More month than money!
Money Sucks when you don't have enough! And these days, it seems like that's most of us. Too many people are having problems paying their mortgage, other bills, and surviving.
The economy is slumping, the housing market is scarier than ever, and American's credit cards are maxed. In other words, we need help!
The economy is slumping, the housing market is scarier than ever, and American's credit cards are maxed. In other words, we need help!
So let's figure out how to get more money! One way is to reduce your debt and another is to build wealth. I think both sound great...
Do You Want To Get Out Of Debt and have more money than you have ever had before? Or the other way around... because if you have the money, you could get out of debt... right?
Well... while a person's path to financial freedom is an individual one, here are some basic building blocks to start you on the path... (Yeah, all of this can be a drag at first, but the benefits are enormous!)
Current financial situation: Good, Bad or somewhere in between?
Determine where you are now in your financial situation, honestly assess it. What's your current financial picture showing you? Do you have a lot of credit card debt? Do you have enough for your kids to go to college? Are you able to set aside for your retirement? This will paint the path of the next steps you need to take to move toward getting out of debt and creating wealth.
Your Plan for Financial Freedom: Not tomorrow and not in 20 years...
Focus on where you want to be financially. Pick the date that you want to have fixed the problems with your finances and move on to creating wealth - like 3 - 5 years, not tomorrow and not in 20 years. Failing to plan is planning to fail!
Your Financial Gap: How does it look?
Now, once you know your current financial situation, consider where you would like to be financially. The difference between the two is called a "financial gap". I'm sure there's a big gap there right now. No worries... you can get there if you work on it.
Are you ready to get down to the details and begin your journey to financial freedom? We offer complete free information DIY style - nothing to buy - just information on how to get out of debt and build wealth here >
And, if you're interested take a look at my other Squidoo Lens, The Ultimate Vacation (and Weekend) Guide and add a vacation (or a weekend trip) to your list of things to do when you have it figured out...(incentives)! After all that, you'll deserve it AND NEED IT!
Special Note: Loral Langemeier is now on Squidoo, too! See her lens named "Put More Cash In Your Pocket"
New Table of Contents
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IMPROVING YOUR FICO SCORE
Removing negative items from a report will almost always lead to an increase in your FICO score, but it's a basic concept at best.
The following strategies will help you raise your score as quickly as you are determined to do so.
PAY ON TIME, EVERY TIME AND MORE THAN THE MINIMUM
Paying late will bring your FICO score down. Paying more than the minimum (even a little more) will help increase your score.
DEBT to CREDIT RATIO:
Your debt to credit ratio is your ratio of debt to total available credit you have been extended. That's revolving accounts, not loans or mortgages, etc.
If you have $10,000 in total unsecured revolving credit accounts and you're currently in debt $2500, your debt to credit ratio is 25%. Since the main way lenders make money is by charging interest, one of the elements of the credit scoring model is driven by your ability to maintain balances and pay over time. This shows your true (long term) credit worthiness, which is most profitable to lenders since they make money primarily via interest and not annual fees. Carrying the proper debt to credit ratio will boost your score faster than paying off your bills in full each month.
If your debt to credit ratio is too high, like having $10,000 in unsecured revolving accounts but you owe $8500, you have an 85% debt to credit ratio. Not good. you need to bring that down quickly. Pay down the balances and maintain a lower debt to credit ratio.
Pay a little over minimum on your cards except one that has the highest interest rate. Concentrate on paying that off first. After that, simply do the same thing on each of your credit cards. If you concentrate on paying one card off at a time, you'll see the benefits sooner and be more motivated than seeing each balance come down a little bit rather than 1 balance coming down dramatically.
Keep in mind that if you continue using the credit card that you're trying to payoff, you won't make much progress.
LIMIT INQUIRIES ON YOUR CREDIT REPORT!
