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 …

The Total Money Makeover: Finish the Emergency Fund

This is the seventh 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 eighth chapter, finishing on page 150. The next entry, covering the ninth chapter, will appear on …

Should I Cancel a Credit Card That is Paid-Off?

You’ve finally paid off that credit card. It’s sitting there with no balance on it and you regret ever owning it. It’s got a high interest rate and no rewards program and you will never use it again. But should you close it? This is an interesting debate that often comes up in personal finance …

The Total Money Makeover: The Debt Snowball

This is the sixth 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 seventh chapter, finishing on page 132. The next entry, covering the eighth chapter, will appear on …

The Total Money Makeover: Save $1,000 Fast

This is the fifth 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 sixth chapter, finishing on page 108. The next entry, covering the seventh chapter, will appear on …

The Total Money Makeover: Two More Hurdles

This is the fourth 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 fifth chapter, finishing on page 92. The next entry, covering the sixth chapter, will appear on …

Rule #4: Eliminate (and Avoid) High Interest Debt.

A reader asked me if I could break down my ideas into a handful of principles. After some careful thought, I came up with a list of fourteen basic “rules” that summarize my money and life philosophy. I’ll be presenting these as a weekly series. This rule is about as subtle as a sledgehammer, of …

Categories: Debt Management, Money

Prolonging the Inevitable

Mitchell writes in: Currently, we have around $100,000 in credit card debt and we’re having a very hard time making the interest payments. How can we consolidate that debt and get a lower rate? Should we go to our credit union? Mitchell is falling into the same trap that I see a lot of people …

15 Ways to Get Started on Snowflaking

One of the best personal finance articles I’ve ever read is Snowflaking: A Primer, at I Paid For This Twice Already. Here’s an excerpt so that you get the idea: Snowflaking is a spinoff of the Snowball approach to debt reduction popularized by Dave Ramsey. With the Debt Snowball method, you figure out what amount …