Get organized now to have a happy holiday season with debt-free gift-giving. Image: CC alancleaver_200/Flickr

The best way to have happy holidays is to enjoy them without the stress of adding to your debt. Retailers and credit card companies pull out all the stops in an effort to make people think buying gifts is what gives holidays their meaning. But you can celebrate the holidays with plenty of debt-free gift-giving if you keep your wits about you.

Santa knows what he’s doing

To avoid holiday debt, be like Santa. Make a list, check it twice … and shop around for the best price on the Internet. This strategy will help you avoid expensive impulse buying and cut down on shopping trips that result in tempting unplanned purchases. Realize that at Christmastime children get the most out of presents, and for everyone else they are often a waste of money. And family name drawing is always a great idea. It cuts down on gift-giving and is a great way to cap the dollar amount everyone feels obligated to budget.

Resist credit card offers

When you’re holiday shopping, every store in the mall is going to ask you to fill out a credit card application. It could be tempting to defer spending cash now on holiday gifts, but in the long run it just makes them more expensive. Also, be aware that every time you apply for a new credit card it can negatively effect your credit score, which results in higher interest rates, and even more hard earned money down the drain. Use cash, and if you can’t afford something, don’t buy it.

Use plastic wisely on the web

Internet shopping requires credit cards, so know your credit score before you make your shopping list. Knowing your credit score and protecting it will help you get better deals on big-ticket items. When you do your holiday shopping with credit cards, don’t max them out. Plus, don’t miss any payments on your credit cards or any other debts in the coming months.

Sources

San Francisco Chronicle

Personal Finance Mastery

District Chronicles

Secured online loans

Many different situations could give you a reason to get a secured loan. A secured loan is a loan in which you need to put up collateral or an asset in order to receive money back from the lender that is allowing you to borrow money from them. The coloratura or asset is something like a car or boat. It could also mean putting up your house for collateral if you need a large enough loan or need to get a second mortgage to pay those bills. You may think that you do not need a secured loan, but a secured loan has a lower interest rate than that of an unsecured loan. Plus, with a secured loan, you have up to twelve months to pay it back. Just remember that the first two payments you make on your loan is usually interest on the loan. So if the loan amount is borrowed at a longer time, it is really ten months plus two months of interest that the cash advance company will charge you with for letting you borrow money.

It cannot happen to you?

Everyone thinks that nothing bad will ever happen to them, until something happens. That is when a secured loan comes in handy for everyone involved.

The title company makes money and you get the extra money you need for whatever reasons that may come along. It’s not like anything will happen, but being prepared and knowing where to go in case something does happen and taking care of your what if’s in life will be a big relief off your shoulder. Taking care of your problems and making an easy solution for them is what a title company loan place is there to do. It is there to make the problem disappear for a little while so you do not have to worry about it.

Start your loan application HERE!

It's going to take some time, but it is definitely worthwhile.

In part one of this series on getting rid of credit card debt, we discussed both drastic and practical ways of approaching financial recovery. Now that you have considered those first steps, it is time to figure out what to do next in order to embrace debt-free living. The following suggestions are certainly not easy, but those who are now in full debt recovery will tell you that they are certainly worthwhile.

Get on the phone and discuss your credit card debt

Now that you’ve created a snapshot of your debt, go down your list and call each credit card company. If you are late on a payment to them, explain why and give them a date by which you can send a payment. Even if it is a small payment, be honest about when you can send it in and then do exactly that.

If you do not have frequent late payments or are not behind in your bill, and if your FICO score is decent, call each credit card company and try to negotiate a better interest rate than the one that you currently have. One way of doing this is to single out one of your cards with a more affordable rate and call the companies with higher rates to inform them that you are considering sticking primarily with the one with the lower rate. Or, another way of approaching this is to research companies offering better rates and tell the credit card companies with higher rates that you are considering changing to one of those cards because of the rate difference. If a lower rate is not immediately offered, don’t be afraid to ask them to lower it. The worst thing that can happen is that they can say no and, compared to the high interest rates that you’re paying, that shouldn’t be nearly as frightening.

