Debt Management

Is Paying Off Debt With a Windfall a Good Idea?

In response to an earlier post on uses for a tax return, Dustin wrote: I noticed that you didn’t have “Pay off debt” as one of the 10 things to do with your refund. Is there any particular reason you chose not to suggest that? The reason that I didn’t suggest using such a windfall …

Categories: Debt Management

Most Frequently Asked Question: Pay Off Debts Or Invest?

Over and over and over again, readers ask me some variation on this question: I have $1,000 in my hand. I am trying to decide if I’m better off paying off part of my credit card debt or investing it. What should I do? The thing is, my answer is almost always the same, and …

10 Steps To Escape From Debt & Build A Financial Future

Late last week, I received a very long and personal email from a reader named Susan. Her situation was dire: between the various payday loans and credit card bills, plus the recent disappearance of a live-in boyfriend, she actually owed more in debt payments each month than she is bringing home. Amazingly, she claimed to …

Categories: Debt Management

Personal Finance 101: Is Debt Bad?

Recently, I received a lengthy email from a reader who had a ton of basic personal finance questions contained within. I thought it might be interesting to start an irregular “personal finance 101″ series to answer and explain some of her questions. Many people out there make broad statements like debt is bad in order …

Transition From Car Loans To Paying Cash For a Car

Continuing the conversation with my readers on the auto insurance issue, in which I recommend switching to liability insurance once your car’s value gets low, Kellie makes a point that’s worth covering: I couldn’t get a car loan for my vehicle unless I had full comprehensive on it. So, I can’t switch to just liability …

15 or 30 Year Mortgages: Which One Is Right For Me?

My wife and I are buying a home this summer and we’re pretty confident on what we’re going to buy based on the local marketplace: a pre-owned four bedroom house. We’ve looked at several in our price range and we’re getting set to make a move. One major part in this decision is determining whether …

Money Merge Accounts: Are They A Good Deal For Home Borrowers?

Yesterday, a reader wrote to me and asked about money merge accounts and whether or not they are a good deal for homebuyers. Of course, this means that I popped open my trusty spreadsheet and started doing some calculations. Hold on, what is a “money merge account”? A “money merge account” is a special home …

The Biggest Risk Of All: You

Whenever I make calculations on this site, I usually involve some calculation in which a person contributes some dollars a month each month to savings in order to make an even comparison of which option is a better deal. Quite often, to the chagrin of my readers who are looking for a “deal,” I recommend …

Categories: Debt Management

An Introduction To Compound Interest With Spreadsheets, Part 3: A Simple Mortgage Calculator

Regular compound interest is (basically) the way most loans and savings accounts work, including home mortgages. Here, we’re going to use a spreadsheet to calculate a home mortgage payment estimator (and even a full payment schedule) using the principles of compound interest. Fire up your spreadsheet and enter the following information into cells: In A1, …

Student Loan Consolidation 101

If you have more than one student loan after college, chances are you’ve been approached by more than one group seeking to consolidate your student loans (if you haven’t graduated yet and have multiple loans… just wait). These groups promise all sorts of things, from a percent reduction in your balance to a low interest …

A Fresh Look At Auto Leases: Does A Savings Account Help?

Recently, a reader left this comment on an earlier post about the auto lease trap: What if you lease a car like a jetta that can be leased for $248 a month and take the difference between what you would be paying if you bought it and put that in a savings account? In other …

Dave Ramsey vs. Suze Orman: Which Plan For Dealing With Debts Is Best?

Recently, AllFinancialMatters posed the following question: which method of getting out of debt works better, Suze Orman‘s or Dave Ramsey‘s? Here are the compared plans: Here’s Dave Ramsey’s Snowball Method for paying off credit cards: Step 1 – Make a list of all your credit cards, ranked in order from the highest balance to the …

5 Ways to Deal With Debt Collectors and Harrassment

If you’re in a situation where debt collectors are calling you three times a day demanding that your debts be repaid, you’re probably rather worried and possibly rather frightened about the situation, especially if you are having difficulty paying back the debts you owe. Even worse, many debt collectors are highly unscrupulous, calling people that …

Categories: Debt Management

10 Options To Consider Before Getting A Payday Loan

Yesterday, I discussed in brief my conflicted opinions on payday loans. To summarize, I basically think they border on predatory, but they exist because society provides no safety net to low-income people, and thus they do fill a marketplace niche. The typical person who takes out a payday loan is an individual who has not …

Review: Generation Debt

My interest in Generation Debt comes from the fruits of a series of lengthy discussions I’ve had with my in-laws as well as the parents of other friends. These discussions basically focused on a two-pronged central concept: that Generation X and especially Generation Y have had a terrible financial hand dealt to them compared to …

Generation Debt: Expensive Schooling And Cheap Labor

This week, The Simple Dollar takes a look at Generation Debt, a book that proposes to show why today is a terrible time to be young, from a financial perspective, at least. Is there enough meat on this idea to make an interesting argument, or is this book just blowing in the wind? Let’s find …

Free Up Extra Money For Debt Payment & Investments

Every once in a while, I look through my collections of various media (more specifically, DVDs, books, video games, and CDs) and realize that it contains a lot of things that I’ll likely never look at or listen to again. I might have a sentimental attachment to some of the items, but for many of …

Buying a Car With Cash vs. Going Into Debt

Recently, I’ve had discussions with several readers about the concept of paying cash versus taking out a loan for medium-sized purchases, such as an automobile. In order to demonstrate how cost-effective it truly is to buying a car with cash rather than taking out a loan, here’s a clear example that you can calculate at …

Categories: Debt Management

Ten Ways To Accelerate Your Net Worth Growth

Now that you’ve calculated our net worth, you’re probably excited about seeing that number go up, and once it starts going up, you’re going to want to see it keep going up, faster and faster, rocketing to the moon. For my net worth growth, I have a thumbnail goal of a 2% increase per month …

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