PT Money » Debt Reduction

Unautomate Your Finances: A Simple Passionate Approach to Money

PT — Tue, 09 Mar 2010 16:30:56 +0000

A new financial guidebook just became available that I really like. It’s called Unautomate Your Finances: A Simple, Passionate Approach to Money. It was created by Baker from Man vs Debt. I was able to get an advanced copy of the guide and thought I’d share a bit of my thoughts on the book. First, here’s what you’ll get with the complete package:

Unautomate Your Finances: What’s Inside?

A comprehensive 83-page eBook, featuring “The Unautomation Theory”, “The Science of Unautomation”, and “Applying Unautomation”. Over 25,000 words dedicated to providing everything you need to adopt a simple, passionate approach to money.

A 27-minute video interview with Leo Babauta of ZenHabits.net. Baker interviews Leo on how he applied the principles of simplicity and minimalism to dramatically turn around his financial life. Powerful insights from a leader in simplicity, blogging, and productivity.

A 29-minute audio interview with J.D. Roth of GetRichSlowly.org, one of the top personal finance blogs on the web. J.D. joins Baker on a call to discuss his own financial recovery story and what it’s like now that he’s in the “third phase of personal finance”.

A 2-page, custom-designed PDF version (printable) of the minimalist budgeting system discussed in main guide.

A bare bones Excel template for those who want to take the minimalist budgeting system digital.

Free Extended Updates! Over the next 6 months, Baker will be releasing sample case studies, FAQ’s, and exclusive interviews… for free!

That’s a lot of information/inspiration for the small fee that Baker is charging. Read more about Unautomate Your Finances: A Simple, Passionate Approach to Money.

My Thoughts on Unautomate Your Finances

First, don’t be thrown off by the title. I’m a huge fan of saving more money using automated techniques, so I didn’t know if I would like the message in the book. But Baker isn’t against using automated tools like direct deposit and bill pay. What he does stress is keeping things simple and doing it consciously.

But he doesn’t stop there with his message. His guide goes into great detail, giving you specific steps for simplifying your finances by spending consciously, simplifying your budget, and he shares his own debt reduction techniques which he’s used to pay off thousands of dollars in debt. This guide will no doubt challenge what you’re currently doing with your money and your life.

I know Baker and I know he’s put a lot of hard work into this guide. Give a listen to his video and see if you connect with his message. If so, I encourage you to pick up his guide. Unautomate Your Finances: A Simple, Passionate Approach to Money.

Tame the Beast: Legally Eliminate Credit Card Debt

PT — Mon, 22 Feb 2010 19:16:37 +0000

How Can You Legally Eliminate Credit Card Debt?

I don’t know exactly where you stand with credit card debt today, but I know for a lot of people, credit card debt is their biggest, most immediate worry. Many people have lost jobs recently and although there are signs of the economy turning around, the job market has yet to recover, or even show signs of stabilizing.

Unfortunately, some of us didn’t save enough to weather this long financial downturn, and have turned to credit cards to make up the difference. But when credit cards get maxed out and/or we can no longer afford to make the minimum payment, thoughts quickly turn to ways that credit card debt can be eliminated for good.

There are several different methods that can be applied to eliminate credit card debt: debt settlement, bankruptcy, debt consolidation, credit counseling services, etc.

Today I’m going to ask you to skip all of those methods and first see if you can do some of the following to help you legally eliminate your credit card debt.

Can You Reduce Your Credit Cards Interest Rates?

If you don’t mind staying on hold on the phone for a while, call up your credit card company and talk to them about lowering the interest rate on your card. It doesn’t hurt to ask. If they resist, tell them you are likely going to switch to using a different card and just pay this one off. Have a competing card in mind when negotiating. Even threaten to close the account. This will likely get your rate lowered. Lower rates mean less money you will owe on unpaid balances. Here’s more about lowering interest rates.

Can You Eliminate Other Expenses?

