Financial Cosmetics

Women spend thousands of dollars on rejuvenation, cosmetics and plastic surgery in order to look young for years or even decades.

Aging men spend money that they don’t have buying sports cars, expensive watches and using Viagra in order to be more attractive to younger women.

We are so focused on looking good that we stop caring about our families and even about our future selves.

Older people become like children.  They can’t earn anything. They don’t understand or feel comfortable in our electronic and ever-changing world. They need to be taken care of. But someday that will be you. Loss of strength and/or confusion just creeps up on people as they age. Are you going to have the money you will need to take care of yourself when you are 80 or 90?

Have you ever seen a 95 year-old man or woman? How long do you think it would take them to run a mile? How do they do their shopping? Do they need help getting dressed or bathing?

Now imagine these two different scenarios:

In one this 85 year-old is living on $800 a month. They share a little room with someone that they don’t really know but is in the same boat. They don’t have a car or a phone and they only eat one small meal a day. Once a month their children visit them and give them a care package and of a couple hundred bucks.

In the second scenario they have an income of $5,000 a month. They live in their own home and get out to shop and entertainment 2 or 3 times a week. They have enough money to give their kids some money when they need it and buy lots of presents for their grandchildren.

Which are you going to be?

If you are young, it’s not a pretty sight, is it? Yet, some day that may be you.

Taking care of yourself

Although we do a lot to avoid dying young we ignore our future quality of life.

Men want a strong erection and women want to be beautiful until they die.

Everybody says I want to be healthy until the day I die.

Consider fixing your finances at this point of your life. The earlier you make a move, the more chances of you living the second scenario when you grow old. www.DebtSolutions99.com can help, we feel you.

What You Should Do Next after Becoming Debt Free

Almost everyone can agree that paying off debt is NEVER easy. It takes a lot of motivation, self-discipline, managing skills and an unwavering commitment to staying on track and paying off your debt faster. Either by debt stacking, consolidating your credit cards, working with a credit counselor or living on a strict budget, the process of getting your life debt-free can be really stressful and confusing. But when you are making your last payment and you realize that you’re one final check or one simple click away from becoming debt free – you’ll know that all of your sacrifices were absolutely worth it.

So for a moment, imagine you have overcome all the obstacles. Envision that you’ve gotten yourself debt-free (yay!) and you nailed your celebratory dances. Now what? What’s the next step?

Well, for starters, you definitely don’t want to get yourself in debt again – been there, done that, no thanks! But you have this great budget set up, and it’s now basically producing “extra money” and you don’t know what to do with it. YOU MUST RESIST THE URGE TO SPEND IT! Now that you are debt-free, this surplus cash flow is EXACTLY the opportunity you needed to start building your financial independence and your future. So here are some tips on what you should do next:

Tip #1 – Build a Large Emergency Fund

While paying off debt, it’s very common for people to consume all extra money they have to reduce their balance. After that final debt payment is made, keep up and use that momentum and start saving some (or all) of that extra money to build a large emergency fund.  This is definitely where you should start.

Most financial experts recommend a six-month emergency fund. A fund of this size should be adequate in covering you against an unexpected job loss or major health issues. Calculate how much money you need in a month to live a comfortable quality of life, and then multiply it by six.  Remember – this isn’t money you're trying to invest but rather something you will leave untouched until needed during the hard/difficult times. It’s best to put it in a separate account for quick reference. You can also find banks that offer a good savings account with terms that allow you to earn a little bit of money while you save.

 

Let’s hope that you’ll never need this emergency fund, but having one can let you breathe and live your life a little bit more freely. Your sacrifices will still pay off!

Tip #2 – Invest a Greater Portion of Your Income

Now, you are debt-free and have a large emergency fund – sounds pretty good, right? So, now what’s next? Now you can start using a larger portion of your income for your investments. You can now raise your investment from 5% to 15% or even 20%. When paying off your debt, you learned how to lean out your spending habits and become more financially responsible.  All the skills and self-discipline that you’ve developed while paying off your debt can now help you build your investment income.  

Take advantage of the compound interest that banks may offer, and since there is no debt to hold you back, you can really make your retirement savings grow bigger – faster! Who knows, maybe you can even have an early retirement and start enjoying life stress-free.

