Archive for 'Debt Reduction' Category

By Peter Andrew

When you recite the months, do you begin, "Penury, February, March, April ...?" If so you're not alone.

Being broke after the holidays is a common experience for millions of us. We're dragging ourselves out of bed, in the dark, and we've nothing to look forward to for months. Daylight is scarce and unavailable outside the hours when we're cooped up at work. Our checking accounts are drained, and December's credit card bills have arrived. What's not to hate?

By Georgie Miller

According to a popular estimate, more than 40 million Americans now owe a combined $1.2 trillion in student loans. That's made the issues surrounding these loans -- including income-based loan repayment plans -- a hot topic lately.

Income-based repayment plans may lower your monthly payments and, over time, even eliminate some of your student debt. But not every borrower is eligible for an income-driven plan, and if you are eligible, there's lots to consider when deciding if it's the right choice for you.

Income-based repayment options

The standard repayment plan for a federal student loan is 10 years. However, as you will learn about money after graduation, your grown-up salary may not be as big as you think it is. You will also have other priorities, including savings and retirement, and maybe even an occasional vacation.

According to the Federal Student Aid website, an income-driven plan is worth considering "if your outstanding federal student loan debt is higher than your annual income or if it represents a significant portion of your annual income."

There are three main types of federally available income-driven plans:

• Income-Based Repayment (IBR)

• Pay As You Earn (PAYE)

• Income-Contingent Repayment (ICR)

By Holly Johnson

No matter where you live, chances are good that almost everyone you know owes money to someone. They owe money on their cars, their credit cards and their private loans. They've got satellite television and swimming pools, season tickets to football games and designer clothing. Judging only by appearances, the average family appears to have it made.

However, the numbers prove otherwise. According to Experian's latest State of Credit study, the average American is over $27,887 in debt, not including mortgage debt. And if you look around you, it's easy to see why.

If you're in debt and ready to change your ways, it's important to know that it's not too late. You can change your behaviors, change your spending habits, and learn to live within your means once and for all. It may not be easy, but it's the only way to escape from the debt you've created. Here are five essential steps to escaping your debt, once and for all:

Track your spending

Most people end up in debt because they spend more than they earn. The only way to solve this problem is to identify your spending weaknesses and address them.

By Justin Boyle

It's hard not to be generous during the holiday season, to ourselves as well as to others. The trouble with that generosity, though, is that it can lead to racking up some lofty balance figures on our credit card statements.

But starting today, you can formulate a solid plan of attack on that extra holiday debt. Here are six steps you can follow to make sure that the personal finance blow-back from your holiday generosity doesn't haunt you throughout the new year.

1. Freeze your spending

Every January 1, my aunt in New York takes whatever credit cards she's used for Christmas gifts that year and chucks them into the icebox. It keeps her from raising her balances any further, she says, while also serving as an effective reminder of her pledge every time she opens the freezer door. Her literal approach to a credit freeze may be a more eccentric gesture than you prefer, but using your own method to halt your spending can help you stop buying on credit as you get things under control.

2. Confront the numbers

Take an hour or so one evening to lay out a roster of your holiday credit cards.

By Beverly Blair Harzog

The Great Recession, according to economists and other in-the-know experts, has been over for some time. But for many people, the debt they accumulated during the recession is still very much with them. If you're one of the people who's still carrying a sizable amount of debt, you've probably already thought about a balance transfer to a credit card with a lower APR.

This is often the first option considered and it's a good one, especially if you're considering transferring debt to a credit card with a 0 percent introductory APR. There are credit cards with introductory APRs on balance transfers lasting from six to 21 months, although it's usually closer to 12 months. After the intro period, you get the "go-to" rate. The go-to rate is the regular APR that you'll be paying on purchases -- and your balance -- once the intro period ends ...

By MoneyBlueBook

by Gary Foreman

This article comes from Gary Foreman at The Dollar Stretcher.

Using the right tools for the job

This is the time of year when many people look at their debt situation and shudder. They dream of what it would be like to be out of debt. And, if they're brave, they begin to plan a strategy to reduce the amount of debt they carry.

They'll begin with high hopes, but many of them will quit before reaching their goal. They’re disappointed, discouraged, and defeated.

 Is there something that they could have done differently that would have given them a better chance at success? I think so. If you watch people long enough, you'll see some patterns and learn some lessons. Let's examine some of those lessons.

 You can find all kinds of advice about how to get out of debt. The web is full of the stuff. But, when you boil it all down, there are three things that form a foundation for a get-out-of-debt effort.

 It’s a marathon, not a sprint

First, don't expect immediate results. You won't be getting out of debt in a matter of days or weeks. The only way to eliminate your debts quickly is to inherit a large sum of money, win the lottery, or declare bankruptcy. The first two are unlikely. The third may remove debts quickly, but you'll suffer with a lower credit score for years to come.

 Recognize that it will probably take about as long to get out of debt as it took you Read the full article »