Where is Debt in Your Life?



I know that may sound like a silly question, but it is one worth asking yourself and answering. Beginning the journey to true financial freedom often requires one to take a long hard look in the mirror. Until one accepts the fact that their current habits are not helping them financially, it is impossible to move ahead with a debt elimination strategy.
The following questions help provide a stark reality check. They are not meant to be judgmental, but are simply intended to help you objectively assess how involved debt is in your life. When you answer these questions and take an honest stock of your current situation, you take the first steps toward true financial freedom.

1.  Do you know the total money you owe? 

2.  Do you use credit cards to get the mileage or other bonuses? 

3.  Do you ever use credit cards for household expenses (groceries, etc)? 

4.  Have you paid bills late or skipped payments? 

5.  Have you taken cash advances on credit cards to pay other bills? 

6.  Do you have any credit cards that are at their limit? 

7.  Do you argue often about money with your spouse? 

8.  Do you ever make minimum payments only? 

9.  Have you refinanced your mortgage in the last 3 years? 

10. Have you ever gotten a debt consolidation loan?

If you answered yes to any of these questions, then debt is a major part of your life. One last question, what do you plan to do about your debt? If you don’t have that answer right now that is fine. I have a suggestion, stop thinking about your debt and start thinking about wealth. I know you think I am crazy, but hear me out.

When you think about debt, you’re inviting thoughts of despair, poverty, and the feeling of being overwhelmed. This forces you to think about putting in long hours and makes you believe that you’ll be paying your bills endlessly, which is a painful and miserable experience.

On the opposite side of the continuum of debt, you have wealth. Of course, earning money is a better experience than paying people whom you owe. When you focus on earning money, your debts will take care of themselves. Focusing on wealth leads you to have pleasurable, prospering, and powerful thoughts.

If debt is a major part of your life, let’s chat about it. Let’s get you on a fast track debt-elimination plan. Book a consultation with me and I’ll help you kiss debt goodbye!

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Money Management Strategies for The Self Employed

Entrepreneurs and home-based business owners take a few extra steps to manage their money. Find out creative way's to manage your self employed finances.

After you have weighed the pros and cons of a home-based business and decided that self-employment is right for you, your next step is to develop a plan. Your business plan should define your business and identify goals. When developing your plan, research laws that may impact your business. For starters, you must find out if you need a license or permit to operate your business. A good business plan also includes financial information such as a balance sheet and income statement.

When working on your business’ financial plan, don’t forget to develop a method for managing your new personal financial situation. Unfortunately, statistics show that many home-based businesses fail often due to poor financial planning. Following are some ideas to help make self-employment work for you.

Don’t underestimate your expenses. Fortunately, more than 40 percent of all home-based businesses require less than $5,000 for startup. However, there are many other costs associated with running a business. In your spending plan, don’t forget expenses such as childcare, insurance, postage, gas, and dry cleaning.

Manage your income. Most self-employed workers have sporadic incomes. If your income varies from month-to-month, determine your average monthly income. Then, if you have a month where you earn more than average, put the extra amount into a savings fund to supplement less lucrative months.

Avoid relying on credit cards. Borrowing from a credit card can quickly lead to costly trouble. If you need to use a credit card for business expenses, open an account specifically for that purpose. If you need money to launch your business, consider a small business loan instead.

Keep tabs on your taxes. Some self-employed individuals may have to pay up to a 15 percent self-employment tax in addition to their regular income taxes. To avoid tax-time surprises, periodically review your taxes throughout the year. Don’t forget to make necessary quarterly tax payments to avoid under-withholding penalties.

Keep accurate records. Complete all of your paperwork on-time, particularly if you are billing clients or customers. Many companies will take several weeks to process invoices. Keep copies of all receipts for tax time. Because networking is so important, keep business cards and contact information in an organized manner.

Get help. Consider working with a lawyer who can help you with necessary, and sometimes complex, legal matters. You should also contact your insurance agent to make sure you have appropriate coverage.

Finally, realize there is no need to reinvent the wheel. The Small Business Administration (SBA) estimates that home-based businesses make up half of US businesses; take advantage of their resources at sba.gov.

