Drowning In Debt? Learn To Swim With These Three Steps

March 28, 2012 By

Quite a few people these days feel like they are simply drowning in debt.  They’re looking at their credit card statements each month and wondering what they’re gong to do to appease their creditors and gain a little bit of financial security and independence again.  The great news is that almost anyone can lessen their debt loads and take one more step towards solid financial ground again.  Not everyone can be a millionaire, but nearly everyone can boost their cash cushion.  Here are three steps to “help you swim when you’re drowning in a pool of debt.”

Since this swimming analogy may work as a gimmick for the article, let me first apologize to those who think it’s goofy, because it kind of is.  And two, please don’t take this as specific advice for people.  Everyone is different, and everyone should do their research and own investigating for the best path to take when paying off their debts.  Ready?  Great, let’s move along.

Swimming Lesson #1: Learn To Tread Water

The first step you’ve got to take is treading water, which in this case means not taking on any more debt.  It is easier said than done, but getting rid of the credit cards for a while and focusing on sound financial maneuvers is better than adding to the balance each month.

It is odd how many people figure that their monthly payment is, say… $100 each month.  And so they go and pay $200 figuring double payments are good, right?  Usually they are if they fit your general financial plan, but it’s not very productive if you’re adding $100 of charges to the card each month.  Instead of being out of debt twice as fast as you could be paying the minimums, you’re just setting yourself back.

Don’t add to debt as you’re actively trying to pay it off.  Stop spending on your credit cards or other lines of credit that allow you to draw against them.  Keep credit to help you buy a car at a more affordable rate, or a house, or a rainy day. 

Swimming Lesson #2: Technology Is Your Friend, Start to Doggie Paddle

If you’ve read any articles of mine, you’ll know that I’m a big proponent of making use of the different technological tools available.  Whether it be online banking to keep track of any potentially suspicious charges, or smart phone apps to track spending and take care of deposits, I’m all about it.  You need to be careful, of course, and be sure that you don’t leave passwords exposed, windows open and account numbers listed on the screen. 

As long as you are careful, then you can make use of obtaining your credit report online through a reputable source, accessing your banking information, and making sure that your payments are put onto a regular schedule that you can monitor in just a couple of moments out of each day.  If you fall behind on your checkbook’s register, you can often get access to your recent expenses online so you don’t overspend.  The list goes on and on.  Being able to track your finances so quickly and easily can be maddening for some people who obsess over such things, but once these folks get a little bit more balance to their approach, this easy access can be a wonderful thing.

As with all things, moderation when you’re using the technology based solutions is necessary, and ensuring that the steps you take are secure is necessary.

Swimming Lesson #3: You Have Got to Have a Plan, Swim Laps

In the first point, I mentioned briefly whether double payments fit into your general financial plan.  If you don’t have a financial plan, why don’t you?  Is it a cost prohibitive type of thing?  Do you not want to go to a professional to get your finances sorted out and have to show them what you make, what you spend, and what you owe?

A point that I’ve made several times from my own experiences is that unless I actually plan out a strategy of spending, saving and repaying, I’m bound for so so success and just as much stress as ever. 

However, if I do the hard work of tracking every expense, identifying the essentials like food, bills etc, then I can easily identify how much extra I can put towards saving and repaying debts.  Without getting this in order, it’s a a train wreck waiting to happen.

Get Out Of The Pool

What are your plans to get your head above water and get your finances in order?  Do you have your own plan that makes these three steps pointless and utter nonsense?  If you do, please share your secrets for the others who are struggling with getting out of debt.

 

I want to thank you for reading this article and introduce myself.  I’m Derek, and I do most of the research and writing at thedebtonator.org, where we gather and make commentary on what we hope are the most useful and interesting links to articles and other blogs about dealing with debt and personal finance issues in one location.

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Compare spread betting companies

March 21, 2012 By

When an individual starts to spread bet and researches Spread betting companies to help him or her decide which company is best to open an account with, we all know that tight spreads are key, but why are tight spreads so key and should they be the only thing that you consider when making this decision?

The main cost to financial spread bettors is the spread, the difference between the buy and the sell price, which is why the tighter the spread the better the investment. Therefore it goes without saying, the wider the spread the more costly the investment to you, the investor. Finding a company that offers you the tightest spreads allows you to recover your investment quicker, unfortunately the way the spread works you always start by making a loss and need to wait for prices to move outside the spread in order to move into gain. So if you compare spread betting companies, the spreads that they offer should be the first thing that you consider. You should try and pick a company that offers consistently low spreads, for example WorldSpreads is famous for offering zero spreads on some markets, WorldSpreads shares are now suspended, therefore showing the importance of going for a company that consistently offers lower spreads rather than one that offers spreads that are too good to be true as a marketing ploy.

Margin requirements are another important aspect to consider when doing a spread betting company comparison. Margin is the amount of cash you need in your trading account in order to make a trade. A low margin requirement means that you only need to deposit a small portion of the value before you can open a trade. As discussed, margin requirement and tight spreads are clearly not the only thing that you should be looking at when you compare spread betting companies. Remember that spread betting allows the trader to take a geared position so you can always lose more than your initial deposit. It is therefore important to consider how to minimise your risk by making the most of the various tools many spread betting companies make available to you. This is an important consideration when researching spread betting companies as many companies offer a vast array of education and learning tools to help their traders minimise risk – which you should be looking to take advantage of.  See below a selection of tools which you should consider when you are deciding which spread betting company to open an account with.

