Tag Archive for Paying off Debt

3 Signs You?re Headed for Financial Trouble

Financial Trouble

9044771759_6a89cc9c60_zWhen it comes to finances, some people just prefer to keep themselves in the dark regarding the true state of their accounts, especially if they are in debt. If you aren?t making enough money to cover all of your expenses, it can be easier to just ignore the problem rather than meeting it head on and finding a solution.

Of course, this is a bad idea ? and can lead to serious problems down the line. Rather than hiding from your money issues, take an honest look at your situation so you can make the tough decisions necessary to get back on track.

Below are three signs that you may be headed for financial trouble. If you notice any of these signs in your own life, be sure to address the issue right away.

Reliance on Credit Cards

This is probably the most common sign that there is financial trouble brewing. While credit cards can be used correctly in a variety of circumstances, you shouldn?t have to rely on them in order to pay your regular monthly bills. If you do, it is likely that you are spending more money than you bring in each month. That reality is a path toward major financial problems in the very near future.

Not only does leaning too heavily on your credit cards mean you will soon be paying interest charges on those accounts, but you will also run out of credit sooner or later. As soon as you notice that you have to lean on credit just to cover your bills each month, stop and take a closer look at your whole financial picture.

Stagnant Wages

Have you been making the same amount of money for a long period of time? The cost of living will gradually increase over time, and if your wages don?t follow suit, you could soon find that you can?t afford the same lifestyle that you had gotten used to.

Keep track of your annual earnings as the years go by and make sure that you are making progress to at least keep up with the cost of living at the very least. If not, you might need to get to work on either obtaining a raise within your current company or finding a new position that pays a better wage.

Lack of Control

People who have very little idea of what is going on in their financial lives are sure to run into problems at one point or another. It is important that you know what your accounts look like and what your expenses look like so you can plan for the future properly.

If you aren?t sure exactly how much money is in the bank, or even how much money you spend on a monthly basis, it will be very difficult to make smart decisions and manage your money wisely. Just like you try to keep your actual house clean and organized, your financial house should be in order as well. There are a variety of tools you can use to take control and monitor your finances – a favorite of mine is Personal Capital as they allow you to manage your finances and track your spending for free.


Have you ever seen any of these signs in your life? What did you do to reverse the trend and get back on track financially? What are some other signs of financial trouble you can think of?



Photo courtesy of: Schwar

Creative Ways to Pay Off Credit Card Debt

Credit Card Debt

Credit Card DebtIt will never happen! That must have been the thought in many people?s minds when they used their credit cards so liberally before the days of the recession. Somehow they did not regard the balances they were accumulating on one or multiple credit cards as any real problem. Even though each balance that was outstanding at the end of the month incurred a late fee they never really saw a day coming where they’d be free of the debt.

The recession blew way the general feeling of complacency and reality struck. Many were simply unable to meet their obligations and the consequences have been various. One consequence that has been constant is their owners? credit score has plummeted and as a result their ability to borrow today has been diminished.

Convenience but…

No one disputes that credit cards are the most convenient way to buy these days but they must be used properly. They provide interest free credit only if the outstanding balances are paid in full each month. Credit cards that have been used to finance everyday living when someone is living beyond their means become extremely dangerous and dig their user a bigger hole.

The problem never goes way without some kind of action by the borrower. With the average credit card debt hovering around $15,000 per household, it can make it feel impossible to ever be free from the shackles.


In some instances a consolidation loan with realistic loans might be the answer to getting some relief. Such a loan allows individuals to have one payment, as opposed to multiple ones, along with a lower overall interest rate.?Doing this in connection with avoiding credit cards altogether can help you get out of debt quicker while also saving some money along the way.

Everyone wanting to clear the cards slowly should start to think about throwing any extra money they have at killing the debt.?You can earn extra money through a side hustle, or you can even send in payments throughout the month to knock down the balance even more.

Feel Good

Psychologically it may be a good move for those with several cards to get rid of them one by one starting with the one with the smallest balance. That way there will be the quickest sign of a result and is known as the debt snowball approach. If the minimum payment is paid on the other cards you can then focus all your effort on the smallest balance. Once you pay off that first card then you can begin to focus on the other cards to pay them off. Alternatively the first card to target is the one which is incurring the highest interest. This is the logical approach as opposed to the emotional one that needs to see a quick result by tackling the smallest balance.

