4 Principles to Follow to Avoid Credit Card Debt During the Holiday Seasons

Business people usually cash in on the holiday seasons to maximize their sales and profits. It will be high season for them. They will stock up, price up and smile all the way to the bank. They know that people will be less restrained in their suspending than at any other time. It possible that you may be among the many who have suffered post-holiday season financial stress, and want to make sure it does not happen again. Your success in this will be determined by how well you control three critical factors: your increased rate of spending, the manner in which you finance that spending, and the heavy financial demands that follow in the subsequent month.

Financing Using Plastic

With holidays like Christmas or the New Year seeming to come round too quickly, people often find they have not saved up enough for their celebrations. Moreover, budgeting is an alien concept during this and spending can spiral out of control. To cover the inevitable shortfall in resources, the credit card is an obvious attraction. There are advantages to using the card to finance your expenditure:

i) It gives you free access to about a month’s credit.

ii) It gives you the temporary ability to spend beyond your current means.

iii) It allows you to track your expenditure.

iv) You do not have to carry lots of cash around with you.

Use of credit card, how ever, does carry with it significant dangers if it is not carefully controlled. Research around the country indicates that spending could increase by up to 35% when using a credit card compared with using cash. Here are some key principles to help you guard against running into credit card debt trouble.

1. Spending Plan

If your spending is going to exceed your income for the festive month, consider cutting intended festive expenses, or other expenses, to stay within your income. I am assuming you have drawn up your spending plan for that period. That’s where a credit card comes to the rescue. Though not readily apparent, the use of your credit card can create distortions in the management of your finances. Unless you are monitoring your spending in both cash and credit, there is a danger that you will be uncertain whether or not you are living within your means. It would therefore be unwise to begin using a credit card if you are not in control of your finances, that means using a spending plan.

2. Debt to Income Ratio

Do not forget that use of your credit card adds to your indebtness. In managing your financial affairs, one of the key indicators to watch is your debt-income ratio. This is monthly debt repayment as a percentage of your monthly after-tax income, and raises a red flag when you tinker with too much debt. A ratio of over 20% is becoming unhealthy. If you already have credit card debt that is overdue, do not add to it.

3. Bridging Finance

Use of a credit card is ideally a means of short- term financing of your operations. That means settling any debt incurred using your card within days. Paying the minimum balance will not do. If you are not confident that you can pay it off in full, you wound do yourself a huge favor by not using a credit card. Should you decide to go ahead and use a card, you need to be prepared for extra costs in interest and penalties associated with extended credit. This adds to your expenses, and you need to be ready to be ready to reduce other regular expense to accommodate this, otherwise you run the risk of creating ongoing hard-core debt

4. Net Worth

Credit card debt incurred during the festive season is usually for consumer spending- paying for your holiday, buying gifts, entertainment, traveling expenses, etc and creates what is known as consumer debt. This kind of debt adds to your liabilities, but contributes nothing to your assets. Your net worth is reduced to the extent of consumer debt incurred. Shrinking net worth is not good for your financial health. So do have yourself a happy holiday. But as you go about it, finance it in a way that gives you the comfort that you won't be debt-laden the following month.

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5 Practical Tips for All-Season Energy Savings

Replacing windows and doors is the fourth most common home-remodeling project and experts say it can dramatically reduce utility bills especially in the winter months. Although the Holiday season is here, most of us are out shopping for family, friends and special someone's; but this is a great time to do something special for the house, like invest in energy efficient windows at a savings this time of the year.

Homeowners should be armed with accurate information in order to make the best choices about the many available options. That's especially true as energy costs continue to climb. The Environmental Protection Agency's Energy Star program estimates that the savings from replacing single-pane with Energy Star-qualified windows ranges from $125 to $340 a year for a typical home.

Since this is the time of year when many homeowners embark on remodeling projects, here are five basic tips for selecting the most energy efficient windows and doors for your home.

* Use Low-E glass. Select windows with Low-E glass, which controls the amount of heat transferred through the window and prevents heat loss in the winter. Jeld-Wen, a window and door manufacturer, now offers Low-E glass as a standard for its wood and clad wood windows and as an upgrade option for its vinyl windows.

* Update technology. Replace older single-pane windows with dual-pane units, which insulate the home from both cold and hot weather. Using both Low-E glass and insulating glass units will reduce home energy costs.

* Consider how they're made. Choose doors with energy-efficient cores, sills and frames that provide a barrier to energy exchange. Dual-pane, Low-E glass helps ensure that they will be weathertight and energy efficient. For example, studies show that over time, steel doors made with polystyrene maintain energy ratings better than doors made with polyurethane.

