Escaping Debt

Have you become recently unemployed due to the pandemic?

If so, this could be particularly painful if you are also deep in credit card, student loan debt, or other types of debt.

What used to be a rare occurrence in our society is now, all of a sudden, extremely common, leaving millions of Americans feeling trapped, lost, overwhelmed, and even ashamed of their circumstances.

The fact is You Are Not Alone.  The economic collapse of 2020 has made sure that this particular boat is currently quite full.

But, however bad things may be now, it is still your responsibility to take action to begin to reverse your situation.  But what are the most valuable steps should we take right now, starting today?

What if you could consult a wealth coach with years of experience helping people just like you work through these matters for free?

That would be a good start to help you out, right?

Well, what if you could get the best ideas from FIVE of them right now?

Use The Top Money Tips From 5 Financial Coaches To Stop Drowning In Credit Card Debt and Build Wealth!

If you are looking for ways to significantly reduce your debt even if your circumstances are currently looking pretty grim, then you have definitely come to the right place!

I surveyed a group of financial coaches who are busy helping regular Americans successfully work through this current, unprecedented fiscal chaos about how to successfully get out of debt.

Not only that, but they have also generously provided an additional piece of advice about how you can also start building a base of wealth to be able to successfully weather any future economic storms.

The valuable answers they provide below will surely get you started on the right path…and keep you there.

Review the guidance below and be sure to keep this information handy so that you can refer to it as often as you like while you begin your journey of getting your life back on solid financial footing!

Our First Financial Coach Ben Watson Discusses What To Do When You Are Drowning in Credit Card Debt

Per Ben, here’s what to do if you are having trouble right now managing your debt:

If your primary source of income has disappeared, your first priority should be to replace at least a portion of that lost income. Working odd-jobs, part-time or finding a gig employment can help you keep afloat until your original job becomes available again or you find another full-time employment. Cut all spending except for those absolutely necessary to provide yourself and your family with food and shelter.

The next thing you should do is call your credit card company and explain the situation. Many card companies will waive penalties and interest due to catastrophic circumstances or lower minimum payments. Missing payments will likely lower your credit score but that shouldn’t be your main concern if you have no income.

So what does Ben say when asked “How Do You Build Wealth”?

Wealth can mean vastly different things to different people, but it is entirely possible to earn income from small amounts of investment. With enough time, even small amounts of money can grow to large sums.

I’m not saying go out and bet on the long-shots, but by utilizing smart investments and scalable business models, a small starting amount of money can provide great returns. In my personal experience, I grew a business from $100 to open a checking account, to replace my full-time salary as a CPA in just over 12 months.

This took time and a lot of effort, but by growing “at the speed of cash” and avoiding debt entirely, I was able to provide myself with a runway that was entirely dependent on how much time and energy I wanted to invest in in. The old adage of “you gotta spend money to make money” isn’t necessarily true if you can build a business organically with low overhead.

I’ve coached clients who have comfortable lives from things like blogging, web design, and dog-walking because they were willing to invest more than the typical 9-5 workday just hoping they get that raise at the end of the year.

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Ben’s advice regarding investing time when you have more of that than money is excellent.  Now, let’s hear from our next financial coach.

Penny Kidd Tells Us What to Do When Drowning in Credit Card Debt

So Penny, if you had a client that had a mountain of credit card debt and recently lost their job what advice would you give them? 
Per Penny:

We recommend prioritizing the things that keep you safe first, such as utilities, food on the table, rent or mortgage, gas in the car to get to work or job interviews. I would only pay the minimums on credit if you can do that and save as much as possible right now.

Trim all fat from your life including subscriptions, eating out, entertainment until you can work again and get some breathing room.

Don’t worry as much about credit scores and debt reduction, it’s time to be in crisis mode. Later you can then craft a plan to eliminate debt and rebuild. No one wants to plan for bankruptcy, but if you’re in crisis and get behind on payments, make sure you are protecting things you cannot bankrupt later and not lose housing.

Utilities come first because eviction or losing a home takes much longer.

Create a plan immediately and don’t hide from it because you are stressed. There are lots of free resources out there for now.

Then when you get a little breathing room, look at your behavior and circumstances to plan for the long haul and the things that come to all of us, even when there is no pandemic. When you have an emergency fund and no debt, this kind of blow is easier to handle.

So Penny, is it possible to build a lot of wealth starting from zero?

YES! I believe in a small emergency fund, attacking the high-interest debt so you’re not wasting money giving it to banks and creditors and consistent investing every month with what you would have paid to debt and more!

It’s mind-blowing how much money can accumulate with compound interest over time.

