If you have a large number of debts and aren’t really sure how to attack them, you can work through them systematically with a method known as “snowballing” or the “debt snow ball.”

This debt management method, widely promoted by radio host Dave Ramsey and Christian financial counselor Howard Dayton, involves listing one’s debts out from the smallest balance to the largest balance.  After having a list of your debts, make minimum payments on all of your payments (regardless of interest rate), and put any extra money that you have toward your smallest debt.

After paying off the first debt, take the payment you were making on the first debt and put it along with your second smallest debt along with any other money you can put in and work really hard to pay the second smallest debt off. Once that debt is repaid, work your way up on the list until you’re debt free.

Typically a debt snowball is used to get rid of consumer debt and paying off one’s house is usually a separate goal that happens after the debt snowball is complete.  If you have business debt, you may or may not want to include those in your debt snowball depending on how your business is setup and the type of debt that you have.

Some people are critical of the debt snowball because it is not mathematically correct. Critics suggest that borrowers should put all of their emphasis on the highest interest rate first to pay the least amount of interest. Dave Ramsey defends the debt snowball by saying that personal finance is more personal than it is finance. By getting rid of a few debts first, you will have some winds under your belt and will be making progress toward getting rid of your debt and will encourage you to continue in the process.

If you have the discipline, you are more than welcome to start paying on the loan with the highest interest rate, but if you’re not entirely sold on the idea of  a debt snowball, start with the smallest loan first.

Obtaining credit has become a little more difficult due to recent events in the financial markets, but most people will have no problem obtaining the credit that they desire. Depending on their actions in the years prior to applying for credit, they will either be easily approved for credit by the credit card company or the company offering personal loans for people with no credit or denied quickly. The final decision will depend on the person’s credit score and their credit report.

Credit Report

A credit report is an electronic record of the way a person uses their credit and manages their payment obligations. A credit report will include records of all credit accounts opened by the person, their payment record on their credit accounts, and their payment record on other bills. Any late or missed payments for any of these accounts will be reflected in the credit report.

Credit issuers will review a person’s credit report to see how the person manages their debt and whether they can be depended on to make their payments on time. If the person’s credit report shows that they have been using their credit wisely and have been making all of their payments on time, then the credit issuer will have no problem with issuing a line of credit for the person.

Credit Score

A credit score is a snapshot of the person’s entire credit profile reduced down to a three digit number. A person’s credit score is compiled from a number of different variables including the amount of credit the person has available, how much of that available credit is being used, the number of times the person has missed a payment on a credit account, and the number of times that the person’s credit report or score has been checked in the recent past. Lenders will often check these if you apply for any type of loan, including Bad credit personal loans and emergency loans.

A person with a high credit score will have a much easier time obtaining credit than a person with a low credit score. For most credit issuing companies, a high credit score is considered to be a credit score of 650 or higher and a low credit score is considered to be 550 or lower. People that have low credit scores are not automatically denied credit, but the credit that they are offered will probably require a higher interest rate to be paid and have a lower credit limit than the credit lines extended to people with high credit scores.

Individuals that have a low credit score have several options for obtaining credit. The first option is to find a credit issuing company that accepts applications from individuals that are trying to establish their credit or increase their credit score. Another option is to get a trusted individual with good credit to co-sign for the credit account with them. Although it will not be as simple as getting credit with a good credit score, it is not impossible to get credit if you have bad credit.

Over the summer a previous I had picked up a summer internship with the state doing technology work in a town about an hour away called Sioux Falls, which has a population of about 150,000. He was able to rent a bedroom from a couple he knew for only $200 a month, what a steal. One of the most interesting things that I saw on my way to work were the businesses on the way. There were three payday loan companies (especially those that provide No fax payday loans and Bad credit loans), one rent to own business, and a title loan company. Of course these companies were in the poorer part of town, wealthy people don’t make use of these services. Let’s face it, pay day lenders are everywhere, here’s how they work and why you should do anything you can to stay out of them.