The only way that anyone will pay off overwhelming debt is to find the self-discipline required to stop spending and not being enslaved to poor money decisions. It might feel impossible to kill your debt, but it is most certainly possible – you just need to want it and be willing to make the sacrifices needed to live a life of prudence.



Photo courtesy of: Jason Rogers


Invest or Pay off Debt? 5 Things to Consider


debtIt?s a rare moment when you find yourself with a little extra money these days isn?t it? You may have sold a few things online or picked up a number of side hustles and found yourself with some extra cash in your budget. Now, what to do? You want to be smart about it, so you don’t end up regretting your decision in the end. If you don?t have a financial advisor to consult, someone like My Wealth Solutions?or one of the others out there, here are five things to consider that might help you make your decision.

Are You Carrying Bad Debt?

Bad debt is any debt that is not attached to an asset. A mortgage for example, is secured by property that has relative value. This is why it is considered ?good debt?. Credit card debt, secured by nothing more than buying stuff you?re still paying off from Christmas 2013, is bad debt.

Credit card debt should be killed as fast as possible. The interest charges alone are enough to keep you from increasing your net worth until it’s paid off. If funneling your windfall in this direction frees your from the credit card debt treadmill, it really is an investment of sorts; in your financial stability as much as in your peace of mind.

Consider The Returns

This one is about simple mathematics. If you have a mortgage, and you?re paying an interest rate of, say 5%, and you put your spare funds into your loan, your return is what you?re saving in interest; i.e. 5%, and with no tax liability to speak of. However, if you invest your money, will your return be greater than 5%? Even after you?ve been taxed on it (tax counts)? Unless you really want to scroll the tax department websites yourself, these are questions you may want to ask your financial advisor ? and remember to ask about the tax. Tax rates are ever changing. Investing in someone else to keep track of these shifting sands for you is a major headache-saver.

Long, Medium or Short Term Goals?

Consider which of your goals you?d like to make the largest leap towards. That will help you decide how and where to place your money. Perhaps you have a long-term goal of buying a home; in that case, you may be best served in putting your funds towards this. If you have a short-term focus of taking an overseas vacation in a few months, you can place the funds in that direction. It depends on your focus and how your money can best serve you.

Check Your Budget

If you have a budget or any kind of savings plan, check your progress. Have you had any unplanned expenses lately? Are there any holes that need to be plugged? How urgent are they? Looking at your finances regularly helps improve your financial intelligence, and you?ll soon find it easier to make smarter decisions about your money.

Remember Risk

Never forget that every investment carries an inherent amount of risk, no matter how small. This is not the case with paying down debt. Consider where you?re at and what?s going on for you. If you think you really don?t want to be stressing about a new deal right now, then paying down your debt may just be the most effective investment you can make ? and there?s nothing wrong with doing something safe and sensible every now and again. Especially when it comes to money.

If you?ve scored a bonus at work, or your tax return just came through, you may be wondering what you can do with your windfall. There are really only ever two options for what you could do with spare cash; invest it somehow, or pay down debt.



Photo courtesy of: Winnifredxoxo

Pay Off Your Debt AND Keep Your Social Life – Here’s How!


debtDespite what you may have heard about having, and keeping to, ?a household budget, it is possible to pay off your debt and keep your social life alive. It can even be fun if you’re creative with it. You can find even more information on how to manage debt and still have a social life by doing a little online research. Many financial advisory companies?have different tips on how you can balance having a social life while paying off debt.

Rethink Dining Options

How do you meet your friends for dinner? Do you book a place and split the bill? Consider some wiser options for entertaining. Can you have everyone over to your place, and they each bring a course? If that doesn’t work then you can also consider things like ordering dinner out as opposed to dining in the restaurant. That’ll allow you to save on drinks and tip and you can bring it back to your place or a friends place. If you enjoy dining at the restaurant you can also do things like getting only an appetizer or splitting meal. Not only will that allow you to save money on dining costs but you can also eat healthier because you’re eating less.

Work Out For Free

Do you have a gym membership? Do you really need it? If you visit the gym more for social reasons than fitness (you?ll know if you?re doing this; do you work out and go, or work out and meet for muffins at the juice bar? Guess who?s there to socialize?), you can probably find a less expensive alternative, especially in the warmer months. Walking is free; not to mention a great way to workout and get some time outside.