The more inquiries the more your score goes down, even if you've been approved by the inquirer. Inquiries stay on your record for two years. These are only inquiries approved by you. If you give out your social security number, it's basically giving permission to check your credit.
The following strategies will help you raise your score as quickly as you are determined to do so.
PAY ON TIME, EVERY TIME AND MORE THAN THE MINIMUM
Paying late will bring your FICO score down. Paying more than the minimum (even a little more) will help increase your score.
DEBT to CREDIT RATIO:
Your debt to credit ratio is your ratio of debt to total available credit you have been extended. That's revolving accounts, not loans or mortgages, etc.
If you have $10,000 in total unsecured revolving credit accounts and you're currently in debt $2500, your debt to credit ratio is 25%. Since the main way lenders make money is by charging interest, one of the elements of the credit scoring model is driven by your ability to maintain balances and pay over time. This shows your true (long term) credit worthiness, which is most profitable to lenders since they make money primarily via interest and not annual fees. Carrying the proper debt to credit ratio will boost your score faster than paying off your bills in full each month.
If your debt to credit ratio is too high, like having $10,000 in unsecured revolving accounts but you owe $8500, you have an 85% debt to credit ratio. Not good. you need to bring that down quickly. Pay down the balances and maintain a lower debt to credit ratio.
Pay a little over minimum on your cards except one that has the highest interest rate. Concentrate on paying that off first. After that, simply do the same thing on each of your credit cards. If you concentrate on paying one card off at a time, you'll see the benefits sooner and be more motivated than seeing each balance come down a little bit rather than 1 balance coming down dramatically.
Keep in mind that if you continue using the credit card that you're trying to payoff, you won't make much progress.
LIMIT INQUIRIES ON YOUR CREDIT REPORT!
The more inquiries the more your score goes down, even if you've been approved by the inquirer. Inquiries stay on your record for two years. These are only inquiries approved by you. If you give out your social security number, it's basically giving permission to check your credit.
FICO and TYPES OF CREDIT SCORED
The score ranges from 300-850 and is calculated using your credit history information contained in your credit report.
The best way to ensure a good FICO credit score is to manage your credit responsibly over time. To maximize your score, it's important to understand what goes into the calculation and how much each factor is weighted:
Types of Credit in Use: 10%--Considers the number of credit accounts and the mix of credit types: credit cards, installment loans, mortgages, and is most important if you don't have a very long credit history.
Payment History: 35%--Takes into account (1)many different types of payments, including mortgages, major credit cards, department store credit cards, car loans, other installment loans such as for furniture, etc., (2)information from public records, such as bankruptcies, liens, lawsuits, foreclosures, judgments, and wage garnishments, (3)details of any missed or late payments, such as the amount, how long ago it occurred, how late it was.
Amounts Owed: 30%--Looks at (1)the total of all the amounts you owe for all accounts, (2)the mix of amounts owed (credit cards versus installment loans, for example), (3)the number of accounts that have balances, (4)how much of your total credit available on credit cards and installment loans you're using (the closer you are to maxing out your available credit, the more negative the impact on your score), and (5)how much of the original balance borrowed you still owe on installment loans, like your car loan.
Length of Credit History: 15%--As long as you don't have negative information in your file, the longer your credit history, the higher your score.
New Credit: 10%--Considers (1)how many new credit accounts you've opened recently, (2)how long it's been since you opened a new credit account, (3)how many requests you've made for credit recently, (4)how long its been since lenders have requested credit information on you, and (5)how good your recent credit history has been.
Types of Credit Category
* Installment debt (where you pay fixed monthly installments to eliminate the debt) is "better" than revolving debt (open-ended credit card debt)
* Certain finance company debts (like buying a product with retailer financing) can lower your score
In general, you need to know that it takes time and discipline to improve credit scores.
The best way to ensure a good FICO credit score is to manage your credit responsibly over time. To maximize your score, it's important to understand what goes into the calculation and how much each factor is weighted:
Types of Credit in Use: 10%--Considers the number of credit accounts and the mix of credit types: credit cards, installment loans, mortgages, and is most important if you don't have a very long credit history.
