Tag Archives: debt

Trick Yourself into Saving More Money

Diamond-Lighthouse-selling-super-weird-guy-shrug

While you may not have gotten a raise, you can still save more money if you introduce smart saving habits into your daily lifestyle. Being able to save really just means you take a closer look at the ways you manage and spend your money, then find avenues for putting cash away. Creating rules to follow and developing smart habits will change the way you think about your cash flow, and can be a great way to trick yourself into saving more money.

Use Cash

Striving to use only cash will cause you to force yourself to pay closer attention to how much money you really spend every time you go out, to the grocery store or clothes shopping. The trick is to put your plastic away so you feel like you don’t even have it to use. You may also want to consider removing your credit cards from easy pay and 1-Click settings from your online accounts to make it harder to make purchases. You might be surprised at how much less you want an item you see online when the added difficulty of typing in your 16-digit credit card number is in your way.

Diamond-Lighthouse-selling-super-old-lady-confused-laptop

Check Your Credit Card Statement Every Month

Your credit usage may have run away from you because you are like the thousands of other people who do not check their credit card statement every month. Looking at how much money you spend and the places you spend it is a good way to make yourself think about your choices in a more deliberate manner. Seeing that you spent $80 at the bar instead of the $40 you planned may shock you into being a little more careful next weekend, or realizing you spend half of your paycheck on new threads may encourage you to create a budget for your wardrobe.

Diamond-Lighthouse-selling-super-confused-lady-iPhone

Good Things Come to Those Who Wait

Attorney Leslie Tayne who writes for Fox Businesses advises you wait five days before making a big purchase. While that hot tub sale is enticing, give yourself five days to ponder whether a hot tub purchase is really in line with saving for your kids’ college tuition. Thinking about what you want to buy is a great way to prevent yourself from spending too lavishly on items you don’t need. A bonus benefit of waiting to buy something is that it gives you a chance to find a better deal, whether you look online or in competitors’ stores.

Diamond-Lighthouse-selling-confused-Asian-shopping-couple

Ignore Extra Income

Even though your surprise income may look like it has “jet-ski” written all over it, try instead to imagine it saying “Save me!” and put it away into an account you don’t use immediately. Tayne advises that you only rely on the money you make regularly to make big purchases. That means you should take that big fat tax refund or even the $10 you found in the parking lot and put it toward debt or into a savings account. Extra income is anything outside of the realm of your weekly or monthly income, including cash you make from selling your unneeded wares, (like diamonds that you sell with us!) By putting that extra cash away, you’ll never be tempted to dump it down the drain on something you don’t need. The unexpected kind of money is best spent by not spending it at all.

Diamond-Lighthouse-selling-bald-man-loves-money

Automate Everything

Investopedia advises against taking care of your financial business on a day-by-day basis. Instead, get your employer to deposit portions of your paycheck not only into your checking account, but into your savings account and IRA as well. In addition, set up your credit cards to pay off the balance each month, not just the minimum. A penny paid off is a penny and a half earned in the credit world, because each time your balance equals zero, that means you don’t have to pay annoying off bank fees later in life.

Saving money is really just about changing the way you look at money. If you don’t let it burn a hole in your pocket and instead let it burn a hole in your debt or build your savings, you’ll be on your way to securing a bright financial future in no time.

Diamond-Lighthouse-selling-super-happy-lady-glasses

How to Choose the Best Credit Card

Consider something called "e-mail."
Consider something called “e-mail.”

Getting mail was exciting when you were a kid because it was usually something fun like a present or an invitation. And as an adult, sometimes it probably feels like you got accepted to Hogwarts when you open your mailbox, so many letters fly out.  The child inside you gets excited but soon you realize they’re all emblazoned with the Bank of America, Discover, or Citi emblem, not the Hogwarts seal. As a grown up, sometimes it seems like the only people who send mail anymore are the multitude of banks vying for your application for a new credit card account and the occasional magazine company that really, really misses you. When your junk mail reaches the point of utter chaos, it can be so overwhelming that you end up throwing it all away or making a hasty, uninformed decision when you need new credit.

