Posts tagged 'Debt'
What do you do if you find yourself with a lot of unstylish debt you know you can’t pay back?
First, stop, absolutely stop, using your credit cards. Find a way to live within your means.
Second, pay off your credit card debt. If your credit card debt is the debt you can’t pay, you can often work with the credit card company to set up a payment plan or to reduce your interest rates. If your credit card company won’t help you, you can call a reputable credit counselor for assistance. Often, they will work with your credit card company and other companies you owe money to and can help reduce what you owe. Log onto www.consumercredit.com for assistance finding a credit counselor who can help you.
Third, if you have many types of the same kind of loans, consolidate. Consolidation means you group all of your similar loans together with just one company. For example, you can get a student consolidation loan where you combine multiple student loans and pay a fixed interest rate to just one company. Or you can combine all of your credit card balances onto one single card (with a lower rate than those you have) that you pay off on a regular basis.
Fourth, beware of scams. There are a lot of con artists who prey on people desperate to solve their credit problems. They may offer to get your debt “suspended” or “canceled” if you pay their fees in advance, sell you supposed credit protection, or offer to help you re-build your credit. These kinds of offers can be very tempting, especially when you are vulnerable. Remember, if it sounds too good to be true, it probably is. Keep in mind that saying about free lunches, as in, there’s no such thing.
The most crucial thing to learn about debt—after the number one rule, which is don’t incur it—is that you should always take it seriously. Wasting it on something frivolous does not become a true Fashionista. A true Fashionista searches out the highest style, but only at a price she can afford.
April 30th, 2009
Sung to Katy Perry’s I Kissed A Girl…
This was never the way I planned
Not my intention
I was so dumb, shoes in hand
Lost my discretion
It’s not what, I usually do
Just wanted to try them on
They were way too expensive
Caught my attention
I bounced a check and I hated it
Got calls from the bank
I bounced a check and I hated it
I hope my credit score isn’t wrecked
It felt so wrong
It felt so bad
It means I’m in debt tonight
I bounced a check and I hated it
I hated it
February 6th, 2009
You’ve been really good. The statement chandelier earrings you were lusting after will have to sparkle on someone else. You’ve curtailed your spending and finally have some extra money this month. What should you do with it? Are you better off paying down some of your debt or tucking it away in your savings account? For overall finance purposes, paying off debt and saving are the same. Incurring debt is negative savings; paying down debt is savings; and savings are savings. That being said, the single best thing you can do for your finances is to pay down your credit card debt (see Barbie: January 23, 2008; Interest: January 15, 2008 and Gift Yourself: December 1, 2007).
Once your credit debt is gone, make sure you have some savings. You should have a minimum of three months living expenses saved up. This may take awhile, but it is really crucial. You want to be able to take care of yourself if you hit any bumps. Promise yourself you won’t touch that money unless there is an emergency.
Then turn your attention to your other debts – high interest, non-tax beneficial ones first. Just like there are good trends and bad trends, there is such a thing as good debt and bad debt. Not all debts are created equal.
For example, a college or graduate school education and a home are sometimes considered good debt because although you had to borrow money to pay for them, you have something of value after you have paid back what you owe, interest and all. You also get to deduct a portion of these debts from your taxes. Credit cards and car loans are often considered bad debt. The value of what you purchased tends to decrease after you borrowed the money to pay for them. Worse, you cannot deduct any portion of these debts from your taxes.
So pay off your bad debts first – as an added benefit, once you have paid them off your monthly income will increase. Earrings, here you come!
February 3rd, 2009
In his inaugural speech, Obama quoted the Bible: “the time has come to set aside childish things.” The question is does that include an obsession with shoes? He asked the nation to grow up and cited our “badly weakened economy” as a consequence of not just “greed and irresponsibility on the part of some but also our collective failure to make hard choices…”
So yes, sadly, it applies to shoes – or at least our obsession with them. A poll of 1,057 women by the Consumer Reports National Research Center for shopping magazine, ShopSmart, found that U.S. women on average own 19 pairs of shoes, although they only wear four pairs regularly; 15 percent have over 30 pairs.
Carrie: [In shoe store with Miranda]: Where did all my money go?
Miranda: At four hundred dollars a pop, how many of these do you own? Fifty?
Carrie: Come on…
Miranda: One hundred?
Carrie: Would that be so wrong?
Miranda: Four hundred dollars times one hundred, there’s your down payment.
Carrie: That’s only four thousand dollars.
Miranda: No, that’s forty thousand dollars!
Carrie: I spent forty thousand dollars on shoes and I have no place to live? I will literally be the old woman who lived in her shoe.
Carrie, with her disregard for her spending habits – tossing off hundreds of dollars for things she doesn’t need and will, in all likelihood, never wear – might be incredibly chic but is a very bad financial role model.
Managing your money, taking control of your finances and living within your means requires hard choices. However, if you put off or don’t make the hard choices, they become impossible.
January 22nd, 2009
Gwyneth Paltrow’s latest GOOP posting (www.goop.com) shares her post-holiday cleanse, complete with menu and bowel movement advice. This year, rather than simply focusing on being thin focus on becoming rich. You can start by truly assessing your financial condition. If you’ve never made a budget, do so. If you’ve never calculated your net worth, try it. If you have credit card debt or other debts develop a plan to pay them down or off – if your debt is caused by excessive shopping vow to hit the gym instead – you’ll get thin and rich at the same time.
Wallis Simpson, the American divorcee for whom King Edward VIII gave up the throne of Great Britain, is often credited with originating the saying “You can never be too rich or too thin.” However, she was wrong. You actually can be too thin- anorexia looks pretty on no one and size 27 jeans cost the same as size 31 jeans so smaller sizes do not help you save money – but you can never be too rich.
January 7th, 2009
Per yesterday’s post, sung to the twelve days of Christmas…
On the twelfth day of Christmas proper spending meant to me:
Twelve affordable gifts purchased
Eleven charities helped
Ten happy friends
Nine happy family
No unpaid bills
Nothing for myself
No more gifts to buy
Nothing for my pets
No forgotten friends
Lot’s of happy calls
Plenty of good-will
and a debt free hol-i-day…
December 3rd, 2008