Don't Do Debt.com

Quick tips and your money

When I tell people that I write about credit cards, debt and money, I am inevitably asked about any "quick tips" I might have. So, I thought I'd take a minute to share these with others who might have this same question. Below are a few of these "quick tips":

1). Have a vision for your money (see blog entry below).
2). Be aware of the cost of being in debt: It is in fact very expensive to be in debt. When you break the costs down, you can see the incentive to begin seriously eliminating, or at least, reducing the balances on your high interest credit cards (see entry/article- "Quicksand: Debt's impact on budgeting").
3). Get organized with your money: Late/missed payments can be very costly to the cost of your debt-load and can seriously erode your credit report. It’s important to be organized with your money in order to avoid these and other unnecessary and costly penalty fees.

Unemployment & debt

Lay-offs, downsizing, cost-cutting. No matter how you say it, unemployment is unemployment and it has a number of consequences on an individual or family. The true consequences of unemployment really hit home with me when a friend described the impact of her husband's job loss on their lives, their little girl, their money.

My friend has a good job and earns about $2000/take home pay every two weeks. Her husband was earning $30/hour plus he frequently accrued overtime hours at time and a half ($45/hr). He recently lost his job. His company looked to cut corners and save money. The company did a round of lay-offs to meet this goal. Right or wrong, fair or unfair, the situation is what it is. Fortunately, this particular company put up no fight when my friend's husband and several other employees applied for unemployment.

He recently began receiving unemployment checks, which is helping their situation. But when my friend sits on my patio, I see in her eyes a stress that is far greater than she is letting on. Her concerns? Most of her first paycheck pays the mortgage. Her second paycheck pays all bills: cable, phone and power bills; the one outstanding loan they have and groceries. Her husband's income, now reduced by more than half, goes mostly to daycare. On this day she is sitting outside my house, she relates that their family has $28 to their name until her next paycheck, a week and a half away. Tonight she is going to her mother in law's to pick up diapers for their 6 month old.

Article: "Quicksand- Debt’s impact on budgeting"

(Highlights from an article slated to appear in an upcoming edition of Budgetstretcher Newsletter)

Ever find yourself quietly pondering where it is exactly
that your money goes? Or, do you find yourself constantly struggling
to save money and get ahead in spite of perfecting your budget
and cutting back on spending? If you’re struggling with money
and credit cards are a part of your spending strategy, it’s time
to look at how your debt-load could be crippling your efforts to
budget and save.

Think of these simple costs to use a credit card:

Balance	Interest	Cost
$2000	10%	$200/year
$5000	10%	$500/year
$10,000	10%	$1,000/year
$20,000	10%	$2,000/year

Other highlights:

Being in debt can cost thousands of dollars a year.
With the cost of being in debt so high, it’s important to understand how credit cards work.
Many people do not comprehend the impact of interest until they’re swimming in it.
When it comes to your money, don’t overlook how your credit cards could be hindering your efforts to budget and save.