Wednesday, December 12, 2012

6 Steps to Reduce Your Worry about Credit Card Debt

A recent survey by myFICO found credit card debt is the top worry for consumers.  It well should be.  If you can’t afford to pay cash for your purchases, you can’t afford them.  It’s frustrating to accept this fact, and so easy to ignore and charge it anyway.  If I’m ruffling your feathers, maybe it’s time to pay attention to your money.  Here are some steps to get you started.

1.       Go online and check your most recent credit card statements.  All of them that are open or have balances. 

2.       Total up all the credit card balances.  How much do you owe?

3.       How much do you take home each month, or pay period?  How does that compare to how much credit card debt you have?  If you earn $45,000 a year after taxes, and owe the national average of $15,328, that means you owe what about a third of your annual income.  That just gave you MORE worry, didn’t it?  Knowledge is power, and now you know where you stand.  If you had no other bills or expenses, yeah right, it would take four months just to pay off the credit cards.

4.       Keep that credit card debt total handy – in your wallet or on your smartphone would be ideal.  You can even take the credit cards out of your wallet when you add in that piece of paper.  If you continue to charge, that number will get bigger with no source to pay it off.   I hear there’s a website featuring old rich guys who are close to kicking the bucket where you might find a new husband, but that’s material for a future Blog. Stop using credit.  Stop today.  No exceptions.  If you want to reduce worry, you have to take action to resolve the problem.

5.       Use this credit card payoff calculator to figure out realistically how long it would take to pay off all your credit card balances. 

6.       Stop using credit, and apply money saved to one of your bills.  It’s going to be a little bit easier to hit a target that does not keep moving further away.   

You’ll intensify your worry as long as you don’t tackle the debt problem.  Increase your power with knowledge on your circumstances, and take some small steps to make a positive change.  Even if you don’t have any extra money to pay towards debt today, at least stop adding more debt to the pile.  That first positive step will give you more control than you had in quite some time.    

Thursday, November 8, 2012

Start Your Emergency Fund

So, what happens when you find yourself in a money crisis?  The car breaks down, or the dog has to go to the vet, or you forgot your boss’s birthday.  First response – stress. How are you going to pay for it?  I know the battery grim reaper has been knocking at my door with slow car starts, so it really did not have to be an emergency.  When I’m in a spot where I don’t have the money, I’ll ignore the problem.  Often, the problem only worsens.  The battery dies on the way to work and I miss a few hours’ pay to get it fixed.  Now my paycheck is smaller.  Bad news seems to attract more bad luck.

What would happen if you had an emergency cash fund?  Start setting one up now until you have $500 to $1,000 set aside in a mattress savings account.  Many credit unions or internet banks will open an account with as little as one dollar or maybe $25 at others. Check your home and car insurance deductibles to make sure your emergency fund could cover a car accident or house fire.  This ensures that you have enough set aside for most of the money surprises that could throw you off track.  Again.

Put money aside for emergencies


Now is the time to use all those money saving tricks you’ve seen to actually save money and put it in the bank right away.  Coupons at the grocery store, eat breakfast at home, and walking to the library instead of driving to the book store.  Every time you save, or find, extra money stash it in the emergency savings.  You’ll feel stronger and more resilient as it grows.

Now you are in control.  You have more flexibility.  You can avoid credit card debt.  There are more choices when you have money saved.  Use the emergency funds ONLY for real emergencies, not great sales or vacations.  As soon as you deplete the account for an emergency, start building it back up. 

A fully funded emergency cash fund will change your outlook on money.  Don’t live in fear of it, you need it to live every day.  Start controlling your money and your circumstances will change for the positive.  If you don’t have an emergency cash fund, find some money today and open that account.  You are getting stronger.

Monday, October 22, 2012

8 Steps For Holiday Money Smiles

Every year we plan to enjoy the holidays with less frantic shopping, more memorable time spent with family and friends, and staying on budget.  Once we hit the day after Thanksgiving, all plans are off.  How can this year be different?
Plans are great, and written plans are the ones that are more likely to succeed.  Here are some suggestions to consider.  Start writing your plan now:

ü  Write out a budget of what you plan to spend, including decorations  (avg $40) and food (avg $85).
ü  If the money isn’t already set aside, there’s still time.  The average planned holiday amount is $689.  O.K., so you started a bit late this year.  Set aside $75 a week for the next 6 weeks, you’ll have $450 by Black Friday.
ü  Use cash (not debit cards).  You’ll spend an average of $180 more if you use plastic. Hide credit cards until 2013.
ü  Don’t fall for the impulse purchases – keep a printed list or put a list on your smart phone and stick with it.
ü  Stores offer credit cards with discounts because they sell more to you – don’t do it!
ü  Focus on happiness – discuss your plans with friends and family. Have a potluck or cookie party and recipe exchange.  Encourage smaller exchanges for our kids who already have too many toys. 
ü  Be creative – yeah crafts, cooking, baking are always appreciated.  Creativity extends to funding gifts, too.  Use reward points, re-gift unused gift cards, or use them to shop for gifts.
ü  After-holiday sales are great if you need it and include it in your spending plan. Return gifts promptly for refunds, use money and gift cards to make purchases.  Still keep those credit cards out of reach.
 Remember, right down your spending plan right now.  Keep it handy and get through the season smoothly and with happy recollections of 2012.

Tuesday, October 9, 2012

A Personal Money Blog

I finally decided to jump into the blogosphere. I've had my share of money related experiences, and helped a lot of friends, family and co-workers with their financial situations. I created Money Wise Advisors as an answer for the people who wanted a more intense money coaching experience. This has been rewarding to start my own business and help people make positive changes in their lives.
I'll start with a little of my background. My mom was a stay-at-home mom who showed me how to balance a checkbook, helped me get my first credit card and shared stories of success and lessons learned. Both my mom and dad always shared with me that the most important thing you can do to get ahead is to spend less than you make. I was brought up in a very frugal, sensible household where we ate casseroles, sewed our own clothes, and spent time with friends and family more than going out to restaurants or other entertainment venues.

Along with being frugal, there was a time to spend for the right reasons. My parents, thank goodness, enjoyed to travel. We took Sunday drives to nearby towns, camped in our truck with a camper shell, or later in our small trailer. We visited family out of town on weekends. Even better, we flew to British Columbia and Hawaii. We enjoyed our family vacations, learned a lot about the places we visited, and shared memories through photos and stories.

Sure, it was a simpler life just a few years ago.  My goal is to break down our current circumstances into easier controlled decisions on how to live well and save and invest for the future.  Are you telling your money what to do each month?  I’m a money coach, and I’ll say the first step is to pay attention to where your money currently goes. ..