You would think that younger Americans would have more debt than older ones, but the truth is that the elderly have been racking up debt on credit cards, according to an article on the ABCNews website.
The article pinpoints that older Americans have higher debt because of rising medical costs. These individuals aren’t spending frivolously but out of necessity. If their retirement doesn’t cover their household bills, medications, etc. it’s easy to just put it on the credit card. Then if they can’t pay off the credit card, they are paying as much as 20% interest and late fees if the minimum payment isn’t paid. This just puts them further into debt the older they get.
Getting Financial Help
If you are an older American - what are you to do? You need to take medication and have a roof over your head. Here are some suggestions if you are elderly and struggling:
Contact social services to ask about any financial assistance for heating and cooling. Some states have subsidies for the elderly.
Contact pharmaceutical companies to ask if there are any discounts or ways to get their medications at a reduced cost.
Ask your doctor about samples. Many doctors get these free samples from pharmaceutical companies and don’t have a problem giving them away to people in need.
If you are using your credit card for groceries, contact churches in your area to ask about food banks. You can receive a bag or two of food that will get you through the week.
What to Do About Your Debt
To start working on your credit card debt, call the credit card companies to explain your situation. You may be able to reduce your interest rate and work out a payment plan that fits your financial situation.
Take One Thing at a Time
Don’t worry about the debt, pay as much as you can and utilize resources. Over time, you will get your debt down and eventually eliminated.
Taking care of your personal finances just got easier with mobile banking!
Today while at the checkout counter, I wondered if I was paid last night. I usually get paid the last day of the month, but sometimes it comes through a day earlier. To resolve my curiosity, I took out my trusty Blackberry and typed in my bank’s website. By using mobile banking, I was able to see that I was paid and that I was then free to buy that extra item I had been contemplating.
If you haven’t used mobile banking yet or don’t know what it is, you should consider using it next time you need to quickly take care of a banking need. With mobile banking, you can:
See your pending transactions
See your cleared transactions
View balance amounts
Transfer funds
Instead of calling your bank’s toll free number for customer service to go through the automated system to find out your balance, you can simply look it up on your phone. If you want to buy something while you are out, you can easily transfer funds from your savings account to your checking account. Another benefit is that if you suspect that someone is making unauthorized purchases with your debit card, you can quickly look at your transactions to see if anything is suspicious, and if there is, so you can call and put your card on alert as soon as possible.
Are you interested in mobile banking? Not all banks have it yet, but if you go to your bank’s website, you may be able to find information about it. You can also just call your bank and ask!
If you are like millions of Americans, you probably have debt. Being debt-free may seem like a dream to you but it is possible. You can get your head above financial waters. All you have to do is set up a budget for your personal finances, a goal and stick to it.
Steps in Becoming Debt-Free
The first thing you need to do is accumulate the amount of debt you have. You want to include your car loans, mortgage, credit card balances, and personal loans - becoming debt-free means not owing ANYONE money.
The next thing is to calculate the minimum amount you have to pay to each debtor. This means how much you have to pay on your car, home, and minimum payments on credit cards and personal loans. Take this total amount and subtract it from your income.
This third step is the important one and will make the biggest impact on paying off your debt. Figure out how much money left over that you can put towards your debt. Let’s say you have $500 a month that you have been spending because it wasn’t allocated to anything (since you already paid the minimum on everything). Instead of wasting it on things you don’t need, commit to putting it towards your debt. You can spread it around such as $100 to each debt or you can place the $500 to one particular debt. The advantage of the second one is that you will see your balance on that debt decline much more quickly, which may give you that extra motivation that you need.
The last step is to create a calendar for paying off your debt. Take your total debt and subtract the amount you can pay towards it each month. Each month circle your new, lower debt amount. See how long it will take you to pay off your debt… Strive for that month! Make adjustments as needed (pay a little more one month and feel good that you will reach your goal earlier!). Before you know it, you will be debt-free!
While reading a recent Money magazine, I came across a new budgeting technique for personal finances I haven’t heard of it. The magazine called it the Three Bucket Budget.
This budgeting technique involves opening up three accounts at your bank, one savings account, and two checking accounts. When you receive your paycheck, place the amount of money you have to pay to bills in the checking account, the money you would like to save into one of the savings account and the amount you would like to use for entertainment and miscellaneous items in the other checking account. This way, you know what you are spending and don’t have to worry about dipping into the money you are supposed to be saving or using to pay bills.
If you need personal finance organization, this is perfect. Use this technique if you need to see where your money goes but play around with it so that it works for your particular financial situation.
The one thing you have to be true to yourself about is how much you really need to be spending on entertainment. For me, if I put money aside to spend on entertainment, I will spend it all. Even though, I may not have spent that much if I didn’t give myself permission to that much. I think an important question to ask yourself with the entertainment checking account is, “How much do I really need to spend?”
