http://www.articletrader.com/ Articles at ArticleTrader en-us http://www.articletrader.com/finance/debt/smart-and-easy-steps-to-debt-free-life.html http://www.articletrader.com/finance/debt/smart-and-easy-steps-to-debt-free-life.html Wed, 23 Nov 2005 00:00:00 -0600
Try out various options to repay debts:
Accept the fact that you are in debt and you have to pay off your loans. Do not file for bankruptcy without trying out the other options to get rid off your debts. It is always better to pay off the debt rather than declare a bankruptcy, which will have a negative impact on your credit profile.

So coordinate with your creditors, discuss your situation with them and initiate the negotiation. Some of your creditors may not be cooperative at all. But then negotiate with those who are willing to cooperate with you. Professional help from creditors can make it easier to deal with debts.

Do not acquire any more credit:
It is a general conception that one can repay previous debts by taking credit from some other creditor. This may help in some cases but if your income level does not support it then you better not go for this option. This is because you have already piled up a lot of debts and it may become difficult for to you to deal with so many loans at the same time.

You may also think of converting unsecured debts into secured debt but you may lose your home or car in case you fail to pay off the secured debt. Moreover, you may not be able to find a suitable debt settlement program, as these programs do not support consolidation of secured debts.

Assign a priority to your debts:
Prioritize your debts and try to pay off those accounts first which may lead you to trouble in the near future. For instance, if you have not paid the power bills, then pay them off first; otherwise, it may lead to termination of the power supply. Also, go for a tight budget and restrict your expenses to those items which are absolutely necessary.

Look for ways to add on to your income:
Look out for a part time job so that you can supplement your primary income with some extra dollars. This will add on to your budget and help you to repay the debts. Along with this, also ensure that you are utilizing all the benefits that you are allowed to get. You may contact the independent Welfare Rights Agency to know about the benefits that you can possibly avail. For instance, if your income level is low, then you may get a discount on your rental expenses or on the council tax payments. Also, go for an insurance policy that can help you with payments if you come across an accident.

Seek debt consolidation services:
Analyze your situation and then opt for a suitable debt consolidation company. Know how much their services can help you to recover from bad credit. Carefully go through the terms and conditions of the company and try to find out if there are any hidden costs involved.

Provide the counselor of the company with all the relevant details of your credit history and financial situation. This will help him to have a clear idea of how much you can pay towards the repayment of your debts and then he can come up with a suitable repayment plan so that you can get rid off debts within a shorter period of time. But the plan will only work out if you follow it strictly. For this, you may have to spend as little as possible; but this is nothing against a debt free life.

Know-how of some useful tips can relieve you from your debt problems as these provide solutions as to how you can manage to pay off debt. These simple and easy steps will help you to get over your debt problems and this ensures that you will be leading a debt free life.



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Ryan Smith is involved with debt settlement related content development and is a contributing writer to debt consolidation care.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/beating-debt-with-a-stick.html http://www.articletrader.com/finance/debt/beating-debt-with-a-stick.html Sat, 03 Dec 2005 00:00:00 -0600 Debt is a Product in America
The #1 sickness in America concerning finances right now is debt. Debt is a product in our culture and it is vigorously aimed at you and me everyday, everywhere. As a society, we borrow more money than the last two generations times two and your online credit report reflects these habits! Some companies like Sears make more profit from their credit department than from all the physical products they sell.

But It's the Norm Isn't It?
We are programmed from childhood to make automatic decisions regarding our personal spending habits thus negatively affecting our online credit report. A few 'real world' examples are listed below:
∙ leasing a car instead of paying for it in cash (unheard of right?)
∙ 90 days same as cash (NOT... really the same in more than 75% of the cases)
∙ rent-to-own (translation = paying 2, 3, 4 times the actual value of the product)
∙ 30 year vs. 15 year mortgages (an accepted lengthy and very costly way of purchasing a house)
What to do? Well, I hate to give the obvious answer here but how about saving money! Try saving money in a money market account for a couple years and then paying for a slightly used car in cash or with a 50 to 75% down payment. Wow, imagine having that extra money every month that most people dump into their lease or high rate loan. Try saving money for 3-6 months interest and risk free for that thing that you needed and you might find that you can get it cheaper with hundreds OR even that you want to use your hard-earned money for something more practical. Your credit report will thank you as well.