Payment History: 35%--Takes into account (1)many different types of payments, including mortgages, major credit cards, department store credit cards, car loans, other installment loans such as for furniture, etc., (2)information from public records, such as bankruptcies, liens, lawsuits, foreclosures, judgments, and wage garnishments, (3)details of any missed or late payments, such as the amount, how long ago it occurred, how late it was.
Amounts Owed: 30%--Looks at (1)the total of all the amounts you owe for all accounts, (2)the mix of amounts owed (credit cards versus installment loans, for example), (3)the number of accounts that have balances, (4)how much of your total credit available on credit cards and installment loans you're using (the closer you are to maxing out your available credit, the more negative the impact on your score), and (5)how much of the original balance borrowed you still owe on installment loans, like your car loan.
Length of Credit History: 15%--As long as you don't have negative information in your file, the longer your credit history, the higher your score.
New Credit: 10%--Considers (1)how many new credit accounts you've opened recently, (2)how long it's been since you opened a new credit account, (3)how many requests you've made for credit recently, (4)how long its been since lenders have requested credit information on you, and (5)how good your recent credit history has been.
Types of Credit Category
* Installment debt (where you pay fixed monthly installments to eliminate the debt) is "better" than revolving debt (open-ended credit card debt)
* Certain finance company debts (like buying a product with retailer financing) can lower your score
In general, you need to know that it takes time and discipline to improve credit scores.
GET OUT OF DEBT
Most of us were never really taught about the proper way to balance a check book, how to properly use credit cards, cash management, how to budget and pay your bills, how to use and build credit, or even how to save or invest.
Instead, you probably watched your parents struggle with money, you were taught that you couldn't afford things, that money was scarce, and that you would have to struggle all your life for whatever you wanted.
Below you will find links to the financial answers that you have been looking for. It's best to follow the order in which they are listed below and take action on each step.
Instead, you probably watched your parents struggle with money, you were taught that you couldn't afford things, that money was scarce, and that you would have to struggle all your life for whatever you wanted.
Below you will find links to the financial answers that you have been looking for. It's best to follow the order in which they are listed below and take action on each step.
- Assessing Your Situation
- The first step in dealing with debt problems is to see on paper exactly where you stand financially.
Detail the appropriate expenses that you are currently paying out of your personal account every month that will always be there. These things are a necessity, and can't be ignored.
Click here to learn more .. - Crunching the numbers
- After you've made your list of expenses, you'll need to do some factoring or number crunching. Don't freak out... we'll show you how. This is absolutely necessary to find out how to create your plan to get out of debt the fastest way possible.
The method is called factoring , learn how here >> - Making the Plan
- Once you assess your situation and crunch the numbers (the two steps above) you'll need to make a plan for becoming debt free at the fastest possible rate. With this information you will see how you can accomplish becoming debt free fast >>
- Debt Consolidation Loan?
- First consider the reason why you're thinking a consolidation loan may be your only way out. Do interest rates burden you to the point that even though you make your payments, you don't seem to be able make any headway? If this is so, then perhaps a consolidation loan is in your future.
Want to know more about debt consolidation loans and other way to get out of debt fast? Go to www.MyMoneyAnswers.com - Setting Financial Goals
- Having long-term goals for your finances can help you in determining, and accomplishing your short-term goals.
It is important when setting a goal, to always start with the end in mind.
If your long-term goal is to make a million dollars, and to be completely debt-free, then you need to know exactly what steps need to be taken in order to reach that goal.
Learn more about setting financial goals...
BUILD YOUR WEALTH
Once you pay off your debt (above), you can start creating wealth with the money you were shelling out each month to make others rich!
- Important Notes for Building Your Wealth
- Here's where you get to start making your money work for YOU!