Here’s how it works. Let’s say we both have a friend named John who is a bit down in his luck, he’s had an expensive car accident and had to pay $2000 to fix his car which wiped out his savings and paycheck, and now he needs some money to eat. John doesn’t want to starve, so he decides to borrow money, and sees all these commercials on television about a payday lender and how they will solve all of their cash problems. So John goes to the pay day lender, writes them a post-dated check for $450, and they give john $400 in cash and the payday loan company says they will cash his check 2 weeks later on his payday. John now has money to eat, and the payday loan company has made a nice profit. So What’s the problem?

So let’s say our friend John takes the money, buys food, gas and pays his utility bill, and then on his payday they take out the $450. What is John supposed to use to eat with until he gets paid again? Payday lenders merely delay the inevitable. John will have to turn to a payday lender again so he can get by until payday again. He will get stuck in an endless cycle of having to use payday lenders. Instead if John is living paycheck to paycheck, he should take a visit to the food pantry, ask for help from his friends or family, or just do anything to stay out of the payday lender.

Payday lenders are sub-prime lenders that provide Online loans who have have caused a great amount of controversy. Many have even compared them to loan sharks who target the young and the poor. If you do the math they usually charge anywhere from 400%-800% interest, which is actually illegal in some states. These payday lenders bill themselves as the answer to all of your financial problems and are charging exorbitant interest rates to those who can least afford them.

In the last several years Payday Lenders propped themselves up right outside military bases, and many servicemen fell into the trap, and had too high debt levels that they were deemed a security risk because they might take a bribe, and could not be sent overseas to fight for our country. Congress reacted and made it so companies could not charge servicemen more than 36% interest

Payday loan companies (and other sub-prime lenders) should be avoided at all cost. They are charging your huge sums of interest when you can least afford it, and are terrible financial products. Do whatever you can to avoid them

A Roth IRA is a popular way to save for retirement. It acts like a savings account, but generates a much higher profit and is designed to compound and grow for many years until the owner reaches retirement age. The profit that is earned is reinvested in the Roth IRA account until it matures to a set date (when the person wants to retire).

Money contributed to a Roth IRA is done on an after-tax basis. This means that you won’t have to pay taxes on the earnings when you want to withdraw from the account. In comparison, a 401(k) retirement account receives contributions before taxes are paid, so you have to pay taxes on them when you withdraw funds.

Roth IRAs also offer more flexibility than a 401k because you can withdraw the funds without the huge penalties before retirement (if you meet their criteria), where as withdrawals from a 401k before retirement results in high penalties and income tax implications.

Roth IRAs do not require that you begin withdrawing your money by a certain age. You are able to keep contributing to it for as long as you want to. Even if you have no intention of ever withdrawing the money, your beneficiaries will inherit it with no penalties attached to the money. They are able to keep the Roth IRA to let it keep collecting interest, or withdraw the funds – tax free.

There are some restrictions on Roth IRAs though. If you are single and make more than $110,000 per year, or if you are married and file taxes jointly, and earn more than $160,000 per year (or more), you’re not able to contribute to a Roth IRA. This doesn’t mean you can’t save for retirement, there are many other options available for you to set up a retirement fund too, just not with a Roth IRA. On the other end, if you only make $3,000 per year, you are only able to contribute (at most) $3,000 per year to a Roth IRA. For everyone else, you are able to contribute a set amount (determined by age) annually.

Depending on your financial situation, a Roth IRA may be a great single, or additional retirement plan for your future. It is always best to get started saving money for retirement right away, and with compounding interest it will only help you save more if you start sooner. If you work at a place that matches or gives a percent on a 401(k) plan, it is always advised to do that too, who doesn’t like free money from their employer?

If you have lost your job or are looking for a change, don’t forget about the 401k account you have with your current employer. You are still entitled to take the funds with you when you leave a job but you need to manage the account the right way to get the maximum gain.