If the credit card company refuses to lower your interest rate, consider moving your debt to a card with a more comfortable rate and, after doing so, you may consider canceling the high rate card.

The road to debt recovery begins with a single month

After cutting your credit cards and/or negotiating a lower interest rate, look at your monthly personal budget and very carefully calculate the largest possible payment you can make on all of your balances each month. Next, add ten dollars to the minimum payment requirement offered by each credit card company. Now, add up all of the minimum payments, plus the ten dollars that you added in the previous step. If the minimum amount that the credit card company allows you to pay is lower than the maximum amount that you can afford to pay each month, go ahead and subtract the lower amount from the higher. The remaining sum is what you should consider applying to the card that is charging the highest interest rate.

After the high interest rate card is paid off, you may consider canceling that card, but don’t stop there. Now it is time to go back to the beginning and repeat the entire repayment process all over again by focusing on the card with the next highest interest rate. Do not lower the amount that your calculations permitted you to pay before the first highest card was paid off, however. Instead, continue to designate this exact same amount out of your personal budget for paying off credit card debt until it is all gone. Continue to repeat this entire process of paying your credit card debt off by assassinating the highest interest rate cards first and working your way down until you are left with cards that have affordable rates and you are debt free.

Carefully consider emergency cash options

Once you are debt free, if you ever find yourself in need of a cash advance, before turning to a credit card, carefully weigh that option against that of a loan till payday or an installment loan from a personal loan company. Always know your options, study them closely and select the one with the lowest repayment terms for your personal budget.

Making a hard decision is the first easy step to a debt-free life

It takes some sacrifice and a lot of discipline, but you really can get rid of credit-card debt for good. Relax. Breathe. Others have done it and you can too. Paying off credit-card debt can seem overwhelming when you look at your statements each month and realize that you’re not even putting a dent in it. You may have tried getting personal loans, applying for extra cash till payday, or even working a second job, but you still feel like you’re drowning in debt.

It isn’t easy to break the credit-card spending cycle but it is, in fact, completely possible. You first have to believe that financial recovery can be achieved and then you have to make the commitment to work hard at it.

Simple (but not-so-easy) steps to financial freedom

Cut up your cards. If you’re ever going to get your credit-card debt under control, you must stop adding to it. There’s no room for negotiation on this one: Cut up your credit cards. This can feel like a drastic action, but if you’re serious about getting out of debt, you cannot use credit cards.

Consider other emergency-cash options. If the thought of not having any credit cards is too much for you to handle at first, choose one card to keep for emergency use only. Store that card in a safe place or give it to someone you trust, but don’t carry it in your purse or wallet. If the card has a high credit-limit, consider asking the credit-card company to lower it. Remember, when you’re in need of emergency cash, a credit card is not your only way out. You can get a short-term loan or an installment loan online even if you have bad credit, without the risk of over-spending.

Don’t be too quick to close accounts. Don’t be too quick to close your credit cards before you’ve paid them off. Many people have made the mistake of closing their accounts when they cut up their cards, without understanding the negative effects this action would have on their credit ratings. For one thing, closing an account stops the clock on that part of your credit history. If you’ve had credit cards for a long time and have made the payments as required, that history can have a positive impact on your credit rating. Closing an account can also negatively affect your debt-to-credit ratio, which can have a direct affect on your credit score. So cut up your cards, but do some research and ask around before you cancel any accounts.

Be honest with yourself. Take an honest look at your credit-card statements and tally up what you owe. This is scary for people who purposely avoid looking at the bottom line because of the stress it causes. Ironically, however, not knowing what you actually owe can be the most stressful part of all. Make a list of your account balances and make a note of the interest rate on each. List the balances in descending order of interest rates, so that the account with the highest interest rate is at the top of the list. Next to each entry, write down the minimum required monthly payment. Finally, note the name and phone number of each credit card company.

