Tuesday, October 25, 2011, AM | 1 Comment
Many more financial advisers would suggest different ways of beating the debt beast. I say there is nothing to beat. You can beat upon it as much as you want, but in the U.S., it’s hard to have some kind of control over it. As long as Mr. & Mrs. Jones are alive and living in your neighborhood, you would want to just keep borrowing till the lender tells you, there ain’t no more money left. And then you start blaming the lender for not lending you the money.
Debt can be your livelihood or it can send you straight to hell where the only thing you can do is burn and burn like hell and sometimes voluntarily I might add.
So I say, stop right now. If you have family especially kids, stop borrowing if you cannot pay it back to the owner. Leave something for the kids they can be proud of. Remember death has no time. If you die before you pay your debt, your kids will be left with a financial mess that you will have created.
If you die debt free, imagine your kids praying for you. You lived a debt free life and left them a debt free life. Unless you have an emergency like medical bills where at no fault of yours, if you can’t pay it, you would be in debt which in most cases is OK. You just have to find ways to return the loan to the proper owners.
Is there anyway to better use your credit and your debt? Of course there is. Change your lifestyle and your mindset and you will do just fine. Here are some specific ways to better use your credit cards, keep more cash in your pocket, and save what you have.
Be warned – credit can be nasty
Many families are seeing their credit card usage and debt steadily rise, and their credit scores fall. Credit scores below 700 often translates to less favorable loan terms on major purchases from automobiles to homes.
But there are several ways to help improve your credit score. Let me count the ways:
Pay bills on time
Use the cards you already have
Avoid opening several accounts simultaneously
Believe it or not, you can hurt your score by never using your credit cards
Therefore make modest charges that you can pay off at the end of the month
Don’t be tempted by offers of lower interest rates to move your balance from one card to another
Beware of low introductory rates which shoot up after a few months and expensive transfer fees
Instead, ask your current credit card company to match any lower rate offer you receive
Read the fine print on any credit card offer or agreement. Many companies use tricky words and they do it because it’s legal. For example, several credit cards have a universal default clause, which allows them to raise interest rates if you fall behind on any payments, including mortgage or medical bills.
Keep more cash in your pocket
If buying is your habit and not a necessity – needs and wants may be different for different people – and you know you can’t pay it back if you charged it with credit card, then by all means carry extra cash. I keep no more than $10 in my pocket. I charge almost everything with credit card if I know I can pay it back at the end of month. Else I don’t buy.
If you can, save for tough times
Psychologically speaking, using cash more often than credit could make you more aware of your spending. Expert suggest hundreds of ways of saving for rainy day. Follow any method you like, but the important thing is to take action now and be safe than sorry later.
Know where you stand right now
First off, get your free annual credit report now or at your earliest convenience. Don’t leave for tomorrow. Remember, Frank Sinatra said at one time, “Let’s forget about tomorrow, for tomorrow never comes.” After you study it and examine it, then take steps to improve your credit score.
In a Nutshell
No matter how much you read about reducing your debt or eliminating it altogether, it is you who can change things and can turn your financial life around and for the better.
Always think about your kids and your family. People depend on you. Leave them a life that is debt free. You have lived your life. Now it’s their turn to live and live within their means and be debt free.Facebook.com/doable.finance