Month: November 2018

have-a-fluctuating-income-here-is-how-you-can-pay-off-credit-card-debt

How to pay off credit card debt on a variable income?

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It is difficult, no doubt, to manage personal finances when you have a variable income. Or, in other words, if you don’t have a steady paycheck on a timely basis.

Then things get even worse when you have racked up some big consumer debts like credit cards, personal loans, and all. What to do then! Does it mean that people, who don’t have a steady income, should not use credit cards?!

Definitely not!

That’s why we have come up with this unique blog post for you, that will precisely help you deal with credit card debt when your income is not fixed. So, let’s carry on with the guide, and point out some very basic ideas to straighten up your credit card payments!

Take a year’s example to understand your net annual income:

This I believe you are already doing it. If not, then you better do it, before things start falling apart. You can be freelancing, have your own startup, or might be into some business. However, you should have a rough idea of what your annual income is.

Go back 2 to 3 years and see how much you earn annually. A few hundred dollar difference is not a problem, but a gap of a few thousand dollars means you need to reinvent your business strategy a bit.

You need to make sure that each year, your net income should fall within a fixed margin. The target has got to be pretty clear that by the end of each year, you are bringing in roughly the same amount of money. That’s your call, and it depends on how you will do that!

Understand the credit cards you have and the payments they require:

Credit card debts are like damsels in distress that require special attention. The more you ignore them, the more will they swell with anger, which grows red on interests!

But, your income is not stable. A big reminder for you, every time you look at the bills. Now, the best thing you can do is get an overall idea of how much percentage the credit card payments demand, of your total annual income.

If around 1/3rd of your net income, then you seriously need to regulate your spending behavior!  A credit card payment that makes up more than 30% of your income is not at all a good sign. But whatever! You’ve got to deal with the situation. This brings us to our next and most vital step.

Keep aside the same percentage of money each month for credit card payments:

If your credit card debt requires 25% of your annual income, to be paid off in full within one year, then here’s what you need to do. Each month, no matter what you earn, you keep aside 25% of it, for your debt. Now, if you earn $1, then separate 25 cents for the credit cards. Sounds funny?? Well, that’s what you got to do, my friend!

It’s a lot easier if you understand this simple math:

Let, your incomes for twelve months be, X1, X2, X3, X4, X4, X5, X6, X7,……. X12!

Now, (X1+X2+X3…… +X12)= Total annual income (A).

So, if 25% of (A), is all your credit cards want, then give it to them.

That would be,
25% of (X1+X2+X3…… +X12) = 25% of (A).

And, that means,
[(25%of X1) + (25%of X2) + (25%of X3) + (25%of X4) +………+ (25%of X12)] = 25% of (A).

Thus, irrespective of your salary, per month, you deduct the same percentage for credit card payments. But the only thing you really need to take care of is that your predicted annual income, the year you are doing the calculation for, should not ditch you!

Give credit card debt consolidation a big-time thought:

Be it you have a fixed income or variable income, debt consolidation is the master plan you can always take shelter from. Highly effective when you are dealing with unsecured debts, especially credit cards.

If you think that your monthly payments are really high, and if only you could extend the course of payments, by lowering your monthly amounts, then debt consolidation is what you are really talking about.

This unique debt relief process works out best when you enroll in a debt consolidation program with a consolidation company. They will talk to your creditor and try to make some shifting and arrangement to your credit card payments, based on your affordability.

Once the deal is successful, you will just have to pay the consolidation company some minimized amount each month, which in return the company will disburse among your creditors, as per the agreement they made.

Debt consolidation will surely lower the payment burden quite significantly. So, be wise and talk to a consolidation company as fast as you can. Once the monthly payments get lowered, you won’t have much problem paying off the credit card debt on a variable income.

The final step to take always increases your income, and get a steady cash inflow:

Big investors, well-off businessmen, and good entrepreneurs all have debts around them. But, rarely you will find them so freaked out about their debts. The hidden truth is, even if they are self-employed, they still try to maintain a steady income.

