Debt Management

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 …

Debt Snowball Into Savings Or Pay Off Debt?

The idea of debt snowballing is a popular one: it pushes you to get rid of your debts and get on a financially stable playing field, plus it encourages you to behave in a frugal fashion because you’re setting aside such a large, steady block of money each month to eliminate those debts. What’s a …

Got Credit Card Debt?

Jon writes in: I have a bunch of credit card debt spread across several different cards and I’m having a hard time getting started paying them off. You’ve offered a lot of little solutions for debt removal, but I need a plan I can execute to deal with these credit cards. How can I get …

12 Tactics On How To Get Rid Of Debt

Almost every day, someone writes to me with intimate details about their debt situation. Some of them are pretty mild and can easily be taken care of with a little bit of elbow grease – others are horrifying and will take some very serious attention to manage. In either situation, the principles for getting rid …

Categories: Debt Management

A Portfolio of Credit Cards for Specific Purchases?

Jenelle wrote in recently and described her way of using credit cards: Unlike your advice to minimize your credit cards, I actually have eight open credit cards that I use all the time. These cards cover all of my purchases but each one has a particular bonus program that I can take specific advantage of. …

How Big Should My Car Down Payment Be?

Jimmie wrote in with a good question over the weekend: I’m going to buy a new car in several months and I’m trying to figure out how much down payment I should have. I’ve heard tons of different answers from different people. What’s your take? My initial take was to give this an off-the-cuff response …

You Can Do This

About two years ago, I had almost $17,000 in credit card debt. That added up to about a third of my salary at the time, and the minimum payments were more than my rent. Most months, my paycheck was gone before I would even see it, swallowed up by credit card payments, a rent payment, …

Pay Ahead on Your Mortgage or Investing?

Recently, I mentioned a Consumer Reports article that encouraged people to invest instead of paying ahead on their mortgage. It left me thinking quite a bit about debt repayment and how I should handle my mortgage. Our situation My wife and I are planning on eliminating our student loans in the next year to a …

Using All Cash To Kick The Debt Habit

One common tactic adopted by people who are in severe financial straits is an all-cash lifestyle. They tear up all of their credit cards and move strictly to a cash-based personal finance plan, cashing each check and living strictly off of that money. I personally feel that this is a good immediate response to the …

Should I Pay Off Low-Interest Debt or Invest?

This week, The Simple Dollar attempts to address challenging questions in personal finance by looking at both sides of the story and figuring out some of the factors you need to look at to make a decision. Most homeowners are in the process of paying off a large mortgage, one which requires a large payment …