An article on MSNBC reports that the rate of delinquent loan and credit card payments is up and they believe it’s due to the nation’s highest unemployment rate in 26 years.
Are you one of the these delinquent loan payment individuals? There are things you can do while unemployed to help you with your finances. You don’t have to let everything slip underneath you. Losing your job is bad enough but is temporary, losing your credit rating can stay with you for years.
One of the first things you should do about your loan payments is call the lender. Explain that you recently lost your job and that you are making strides in looking for another one. Since the economy is in such devastation, most lenders will understand and try to work with you. This may include lowering your payments or deferring your payments to either the end or beginning of the month when you have more cash.
If you don’t have a loan but credit card debt, you can also call the credit company to ask for a reprieve on your debt. If the card company is unwilling to help you, consider getting another credit card with a lower interest rate that you can use to pay other card. This is not the ideal situation but it’s better than skipping payments. Of course, you will still need to pay on the new card as much as you can each month.
If you’ve paid off your debt or you’re working on it and want to have a celebration about it, why not get rid of your credit card in a creative way.
ABCNews reported on this in an article, Wackiest Ways to Destroy Your Credit Card. Robert Ciley holds funerals for people who want to bury their credit cards once and for all.
Getting rid of your credit cards is one of the best ways to stay out of debt. If you don’t have the credit card, you can only use the cash that’s in your wallet. This means that you keep yourself from spending money you don’t have. Are you scared about leaving your precious credit cards? Well, you could join Ciley for one of his funerals and mourn your credit cards’ loss by receiving support from other funeral goers, or you could hold your own funeral and use one of the wacky ways to destroy that plastic.
You don’t have to wait until you pay off your debt to get rid of your credit cards. Actually, destroying them before paying debt off will ensure you don’t keep adding to it. So take the plunge and rid yourself from that small piece of plastic that has caused you so much trouble!
Debt consolidation can cost you money that you don’t have. The company has to make money somehow and in the end, you may be spending more money with them than what you would spend to settle your debt outside of the debt consolidation company. For an alternative to using a debt consolidation company, try consolidating your debt yourself. You may feel overwhelmed right now with just thought of handling your own financial mess, but you have to remember is that your financial mess is yours and you need to own it and take care of it.
Where to Start with Your Debt
If your credit card debt has been sent to collections, it’s time to deal with them directly. Call the collections agencies and tell them your situation. In most cases, they will be happy to work with you. This is actually what debt consolidation companies do but charge you a fee for it.
Once you work out a plan with the collections agencies, pay them with something other than a personal check. You don’t need to provide them with any other information about your finances. You can get a money order or a cashier’s check by going to your bank.
While it may take you a while to dig yourself out of credit card debt, it’s possible with a close relationship with your creditors.
Last night, major news networks announced that Texas billionaire R. Allen Stanford had surrendered to officials for charges related to a $7 billion “ponzi scheme.” Stanford, a chairman of Stanford Financial Group, and his associated had advised investors to purchase certificates of deposit from the Antigua-based Stanford International Bank. This activity caught the attention of the Securities and Exchange Commission who filed civil fraud charges earlier this year.
Since this follows so closely behind the Bernie Madoff scandal of 2008, it’s no surprise that investors may be casting a suspicious eye toward their own investment purchases. As such, we’ve pulled together some information to help explain what a ponzi scheme is, and how to avoid it.
Benefit: The investment is promised to have a rate of return that is better than average, or most other investments. Oftentimes, a rate of return will be specifically noted.
Setup: Investors are given a believable explanation for why the rate of return will be so good. Oftentimes, this explanation includes the investor’s extensive skill, insider information or unique opportunities not available to the public.
Credibility: The person running the scheme may have exceptional credentials that make them easy to trust and believe.
Initial Pay-Off: Investors will reap the expected (high) rates of return for the first few periods, helping to substantiate the investment.
Ongoing Success: Other investors are told about the success in order to bring in new funding.
Step 5 is crucial to the ongoing success of the scheme, because the “investments” being sold are actually just empty purchases. The “return” is funded by new investors. Once new investors stop coming in, or current investors request liquidation of investments, the scheme collapses. Oftentimes, the leader will have stopped returning funds to investors and simply escaped with all of the money.
How to Avoid a Ponzi Scheme
There are five steps you can take to ensure that you are not investing in a Ponzi Scheme or similar fraudulent investment (Courtesy of USNews.com):
Verify Credibility with Second-Party Sources: Anyone can call themselves a financial planner, so check with national organizations such as the National Association of Personal Financial Advisors to get the credentials of the person you are considering. It may also help to get referrals from trusted friends and family members. Also, check your state’s securities regulator for complaints filed against them.