On the other hand, however, if your income is season based, like woolen products or commodities and all, then try to expand your product range. Now, we can’t discuss over here how to expand your business! I believe I have done my part.

Best of luck, and do follow the tips I gave you throughout the post. If required go through this post again and again, in order to understand the simple maths, I explained.

is-the-60s-and-70s-rock-lifestyle-to-be-blamed-for-current-US-debt

Is the 60’s and 70’s rock lifestyle to be blamed for current US debt?

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“There must be some kind of way outta here

Said the joker to the thief

There’s too much confusion

I can’t get no relief

Businessmen, they drink my wine

Plowman dig my earth

None were level on the mind

Nobody up at his word

Hey, hey”

……………………. All Along the Watchtower.

A pretty tough man, pretty tough! There ain’t no words to describe the blast, that happened in the decades of 60s and 70s. A new wave of culture that redefined the forms of Arts, Science, Philosophy, Music, and anything you name!

It was a movement! The mass upheaval of a chaotic situation that questioned rules, peace, war, and most notably, love!

But it was this Rock and Roll amongst all, that brought significant changes to how the world worked, such as musical and artistic acts like Elvis Presley, Bob Dylan, Allen Ginsberg, Jack Kerouac, The Doors, Lynyrd Skynyrd, Andy Warhol, The Velvet Underground, The Rolling Stones, Jimi Hendrix, Janis Joplin, The Beatles, and so and so, came into the picture.

The time was the high heat of the 1960s and 1970s. The World Wars are over. Big politicians and diplomats were busy fighting the unnecessary cold war! And, in the middle of nowhere, popped a mushroom. Large enough to shed everything that came it’s a way!

This mushroom took the shape of a different dimension of thoughts and actions. This was the rock lifestyle of the 60s and 70s. The hippie age. The age where music and drugs wiped the streets. The age where people loved to dance to the end of love. And an age, where the last thing the youths cared about was money.
It was an age of realization, spiritualism, psychedelics, opening the doors of perception, intelligence, and intellectualism!

But they lost track! As per the words of Karl Hyde’s song, Born Slippery, the hippies had chemicals grown so close to them, that they forgot the fact, that this world still finds solace in worldly and materialistic objects!

And, that’s exactly when the whole thing went wrong, economically. The effect of which we are still bearing, enormously. It is the current US debt. But, will it be ethical to blame the culture of the 60s and 70s solely for today’s American debt?

Let’s evaluate.

Understanding the Baby Boomers- the initiators of the hippie movement:

Am I missing out on anything? The Silent Generation or the Lost Generation or something like that? No, I guess not. For they have their share already. The lost generation got washed away by the start of World War II. This generation was followed by the Silent Generation. Both these generations witnessed the 2 great world wars, and both succumbed to the great depression of the roaring 20s.

Obviously, we can never erase scars, and the effects the world wars had on the economy is still reflected. Believe it or not, it’s more or less like the butterfly effect, where one event results in an effect, that triggers several other series of events.

These continuous events created by the age of depression, the world wars, and the start of the cold wars, led to an amalgamation of frustration among the youth of the late 50s and early 60s. They strive to cut loose the social chains of rules, regulation, controlled speech, and all! And, these young fellows were the baby boomers! They just wanted to break on through to the other side!

Most of the baby boomers’ parents were servicemen, soldiers, army men, law-abiders, and definitely were on the stricter side. As far as we have heard, the silent generation was busy building wealth and securing a systematic future! This generation wanted peace with the help of civilization, family ethics, and rules.

But their children, the baby boomers, felt suffocated as the Cold War was prevalent both in the country and in the house. This suffocation led to a big blow out! And, that’s what turned them into hippies! Hippie might sound like a mellow word, but this word really broke through that time I tell you.

Examples include Elvis Presley, Johnny Cash, Jim Morrison, Jimi Hendrix, Hunter. S. Thompson, Janis Joplin, The Grateful Dead, Bob Dylan, Lou Reed, and all!!

