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Take Control of Your Life and Finances

07.29.2011 by Guest Author //

Times are difficult, with a slump in the economy and a lot of people in debt.  If you are one of those people, it probably feels as if your life is spinning out of control.  Not knowing how to get out from under that debt adds to the pressure of having the debt in the first place.  You feel it is necessary to do something, but you are not sure what to do first.

Control Your Finances

The first thing that you should do is to get copies of your credit reports from all three of the major credit reporting agencies (Trans Union, Equifax and Experian).  Everyone is entitled to a free copy of each one once a year.  You can request your copies by mail or you can get them on the internet at AnnualCreditReport.com.  Once you have your copies, review all of the entries on them to be sure there are no errors or that there are no debts or entries that do not belong to you.  You would be surprised how many people are affected by someone else’s bad credit.

Matt’s Note: Once I had a $275,000 mortgage with 5/3rd bank on only one of my credit reports.  I followed the advice here, called and had it removed.

If you find any errors, you must contact the credit reporting agency to register a dispute in order to get the errors corrected or have the false entries removed.  You can register a dispute by telephone, but the agency may request that you mail or fax any supporting documentation in order to support your claim.  Keep in mind that this process does take some time.  It can be from three to six weeks before all of the corrections are made.

Once your credit report corrections are confirmed, consolidate your debts.  Getting a debt consolidation loan lets you make only one payment to the financier versus multiple payments to your creditors.  In addition, you might save some money on interest rates since you will no longer be paying interest on multiple debts, but on only one that has a reasonable rate.

As you are paying off your debt consolidation loan, you will be rebuilding your credit.  Be sure that you never miss a payment or pay it late, and you will see a big improvement in your credit score.

Matt’s Note:  When me and Betsy started our debt free adventure we consolidated debt with Lending Club – read more about our debt consolidation with Lending Club.

Change Your Attitude

Now that you are taking action to pay off your debt, it is time to focus on other areas of your life.  You have to make some changes in order to improve your life, and those start with changing your attitude toward the events that occur.  It is not the events in life that affect you, but your attitude toward them.  You have to look around you and focus on the many things that you do have, not the ones you don’t have.  As long as you have your home and family you are truly blessed.

Developing a positive attitude toward life will also help you in your dealings with other people.  When you smile at them and greet them warmly, they are more positive toward you and will be more willing to communicate with you.  That is the way to start some great friendships and build a network of support in your life changes.

In addition to your positive attitude, you need to keep your goals in mind.  Make sure they are realistic and attainable, and keep working toward them.  Each time you reach one of your goals, create another and keep going.  Reaching your goals will give you the motivation to reach for what you want out of life.

Give Back

As you make changes in life, there are probably people that helped you along the way.  Perhaps a neighbor brought a food basket for you when the money got tight, or a young person did some odd jobs for you.  Those are the people that gave the most, not in monetary value but in spiritual value.  Be sure to thank them for their generosity and return the favor if you are able.

While your life continues to improve, you should help others that are less fortunate than you are.  Volunteer in your neighborhood by doing community cleanup projects, working in a mission kitchen, or visiting the people that home-bound.  Sometimes it is your time and energy that is the most valuable to others, and in helping your fellow man you give them hope.  In addition, you reap the benefit of gaining a sense of well-being.

With your financial situation improving, donate what you can to charities or to your church.  Even one dollar is one dollar more than they had, and can go a long way in providing services to the poor.  No matter what amount you give, make sure you give.  Your gifts are the backbone for charitable organizations that makes them able to give to others as well.

****

Miles Williams is a creative writer, marketer, and salesman living in Northern Michigan whose passions are finance and real estate. He writes at Real Estate Marketing Stop helping real estate agents make the most out of the social movement. Miles’s small web company lovewritingmakemoney.com specializes in writing reports, articles, and ebooks for clients.

Categories // Debt, Giving Tags // consolidate, Debt

Pay Off Debt

04.26.2011 by Matt Jabs //

Many of the reader questions I receive are inquiries on how to pay off debt, most in regards to the optimal order to pay off the debts.

Ways to pay off debt

I have mentioned this before, but it’s worth repeating – in most circumstances it is best to pay off debt in order from highest to lowest interest rate.  Put another way, if you have an auto loan at 10%, credit card 1 at 16%, and credit card 2 at 24%… it’s usually best to repay credit card 2, credit card 1, then the auto loan.  This route should cost you the least amount of money.

Some exceptions to this rule can include losing motivation to repay highest interest debts because of large balances, or debt with tax deductible interest like student loans and mortgages.  If the balances on your high interest debts are quite large, they may take awhile to pay off, possibly several years or more.  If that will cause you to lose steam you should consider repaying your debt in order from smallest to largest balance – as suggested in Dave Ramsey’s Financial Peace University.  Debt with tax deductible interest may be best left for last since it can reduce your tax burden… but determining the order is always unique to each situation, so generalizations should be considered just that.

