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This article is a guest post by UK money writer Les Mitchell, who regularly writes about finance topics across the web.
The most important first step you should take when preparing a debt attack game plan is to formulate a budget. Make a list of all of your expenses and a list of all of your income. If you don’t want to do this by hand, there are a number of software spreadsheet programs available that are a handy tool to use for adding up a large amount of numerical data.
Your budget should include regular and occasional expenses. Regular expenses include the kinds of expenses that you know will not vanish or vary all that much from month to month, such as mortgage or rent payments, grocery expenses, transportation, etc. Occasional expenses come up from time to time but do not fit into the regular expenses category. These include items such as birthday presents, car repairs, etc.
You can break down your budget into yearly, monthly, weekly and even daily categories. Once the budget is complete, total up all of your expenses and all of your income. Based on that figure, you can see where you stand financially.
The second step in the debt attack process is to prioritize your payments. What absolutely cannot be delayed? Food and shelter are usually the highest on the priority list, so mortgage or rent payments and grocery bills should be paid first.
Contact your creditors and work with them to try to arrange a reasonable payment plan. You may be surprised at how open companies and businesses will be to working with you. From their point of view, some repayment is better than no repayment. You may also contact creditors with whom you have loans and lines of credit, to ask if they will lower your interest rate. This works especially well if you have a long history with the company and have made regular payments in the past.
One of the best ways to save money on credit card payments is to do a balance transfer. By doing a balance transfer, you can save money on the amount of interest you pay monthly. A balance transfer is a smart, efficient way to cut down those monthly credit card payments.
Pay at least the minimum amount on interest bearing loans and lines of credit. Missing payments will only extend the amount of time you are in debt, as well as the severity of your debt. If you know will miss a payment, or anticipate the need to miss a payment, contact your creditors immediately and alert them to this fact. Sometimes, but not often, you can avoid late fees and penalties by doing this.
There are also a great many debt relief services and debt management programs that may be able to assist you in working with creditors to make repayment arrangements. These companies may be found online, but take note: be very cautious, do your research, make sure that a company is 100% legitimate and reputable before entering into any agreement or providing them with any of your financial and/or personal information.
One of the biggest mistakes made when dealing with debt is avoiding the issue entirely. The bills pile up and pile up as the debt grows and grows.
Make certain that you follow the third step to attack your debts: set aside a regular day and time to pay bills every week. This will help you get in the habit of dealing with your finances on a regular basis.
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I certainly hope you’ve done your research on travelling to FINCON11, I sure know I have! Remember, you don’t just have to get to Chicago, it’s pretty ideal that you actually get yourself to the hotel. You know, so you can participate in the conference. Being 30 miles away in the middle of downtown isn’t going to do you much good!
The obvious first choice was just to ride the scoot out to Chicago. I like to be able to do what I want, when I want, where I want, and if I made it to Vermont last summer on it, surely Illinois would be no problem, right? Alas, such a plan is stricken with problems. I got up north in 5 or 6 days, not one, followed by a death-defying 17 hour ride home. Interstate travel would only take 12 hours, and while the Big Ruckus can handle interstates pretty decently, the longest such ride — about 2 hours — was a mindbender of it’s own, so increasing that 6-fold just ain’t happening. Obvious second choice would be to take state and local highways like I do with all of my previous scoot trips, but that clocks in at a whopping… 17 hours. Throw in some breaks, construction, etcetera and the trip turns in to a nightmare. The only way that would fly is if I make it a two day leap, which would involve a place to stay overnight. Figuring on current gas prices and at the bare minimum $30 for a tent site, I would be looking at about $90 each way. Throw in the risk of breaking down on the side of the road, and this plan is scrapped.
Okay, so, scrap that. Next obvious choice? Airplane, naturally. Oh wait, that’s right, it costs over $400 freaking dollars, each way! That and the fact that I refuse to fly domestically for any reason until the TSA goons stop what has best been described as security theater, including number plate recognition. $900 to get groped by a man… twice? No thanks.
And then it dawned on me. One of the most ignored transportation systems in this country, the train! Wheeeee!!! Sure enough, hopping on Amtrak from Lancaster, PA to Union Station will cost me a whopping $88 one way! That’s just as much as riding the scooter out would cost, but without the need for a chiropractor/tow truck/ambulance. And I get to sit back, relax, and let someone else do the worrying for me. PERFECT, I thought! Sure, it takes almost 20 hours to get there, and includes a 4 hour layover in Pittsburgh at the end of the line, but that’s a small price to pay for affordability and convenience, right? Right.
From there, however, the problem lies in getting from Union Station to the hotel. Again, I did my homework. Taxi? An amazing $67 each way. Car rental? Freaking expensive. Scooter rental? Even more expensive than a car! I seriously fretted over this for a few weeks until it dawned on me – the answer was right in front of my face. Take another train, Jake! We’re dealing with a major city here. Major cities have their own trains. Stupid. Riding the Metra out of town to Medinah Station, where – get this – the hotel actually offers shuttle service, costs a budget busting four dollars and fifty cents. Lacking the shuttle, it’s only 4 miles away from the hotel, and I plan on packing light, so it would be a pretty easy hour long walk.
That brings my total cost to…. well, about $90. Same as the scooter, including quite a bit of luck on the scooter. It also gets me there pretty early, so if anyone knows of anything to do in the area (besides geocaching) that early in the morning, I’m all ears.
For those of you attending FINCON with me, how are you getting there? What are your expected costs?
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Another three months, and another goals update! You can find the last one here.