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Set Yourself Up For Financial Success: Make A Family CFO

Organizing your financial paperwork helps you see just where you stand financially.

While all members should be aware of the family’s overall financial situation, choosing one person to conduct the day-to-day financial tasks is a good way to stay on top of things. The appointed individual should be organized and a good communicator. They should be given uninterrupted time to do their tasks effectively.

Consider making the job of family CFO easier by establishing an online bill payment service (offered free-of-charge by many banks and credit unions). Even better, check with your creditors about setting up automatic bill payments.

Designate a spot in your home for organizing financial paperwork. Used office supply stores offer great bargains on filing cabinets, or consider small plastic filing cabinets instead of metal or wood. If your goal is to have a paperless filing system, make sure that you back-up your computer regularly and invest in a good security program to prevent criminals from obtaining sensitive information. To keep your most valuable documents safe, consider opening a safety-deposit box at your local bank or credit union.

5 easy steps to get organized and save money

Did you know that being organized saves you money?

• You waste money buying duplicates of items you didn’t know you had
• You waste money on late charges because you can’t find the bills you need to pay, or you forget to pay them on time
• You also waste money not deciding in the store where you should store the item you’re thinking of buying, and then not using it

So now that you know why you should get organized, let’s discuss some practical tips to show you how you can get your finances organized. It’s a big myth that organizing is difficult and time-consuming. Yes, you do have to take some time initially to set up your system but unless you want to make things really complicated, it’ll only take you about 15 to 30 minutes.

1. Put all bills to be paid in a specific folder
When you bring in the mail, throw away the junk mail and envelopes immediately and only keep the actual bill in a dedicated plastic see-through envelope in a specific place. Arrange the bills in order of when they have to be paid so that the one facing you is also the most urgent bill.

This way you and the rest of your family always know exactly where to find all the bills.

2. Automate as many bill payments as possible
We live very busy lives so if you don’t have to think about paying it, all the better for you. That said, schedule a day of the month to check your online payments against your actual budget.

3. Dedicate a specific day or days of the month to pay your bills.
Mark off a date on your calendar when you pay bills. If your bills are due on different days of the month, you may need more than one date. Because life happens, schedule the date a couple of days before the payment is actually due so you don’t incur any late fees.

4. File
Once your bills are paid, file them in the way that’s easiest for you to manage. If you’re not a file puncher, don’t fool yourself that you will start punching and filing. The road to hell is paved with good intentions! 🙂

5. Maintain
Restrict your filing space so that it forces you to clear out old bills every 6 – 12 months. This easy-to-use system will take you only a minute or two a day, and about 30 minutes when you sit down and pay your bills.

For more on organizing your finances, I invite you to my private Facebook group, Cocktails, and Coins where I recently did a live broadcast about organizing your financial paperwork. How do you keep your financial paperwork organized? Let me know in the comments below.

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6 Easy Steps To Raise Your Credit Score

With these 6 steps to raise your credit score, you can't go wrong.

Your credit report is essential in building a strong financial foundation. In the spirit of National Financial Literacy month let’s discuss some things you can do to raise your credit score. The better your credit score, the less you have to pay in interest. Just about every bill you pay is tracked by the three credit bureaus, TransUnion, Equifax, and Experian.

Your credit score is based on a risk measure invented by a company called Fair Isaac and is called your FICO score. This number lets companies know how good or bad a credit risk you are. Your score can range anywhere from 300 to 850. All credit bureaus use this scoring method as a basis to rate you as a good or bad risk.

There are six easy steps to getting and getting your credit score healthy.

Pull Your Credit Report

See what the three bureaus have to say about you. You can to http://www.annualcreditreport.com and order your reports from all three bureaus for free.

Check For Inaccuracies

Given your age, your credit report spans decades of your borrowing activity. It’s no surprise that errors sometimes occur. Some common credit-reporting mistakes include: outdated addresses, closed accounts being shown as open. Misspelled names are common mistakes as well. One last mistake happened to my husband, he had one of his brother’s accounts on his credit report, because they have the same last name and similar social security numbers.