There are tools online to show you what every dollar you blow could have added up to when it’s invested, even conservatively.

Don’t fall into the trap of thinking you cannot build wealth, because you have options to increase your income and make choices about where you spend your money.

Don’t rely on the government or anyone else for your retirement!

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Thank you so much Penny for your guidance! Let’s meet our next financial expert and see what she has to say.

Next Up, Lisa Duke Has Great Advice To Take If You Want To Get Out Of Serious Credit Card Debt

This is what she had to say:

If you are burdened with consumer debt and recently became unemployed due to the pandemic, you have a few options.

If you have an emergency fund or other source of income, such as a side hustle or a working spouse, put aggressive repayment plans on hold and pay just the minimums until your income gets back on track. Go ahead and get out of any bills you can by canceling any extras, such as memberships and subscriptions.

If you have multiple vehicles, you may want to try living as a one car family for awhile. My husband and I were able to do this for a few years in metro Atlanta, so it may be possible if you get creative.

If you aren’t able to make the minimum payments, the best thing you can do is to contact your creditors and let them know what happened. Many of them currently have programs in place for people in exactly this situation. You may be able to skip a payment or negotiate lower payments for awhile. I would recommend doing this for all the money you owe to give yourself some breathing room.

There’s always “the nuclear option”, which would be to declare bankruptcy. That would likely wipe out almost all your unsecured debt, such as credit cards. However, doing so will hurt your credit for the next several years, so this should be a last resort.

The main thing is to try to stay focused on your options. Scarcity thinking plus emotions like guilt and shame can narrow your view of the situation so that you don’t see possible solutions. A friend or coach may be able to help.

Many thanks to Katie for her inspiring advice.

Our Anchor Coach Veronica Gomez Mojica

Veronica, what advice would you give me if I am heavily in credit card debt and lost my job due to the pandemic?

First things first, make sure you are following a budget. Oftentimes you are losing money in places you are unaware of because you are not tracking where it is going effectively. There are many forms and apps online, such as EveryDollar and You Need a Budget.

Find a budget that works for you, update it often (at least monthly) and find someone to discuss it with that will hold you accountable.  Include all your debt payments in the budget, as well as savings. Make minimum payments until you have saved up $1000 for emergencies.

Hopefully having an emergency fund will help you to avoid taking on new debt.

Reach out to debt collectors if you feel that you will not be able to make payments. Explain to them that you will pay what you can and are actively seeking jobs. Stay in constant contact with them for as long as you need to until you are able to pay the full payment.

While staying at home, I have worked as a financial coach, a teacher for VIPKid and have transcribed with Rev.com just to name a few ways you could think about making money yourself.

Continue using a budget for your money even once you are back to your normal salary. Don’t lose hope!

Great! What wealth building advice would you give me in this situation?

My husband and I have used EveryDollar as our budgeting tool since we got married. We have paid off $50,000 worth of debt, built up a 3-6 month emergency fund and are now contributing to a retirement account. We have also opened 529 accounts for our children (which is a way to make investments in their education using today’s dollars).

We have gone from two salaries to one, and when we return to two salaries in a few years, our goal is to continue to live off of one salary and build up our retirement and 529 accounts as much as possible.

Budgeting and living below our means has allowed us to continue to build wealth on one salary, when we were previously in debt with two salaries.

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Many thanks to Veronica for sharing her story and to all the guest financial coaches for sharing their wisdom and guidance that should be a huge help to anyone struggling to stay meet their credit card or other debt obligations and want to also build a more comfortable future!

Returning Disabled Veterans Face Tough Financial Circumstances

Returning from war is one of the most difficult tasks for a veteran to take on. In war, you are with your comrades day in and day out. You have each others back and you are a well-oiled machine. You know your daily duties. You know all your available resources.

But upon returning to civilian life it may sometimes feel like no one is on your side. Add to this the sometimes crippling PTSD that can affect every area of your life. From job interviews to relationships with families, being a disabled veteran is a really difficult task.

Fortunately, there are grants available to help those in need so that veterans can get help on the road to recovery.

Nonprofits that provide grants for disabled veterans to pay bills

One non profit that gives veterans financial assistance is Operation Family Fund. They offer assistance for the families of injured veterans.

Unfortunately, injured veterans often fall through the cracks. Because they have to be removed from service, and oftentimes there body needs time to heal, they are no longer able to assist their family financially. Operation Family Fund is there for those instances.

To qualify is simple. You have to be a veteran who was wounded in war.

Another great option is the PenFed Foundation. They are a non profit that offers help for veterans financially.