But don’t let the inundation of information overwhelm you, nor the disappointment that you still are not a wizard in training. Whether you’re a first time borrower or a seasoned veteran at getting late notices, it’s a good idea to compare what’s out there to select the best credit card for your needs.

House of Credit Cards
House of Credit Cards

Below is an overview the basic types of credit cards you can choose from based on the benefits each one offers.

Low Interest: The focus of a low interest card is to make it easier to carry a balance from one month to the next without having to make continuous balance transfers or open new lines of credit. A lower interest rate will result in lower fees each month while you pay off your card or accrue new debt that you plan to pay off later. The interest rate on these cards sometimes increases after a promotional period, which makes them useful for balance transfers or short term hardships.

"I found this card in the food court at the mall!"
“I found this card in the food court at the mall!”

Balance Transfer: Balance transfer cards can help you pay down a credit balance that you have been carrying. Many balance transfer cards have a promotional period during which the interest is at zero or low percentage rate. Balance transfer cards are popular for people who want to consolidate their debt in order to make their payments easier or lower, as well as people who have one credit card with a high balance and a high interest rate. With balance transfer cards, there is usually a one-time balance transfer fee added to the total balance.

Cash Back: Cash back cards give you cash in return for making purchases on your credit card and paying off the balance. Cash back cards reward people who are dedicated to paying off their balance each month and the reward can go toward the balance itself or be redeemed in a checking account or a check. Cash back cards often offer special promotions with particular restaurants or retailers, as well as higher cash back percentages in certain categories. Cash back cards are popular for people who like to charge most things on a credit card, but are good at paying off the balance each month.

Diamond-Lighthouse-selling-credit-card-old-dude-chilling-phone
“I’d like to purchase twelve thongs, please.”

Rewards Points: Points cards are similar to cash back cards, except the account holder get points in return for purchases instead of cash. The points can usually be used toward purchases through an exclusive shopping site for cardholders or converted to payments on your credit balance. Some points can be converted to cash. Some points cards offer hotel or airline rewards points, which often offer bonuses for purchasing travel during various times or give a large amount of points to new card holders. Points can be used for free airline tickets or even free hotel stays.

Whether you’re an avid traveler, a lover of saving money, or a fan of getting rewarded for your diligence, you have choices that will suit your spending style and your financial needs. Most banks offer multiple cards, so it may be a good idea to choose the card type that fits your lifestyle first, then compare each bank’s offerings to choose one that makes sense for your financial goals.

Diamond-Lighthouse-selling-credit-card-couple-smiling-African-American
“You ruined my credit…why am I smiling??”

 

The Ups and Downs of Doing a Balance Transfer

Diamond-Lighthouse-selling-credit-card-debt-couple-help

So you’ve gotten yourself into some credit card debt and you’re feeling a little overwhelmed about how to get out of it. It seems like every time you look at your balance, it’s gone up way more than you expected because of those pesky interest charges, and you’re beginning to wonder whether you’ll ever be able to get it back to zero.

But then, a beacon of hope arrives in the mail. Your bank is telling you that you can put a stop to those interest charges—at least for a little while—by putting all of that debt somewhere else. Or, maybe a new bank is telling you to bring your debt over to them by opening an entirely new account. Whether or not you should take advantage of one of those balance transfer offers depends upon the current state of your credit and the merits of the offer itself.

Diamond-Lighthouse-selling-piggy-bank-debt-drowning

If you’re interested in opening a new card, one of the negative sides is that, even though the direct mail letter may make it seem like you can basically call them and the card will appear in your hand, you still have to apply for the new line of credit. Because of that, the process can take time and you risk being denied. Daily Finance advises against applying for several lines of credit at a time because it will work against your credit score, decreasing your chances of actually getting a new credit line. However, if you are approved, your credit score could increase because your credit utilization rate (or your credit-to-debt ratio) will improve.

Using an existing line of credit may be a great way to consolidate your debt as well, especially if you already opened a new line of credit in order to complete a balance transfer in the past. CreditCards.com shares the important reminder that you may not be able to open a new line of credit because creditors could see you as a risk if you continue to carry a balance even after getting new credit. Being seen as a risk would make it harder for you to get different types of credit, such as loans for cars or a home.

