Credit Cards as a Debt Reduction Tool
By Nickel
This is a guest post from Nickel, who writes about personal finance over at FiveCentNickel. And since that, combined with his four kids, don’t keep him sufficiently busy, he has recently launched yet another site, this time focused more narrowly on credit cards.
You’ve heard it before: you can’t borrow your way out of debt. But that doesn’t mean that you can’t use credit cards to your advantage when digging yourself out of a financial hole. The trick here is to apply for and use balance transfers that reduce your interest rate — ideally all of the way to zero.
How it works
Start by applying for one of the many 0% credit card offers that are out there floating around. These cards come with promo periods as long as 12-15 months, so you can save a ton of interest.
Expanding Your Family and Reducing Your Income
By Shawn
Shawn, a subscriber and frequent commenter here at Clever Dude, as well as a personal friend of the Clever Dude and Dudette will be posting occasional guest articles. You can read his introduction here.
My wife and I are less than 10 days away from the birth of our first child. As a result, we’ve had first hand experiences with a lot of the concepts that the Clever Dude has discussed on this site.
Stay-at-Home Parent
The first arises because my wife and I thought it would be best if she stayed home for a year or so. This means we’ll be heading down to one salary.
One of the most important things we needed to do as a couple to make this adjustment was to sit down and discuss our new financial goals. We’ve had a debt-free plan that was contingent on a 2 person family with 2 incomes. Adding a third and losing an income obviously has an affect on our goals.
Language of the Perpetual Poor
There aren’t many articles each week that stick out (to me) as being worth writing about, but Frugal Dad’s article today about the “Language of the Perpetual Poor” is an excellent diatribe about what you often hear people saying when they want to blame someone or something on their station in life.
How often have you heard (or said) these things:
- The poor man just can’t get ahead
- We struggle just to make ends meet
- Everyone has a car payment — It’s a fact of life (my own family says this)
- The only way to get rich in America is to hit the lottery
Frugal Dad has a few more quotes so I won’t spoil them all for you, but I highly recommend hopping over and reading the article. It’s insightful, humorous and thought-provoking.
Thanks for the great article FD!
Check is in the Mail: Stacie’s Student Loan is Paid Off!
7 days ago, I told you we were in the homestretch of paying off Stacie’s student loan, and today we finally did it!
We had enough money in the checking account to pay the last $970 on the loan, but I don’t like bringing the balance down below $1000 (don’t ask because I don’t have a reason why). So I waited until I got paid today to send the last online billpay for Stacie’s undergraduate student loan. That’s over $10,000 paid off in the last 6 weeks! You’ll want to click through that link above to see how we did it, or keep reading below.
NOTE: Make sure you turn off any automatic bill payments when you pay off a loan! I almost forgot and a payment was set to go out tomorrow. I would have sent them an extra $150 and probably waited a few weeks to get it back.
So what’s next?
So we have 3 remaining debts other than our mortgage, and they all belong to me:
12 Tips for Saving Money in College
Heather P. Johnson is a freelance writer, as well as a contributor for Credit Card Lowdown, a site for finding credit card reviews. Heather invites your comments and freelancing job opportunities at her email address: heatherjohnson2323@gmail.com.
Many of us have to maintain a lean lifestyle when we are in college. While you could argue that this is an effective way to build character, that perspective doesn’t make life any easier when you’re sitting down for another bowl of Ramen noodles. If you are a college student who is having trouble making ends meet, try the following 12 simple tips for saving money.
- Create a household budget. Most importantly, you need to make sure you stick to the budget. American Consumer Credit Counseling (ACCC) offers a free household budget worksheet.
- Avoid buying new textbooks. If you can’t find what you need at a local used bookstore, try eBay or socialbib. The latter is a free online book swap for college students.
Question: How much is your debt holding you back?
For some of us with debt, we feel rooted to our current location, job or life situation because we can’t afford to change. But have you ever added up all your monthly debt payments and multiplied them by 12 to see how much less per year you could handle if you didn’t have that debt?
For us, at one point, we were paying $1400 per month, or $16,800 on debt payments (not counting our mortgage). Now we’re down to about $800 per month, but that’s still almost $10,000 per year coming out of our post-tax income. Additionally, that’s $10,000 more per year that we need to earn just to maintain our current quality of life. How crappy is that?
So how much is your debt holding you back from accomplishing your dreams or simply improving your station in life?
Stacie’s Student Loan and Other Debt Status
We’re in the final homestretch of paying off Stacie’s student loan. I made some serious payments in the last 30-40 days to get it down from $3100 left to $963 remaining (as you can see from the debt scale on the right sidebar).
And to just think that it wasn’t that long ago that the loan was up over $20,000 to start. We’re making some excellent progress in becoming debt free (except for mortgage of course), as we’re now down to about $36,000 remaining debt from a high of about $112,000. I expect to pay off the remaining $963 in a few days when some extra income from this site hits the bank account.
The final debts remaining are:
- My Honda Ridgeline (under $20k left)
- My student loan (about $11k left) — Deferred
- My graduate school tuition (about $4k left) — 0% till December
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