Mend Your Uncreditworthy Ways

Those self-inflicted credit wounds, such as a history of late payments, defaults, or judgments will fade from your record over time. You won’t be able to wipe out accurate information from your credit report, nor can any firm who offers to do so for a fee, no matter what story the spin.

Pay On Time

Now that you have looked at your credit reports and corrected in inaccuracies, make sure to pay everything on time, every time. Also keep your debt level low, compared to credit available.

Credit Card Usage

Remember, a credit card is a credit card, not cash. Even though you may have been deemed worthy by some entity to borrow $50K doesn’t mean you actually have $50k, nor do you need to spend $50K.

Acceptable Level Of Debt

Your debt-to-income ratio is the measure of debt you carry to how much money (after taxes) you have coming in. In the world of lending, it is acceptable to carry 25% of your income in debt.

As you can see, it doesn’t take much work to keep your credit healthy, Just keep your spending under control, pay your bills on time, and don’t apply for extra credit too often.

If you are having trouble with your credit, I am taking appointments for consultations. Feel free to book yours here

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Financial Literacy Basics

Financial literacy basics make for a strong financial foundation.

When I was in school, the most we learned about personal finance was how to write and check, how to balance a checkbook, and how compound interest works. Did you know that as few as 13 states require high school students to take and pass a personal finance course to graduate? I know that some of these may seem pretty basic, but you would be surprised the number of people who don’t know or understand these personal finance basics. Here are five personal finance basics everyone should know.

1. How To Budget

I was well into my twenties before I learned how to budget and I am not ashamed to say that. Budgeting is as simple as learning to prioritize. The best way to decide where your money goes is to create a monthly budget. First, calculate how much money you have coming in. Next, identify your needs, i.e. food, shelter, insurance, transportation. Finally, add those up and subtract from your monthly income. You may want to add your monthly savings to your needs, just to make sure that you are making saving a priority. Once this is done, you will know how much you have left over for discretionary spending. If you need help with setting a budget, you may want to participate in my beta test for the new Money Makeover Planner. 

2. The Time Value Of Money

Saving a small amount each day can do a world of good for your finances. Instead of spending that $8-10 a day on lunch try putting that amount in an interest-bearing savings account and let it sit. This concept is something that is beneficial to all ages but can be super beneficial to younger people, who can accumulate a lot of money over the years from learning simple steps to cut their daily expenses.

3. Checking Account versus Savings Account

Okay, I know this is super basic but I am going to cover it anyway. A savings account is an account in which you deposit money into and watch it grow to accumulate interest. Some banks may require you to have a minimum balance in order to keep the account open. Since you won’t be using this money daily it can grow. Daily use money is to be kept in a checking account. You can use the checks to pay for expenses such as bills. You can also get a debit card to go with the checking account so that you can make purchases or withdraw money from the ATM.

4. Debt

I understand some debt is unavoidable. Accumulating massive amounts of debt such as with student loans, credit cards or car loans can wreak havoc on your personal finance and credit score. The average household carries $16,000 in credit card debt. If you miss a payment on any of your debts it may be hard to recover.

5. Credit

A high credit score makes businesses like auto lenders, banks, and insurance companies view you as a trustworthy risk. When you are just starting out, opening a checking or savings account enables you to show lenders that you can manage money. Keeping your credit score high also helps with qualifying for that dream job you want, as many employers check your credit before hiring you.

 

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The History Of Money

If you have ever wondered how money came to be, then you are in the right place. This money history lesson is a great start to a financial literacy foundation.

Money has been a part of human history for almost 3,000 years. From the origins of bartering to modern money, this is how the system has evolved.

Bartering

Way back when bartering was used in lieu of money to buy goods. As early man began to rear domestic livestock, one of the earliest forms of barter included cattle, sheep, as well as vegetables and grain.  Bartering is the exchange of a good or service for another good or service. For example, a bag of rice for a bag of beans. However, what if you couldn’t agree what something was worth in exchange or you didn’t want what the other person had?  To solve that problem, humans developed what is called commodity money.

