Easy Change

Financial Primer When I think back on my financial situation growing up, I never really understood how many issues that there are when it comes to money. Understanding the major financial concepts early on in life and having some tangible, concrete understanding would have been much better than some random experiences and emotions. Just understanding these important aspects as a young person and how to handle them correctly can contribute to financial well being. Income Income is the way money enters your life. Usually, this is in the form of a job, but there are also other sources of income like gifts, bonuses, interest income, and investment income. My concept of income was rather skewed as a kid. I didn't usually need much money. I like to think that I wasn't that greedy. I generally was happy if I had a bike to ride and some sticks and balls to play with outside and some video games to play with inside. I never got a steady allowance per se, so by the time I started learnin...

One of the more advanced topics in personal finance is the use of credit cards for your own benefit. Some people are involved in applying for credit cards and moving the balances around to get balance transfers. Others are simply using cards that have the best interest rates and reward programs. Now that I am credit card debt free, I have chosen to continue to use a single credit card because I get rewards on the card which can be used later on for higher-education related expenses. So, this is what I have been doing for the past year or so. Every time I buy essential expenses like gasoline or groceries, I buy them with the credit card and pay the balance each month. Recently though, I've become aware that credit cards have resumed their dirty tricks and have started moving around the due dates of the statements. This means that inadvertently, you can miss the payment date and be slammed with late fees and extra interest. So, I decided to fight back. I wanted the rewards but I didn...

One of the interesting things that I've "figured out" over the past few months with regard to my debt repayment is the importance of paying early on daily compounded balances. I've been doing this myself over the past year and it really makes a difference. The first question for all of your debts should be "how is the interest compounded?" For many debts, the interest is calculated each month on a monthly basis. For others, it is calculated up front for the life of the loan and then factored into your payments. Prepaying effectively does nothing to save you money on interest. If however, you have credit cards, it is likely that you have a type of interest calculation that is called the average daily balance or two-cycle average daily balance method. If this is the case, paying off your balance earlier in the month can save you money. This tip is not about paying extra principal per se, although you obviously should do that. Instead, the tip is about how you...

Working toward controlling debt is not easy. But it must be done. For me, getting a handle on debt has meant looking at all of the interest rates that I am paying on my debt. After tackling the real credit card debt, I realized that I would be able to get a credit card that gave me a zero percent interest rate. This was a transfer over to my chase credit card from my student loan. So, I moved all of the debt from one of my student loans onto a credit card at zero percent and paid a 75$ fee for the transfer. Unfortunately, I goofed. I paid my bill online and the payment posted one day late. Interestingly enough, the due date actually moves. I never knew this. So, it was something like the 3rd one month and the 2nd the next month. As a result of this late payment, they incurred a late fee and the 0% rate ended. This was a nasty bit of reality for me but I learned a lesson: always pay the credit card bill at least a week before the due date. The late payment didn' t hurt my credit or ...

So, one of the things that I've started doing is trying to pull my credit reports at regular 4 month intervals so that I get a free one frequently to make sure that things are progressing as I'd like them to and also as a safeguard against identity theft. Of course, the part that I don't like is that these reports don't include a fico score - the key number when it comes to determining if you are going to be extended credit and at what interest rate. This time, I got the report from Equifax - I went to the end of the process and for 8 dollars more I could get my credit score. And the Equifax gave me a credit score of 742. This of course is not even close to the perfect score of 850 when it comes to fico score nirvana, but 742 is still a respectable fico score. Things to improve are basically lowering my balances on my credit cards and loans, which I already have a plan for. And also I noticed that the amount that I paid off on one of my loans is actually still being rep...

Six thousand dollars. Unfortunately, that is just a small fraction of the student loan debt that I currently carry, but I am taking some great positive steps. One of the steps that I am taking is to work on getting these amounts paid off by figuring out (one bill at a time) where I can put them to reduce the amount of interest I am paying and therefore improve my overall progress toward paying them off in total as I make each monthly payment. Interest is a huge killer for me, especially on this one loan. It was up near 8.5% because of the variable interest rate. the problem, of course is that The Student Loan Corporation ( STU ) was moving my interest rate around. And I really wish that they (along with other student loan lenders) were more up front about the amount of money that I was wasting in interest and how long I would have to be paying off the loan. Learning my lesson was not easy but I have learned it. Thankfully, I have nice credit and get offers from other credit card com...

Well, I have figured out a plan to start tackling the next debt. It calls for about 340 dollars per month going toward this debt. The difficult thing will be sticking to it through the long haul. If the income side of things continues as I am forecasting, and I am being conservative here, then I will be doing this routine for about 19 months. That assumes no major changes or shifts in the meantime. Of course, there is always a chance that more work could come in faster, but I dont want to plan on that. So, for right now, the plan is to have this student loan paid by the end of June 2008. I'll work like heck to get it paid off before then, but I am curious if I will be able to make it or not :) The one thing that I havent figured out yet is whether or not a 0% interest credit card transfer is something I should try for or not. By my calculations, in less than 6 months I will be down to something like $25 dollars or less in monthly interest. I just wonder if the potential ding to my ...

Most people follow the standard advice of financial planners and other advisors when deciding what debt to tackle first. This advice is usually fairly basic: pay off the highest interest debt first (usually credit cards) and continue to take that same monthly payment and apply to the next debt etc down the line until all the debt is paid off. But recently I considered this I am getting ready to start paying down principal on my student loans and last credit card. I discovered that this advice is not true for everyone, especially not in the case of a windfall. The reason that this is not true is because of the doom that compounding interest can bring. Here's a simple example to show you why time, not just your interest rate, should be a big factor in deciding your lump-sum payoff targets. Scenario There are two loans: one at 17.5% (a credit card with a 2000 balance) and a personal loan at 7% that has a 10000 balance. Each debt has a normal payment - the credit card is 125/month and ...

Well, its January 5th, so its about time I stated, for the record, what my goals are for this year. My big focus is to keep working toward being healthier. That is my resolution, if you could call it that. I'd like to eat more and more healthy food, which I have been doing fairly well. I am a total junk food junkie so it is a little difficult for me. My most recent decent into sinful food is my morning splurge on Dunkin Donuts . It is a problem; and one that I didn't have until my company switched the brand of the free coffee that they bought. It is just awful and I can't stand it. So I buy a coffee in the morning which is killing my money supply and also packing on some extra calories since it is more loaded with sugar and cream than what I would normally make for myself. Staying On Track With Exercise has been a big issue as well. I find that I cannot stay on a regimen for a very long time, but perhaps if I do a chart and put it on the fridge or something, that might hel...