Teens need training on financial basics Business Lexington
Lexington, KY - The following article is the first in a series by Henry Clay High School senior Jay Schrader, examining the financial literacy of today's young people.H1N1 is not the only infection threatening America's youth today. Financial illiteracy is rampant among young people transitioning from the monetary support of their parents to economic independence. The effects of unbalanced checking accounts and heavy credit card debt can be devastating to the financial well-being of today's young adults.
But why are more young Americans lacking in knowledge these days on the basics of saving, spending and investing? Luther Deaton, Jr., president and CEO of Central Bank, attributes some of the issues to a shift in mentality.
"(My parents) taught me how to save and be prudent with my money. That sense of prudence has been lost a little bit," Deaton said. "I don't think people know how important [saving] is until they have something they want
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Youngsters wanting to make blizzards of money got valuable advice from financier Warren Buffett who was visiting his local Dairy Queen for the ...
Where can I get free legal advice regarding credit card debt?
I'm searching for a web site or phone number to get free legal advice for credit card debt. I need a place that will give me an immediate answer. Thanks for your help.
In most areas, attorneys will give you a free consultation. As this is a credit card debt, you may want to look for someone who does collection work for companies, as they are more experienced in debt law. A lot of "general practice" lawyers have not impressed me on their knowledge.
in need of some financial advice...credit card debt, mortgage?
My husband and i are looking into getting a house next year when our rental lease ends (Jan 08). We plan on spending this year trying to get out of as much debt as possible. We have about $14K of unsecured debt. My credit score is within the 650 range, his is way over 700.
We are in desperate need of some advice as to what we should do this year. We're both contributing to our company's 401K programs. Obviously, we need to focus on paying off our debt, but at the same time, we also need to save up for the house.
Which do we focus on?
I have about $30K in inheritance money that I can get which we will use as the down payment. And that raises a whole different issue about who will own the house, etc (just in case of divorce).
Any advice as to where we should navigate our finances this year will be very helpful. Thanks in advance!
I would say only pay on the house closing costs. People become wealthy by paying as little as possible on their house. Because of current low interest rates and tax deduction, houses are the best investments on earth as long as you do not put money down or into them outside of closing costs. With your good credit scores you should be able to get a good interest rate on a 30 year fixed interest only loan. Below are some ideas on how to decrease your expenses so you can save more. Then invest extra money in real estate--rentals.
The biggest ways you can do this are in expense categories that are recurring--those you must pay every month that represent a big part of your income. The quickest to address are downsize your car expenses ASAP. You can do this by selling what have at top price as listed on KBB.com private party value. If you take your time selling you should be able to get "Private Party" value for your car. Then plan to buy a lower cost, reliable used car that Consumer Reports rates as most reliable. That way you can minize your repair costs--this is typically a huge ongoing expense for most people. I have four older cars that are of these types that Consumer Reports recommends most reliable: Honda civic and Odyssey, Ford escort and Suburu (mine has 284,000 miles on it). Also, these cars get good gas mileage. Another priority when you buy to help you save $. When you buy use KBB.com and try to find cars selling for well under the Private Party value. I always buy well used cars this way. I wait until I see one advertised well below the private party value, then I call asap, give seller a $50 deposit and write up a contract I will buy it subject to my mechanic finding no major problems. You want to buy an older car for cash (like $1,500) so you don't have to pay any collission or other extra insurance and that reduces your expenses more. I have a Ford Escort wagon (I like wagons and vans because cops pull you over less on these family cars--we have way too many cops, not that I get tickets. But I just like to be left alone, I digress . . .) I bought my Ford Escort wagon for $1,500 five years ago and it has 180,000, miles and looks great, drives like a dream and has had the lowest repair cost of any car I owned. That is my dream car because you can buy them so cheap, about 1,000 for a 1993 easy. Then be sure you shope insurance coverage among various companies--Geico tends to have cheap coverage--to get lowest cost insurance. If you own a home, you can do that same idea by looking for a bargain house. With the depressed market this is a great time to buy a fixer upper well below market to reduce your housing expenses asap. Sell your current home at market rate. If you rent, you need to own because you reduce your expenses by deducting the payment from your taxes. If your credit score is above 500 you should be able to get a loan or find a lender who can help you get your credit score up. By the way, better to buy one of those well used cars with a loan to reduce your car expenses. In general you need to become a serious bargain buyer on quality cars and on houses. You can find bargain houses on the HUD website of foreclousres using a realtor. Just be sure to bid way low on HUD foreclosures--realtors will suggest you bid too high. Be cheap, cheap, cheap and you will reduce your monthly expenses on these things.