Whatever your circumstances, I encourage you to try repay debt using good old fashioned discipline and self-management before paying someone to help you pay it off – but since many are beyond being able to help themselves… let’s consider some progressive options.

Debt consolidation using peer lending

Sometimes you’re better off consolidating a number of smaller debts into one.  Possible benefits of consolidation include lower interest rates and the simplicity of having fewer lenders.

I consolidated debt using Lending Club.  Read my Lending Club Review for details but in summary I consolidated an auto loan and 3 credit cards – each with higher rates than my Lending Club loan.  You don’t have to use peer lending to consolidate your debt, but it’s certainly a solid option.  Using Lending Club I repaid over $11,000 in just 7 short months – the process would have taken much longer had I not consolidated.

DIY debt management

If you can afford to repay debt but could use help organizing payments and determining who to pay first… check out DebtGoal.  Before you consider using a full-fledged debt relief company, I encourage you to give their service a shot.  In short, DebtGoal is a DIY middle ground between self service debt management and full service debt management.

I am in the process of writing a full review of their product, but have already checked it out and feel comfortable endorsing it.  Using their service should save you far more each month than it costs, and right now they’re offering a free trial.

Debt relief

If you are in financial trouble and need professional help, be sure to choose your debt relief partner company carefully.  I’ve been searching for a reputable debt relief services company for years and will confidently endorse a company once I find one I trust.  If you can manage your debt yourself, then do so, but if not… debt relief services with the right company can be a solid option.

I highly recommend this free professional debt relief analysis to help you get a handle on things. This company rocks, and I endorse them with confidence.

Debt management

Debt management plans are useful for those struggling to keep up with monthly credit card or other debt payments.  A company offering this service should help facilitate the consolidation of unsecured debt into a single monthly payment, negotiate lower interest rates and waived late fees with creditors, and provide comprehensive debt counseling.

Debt settlement

Debt relief companies also typically offer debt settlement services for those who cannot afford the monthly payments and are looking for an alternative to bankruptcy.

Other ways to pay off debt

To pay off debt, you can also:

  • stop spending!
  • get on a budget
  • get a loan from loved ones
  • get a 2nd job
  • considering the cost of owning a car… try selling one
  • sell other stuff you don’t need
  • refinance your mortgage – read how I saved over $41,000 by refinancing.

However you pay off debt… just pay it off! Reducing your debt burden increases you freedom.  If I have a $2,000/month mortgage, a $1,100 in auto payments, $600 in credit cards, etc., etc., etc., I’m going to have a lot of pressure to repay that debt each month.  If I choose instead to sacrifice my wants and focus on true needs… I will simultaneously reduce financial pressure, increase giving,  and increase my freedom to spend my time doing things I enjoy rather than working to repay interest on debt.

I don’t know about you, but that’s very appealing to me!

Categories // Debt Tags // consolidate, credit, Debt, peer lending

Lending Club Drops Borrower Interest Rates

02.03.2010 by Matt Jabs //

Borrowing from Lending Club just got cheaper

From Lending Club:

“We have reduced our interest rate for borrower loans by 50 basis points, effectively decreasing a borrower’s interest rate by 0.5%.“

What does this mean for you?  Simple… when you borrow from Lending Club your interest rate will be approximately 0.5% lower than it would have before.  This is great news for those who were on the fence about borrowing from Lending Club.

We borrowed from Lending Club

In case you were unaware, we consolidated our high interest debt with a Lending Club loan and will save over $500 because of it.

Here are the loans and their respective rates that we consolidated with LC:

  1. Auto Loan – Capital One @ 10.5%
  2. Credit Card 1 – JP Morgan Chase @ 14%
  3. Credit Card 2 – Capital One @ 16.25%
  4. Credit Card 3 – Citigroup @ 19%

The resulting loan we were able to secure through Lending Club was for $11,000 at 9.23%.

I am almost never a proponent of borrowing money, but if you can consolidate your high interest debt and save money then you would be a fool not to.

Follow these debt consolidation rules…

If borrowing from Lending Club to consolidate debt sounds like a good idea for your situation MAKE SURE you follow these rules of debt consolidation and repayment:

  1. Have a game plan to repay the debt.
  2. Do not take on more debt.
  3. You have not paid off the debt until you actually pay off the debt.
  4. You can consolidate at a lower rate than all existing loans.
  5. Always speed up debt repayment.
Here is a more detailed look at these debt consolidation rules.

If these five rules sound doable and you can save money by consolidating… then go for it.  I did and I have no complaints.

Categories // Debt Tags // consolidate, Debt, Lending Club

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Disclaimer

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