- Reduce debt 33%
Halfway through the year and I’m sitting pretty at 47.8% of my way to this goal! Would I like to be past the halfway point by this time? Certainly, but as my income generally increases with the number of months in the year, I think I’m definitely in good shape to achieve this goal. I just need to make sure to put my nose to the grindstone while playing catch-up in the next few months, and not lose sight of the target. - $3,000 emergency fund
Thanks to my inability to just pick up the phone and call someone (I’ve got a problem with phones), my emergency fund is much fatter than I ever dreamed possible, at a whopping $1,500! I’m quite happy with that as it is, so I think it can sit on the back burner while I focus on the debt goal. - Exercise – 7 minute mile
I just stopped slacking on my exercise goal recently. That’s a good way to put it, right? I’m trying my darndest to get the usual 10 mile bike ride in every night, but the late work nights have been getting in the way of that. A week or so ago I did my first one mile run, since I didn’t even have a benchmark for my progress, and managed to pull it off in 8 minutes, 15 seconds. It’s still over a minute from my goal, but as long as I take advantage of the warm nights during the summer, I just might be able to hit 7 minutes by fall. My general plan of action right now is to ride 5 or 6 days a week (where possible), and do a one mile run once a week so that I can really quantify and see my hard work in action. - Quit smoking
No progress, still hoping the exercise goal will kick my butt here. - Quit drinking
I am now officially a social drinker! I don’t miss being buzzed every night one bit. Ever since the Super Bowl, the only times I have drank have been up at my mom’s house. The last time I was up there, though, I drank until I puked, but — if it makes any difference, it was about the best drunken puking I’ve ever done. And, I didn’t really feel all that drunked up. Aaaand, that usually puts me off of alcohol altogether for a few months. T’was quite the waste of good shrimp, though…. I figure I’ve saved about $450 this year on not buying a case of beer every week. - Junk out
While I made good progress during my vacation a while back, that was about it. I lost my mojo. No time soon am I ever going to count all my worldly possessions, so quantifying the goal is pretty darn difficult. And when you can’t quantify it, it’s all the harder to reach it. I’m sure one of these days I’ll get that motivation back for a day or two, but until then, I’ll just keep watching what I bring in. - Conversationally fluent in Japanese
This one is also pretty hard to quantify, so all I can really say is, “progress.” However, progress is progress, and I’ve been seeing a lot more of it since I switched from Rosetta Stone (not so conversational) to Pimsleur (nothing but conversational). And, since Pimsleur is mostly audio-based learning, I’m able to do my learning while doing some other low-attention task at hand, such as riding bike. In the middle of the night. Where nobody will be around to hear my screams of “boku wa nihongo ga sukoshi wakarimasu!” That sentence alone is more valuable that 80% of what Rosetta Stone taught me.
Three months ago, I considered myself as achieving two out of six goals. Right now, I think it’s pretty fair to call it five out of seven. Okay, okay, four and a half. I’d say that’s… good, yes?
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From June 1 to July 1, my net worth increased an average of $8.31 per day, or $249.35 overall, to -$35,978.21. This is a 0.69% increase, and results in a projected zero net worth on 5/20/2014.
Better than last month, but not by much! Of course, the new computer build had pretty much everything to do with that. The three paychecks this month, however, should turn that around right quick, which is darn good, too, because the fact that I still haven’t paid off the Ellis debt is getting kind of annoying. And oh, how I was tempted to last night… C’mon now, only $122 left to go? Sheesh.
And as always, that presents a new problem in itself – where to throw the snowball next? I’m thinking…. the scooter.
Sidebars updated. Naturally. And with the dates updated, too!
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This article is a guest post by UK money writer Les Mitchell, who regularly writes about finance topics across the web.
More and more people are looking for just the right place to stash away money for retirement. Some are looking to sites such as moneysupermarket.com to ensure that they get the best rates and make the most informed decisions.?
If you are in the process of learning more about your IRA, here are five important facts that you need to take into consideration. Information is the key to being successful.
An IRA is advantageous when it comes to taxes.
When you create an individual retirement account, or IRA, you are putting money away that you will be able to access at a later date. You can put away money that you have already paid taxes on and gain interest on the funds without a tax penalty.
You can also put away money before you pay taxes on it and deduct this from your tax return. At a later point, when you withdraw the funds, you will pay taxes.
This is a source of income you can depend on.
Most Americans have grown up with the belief that Social Security would be available to help fund retirement. As you look at the system today, you, like most, probably have your doubts that these funds are going to last by the time you hit the age of retirement. As you put away your own money, you may gain a sense of security that you did not have before.
It starts with just an opening amount.
You don’t to have a huge amount of money to start an IRA. Most people start small and make it a point to set up deposits at different times throughout the year. While you want to have an amount in mind that you are working towards, don’t let it overwhelm you. Each and every deposit, no matter how small or large, will get you one step closer to the amount of money that you need.
Make sure you have a plan.
Don’t just throw money at your IRA and hope that everything will be okay in the end. You want to figure out how much money you can deposit each and every year.
You need to be able to take full advantage of the tax breaks, if applicable and also have some idea of how much needs to be deposited each year in order to reach your final goal.
Find a company to help you get started.
Most people don’t plan to set up an IRA and leave the money under their mattress. You can check rates as well as other important information before making your final decision as to where you want to start your account.
Find out how to make deposits and whether or not you can set up a payment plan in order to keep up with your goals. Over time you will see your nest egg grow.
The more information you have about an IRA, the more successful you will be. Find out all of the requirements for deposits and all of the specifications for tax deductions. As you continue to grow your account, you will see that successful retirement is just around the corner for you.
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