When it comes to money, the best defense is [...]]]> The economy is in a shambles. The stock market’s down, unemployment’s up, and the housing market is still skidding sideways. The people I know are beginning to get nervous. They’re worried that the recession will turn worse, and that their personal finances will end up in ruins, too.

When it comes to money, the best defense is a good offense. The best way to avoid fallout from the national economy is to take control of your personal economy. By developing smart financial habits, you can remain calm even in the midst of a financial crisis. (Well, mostly calm, anyhow.)

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9 Ways to Pay Off Debt

You can throw the reminders in the Cuisinart or chuck them into a garbage can, but that won’t make the debt go away. Debt hovers like a carrion bird over a dying beast, with annual [...]]]> Some sites that I’ve found that offer good suggestions on how to manage getting out of debt:

9 Ways to Pay Off Debt

You can throw the reminders in the Cuisinart or chuck them into a garbage can, but that won’t make the debt go away. Debt hovers like a carrion bird over a dying beast, with annual rates of 20% or more compounded monthly, month in and month out. You can’t wish it away. But you can pay it down with determination, our free debt-fighting resources, and the good graces of a few wealthy relatives (see tip No. 5). Here are nine ways to get out of debt:

1. Pay more than the minimum
First, break the habit of paying only the minimum required each month. Paying the minimum — usually 2% to 3% of the outstanding balance — only prolongs the agony. Besides, it’s precisely what the banks want you to do. The longer you take to repay the charges, the more interest they make, and the less cash you have in your pocket. Don’t play their selfish game.

Instead, bite the bullet and pay as much as you can each month. If your minimum payment is $100, double that to $200 or more. Examine your normal expenses — you can find the money. (For a gazillion ideas, check out our Living Below Your Means discussion board.) Skip eating out at lunch, and bring it from home instead. Eliminate desserts. Give up happy hour. We all have “luxuries,” and you know what yours are.

Make a few sacrifices, and you will find the extra dollars needed to increase your debt repayments dramatically. Those increased payments will save you hundreds, if not thousands, in interest payments. Plus, you will get out of the hole you’ve dug for yourself much more quickly. Is it fun? No. But it sure beats living a hand-to-mouth existence, fearing bills each month.

MORE HERE http://www.fool.com/ccc/debt/debt03.htm

Don’t Pay Your Minimum Balance

If you’re like most Americans, you have debt. If you’re like many Americans, you try not to think about just how much debt you have and what it’s really costing you. If you did think about it, you might not sleep well.

But ignorance never was bliss, and in order to get out from under the burden of debt, you need to face the uncomfortable (and perhaps downright ugly) truth: it may take you 30 years to pay off that credit card balance.

How can this be, you ask? You may have balances totaling less than $5000. Surely this will be paid off in no more than a couple of years. The credit card company wouldn’t let you take so long to repay them, would it?

The answer is: yes, it would. In fact, if you took 30 years to pay off your balance, you would be the ideal customer.

MORE HERE http://financialplan.about.com/cs/creditdebt/a/GetOutOfDebt.htm

Debt Snowball – The Truth About How to Get Out of Debt

Myth:  I should pay off the debt with the highest interest rate first to get out of debt quickly.
Truth:  You should pay off the smallest debt first to create the greatest momentum in your debt snowball.

The math seems to lean more toward paying the highest interest debts first, but what I have learned is that personal finance is 20% head knowledge and 80% behavior. You need some quick wins in order to stay pumped enough to get out of debt completely. When you start knocking off the easier debts, you will start to see results and you will start to win in debt reduction.

Debt Snowball Plan
The principle is to stop everything except minimum payments and focus on one thing at a time. Otherwise, nothing gets accomplished because all your effort is diluted.

First accumulate $1,000 cash as an emergency fund. Then begin intensely getting rid of all debt (except the house) using my debt snowball plan. List your debts in order with the smallest payoff or balance first. Do not be concerned with interest rates or terms unless two debts have similar payoffs, then list the higher interest rate debt first. Paying the little debts off first gives you quick feedback, and you are more likely to stay with the plan.

MORE HERE http://www.daveramsey.com/the_truth_about/get_out_of_debt_4055.html.cfm

Review your living expenses, decide where you can cut some spending.

A change in lifestyle can be a simple and effective adjustment. I see friends who MUST have their Starbucks daily, so lets do some math:

I sometimes get a Vanilla Bean Venti size Cappuccino, it [...]]]> Here are a few suggestions on ways to get out of general debt:

Review your living expenses, decide where you can cut some spending.

A change in lifestyle can be a simple and effective adjustment. I see friends who MUST have their Starbucks daily, so lets do some math:

I sometimes get a Vanilla Bean Venti size Cappuccino, it comes out to $4.something, so if we round down to $4 even we get $4 x 30 days in a month = $120/mo for something that you can live without. So given the fact I know these friends are spending around $75-$150 a month on Starbucks visits, I see that money spent as covering most power and water bills combined, if not more.

Is that change in lifestyle really going to kill you?

On a typical day at a local cafe near my office I see people spend anywhere from $7-$12 on lunch, and they have great food but it’s nothing they couldn’t live without. Yes, humans have to eat…but look at the math of buying lunch every day vs. making your own lunch.

$8 x 20 workdays = $160 a month to eat out, vs. roughly a third of that to buy the goods and make your own lunch every day. So there you have around $100 a month to put towards paying off that credit card. You also don’t have to totally cut yourself off from eating out, treat yourself to a nice lunch every Friday. You’re still saving a lot of money, and giving yourself a treat. If you happen to have one of those jobs with bad Monday’s switch your treat from Friday to Monday to make your day a bit better. Since you’re saving money, go ahead and splurge a little and treat yourself to a really nice lunch.

With some of the basic savings advice above the money you would save would easily give you a chance to double or triple a credit card payment. Try it for a month, it surely won’t cost you anything so see how much you save. Remembering the saying from my first grade teacher on math problems, “always do the easy problems first, then go back and work on the hard ones” the same rule can be applied to debt…pay off the small debts first, then go back and work on the larger debts. You’ll also feel better about the debt since one or two large debts hanging over your head is much better to manage than a lot of small ones driving you crazy.