Posts Tagged ‘marriage’

Can credit card debt management help you to save dollars?

People in this part of the world are used to using credit cards rather than cash for their day-to-day expenses. The proportion of credit use is far more than their retirement savings. Credit cards have given them immense portability and convenience to make frequent purchases. However, this has given rise to several financial diseases which is affecting the fragile US economy. One of the major setbacks is the accumulation of credit card debt. This makes it imperative for the people to know the ways of credit card debt management to avoid getting into a financially sticky situation.

The ways of credit card management

Here are few methods of reduce credit card debt as well as save dollars:

  1. Transfer your credit card balances – This means transferring all your multiple credit card balances into a zero interest credit card. This may be for a year or so as offered by the credit card company. This creates a great opportunity to clear out all your outstanding bills within the promotional period. In this process, you’ll be paying for the principal balance and not for the interest. However, there is a transfer fee for this procedure which hovers around 3-5% of the balance amount. By this method, you’ll save a lot of money even after paying the transfer fee.
  1. Create a budget: Start developing the habit of spending less. Vow to start living a frugal life. This is because the more you spend on useless things, the less you save. Therefore, to fight back such irresponsible behavior, plan a budget that will be comfortable for you to follow. Keep in mind that this budget should not become a burden for you; instead it should motivate you to spend smartly and save money for the rainy day. Use those savings towards debt repayment and you’ll see a remarkable decrease in the number of outstanding bills.
  1. Lower your interest rates: This is one of the most effective steps in the credit card debt management plan. Be vigilant and do your market research to learn about the recent market offers which various creditors are making. After a getting a thorough knowledge of the market offers, contact your current creditors. Request them to lower your card’s interest rate. The creditors will welcome this sort of gesture from you and will readily oblige. If you’ve been a good customer who has been punctual in making the payments, then the creditors will surely consider your request.

During the negotiation phase with your creditors, tell them that you are considering balance transfer as an alternative to lowering the interest rate. This will give them the necessary nudge to accept your terms.


This article was written by Grace Ruskin.  Grace is a financial writer and is associated with DebtCC Community.

Budget Basics #10 – Creating Margin

In business and financial terms, margin is typically defined as the difference between income and expenses.  For your personal finances, it can be thought of living below your means.

It’s easy to look at someone who is successful and wealthy and think that they are successful because they never have problems.  The reality is that sooner or later, every person and business will experience struggles and challenges.  Success is often the result of surviving problems, not the absence of problems.

There are cycles to the economy and to most businesses.  Success comes to those who can persevere through the downturns and hold on until things get better.  Margin helps to buy you time until things improve, and it gives you flexibility to make adjustments to handle your situation.

Like many people, I had a lot of margin a couple of years ago.  I was giving away nearly 30% of my income; taxes consumed another 25-30%; and I saved/invested another 10%.  As a result, I was living on about 30-40% of what I made.  Within a matter of months, things changed dramatically.

In addition to the economic recession, Lady M and I decided to relocate from Vermont to the great State of Texas.  Within a six-month period of time, we went from three sources of income to one.  Including employer-provided benefits, our income dropped by about 45% in a matter of months.  Having margin allowed us to make that move.

We had to make some adjustments in our giving, savings and spending to reflect the reduction in our income.  Too bad we couldn’t adjust our taxes as well.  Our margin shrunk, but thankfully, we have weathered the storm so far.  We are working towards increasing our income, expanding our margin and restoring our level of giving. It’s taking time, but we’ll get there.

How big of a margin should you have?  There is no universal formula.  It all depends upon your income, lifestyle and ability to make changes.  Margin is a lot like an emergency fund.  It won’t solve all problems or keep you from experiencing challenges, but it will increase the likelihood you will survive a challenge when it arises.

Want a few tips on how to create margin.  Here are a couple of articles you can read which may give you a few ideas.