Penny Pinching is Boring!
Most people today think that to be frugal one must live out of a shack and only make purchases when they are on clearance (or if it's life or death). Well they're only half right. Have you heard the expression "It's the little things that count"? This holds very true when dealing with financial decisions. While large purchases definitely have great effect on one’s online credit report as well as their overall situation, it is often the everyday spending habits that accumulate and hold them back from attaining wealth of any sort. What many people fail to realize is that the majority of true millionaires in America (those with net worths exceeding 1 million dollars) got rich from thinking outside the box and not following the crowd. Try thinking a little more about how you handle your money and you might find that you know more than you think you do.

Summing Up the Debt Sickness Fiasco
A decision as simple as using a debit credit card instead of a credit card shows discipline. Report that paying with cash instead of credit shows that you have properly budgeted your money and it just feels better to own something the day you walk away with it. Your credit report will also reflect these positive actions. Since the average consumer has little control over their own spending habits, the credit report picks up the slack and in turn there are more negative items to show for it. Even statistics show that using cash when making purchases will greatly reduce spending thus causing you to think harder as a consumer before swiping that credit card. Get off to a good start by seeing what is on your online credit report. By removing negative items from your online credit report you can improve your credit rating.

To read more about how you can get your online credit report free with no obligations, see what is on your file and find out how to fix your credit report go to http://www.cleancreditonline.com


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Tom Justice is the webmaster for Clean Credit Online and does all the designing, marketing, SEO and maintenance for the site. He has a passion for personal finance and how the economy and consumers are affected by money. To see how you can use Clean Credit Online to help you with your personal finances please visit http://www.cleancreditonline.com “Beating Debt with a Stick” - © (2005) Reprinting is allowed assuming all content is left the same.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/plastic-debt.html http://www.articletrader.com/finance/debt/plastic-debt.html Tue, 13 Dec 2005 00:00:00 -0600 The Debt
In America, it is not only accepted that the majority of us are knee-deep in credit card debt, it is normal. Two generations ago it was just flat out wrong - a sin, to have any kind of debt at all. Today it is quite a different story and credit card debt is a mega, multi-billion dollar a year industry. The major credit card companies are eating it up like hotcakes and our credit reports are taking a lot of the heat. More than 75% of all college students are in credit card debt within their first year of school. From Sears to Visa to Diner's Club, people are adding to the debt stock pile that the distributors thrive off of. There are tens of thousands of websites that support and offer more to this enormous problem and it has got to stop! We have to draw the line individually, because there are no boundaries on the excessive spending in America.

What's Really Happening
It's even stated in the Bible - "The borrower is slave to the lender." In any case, where you have taken out credit on something; be it a car, mortgage, student loan, credit card, etc..., you are borrowing money. Not only that, but you are borrowing more money than you need. The average APR (annual percentage rate) on a credit card is 19%! In many cases, when a credit card is "maxed out" you will pay only interest with the minimum payment. As if this wasn't enough stress, the creditors harass you like their life depends on it and you begin to feel uneasy about even answering the phone.

Is Debt Consolidation the Answer?
Many consumers are drawn in by debt consolidation loans. It feels like instant relief and the monthly payments go down. Suddenly you feel like life is getting better by the minute. Oh and what's this, there is left over money from the loan - PERFECT! You needed this for that yard project or supplies or something that you've been waiting to have the extra money for. Why not reward yourself, you have taken a big step and your financial future is improving. Or is it? The fact is that you have fallen into another trap. You are now borrowing more money with an interest rate and you most likely got more than you needed. Statistics show that even though the math often works for a consolidation loan, the consumer ends up with his ears nailed to the wall.