The England side included Pink Floyd, Led Zeppelin, The Black Sabbath, Marc Bolan, and this could just be endless if I keep on going, and if you keep on reading!

So, the point is, these kids wanted a great and good ol’ party time. They saw enough of suppression, and rock and roll just acted as a sedative and a stimulant at the same time. If not anything, at least this ‘music-and-culture’ spoke of freedom, spoke of love, and spoke of happy memories, that brought rain into the then dry world! Even if the rain was ‘acid’!

Understanding Generation X, the punk, and the economic breakdown that followed:

The rock and roll craze was about to collapse, as substance abuse, debt, relationship chaos, and a feeling of guilt started to cover the baby boomers. It was now time for their kids to question the past and answer for their mistakes. Many rock stars of that era suffered depression, isolation, ill financial health, and a collapsing burden of fame.

Club 27 took place, as many influential and promising figures started to fade away at very young ages! In the meantime, the Vietnam war ended and the soldiers returned home. There were memories of Woodstock, and the storm of the hippie wave was about to go silent.

It was time for the hippies’ kids to take charge of this world! These kids came out more charged up. More metal headed and punk souled than their ancestors. Loved to experiment with everything available.

They started to change the face of the rock lifestyle into something more intense and robust. Notable genres and artists that ruled the culture and lifestyle of this era include Punk, Glam, Pop, Techno, Shoegazing, The Sex Pistols, The Smiths, heavy metal, death metal, Indie, The Motley Crue, Aerosmith, Nirvana, and all!

“Now look at them yo-yo’s that’s the way you do it

You play the guitar on the MTV

That ain’t workin’ that’s the way you do it

Money for nothin’ and chicks for free

Now that ain’t workin’ that’s the way you do it

Lemme tell ya them guys ain’t dumb

Maybe get a blister on your little finger

Maybe you get a blister on your thumb

We got to install microwave ovens custom kitchen deliveries

We’ve got to move these refrigerators, we gotta move these color TV’s

See the little faggot with the earring and the make up

Yeah buddy that’s his own hair

That little faggot got his own jet airplane

That little faggot he’s a millionaire”

………………….. The Dire Straits, Money for Nothing.

The hedonistic mottos of this age, that preferred luxury, pleasure, happiness, ecstasy, and courtship gave economy, savings, wealth, and investments the least importance. This period had elongated nights that saw gangsta rap, discs, and pubs taking up most of the education!

The hippie movement continued but in a whole new different shape and size. And this was when Credit Cards started to rule the market. It increased the buying power of people with reckless money habits.

Then came the housing crisis:

The 1987 Tax Reform Act and the Taxpayer’s Relief Act of 1997, made housing seem the only profitable investment, as tax deductions for interest amounts on consumer debts were cleared out. With little knowledge gathered on finance and economics in these two generations, people started to take out subprime mortgages at a huge rate.

Due to havoc and wrecked-up lifestyles that only a few people were successful at, many went through unemployment! Even notable figures and bands like Johnny Cash, Bob Dylan, The Doors, and other contemporary celebrities went through severe times of bankruptcy, social and rehab issues.

If at one part, something was rising (what became the golden age of modern music, science, arts, and spiritualism), then, on the other hand, the whole mass was falling down! The world was losing its balance!

And, haphazard financial decisions just occupied the minds of young adults. An act of desperation, maybe! It’s the first decade of the 2000s and big financial institutions like Layman Brothers, for instance, went underwater.

Entering the current national debt scenario:

So, here we are today. As our past ancestors did little financial planning and wealth building, we have only learned to make amends with debts.

We rely on credit cards, loans, and secured debts, for making our financial grounds independent. Doing Savings has never quite been the prime priority of the American Dream or the San Francisco acid wave!