If you’re saying your not able to make your credit card payments but you haven’t yet gone hardcore frugal, then I have no mercy for you. Determine the minimum level of expense you need to give your family food and shelter, and eliminate all other expenses.With this new found money can you eliminate your credit card debts?

Can You Bring In Extra Income?

Once you have your expenses to a minimum, search out ways to bring in extra income. I recently completed a series of interviews with real people who’ve learned to bring in extra income for their families. I encourage you to take a look at those money making interviews and also exhaust every other resource you have for coming up with other income ideas. Take these extra earnings and use them to pay off those old debt.

Can You Transfer the Balance to Another Card?

While this doesn’t eliminate your credit card debt. It does help you pay it down with less interest paid. This isn’t a method that should be used by the undisciplined, but it’s a wise move. You can move the debt that is on a card charging high interest to another credit card that will actually not charge you interest for a certain period. I did this myself back in 2002 when I was paying off my own credit card debt. Visit how to transfer credit card balances and view some of the top balance transfer credit cards.

Know Who to Trust

Now I know some of you are probably getting upset with me right now because you’ve done all of the above and you’re still struggling to pay off your credit card debts, and find that you simply can’t go on. If you are in this position then I encourage you to turn to the right people for help. The credit counseling industry is full of scammers and fraudulent people. Avoid these types by going to the National Foundation for Credit Counseling and seek out one of their members, a Consumer Credit Counseling Service.

If you are going to go through a service to help you eliminate your credit card debt, I like what’s offered by the people at DebtGoal. The charge a flat fee to help you pay down your debt. DebtGoal is a unique do it yourself debt reduction program that launched in December 2008 and has since enrolled over 20,000 users paying down over $1 Billion of debt. DebtGoal helps borrowers pay off debt up to 16 years sooner and have $35,000 in savings, without paying any more than they do today. They have been profiled in notable publications such as Reader’s Digest, Newsweek, US News, and Yahoo Finance.

Should Companies Teach Their Employees the Basics of Personal Finance?

Guest — Wed, 06 Jan 2010 10:00:48 +0000

It’s no secret to anyone that Americans have accumulated high personal debt with less than wise spending in the last several years. Savings have been down and debt high by most measures available. The recent economic state certainly has changed consumer behavior and helped surface a real need to pay down debt, save more and spend wisely.

Debt, in my view, is crippling. The loss of a job or the need for extra cash at the time of an emergency are real circumstances for people. Debt clogs us up. It hinders us. It weighs us down. It enslaves us and it simply makes us inflexible to maneuver through these circumstances.

Where do we begin to change the trend? Sure, uncontrollable forces such as the economy that I mentioned will help, but surely there is more. Public schools are making the move to educate children on money management fundamentals and build personal finance curriculum. These children are our future leaders. They are the business owners and the family CFO’s.

It reminds me of years in playing soccer and loving the sport. It gave me the opportunity to see and think about what would change soccer in America forever? How would America become a competing powerhouse in the World Cup? It starts with the youth, right? You give them the best coaching and play them against the toughest competition and the future of soccer in America can change.

But, what do we do about the people like you and me who are in the working force today. Our personal finance education may have been minimal in our youth. Unfortunately, most families don’t train up children in this area. So for me it became a passion to learn more about personal finance when life got serious (marriage, children, etc.). My passion grew more and more and so much that I love to coach people today in money management.

In a recent article from the Harvard Business Review titled, “Teach Workers About the Perils of Debt”, experts found that employees are quite uneducated when it comes to personal finance. Surprise, surprise, you might say. Well, companies might be missing the boat on this one if they aren’t moving to include more educational tools (outside of the 401k/retirement) to help their employees.

“In light of the money consumers are pouring into credit card fees and interest payments, wouldn’t it be wise for companies to put some effort into improving debt literacy, rather than focusing workplace programs exclusively on retirement savings? Piling up credit card debt at rates of 18% or higher while investing a small fraction of weekly pay into a 401k may not be the best way for an employee to achieve financial well-being.”

