Borrowing Money to Consolidate Debt
Debt consolidation is usually done by taking out a big loan to
pays off other smaller loans. This is called a debt
consolidation program. Debt consolidation programs can be very
beneficial to borrowers, but may also put you at risk of...
How Do I Know A Good Credit Card Debt Reduction Strategy When I See It?
Credit card debt reduction is an important part of the debt reduction process. The way credit card debt reduction works is if you have five credit cards, you need to keep track of and pay 5 bills every month.
Once you enter a debt...
How to Pay Off Your Student Loans and Reduce Your Debts
Financing a college education is one of the more expensive debts you may incur. Student loans can take years or even decades to pay off. Making late payments or missing payments all together can result in a poor credit rating and collections on your...
Paying Off Your Student Loan With Debt Consolidation
It’s not unheard of, surely. But let’s get to the basics. There are two student loan types that are made available to financially struggling students. The federal student loan is a loan given by the government, particularly the country’s Department...
Teaching Students To Keep Out Of Credit Card Debt - The Parents' Role
Parents have the full responsibility for their children and their education. It is up to parents to teach their children what's right and what's wrong, how to conduct themselves as good citizens, how to cross the road safely and generally protect...
Debt Free Living - 5 Tips To Get Out Of Debt
A few times I wonder what sort of credit system moved the global economy 200 years ago. If the intention of getting into a business is meant to 'help' fulfill the needs and wants of someone, I don't see how credit card salesmen can drove more people into debt and backruptcy. Clearly most people fail to have a good understanding of the increasingly sophisticated (and complicated) terms and conditions behind the card they apply for, how it benefits the bank more than the applicant and what the ubiquitous card is best used for.
The 'cashlessness' of the advanced world surely works its illusions into the minds of those caught up in the disease of consumerism, who found it too easy to buy anything anywhere with a flash of the card without realizing the interest incurred to the bank everytime a purchase is made. Before you get the math right, you must get personal spending principles and habits right first, and only then you will attain self-awareness and a conservative mindset that lights up a red warning in your head just when you are about to make a purchasing decision.
Here are 5 tips for you to get a headstart:
1) It's not how much money you make (or spend); it's how you can keep. I didn't say this. Robert Kiyosaki said it. Far too often poor people never carry happiness within themselves and depend on external sources for their own happiness, so they either buy to impress others or get a certain 'nice' indulgent feeling for having new things. Mathematically speaking, if that new thing does not serve a purpose or even a significant function, it is a wasted loss.
2) Forget credit; get debit. A debit card is quite similar to your ATM card in that it deducts directly from your account on purchase and can be used worldwide. The credit card enables you to BORROW money from your bank to fulfill a particularly expensive purchase provided you pay back the loan PLUS the interest incurred in the form of monthly bills. Based on track record, if you have always fulfilled your credit obligations, your credit ratings will get better, leading to better protection and concessions. But unless you typically deal with large transactions and understand your spendings cycle, you are better off making your life simpler just knowing exactly where YOUR money--not the
bank's--goes if not into your account.
3) Be conscious of your financial balance. Do a monthly plan-and-review for your savings and expenditure. Those items that you have to buy with your card...how necessary and regular is it? Why is it an investment to you and to other people like your family? What else can be cut down? Sometimes you must realize your financial decisions do impact your immediate loved ones and this is a significant consideration to take care of.
4) Use your card only for emergencies. I don't know how many times I've been reminded by my elders but don't get rebellious for the sake of it.
5) If you are facing a tighter budget, you did better confront the problem sooner than later. Discuss with your immediate loved ones and financial advisor where the finer problems lie and they are sure to help, not to aggravate your situation, because if it doesn't affect you, it will affect them and your relationships.
The debt problem is not one on a personal scale but a prevalent one worldwide. It is a sickness infecting people who grow too worried witnessing the exorbitant increase in the cost of living everywhere they go, whether it's in the New York or Kuala Lumpur, so they keep on borrowing in order to 'stick their neck out'. Wrong thinking: it becomes a vicious cycle that feeds on itself, pushing you closer to losing it all than ever before.
Come one day, you finally wake up from your debt problem when the bank or creditors start knocking on your door, and you don't want that to happen. Stop being influenced by what goes on around you but to take good stock of your financial attitude and well-being. You have a choice not to get involved with your bank 'deeper' than you need. It's time to be happy living within your means. Be grateful for what you have now and work the most out of your current resources, then you will find better use for your pair of scissors than to cut up credit cards.
About the Author
Justin Koh is a freelance writer whose articles have appear in most major ezines. You can find more of these at: http://www.debtcenter.info
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