From car payments to groceries, they can help any veteran who needs it. Qualification for this program is to be in need and be a veteran.

A third great option for any veteran in need is the Dixon Center. This is financial assistance specifically for female veterans. This program offers financial expenses for any living expenses that the female veteran comes into contact with as they transition back into society.

Lastly, Veterans Inc. Veterans inc is a program to help homeless veterans find and afford housing. When life knocks you down for too long, eventually a veteran can become homeless and hungry.

This program is there to help veterans in need get back on there feet. Veterans inc. is available to all veterans but there assistance is limited to just helping with housing. Unlike the other program options, they do not assist with a variety of daily needs.

However, for most veterans, a home would do the trick on helping them get back on there feet and back integrated into daily life as a citizen of the United States.

It is an unfortunate part of the United States of America that our veterans are our highest class of homeless. Why should a person who has given basically everything for our country to be homeless and uncared for.

It is our duty as citizens of the United States to ensure these people are taken care of. These few programs are a part of many that ensure that our veterans have opportunities for the help that they are in desperate need of.

More Resources: https://smartmoneystar.com/texas-assistance-programs-for-veterans/

As Americans, we owe great respect and gratitude to the veterans of our country’s military. Yet despite the sacrifices they have all made to protect us and our freedom, many veterans end up struggling with money when they return to civilian life.

For them, we’ve put together a list of some charities they can call on when times get really tough. They have programs that can help veterans struggling with finances. So without further ado (and in no particular order):

The Best Charities That Provide Financial Assistance For Veterans

Veterans Families United

An all-volunteer organization, Veterans Families United provides financial resources and more for veterans and their families. On their website, you’ll find several therapeutic, pharmaceutical, and funding options.

The organization was founded after Cynde Collins-Clark realized how difficult it was to find even life-saving resources. Returning veterans suffering from PTSD had a weak support system and sometimes couldn’t advocate for themselves.

Collins-Clark started putting together a vast network of empowerment-based tools that can help heal and educate veterans and their loved ones.

Veterans Families United is still considered an ongoing project; the goal is to create an ever-increasing community of support for the population that has served America in more ways than one.

Learn More: https://veteransfamiliesunited.org/

Homes for our Troops

Homes For Our Troops is a publicly-funded nonprofit that builds custom homes for the severely injured veterans of post-9/11 wars.

Many veterans in post-9/11 wars have suffered from limb amputations, severe traumatic brain injury, or partial or full paralysis. By building and donating custom homes for these veterans, HFOT helps restore the independence lost while fighting for America.

Instead of struggling to get back to stability, these newly-housed veterans can instead focus on normalcy; they can focus on their families, on recovering physically and mentally, and on rebuilding their civilian lives.

Since the organization was founded in 2004, nearly 90% of every dollar spent has directly helped veterans through its programs. The veteran chooses where the home is built, and a relationship between veteran and organization continues even after the home is donated.

Learn More: http://hfotusa.org

Hope for the Warriors

Founded in 2006, Hope For The Warriors also focuses on post-9/11 service members and their loved ones. Since its inception, the organization has focused on restoring both the family unit and a sense of self. To date, the company has served over 23,000 through its various support programs, each designed to assist with transition, health and wellness, and sports and recreation.

HFTW’s first program, A Warrior’s Wish, has fulfilled more than 200 wishes for improved quality of life. Its sister program, Run For The Warriors, have helped more than 25,000 in just ten years. The organization also maintains a visible presence on various social media channels.

Learn More: http://hopeforthewarriors.org

Fort Family Outreach and Support

For all of its rewards, being a soldier in the U.S. Army Reserve can lead to emotional, financial, and logistical challenges for both the veteran and their family. These struggles impact hundreds of thousands of family members, and each unit is unique.

Fort Family is the Army Reserve’s rallying point for struggling families 24/7/365. It is an outreach program with knowledgeable support specialists working out of Fort Bragg, N.C., and it offers a wealth of programs including some that provide financial assistance to veterans and services depending on what the veteran needs.

In all cases, Fort Family offers prompt referrals to current and retired soldiers, their family members, and Army Reserve civilians.

Learn More: https://www.usar.army.mil/ARFP/FortFamily/

Modest Needs Provides Emergency Grants For Veterans In Need

Veterans stuck in the cycle of poverty often could avoid the trouble with a little well-timed financial help. To restore the rest an otherwise self-sufficient family’s independence, Modest Means seeks to empower the permanently disadvantaged and those willing to work but currently unable to afford looking for work.