But doesn’t it go beyond financial well-being? If employees are better at managing their money, perhaps they’ll be better at managing company resources. Perhaps they will carry with them less stress to the workplace which certainly impacts their ability to perform at the highest level. These are just my theories, but I think would be worth trying to measure for companies.

One of the things I’ve always been trained to do is to manage the company’s money like it were mine. But what if I’m drowning in debt and spending recklessly? “But I don’t have much financial responsibility at my company”, you say. Really? The smallest matters count. Are you wasteful with office supplies? Yes? Then you aren’t managing resources wisely and perhaps money management education could help.

This is a great opportunity for companies today. If they care for their employees, or provide them the instruction to better manage their money; I believe people will be able to give them more in return. Basic courses in budgeting and debt reduction in addition to the retirement planning would be a great start.

What do you think about employers investing in such programs for their people?

This is a guest post by Jason Price. Jason is a volunteer financial coach and personal finance blogger at One Money Design. He helps people manage money wisely for everyday life using practical ideas and Biblical financial principles. If you want to get his free money management tips and put your personal finances in order, follow him by Email, Twitter, Facebook, or RSS

10 Tips to Help You Reduce Your Credit Card Debt

PT — Tue, 15 Dec 2009 06:18:02 +0000

Credit card debt stinks. And most of us aren’t immune to the evils of credit card debt. We experience it at some point in our lives. We typically find ourselves in credit card debt when we don’t know any better (and don’t understand the cost of high interest debt) and/or when we’re struggling financially for some reason.

When you finally wake up or get back on your feet and realize you need to pay down this credit card debt, depending on how much you have, it may seem like a pretty daunting task. Here are a few tips (in no particular order) to help you reduce your credit card debt and to help you avoid going into more debt in the future.

Note: I’m anti-bankruptcy, bail outs, consolidations, short-cuts, etc. I think the ideal way to go is to just total up your credit card debt, own up, pay it off, and get on with your life.

1. Create a credit card debt reduction plan. Credit card debt is typically the worst kind of debt we have in our liability portfolio. But there actually may be something worse in there. It’s good to have an overall debt reduction plan and see where your credit card debt falls into priority. Should you be attacking this debt first?

2. Put the cards on ice. Literally put your credit cards in a cup or bowl of water and place it in the freezer. You’ll still have the card(s) for emergencies, but you won’t have it with you at the store or have it readily accessible for online shopping.

3. Think twice before you cut up the card. Cutting up the card and swearing off credit for good works for some people, but not me. I’ve found a positive side to credit cards. And really think hard before cancelling your credit card account. This can negatively affect your credit score.

4. Know which credit card to payoff first. Should you pay off the card with the lowest balance first or the one with the highest interest rate? Take the time to understand the difference and make the decision for yourself. If you only have a little bit of credit card debt it’s not going to make much difference. But for big balances this can be worth your time.

5. Consider the debt snowball. A popular debt reduction plan is the debt snowball, made famous by Dave Ramsey. There’s a big psychological advantage to using this plan of attack.

6. Track your debt reduction progress visually. Once you have your plan in place, put it to paper and put it up somewhere in your house for you to see every day. Be sure to reflect your progress as you start to pay off your credit card debts. You might also want to put something in your wallet with your cards if you haven’t already put them on ice.

7. Use extra income to pay it off quicker. If you get an extra bonus at work or find some unexpected money somewhere, use those funds to help pay off your debt quicker.

8. Call your credit card companies and negotiate a better rate. By lowering your interest rate, you’ll be lowering the amount of money your credit card company is adding to your debt each month. All this takes is a few minutes of your time. The worst they can do is to tell you no.

9. Take on a second job to make more money for debt reduction. If you’re serious about reducing your debts, take on a second job or find a way to bring in extra income. Use the extra funds towards reducing your credit card debt. Once you’re done, you can drop the second job.