What to do Now
STOP BORROWING MONEY! This would be a good first step. Stop right now. Do not borrow a dime. If you don't have it - don't spend it. You can build up an emergency savings account to pick up any negative events that may occur. This emergency savings account is of course another article but you get the basic idea right? Oh, you still feel you need plastic in your wallet? Get a debit credit card. At least with a debit card you can only spend what is in your bank account. You can also use most credit card debit cards just like a credit card for purchases. Your credit report will begin to reflect this positive behavior because there will be no more credit card bills piling up. Here is a saying to ponder before you think of making another large purchase - "If you can't afford it, don't buy it. If you can afford it, sleep on it."

To read more about how you can get your online credit report free with no obligations and get a prepaid Mastercard debit card with no immediate debt, go to http://www.cleancreditonline.com


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Tom Justice is the webmaster for Clean Credit Online and does all the designing, marketing, SEO and maintenance for the site. He has a passion for personal finance and how the economy and consumers are affected by money. To see how you can use Clean Credit Online to help you with your personal finances please visit http://www.cleancreditonline.com “Plastic Debt” - © (2005) Reprinting is allowed assuming all content is left the same.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/online-debt-consolidation-loans--just-a-click-away.html http://www.articletrader.com/finance/debt/online-debt-consolidation-loans--just-a-click-away.html Sat, 18 Feb 2006 00:00:00 -0600
Debt Consolidation Loans replace your multiple existing loans and debts with a single consolidated loan from another creditor altogether. A debt consolidation process brings together your pending debts and multiple payments like store, gas and phone bills, medical bills, taxes, overdue rent etc. This consolidation reduces your monthly payments by lowering the interest rate or extending the repayment period or sometimes both. So finally all you have to do is pay off one loan by making single monthly payments. The creditor of this loan corresponds with all your previous lenders and you no longer have to deal with them. The main attraction of this loan is its low interest rate. Debt Consolidation Loans that are applied for and dealt with online, are called Online Debt Consolidation Loans.

Online Debt Consolidation Loans are very efficient and time saving. Instead of walking into a bank the traditional way, these loans allow you to apply online. The internet presents you with an opportunity to find detailed information on all the loans available, interest rates, repayment options, credit scores and lists of the innumerable companies offering them. With Online Debt Consolidation, you can compare quotes, choose your loan, fill out the required documents, apply for the loan, get an answer and manage your finances, all from the comfort of your home.

There are infinite loan companies that provide the online facility. It is not only easy for you but also for your creditors to deal with all their clients without having to personally visit them. They can maintain records and keep you informed by the minute. To find the best deals, you can simply start off with a search engine by typing “Online Debt Consolidation Loans”. From there, look up companies and check for reviews to see which are the most reliable when it comes to online debt consolidation. It may be a good idea to ask the company you are thinking of using, for references from former clients that had similar debt problems.

Remember:

•There are endless online debt consolidation programs available on the internet. Get as many quotes as possible. Find out about interest rates, repayment options, security or collateral needed, etc. Dig out all the information before getting one.

•Get references from former clients that had similar debt problems.

•Be vigilant about fine prints, lender fees and hidden costs. If in doubt, clarify with your lender; once the agreement is signed, the terms are binding to both parties.

•Do not hesitate in taking the help of legal experts.

•Always be cautious and keep an eye out for fraud.


Online Debt Consolidation Loans facilitate you further by allowing you to make your payments online as well. It uses your savings account number to wire money into your new consolidation loan. There is, as with anything, always a fear of being a victim of fraud when it comes to online dealings. Always remember that fraudulent companies will provide minimum information about themselves while extracting maximum out of you.

Do not apply:

•When there is a fee for application.
•When there is no customer service or representative help.
•When the company is not reputable.
•And even if your instincts just tell you so.

When it comes to managing your debt quickly, easily, and conveniently, Online Debt Consolidation Loans may be ideal for you. They help individuals research, apply, and use debt reduction programs in order to take charge of their debt. Look around and talk to people before committing to any lender. It sure pays off to take full responsibility for your own finances. All of it can happen through a series of mouse clicks and keystrokes. Get your deal right away!