The organization also seeks to strengthen nonprofits by providing a space for them to apply to the public for help. These nonprofits all provide programs to help improve the self-sufficiency of their communities.

Learn More: https://www.modestneeds.org

Navy-Marine Corps Relief Society

The Navy-Marine Corps Relief Society works directly with the Marine Corps and the Navy to provide financial, educational, and other help to its veterans. Relief assistance comes in the form of interest-free grants and loans to current and retired naval servicemen and their eligible family members.

Other programs offered by the Navy-Marine Corps Relief Society include the volunteer program, which provides training, reimbursement for mileage, and child/elder care for volunteers; an education program, which provides interest-free financing based on need to the dependent children of retired service members; and non-financial programs that provide budget counseling, thrift shop services, and more.

Learn More: https://www.nmcrs.org

Newbyginnings

According to founder Theresa Hart, Newby-ginnings was born on a car ride with her mother on I-90 a year after her son had died in service. She explained that she wanted to start a nonprofit in his honor, one which would serve the community he was a part of and loved, and the name came to them instantly.

Today, the North Idaho-based organization’s goal is to deliver respect and integrity to active and retired military and their families.

There are no income eligibility requirements to receive the basic essentials for free; veterans do not need to prove a need. The only required proof is evidence of past or present military service.

The organization also accepts donations of any clean and functional items. This includes clothing, cold weather gear, household items, and furniture. Monetary donations are also welcomed.

Learn More: http://www.newbyginnings.org/index.html

Operation First Response

Operation First Response provides help with personal and financial needs to the wounded warriors of America and their families. Some of these services include paying for medical bills after injury or illness, other financial hardships that come up during the recovery period, and the costs of transitioning from the military world back into civilian life.

The amount of financial aid provided to a veteran depends on how great the need is. If a serviceman is struggling to make ends meet and pay for rent, groceries, clothing, utilities, vehicle payments, or travel expenses for finding a job, Operation First Response can provide aid.

To date, the organization has helped over 15,000 veterans and their family members. Additionally, OFR has sent over 10,000 backpacks to combat support hospitals.

Learn More: https://www.operationfirstresponse.org

Operation Homefront

Operation Homefront has provided critical financial relief to more than 14,000 families making over 35,000 requests for help. This organization specializes in providing emergency financial assistance for veterans to pay bills, recovery support, and counseling when needed.

When a veteran applies for help with Operation Homefront, the organization writes a check to mortgage lenders, doctors, dentists, contractors, auto mechanics, hospitals, and other providers within a 72 hour span.

To date, the organization has put 500 families through transitional housing, giving them over 4,000 months of rent-free housing, and ultimately saving these families $4.7 million in cost-of-living expenses. OHF has also put over 600 families in mortgage-free homes and saving nearly $50 million in deed value. More than 3,000 caregivers now work through 60 support groups nationwide, as well.

Finally, Operation Homefront holds Homefront Celebrations in which military families receive essential items. To date, these celebrations have facilitated the distribution of 250,000 backpacks and 70,000 meals for thousands of military families.

Learn More: https://www.operationhomefront.org

Salute Inc

Salute Inc provides aid to post-9/11 veterans through a few different programs. The organization’s flagship program is its Emergency Financial Assistance program, which provides financial aid for car-related expenses, mortgage payments, rent payments, utility bills, moving costs, and more. The organization will also bridge temporary income gaps as needed.

The Shirley Ryan AbilityLab Paralympic Sports Camp was started by Salute Inc to reintroduce injured servicemen to physical activity through the help of disability sports. Besides improving physical activity in injured veterans, the structure of the program also helps improve their psychological state as well; the increased socialization and improved self-esteem both lend themselves to helping veterans achieve their goals.

Finally, Builders of Hope is another effort of Salute Inc to bring together local businesses, builders, and contractors. Together, they band together and help renovate the homes of the severely disabled and their family members.

Learn More: https://www.saluteinc.org

Thanks to Yanks

Thanks To Yanks was founded in 2006 by Michael Shain, beginning as a simple idea and growing into a mission to support the members of the military, past and present, and their families.

The first Thanks To Yanks dinner began as a 9/11 tribute five years after the attacks on the World Trade Center. What was meant to be a one-year tribute grew into an annual event that feeds veterans. Nowadays, the dinner supports nearly 400 guests.

The all-volunteer organization’s goals have also grown with the dinner guest list. It works tirelessly to keep itself involved with the military so it can identify gaps in service, enabling them to provide educated support that actually helps. In addition to delivering resources, Thanks To Yanks helps connect the community with one another through civic and religious groups that also support America’s military and veterans.