Many people make the mistake of taking the money out of the account. They end up paying much in penalties for early withdrawal and deplete their own accounts for retirement unnecessarily because they don’t know what else to do. So what should you do with the money you’ve been stocking away?

Rolling Over Your 401k
In order to keep the money you have in your retirement account, you can opt to rollover the funds into another account without having to pay taxes or penalties on the amount. You can choose from a number of options for rolling over your 401k account including your new employer’s 401k plan, IRAs, Roth IRAs, and Mutual Funds.

How to Rollover the Funds

Contact Old Provider
Check with your old 401k provider for eligibility rules. You’ll want to make sure there are no fees or requirements involved with rolling over your funds into a new account. You also need to make sure that your status is listed as a terminated employee because funds can not be released unless you are terminated. Sometimes an employer will fail to update the provider so knowing upfront that all is in order will help make the rollover process smoother.
 
Contact New Provider
You’ll need to contact the new provider of the account to find out the protocol for rolling over your money. Even if you are not rolling your money into another employee-sponsored account, there will still be paperwork to submit so you’ll need to know the rules of the new provider. Ask for the information you will need to give to your old provider to initiate the transfer of funds.

Fill Out the Forms
Your 401k provider should send you the paperwork necessary. Once you receive the documents fill them out completely and return them to your provider. Some providers will only require documentation from the new provider and you won’t have to do anything. You will also need to submit paperwork to the new provider. The key to a successful rollover is to fill out forms completely the first time to prevent delays. Provide accurate information about where the money is to be transferred.

Make Sure You Follow Up
Follow up by phone to find out the status of the transfer if you have not received correspondence from the provider within a few weeks. Never assume the money was transferred as scheduled. It is smart to confirm the funds are where they are supposed to be. It can be easy to forget about money that you virtually never see so check with the new provider to verify the money transfer has been completed.

If you have been struggling to keep up with your debt repayments and are considering a debt settlement to improve your financial situation, you should understand the potential affects to your FICO credit score.

What is a Debt Settlement?

A debt settlement allows you to pay less than the total amount owed on an account. This will help you get out of debt faster and make it possible to keep up with your living expenses. Typically with a debt settlement, if a creditor agrees to ‘settle’ and accept less than owed, you need to have the amount ready to send in a lump sum. Once the amount is sent, the account should then be closed and no further action can be taken from the creditor to collect the remaining amount of the debt.

What About Your Credit Score?

If you’re considering a debt settlement, chances are good that you’ve already experienced a drop in your credit score. Only people who are having extreme difficulty keeping up with their payments and living expenses should even consider a debt settlement. While it’s better than filing for bankruptcy, a debt settlement will be reported to the credit bureaus, show up on your credit report as a negative notation, and will cause your credit score to drop considerably – by as much as 125 points.

Debt settlements remain on your credit report for 7 years after the original delinquency date of the debt. You will have trouble obtaining credit while this remains on your report.

On the plus side, however, if a settlement makes it possible for you to begin paying your other debts and expenses on time, every time, where as you couldn’t before the settlement, you can quickly begin increasing your credit score by making on time payments on the remaining debts you still have after the settlement.

Debt Settlement and Income Taxes

What many people don’t realize is that debt settlements may also affect your income taxes. When you file your income taxes after a debt settlement, you are required to pay income tax on the difference between what you owed and what you actually paid as “income”, with a few exceptions to the rule. If you owed $16,000 but settled the debt for $8,000 – at income tax time you have to report the other $8,000 as income and pay taxes on that amount unless you meet criteria for the exceptions. This is something you will want to look into before agreeing to settle your debts.