Diamond-Lighthouse-selling-debt-mouse-trap-money

Regardless of whether you need to open a new account or are considering using an existing line of credit, make sure to read the fine print to find out how much it will cost. Every balance transfer will have a fee associated with it, regardless of the bank or the newness of your account, but some balance transfer offers have lower fees than others. Another consideration is the length of the zero or low interest rate promotion: some give you 18 months to pay off the amount, while others give you 24 months. USA Today makes an important point for debtors: creditors have no legal obligation to remind you of the end of your promotional rate, so it’s important to be diligent about paying off the entire amount in time or be prepared for the appearance of interest charges when the promotional rate expires.

Diamond-Lighthouse-selling-credit-card-debt-hands-help

In addition to enjoying a lower interest rate on your debt, you’ll have the added benefit of easier, streamlined payments. If you have found yourself confused by due dates and bill cycle closing dates, this may be a very real perk to help you get back on top of your debt. The phrase “consolidating debt” sounds a lot fancier than it really is: all it means is that you put all of your debt in the same account, typically using a method like a balance transfer. But, keep in mind that many balance transfer offers have a limit on the amount of debts you can transfer.

If you do a balance transfer, be careful not to forget about the debt or only pay the minimum just because you are enjoying a zero percent interest promotion. Make regular payments and remember, if you have zero debt, you won’t have to worry about finding a card with zero interest!

Amazing Tales of People Who Got Out of Debt

Diamond-Lighthouse-selling-shocked-woman

It can happen to anyone.

Everything in your life is going fine.  Good, stable job, appropriately priced living space, transportation costs under control, etc.  Then, one day, something happens.  Either it is traumatic and crushing (like becoming unemployed), something joyous (you have a baby – or, twins!), or something of such apparent inconsequence that it barely registers on your radar (…a new credit card arrives in the mail).  Whether monumental or seemingly minimal, an event occurs that steers you off your straight and sensible economic track.  Before you know it, you’re swimming, nay, drowning in debt.  Now what?

While there appears to be an unlimited resource of online articles, instructions and advice on how to climb out of the debt abyss (Solving the Credit Card Debt Enigma, Facing The Final (Bankruptcy) Chapter: 7, Divorce Yourself from Financial Woes), it’s one thing to read about how to theoretically do it; it’s another to hear from people who actually have.  Here is an assemblage of brave souls who tackled their debt head on, and the specific methods they used to remove the money owing albatross from their backs for once and for all.

Diamond-Lighthouse-selling-happy-guy-woman

You don’t have to get into Harvard to figure out that Harvard Business School isn’t cheap.  The businessinsider.com highlighted the intriguing circumstances of Joe Mihalic, a grad from said institution who left with an impressive diploma …and a student loan debt of $101,000.  After two years of making payments on this sizable loan, Joe wasn’t seeing any significant results ($22,000 paid back to the banks only saw an actual decrease of about $10,000 – because of the high interest fees).  He knew he had to makes some changes: “Joe took a two-pronged approach, decreasing his spending and increasing his revenue. He got a weekend gig as a pedicab driver, started a landscaping business with his friend, bought a flask to skimp on booze spending, got a roommate for his Austin home, temporarily stopped his 401(k) contributions, and did the usual lunch-eating, restaurant-skipping money-saving tricks. It worked. In under a year, he shaved off his entire debt-load.”

Diamond-Lighthouse-selling-happy-field-woman

In a story featured on time.com, Master Sergeant in the United States Marine Corps, Rachel Gause explained the tactics she was able to put into place to eliminate her debt (which totaled $179,625), and which allowed her to control her future expenditures.  Guase explained “I use the envelope system. Before I get paid, I do my budget. Then I have 13 envelopes—one for groceries, one for clothes and shoes, one for charity, one for dining out, one for gas, and so on. I go to the bank, take the money out, and divide it between the envelopes.  I don’t spend anything that doesn’t come out of those envelopes. Debit cards are nice, but swiping is less emotional. Cash makes me more aware of what I’m spending my money on. If I run out of money for something that month, I don’t buy it. But I’ve never run out of money for something important—now I’m more aware of how much I’m spending.”