Services and tools that spread betting companies offer to minimise risk include; new account offers, 24 hour trading hours, automatic stop losses, guaranteed stop losses and trailing stops are other points that you should thinkabout when looking at spread betting brokers. Many spread betting companies also offer a wide selection of online modules which you must take advantage of. Nobody expects you to jump into spread betting without any helps so always open a FREE demo account. Demo accounts allow you to trade with virtual money and receive access to a variety of markets. Spread betting demo accounts allow you to familiarise yourself with the different trading platforms on offer without risking your own funds. Familiarising yourself with trading platforms is essential when you start to trade with a new spread betting firm as you will minimise the risk of making elementary mistakes which can be easily avoided. Finally, it is always advisable to stay “in the know” and attend some FREE seminars that the superior spread betting companies have on offer, if you can’t physically get to the seminars then try and attend some webinars that permit you to keep your trading knowledge up to date in the comfort of your own home or office

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Signature Loans – A How To Guide

January 27, 2011 By

The loans offered to a borrower which uses his signature as an agreement of repayment are called signature loans. Due to increasing competition among financial institutions, they come up with innovative schemes to attract more customers. One such category is the signature loan which does not require the borrower to undertake any hassle associated with the normal loans.

Signature loans are applicable to borrowers having a good credit score. The borrower does not place any asset as collateral with the money lender. Since no assets are involved, the money lender’s processing is simplified. In any normal loan method, such as a secured loan the money lender needs to investigate the asset placed by the borrower.

The investigation includes verification of the asset, the asset value analysis and the asset value based loan estimation. These procedures take normally up to 6 weeks for processing. However, the signature loans can be sanctioned within 1 to 24 hours of application.

The requirement on the part of the borrower is that he/she needs to submit is a photocopy based personal identification, income proof so that the money lender can access the borrower’s repayment capacity and bank account details from which the money lender directly deposits the loan so that it is available to the borrower.

However, the signature loans or instant loans are considered risky by most money lenders since no security of repayment is assured. The money lenders have to make careful decisions regarding loan repayment policies and schedule. The borrower has to pay a significantly higher interest rate compared to the normal loans. The amount of money that can be procured with this loan is limited.

Bad credit signature loans offer a lot of advantages for those people who need money but are ineligible for applying for a normal loan. The borrower can use such loans to pay medical bills or some shopping purposes such as the purchase of a computer.

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Where Can I Get Secured Credit Cards?

December 25, 2010 By

Instead of getting unsecured credit cards for bad credit, people have started to look into getting secured credit cards. What they have to bear in mind though is that it’s up to how they use the credit that was extended to them and making each use and payment count. This is especially true if they want to improve their credit fast.

It would also matter from what financial institution you will get a secured credit card. Provided below are some of the banks that have been given a lot of positive feedback by their own customers.

  • Digital Federal Credit Union
  • Amalgamated Bank of Chicago
  • Suncoast Schools Federal Credit Union
  • Orange County Teachers Federal Credit Union
  • Orchard Bank
  • The Golden 1 Credit Union
  • Bank of America, NA
  • Plains Commerce Bank
  • First Premier Bank
  • Wells Fargo Bank
  • Emigrant Saving Bank
  • The Harleysville National Bank & Trust Corp.
  • First National Bank of Chester County
  • Malvern Federal Savings Union

If you have already chosen a reputable bank, then you have to look into several factors when choosing the right secured credit card for you and what features you want and those you want to avoid. Below are some of the criteria provided by bankrate.com that would be useful in helping you decide what type of card you need.

  • Class
  • APR (the interest rate)
  • Annual Fee
  • Purchase Late/Over Limit Fee
  • Grace Period (time before interest accrues after a purchase)
  • APR on Cash Advances
  • Fees on Cash Advances

By the time you are done applying for a secured credit card, you will realize that you did not go through much difficulty during the process, certainly not as much as you would when you apply for things like $5000 loans. As soon as you have the card, you have to take a look at its fees and interest rates so that you will not get surprised by the time your statement of account arrives.

Having great credit is your only passport in getting rid of bank loans for people with bad credit that have exorbitant fees. If your credit is not all that great and you don’t know what it takes to improve your credit score to help you avoid the high fees that a lender will charge for those with bad credit then you may want to learn about the credit score scale and also learn about some of the things that are considered as credit repair secrets.

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Why Mortgage Life Insurance Is Considered A Safety Measure?

December 24, 2010 By

Lending institutions consider a number of factors before mortgages are offered to any applicant. One such measure that lenders take seriously is the life expectancy of the applicant for the mortgage.  When calculating the cost of a mortgage the lenders hope that people will live long enough to repay the mortgage that has been provided, but they still look forward to take certain safety measures in order to recover their investment into a property. They ask people applying for a mortgage to purchase mortgage life insurance, which will help their family to make a repayment of the mortgage if they were to meet an untimely death.

Lenders do not ask people to purchase such insurance without enough data in their possession. They would not like to repossess properties and leave people homeless in case the titleholder of the property were to pass away unexpectedly.  When people purchase mortgage life insurance they ensure that their families would not have to run around from pillar to post in order to arrange finances for the repayment of the mortgage.  The insurance company that has sold the policy will be held liable for the repayment to the lending institution.

People applying for a mortgage usually show some reluctance to purchase mortgage life insurance, knowing full well that the beneficiary of the policy will be the lender and not them. Under the circumstances, they tend to believe that the lender is trying to sell them and insurance policy just like they would do a commercial insurance policy if they were to offer a loan to a business.

People fail to understand that lenders are not just trying to ensure the safety of their own investment, but are also making an effort to see that the family of the titleholder does not face any difficulties in making the repayments of the mortgage that is outstanding.  Applicants for a mortgage would do well to think about this matter in a similar manner as the lenders as they would be able to leave their families without any worries.

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