Debt-What Keeps Us There

October 7, 2010 by  
Filed under Credit Basics, Free Debt & Credit Information

Debt, and what keeps us there is really no big secret. There are some very identifiable reasons of why most people get stuck at a certain point in their finances and can never seem to get out from. So if your ready, here they are(see which ones you can identify with).

1)- Not knowing or wanting to know your own limits. I know, it’s always the Jones-es fault. Most people are always trying  to keep up with the Jones-es. Well, stop talking to Mr.and Mrs Jones then, and start talking to the Smith’s. I hear there a real nice couple.

2)- Fees- It’s time to start consolidating folks. Know what you really need and start eliminating the rest. There are bank fees, credit card fees,  ATM fees, interest, penalties,overdraft, and countless others. Understand them, and know who is charging you them, and then eliminate as much of this debt  them as possible.

3)-Paying the minimum. We already know the outcome to this one folks. Pay the minimum on  couple thousand dollar credit card and the banks will have you in debt to them for the rest of your life.

4)-Cash advances. I believe most card companies charge a minimum of $5.00 ranging up to $15.00. Then of course will get the privilege of paying interest on that.

5)-Payday loans. I don’t even want to get started with this blatant legalized loan sharking scheme. Try charging these rates  to local neighbors and see how long it takes for you to get locked up.

6)-Negotiating. Don’t ever be afraid to call up creditors and negotiate better rates. Just do your homework first, and use their competition against them if needed. just get that lower rate. Period

7)-Ignorance. You must fully know where all your money is going. I’m not suggesting you become Mr. Scrooge now with your money, and you don’t have to keep your wallet under lock and key, but know where your money is going each month by keeping better records of it. Put together a manageable budget and stick to it. And also, understand all your financial options when you run into some type  of problem or unforeseen emergency.

There you have it folks,  the reasons why people get stuck in debt.

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Comments

One Response to “Debt-What Keeps Us There”
  1. Jill Herendeen says:

    Yes, but after you’ve done all that and your outgo still exceeds your income–IF YOU’RE PUTTING GROCERIES ON YOUR CREDIT CARD–there are some other things you have to do:
    1) apply for food Stamps–and if the lady on the other end of the line tells you you can’t get food stamps while you own your own home, that’s an oversimplification which should NOT PUT YOU OFF.
    Sometimes, there’s state assistance w/ heating bills, sometimes you can get help/reduction on medical bills. People don’t go around volunteering this information, so you have to ASK, ASK, ASK EVERYWHERE. Whatever you do, don’t put those bills on your credit card.
    2) Investigate bankruptcy–all states have different laws about what you get to keep–in NY you only get to own $50,000 worth of house (per owner–a married couple then gets to keep $100K-worth); in FL you can own a house worth the-sky’s-the-limit.
    3) If your credit cards are way up there, you may be able to negotiate a big discount on what you owe the company (if, for example, you have a kind relative who can help you out, or a debtor finally pays your a chunk of change) by just telling them, “hey, I’m going bankrupt here, will you take $20K to settle this $65K debt in its entirety, because my income is nil & you won’t make out nearly as well if I have to declare bankruptcy.” Any they will probably take it, because they’re not stupid. but be aware that the debt ou’re forgiven is going to be counted as “INCOME” next tax season…
    Another point you don’t men tion is that these debt consolidation companies were formed w/ public monies by our dear Congress. In other words, we’re all paying taxes to set up these commpanies to make a profit skimming fees from people who are going belly-up financially. It’s just more socialization of pain & privitization of assuaging the pain (while, unfortunately, adding to the pain.) Congress would have done a lot better to merely give the same monies directly to the under-employed, or better yet, make incentives for real job creation and require wages high enough to actually live on, or require that CEOs cannot earn more than 15X the wage of their lowest-paid employee, or all of the above, or probably a number of other actions which would help people who weren’t bankers.

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