* Understand the standards. Efficiency ratings are based on U-factor, which is the amount of heat flow through a product. The lower the U-factor, the more efficient the product. Efficiency also is measured by Solar Heat Gain Coefficient (SHGC), which indicates the ability to block heat generated by sunlight. The lower the SHGC, the better. Finally, experts evaluate Visible Light Transmission, which is the percentage of sunlight that is able to penetrate a window or door. Higher percentages mean more light will enter through the glass.

* Focus on efficiency, not bells and whistles. Manufacturers achieve efficiency in different ways. No matter what technology is employed, one of the easiest ways to identify the most energy-efficient products is to simply look for the Energy Star label. Deals are everywhere right now for the Holiday season, perhaps, an amazing gift is waiting for you that everyone in the family home can enjoy - energy efficiency.

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Why Consider A Gas Credit Card?

It seems like every gas station in the nation now has applications on the counter for a gas credit card. While many people may think, "Why bother, I already have a credit card," gas cards today also frequently offer member bonus features like regular credit cards, including airline miles, cash rebate systems, discount offers with participating merchants and affordable roadside assistance programs. Often, gas card plans will approve accounts for individuals who don't qualify for a good deal on a regular credit card account, also making them a great option for people who need to build their credit rating.

If you're looking to build credit, your options may be somewhat more limited. But if you use your gas card regularly, and pay it off at the end of every month, you'll soon find that you're able to negotiate a better interest rate with your existing card, or even apply successfully for a card with a better benefits package. However, keep in mind that gas cards often have much higher interest rates than a regular credit card would, so you should always make sure you can afford to pay your balance on a monthly basis, to prevent exorbitant interest charges.

If you have driving-age children living at home, a gas card is a great way to ensure your kids don't end up stranded with an empty tank, while at the same time knowing that a regular credit card won't get taken on a "joy ride" by their friends. A roadside assistance benefit can give you extra peace of mind, knowing they won't have to rely on the assistance of strangers if the car breaks down or gets a flat tire.

If you have a particular gas station you visit regularly, getting a gas card from that company would be a good choice, particularly if it offers an incentive program based on frequency of use, such as airline miles per dollar spent, or a coupon or rebate program. If you travel a lot, choosing a gas card for a major nationwide chain of gas stations may be more useful than one that's branded for your neighborhood station.

A gas card with a roadside assistance option may be an affordable alternative to a premium roadside assistance plan such as AAA. There are as many options in gas cards today as there are reasons to apply for one, so don't hesitate to comparison shop to find the best benefits package for your needs! Even in this Holiday season, roaming around shopping can still have your gas costs rising. A gas credit card is a great way to save on cash out of pocket and get those amazing rebates that could put even more cash in your pocket.

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5 Simple Tips For Getting Out Of Debt In 2013!

Is credit card debt driving you crazy? Spent too much this holiday season already?

Well, you’re definitely not alone. Credit card debt is a way of life these days. Especially now, during the holidays!

For many people, money gets REAL tight this time of year – we need to pay for all the holiday gifts, get ready for tax season…

Ahhhh! What a drain!

Here is what you do if debt has taken over your life?

Make getting out of debt your New Year’s Resolution for 2013!

Here are 5 simple tips for getting out of debt. Keeping a New Year’s Resolution is difficult. But if you follow these tips, you’ll be prepared for a prosperous 2013!

1) Write down your goal and make a plan for achieving it!
The first step to getting out of debt is by far the most important – you need to:

• make a commitment to get out of debt, no excuses!
• write it down - write exactly what you want achieve - STICK TO IT!
• and come up with a plan for reaching it!

• Make extra money by starting a part-time business
• Examine the money spent on stuff you don't need
• Pay yourself first - old rule still works

Hey, you didn’t get into debt overnight, and you won’t get out overnight, either. But if you want to get out of debt – if you REALLY want to get out of debt, you need to have a plan. And you need to stick with it.

2) Seriously consider using a debt reduction program
If you have the discipline to get out of debt on your own, without any help, then good for you! But if you’re like most people, a little help will go a long way. Here are a few debt reduction programs to consider:

• Credit counseling: If you have high interest rates on your credit cards, working with a non-profit company will help you lower those high rates, and combine your credit card bills into one lower monthly payment – which means more of your money will go towards reducing your debt!

• Debt consolidation loan: If you own a home, you can consider taking out a home equity loan to pay off all your credit card bills, lower you interest rates, and possibly deduct the interest on your taxes (but check with your tax professional on this one).