Diamond-Lighthouse-selling-happy-guy-woman-jumping

Even if you make a lot of money, you can owe a lot too.  After a decade of healthy spending, Travis Pizel and his wife Vonnie (both of whom have high paying jobs) had collectively racked up a credit card debt to the tune of $109,000, according to the Pizel blog Enemy of Debt.  They realized the best way to combat the intimidating figure was to find a debt management plan that worked for them.  By condensing all of their credit card payments into one figure of approximately $2,500 per month, and adhering to a strict budget, they found that the new order and structure made things easier for them.  With 100k in the books, they are on the fast track to becoming entirely debt free quite soon.

College tennis star Ja’Net Adams was doing very well for herself after graduation, as reported by forbes.com.  She lost her job, however, in the dark days of 2008.  Soon after she and her husband were facing the precipice of a  $50,000 financial chasm.  Ja’Net knew she needed to land another full time job, but also was wise enough to focus on supplemental income as well.  She explained “I started coaching private tennis lessons for $25 an hour, and my husband taught basketball lessons for four or five kids at a time, at $25 per child. This earned us $500 a week.  Then I sought out easy ways to help reduce our expenses, like downgrading to basic cable, scaling back on our cell phone plans, and being conscious of how wasteful habits—like failing to turn off the lights after leaving a room—affected our utility bills. These simple adjustments saved us hundreds each month.”

Diamond-Lighthouse-selling-happy-girl-leaves-cheering

Maureen Campaiola was able to devise a three year plan to eliminate $79,500 in credit card and student load debt, states wellkeptwallet.com.  Her inspiring story involved a rollercoaster of economic ups and downs, but ultimately she came away with some extremely helpful wisdom in the debt management forum.  Here are some of the unapologetic tips that she cultivated:

“Cut up your credit cards and don’t look back. You don’t need them and you don’t need the points.

Track your income and expenses religiously. Evaluate it regularly and make adjustments to your spending plan to meet the financial demands month to month.

Be willing to make sacrifices. If you’re not willing, you won’t be successful. Sorry if that sounds harsh, but it is the truth.

Ask yourself if you need something, BEFORE you make the purchase. If you can’t honestly answer yes to that question, don’t buy it.”

If you find yourself in debt, even if the figure isn’t as astoundingly high as some of ones just listed, there are clearly a variety of steps you can take to help yourself become fully debt-liberated.  Along with the helpful suggestions supplied by the people above,  another method to reduce debt is to sell off any unneeded valuable items in your possession.  If you have diamond jewelry that fits into that category, check out diamondlighthouse.com.  We help people find the very best prices for their diamond jewelry, every day.  Whether you have a one carat sized engagement ring, or a set of diamond earrings totaling 10 carats, we will find the best price for you.  As evidenced from many of the debt eliminating stories in this post, every little bit can help.  Find out more here.

Diamond-Lighthouse-selling-happy-guy-cheering

 

-Joe Leone 

Facing The Final (Bankruptcy) Chapter: 7

Diamond-Lighthouse-selling-comic-guy-debt-ladder

akaWhen Liquid Assets Leak Out

So what exactly is “Chapter 7 Bankruptcy?”  Well…it’s not good.

The notorious yet somewhat arcane Chapter 7 is when you declare (yes, from the rooftops, in a joyous, mellifluous bellow!) personal bankruptcy, and any assets you possess are liquidated in order to settle your insurmountable debts.  This is pretty much a last resort, when you’ve sunken into a financial abyss so grave that your only hope of escape is to relinquish all your worldly possessions.  As the online legal symposium findlaw.com reports: “Bankruptcy will ruin your credit for some time to come.”  What happens is,  a legal “trustee” (this term makes them sound like someone comforting that you can confide in, but in actuality they can be viewed as rapacious reapers of all your remaining objects of worth) is put in charge of determining what you indeed do own and which of these things can be transmogrified into tangible cash.  The end result is that you may now be utterly destitute…but at least you’re no longer in debt.

Sounds like either Dante’s 5th or possibly 6th stage of hell, correct?
Continue reading Facing The Final (Bankruptcy) Chapter: 7