Debt Management

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

Good Debt vs. Bad Debt

One of the most common ideas that personal finance writers bring up is the distinction between “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 …

Categories: Debt Management

That First Taste of Financial Success

About a month after I hit bottom in terms of my debt, I sent in a large payment on one of my credit cards, a big enough payment to completely eliminate the balance. That money had come from a lot of things: eating very cheaply for a while, selling off a bunch of DVDs and …

Debt Freedom: A Personal Finance Startegy

I hear from a lot of readers who avidly follow Dave Ramsey. Many of them have taken his Financial Peace course, some got on board with his Total Money Makeover, and others avidly follow his radio show. Virtually all of them are strongly committed to complete debt freedom as a goal and they’re throwing everything …

The Big Debate #4: Pay Off Debt or Save for Retirement?

This week, The Simple Dollar is taking a deeper look at five common personal finance debates. Once a day or so, I’ll get a long email from someone pouring out the details of their personal finance situation. Quite often, they’ve reached an age where they’re starting to seriously worry about retirement and have realized that …

Looking at Debt Repayment as an Investment

Quite often on The Simple Dollar, I’ll mention the advantages of getting your debt paid down. For most debts, paying them down is the best thing you can do with your money, provided that you have a small emergency fund set up to protect yourself against the unforeseen and at least some retirement savings. As …

The Single Biggest Money Mistake I’ve Ever Made

The single biggest money mistake I’ve ever made was the day I decided that my future self would pay for stuff that I wanted (not needed, but wanted) now. The amazing part is that I remember it like it was yesterday. I was twenty years old and a junior in college. I had taken the …