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Rick Russell has no formal degree in finance, but years of work that he has put in the finance industry makes him perfectly eligible to be called an expert in financial matters.To Find Adverse Credit debt consolidation,UK Debt consolidation Help,Fix Your debt Repayment visit http://www.fixyourdebts.co.uk/

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/debt-consolidation-loans-%96-how-to-locate-the-best-deal.html http://www.articletrader.com/finance/debt/debt-consolidation-loans-%96-how-to-locate-the-best-deal.html Tue, 21 Feb 2006 00:00:00 -0600
Ease in getting personal loans has largely influenced the spending habits of people. Instead of spending only up to the limits of their income, more and more people are using loans to purchase items of comfort and luxury. The habit has attained mind-boggling proportions, such that more and more people have been found with some or other credit deformities. The number of people in debts has also increased.

Debt consolidation loans, though personal loans, are different from the other loans that constitute ones debts. The primary objective of debt consolidation loans is to solve the debt problem. Therefore, debt consolidation loans have been designed thus. Personal loans earlier taken by borrowers may have been taken at higher rate of interest. In debt consolidation loans, one of the primary features is low interest rate or APR. Debtors must always try to arrange debt consolidation loans at a typical APR.

There is no shortage of debt consolidation loan providers in the UK. Nevertheless, ones chances of getting a good deal in debt consolidation loan are few; mostly when one goes all alone in the search of loan assistance. The stakes are high when using debt consolidation loans. A good deal can settle all your debts. However, if one is not able to secure a good deal, he is not able to settle all his debts. Moreover, he adds further to the debt load in the form of debt consolidation loan and its interest.

Brokers can significantly help debtors in their endeavour. Brokers are linked both to debtors as well as to loan providing banks and financial institutions. They are associated with debtors in the sense that they are endowed with the responsibility of finding proper deals. Brokers are associated with loan providers through an agreement, by which banks and financial institutions advance loans to their customers in exchange of a commission to broker.

Broker thus acts as a missing link between loan providers and borrowers. Once, borrowers get their desired deal through a loan provider, the role of broker ends.

Allowing brokers to find debt consolidation loans will be advantageous for borrowers on two grounds. Firstly, borrowers’ main area of specialization is the one in which they are employed. The field of loans is new to them, or they are not much conversant with it. Consequently, they cannot find deals with as much precision or professionalism. Secondly, loan providers respond much promptly and amicably to brokers than to borrowers, particularly when borrower has bad credit history. Borrowers with bad credit history too are able to secure good deals in debt consolidation loans at the reputation of the broker. However, in case of brokers too, borrowers need to contact only reputable lenders.

The beginning is the half of every action. Therefore, if you are able to locate a good deal in debt consolidation loans, you are almost up to your desired goal of freedom from debts.

When a debt consolidation loan provider receives the application for loan, it verifies and then approves and sanctions the loan proceeds. Borrowers can get maximum help through lender in the settlement of debts. The lender may assign a debt expert to assist debtor. The first thing that borrower needs to do is to total all his debts. The aggregate of debts serves as the measure for total amount of loan. Loan amounts in the range of £5000 to £50000 can be raised quite easily.

When debts are totaled and a sum equal to the debts has been raised, borrowers can get to the task of eliminating debts. Debt experts, equipped with their experience and excellent negotiation skills, can eliminate debts easily.

Debt consolidation loans are offered for a certain period, usually between 5 to 25 years. Borrowers will thus have to pay the loan amount along with the interest within the said time period. For the purposes of convenience, it will necessary that borrower discuss several repayment options with the lender and stick to whichever method chosen for repayment.


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James Taylor holds a Master’s degree in Commerce from JNU he is working as financial consultant for chance for loans.To find a personal loan,bad credit loans that best suits your needs visit http://www.chanceforloans.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/debt-management-tips-to-bring-your-life-back-on-the-right-track.html http://www.articletrader.com/finance/debt/debt-management-tips-to-bring-your-life-back-on-the-right-track.html Fri, 10 Mar 2006 00:00:00 -0600
Number of loans taken on different occasions may have benefited you a lot many times and must have worked as lifesaver in urgent situations. But, you never knew that these loans can pose to be a threat to you, now you have to remember which lender to pay, how much and when. Failing to pay any of the installments on the loan may affect your credit score adversely. In such circumstances, debts become a burden. You may get into a life long debt trap if you don’t know how to handle these debts. A debt management program in such conditions can work as an effective debt management tool helping you in reducing the debt burden.