• Debt settlement: If nothing else is working, and your debt is still overwhelming, then you should consider debt settlement. This is a more aggressive approach, and is not right for everyone, but if you’re considering bankruptcy, this is a good option. You can pay off all your credit card bills at a savings of 40-60%, and get out of debt much quicker.

3) Start fixing your credit problems
Many people think that anything that goes on your credit report stays there for 7 years. Well, that’s not always true. I got a bunch of negative credit items off my credit report – all I did was get a copy of my credit report, and ask the credit bureaus to remove the “bad stuff”. In just a few months, my credit was almost back to normal. There’s nothing that says we must pay for our mistakes forever (or even for 7 years)!

4) Cut down your monthly expenses
If you overdid the spending in 2005, then it’s time to cut out all the expenses you don’t need, and use the money you save to pay off your credit card bills. Take a look at your checking and savings account statements, your credit card statements, and your monthly bills. Then start looking for things to cut. I know, I know, it’s hard to live without cable TV, cell phones, internet access, the morning paper, weekend dinners and entertainment. BUT DO IT ANYWAY – at least until you get your debt back under control!

5) Make some extra spending money
Sometimes making more money is the best answer! There are lots of ways to make money – selling some of your valuables, getting a part-time job, starting your own business. Despite some of the ads you read, there’s no really secret to making money – you just need to find something you like to do, and work hard at it!

6) Think positive!
OK, there were only supposed to be 5 tips, but this one is the best one – no matter how hard life can get, no matter how much debt you have, the one thing in life you can control the most is how you think. So rather than focusing on what you don’t have, be thankful for all that you do have. Nobody dies wishing they had made more money or worked longer. But many people do regret all the fun and meaningful things THEY DID NOT DO! So make some time to have fun, think positive, and find little ways to enjoy life EVERY SINGLE DAY you are here on plant Earth!

Wondering what makes me an expert on debt? Well, I lived through it. I know what it feels like to struggle. And I know what it feels like to overcome financial problems. There’s nothing special about me. I work at a college, so I don’t make a heck of a lot of money. I didn’t win the lottery. And no rich relatives left me a pile of money.

I just learned a few simple strategies – actually, I learned the 5 tips you just read about – and stuck with them until my life changed for the better.

And you can, too – just follow the tips above, believe in yourself, and DON’T LET ANYONE OR ANYTHING STOP YOU FROM REACHING YOUR GOALS in life!

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Building An Emergency Fund - A Vital Part of Financial Planning

None of us have the ability to foresee the future or predict the hurdles which lie ahead of us. This makes building an emergency fund a financial priority. Building an emergency fund is healthy for your financial well being, since you’re rarely given advance notice of a setback or an accident which will keep you out of work for an extended period. It is also a safety net that can save you from bankruptcy or severe financial hardships in the event of an unexpected change in your income or expenses.

Housing a small rainy day fund should be a vital part of an individual’s financial goals. This is of high importance if you don’t already have readily available funds in your account for covering any unanticipated expenses. They provide financial security because they give you funds to fall back on if you become ill, or if you or your spouse loses your job, you incur large medical bills, or have an unexpected large bill such as a major car or home repair. You do not want to end up in a situation where you have to buy daily necessities on credit and end up payments on groceries you bought two years back on credit, with a further 10-18% interest on it.

Saving your money in an small account for emergencies is definitely a better alternative to taking a loan or cashing in your long-term investments. If you take a loan, there is the additional burden of paying interest. Encashment of your investments before maturity means not only will you lose out the interest, but also some part of the original investment. This will also set you back significantly in your overall financial plan.

Success at building an emergency fund depends on consistency of saving money on a regular basis, and resisting the urge to dip into this rainy day fund for non-emergencies. This money should be kept separate from the general savings account. Otherwise you will be tempted to dip into these monies even if you simply run over your budget at a certain point. A substantial part of this emergency fund account should be invested in low risk funds. This ensures that your investment does not lose its value in case you need the money. Also, it should be extremely liquid, to give you access to the cash easily and quickly if you need it.

The size of the special savings account will depend on your personal situation. People often keep three to six months’ salary in the reserve. But you will have to decide on an appropriate amount based factors such as your dependants and fixed monthly expenses.

If you are single with no obligations, and have a reliable support system of friends or relatives during a financial crisis, you might not need a substantial amount stashed in this fund. This is opposed to someone who needs to pay nursing costs for his aging parents and supporting a young family. The more people you support, the more likely you are to have unexpected or unplanned costs.