One other point, if you find yourself overspending on consumer stuff you buy, you need to get self control. Best way to do this is not a budget but fasting. Start skipping a meal and then work up to where you skip food one day per week. I fast a day a week regularly and am unbelievalbe disciplined. I must be because I provide for a family of 6: with 5 older girls, two in college, etc. Talk about expensive! But I never buy anything in a store on impulse because fasting has trained me to be way disciplined.
Also try monthly reviewing a list of your recurring expenses to see where you can save.
Source(s):
KBB.com used car values
Zillow.com home values. Multiply the value they give you by 1.15 and you will be close o market value. Also look at comparable sales on that web site for a per square foot value to apply to the home you are considering. Watch out with realtors. They tend to push you to pay too much but you must use a realtor to buy a HUD foreclosure. You can shop other bargain houses with motivate
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planner.
Both can help you plan out what to do next, or decide how you want things done.
If you want to do it on your own, draw up a budget, pay off the low bills first, so you have a lower debt-income ratio, and then work on the bigger ones. The less debt you have, the better for buying a house.
Look for a home loan with low down, or no down. If your country has a 1st time homebuyers program, use it.
Keep putting money in the 401k. Just pretend like you don't have it. Don't forgo the 401k contributions so you can have more money for a bigger, better house. You'll be glad in the long-run.
- If your 30k is enough for a down payment, then you don't need to accumulate a lot more mony to purchase a house.
- Keep contributing to your 401k. It's awesome that you're already doing that, don't drop it.
- Set aside an emergency fund. 4-6 months of living expenses is recommended, but any amount you can start with is better than nothing. You should try to set aside 1 month's worth of expenses between now and when you get the house
- Set aside some money for move-in expenses. There's lots of things you don't think about that you need. Tools, lawn mower, snow shovel, etc. Good idea to get that set aside up front
- Use any additional money to pay down your debt
However, where we are in Canada, ANY inheritance money put into a marital home becomes community property.
It may be best to have spouse SIGN for a loan of $15K (with witnesses) to protect you from any breakup later on.
As to the inheritance money being used to make the downpayment and who will own the house in case of divorce - you're married so most consider the house to be equally owned by the both of you, especially if you're in a community property state. Even if you don't have both your names on the title or the loan papers it's still a communal asset when you're married.
I will hereby talk from my personal experience.
I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details,
if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first,
a good place to start in my humble opinion is astraight to the point ebook with question and answer I found :
http://umgarticles.atspace.com/debt-consolidation.htm
if it helps kindly remember me in your voting!.. cheers!
Credit card debt advice please?
I am in $4000 credit card debt. I am planning a budget, but keep on changing my mind about what to do. Should I pay minimum payment On the cards and save as well so that if I end up out of a job for some reason, I have some rainy day money or should I just put all the money I have after bill etc onto the debt. Thanks
You have two choices.
1. Pay it off in the fastest time thereby reducing your interest charges.
This way you will always be able to get another card if you want.
Credit cards are the biggest rip off as you know.
2. Get a court order order/arrangement that you pay it off at $20 a fortnight; plead hardship; the credit card company will 'write you off' and stop charging you interest. You may have to exaggerate your financial commitments. The chances of your EVER getting another credit card again will be close enough to zero. This is NOT a bad thing; it's where I am at.
You've heard of the triple A credit rating? Mine's a triple Z.
~
Instead, set aside $1,000 for an emergency account and then pay as much as you can on each card.
Once you have paid off all the credit card debt, put the same amount toward savings until you have six months' of expenses saved.
1. The longer you take to pay off the credit card, the more the total cost will be. Paying the minimum is never a good business practice.
2. The interest rates on credit cards are almost always higher than on a savings account. So whatever you have in savings will not gain as much as you will lose on the remaining credit card debt.
3. If you lose your job, you will still have the debt hanging over your head.
Making minimum payments does not help for quintessentially you are paying the interest.