18 Means for Living Below Your Means by Mark and Angel Hack Life.

10 Smartest Ways to Live Beneath Your Means by Dumb Little Man.

Budget Basics #8 – Ways to Cut Your Spending

I have had the pleasure of living with more money, and the joy of living with less.  I will tell you that it’s always easier to spend more than less.  No matter how much money you make, it’s difficult to ratchet back your lifestyle.

Your motivation for cutting your spending may be voluntary (you’re saving for something big) or forced (you lost your job).  No matter the reason, accept that there is no magic formula or simple solution to cutting your spending.  Your success will depend upon your willingness and ability to exercise self-control and discipline.

The following are a few principles and techniques that you may find helpful.

  • Cash – Generally, you will spend less money if you pay cash.  You can also implement an envelope system Dave Ramsey highly recommends.  Basically, you put cash in various envelopes for each type of expense and only spend what’s in the envelope.  For instance if you have a clothing envelope, you only buy clothes with the allocated cash.  When the cash is gone, you stop buying. 
  • Cheaper Options – Review your budget to see how you might maintain a type of service, but use a cheaper option.  Cable tv and cell phones are good examples.  Do you really need the DVR, movie channels or the unlimited data plan?  Eliminating options and extra services can cut your bill by 25-50%.  Having all the bells and whistles may be nice, but it may not be worth the added expense.
  • Cutbacks – Rather than completely eliminating expenditures, reduce the frequency.  Entertainment is a great example.  You can still go to the movies or eat out; just don’t do it as often.  Go once a month, rather than once a week.  You may be able to really curtail your spending if you cutback the frequency and select a cheaper option.
  • Eliminate – Completely eliminating an expense can be the hardest thing to do.  Unless you like to throw away money, you obviously had a reason for spending the money in the first place.  It can be difficult to let something go.  Acknowledge the sacrifice you are making, but keep in mind that’s it’s less important than one of your higher priorities (like paying your mortgage).

No doubt, curtailing your spending is hard.  Changing behaviors and sacrifice is never easy.  You may not get it right every time, but don’t give up… and don’t keep overspending.  It may take a little while, but you can control and cut your spending if you remain focused and diligent.

Hint: Stay more focused on what you are going to gain by cutting your spending than what you are losing.  It will be much more difficult if you are constantly thinking about what you can’t have or can’t do.  Far better for you to think about what you’re going to achieve.  It will be your reward for trimming your spending and managing your money well.

Budget Basics #2 – Starting a Budget

First step to budgeting… do something.  You can finesse the process as you go along, but you have to begin somewhere.Like many tasks in life, one of the hardest things is getting started, especially if it’s something you prefer not to do.  How many diet, exercise and financial plans have been delayed until tomorrow?  So let’s get started. 

For your first step, my recommendation is tracking your current spending.  It can be difficult to budget how you’re going to spend your money if you don’t know where your money is going.   Relax; this isn’t as difficult as you may think. 

In the present electronic age you probably buy a lot of things with your debit or credit card, and you may pay some of your bills online.  Copies of your recent bank and credit card statements will probably capture the bulk of your expenditures.  If possible, I would recommend using the past three months’ statements.  By averaging out multiple months, you should reduce the impact of atypical expenses.

Create a simple four-column Excel spreadsheet; a column for each month, and the fourth column for the three-month average.  Next… decide on some income and expense categories.  The advantage of using Excel or something similar is the easy ability to add or eliminate categories.

A common question is how many categories should I have?  It all depends upon how tightly you are trying to manage your finances.  If you’re on a very tight budget, then I recommend more detail.  The more detail you have, the more you can assess your spending.  Be honest with yourself and your situation.  Unnecessary information can actually reduce the effectiveness of your budget.

Consider utilities as an example.  If you have no intention on altering your behavior no matter what your utilities cost, then simply group everything together as utilities.  However, if want to explore ways to reduce your electrical, heating, water or cable bills, then you should segregate them into different categories.