One domino that fell down in the 60s and 70s, has been continuously pushing the dominoes coming in line, one by one. Today the USA holds the majority of the global debt! Nearly $20 trillion of global government debt. Where do the psychedelic dreams are when the economy is concerned?

All seem to be a big misfit.

  • We really don’t know what reasons are hiding in the central eye of this economic deficit we are facing. Is it the poverty of the world wars?
  • Is it the total abandonment of money and commerce during the rock n’ roll era?
  • Is it too much substance abuse, con, and gang activity that funneled the enormous national debt?
  • Or is it the pointless blaming one generation does on the other?

The answers from the past do reflect the collapse of this economy. So many things are still left to be pointed out in this post!

But all I can say is, history repeats itself.

And it is up to us, Millennials and Generation Z, to fight for our country’s economy. We need to be the sensible game changers our forefathers fought for. Even though many failed to cope with the rush back then, still many were able to show us a bright future made of love and peace.

I believe if only we can just straighten up our personal finances a bit, then all problems are solved, and we will flourish as a supreme civilization!

Master the art of moderation and be debt-free my fellow current American generation!

“When I’m counting up my demons

Saw there was one for every day

With the good ones on my shoulder

I drove the other ones away

If you ever feel neglected

If you think all is lost

I’ll be counting up my demons yeah

Hoping everything’s not lost

When you thought that it was over

You could feel it all around

Everybody’s out to get you

Don’t you let it drag you down”

……………………………………….  Everything’s not lost, Coldplay.

Below is a table showing the rise of Gross Public Debt, from the fiscal year 1950, till the present 2018, at a 5 years gap:

Fiscal Year Gross Public Debt
1950 $256.85 billion
1955 $274.37 billion
1960 $290.53 billion
1965 $322.32 billion
1970 $380.92 billion
1975 $541.93 billion
1980 $909.04 billion
1985 $1.8 trillion
1990 $3.2 trillion
1995 $4.9 trillion
2000 $5.6 trillion
2005 $7.9 trillion
2010 $13.5 trillion
2015 $18.12 trillion
2018 $21.46 trillion

 

How-to-do-debt-consolidation-efficiently,-all-by-yourself

How to do debt consolidation efficiently, all by yourself

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Debt consolidation approaches are increasing with the rise of household debts and unsecured debts in our country! But, most of the consumers, who want to do debt consolidation, don’t actually understand how this debt relief process works.

Many who choose to consolidate debts do so with the hope of a better financial future, without knowing the ins and outs of the process. They see the jolly internet ads and the razor-suited financial advisors burping out complex words, like ‘consolidation loan’, ‘credit score boost’, ‘single payment’, and so on, which make them confused.

Plus, many take the help of a consolidation company to become debt-free!  They just seem to be so ignorant of the hidden truth, that you can consolidate debts on your own without taking professional help.

Welcome to this post that we have created exclusively for you, if you want to know what debt consolidation is all about, and how to do it all by yourself without asking for help from third parties.

Let’s begin!

A precise breakdown of debt consolidation as a starter:

Before I brief you on how to go about DIY(Do It Yourself) debt consolidation, let me first introduce you to debt consolidation in the easiest words possible! By consolidation, we mean bringing various components and materials into one place. This can also mean summation.

It’s like instead of keeping $50 in one pocket, $20 in the other pocket, another $30 in the back pocket, you keep $100 in one single pocket! So, with debt consolidation you bring all your debts into one single place, and rather than having multiple debts to keep track of, you only have one amount to chase.

That’s the beauty of debt consolidation. It feels like you are building a new block of bread by joining the slices!

An example would clear it out even more. Suppose you have 1 credit card debt, 1 personal loan debt, and 2 payday loan debts. This allows you to make 4 distinct payments each month for each of your debts.

With debt consolidation, you get to bring in all your debts together and thereby be left with only one monthly payment instead of 4 different ones. But, the issue that you’ve got to deal with is, how can you bring all your debts from different lenders into one place?!

