Posts filed under 'Blog Carnival'
Let’s not fool ourselves. If you are in debt, paying interest, then you’re already a slave to debt. The real question is this: What’s YOUR best choice to get out of debt? Here’s a quick game plan to help you make your best choice to be debt free ASAP… Hint: You can use these “choice-making” tools to make the best choices in any area of your life, not just choosing your best option for debt relief.
OK, here it is:
Six-Steps to Making Your Best Choice:
1) What are your goals?
2) What are your options?
3) What are the consequences and probabilities (positive & negative) of each option?
4) Evaluate your options: How do the consequences and probabilities of each option look and feel in light of your goal(s).
5) Mitigate risks. How can you mitigate any negative consequences to reduce the likeliness of this happening? How can you expand on the positive consequences and increase their likeliness of happening? Is the long term benefit greater than the reward? Is the option worth doing in light of your goal(s)?
6) Resolve inside yourself which choice produces the results that benefit you most in the long-term in light of your goal(s). Make your choice, and take massive action!
If you’re reading this, and you’re in debt right now, then you may relate to these four top reasons why people stay enslaved to debt for so long before making a better choice…
Four Reason Why People Put Off Making Important Choices:
1) Fear.
Many people are afraid of failure or making the wrong choice. Remember, however, theonly failure is failing to choose — putting off what you know you inevitably need to so. The hardest part is always making the choice because once the choice is made, the rest is easy. We need to let go of our fear and make a choice even if it’s the wrong one.
2) Uncertainty about what the choice is going to mean.
Most of us have an illusion that choice are based on certainty. The truth is that choices must be made based on the greatest probability. If you wait until you’re certain to make a decision, it will be too late. This is why leaders are paid to make the tough decisions.
3) People have weak choice-making muscles.
The way to get good at making choices is to make more of them. Then, if you make the wrong ones, you’ll learn more quickly and you can use what you’ve learned to make better choices in the future.
4) People feel overwhelmed.
In today’s society, we all experience a constant deluge of information — it’s on our emails, our voice mail, our cell phones, our fax machines. And we are constantly pressured to make choices based on information that surrounds us. Often, we simply don’t know where to start. We need a system for making choices that cause us to focus on our goals and produce the results that benefit us most in the long-term.
Four Rules For Making Your Best Choices:
1) All important (or difficult) choices must be made on paper.
Do not do it in your head! This causes a “Looping Process’ making choice-making difficult to impossible, makes people crazy!
2) Know what you want and why you want it.
The most important first step in all choice making is to be clear about what you want (your goal) and why you want it (your purpose). What do you really want? Why is it important to you? How will you know when you’ve achieved your goal? How will you measure?
3) Remember, choices are made based on probability.
Rarely will you have the luxury of absolute certainty. All decision making carries some consequence - that’s its power. However, failing to make a timely and intelligent decision can also carry sever consequences.
4) All decision making is Value Clarification.
Often, you will have several goals you want to achieve simultaneously. Therefore you must be clear about the order of important of all these goals.
Use these tools to set yourself free from slavery to debt and avoid living in a virtual debtors prison.
Hi! I’m Jesse Niesen of DebtGOTOGuy.com. I get people out of debt to improve your wealth, health, relationships and FUN! Choosing the best debt relief options like debt settlement, credit counseling or bankruptcy can be confusing. You must beware of all the scams out there, but I’ve made it easy for you! Claim your Free Debt Analysis, Budgeting Guide and educational audio “How To Get Out of Debt” instantly online at => http://www.DebtGOTOGuy.com/
November 10th, 2008
The debt-snowball method refers to a method of paying debts down by paying an extra amount to the smallest monthly payment and then rolling that payment amount over to the next debt once the first has been paid off. This method of eliminating debt has been made famous by Dave Ramsey.
With the debt-snowball method you first list all debts in order from smallest amount owed to largest amount owed.