Here are a few debt management tips that can help you in managing your debts and getting your life back on the right track: -

1. Create A Budget

An organized and well-planned budget can help you in keeping control over your monthly expenses. Write down each and every financial transaction you do each month this will help you in staying on the track. It will give you the real picture of your finances and thus you can make the decision accordingly. A budget will give you an overview about how funds do you have and how are you going to disburse the expenses with the available money. Setting up the budget is not enough what is important is to stick to it.

2. Consolidate High Interest Loan

Consolidate your debts that carry high rate of interest with a debt consolidation loan. A debt consolidation loan can work as an effective debt management tool. It will help you in getting rid of the debt burden by reducing the monthly outgoings. With a debt consolidation loan, you will get freedom from all the hassles involved in dealing with several creditors, you will be accountable to only one loan, one lender and one lower monthly installment.

3. Avoid taking on new credit

If you are already in a debt trap, avoid taking up a new loan. Borrowing a new loan may be of great help to you, but it will be for a very short term. It may increase the debt burden and will add to your troubles rather then solving them.

4. Debt Management Counseling

You can also seek for advice from debt management counselors. Majority of the lenders in the UK engage debt management counselors who have years of experience and can provide you with an easy road map to get rid of the debt trap by paying off the existing debts.

5. Learn To Save

A need for a loan arises when you do not have sufficient funds in your saving account to meet your personal desires. Make saving a habit, try not to overspend on unnecessary things. No, don’t become a miser but use the funds carefully, a little sum of money saved today will be highly beneficial for you in the future and will make it easy for you to deal emergency cash need with the available funds on the right time and in the right manner.

Debt management is a time taking process. You can save your time and hard earned money by employing a debt management company who will take of your debt and can offer effective solution to all your debt related problem.

Tips for managing debts employed in the right manner can curb the menace created by debts, helping you getting out of debt in an easier way. Paying off the existing debts will help you in securing a smoother and easier life for the future.

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Rick Russell has no formal degree in finance, but years of work that he has put in the finance industry makes him perfectly eligible to be called an expert in financial matters. To Find Adverse Credit debt consolidation , Fix your debt Repayment visit http://www.fixyourdebts.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/five-reasons-to-get-out-of-debt.html http://www.articletrader.com/finance/debt/five-reasons-to-get-out-of-debt.html Tue, 14 Mar 2006 00:00:00 -0600
Well if you need a burst of motivation to improve your financial position, I've put together five reasons to get out of debt and avoid borrowing in the future.

1) Everything that you buy becomes much more expensive

OK, I’ll show you. While out shopping you just can’t resist buying a new plasma television. The price was $2300, but it has been reduced to $1995. Bargain! So you sign up to an attractive looking credit agreement.

How much will is cost? This is not a trick question.

$1995? Wrong!

Whenever you borrow to buy something, the total cost to you is made up of three distinct parts.

a) The actual amount that is borrowed - $1995

b) The interest on the loan – Perhaps 3 years at 29.9% APR. That would come to $915.78 (36 payments of $80.85 less $1995)

c) These payments must be made from your taxed income – Let's say 30%. That would add another $1247.40

So taking all of these things into account, you’ll have to earn an eye watering $4158 to pay for your television.

And that’s before we take into account the opportunity that you’ve lost to earn interest on the money that you’re using to make the loan repayments. At 5% per year over 3 years this could amount to another $300 in lost interest.

Doesn’t seem such a ‘bargain’ any more, does it? Do you really want it that much?

2) Lack of Freedom

The world is full of credit junkies. Too many people hold a ‘must have’ attitude that they simply can’t afford. Unfortunately, this position translates into a ‘must borrow’ state of mind. They borrow in order to feed their need for a regular consumer spending ‘fix’.

But this addiction is not without its consequences. Every time you borrow money you forfeit a piece of your life. It means that your lender owns a bit of you. They own the time that you take to earn the money to repay the debt every week or every month. Welcome to life as a human limited company….and your lender has just become a major shareholder!

