Posts Tagged ‘pay off credit’

Build Your Financial House of Brick

Remember the three little pigs? Sure you do. The moral of the nursery rhyme was simple:  build your house right the first time and it won’t be blown over.

In the arts, we’ve all heard this advice before. It’s the quality of our work that brings people back. We’ve watched suspiciously as performers with gimmicks shoot to the heights of fame for a few brief moments; but it’s only quality work that helps ensure a long, prosperous career.

Or in other words, using three little pigs speak:  If you’re building your house, make it brick.

I’ve often heard financial planning referred to by professionals as a house. A foundation laid on the sandy ground of debt and scattered income is bound to fall later. For the average person, building consistent, dependable income and paying down debt are jobs number one and two.

But we aren’t average, are we? (more…)

The Most Important Score in Your Financial Life

I pulled my car into a garage to have the oil changed this week. I realized during this process how closely some of these financial topics mirror auto repair jargon. Sometimes it takes all of my acting experience to pretend I know what a mechanic means when he’s explaining the difference between types of oil. I’m terrified he’ll recognize me as the not-sure-where-the-oil-goes person I am, and suddenly the cost of my car repair magically skyrockets.

As I’m smart enough to realize that there are auto-related facts I must know to keep my costs down, it’s similar with some financial concepts. One number may save you more money than any other in your financial life. It’s called a FICO score. This number tells lenders how reliable you are with payments to debt. People with high credit scores are offered lower interest rates to borrow. They’re also often given better repayment terms.

Knowing your score became more important than ever a couple months ago when Bank of America changed their fee structure. (more…)

When Debt is the Only Way

CONGRESS appears to be nearing a fight about debt. I don’t want this to be a political discussion, but often current events can help us look at our own financial picture more objectively. Some members of Congress assert that they will not allow the United States debt ceiling to rise. Others, recognizing the huge gulf between the amount of money available and the amount that needs to be cut in order to balance the budget, seem willing to talk about cuts but want a more reasoned approach. However it ends, this fight is long overdue. Imagine if you managed your financial house this way, constantly adding new debt without a plan to repay it?

Long time readers of this newsletter know that I’m on a mission to free the creative community from the pain and stress of out of control debt. I’ve watched more people’s dreams crumble under the weight of debt than from stock market declines or rising health care costs. Debt can bring a person to her knees quickly. Just one more credit card can be the tipping point between financial solvency and ruin.

But what happens when you must take on debt? What if there is no other way?

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Paying Off Credit Card Debt

Ever watch a hamster spin the wheel inside of its cage?

My daughter Kiera has a hamster named Violet. At least once every day I’ll find my kids in their bedroom giggling as they watch poor Violet spin faster and faster, her little legs pushing harder and harder. Where does she end up? Right where she started. Funny entertainment for my children, but a lot of work with no payoff for the hamster.

Many people with credit card debt feel like the hamster. Every month they send a large chunk of their paycheck to a credit card company, but just like Violet, they spin and spin, working hard, collecting a paycheck, sending it to the credit card company, again and again, never seeming to get anywhere.

This week I’m going to help you stop spinning the wheel and start making some progress.

Let’s avoid three common mistakes I see every day:

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Drowning in Debt?

“I’m drowning!”

That’s the common cry when people tell me they have too much credit card debt. It isn’t simply “I have too much debt,” or a polite “I’d like fewer bills, please.” They’re sinking in debt and need to be rescued fast. It’s a full-fledged, panic-stricken wail.

Maybe it should be. According to CBS News, the average credit card interest rate jumped 13 percent to 14.7 percent in just the last twelve months. I met a woman last week with a thirty percent interest rate card. Thirty percent! She’d paid over one thousand dollars in interest since the beginning of the year. Imagine what you could do with an extra thousand dollars.

Drowning is a creepy, but appropriate analogy for debt. Maybe you’re drowning in overdue or soon-to-be overdue bills, but I’m not going to save you.

I’m going to teach you how to swim.

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