Category: debt

11
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What Is Your Debt Philosophy?

While I am not a fan of carrying consumer credit card debt (yes, there are some people who don’t mind), there are three kinds of debt I don’t necessarily have a problem with. Going into debt to pay for a home, for an education, and even for a needed car are the only three times I feel it is OK to go into debt. Most people don’t have the income or savings to pay cash for their home, so they take out a mortgage for 30 years. Some people might want to get a better job, and might need to borrow the money to go back to school. And some people don’t feel comfortable shelling out $20,000+ in cash for a new car, so they might have to find a way to borrow some at a low rate. The only debt we have right now is our one car payment; our other car, my Jeep, was paid for in cash because it was a lot cheaper. The car debt is for another 4 years at 3.9%, so it’s not all that bad to take. While I use credit cards to pay for almost everything each month, I pay the balance off when it is due. This helps me get rewards points or miles, and keeps my credit history moving and current. However, some people have a different debt philosophy than me…

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debt
8
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Carrying Consumer Debt Is The American Way.

In case no one noticed, there is a continually growing debt problem here in this country, especially with the economy the way it is. Americans are putting themselves further into a hole that while it seemed shallow at first, continues to get deeper and deeper the longer unpaid debt racks up interest. There is approximately $2.5 TRILLION in outstanding consumer debt on mortgages, credit cards, auto loans and student loans. That number almost seems fake and I think that is what contributes to the American attitude towards debt; the “we can handle it” syndrome. Well, guess what…we can’t anymore! Here are some of the reasons I think why we are in this sinking hole and how all this debt is going to hurt even more in this economy.

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debt
2
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Do It Yourself Debt Reduction.

Debt consolidation loans, debt settlements, debt management programs ““ as an increasing number of people find themselves trying to climb over a mountain of debt, the number of companies offering various types of assistance increase. Before you join one of these programs however, you should try to reduce your debt on your own and avoid company fees or the potential for a dishonest company to make your financial situation even worse. Here’s how you can set up a do-it-yourself debt reduction plan:

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debt
11
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Is It A Good Or Bad Thing That So Many Companies Are Going Out Of Business?

What exactly will 2009 bring us in terms of businesses closing down for good? Estimates are that hundreds of large, name brand businesses will go under in 2009 due to the economy – which while sad for the workers is not necessarily a bad thing. We have consumed ourselves right into this mess, and with people starting to buy what they need rather than what they want, many of these stores are seeing their customer base disappear. Shopping had become a national religion for too many people and stores took advantage of that fact by duplicating themselves on every street corner…only to find their customer base disappear this year. We should have known that this level of consumption could not be sustained forever, but not too many business owners thought long term or of anything other than profit; they expanded into every nook and cranny expecting to continue to reap the rewards of the “American Way” of shopping our way into the poorhouse. After all, Americans carry $2.56 trillion in consumer debt, with the average household’s credit card debt amounting to $8,565! Well, it’s over for many businesses already as of the end of 2008:

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debt
16
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Reader Question – Keep Emergency Fund Or Pay Off 0% Balance Transfer Credit Card?

I received a question from reader Diane the other day as follows:

“My husband and I have a $5,000 balance on a credit card that is at 0% interest for another 8 months which we have been paying down slowly. However, carrying debt in this economy has us scared, so we are thinking of emptying our emergency fund to pay it off, which would leave us with no cash but also with no credit card debt. Do you think we should do that? Or do you think we should continue paying what we can on the card and then maybe pay off the balance at the end of the interest cycle? If you have any suggestions, would love to hear them. Thanks.”

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