Every pound of debt reduces the freedom that you have in your life. It’s a simple equation.

Debt = lack of freedom to spend your time as you decide

Part of your precious, non-renewable life, now has to be devoted to acquiring enough money to repay your creditors. Your personal freedom has been curtailed. Every pound of interest paid represents a waste. Waste of your money. Waste of your effort. Waste of your time. Waste of your freedom. WASTE OF YOUR LIFE!!

3) Rows

What’s the most common reason for rows between couples? Work, children, sex, the house, trivial matters?

Wrong!

The answer is money. Debt is the biggest cause of rows and relationship problems.

4) Stress

This is the inevitable result of the last two items. You owe money that you no longer have. You have to repay it with interest. You have to work every hour available just to make ends meet. And at the back of your mind is the nagging doubt, ‘what if I can’t keep up with the repayments?’

Then on top of all that worry, there’s the frustration of being permanently skint, despite the fact they you’ve never worked harder in your life.

And all the time your ‘better half’ is nagging you about never having any money and the amount of time that you’ve been spending at work.

5) Bankruptcy

With all debt, there’s always the chance that it will spiral out of control. One debt can lead to another debt. After you’ve borrowed money once, it becomes incredibly easy to do it again, and again, and again!

It’s the easiest thing in the world to say ‘Oh I’ll just stick it on my credit card’, but it’s much harder to repay! Especially when you’ve got interest working its mischief against you!

Eventually, it can get to the stage where you can’t even afford to repay the interest, let alone the original amount you borrowed.

And the end result?

Life is not be as happy and exciting as it should be! And if that's not a good enough reason to get out of debt, I don't know what is.

by Stuart Laing

Copyright (c) Get Out Of Debt

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Stuart runs a website dedicated to helping people get out of debt. So if you want to improve your financial position, visit www.icanhelpyougetoutofdebt.com for free, impartial debt help information.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/the-danger-of-rounding-up-your-debts.html http://www.articletrader.com/finance/debt/the-danger-of-rounding-up-your-debts.html Tue, 14 Mar 2006 00:00:00 -0600
This way of thinking is best summed up by the following comment; ‘I already owe $27500 so what’s another $500. It takes my debt to a nice round figure $28000’.

That’s a dangerous way to think. From bitter personal experience, I know what it’s like. You try to limit your debt to a certain amount, such as perhaps $10000. But that limit comes and goes. Your debt creeps up above that amount. But you’re enjoying yourself, so you carry on spending.

You reach $13500, but you don’t want to stop, so you readjust your ‘limit’, thinking ‘I’ll go up to $20000, but I’m not going a penny higher’.

So you carry on spending and your debts hit the $20000 barrier…and then go slightly beyond.

Then what happens?

Correct! You increase your self-imposed limit to the next psychological barrier. Perhaps $22000 this time! And then you carry on spending.

Eventually, after many more ‘final’ limits have come and gone, your debt stands at $27500. And then you see a rather nice 7 day package holiday advertised as a ’special, once in a lifetime, never to be repeated’ offer. $500 first come, first served!

Your reasoning goes something like this. ‘That’s a great offer. I’ve not had a holiday for two years, and I could do with some sun before the winter sets in. I’ve already borrowed quite a lot. But it’s a special offer, and I couldn’t normally afford that type of holiday. I know it’s kind of expensive, but I already owe $27500, so what’s another $500. It hardly makes a difference. And I’ll worry about paying it back when I get home.’

You’ve reached another of your preset limits. But is doesn’t stop there, oh no. After all, what about a new wardrobe of clothes to take on holiday! And you couldn’t possibly go away without some spending money. You just wouldn’t enjoy yourself otherwise.

And so the $28000 mark is broken. Next stop $30000, or will it be $35000?

But as I said earlier, every extra dollar that you borrow restricts your freedom even further. Every dollar that you owe will cost perhaps $2 to repay after interest. It could take you half an hour (after tax) to earn that amount.