Make a realistic personal budget. Once you’ve decided to get serious about credit-card debt recovery, have cut up your cards and taken an honest look at what you owe, take some time to make a realistic personal budget setting forth your monthly income and expenses. Look at what’s left after deducting the essentials – rent or mortgage, car payment, utilities, food, etc., — and decide how much of your disposable monthly income you can devote to paying off your credit-card debt.

What’s next?

Read part two of this series for suggestions about what to do next. There, you’ll find advice about negotiating with credit card companies and getting rid of account balances with high interest rates. If you exercise some willpower and resolve and take these suggestions seriously, you really can find your way to a debt-free life, once and for all.

Success Key Number One

Surround yourself with successful people.

Accept that financial freedom is possible. Many cannot imagine going through debt repair, being debt free or possessing the freedom to design one’s own lifestyle by having access to a healthy cash flow. Therefore, the first step in achieving financial freedom involves believing that such a thing exists.

Success Key Number Two

Accept that financial freedom is attainable for everyone. Billionaires are ordinary human beings, and if they can achieve financial independence, this means that other ordinary human beings can, too. Yet, far too often, people are convinced that financial freedom is an ideal reserved for the enjoyment of select individuals. It is counterproductive for anyone who longs for financial freedom to believe that it is attainable by an elite few, but not for everyone.

Success Key Number Three

Provide a needed service or create a product that will be helpful to others. Know the difference between the things that people want and the things or services they actually need. If someone else is already filling these needs, determine ways in which those services or products can be improved upon. The person that is able to offer these at the best price is the one who will achieve financial freedom faster and sustain that freedom much longer than most others.

Success Key Number Four

An education is key. Whether an education is formally attained or a person is self-educated, one of the most important keys to financial freedom involves moving beyond knowing the basics of one’s niche service or product. This success key to financial freedom actually requires going beyond the fundamentals in order to field valid questions or concerns and address them using superior knowledge. Doing so makes presentations more productive and helps to pave a path to financial freedom.

Success Key Number Five

Routinely exceed expectations. When asked to do A, B or C, make a habit of going beyond these measures to provide D, E and F. In other words, go an extra mile or two for customers. Doing so helps in standing out against competition, increases reputation and attracts greater public loyalty. Each of these translates into higher revenues, which contributes to financial freedom.

Success Key Number Six

Become an expert. No matter how many professionals exist within a niche, few will ever stand out as true experts. Professionals know how to do a job, but experts strive to be at the top of their game. This is true when it comes to being the most educated within their niche, earning the trust of other professionals and endeavoring to inspire other individuals along the way.

Experts are widely recognized by their peers as those who work hard to stay a step ahead of the rest. They are the best of the best. This is not because they are competitive egomaniacs, but because they genuinely believe that what they have to offer is helpful and necessary. It is no wonder that those who experience the financial freedom that others dream of are also the top experts within their selected professions.

Success Key Number Seven

Destroy distractions. During working hours, do not allow anything short of a life and death emergency distract from projects that must be completed. Also, during personal hours, minimize time spent with mindless activities, such as endless hours of television and activities that have no real purpose. Instead, spend this time on productive activities that contribute to good health, build mental stamina and focus on mind/body renewal efforts. Avoiding useless distractions means avoiding things that drain energy and take one’s mind off of the target of financial freedom.

Success Key Number Eight

Create an inner circle of positive, focused individuals who also seek financial freedom. There’s an old adage, which explains that people are only as successful as their five closest friends. Another says that, “birds of a feather flock together.” The wisdom in both of these thoughts imply that one’s inner circle will directly impact their success. Therefore, make an effort to befriend those who have made a positive effort to adopt these wisdom keys to financial freedom and who may have a few extra to share along the way.

Success Key Number Nine

Reach out to a mentor. Target one or two experts who are willing to sacrifice a few minutes by phone, email or face-to-face at regular intervals. The mentor should be approached with the understanding that you won’t require a lot of her or his time. Instead, even if only a few minutes can be spared, the time will be helpful in reporting goals, progress and identifying areas that need to be improved. While it can be frightening to think of approaching someone to request a mentor, it should be noted that most people are flattered to be asked to share their wisdom and eager to contribute to someone’s life in such a way.