Bike paths, park trails, and walking tracks are all options that cost less than the gym, and you can arrange to meet your friends there. There are even clubs meeting in most cities to run up staircases – and then go for breakfast and coffee; no membership fee required. Most of these local groups can be found via social media sites, or start one of your own.

Be Honest With Your Friends

Talk about your financial goals. Tell your friends and family that you?re working towards certain financial goals and you?d appreciate any support they can offer. This way, when you back out of expensive arrangements, they?ll understand. They may even help you by adjusting their activities to suit your slimmer budget. The more you talk about what you?re aiming to achieve financially, the better it is for your own self-discipline. No one is better at holding you to account than your inner circle.

Most people balk at the ?B? word, but sensibly orchestrated budgets are not supposed to mean the end of having a life. It is important to ensure that any sound financial plan (which is, really, all a budget is), incorporates a level of flexibility. This way, your budget becomes a part of your life rather than the massive social handicap so many people experience.



Photo courtesy of: Jason Rogers

Get Out of Debt: Staying the Course

get out of debtGreetings, friends!! Last time we talked in our getting out of debt series about dealing with roadblocks. Today we’ll talk about staying the course and finishing your journey to becoming debt free.

One might think it’d be simple to stay on track once you’re smooth sailing on your debt free journey, but as with any goal, there are little monsters?that can pop up and discourage you from crossing the finish line to debt free. In light of that I thought I’d talk about a few of those little monsters and how we can kill them once and for all.

Get Out of Debt and STAY Out of Debt

The “we’re doing SO much better than we were” lie.

Yes, it’s easy to succumb to. You started with, for instance, $25,000 in credit card debt and a $15,000 auto loan. Now the credit card debt’s been whittled down to $5,000 and the auto loan is down to $3,000.?It’s a manageable amount of debt, you tell yourself.?Not enough to cause any problems. Soon, though, you find yourself pulling out the little plastic card again and falling prey to the “it’s only” lie. It’s only $100. Or $50, or $25.

Soon, though, those “little” amounts add up to big amounts, and that credit card balance is creeping back up into the double digits.? Make a commitment that, no matter how low that credit card balance gets, that you won’t allow that balance to increase, or to stay the same. Commit to yourself that some progress at whittling that balance away each month must be made, and that the goal is still to get to a zero balance.

The “we’re out of debt now: it won’t hurt to throw a little bit on the card” lie.

I’ve seen, read and watched as lots of people (ourselves included) have fallen prey to this lie. You reach debt freedom, you revel in the accomplishment you’ve made and in the pride you have over being debt free. Then you see a shiny, sparkly something that you just have to have now, even though you don’t have the cash set aside for the shiny sparkly something.

What will it hurt, you tell yourself, to just put a little bit on the card? I can have it paid off again in a few months.?But somehow, that never happens, and before long you’re looking at a balance in the thousands again, wondering how you got yourself into this mess when you worked so hard to get out. Commit to yourself that any use of the credit card?from now on will be paid in full each month, no matter what.

The “I’m so tired of sacrificing/budgeting/spend-tracking. I’ve had enough. I need to live again” lie.

This can be a tough one. When on a journey to kill debt, people often spend months/years on end living frugally, writing down every expense, and telling themselves “no” a lot as they payoff the debt. And sometimes, debt fatigue kicks in and you find yourself overwhelmed, causing you to fall off the wagon and give up on your journey, even though you may be just a few short months away from the finish line.

How to handle such a situation? Do something fun. Not “go to Ireland for a month” fun, but set aside a budgeted amount of money to do something fun that you haven’t been doing since your debt payoff journey began. Take a day or a weekend trip ?Go to dinner at your favorite upscale restaurant. Set a limit of $100 and buy something new for yourself that you’ve really been wanting. Do this as a reward to yourself for how far you’ve come, and then get back on track to finish the course.

A journey to debt freedom can often be long and arduous, and there are many roadblocks to conquer along the way, however with a few maneuvering tactics in your weapons arsenal, you can make it through with flying colors.


Are you on, or have you completed, a journey to get out of debt? What was the hardest part about seeing it through to the end? What roadblocks are you currently fighting with debt or anything else financially related?



Photo courtesy of:?Kris Krug