$1 borrowed, half an hour of your precious, non-renewable life. Gone! Never to be replaced! Wasted!

Now half an hour may not seem like much. But what if it’s multiplied by five hundred?

That’s 250 hours of your life. That’s almost six full working weeks!

And once your debt reaches $28000, what is there to stop you from thinking ‘it’s only another $2000. It will take my debts to a nice round $30000’ when you see a leather sofa/laptop/hi-fi that attracts your attention?

Bang goes another 1000 hours of your life. That’s another six months of eight hour shifts to look forward to!

When will it end? When your life runs out of time or the bank manager says ‘no more’?

Round figures aren’t nice! Especially when it means that your debts are even bigger than before. When you owe money, every penny counts! I can’t stress how important this is!

This rounding up attitude is very subtle, that’s why it’s so dangerous. It draws you in. And the more you owe, the larger these ‘what’s another [insert sum of money]’ thoughts become. If you owe $9200, what’s another $800. That takes you to $10000. But if you already owe $92000, this ‘what’s another’ attitude could cost you $8000. That will take you up to a nice round $100000.

Don’t mentally round up the amount of your borrowing, in order to justify spending even more. Every dollar you owe = less freedom.

by Stuart Laing

Copyright (c) http://www.icanhelpyougetoutofdebt.com

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Stuart runs a website dedicated to helping people get out of debt. So if you want to improve your financial position, visit www.icanhelpyougetoutofdebt.com for free, impartial debt help information.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/the-real-meaning-of-debt.html http://www.articletrader.com/finance/debt/the-real-meaning-of-debt.html Tue, 14 Mar 2006 00:00:00 -0600
Debt is money that someone else lends you, on the understanding that you’ll pay it back. Let’s face it, if you didn’t have to pay it back, it wouldn’t be a debt, would it? It would be a gift or a grant.

But it doesn’t end there. If only it were that simple!

Almost everyone who is willing to lend you money will expect something in return. Yes, you’ve guessed it, interest. Now for those who have forgotten about the effect of interest, let me remind you.

I want you to open your wallet or purse, and take out a bank note (if you have any, that is!). Now hold it out in front of you and set fire to it.

Go on, watch it burn. Watch it shrivel up and disappear in front of your eyes. Think about the effort that it took to earn that money.

Now take another note and repeat the procedure. Set fire to it and watch it disappear. Then do it again. And again! And again!

Not too keen, are you? And I’m not surprised.

But that’s what interest means if you owe money. It’s money that you have to shell out just for the privilege of being able to use other people’s money. And that’s before you think about repaying the amount that you originally borrowed!

You may as well set fire to your money. At least it would keep you warm and give you something vaguely interesting to watch for about thirty seconds!

The interest that you pay on your debts is dead money. You have to pay it just to stand still. So despite all the time and effort you may have taken to earn it, you remain in exactly the same position as you were before.

It’s like repeatedly paying for meals that you’ve already eaten, trips you’ve already taken and entertainment you’re already enjoyed.

Right back at square one!

Interest is the price that you pay for not having enough money to afford the things that you've bought. It’s the penalty for having tastes that are more expensive than your means. It’s your punishment for being poor!

But interest works both ways.

If you have money, it can be invested to make more money. You are the master. It is your servant!

But things change when you’re in debt.

Every penny that is borrowed has to be paid back….with interest! You become the servant. Money becomes your master, and it fairly cracks the whip!

I think this example with make everything clear.

Money and debt are like a giant pulley. Okay, imagine you’re standing on the top of a 100 storey building. There’s a giant pulley attached over the edge of the building. Hanging from the pulley is a heavy weight. It weighs the same as you. This weight represents the state of your finances.

You are on the roof of the building holding the rope that supports the weight from the pulley. Now imagine that the height of this weight represents the amount of money that you have. It starts level with the fiftieth floor. That represents break even. No money, but no debt!

The higher the weight rises, the more money you have. The lower it drops, the more you are in debt. Nice and simple, except that’s not the whole story!

The higher you manage to heave the weight, the healthier your bank balance. And to represent the interest your money would earn, for every floor the weight rises, you become 5% stronger (that’s your financial muscle). So by the time the weight rises from the 50th to the 65th floor, you become twice as strong, making the weight much easier to support (and lift even higher!)