10. Sell your junk.Odds are your credit card debt is made up of things just lying around your house that you are using anymore. Get a Craigslist account and start listing your stuff for sale. Use the funds to pay off your credit card debt.

What are your tips for reducing credit card debt??

Relying Too Much on “Future You”

PT — Thu, 08 Oct 2009 08:38:37 +0000

Your future self just called. They want their money back.

We all have to rely on others from time to time. What are friends and family for, right? So, is relying on your future self the same as asking for a handout from someone else?

I say there’s nothing wrong with doing that occasionally. But when you do it over and over again, you sort of wear out your welcome, don’t you?

The “future you” I’m referring to is of course your future earning capacity. When you go into debt, you are relying on future earnings to pay for things that you want now. And, because of the associated interest payments, you’re asking your future self to pay more than they should.

For things like a home, a car, an education, asking the “future you” for a little help isn’t that bad of an idea. After all, they will all either increase / maintain value or provide some other source of income over time.

Where you get into trouble is when you go into debt to pay for things that don’t maintain value or help produce income. The future you ends up paying money (in the form of high interest) for something that isn’t there anymore, or is outdated and long replaced.

Action step for today: Write your “future self” an email. Say that you’ve started a debt reduction plan and you’ll quit relying on his or her earnings so much.

How to Effectively Use 0% Balance Transfer Credit Cards

PT — Wed, 02 Sep 2009 14:33:56 +0000

Today I want to discuss how you can properly use zero percent credit cards in connection with a debt repayment plan, or even as a way to make some extra money.

A few months back I warned of the dangers of zero percent interest rate credit card balance transfers. I still stand by those points, but at the time I promised I’d follow up with my story of how I successfully transferred my credit card balances. I also promised I’d share some tips for making the balance transfer work for you. That’s why I’m back today to help fill in the gaps on the process.

How I’ve Used Zero Percent Balance Transfer Credit Cards

Back in 2001 I had about $3,000 in credit card debt. Around that time decided it was time to quit spending more than I was earning and pay off the debt completely. I had wised up. Specifically, I realized I was paying a bunch of money in interest by keeping that balance AND that extra outflow was keeping me from achieving other goals.

So, I came up with a plan to pay it off. It was a simple plan that included throwing any extra money left over each month at the debt. I decided a piece of the plan would be to used a zero percent credit card to help:

lower the amount of interest I was paying while I paid it off,
and motivate me to pay it off quicker (by the end of the term).

It worked. It took me about 6 months to pay it all off.

I’ve also used zero percent interest rate deals in other instances. I may go into these more in a later post, but I actually used a zero percent credit promotion when I got Lasik surgery and a zero percent credit card when I paid for some wedding costs. In both instances I never paid a dime in interest, I racked up a bunch of credit card rewards, and never had to tap into my short-term savings.

Why Use a Zero Percent Balance Transfer Credit Card?

There are a couple of good reasons to consider using zero percent balance transfer credit cards:

Paying Down Debt – The first and obvious reason is to help you pay off debt. While the transfer itself isn’t going to pay off your debt, making the transfer will mean you are paying less in interest payments while you pay down your debts. Make sense?

You might currently find yourself in a bunch of credit card debt. Not the end of the world. But maybe you’ve built up a balance over the years and you’ve just been paying the minimums. This is the best reason to use the zero percent balance transfer, in my opinion.

Credit Card Arbitrage – Second, you might want to do what’s called credit card “arbitrage”. This is where you apply the transfer to an old card that doesn’t have a balance. You receive a negative balance on your card. You then ask for a refund of that negative balance. The money can then be used to earn more money.

How does that work? Well, in the past people would do this by placing the money in a high-yield online savings account. Since those accounts aren’t paying that much in interest these days, people have turned to riskier strategies, like micro-lending.

The bottom line with arbitrage is that you are using the credit card promotional deal to get free money so that you can earn money with that money elsewhere. I’m not going to address this much more in this post, but I will promise to cover it in a future post and to share some of the better strategies out there today.