Tip #3 – Spend (Wisely) and Have a Blast!

This could be considered one of the toughest/hardest steps for anyone who has paid a large amount of debt. You might be traumatized from your recent debt riddled experience, and find it’s harder for you to let go of money! But if you still find yourself with extra money while consistently saving 15% or more of your income, investing in your retirement savings, and maintaining an emergency fund, then by all means REWARD YOURSELF! It’s not a bad thing to give yourself a little treat. You deserve it!

Go on a vacation. Buy whatever you want. Go skydiving! As long as you have a plan and it’s not beyond your means, you should enjoy life. You have to see it for yourself how far you have come through in making your financial freedom come to life.

Conclusion

Finding your financial success or financial independence is not only about money, savings or saving some more money. Leave yourself a room to enjoy the good things life has to offer. Saving money can be set as a priority, but it’s also very important to remember why and what we are doing this all for in the first place – quality time with the family, meeting up with friends, and most especially keeping yourself healthy and mind at peace – you know, the things that make you happy and inspired. There’s no greater achievement than having yourself debt free and at the same time not losing your life and aspirations.

The Smart Way to Consolidate your Credit Card Debt

Juggling multiple credit cards can be both confusing and time consuming. You have to worry about multiple interest rates, multiple due dates and multiple chances for late payments. One way to simplify, or even lower your payments, is by consolidating your credit card debts into one monthly payment. There are several ways you can do this, with one being transferring your balances into a single low interest rate credit card. However, a balance transfer can be tricky and you need to be 100% sure when making the decision, for it might ruin your credit score if handled incorrectly.

Be Smart. Here are some guidelines in consolidating your debt:

-         Understand your current situation. Collect all your credit card statements and add up the total debt you have to your creditors. Make sure there are no errors when doing this – an error could disqualify you.

-         Understand what you can save. Calculate the amount you can save monthly to pay off your debt.

-         Understand what you are getting into. Know how long the introductory low-APR window is.  A longer duration gives you more time to pay off your debt at a lower rate before it goes back to the standard (and usually higher) APR. Understand that typically credit card companies offer zero-percent for a limited period, but there’s a catch: a 0% APR does not mean it’s totally free. Be aware that when you transfer, there’s a one-time fee equal to 2-5 percent of the transfer amount.

-         Be Responsible. Avoid any late payments on the balance transfer card, as it can trigger an increase your interest rate AND if you make purchases on these cards, you will be charged additionally on the interest rates of purchase.

-         Know that you are really saving. Calculate how much you can save on interest during the 0% APR window compared to your existing rates. Then figure out how much you will pay in interest at the standard purchase rate after the 0% APR window, covering the estimated time you think it will take to pay off the remainder of the balance. Compare these numbers to what you would pay in interest at your current rate(s). The goal is to estimate how much money you can save in the long run if you choose to take on a new card for consolidation.

-         Get (the right) help. You can also try consulting a non-profit credit counselor to help you out with the decision but choose the reputable organization. A non-profit does not guarantee free or legitimate services, sometimes, they even charge higher fees.

Also, one of the benefits of consolidating credit card debts is the potential to increase your credit score. You can achieve this by keeping in mind the following:

-         The credit utilization or the amount of credit actually being used. Try to keep credit card balances low for higher or optimal credit

-          If possible, avoid closing old accounts after consolidation. 15% of a credit score is contributed by an established, aging account

In conclusion, if you wish to consolidate your credit card debt, and eventually pay off your debt sooner, you have to consider all the scenarios and be honest on your financial capability to sustain or meet payments on time. This process is not for everybody and it may end up costing you more in fees and rising interest rates on a balance transfer, which may hurt you and your credit score. You have to make sure this will benefit you in the long run, so it is best to compare the rates first and/or consult a credit counselor if you think you’re stuck on the right approach to resolving your debts.  Remember: Your way of life is at stake, not just your credit score.

