As a Real Estate professional… as Michelangelo once stated… “I am still learning” Here is a very good article from Michele Dawson of Reality Times I thought I should share with you. Don’t hesitate to give me a call at 340-690-9177 or shoot me an email at [email protected] if you would like more information about Real Estate from one our professionals here at RE/MAX St. Croix in Americas Secret Paradise.
Eight ways to reduce your credit burden
Are you suffering from a holiday spending binge hangover? Perhaps you’ve recently been through a divorce, illness, the death of a spouse, or you lost your job. Finding yourself in debt and having a hard time keeping up with your mortgage payments—or you’re seeing your dream of buying a home this year drift away.
You’re not alone.
Consumer Credit Counseling Services, a nonprofit credit counseling organization, traditionally sees an increase in consumers seeking help during the month of February, when they have problems paying holiday bills.
If you resolve to get out of debt this year, you’re in good company. A survey of 100 CCCS clients found that 70 percent had made financial-related resolutions in years past.
Making the resolution is the easy part. Keeping it is another story. In fact, about 77 percent of those setting their sights on getting out of debt said they lost focus of their goal by June and ultimately contacted CCCS for counseling.
“The beginning of a new year is a great time to commit yourself to improving your financial life,” said Suzanne Boas, president of the CCCS Atlanta branch. “But it’s easy to become overwhelmed by money matters as the months wear on. If folks make a resolution to conquer debt, they need to put some serious muscle behind it in the form of a realistic action plan.”
Various branches of the CCCS recommend the following:
Don’t use credit cards. Keep a record of all your daily expenditures for one month to determine where your money is going. Drawing from your daily expenditures, cut your spending and set a realistic budget. Get rid of the extras – those fancy coffee drinks every morning, lunch out, entertainment, etc. If you normally spend $2 for coffee every day at work, you could put $520 toward your debt over a year. Two $5 lunches a week will also cost you $520. If you go out to lunch five times a week, spending an average of $5, you end up spending $1,300. If you take a sack lunch at a fraction of the cost, you would have about $1,000 less in debt. Set up a priority list among your creditors. Figure out what your balances are and pay off the ones with the largest interest rate first – normally those will be department store credit cards. Increase your monthly payments. Even $5 or $10 more toward each credit card can make a difference over time. Set some goals. Make them realistic and simple. Set short-, middle-, and long-term goals. And when you achieve them, reward yourself (without spending a lot of money, of course). Once your debt is gone, revise your budget accordingly. Put the money that you were putting toward your debt into a savings account. Start your holiday shopping early and spread it out throughout the year so you can take advantage of sales and you don’t find yourself in debt come December.
Once you’re out of debt, the experts say you should review your retirement plan. If your employer offers a 401(k) plan, take advantage of it – your earnings are directly deposited before taxes. Find out about Roth IRAs and determine what’s best for your situation.
But the real key to getting out of debt and saving money is in your day-to-day habits, not your investment strategy.
“How you spend your money is more important than how you invest it,” says the staff at the CCCS branch in Atlanta. “It’s much simpler to reach retirement goals by deciding how to live rather than how to invest.”