Warning: Don’t use this 0% balance transfer credit cards strategy if you are simply planning on consolidating debt in order that you may free up room for more spending on credit. This is the wrong way to use this strategy. Just don’t do it. It will only encourage you to rack up more debt and give you a false sense of security. Only use a zero percent balance transfer if you are on a serious debt repayment plan, or you have no debt and want to responsibly take on an arbitrage strategy.

The above word of warning was not meant to discourage people who are in dire straights from using these cards. I realize people often turn to these cards when they are experiencing a temporary financial set back, like a job loss or injury. By all means use these cards to help float you over that down period. Just remember to be aware of the dangers.

How to Evaluate Zero Percent Balance Transfer Credit Cards

So which card should you go for? There are a couple of things to focus in on when looking at credit cards with 0% promotional interest rates:

The length of the zero percent promotional period (or term). This can be anywhere from 3 to 18 months. Obviously the longer the period, the better the deal. You know how long it will take you to pay off your debt, so make sure you get a card with a period long enough to cover you.
The balance transfer fee. This is the fee that the credit card companies will charge you to make the transfer. It can be anywhere from 0-3% of the balance you are transferring, and/or a minimum of $75. This is the difference maker. Compare this fee with the amount of interest you’d expect to pay on the card if you did nothing but continue on your debt repayment plan with the old card. If the fee is higher, then don’t do the transfer.

See my review of some of the top zero percent credit cards.

How to Make the Credit Card Balance Transfer

Understand the dangers.I can’t stress this enough. Playing with credit cards is no amateur sport. You have to understand the rules and be disciplined throughout the process.
Check your credit. It might be a good idea to check your credit report and score. To get the card and the limit you’ll need, you’ll need a decent score. No sense going through this process if you can’t move that much money.
Find the Right Card. Using the criteria listed above, determine which credit card is going to suit your needs.
Apply for the new card and ask for the transfer. Now that you have decided on a card, complete the application, making special note of the balance transfer section. This is where you will need to put your card number and latest balance. It’s obviously a good idea to have your statement available for reference.
Don’t close out the old card. But don’t use it either. Lastly, after you transfer your balance, make a point to not use the old card. Remember, making the transfer isn’t a license to rack up more debt. It’s a chance to pay down debt without paying interest. Put the old card somewhere where you won’t be tempted to use it. But don’t close the account as the available balance and credit history both positively affect your credit score.

Have you every used a zero percent balance transfer credit card to your advantage? Share your experience in the comments below…

Photo by: Andres Rueda

Carnival of Debt Reduction #202: Dog Days of Summer Edition

PT — Mon, 27 Jul 2009 11:00:12 +0000

We’re well into the dog days of summer. Summer vacations (or stay-cations) have come and gone. The heat is still rising, along with energy bills. But don’t sweat it. I’ve got plenty of debt reduction posts to keep you cool and motivated to get rid of your debts.

If this is your first time visiting Prime Time Money, I’d encourage you to check out my posts on Debt Reduction and consider signing up for the free updates.

Without further delay, I present the Carnival of Debt Reduction #202 – Dog Days of Summer Edition. First up, some of my favorites.

Top Dogs

There were plenty of excellent submissions to this week’s carnival, but a few really focused on specific steps you can take to get rid of your excess debt.

The Digerati Life – The Digerati Life submitted a post called How To Get Out of Debt With A Debt Repayment Plan.
Five Cent Nickel – nickel presents Debt Reduction: Share Your Story posted at fivecentnickel.com.
Penny Jobs – Curt presents 7 Steps To Dig Your Way Out of Debt posted at PennyJobs.com.
Single Guy Money – presents It’s Time To Get Out Of Debt – Debt Reduction Tips posted at Single Guy Money.
Prudent Money Blog – Bob Brooks presents A Big Victory for Those in Debt Collections posted at Bob Brooks – Prudent Money Blog.
Debt Kid – debt kid presents Paid Off Credit Card Reminder posted at DebtKid.com.