But that’s where the good news ends. If you ease up on your efforts to lift the weight any higher, it will start to drop, and the extra strength you had will start to disappear. By the time the weight falls back to the fiftieth floor, you’ll be of average strength once again.

And then it gets even worse! As the weight drops below the fiftieth floor, to represent you slipping into debt, the weight gets heavier. For every floor that the weight drops below the fiftieth, the weight will increase by 5%. This represents the interest that has to be paid on your debt.

So in other words, you have to work harder and harder just to keep the weight from falling any further. The further the weight slips the harder it becomes to stop it dropping any further.

By the time it is level with the 25th floor, the weight would be three and a half times heavier than it was at the start. That means you’d have to work three and a half times as hard just to stop the weight from falling any further. That’s a mighty strain!

And people who are in debt wonder why they feel miserable and full of stress!

Oh yes, one final thing, if the weight hits the ground at the bottom of the building it’s game over! Bankruptcy! You lose everything that you currently ‘own’.

And the sad fact is that millions of people around the world are struggling to hold their weight somewhere around the 25th floor! At that level they can’t afford (no pun intended!) to ease up on their efforts for a moment. One slip and their weight will hit the ground.

If that doesn’t motivate you to get out of debt, I don’t know what will!

by Stuart Laing

Copyright (c) http://www.icanhelpyougetoutofdebt.com

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Stuart runs a website dedicated to helping people get out of debt. So if you want to improve your financial position, visit www.icanhelpyougetoutofdebt.com for free, impartial debt help information.

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/debt/becoming-debt-free-requires-desire.html http://www.articletrader.com/finance/debt/becoming-debt-free-requires-desire.html Tue, 14 Mar 2006 00:00:00 -0600
Don’t be under any illusions about this. Enormous self-discipline is required from you. The more you owe, the harder this will be, and the longer it will take.

You must genuinely desire to become completely and utterly debt free. Achieving such a difficult task is only possible if you’re 100% committed to it. Clearing your debts is an all or nothing decision. Ninety-nine percent is no good!

If you’re at the stage where you’d ‘like’ to pay off all your debts, I can tell you now that you won’t get very far. That’s nothing more than a vague pipedream that ranks up there with ‘I’d like to go to the moon’.

Make a promise to yourself to repay your debts as soon as possible. Get the bit between your teeth and keep plugging away at it until you’re completely and utterly DEBT FREE! Then vow never to borrow ever again!

Feed your desire to become debt free

Remind yourself how hacked off you are that you could have allowed yourself to get into such a mess. If you aren’t annoyed by the very existence of your debts, then I suggest you do whatever it takes to become that way, because:

1) If you still passively accept the fact that you’re in debt, you won’t have the motivation to get the job started and see it through to completion.

2) If you think that your debts ‘aren’t too bad’ you won’t have the willpower to keep chipping away at them when times get tough, and

3) If you still believe that debts are inevitable, then you’ll never be debt free. That, I can virtually guarantee!

You must be ready to do whatever it takes for as long as it takes. And once you’ve started, you must be prepared to keep going until you owe nothing. It could take months or even years. But that shouldn’t matter, because your sole focus should be on the day when you become free of debt.

There’s little point in trying hard for three weeks and then blowing all the extra money that you’ve saved to reduce your debts, on some ‘treat’ that you ‘deserve’.

Everything that you put towards reducing the size of your debt makes a difference. It should be enough of a treat to know that your total debt is becoming smaller with every day that passes and that you’re moving nearer to freedom from debt.

So, are you ready to beat your debts to death with every bit of money that comes into your possession over the weeks, months and even years that follow?

Desire and grim determination. Nothing less will do!

by Stuart Laing

Copyright (c) http://www.icanhelpyougetoutofdebt.com

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Stuart runs a website dedicated to helping people get out of debt. So if you want to improve your financial position, visit www.icanhelpyougetoutofdebt.com for free, impartial debt help information.

Source: http://www.articletrader.com ]]>