Debt Management

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 …

The Simple Dollar Weekly Roundup: Bringing Back the Book Club Edition

After chatting with a few readers lately, I’ve been thinking about trying the “book club” concept again, where a single book is discussed in detail over a series of posts. I’ve done this three times in the past: The first time, with Your Money or Your Life, went really well, with tons of good discussion. …

Debt Repayment and Frugality as Obsession

Yesterday, J.D. Roth at Get Rich Slowly posted an interesting article about whether repaying debt should be an obsession. His conclusion, to put it succinctly, was no: When a person decides to make a lifestyle change — financial or otherwise — there’s a temptation GO ALL OUT. With the zeal of a new convert, you …

Credit Cardholders’ Bill of Rights Act of 2009

On Tuesday, the Senate passed the Credit Cardholders’ Bill of Rights Act of 2009, an act that will quickly be passed into law with the signature of President Obama, likely within the week. This bill has a huge number of ramifications for credit cards – for users who are late on their payments, for those …

Personal Finance: Rounding Up Debt Payments

One technique that I’ve always used to make my personal finance management easier is to round up regular debt repayments to the nearest $10 or $100. I do this for two reasons. First, a round number is much easier to handle for simple calculations. With a nice round number, it’s easy to just glance at …

Help! I Owe More On My Car Than It’s Worth!

“Michael” writes in with a common question: What do you do when you find your car is worth less than you owe on it? This is a pretty common question, particularly given the current state of the economy. Some people are out of work. Others are looking to seriously cut back. Thus, there are a …

Is Suze Right? Do Emergency Funds Now Trump Debt Repayment?

Recently, an astute reader pointed me towards a very interesting Yahoo! Finance article entitled Suze Orman and the New Rules of Credit Card Debt. In the article, Suze changes her usual tune of paying down debt above all else – here’s a key quote: “If you have an unpaid credit card balance [and] not much …

The Simple Dollar Weekly Roundup: Freebies Edition

One interesting element of having a fairly popular blog is the amount of free stuff people want to send you for the purpose of convincing you to review it. I get multiple emails each day with people wanting to send me promotional materials (t-shirts, etc.), books for review, DVDs for review, some truly bizarre things …

The Low-Interest Debt Debate

A few days ago, I posted an article about our purchase of a 2009 Toyota Prius. One of the elements of the article that got quite a few readers angry was our decision to take out a 4% loan to cover much of the cost of the car, even though we had enough in our …

Categories: Debt Management

Personal Debts: Should They Come First?

Sharon writes in: I created a debt repayment plan just as you suggested, but I had one real problem. I borrowed $1,000 from my mother with no interest, which would mean it should be the last debt I repay on that plan, but every time I see my mother, I feel guilty knowing I’m repaying …

Categories: Debt Management

How To Lower Your Credit Card Interest Rates

When I was near my financial low point, I was literally paying hundreds a month in finance charges on my credit cards and needed to lower the interest rates. That money was an enormous burden at the time, since I didn’t have any savings built up and I was also dealing with the “startup” expenses …

Financial Windfalls and a Revelation About Debt

Earlier this week, I tossed out an interesting question to the people following me on Twitter: What would you do if someone gave you an unexpected $10,000 gift (meaning it’s tax free)? I was utterly flooded with responses to this question, far more than I anticipated. I took the first 250 responses and did a …

Categories: Debt Management

The Simple Dollar Weekly Roundup: Nature Exploration in Winter Edition

Suddenly, my three year old son is very interested in nature and the outdoors. He’s started noticing tons of things outside (even in the Iowa winter) and has started requesting that we watch nature documentaries when we watch television, instead of his usual previous standbys of various PBS shows. This makes me even more anxious …

Debt Reduction & Debt Relief Programs: What’s the Catch?

One of the most frequent issues that readers contact me about is more information about a debt reduction or debt elimination program that they heard about on the radio on their way home from work. “The people on there claim to have eliminated 90% of their debt. Can that be for real? What’s the catch?” …

Categories: Debt Management

Is Debt Necessary For Generating Income?

“Margie” writes in: My husband and I are pretty frugal, but we currently carry about $25,000 in credit card debt and a personal loan. Our monthly interest is about $800 on the balances. My husband owns his own business and has cash in hand to pay off these balances; however, he chooses to keep the …

Categories: Debt Management