Cool Dogs

Looking for a little get out of debt inspiration? Check out these super cool posts:

Matt Jabs presents A Journey of a Thousand Miles begins with A Single Step posted at Debt Free Adventure
Madison presents The Exponential Power of Delayed Consumption posted at My Dollar Plan
Craig Ford presents Debt: Upside Down and Backwards posted at Money Help For Christians
Debt Freedom Fighter presents The Benefits of Debt Reduction posted at Discover Debt Freedom
Benjamin presents Dave Ramsey’s “Baby Steps” to Financial Freedom posted at Trees Full of Money
Master Your Card presents How To Avoid Financial Sabotage | Master Your Card posted at Master Your Card

Chill Dogs

These posts discuss different strategies around debt reduction, credit scores, and credit cards. Don’t work hard. Work smart. Then kick back and watch your debts go away.

J. Money presents The Best Order To Take Out Money posted at Budgets are Sexy
DR presents How to Get Your Free FICO Credit Score from myFICO.com posted at The Dough Roller.
Mr Credit Card presents Should I Close My Account If My Rates Get Increased? posted at Ask Mr Credit Card’s Blog.
Patrick @ Cash Money Life presents Using Credit Cards to Rebuild Your Credit Score posted at Cash Money Life.
The Smarter Wallet submitted a post called How To Consolidate Debt: Ways To Reduce Your Debt Load
oneadvice presents Reduce Your Credit Card Debt posted at One Advice
Personal Finance Analyst submitted a post called Dealing with the Devil – Getting Better Deals on Your Credit Cards
FMF presents A Full Credit Lockdown posted at Free Money Finance

Good Dogs

Here’s a few more good reads. While not directly related to debt reduction, the money management, frugality, and investing information below provide a great supplement to your efforts on the way to debt freedom.

Thanks for reading, everyone! If you’d like to participate in a future edition of the carnival visit the Carnival of Debt Reduction website and submit your posts. You can also submit your posts at Blog Carnival.

Photos by: Zenera, Rodrigo Basaure, Pacdog, lecates, TheGiantVermin

Who is this Dave Ramsey Guy?

PT — Fri, 24 Jul 2009 19:13:00 +0000

Although I don’t mention him much, I’m a huge fan of Dave Ramsey. I’ve been following him online and on the radio for at least six years now. He actually played a huge role in helping me get my own finances in order.

I like Dave for the tough, straight-forward message that he brings. Sometimes you just need someone to tell you how it is. Dave does that well. I also like Dave’s application of Christian principles in his message.

Who is Dave Ramsey?

I know a little about Dave’s past; mostly from what I’ve heard him tell though. Basically he was a real estate entrepreneur that made a ton of money, but also racked up a bunch of debt. He went through a bankruptcy, and came out of that experience smarter about his finances and with a passion to help others. He then started his radio show and wrote a book, Financial Peace, which really got him established in the world of personal finance.

Dave is now the ultimate “get out of debt” guru. I would guess that no other person has helped more people payoff debt. Dave is the man.

The Dave Ramsey Show

The best way I’ve connected with Dave over the years is by listening to his show. The show has a little bit of everything going on. Dave takes questions from people struggling with money issues, people who are finally debt free, and even throws in some occasional commentary on the economy and politics. If you listen, you’ll end up agreeing with what he says as a whole, but you’ll be left with the feeling that you got punched in the gut. He definitely calls you to action.

You can listen to it over the radio (check local listings), or stream it online. When I first started listening to Dave, I listened to the online podcast. I liked it because I could skip around to the parts that applied to me and skip the commercials as well. Check out his radio show page.

Financial Peace University

If you want to really get to know Dave Ramsey’s approach, sign up for his Financial Peace University (FPU). The 13 week video series takes you through all that Dave has to offer. Plus, you get to experience it with others going through the process. The accountability has to be the best part of this program. The best place to find a Financial Peace University is at your local church or community center. Unless your church is offering to pay, this will cost you around $100. Pete from Bible Money Matters recently shared his experience with Financial Peace University. It’s definitely worth checking out if you’re interested in doing the full course.