Well, it’s pretty easy actually! Remember poison kills poison! That’s the same case down here. You take out a big debt that covers all the amounts of the debts you plan to pay off! With this new debt, you clear each and every one of your existing debts. Pay them off in full, and kiss them goodbye.

Thus, you are now left with a single amount to pay off, that too at a lower interest rate than the combined average of the existing interest rates. Sounds good? That’s exactly what we call debt consolidation. A process that you can simply do it yourself, and thereby manage debts while keeping your head held high!

But, but, but— there’s one thing that I was just skipping out on. From where will you get this big fat amount, that will wave off your debts? Believe this brings us to our next part:

Best ways to consolidate debts on your own

a. You can take out a consolidation loan or a personal loan:

Taking out a loan to pay off old debts is the most sought after option for DIY debt consolidation. There are many banks and credit unions that offer these loans, especially to customers who are having difficulty paying off debts.

The credit score check and qualification rules for these loans are pretty lenient when compared to other conventional loans. Also, the interest rates on these loans are quite moderate. But, it’s better if you take out a consolidation loan from the bank with whom you have your existing credit/debt accounts.

Banks love to work with existing customers. So, you can expect more decent and favorable loan terms if you take out the loan from the same bank. However, if you plan to take out a personal loan, then you can do so, but remember personal loans are costlier than consolidation loans. I would always suggest going for consolidation loans over personal loans, as loan terms are better with the former.

b. Try balance transfer for credit card debt consolidation:

If all you have is credit card balances to pay off, then it’s better you choose credit card balance transfer.

Unlike a consolidation loan, here you can take out a new credit card or use an existing card of yours that has nil or very low balance. With this card, you will transfer all your existing credit card balances.

By doing so, you will eliminate all your previous credit card debt, and have only one card to pay off. Interestingly, credit cards that are designed solely for a balance transfer, also carry a 0% or low APR introductory period that can extend, at times, up to 20 months or 2 years.

So, after you have transferred your balance, you will now have a single card balance, with barely any interest charges during the introductory rate period.

c. You can access your home’s equity:

This is a very crucial decision you can make if you are too desperate to be free from debts. You have two options if you want to compromise your home’s equity to pay down debts. One is, you can take out a HELOC (Home Equity Line Of Credit), which functions like a credit card. The other is, you take out a Home Equity Loan which is just like any other conventional loan.

But you have to consider the fact that you are turning all your unsecured debts into secured debt, by choosing to access your home’s equity for debt consolidation.

Why?

Because the debts which are bothering you are unsecured debts, like credit cards and payday loans. Once you take out a home equity credit and pay off these debts, you will be left with an asset-backed credit!

If you start to default on the payments of the Equity Loan or Equity Line of Credit, then you are jeopardizing your house. That’s so, as your equity is the collateral for these two forms of credit.

Hence be wise, and only try this, if your above two options of ‘consolidation loan’ and ‘balance transfer’ are closed or insufficient to pay down your debts. Else there are high chances that you might have to lose your home!

d. You can borrow money from retirement accounts and insurance cash-value:

This one’s probably the riskiest tool to use for debt consolidation. You are compromising your retirement savings or the cash value that’s your whole life insurance has been building over the years.

You can definitely borrow from such financial tools, but it’s very risky. So, it’s better you discuss with a financial advisor whether or not you should pull out money from a 401(k) or your life insurance policy. With this, we have come to the end of our discussion.

But before we leave this page, here are a few one-liners you must pay attention to accomplishing the best DIY personal debt consolidation:

1. Any new form of credit, that you are about to take out for consolidation must carry an interest rate significantly lower than the debts you plan to pay down.

2. You should not start to default on the new credit, else things can get really complicated later on. If things don’t go as planned,  you can always turn toward the best debt consolidation companies, which are authentic and will help you out of this mess!

3. Debt consolidation is only possible with unsecured debts. For secured debts like mortgages and all, you will have to choose between refinance or loan modification. But, that’s a completely different topic to discuss!