerations that you need to keep in mind before taking out a car loan.

1. Used or New?

2. Budget

3. Credit Score

4. Car Loans


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Playing – and Losing – the Credit Card Game

credit card,

The debt trap

The problem with manufactured spending isn’t that it’s illegal – it isn’t. Nor do I believe it’s unethical – credit card issuers bleed the very life out of millions of consumers every day in the form of interest charges and miscellaneous fees. Getting something back is fair. No, the problem isn’t that manufactured spending is wrong. It is that most consumers cannot avoid falling into a debt trap when they start using credit cards. Consumers with credit card debt tend to find it very easy to add more purchases to their existing balance, and thus the never-ending cycle of debt lives on.


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Snowballs or Avalanches: Which Debt Reduction Strategy Is Best for You?

debt reduction strategy

Are you in debt? Well, according to Transunion, many of us are — at least when it comes to credit cards.

If you answered “yes,” then my guess is that you really want to get out of debt and need a debt reduction strategy.

Once you come to this decision and begin looking for ways to get out of debt, you’ll likely find two methods:

  1. The Snowball Method
  2. The Avalanche Method

Let me briefly describe both — and which one is better.


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The Importance Of Home Insurance Scores

home insurance

A big part of financial responsibility is maintaining adequate insurance coverage. Premiums act as a safeguard for your assets, and a little money spent now might pay off big time in the future. How much you pay now, though, will vary. You probably don’t have the same premiums as your brother-in-law or neighbor. How can you predict rates then? Credit Karma already provides your auto insurance score and now provides your home insurance score as well.


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How to Slay The Debt Monster


The Debt Monster

It all started one dark day while Kyle and Diana were on vacation celebrating their first anniversary. Kyle needed to visit the magical ATM wizard and decided he should check his checking account balance first to see how much was available. While examining his account on his phone, another number jumped out and grabbed him — their credit card balance. The couple’s balance was already dangerously close to their limit with much of the month still remaining.


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Is Credit Repair Right for Me?

credit repair

The bottom line.

It sounds, on the surface, like the Do-it-Yourself credit repair model is always the way to go, but you’d be wrong drawing that conclusion. Dealing with the credit reporting agencies isn’t easy. Your well-written dispute letter to the credit bureaus is homogenized into a 3-digit code, which is then sent over the Internet using a system called E-Oscar to the company that furnished the offending credit entry, usually a lender or a collection agency. At that point it’s up to the furnisher to A) understand what you’re disputing and, B) take time to investigate your claim.


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5 Painless Ways to Pay Yourself First

save for yourself

We all know that we ought to be paying ourselves first (or save for yourself) — by building a healthy emergency fund, investing in our retirement accounts, and saving for important future purchases.

But for many of us, it can feel like paying ourselves first will end up shortchanging our other financial obligations. How can you pay yourself first when you barely have enough money to make it to the end of each month?

But saving is just like Lao Tzu’s journey of a thousand miles. They both start with a single (and, in this case, easy) step.


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5 Things You Can Do This Week to Start Growing Your Wealth

Three years ago, I broke free from being broke. I was 26 at the time and was worth as much then as the day I was born back in 1984. I decided that 26 years was enough time to learn that I didn’t want to be broke anymore. I knew what I needed to know. I knew growing your wealth meant:

  • Our culture wants me to be broke.
  • No one else will look after my money but me.
  • Friends and family will encourage me to spend my money and buy nice things.
  • Life is packed full of unexpected, expensive things that I’ll have to pay for.
  • If I have kids, their college will be expensive.
  • My income is my biggest wealth building tool.
  • I never want to borrow money again.
  • Being broke brings me stress and anxiety.
  • I won’t be at my job forever.