Total Money Makeover

Dave’s biggest achievement to date has to be the success of his book, The Total Money Makeover. In the book, Dave outlines his approach to helping you get out of debt and the seven baby steps that you need to use to get started. This is likely the best way to approach Dave’s methods if you’re not ready for the full FPU and don’t have him on the radio.

The 7 Baby Steps

Dave’s message can be boiled down to seven steps that you need to follow in order to have financial peace.

$1,000 to start an Emergency Fund
Pay off all debt using the Debt Snowball
Three to six months of expenses in savings
Invest 15 percent of household income into Roth IRAs and pre-tax retirement
College funding for children
Pay off home early
Build wealth and give! Invest in mutual funds and real estate

Where do you find yourself on the list of baby steps?

Endorsed Local Providers

A big benefit of being a Dave Ramsey fan has been learning about his Endorsed Local Providers (ELP). ELPs are essentially financial companies that Dave has hand picked to endorse. From this list, I was able able to find a real estate agent in my area I could trust. And most recently, I recently used Zander Insurance (an ELP) to help find the lowest quotes on life insurance. Dave gives these ELPs his stamp of approval and holds them accountable for their service.

Dave Ramsey is Bad at Math

Because of Dave’s Debt Snowball (paying down debts using lowest balance vs highest interest rate) he’s been accused of being bad at math, or dumbing-down his methods for the masses. While I don’t personally subscribe to all of his methods, I know they work for the people who use them. Whatever your thoughts are on his specific methods, you’ve got to admit it’s resonating with a bunch of people and truly helping them.

Why Dave Ramsey Works

I never been a strict follower of Dave’s steps and to be honest, I haven’t even read his books. But I’ve absorbed his message over the years through his radio show and been moved to make a change with the amount and type of debt I was carrying. And each day, hundreds more are experiencing Dave for the first time. What they’re getting is an honest, no-gimic approach to getting to financial peace. That’s the best you can hope for, and that’s what Dave brings.

Paying Off Student Loan Debt Early

PT — Mon, 29 Jun 2009 23:14:09 +0000

If you have student loan debt, are you planning to pay it off early? Or are you simply making the minimum payments because you’re comfortable with the low interest rate, tax deduction, and low payments?

For the longest time, I’ve been in the second camp, happy to pay off my student loan debt using the minimums, knowing I had other financial goals that took precedence.

Well, that time has come and gone. With the down payment of our house complete, repayment of our high-interest auto loans, and money saved up for our first baby, the only big financial hurdle Mrs. PT and I currently face is the repayment of our student loans. And we’ve already taken action…

Last month we paid off one of our loans with one big chunk payment. Most of the funds came from our most recent ESPP flip (forced extra savings using company stock). And by the end of the summer, we should be able to wipe out the last student loan.

Overall I’m definitely proud to be able to close out this debt, but I do have mixed feelings whether this is the best move financially. With stocks, real-estate, and other investments on sale right now, I wonder if this money could have been better served elsewhere.

But I won’t be wondering long, as there are huge benefits to having this debt behind us: more money available for savings, more flexibility in our budget, one less payment to worry about, etc. Not to mention, student loan debt is the debt that would never be forgiven, even in bankruptcy. Lastly, it just feels good to be rid of it.

How about you? What did you do, or what are you planning on doing with your student loan debt?

In other news, last week I participated in a few blog carnivals. Check them out:

And there were plenty of nice article from last week throughout the blogosphere:

Have a great week!

Carnival of Debt Reduction #193: New Credit Card Rules Edition

PT — Tue, 26 May 2009 10:00:32 +0000

New Credit Card Rules Edition

Welcome to the 193rd edition of the Carnival of Debt Reduction. Considering the recent rule changes we’ve seen enacted for the credit card industry, I thought that would make a good theme for this carnival. The carnival features a section of articles related to the new credit card rules, as well as lists some of the highlights from the new legislation. Thanks to the WSJ’s Washington Wire for the list.