I you are able to pay this down in three payments:
1st payment) $1333.33
2nd payment) $1333.33
3rd payment) $1333.34
The will help substantially.
Here are some tips that may assist you:
- Spend money on what is neeeded rather than wanted
- Use your credit card with the knowledge that you WILL be able to pay it off when the bill comes in
- Limit yourself to 60 or 80 dollars for spending money
Hope that helps you!
All the best!
I need advice on credit card debt?
I have about 2,500 in credit cards that went to collections, what happens if I start over with new means of rebuilding my credit and stay on top of making payments will my credit score go back up or stay low still because of the debt in collections?
OK....lets all stop...take a deep breath...and take a look at Bama's answer.
For you folks who have been here on Yahoo for a while, try to do it without laughing.
OK, THIS is the reason I am here, and why I try to help people fighting with collection agents. What she just posted is complete nonsense! This is what collection agents tell you when trying to scare you into paying your debts.
I was just gonna pass this up until I saw her claim of being a credit card company rep...makes it sound like he/she knows what they are talking about.
Just read the Fair Credit Reporting Act....it will refute all the lies.
1) Debts can NOT say on your credit report longer then 7 years, no matter if they are sold to other collection agents or not.
2) A debt can only be listed more then once on your report. The only person allowed to list a debt is the one who legally has the right to collect it. If it's listed multiple times, you simply dispute the duplicates. If they don't come off, you have grounds to sue them.
Been there...don't that.
OK, now to answer the question which nobody seems to have a clue about, other then to pay the bill.......
The negative mark will stay on your record for 7 years. The longer it stays there, the less impact it will have. So expect poor credit for the next 4-5 years at a minimum.
Remember that your credit score is a measure of your total credit history. You can improve your score by getting other sources of credit. But for the next 5 years it isn't going to make that great a differance.
If you pay the past due bill, as these nice folks are suggesting, it will NOT get the negative item removed. All it does is change the status to "paid" but all negative info is still there, ruining your credit. If you do pay this bill, be sure that the creditor agrees IN WRITING to delete this item once you have paid the debt. Otherwise you just spent a lot of money and didn't do anything for your credit history.
This stuff stays on your credit report for a long time, so start now.
Good luck!
At the same time, if you still have a credit card, you can make the bill roll. Pay on time, and your credit score will increase.
good luck !
p.s. And watch out for scams!! There are a lot of things out there that promise to fix your credit. Very, very few of them are legit; especially if they charge a fee. If it sounds too good to be true, it probably is. You are much better off being patient and fixing the problem yourself.
DO NOT START OVER UNTIL YOU HAVE PAID THE COLLECTORS........... HUGE MISTAKE
And Studly... yes, I do (Capital One to be exact) and even though the laws say that.. it almost never works out that way & then the time it takes to get it straight is just nuts (although, I side with consumers that FACTA is something that should be followed, it simply isn't and there really isn't anything anyone can or will do about it.
Yes, I have gotten phone calls from people who found out while they were selling thier house that they couldn't because of a lien on thier house from a debt that originated as an unsecure debt
See all things are sort of a trade off... we got FACTA & "they" got the rights to get liens on property to restitue unsecured debt.
Sometimes the truth hurst really bad........ but it is the TRUTH
and I will add this as well.. studly... the other part of facta is the "acurate" part... even if the company said they will remove the debt & even if the collections sent a letter saying they would remove the debt.... that is also a VIOLATION OF FACTA
FACTA --- Fair (sorry, I wish it were so & I hate collection tactics as well... this is why I DON'T WORK IN COLLECTIONS) and ACURATE (as in a business reports, then it reports both the good and the bad) Credit (3 major & a few other credit reporting agencies) Trade (folks who did business with each other) Agreement (as in the original contract that said if you borrow the money, you must the also pay it back)
Folks who don't pay what they borrowed are the folks who cost the responsible people money.... that is also a FACT... if you borrow it, don't depend on the rest of society to take that burden... it affects all kinds of things like stock values... and seeing as your profile said you worked for SBC then you woud clearly know that your defaulting on debt cost your co-workers money because all of your pensions in invested in the stock market, and even though I don't like big business, the reality that as soon as the market was created, we as a society become a slave to that system, even if we as individuals elect not to directly participate........ Remember Black Tuesday & Blue Monday??? Blue Monday was a driect result of folks like you. (people living beyond thier means & not paying & without a savings account to buffer life's disasters along with Kennedy & Rockefeller)..................... (Studly, not this young man fat85crx)
Controlling the expenditures is to control your urge to spend which is the first step for credit card debt elimination. To explain this it's about the way you make your payments using your credit card. Getting into credit card debt can be due to uncontrolled expenditures using your credit card. To control your expenditures this is a guide that will help in credit card debt elimination.