The next task is pouring through your statements to see where your money went.  It may seem like an arduous process, but I think you’ll find it can go rather quickly.  Depending upon your financial institution you may be able to download your transactions into a spreadsheet or a program like Quicken (I’ll talk more about tools and software later).  Even if you can download the info, I suggest you compare the downloaded information with your statements.  The software may classify things in a manner that is not helpful to you.  I encourage you to take your time with this step.  It may seem tedious, but in the end, it will help provide you with a clearer picture of how you’re spending your money.

The next step for this exercise is calculating the average expense for the number of months you input information.  Unless you like running a calculator, the average function in your spreadsheet should make this an easy task. 

Take a look… any surprises?  I would be amazed if you did not look at a category or two and say, “Wow.  I didn’t realize I spend that much on____.”  It happens to best of us.

Congratulations!  You did it.  You got started.  Slap yourself on the back.  High five yourself.  There is more to do, but you just performed a critical step to creating a budget.

In Budget Basics #3, we’ll consider some of the tools and technology that you can use to help you create and monitor your budget.

The Treasures of Life (The Value of Money – Part VII)

Have you ever heard that there are more important things in life than money?  If so, then what is more valuable than money?  If you can’t answer the question, how do you know that money isn’t the most significant thing in your life?

Three things have much greater value than money in my life – faith, family and friends.

I have very strong convictions about my faith.  You don’t have to agree with my theology, and I respect your right to be wrong… just kidding.  Seriously though, I do believe my faith is real and true.  If I don’t really believe my religious convictions are true, then I’m essentially saying that I believe in a lie.  However, I also respect your beliefs and convictions even though I may not personally agree.

It’s my faith in the true character and nature of God that I know will see me through anything I encounter in this life, and usher me into the next.  It’s been a difficult couple of years for Lady M (my wife) and I. My faith has helped me deal with life, people and situations when I didn’t understand or have a clue.  At times, I just needed to remind myself of the Biblical verse Romans 8:28, which states that in all things God works for the good of those who love Him, who have been called according to His purpose.

Family is the next most important thing to my faith.  Over the past two years, I have truly come to appreciate the value of a good and supportive family.  I can lose everything and still be okay, so long as I have my family.  Conversely, I also know that I could have all the fame and fortune in the world, but it would be worthless if I sacrificed my family to attain it.  Careers will end, kids will grow up, and friends will come and go.  Lady M will be the one thing that remains… until death do us part.

Your family history may be destructive and painful.  Families can be a great source of strength and encouragement, but they can also inflict some of the deepest wounds you’ll ever experience.  If that is your story, I’m sorry and truly wish it were not the case.  I have no simple solutions to overcome your past.  All I can do is to offer you hope that you can build the family you never had.  Learned behaviors and patterns may be hard to break, but I have seen other people do it and know you can too.

Friends follow close behind family.  I believe we all have an innate need and desire for relationships with other people.  Maybe it goes all the way back to the beginning when God said that it was not good for man to be alone.  The victories and successes of life can become hollow if you don’t have anyone to celebrate with and share the good news.  Furthermore, if you stumble and fall, it can be difficult to recoup and regain momentum without someone to help you.

You can choose to live life alone, but I think you will miss out on so much by going solo.  All relationships take effort, and people will disappoint you.  They are human, and so are you.  Friends can hurt you the way that complete strangers can’t, but like family, they can also bring you greater love, appreciation and joy.

I have a Successories print that’s been hanging in my office for over a decade.  Under the picture of a little boy it reads, “Priorities – A hundred years from now it won’t matter what my bank account was, the sort of house I lived in, or the kind of car that I drove… but the world may be different because I was important in the life of a child.”  I admit it’s a bit cheesy, and I’m dorky.  However, it can also be a good reminder of what’s most important in my life. 

Call them priorities, values or the treasures of life.  When it’s all said and done, so many things that I expend my energy upon won’t matter.  Money may keep me alive a little longer, but it can’t make me live forever.  All the treasures and possession I accumulate in my life will one day belong to someone else.  With that in mind, I want to invest in treasures that will last a hundred years and beyond.  For me, that’s my faith and the lives of other people. 

What is it for you?