Verify Credibility Directly: Ask your potential financial planner for their documentation of success and ethics by requesting to review ADV Form, Part II, which a planner files with the Securities and Exchange Commission. It contains information about the adviser’s background, services, and fees. A site visit can also be a good idea.
Manager v. Custodian: A custodian is in possession of your investment account and issues periodic statements of transactions (i.e., Charles Schwab). The manager of assets executes those transactions (i.e., broker). Beware anyone who offers to do both functions, and asks that checks, etc. be made out directly to them.
Understand the Playing Field: Banks, brokerages, and planners offer both domestic and exotic investments, and it helps to get to know some of the basic types or names of these. If you get a pitch for an obscure or exotic investment you’re not familiar with, make sure you understand how exactly you will receive returns, including the process and the sources.
Age Matters: Your age, that is. If you are close to retiring, be especially careful with whom you trust your financial investments. Ponzi schemers have been known to prey on those near retirement because they may have some substantial securities to liquidate and “invest” with them.
And, as always — if it sounds too good to be true, it probably is.
If you are looking for a good way to build credit from either no credit or bad credit, getting a prepaid credit card may be your answer. Opening up a prepaid credit card account is easy. You simply apply just as you would like a regular credit card. The difference is that you won’t have a problem being accepted as you would with a credit card since you’ll be using your own money.
Once approved, you will deposit money into the prepaid credit card’s account. Then you are free to use your card anywhere that accepts regular credit cards. You can use it to book airfare, hotels or just regular purchases at a store. The only difference is that you are using cash rather than credit, which means you stay out of debt and show creditors that you are being financially responsible.
One of the biggest disadvantages of prepaid credit cards is you will have to pay a fee every time you deposit money into the account. You also will have to pay a fee for every time the card is used. It’s a lot like using an ATM that isn’t associated with your bank and you have to pay a fee each time you use it. These fees can add up but if you think about the cost of debt, the fees don’t seem so bad after all.
The other disadvantage is that not everyone will accept a prepaid card because of fear that you won’t have enough funds on the card to pay for what you are purchasing. This is usually the case with pre-authorizing something because they want to make sure if you don’t follow through with a reservation, you’ll have money on the card to pay for the penalty.
What are some of your experiences with prepaid cards?
If you’ve never considered how your emotions affect your finances, it’s time that you did. It could make a big difference in how you spend and save money.
Your Emotions and Actions
Your emotions are directly related to your actions. When you are angry, you may do something physical to relieve the tension you feel. When you are happy, you may feel like you can take on the world and nothing really matters at that point in time because life is grand. While both of these emotions are opposite, they can both have the same action, impulse buying.
Emotional Buying
Emotional buying is impulse buying. When you are stressed out or angry, you may go to the mall or store so that you can buy something that will make you feel better. When you are happy or excited, you may not think about the debt you are in or how you shouldn’t really save the rest of your paycheck because life at the moment is as good as it gets. You don’t want to think about the repercussions of spending, so you do it and don’t think about it. The problem comes when the bills start coming in.
How to Control Emotional Buying
If you tend to shop during heightened emotions, you may need to start taking precautions so you don’t put yourself in financial hardship because of it. Here are some tips to follow if you are an emotional buyer:
Take credit cards out of your purse or wallet and place them somewhere that you will have to go out of your way to get. This way you won’t find yourself driving home from work stressed out and just stopping off at the store for some shopping because you won’t have your credit cards with you.
Find a shopping buddy to do all your shopping with. This can be your spouse or friend. You need someone you trust and whom you will listen to if he/she tells you that you don’t need to buy a particular item.
Give yourself an allowance and forget about credit cards entirely. If you have a problem with maxing out credit cards, get rid of them and only use cash. Using cash ensures that you don’t put yourself in debt because you can only use what you have.
Do something else physical rather than shopping when you are emotional. List some things that you can do the next time you have a heightened emotion and refer to it when you feel yourself wanting to shop.
Do you suffer from emotional buying? How do you handle it or not handle it?
The world of finance is constantly changing and evolving. Our Blog sites on identity protection, insurance, bankruptcy, and small businesses are here to give you all of the information you need about finance—whether you’re a high-powered business executive or simply wondering what type of insurance is right for you.
We welcome you to start exploring our family of finance Blogs! Like what you see? You can subscribe to our posts, share investing tips with a friend on Facebook, or follow the latest finance updates on Twitter.
From all of us in the morefocus blog community—Welcome!
If you’ve never considered how your emotions affect your finances, it’s time that you did. It could make a big difference in how you spend and save money.
Loading ...