Controlling The Expenditures
1. Do not buy anything that you do not really need. Step back and go home consider what you are about to buy. Sleep on it and get a better perspective the next day and then tell yourself do I really need to purchase that item. Stay away from attractive offers; remember you are looking into taking steps towards credit card debt elimination not supplementation. Read more about it at: http://www.credit-card-gallery.com/article/126,Two_Steps_To_Credit_Card_Debt_Elimination
I need some loan advice for credit card debt, what shall I do? I don't want a credit consolidation company.
Is it possible for me to get a loan for some credit card debt? I have established credit and it is not the greatest but Im about 6,000 in debt with credit cards. I make about 2,000 a month take home and was looking for a loan so I can make one payment a month and pay off the high interest cards in the mean time. Any recommendations anyone?
Found this web site because it made it to the CBS news last week.It is called Prosper.I am thinking about being a loaner for them.Looks really good I feel for banks when this really takes off the web site has been up a year.Check it out.People loan People money.And you make 1 payment to Prosper a month.
u can get the loanof any type easily..............
i had found it very easily by dis source
i hope this will help u.....
http://www.thecreditrepairmanual.com and you'll get all the information you need.
anyone having experience in settling credit card debt please send any advice you have?
I currently have $30,000.00 plus credit card debt and would like to settle and pay them off in the next month. I will have a lump sum to work with and am hoping they will accept 50 to 75 cents on the dollar. I have medical problems and work on commission only. Because of my health, not knowing how much longer I can work with my condition, I can't consolidate and make monthly payments. My plan would work best for all. I just need some advice on how to communicate best with the creditors.
As long as your credit card is significantly past due (6 months or more) and currently in collections then you should be able to settle your debt for less than what you actually owe. However, your credit report will reflect the debt as settled so it will warn future creditors that while you did make an attempt to pay the debt you didn't pay what you actually owed. This will hurt your credit score but over time you could repair your credit. However, if your account is currently not past due then the company will most likely refuse to settle the debt. The only reason companies offer to settle is because the account is already late and they are making a last ditch effort to get some of what they are owed.
Huge credit card debt...Need advice on consolidation?
My friend and her husband have a huge credit card debt (42,000) and she recently had to stop working due to a difficult pregnancy. They cannot make their payments any longer. The debt is in her name only and they are considering a credit card debt consolidation company but she is wondering would it affect her husbands credit if she filed it in her name only. Anyone been through this or have advice? Serious answers only please...they are having a really rough time right now.
Okay... here's what's up... you are using the term "debt consolidation" but a consolidation is simply taking the debts you owe and combining into one loan. Unless they can drastically reduce the interest rates to a manageable monthly bill that they can pay off on time, it's no different to owe $42K to one creditor or 15 creditors... the reality is they owe $42K. With that said, I believe you are asking about a debt management company like Consumer Credit Counseling. Yes, she can file her own bills with them but she's going to end up not having the income to repay the debts since she has no income. That's not going to work. There's no reason for hubby to go into a CCCS type of plan if he has no debts. You may be thinking of the kind of company that settles debts with creditors for pennies on the dollar. The problem there is that it's one step shy of bankruptcy according to the credit reports and scores so it's really not going to be of much advantage to owe $20K of the $42K that she cannot pay either. That leaves bankruptcy. That's a last resort option but sometimes people have to do what they have to do and at least they can get a fresh start. The problem with bankruptcy is that being married, it doesn't matter whose name is on a debt because in many states, his bills are hers and her bills are his and even if he doesn't want to file bankrutpcy, he may have no choice is he's pulled in. Also bankruptcy puts your finances in the hands of the court. You do not choose who you pay and not pay. Some people are forced to sell homes and cars and other assets while others can keep such possessions depending on what the court deems to be the best route for the consumer. The real answer to the question isn't really the debt. For some people $42K is 50% of their income and to others $42K is only 10% of income. What's alot to you and I might not really be alot depending on equity in the home or a variety of factors. The debt settlement companies turn you into a deadbeat with the creditors and then THEY make the money that you would have paid to the creditors anyway. What's the advantage there??? The first step might be to call the credit card companies directly and ask what kind of hardship programs they may qualify for. Perhaps they can suspend credit priviledges and payments until she returns to work. They may suggest a program like CCCS. The thing is if her income is zero, that's all she can pay. Give your friends the website or phone #s on the "take the first step" link below to the NFCC.ORG consumer credit agency below and ask what options, pros and cons, are available to your friends. It'll be the best phone call they can make.