If you’ve discovered you no longer qualify for traditional credit cards due to a low credit score, there are some other credit card options you might want to consider to start rebuilding your credit:

Prepaid Credit Option

Some companies issue prepaid credit cards and report your payments to the credit bureaus. The prepaid nature of the cards makes it possible for people with poor or bad credit scores to qualify; and the fact that some will report to the credit bureaus means you have the opportunity to begin rebuilding your credit again.
Since you’ve prepaid, there are no interest charges on purchases and no billing statements to worry about. Most prepaid cards have fees, however. From an opening fee (around $10) to monthly maintenance fees (usually another $9.99 a month) to per-transaction fees and fees when you add money to your card – the prepaid cards can end up costing you a fortune.

If your goal is to rebuild credit, make sure you choose a prepaid card that reports to credit bureaus otherwise you’re paying a lot of fees for no benefit. A prepaid card with the Mastercard or Visa logo can come in handy if you need to rent a car or reserve a hotel or flight and you don’t have any other credit card options available to you.

Secured Credit Card Options

A secured credit card is a step up from the prepaid card. They almost always report your payments to the credit bureaus and can work in your favor to rebuilding your credit. Basically, you make a deposit to the issuing bank (around $500 usually). Your credit line will usually start out at the amount of your deposit, but with on time payments they will often increase your credit line.

Credit Union Credit Card Options

If your score is in the fair or better range, you might check with a local credit union before exploring other options. Credit unions are less likely to charge the high fees and penalties that traditional credit cards charge, have lower or no annual fees and longer grace periods for making payments. If you qualify for credit union membership, you should look into opening an account with them (savings or checking) and then consider them for your credit or loan needs, too.

You can find credit unions by visiting www.creditunion.coop or calling (800)358-5710.

When you live in and oversee a busy household, it can be chaotic in the best of times. With several people living in one space, there are probably 100 things each day that can be left on, left open, knocked over, or broken that costs money. For instance, in an average morning a family getting ready for work and school will likely waste water, burn unnecessary lights, let the heat escape through an open door, or let the cold air escape from the refrigerator. With everyone so busy, it is very easy to overlook some efficiency problems that cost extra money.

How To Fix The Problem
It is easy to say ‘slow down a little; but much harder for a family to accomplish the task. Here are some ideas to help conquer the wastefulness of a busy family.

Schedule a Family Meeting
It may be worth it to schedule a family sit-down were parents can voice their concerns and ask for better cooperation amongst the kids. Of course, parents are just as guilty of wasting energy and other things so it is important to get all family members on board with the idea of being more efficient. Everyone must cooperate to find success. Allow all family members the opportunity to consider ways they can help save on electricity bills, grocery bills, and other costs then create a concrete list of the ideas and ways to incorporate changes into the busy household.

Dole Out Responsibilities
Make each child responsible for energy-saving tasks. For instance, have one child ensure all lights are turned off when no one is in the room or as the family is leaving the house. Each family member can be assigned a task based on the efficiency ideas developed in the family meeting.

Make a Chart
Having a visible reminder of duties can certainly help keep people on task until the new habits become like second nature. List the efficiency tasks for each child for the week and then rotate jobs throughout the month so everyone gets experience in the new habits.

Really, Slow Down
If your house is always on the go and you find you spend more at the fast food joints then you do at the grocery store, it may be time to schedule some down time into your routine. Consider appointing one day as family time where everyone can catch up and catch their breath. Review the list of activities both kids and parents have each week and see if there is anything that can be cut out or modified.

Plan Early
Everything from meals to chores to other details of regular life can be molded into a plan. If everyone is on the same page and feeling not so rush, the family as a whole will be more aware of their surroundings and their part of an effective family. Without all the pressure since everything is laid out in advance, families can reduce the amount of waste they produce, the amount of bad decisions they have made, and the increased health risks of always being on the go.

The best debt advice is never to incur any debt.  However, we are surrounded by debts everywhere – mortgages, student loans, credit cards, utility bills. According to “Credit action” report average amount of debt owed by every UK adult is ~ £30,000 (including mortgages). In the current time of economic recession it becomes very difficult to manage debts.  Figures released by “Credit Action” are striking – 1, 900 people are made redundant every day in the UK.  Debt problems can have a significant impact on your life – financial difficulties are leading to constant stress, which on its own can cause various health problems such as severe depression, anxiety and migraines to name just few. Excessive stress can throw your private life (relationship with family and friends) into disorder. Debt problems can have a negative impact on your workplace performance and productivity as well.