Commodity Money

A commodity is a basic item used by almost everyone. In the past, items such as salt, tea, tobacco, cattle, and seeds were commodities and therefore were once used as money. However, using commodities as money had other problems. Carrying bags of salt and other commodities was hard and commodities were difficult to store or were perishable.

Coins and Paper Money

Metals objects were introduced as money around 5000 B.C. By 700 BC, the Lydians became the first in the western world to make coins. Countries were soon minting their own series of coins with specific values. Metal was used because it was readily available, easy to work with and could be recycled. Since coins were given a certain value, it became easier to compare the cost of items people wanted.

Some of the earliest known paper money dates back to ancient China, where the issuing of paper money became common from about AD 960 onwards.

Representative Money

With the introduction of paper currency and non-precious coinage, commodity money evolved into representative money. This meant that what money itself was made of no longer had to be very valuable.

Representative money was backed by a government or bank’s promise to exchange it for a certain amount of silver or gold. For example, the old British Pound bill or Pound Sterling was once guaranteed to be redeemable for a pound of sterling silver.

For most of the nineteenth and twentieth centuries, the majority of currencies were based on representative money through the use of the gold standard.

Fiat Money

Representative money has now been replaced by fiat money. Fiat is the Latin word for “let it be done.” Money is now given value by a government fiat or decree. In other words, enforceable legal tender laws were made. By law, the refusal of “legal tender” money in favor of some other form of payment is illegal.

There you have it, the history of money and how we know it today!

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National One Cent Day

 

National One Cent Day. Find out the history of the penny and what is has to do with financial literacy

Today starts National Financial Literacy Month and what a month it is! To kick it off this month we start with National One Cent Day. Although the penny is nearly obsolete, here are some fun facts about this day and the penny.

 

What does Benjamin Franklin, the phrase “mind your business” and April 1 all have in common? The answer is the penny, which we recognize on National One Cent Day.

The United States first issued a one-cent coin produced by a private mint in 1787.  It was designed by Benjamin Franklin.  On one side it read “Mind Your Business” and the other “We Are One.”  This coin was made of 100% copper was larger than today’s penny and came to be known as the Fugio cent.

It wasn’t until 1792 that the United States Mint was first created.  The first coins struck by the newly established mint were called Chain cents, or Flowing Hair Chain Cents by collectors today.  On one side of the was coin a circle of 13 links of chain representing the 13 colonies. On the reverse was an image of a woman with flowing hair, otherwise known as Liberty.

The one cent coin was reduced in size in the 1850s to make the coin more economical and easier to handle.  In 1856, the mint produced the Flying Eagle cent with a wreath on the reverse side. This coin was soon replaced with the Indian Head cent in 1859 which quickly became popular and remained in circulation for decades.

Today’s one-cent coin is made of copper and zinc and has borne the image of President Abraham Lincoln since 1909.  From 1959  to 2008, the reverse featured the Lincoln Memorial. Four different reverse designs in 2009 honored Lincoln’s 200th birthday depicting various scenes from his lifetime and a new, permanent reverse – the Union Shield – was introduced in 2010.

Pennies Add Up

Even if you don’t possess the rarest and most valuable of pennies, you can still cash in on the ones you do have. Every penny counts and every coin is worth saving. Get a jar or one of those big plastic water cooler jugs and fill it with your loose change. After a few years have passed and your change jar is filled to the top, roll up your coins and take them to the bank. It may take time, but hey, it’s a payday worth waiting for.

Overall, if you wish to observe this national holiday known as “National One Cent Day,” try doing a little of your own research on the history of the penny. Look at how much pennies are selling for online. Count your own pennies and maybe even start a penny collection. Whatever way you choose to celebrate National One Cent Day, remember that every penny counts and when several little coins come together, they can add up to big things

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Personal Finance Best Practices

Financial best practices will help you set the foundation to manage your finances and assets.

Throughout the month of March, Asset Management Awareness Month urges businesses and organizations to learn how improved asset and property management practices can contribute to the overall mission and revenue goals of their organization. I thought to myself, what if people treated their personal finances just like a business, and learn to improve their financial management practices.