Credit Card Debt Need Advice.?
Hi, I have serious issues with my credit card debt. I'm in between 10-20 thousand dollars in debt. (Never accept a credit card when you're a senior in highschool). I am having serious problems paying off my credit card. I lost my 2nd job, due to conflict in schedule with my current job. Applying everywhere, no luck. What are my options, and list their pros and cons. I need sound advice. If i can get another job, then i would be better, no luck so far. New Jersey area here.
Contact Consumer Credit Counseling Services at 1-800-388-2227 they are the largest and oldest credit counseling service in the nation and have offices in most every major city.
They will lower your interest rates and monthly payments and they are non-profit.
I used them several years ago and was debt free in 36-months.
I am 25,000 in credit card debt. I own my home (no equity) - need help with loan advice or debt consolidation?
I have been transferring balances and making payments but I would like to know if there are any viable loan options to turn it into one payment without killing my credit score. Any help would be appreciated.
I don't understand how you own a home but say you have no equity--of course you do. Do you still have a mortgage? My hubby got us in this situation years ago, we were actually seperated at the time. When I came back it was to find that he owed money to a bunch of lenders who were charging outrageous interest.
We went to the bank that holds our mortgage and they were more than happy to consolidate all the loans and even asked why we had not come to them first. Good question. The interest at the bank was 10% lower than what my guy had been paying.
Happy to say we are out of debt and the house will be paid for in 3 years, yeah!
Any advice on reducing/paying off credit card debt, without damaging credit?
My husband (of 1 year) has a large amount of Credit Card debt, and two of them have just raised the intrest rate. The intrest hike was to due to him co-signing on a car loan for his younger brother, who missed a few payments (paid off in Dec.). He has transferred balances so much in the past , and because of the co-sign nightmare, he is now unable to transfer to get the lower intrest rate. We own a home, but haveonly been in it for 9 months. Any suggesstions?
Cut up the cards and stop spending money on items that are not essential to your continuing to breathe.
If you have more than 2 cars, sell the extras. If you have an ATV or a motorcycle or anything of value of which you do not *need* (read: require to continue working or keep food in your mouth), sell it.
Even if you take a 50% loss on an item, you are better off than keeping the item and paying off the CC debt slower.
If you want an easy method, you won't find one. Your husband screwed you out of the 'easy way' when he went on spending sprees.
Stop going out to dinner, period!
Until those cards are paid off and you are out of debt, consider yourselves grounded from anything except the essentials of staying alive.
Like steak and shrimp? Tough! Buy chicken and canned green beans. There are 1000 different recipes for chicken. That means a new meal every day for three years.
The clothing you currently own should be your entire wardrobe until you are out of debt.
Spending wisely is not only smart, but also the easy road to happiness.
I own a home, 2 cars, a motorcycle and a laundry list of toys (including this PC) and I could live off $1100/mo (including insurance, mortgage and food) if I needed to. How? I pay cash for anything I buy (with the exception of my home, which I placed a large down payment on) and if I cannot pay cash, I save up until I can while still having at least a couple of grand left over for emergencies.
If you bank account if over 3 months of living expenses, you should be putting that towards the cards. There is not one thing in life more expensive than the interest rate of a credit card.
I would say the only exception in life for not paying cash is for a home, as with a healthy down payment (and *only* with a healthy down payment.. 20% or more), you will end up saving money over renting. For anything else, there is no excuse to ever go into debt, as food is cheap, and that is all that is needed to keep you breathing.
Good luck, and buckle down. It will be a tough ride, but you will end up infinitely happier as a result.
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