Debt Management

Alternatives to Payday Loans If You Need Cash Immediately

Payday loans are an incredibly poor deal for the customer. It’s a loan with an absurdly high interest rate. If you take out a payday loan, you’re going to come out the financial loser almost every time. They almost always cause more problems than they solve. Almost everyone knows that payday loans aren’t worthwhile, so …

4 Steps to Take If You Loan Money to Friends or Family

This article first appeared at US News and World Report Money. A friend or a family member is struggling with a financial problem. That person comes to you and asks you to lend money to help them through their crisis. What do you do? This situation comes up quite often in tightly-knit families where there …

Categories: Debt Management, Family

Does Good Debt Exist?

A long while ago, I wrote about the idea of good debt and bad debt: There are several fairly similar definitions of each kind of debt, but generally they either revolve around the terms of the debt (low interest rate debts – usually below 7% or so – would be “good debt”) or the purpose …

Categories: Debt Management

Five Steps You Need to Take If Bill Collectors Are Contacting You

This article first appeared at U.S. News and World Report Money. You failed to pay a bill when you were out of work or you forgot about an old debt. Suddenly, debt collectors are contacting you through the mail and on the phone. It can be frightening, particularly if you’ve never been in such a …

Categories: Debt Management

Why Lending Money to Family Is a Bad Idea

I have very few fundamental rules of personal finance that I follow. Spend less than you earn is a big one, but once you get past that, there tend to be exceptions to most rules in life. However, there is one principle that I’ve followed for a long time that has never guided me wrong. …

Credit Card Debt Getting You Down?

This article first appeared on U.S. News and World Report Money. Personal finance writers, whether on the internet, in magazines, in books, or elsewhere, are usually very strong advocates of investing. There’s good reason for that, of course: assuming that you’re in a financially stable position, investing in things such as the stock market or …

How to Pay Off Debt

There are few things quite as painful as looking ahead at your future and seeing nothing but debt. So many people today graduate from college with extensive student loans and consumer debt on top of that. They struggle to find a job and, sometimes, they never find the job that they want. Sometimes, people get …

How to Fix Your Credit Properly

Sometimes, it seems like you can scarcely turn on your television or radio or web browser without seeing someone offering you a great solution to your credit woes or proper protection against credit worries. Pretty much anything involving the word “credit” is a hot commodity. There are thousands of businesses out there who want to …

“House Poor” Versus Controlling Your Own Destiny

Anyone who’s been awake to watch the changes in the economy over the last five years is familiar with the burst of the housing bubble. Too many people were given mortgages that were bigger than their budgets could handle and when those people couldn’t pay, the banks that offered those mortgages were in serious trouble. …

Low Home Mortgage Rates and Early Payoff Info

Over the last few years, home mortgage rates have drifted up and down between 3% and 4.5% for a thirty year fixed rate loan. That’s astonishingly low, especially considering savings accounts were giving out 6% returns in 2006. (I remember those days… 6% in a savings account. What I wouldn’t give for those days to …

Categories: Debt Management

How to Deal with Debt Collectors: Your Consumer Rights

Money has been tight, there’s no doubt about it. The Great Recession has taken its toll. But even before a financial crisis shocked the economy, American wages were stalled. According to the Social Science Research Council, the typical American earned $2,200 less in 2010 than in 2000. And while we all want to pay our …

Categories: Debt Management

Do Low Interest Loans Change the Rules For a Mortgage?

A lot of different “rules” are passed around regarding the size of a mortgage that a person or a family should take out in order to afford a home. One common one I see and hear repeated is that you should never take out a mortgage that has a value of more than twice your …

Debt Isn’t Required

Like a lot of people in my twenties, I spent much of that decade in a rush to saddle myself with a lot of debt. I owed money for my education. I owed money for my car. I owed money for my home, too. I had this strong sense that I needed all of those …

Categories: Debt Management

Need Help With Payday Loans? How To Escape The Cycle

I had a long conversation with a reader whose brother seemed to be caught in an endless cycle of payday loans. He works about thirty hours a week earning about minimum wage at a convenience store. About two years ago, his car broke down and in order to get it back on the road very …

Should I Cosign a Loan?

I get this type of question all the time. A family member or a friend is trying to get a loan for some reason. Those evil banks won’t lend them any money. They want you to cosign their loan for them. It won’t cost you anything (so they say) and it’ll help a friend out! …

Categories: Debt Management, Family

Does a Extra Payment Have an Impact On Your Mortgage?

Let’s look at a “typical” mortgage. Right now, the average American mortgage is $235,000, so let’s use that as our baseline. The Seattle Times reports that, right now, the average 30 year fixed mortgage rate is 3.42%. So, let’s use those numbers. We’ll look at a 30 year fixed mortgage at 3.42% that borrows $235,000. …

Categories: Debt Management

The Challenge of Lifestyle Deflation

It’s a pretty common story. Boy (or girl) wants something. Boy discovers that there’s easy credit available. Boy convinces self that they can just pay the debt later. Boy buys that thing on credit. Boy gets more credit and buys more things. Boy starts realizing the bills and interest are drowning him. Boy decides to …

Categories: Debt Management

Examining Two Credit Card Repayment Strategies

Kim writes in: My dad told me that the best way to pay off a credit card is to pay it all off at once so I have been saving up the money to do that. My boyfriend argues with that saying that the best way to do it is to make the biggest possible …

A Seven Year Old Learns About Credit Cards

Here’s some food for thought for those of you out there raising children and hoping to teach them good lessons about money. I was at the store recently with my seven year old son. When it’s just the two of us, he’s very quiet and observant of what’s going on around him (he can be …