- Starting A Business
- Having a business of your own is both challenging, and rewarding at the same time. There are also many decisions that you will need to consider.
Do you know the tax implications of the types of business structures? There's a big difference and this should not be ignored!
START TODAY
With very rare exceptions, millionaires don't have nine to five jobs. And if they do, it's only because they enjoy what they're doing and it's not usually how they make the bulk of their money. Millionaires have a system. You need to know how millionaires make - and keep - most of their money.
They use a structured cycle of earning and investing money that allows wealth to multiple exponentially.
Your first task before beginning your strategy for wealth building is to get out of debt. That's how you'll get the money to invest in your future. Quit throwing your money away on borrowing from your future and instant gratification... you're paying interest on things that won't last. Earn more money by investing instead. After you pay off your bills, that monthly savings can be put toward investments instead of interest and will put you solidly on the path to wealth for generations to come!
They use a structured cycle of earning and investing money that allows wealth to multiple exponentially.
Your first task before beginning your strategy for wealth building is to get out of debt. That's how you'll get the money to invest in your future. Quit throwing your money away on borrowing from your future and instant gratification... you're paying interest on things that won't last. Earn more money by investing instead. After you pay off your bills, that monthly savings can be put toward investments instead of interest and will put you solidly on the path to wealth for generations to come!
STEPS TO BUILDING YOUR BUSINESS
1. Identify your personal skill set and strengths and weaknesses
2. Brainstorm viable business ideas
3. Measure sales potential
4. Create an actionable business plan
5. Build and manage your team
6. Develop key marketing strategies (short- and long-term)
7. Increase profitability and continue to grow your business
2. Brainstorm viable business ideas
3. Measure sales potential
4. Create an actionable business plan
5. Build and manage your team
6. Develop key marketing strategies (short- and long-term)
7. Increase profitability and continue to grow your business
HOME EQUITY... HOW TO USE IT...
Here we will discuss how best to use (or not use) you home equity in today's market.
Here are two ways to pull money out of the equity you've built in your home.
1. Home Equity Line of Credit (HELOC)
2. Home Equity Loan.
In brief, the difference is that a HELOC is revolving credit. Pay it down, use it again, just like a credit card.
A Home Equity Loan is a fixed amount. Generally the monthly payments are interest payments and what you pay over that goes to the principle.
Your decision should be weighed carefully.
With any type of credit, you're actually borrowing from your future. You better be sure that your future can afford it!
It is a smart move to pay off high interest loans (such as auto loans and credit cards) with the lower interest equity loan. However the problem worsens when people pay off their credit cards and then charge them back up again!
Another benefit is the fact that you can deduct the interest on a home equity loan up to $100,000 regardless of where you use the money.
A tip to consider when seeking a home equity loan is to do your rate shopping within a focused period of time, generally one week. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
Here are two ways to pull money out of the equity you've built in your home.
1. Home Equity Line of Credit (HELOC)
2. Home Equity Loan.
In brief, the difference is that a HELOC is revolving credit. Pay it down, use it again, just like a credit card.
A Home Equity Loan is a fixed amount. Generally the monthly payments are interest payments and what you pay over that goes to the principle.
Your decision should be weighed carefully.
With any type of credit, you're actually borrowing from your future. You better be sure that your future can afford it!
It is a smart move to pay off high interest loans (such as auto loans and credit cards) with the lower interest equity loan. However the problem worsens when people pay off their credit cards and then charge them back up again!
Another benefit is the fact that you can deduct the interest on a home equity loan up to $100,000 regardless of where you use the money.
A tip to consider when seeking a home equity loan is to do your rate shopping within a focused period of time, generally one week. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
New YouTube vids
Money as Debt Trailer
Paul Grignon's 47-minute animated presentation of "Money as Debt" tells in very simple and effective graphic terms what money is and how it ... all » is being created. It is an entertaining way to get the message out.
Runtime: 107
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