While making a decision about an emergency fund, you should also take into account the degree of difficulty you'd have in finding a new job if you lost the present one. In case of a two-income household, the contribution of both parties should be weighed while calculating how much you should keep aside.

You may not be able to gather your emergency fund money together at once. Treat it as a financial goal and add to the kitty over time. If you get a tax refund, put it in your special rainy day account. Maybe a part of the bonus at work!

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Keep Your Distance From Alternative Financial Services

There has been a huge wave of alternative financial services feeding off of the sub-prime lending market in the last couple of decades. These services prey on people with poor credit to get the items they need financed or the money they need to pay bills. These arrangements are just ravaged with pitfalls and shady business. Continue reading to find out helpful tips that you need to know.



People use alternative financial services because they are available to them and legal. While legal, they offer services to people with the understanding that the help they are offering isn't really help at all. The interest rates on loans offered are just outrageous. The people using these services are are hurting financially and need the help. Is it possible to get out of a bad situation by creating another one? No! People argue that these services are needed, but the people that are using them are trying to fix a bad situation with an even worse situation.



Payday loans are a major source of pain for people that have less than perfect credit. At times of distress, when other options should be the rescue plan, payday loans step in as an easy convenience. The only problem is that later on, the payday loans really stick it to the consumer. These types of loans should be avoided at all cost.



Make sure you don't use a rent-to-own program. You want to bust your budget? You're never going to pay things down and have a budget that you can handle if you keep taking on items like this. If you can't afford the new furniture outright or on 0 percent financing, then work your way to where you can. Don't pay for something by the week that carries a huge interest rate. They want to charge you 20 bucks a week for something, and after taxes and fees, that takes 100 bucks a month out of your budget. That is if you buy one little thing!



Stay away from auto title loans because these are a source of major distress. They carry the same high interest rates, and the more you borrow, the more trouble you are going to be in. While these loans are backed by your car, the same reason that seems to negate the problem actually becomes the problem. People have no choice but to let their car go if they can't take care of the loan. No matter the determination, taking the loan was enough to doom them. The interest rate and terms are so ugly that there is nothing much the person can do to keep their car.



Alternative financial services have found a place in society, but they haven't found a very good one. You can be easily stripped of your financial freedom, and it is hard to get it back coming out of those waters. These companies are downright dangerous, and they should be avoided at all cost. Make sure you remember the helpful tips you've just read as you continue to battle your personal finances without contacting one of these companies.

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How To Control Your Spending To Reduce Your Financial Anxiety

One of the most common sources of anxiety are financial problems. For many people, such problems are caused by an inability to control their spending. By spending too much, it is easy to accumulate debt and damage your credit. If you are having trouble keeping your spending at a realistic level, the following advice may help.



The most important thing to do to take control of your spending is come up with a budget. You need to know exactly how much money is coming in each month and how much is going out. Start out by writing down all of your mandatory spending. This includes things such as food, utilities, housing, and other bills. If this amount adds up to more than you earn, you have found the source of your trouble. If you earn more than you need to spend, but are still having problems, you need to isolate the excess spending that is causing your problems.



Before you spend any other money, you need to allocate enough to pay for your monthly bills. These will likely include your rent or your mortgage payment, your utilities, your telephone, and any loans or credit cards that you may have. Missing payments on any of these bills can have serious consequences, so make sure you pay them first. You do not want to have to worry about damaging your credit or having your electricity shut off.



To get a better sense of your spending patterns, it can be useful to track every penny you spend for a month. If you stop and buy a cup of coffee on the way to work, write it down. If you get a bag of chips from a vending machine, make a note of it. At the end of the month, stop and look back at your records to see exactly where you are spending money. You may be surprised.



By using a record of your monthly spending, it can be easy to identify areas where you are spending too much. A cup of coffee every day can add up to quite a lot over the course of a year. You may even be able to cut back on some of your bills. If your electric bill is quite high, try using less energy at home. If you pay too much for gas, try walking or taking the bus for some trips. Once you know where your money is going, you will be better able to find ways to cut back.



Credit cards may get more people into financial hot water than anything else. With that card in your wallet, it is all too easy to buy things you do not need with money you do not really have. Instead of carrying multiple credit cards when you go shopping, take cash instead. This way, you will be unable to spend more than you can afford. Keep your credit cards at home and only use them for emergencies.



Many people find themselves in financial trouble because they just do not know how to manage their money. If you are having money problems, keep the advice you have read here in mind. Once you start applying it in your daily life, you should soon be able to achieve true financial stability.

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