If you have debt problems it is essential not to panic. But don`t ignore the problem – it won`t disappear either.  If you are struggling with debt it may seems impossible to manage.  However, we will offer simple guidelines, following which you should be able to get your life back on track.

• Work out your personal budget, analyzing where your money goes.
• Find out how you can cut out your expenditures. Be realistic.
• Sort out how big is your debt.
• Prioritize any urgent debts (such as utility bills and rent).
• Find out if you can pay your debts off, if so, how much.
• If you are unable to pay your debts off with your current income, find out if you can increase your income.( You may want to think about renting out a spare room in your house or applying for the benefits you`re entitled to)

If you worked out all possible options and are still unable to pay your debts off, you can get free and independent debt advice from organizations like Citizens Advice or National Debtline (the list of those and similar organizations is given in the end of the article).  You can get help either online, by telephone or face to face.  Trained advisors will discuss your circumstances with you and offer the best solution.

If your debt is between £3,000 and £15,000 you may want to consider Debt Management Plan (also known as DMP) – an agreement between you and your creditor to make monthly payment. It can be managed by yourself or by a third party (DMP `operator`) which can negotiate with your creditors on your behalf.  If you have surplus income (£200+ after essential living expenses) you will make one monthly payment, which then will be distributed between your creditors.  Most companies will charge for this service, but there are some organizations like National Debtline or Consumer Credit Counseling Service which will do it free of charge.

If you have a debt over £15, 000 you may want to consider Individual Voluntary Agreement.      This solution offers you an ability to pay off one portion of your debts and write off the debts you cannot afford to pay.  If you go for IVA your interest fees and debts will be frozen.

Options like Administration Orders, Informal Arrangements, Consolidating Debts are also available among others.  There are many ways of resolving debt problem and it is often confusing to choose between them. The best way is to use free and independent advice available to you through various organizations all over the UK.  Don`t neglect this opportunity and sort out your debt problems now.

The cost of a family outing is sometimes very expensive, especially for a family on a strict budget. Below are some suggestions for going out on the “cheap.”

Movies

Many cities and towns offer newly released movies at a discounted rate (less then half the price of a regular ticket) on certain days of the week. All that is required is that you sign up for a FREE movie card. In my city, there are several theaters that also offer a free popcorn along with the discounted movies on certain nights. My movie card keeps track of how many times I’ve visited the theater and I also receive other discounts – such as free drinks, free snacks and sometimes a free movie ticket. With the skyrocketing price of movies today, this really is a winner if you’re on a budget.

Meals

Pay attention to those coupon magazines and flyers you receive in the mail. Many times they offer big discounts on meals in your area. Restaurants often offer buy one/get one free coupons for lunch and dinner as well as a full breakfast for under $3.00 or $4.00. This could also be a great add-on to the discounted movie night with the family.

Bowling

After not having been to a bowling alley in a quite a while, I was surprised to see how much the price of this activity had gone up. However, I did discover that many alleys offer a free “birthday club” that you can sign your child up for and in some cases, even adults can participate in this. The alley will send you coupons for several free games of bowling during your birthday month. Many times coupons for bowling are also offered in those coupon magazines and flyers. You can also check out the bowling alley’s website, if they have one, for printable coupons that offer great discounts.

Nature Centers, Parks, Etc.

Nature centers offer children a free look at the way our wildlife lives. Children can often pet the smaller animals and feed them and free programs to learn about wildlife are offered. Our city’s parks seem to be expanding nowadays as well. Many of them provide a wide variety of things for children to play on and many parks have small “water areas” for the children to run through on hot days and full sized swimming pools. It might be an extra treat to follow that $3.00 breakfast with a trip to the park!