Much like getting in shape by losing weight or working out more, living a healthy financial life is easier said than done. When it comes to understanding and feeling confident about finances, many can feel overwhelmed. That’s understandable because when you think about all of the things that have a dollar sign that affect you – like saving, investing, insurance, estate planning – there’s a lot to consider.

My first piece of advice is to take a day and “hire yourself”. Sometime in the next few months, set aside a day to learn more about your personal financial situation. Let’s face it; most people would rather do almost anything on a personal day than think about their finances. But the things you will learn in just that one day will have a tremendous positive impact on the rest of your life. That’s not a bad tradeoff.

Personal Finance Best Practices

Financial literacy is not taught in American schools. It is up to each of us to educate ourselves, or we leave ourselves open to making bad financial decisions or being scammed. Here are seven basic financial tips to help you better manage your finances. Put these “best practices” in place to keep from falling into financial trouble.

  • Make a Budget — Developing a personal budget is a crucial first step to building and maintaining your financial health. An accurate budget helps you:
  • Figure out what you can afford
  • Understand where your money is going
  • Set appropriate spending targets
  • Make a realistic plan for a solid financial future
  • Cut Spending — The modern world is full of pressure to spend money. As our consumer culture expands, it takes more discipline to separate what you need from what you want. Don’t let a desire for the newest phone or fancy car lead you into spending more than you can afford. Trim expenses where you can. Even a small change in habits can save a lot of money.
  • Pay Down Debt Effectively — If you are already accumulating credit card debt, take the steps to correct that problem before it spins out of control. Don’t develop the habit of paying only minimum monthly payments. Find a way to pay more, if at all possible. Use any funds you free up by trimming expenses and apply them to your debt. You can choose to put the extra money towards your smallest debt or towards the one with the highest interest rate. Either way, stick with the strategy you choose and keep your total monthly debt payments the same, even as you pay off creditors. This way, you pay off the debt quickly and save a large amount of money in reduced interest costs.
  • Use Debt Relief Programs Cautiously — If your credit card debts are already out of control, you may consider working with a Consumer Credit Counseling Service or a Debt Settlement firm. Credit counseling offers budget advice and a debt management plan that can lower your interest rates, so you get out of debt faster. Debt settlement works by negotiating reduced balance settlements, so you pay back less than you owe. To do debt settlement, you have to choose to stop paying your creditors, so your credit is harmed. Before signing up for any debt relief program, check into the effect the debt relief program has on your status with your job. Some jobs frown upon using debt relief programs, and me personally, I don’t recommend them either.
  • Monitor Your Credit — If you don’t have strong credit, you can’t qualify for the best interest rates available. Check your credit report for free at http://www.annualcreditreport.com, where you can get one free report from each bureau once a year. Stagger your requests every four months, pulling one bureau at a time, and you can check your report for free three times a year. Dispute any incorrect information.
  • Build Your Credit Score — Even if you’re not planning any large purchases in the near future, you should work to build a strong credit score. This way, when the time comes to buy a car or home, you can get the best financing available. It takes using credit responsibly in order to build a good score. You should have three active accounts in good standing. Don’t run up debt on your cards, but use them and pay them off each month. If you don’t have any credit history because you have never had any credit accounts, you’ll have to start from scratch. Applying for a secured credit card is a good way to build credit when you have no credit history. Just make sure the secured credit issuer reports to the three main credit bureaus.
  • Watch Out for Scams — Don’t fall for any of the variety of scams that target consumers. Many scam-artists use the internet to lure their victims. Common scams include online offers to sell cars at an extreme discount or offering loans that don’t require a credit check. If you are looking to rent a home or apartment, make sure that you know whom you’re dealing with. Scams exist where someone who is not the lawful landlord offers a home for rent. One red flag is if you’re asked to wire-transfer a security deposit.

If you can follow the basic advice in this article, you’ll find ways to save money and establish the foundation for a solid credit future. Before you take any action, be sure to carefully evaluate your financial decisions so you don’t rush into a bad one.

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How To Save On Easter Dinner

Easter is about a week and a half away. If you haven't thought about Easter dinner, here are a few tips to help you save.