You pay the minimum on all debts and the minimum plus an extra amount on the first balance (the smallest balance in this case). You pay this amount every month until the debt is paid off.
Once the first debt is paid in full, you add the payment amount from the first debt and add that amount to the minimum payment of the second debt. So now your payment on the second debt includes: the minimum amount of the first debt, plus the extra amount you decided to pay, plus the minimum amount of the second debt. Pay this amount until the second debt is paid off. Wash, rinse, repeat, i.e. do this until all debts are paid off.
There are some experts who disagree with paying the smallest amount first. It does give one a physiological benefit, in that you “Feel” good about paying off one debt and you become more committed to the plan. However paying the debt with the highest interest rate may actually be better as far as saving money.
You have to compare different options to see which works best. You can literally save hundreds in interest if you choose the right method.
We have downloadable, personal software that can help you decide which works best for you at accelerated debt payoff calculator.
November 9th, 2008
Remember the old story about the poor farmer who broke into his doctor’s office to steal medication for his dying daughter because he couldn’t afford the medication? The debate around this had to do with ethics: Is it okay to steal to save the daughter’s life? Is it right for the drug companies to charge extremely high prices for a prescription? Should the farmer be imprisoned? Is he justified in stealing?
A similar parallel exists today with credit card companies and us consumers. Shouldn’t it be illegal for the credit card companies to charge us 18%, 20%, even 30%? How are we supposed to get out of debt if all we are able to pay is minimum payments each month? If you’re a 700+ credit score and you think you have a low rate, I advise you to check your statement the next time it comes in the mail. Your credit card company can raise your interest rate on a whim; and if you don’t believe me read the fine print. As consumers we are expected to be in debt our entire lives.
We all want to live more than paycheck to paycheck. We all want to not work to just pay our interest on our cards every month. We all want more disposable income. We all want that nest egg. We all want the credit card companies to reduce their interest rates and play fair so we can move forward in our lives. The fact of the matter is that despite all your begging and pleading, they won’t; and why would they? Their pockets are getting fatter by the day thanks to us.
So how do we get off this nightmare of a merry-go-round? What will happen if I stop paying my credit cards and tear them up?
First of all know that there is no such thing as credit card jail. However there are repercussions:
Collection and Creditor Calls: You are going to be harassed day and night with calls up to 5, even 10 times a day. Your relatives, friends, and workplace could be contacted to find out where you are. It won’t be pleasant but you do have rights and they are protected by the FTC (Federal Trade Commission). For more information look up the Fair Debt Collection Practices Act.
Credit Score: You credit score will be affected. Late payments will be reflected on your credit report. If you let it go for sometime, collections and charge-offs will appear on your credit report. These can be removed once debt is paid or settled.
Legal Action: Depending on what state you are in, you could be garnished. You could have an aggressive creditor that takes you to court and imposes liens and/or judgements. Though the latter can happen, most creditors will sell your debt to a third party collection company simply because it’s economical for them to do so rather than seek litigation.
Side Note: If you have a moment I recommend watching (and simply type this into a search engine and you’ll find more than a dozen links) the PBS Special: The Secret History of the Credit Card. You’ll be floored by not only how we got hooked on credit, but the methods used by credit card companies to earn enormous profits..
Though the repercussions are scary. The good news is that there are legitimate companies out there working with your best interest at heart and who can not only handle these for you, but legally wipe your debt clean and have you free of your creditors. Just like in anything else though, do your research and talk to several firms before enrolling in any program.
If you are experiencing collection and creditor calls, a burden of debt, the inability to make monthly minimums, or scared you’ll be taken to court because you haven’t been paying on your cards, contact RAM Financial Services. Their website is http://www.CalltheRam.com
Nicoli Menninger works for RAM Financial Services. RAM Financial takes the approach of Full Disclosure. We go over a financial budget, discuss all your options and point out the good, the bad, and the ugly, and equip you with the knowledge to choose a program that best suits your situation.
November 8th, 2008
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