Best of the Best Debt Reduction

Existing balances: Issuers cannot retroactively change the rate on an existing balance unless the account is 60 days delinquent.

Payments: A consumer payment above the minimum applies first to the balance with the highest rate.

Christian Debt Help submitted a post called A debt reduction strategy.
Super Saver presents Saying Bye Bye to our Mortgage posted at My Wealth Builder.
The Digerati Life submitted a post called How To Avoid Bankruptcy: 5 Steps To Solvency.

More Debt Reduction

Teaser rates: Issuers cannot raise rates for the first year after an account opened. Promotional rates must last at least six months.

Bills: Issuers must send a bill 21 days before the due date.

MatthewPaulson presents The Top 5 Financial Resources You Need to Help Manage Debt posted at Fine Tuned Finances.
Lakita presents DANCE Out of Debt: 5 Starter Steps to Eliminate Debt posted at Paneh Praise.
CreditCardAssist.com presents The Best Balance Transfer Card Strategy posted at CreditCardAssist.com.
kathryn presents Saving Your Mortgage from Foreclosure posted at Out of Debt – Christian Finances and Debt Help.
Mr Credit Card presents Radio Interview with Adam Baker from Man Vs Debt posted at Ask Mr Credit Card’s Blog.

About the Credit Card Industry Changes

Over limit: Issuers cannot charge over-limit fees on credit cards unless the consumer has signed up to allow such transactions.

Minors: For consumers under 21 years old, a company must get the signature of a parent or another to take responsibility for the debt, or it must obtain proof that the under-21 consumer can repay credit.

Madison presents Credit Cardholders’ Bill of Rights Act of 2009 posted at My Dollar Plan.
Patrick @ Cash Money Life presents Changes to the Credit Card Industry posted at Cash Money Life.
PF Credit Cards presents Credit Card Companies are Screwed with the New Bill posted at PF Credit Cards.
Man Vs. Debt submitted a post called 18 Year Olds Now Require Co-Signer To Obtain Credit Cards. Still Maintain Right To Catch Bullets With Their Face!.
SpendOnLife.com presents Debit Cards Take the Lead Over Credit posted at Spend On Life.

General Finance Advice That Might Help You Reduce Your Debts

Disclosure: Cardholders must get 45 days notice of change in terms.

Fees: Issuers cannot charge fees to pay by mail, phone, and electronic transfer or online, except for expedited service.

Gift cards: All gift cards must have at least a five-year life.

Peter presents 10 Practical Ways To Save Money And Increase Your Net Worth posted at Bible Money Matters.
FFB presents Credit Cards Don’t Suck, You Suck! posted at Free From Broke.
Pinyo presents Why You Should Start Using Sinking Funds Today posted at Moolanomy Personal Finance.
Leave Debt Behind presents Starting a Budget for Your Family posted at Leave Debt Behind.
Raj Patel presents Debt Settlement vs. DMPs: Questions and Answers posted at DebtGoal.
Enemy of Debt submitted a post called Got Credit Cards: Here’s Aother Reason To Say Goodbye!.
nickel presents How to Find the Best Mortgage Rates posted at fivecentnickel.com.
d. ninja presents Get rid of that darn murdercycle. posted at Punch Debt In The Face.
The Smarter Wallet submitted a post called Cheap Family Lives The Frugal Life With Ease.
J. Money presents Dear Shopping Malls, Best Buy, Target – I miss you… posted at Budgets are Sexy..
Matthew Paulson presents A Resource for Getting Debt Free posted at American Consumer News.
KCLau presents Easy Pawn Shops – Do you need to Pawn? posted at KCLau’s Money Tips.

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A big thanks to everyone who participated in this week’s Carnival of Debt Reduction. If you’d like to participate in the future or possibly host it yourself, be sure and head over to the carnival website.