Easter is a little over a week away. If you haven’t started planning your meal then here are some way’s I plan to save on this year’s Easter feast. Now, if you know me personally, then you know I like to pull pranks and have fun. I told my husband since Easter falls on April 1, April Fool’s Day, we could invite the family over, boil an onion to make the house smell like a meal is cooking. After about an hour I would say April Fool’s sorry, no dinner. I thought that was hilarious, but my husband won’t let me do it. He is a killjoy sometimes. Anyway here goes my saving tips.

  1. Potluck. This year we are doing a potluck. Since dinner is at my house, I will provide the meat’s and the rest of the family can show their best culinary skills and bring their best dish.
  2. Keep it simple. On Easters past, when we had to feed the entire family the entire dinner, we kept it super simple. One year, we did baked chicken, green beans, creamed potatoes, rolls, tea and store-bought dessert. This year it is still pretty simple. My house is doing roasts, with carrots and potatoes. The rest is up to the rest of the family. I can pop those roasts in the crock pot overnight and boom. No muss no fuss.
  3. Scrap the paper. Now I love disposable plates, but it is a thump of us so I would need lots of paper plates. For the adults, we will use real dishes. For the person who has the most children, they will bring paper plates for all the children to eat off of. I am so glad my children are adults because I used to be that person with the most children.
  4. Plan. Hey, if you haven’t even begun to plan, you better hurry. Find out what’s on sale and grab your coupons and head to the store. Having a plan in place saves you tons of money,

Ok, these are my tips, Happy Easter yall, April Fool lol. Just kidding, I really want yall to have a Happy Easter!

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Spring Clean Your Credit

Spring has sprung in some parts of the world. Here are a few tips you can use to spring clean your credit.

This is National Credit Education Month and we all know that spring has sprung. This is a great time to spring clean your credit. Here are a few things you can do right now to make sure that your credit report and rating are in tip-top shape.

Credit Reports And Scores

A credit report contains information on where you work and live, how you pay your bills and even whether you have been sued or filed bankruptcy. Credit reporting agencies (CRA’s) gather this information and send it to creditors, employers, insurers, and others upon request. The most common CRA”s are the three credit bureaus, Equifax, Experian, and TransUnion.

Credit Scores

A credit score is a number that lenders and other companies use to evaluate your credit-worthiness. Scores generally range between 300 and 850. The higher your score, the less risk you pose to creditors.

Credit scores are based on the information in your credit report. There is not just one universal credit score. There are different versions, created by different companies. Each credit score provider uses their own formula to create a score for you and places different amounts of emphasis on several factors, such as:

  • Payment history. Do you pay your debt on time?
  • Available credit. What is the total amount of credit available across all of your accounts?
  • Credit utilization. How much of your available credit are you using?
  • Inquiries and new accounts. Have you recently applied for credit or purchased items that required a company to review your credit reports?
  • Type of accounts. What is the mix between your mortgage, car loans, credit cards, and other credit accounts?
  • Length of your credit history. What is the age of your oldest and newest accounts, along with the average across all accounts?

Although you can obtain your credit reports for free from http://www.annualcreditreport.com you typically have to pay to obtain your credit score. This leads me to the first step in spring cleaning your credit.

  1. Order your credit reports
  2. Check for any inaccuracies and correct them.
  3. Make sure all accounts are up to date with correct balances.
  4. Reduce your debt to income ratio.
  5. Have a good mix of debt.

Build A Better Credit History

Let me start by saying, you do not rebuild your credit score; you rebuild your credit history. Time is your ally in improving your credit score. There is no “quick fix” for a bad credit score, so be suspicious of any deals that offer you a fast easy solution. Furthermore, you can repair your credit yourself for free. These tips will get you started.

  • Pay your bills on time. Delinquent payments and collections negatively affect your score.
  • Keep balances low on credit cards and other “revolving credit.” High outstanding debt lowers your score.
  • Apply for and open new credit accounts only as needed. Don’t open an account just to have a better credit mix, it may not raise your score.
  • Pay off debt instead of moving it around.

Alright, now that spring has sprung, let’s spring those credit scores up if need be. Happy Spring!

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