Debt Management

Some Notes on Filing for Bankruptcy

A reader who asked for anonymity wrote in: I’m visiting a lawyer next week to get started on filing for bankruptcy. I have no way to pay my debts or even make the minimum payments each month. My problem is that I simply can’t find a place online that actually explains what the different kinds …

Car Finance: The Math on Why You Should Pay Cash for Your Next Car

Quite often, I get emails from readers asking about car finance. What is the “best” way to purchase a particular car that they want? They have their eye on some new model and want me to essentially tell them that it’s okay to purchase it. When Is It Ok To Finance A Car? I rarely …

APR, APY, and Mortgage Math: A Real World Example

I have lots of readers here in the central Iowa area, so it came as no surprise to me that when I began hearing an ad frequently on local radio advertising a particular mortgage product in terms that were a bit on the confusing side, I received an email about it. Jim writes in: I …

Pay Cash or Not? Cash Flow Versus Liquidity

Let’s say, hypothetically, I have $50,000 in cash just sitting in my savings account. I need to replace my car and I’ve decided on a model that costs $20,000. I can get a very low interest loan for that car from the dealership – 0.0% or 2.9% or something like that. What do I do? …

Why a Zero Percent Auto Loan Isn’t Always the Best Choice

Brian writes in: I was at a local car dealership looking for a replacement for my truck. I only have about $8000 in savings so I knew I would have to take on some debt to buy. The dealer offered to sell me a new F150 for a good price and a zero percent auto …

Categories: Debt Management

Why Not Walk Away from My Mortgage?

Kelli writes in: My husband and I are sitting on a thirty year mortgage (with twenty six years left to go). We still owe $330,000 on our home. A week ago, a very similar home to ours two blocks away sold for $220,000, so we’re under water by at least $100,000. We are thinking of …

Credit Card Debt: Marriage, Privacy and Honesty

Archie writes in: In our marriage, my wife and I have agreed not to open financial statements addressed to each other. We supposedly did this so that we would be able to hide things like gift purchases from each other. Whenever we talked about our finances, we just talked about balances on accounts and didn’t …

Debt Consolidation and the “Orbital of Stupid”

Yesterday, I heard a very interesting story on NPR that focused on Dave Ramsey looking at Greece’s debt situation through a personal finance lens. Without going into the politics of it, Dave made the astute observation that if a person behaved in the same way that Greece (or any other nation verging on default) behaved, …

Categories: Debt Management

The Myth of the Tax Deduction

Most of the time, when I talk about the implications of various debt repayment options on The Simple Dollar, I utterly ignore tax deductions. This is not an oversight. Usually, it just makes a situation needlessly more complicated and takes the “simple” out of The Simple Dollar. As is often the case, astute readers email …

Categories: Debt Management

Never Cosign a Loan Unless You Want to Pay It Yourself

One of the most common questions I get is whether or not a person should cosign on someone else’s loan – a car loan, a student loan, or so on. I have a single response that I always give to this type of question: You should only co-sign a loan that you’re perfectly happy paying …

Categories: Debt Management, Family

Going Up?

Today, Seth Godin (one of my favorite bloggers who usually talks about marketing) posted a great piece about consumer debt. Two great excerpts: Here’s a simple MBA lesson: borrow money to buy things that go up in value. Borrow money if it improves your productivity and makes you more money. Leverage multiplies the power of …

Mortgage “Half” Payments: How Much Do They Save?

One frequent question I’m often asked is whether or not paying half of a mortgage payment twice a month versus paying a full mortgage payment once a month is actually worthwhile. Let’s say, for example, you’re in the situation that Paul, one of my readers who wrote in recently, finds himself in. He just took …

Categories: Debt Management

Insurance Companies & Debt Free Living

Mary writes in: My husband and I have been debt free for seven years. Hooray! We cancelled all of our credit cards in 2001 and paid off our home mortgage in 2002. A few weeks ago, our homeowners insurance premium went up substantially. I called our agent to ask why and he told me that …

Categories: Debt Management

Debt Reduction and Debt Elimination Ads: The Real Scoop

Iris writes in: I was wondering if you could comment on the debt reduction and debt elimination ads I keep seeing on tv. Are these companies reputable? Are they doing anything that I can’t do myself? I would hate to pay a huge fee for something I could do myself. I would really like to …

Categories: Debt Management

The First Steps On How To Get Out Of Debt

A while back (has it been almost eighteen months already?), I wrote a very detailed article about coming up with a debt repayment plan. This plan works – it’s what I did when I realized that I was in serious financial trouble and needed to overcome it. Yet it’s not the first step in the …

Revising and Setting New Money Goals

Over the past few months, our finances have been in something of a “reset” mode. In the process of taking more control of the advertisements on The Simple Dollar’s website (which is my primary source of income), I had to change billing systems. With my previous primary advertising representative – Google – I would get …

The Simple Dollar Weekly Roundup: Agricola Edition

For my birthday a few weeks ago, my wife gave me the board game Agricola. I opened up the box, looked at the abundance of pieces, read through the instruction book, and was immediately worried that the game would be too complicated for us to enjoy. The first game we tried was pretty miserable. Sarah …

How Low Can You Go? Vegetarian Burrito Bowls

In April and May, National Public Radio featured a series on inexpensive gourmet dishes entitled “How Low Can You Go?” Although many of the dishes looked quite tasty, most of the dishes weren’t actually all that inexpensive, often narrowly getting below $10 to feed a family of four, and many involved arduous cooking processes. I …

The Total Money Makeover: Pay Off the Home Mortgage

This is the tenth of twelve parts of a “book club” reading and discussion of Dave Ramsey’s The Total Money Makeover, where this book on debt reduction is teased apart and looked at in detail. This entry covers the eleventh chapter, finishing on page 202. The next entry, covering the twelfth chapter, will appear on …