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How to Win the Credit Card Balance Transfer Game

There’s nothing fun about credit card debt. An outstanding balance of $5,000 that is subject to 19.99% interest means you’re paying about $1,000 a year just in interest. Imagine if that $1,000 could go directly to repaying the balance instead. You could pay it off in record time instead of stringing it out for many years.

If you’re carrying credit card debt, transferring that balance to a new credit card with a 0% introductory rate could be the way out of your heavy debt situation. Just beware: There are pitfalls in the balance transfer game that if not avoided could end up making your situation worse, not better.

 

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To play the balance transfer game well requires financial maturity and personal discipline. Are you up to it? Should you wish to play, you’ll need to adopt this strategy to come out a winner:

Fine print

Find a balance transfer credit card application. You want one that offers at least 15 months of 0% interest, has no annual fee, and a small if any, balance transfer fee. Search at IndexCreditCards.com. Read the application very carefully. Know exactly what’s in the terms and conditions.

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5 Home Buying Mistakes That Will Make You House Poor

Buying a home is likely the largest purchase you will ever make. This is not the time to make mistakes that could easily plunge you into a financial situation you cannot afford. 

During my 18-year career as a real estate broker, I learned a lot of things but none as valuable as what not to do! I didn’t learn this in a seminar or while studying to pass the licensing exam. I witnessed real-life situations where buyers did really dumb things related to buying real estate—buyers who then went on to regret the decisions they’d made.

Avoid these five home-buying mistakes and you will avoid getting in over your heads with a house you cannot afford—and save yourself many thousands of dollars and heartaches in the process.

 

Young couple looking at their dream house

Mistake: Allowing a lender to determine how much you can afford

When you meet with a lender to get pre-approved for a mortgage, that lender is going to tell you how much house you can afford and how much money the company is willing to lend to you. Understand this: He or she is concerned about only two things: 1) Your ability to repay the mortgage and 2) the size of his commission.

This lender wants to steer you into the biggest mortgage possible. Ignore that number. It is not based on what you can afford because the lender has no idea what you can afford.

You need to set your own housing budget before you ever sit down with a lender or other real estate professional, which is based on your specific financial situation and lifestyle. And that housing budget should be realistic enough so that you can afford to make progress on all your other important financial goals like maintaining a healthy emergency fund, getting debt-free, and funding retirement accounts. Read more

How to Live on a Budget and Love It

For many years I wouldn’t have anything to do with a budget because I couldn’t stand the idea of anyone—or anything—telling me how to spend my money. And where did that get me? Into one big financial mess.

 

Looking over the shoulders of a happy couple creating a budget they can live on and love

 

Every month, when I ran out of money, I would turn to MasterCard and Visa for a bailout. To me, any available credit was the same as income. It was my money to do with as I found necessary. Really bad idea.

What I learned from going through that experience and finding my way back to solvency is that, as much as we may loathe it, a budget is the ticket to financial happiness―not the straitjacket I feared it would be. I’ve come to prefer calling this a “spending plan” rather than a  budget, but honestly, the terms are interchangeable. It’s just a way to pre-spend your income on paper first.

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Common Money Myths and How to Stop Believing Them

The wedding was complicated and expensive. But it’s over and you are ready to settle back and enjoy your new life together. I’m here to warn you about some common money myths that newlyweds have been known to bring with them into their marriages.

But wait. You’re not a newlywed? No one is immune to believing these myths. No matter your marital status—learn these lies about money so you can stop believing them. It will improve your life.

 

 

Myth: Double the income, half the expenses

This is what I call newlywed fuzzy math: Merging your lives and incomes into one household is the equivalent of getting a raise. It goes like this:

When we live together, we split the rent or mortgage payment; we share the utilities and household expenses. We’ll have twice as much money.

Don’t believe that, not for a second. While there may be some truth in sharing expenses, the outcome is not what you think. Been there, done that, trust me on that. More likely, more money will immediately lead to more spending. Without a solid plan, that will quickly lead to more debt because you’ll use that money for a down payment on stuff you really want.

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The Ultimate Risk-Free, High-Yield, Guaranteed Investment

From time to time, this kind of question pops up in my inbox:  How can I get started investing in stocks and mutual funds that are risk-free and have guaranteed high rates of return?

Of course that makes me laugh hysterically, not only because there is no such thing as a risk-free investment let alone one with a guaranteed high rate of return, but more because someone thinks I am an investment advisor. I am simply not qualified nor licensed to advise anyone on traditional Wall Street, stock market type of investing. But that’s not to say I don’t have some advice for them.

Happy couple jumping for joy investing in their debt

My investment advice is unconventional, perhaps, but it makes so much sense, I think you’re going to be amazed. When looking at investments, many people disregard one of the best and easiest places to invest their money—their own debt.

 

First, let’s agree that the reason anyone wants to invest is to increase their net worth by making their money grow. There are two ways to do that. 1) You can increase your assets or 2) decrease your liabilities.

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What to Do When You Can’t Pay All Your Bills

You’ve lost your job or for some other reason don’t have enough money to pay all of your bills. Which bills should you pay first and which ones can slide for a while?

 

 

Couple stressed and worried looking at bills

 

Here’s a basic rule of thumb according to the Boston-based National Consumer Law Center in its book, Surviving Debt:

“Always pay essential expenses and debts first. If any money is left, you can decide which nonessential debts, if any, to keep in your expense budget.”

An essential debt represents a serious obligation that if not paid could produce severe, even life-threatening consequences.

Do not make payments on nonessential debts when you have not paid essential ones even if your nonessential creditors are breathing down your neck. Keep your priorities straight.

Please do not misunderstand! I am not suggesting that you should just walk away from your financial obligations. You must pay your creditors, you must pay your bills. To not pay them is not an option.

Of course, it is not ideal to let some of your bills slide for awhile. But your situation is what it is. Your resources are severely limited. In time, as things improve (they will) you will be able to get caught up completely.

But for now, you need to know how to get through this month.

Once you’ve determined which bills are essential, prioritize them according to the severity of the consequences you will suffer for non-payment.

Here is a guide to follow, listed by priority. Read more

The Gift of a Crisis

It was the worst day of my life. Not one of the worst days. Not a day where not one thing seems to go right. Worse than that.

Woman in crisis with head down on desk

Worse than any day I’d ever experienced before that day, worse than any day since. And I would say that like most people, I’ve had some real doozies.

I was in crisis, the kind that took my breath away and made me believe I had no hope. My world crashed. 

We were four months behind on our mortgage. All of the credit accounts were maxed to the hilt, and beyond. We had bills on top of bills, collections up the wazoo. We had no money and worse, no jobs. Not one between us. Nothing coming in. I hate to tell you even how much credit-card debt I’d run up and the size of our mortgage and automobile leases. It was really, really bad.

This was not a crisis that developed overnight. It started gradually, of course.

Not many people start out in financial trouble. Neither did I. It happened quite innocently, really.

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How to Curb Emotional Spending in 5 Easy Steps

Somewhere back in my dark financial past, I discovered that emotional spending was a great antidepressant. I spent to change my mood, to reward myself and to make myself feel better. 

I spent money when I felt sad and when I felt glad. I spent money so I wouldn’t feel broke. I spent to get approval, to make my kids more popular, to impress people I didn’t even know. The list goes on and on. 

 

 

Emotional spending, or it’s much cuter name “retail therapy,” was my go-to activity when I was feeling stressed out, bored, under-appreciated, incompetent, unhappy or any number of other emotions. In fact, I’ve been known to spend mindlessly just because I’m happy.

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