Best Practical Ways to Get Out of Debt

For many of us who work for a living, a financial struggle is something that seems inevitable. There are so many necessities tugging at your pocketbook like monthly bills, food, car expenses – the list goes on. This is where having a debt becomes stressful, especially if you don’t know how to handle it properly. If you take out a bank loan, you are obligated to pay it back as agreed, no matter what your circumstances. If your life leads you to losing your job, or you get into an accident, or an emergency, or you become a single parent, etc. – situations that likely increase your financial burden – your obligation to pay that loan does not change. Life is unpredictable.

However, there are cases when debt can just be a result of overspending. The key to getting out of debt starts from you maintaining self-control and setting goals towards your financial freedom. A lot of people try to get rid of debt, but give up when they find themselves stuck and helpless. There’s a lot of simple tips and life hacks that can help you eliminate your debt in a short period of time. Here are some practical ways to get out of debt:

1.       Stop Borrowing Money

This is the obvious one. Always remember to stop using debt to fund your lifestyle: if you can’t afford it, don’t buy it! This means not giving into your shopping addiction or compulsive buying habit. Avoid signing up for more credit cards. Focus on what you need over the things you want. Focus on sticking to your strategic plan to get rid of your debt.

2.       Make it a Habit to Stick to your Budget 

This one is about being consistent. When making a budget, track and balance both of your monthly income and expenses. It will help you monitor your financial situation so you can move forward and plan on how to clear your debts. By monitoring, you will identify if you have extra money (surplus), or if you still have negative income (deficit). The goal is to increase your surplus and use THAT excess money to pay off your debt. To build a higher surplus means earning some extra cash and/or trimming down your expenses.

Earning some extra cash can be done by picking up those extra hours at your job or finding a second part-time job or services. Just make sure you are able to do it within your limits and capabilities – never compromise your health! Adding medication or hospital bills is the last thing you want to happen if you’re in debt.

                                                                                                             

Trimming your expenses means prioritizing your needs over your wants, cutting out the unnecessary stuff like your gym membership, cable and magazine subscription, home phone, Netflix. Minimize eating out at your favorite café or restaurant. It’s not easy, but neither is a life in debt.  

3.       Create/Build an Emergency Fund

It might seem counter-intuitive to save money while you are currently in debt. But in doing so, you can help your future-self avoid the immense strain. You can start by keeping a $1000 emergency fund. The idea is to avoid taking out more loans or charging more on your credit cards by having cash ready in case of emergencies.

If you are a home owner, there is also a home equity line of credit (HELOC) possibly available to you. A HELOC is a revolving line of credit secured by equity in your home – a line credit you can use as your emergency fund along with other purposes such as paying off your debt, etc. However, use it wisely! It can become another problem if you don’t pay it back on time. Still, it is a good available option to you if you need it.

4.       Use a Balance Transfer

Getting offers for zero percent credit cards is very tempting and can be a good way to pay off your debt. You can convert your high interest credit card debt to zero interest credit card debt via balance transfers. You may also be able to consolidate multiple cards balances onto one card.  With discipline, you can use the grace period to transfer your balance and help you get out of debt. But remember, you can only get this privilege if you’ve got good credit.

5.       Use a Personal Loan

      Obviously, you don’t want to create more financial obligations, however, you can use the funds from a personal loan to pay off your credit card debt. Why? A personal loan will carry a lower interest rate than your credit card, so in effect, you are “transferring” the balance from a high-interest account to a lower interest account – saving you money.  There is the added benefit to your credit scores since you’ll be converting “score damaging” revolving debt into “score benign” installment debt. 

6.       Organize your Debt

It is essential to organize your debt with its interest rates, minimum payment and actual payment on the list. This can help you map out a plan to paying it off more effectively. If you are having a long list of debts you want to settle, there is a Debt Stacking method you can use wherein you will be comparing several debts and using the differences in the interest rates and minimum payments to mathematically calculate the fastest and least costly way to pay your debts off. This method will give you a better plan to get out of debt sooner.

7.       Throw Excess Cash at your Debt

Like we said at the beginning of the article, “Life is unpredictable.” Sometimes your luck is unfortunate, but other times life presents you some excess cash. You might win a bet, receive an inheritance, or get a tax refund. The idea is to prioritize paying your debt whenever you get the chance. The more cash you can put towards your debt, the faster you can get rid of it.