All the organization’s work serves to fulfill its mission statement, which is to promote civilian respect for past and present members of the military, to provide support to military veterans, and to always honor the heroes and victims of the 9/11 attacks.

Learn More: http://www.thankstoyanks.org

Veterans of Foreign Wars

Eligible veterans and members of the active, guard, and reserve forces can all benefit from the Veterans of Foreign Wars.

The American nonprofit traces its roots all the way back to 1899 when local groups were founded to support injured and sick veterans of the Philippine Insurrection and the Spanish-American War. At the time, there were no available pensions or medical care options for these veterans, which means they were left stranded in struggle.

These veterans worked together to create the organizations that eventually became the Veterans of Foreign Wars. Chapters were formed in Pennsylvania, Colorado, and Ohio, and today there are more than 1.6 million members nationwide.

Learn More: https://www.vfw.org

USACares

Post-9/11 military veterans and their families can benefit from the skills training and emergency financial assistance provided by USA Cares. The group’s mission is to help veterans bridge the gap and build their own foundation for stability in the long term.

USA Cares wants all post-9/11 veterans and their families to regain self-sufficiency through financial stability. It seeks to reach out to veterans at the earliest possible point of intervention to stem the flow of financial distress, especially for those who are too injured to seek work. The group states that it takes a holistic approach to its mission, concerning itself with the whole of the veteran and not just the numbers.

All veterans can access free services and apply 24/7. As soon as the application is processed and USA Cares determines that the applicant is eligible, they can provide financial help in less than 48 hours.

Learn More: https://usacares.org

USO.org

One of the most well-known veterans’ organizations, the USO creates strong connections between veterans and their homes, regardless of where they serve. The group seeks to express the full extent of the country’s gratitude to its service members and their loved ones by offering programs designed to improve wellness, resiliency, strengthening, and connection.

The USO also supports service members abroad, even if they are stationed in remote, isolated parts of the world. By offering extensive outreach support expeditions, which includes the delivery of holiday celebration items, care packages, snacks, and functional internet services for the duration of a challenging period, the USO helps keep military members connected to the rest of the world.

In addition to supporting retired veterans, the organization also brings celebrities to active service members by way of its trademark entertainment tours. These programs focus on American pastimes, connecting the military with its nation during these times of separation.

Learn More: http://uso.org

Avoiding Veterans’ Charity Scams

Unfortunately, for all the legitimate nonprofits there are to honestly help out retired veterans, there are just as many shams to beware of when seeking help. These groups don’t just misspend or steal your money; by participating in these unethical practices, they divert millions of dollars that could otherwise go to veterans through honorable organizations that provide real financial assistance to veterans as well as mental health care, job training, and housing.

According to the FTC, older veterans are targeted more frequently than other age groups.

Such scams will use similar methods to reach out to veterans as the above organizations would: by way of email, phone calls, letters, and texts. In fact, they’ll often use similar names as well. Still, they rely on high-pressure tactics and deceptive practices to wear down people until they pay them money.

By doing a little research on your own, it’s not too difficult to weed out the sham companies. If an organization reaches out to you and isn’t on the list above, take a few extra steps to ensure that you’re not dealing with a fraudulent company; don’t allow the scammers to take advantage of your generosity or need for help.

Warning Signs

• Pressure to immediately donate. Legitimate organizations only want donations when you choose to make it, not before.
• Claims that you have won a prize or that you will be eligible for the prize after donation. This is illegal.
• Thanks you for a donation you haven’t given. This is a technique used to try and trick people into believing they have donated with them before, which makes them more likely to donate again without thinking about it.

What should you do if you think you’re dealing with a scam company?
Do:

• Do hang up if the VA makes an unsolicited call to you
• Do research any properties that are offered to veterans at a discount or for free. Look up the online property records to ensure the ownership is up to speed, and don’t pay anything unless you have signed a contract.
• Do consult your state’s security regulator to check the credentials of an advisor who wants to get you additional benefits through schemes.
• Do rely on the VA’s representative to assist you with obtaining benefits and additional assistance. The organization has a database of attorneys it can search, as well as veterans service organizations and claims agents.
• Do check evaluators like Charity Navigator, the BBB Wise Giving Alliance, and CharityWatch to verify the legitimacy of an organization.
• Do keep informed on other ways to prevent falling for phishing attacks.

Don’t:

• Don’t hand out your Social Security number or credit card details unless you know exactly you are dealing with.
• Don’t wire money to strangers. This is as unrecoverable as handing out cash.
• Don’t pay to get your military records; your local VA provides this service for free.
• Don’t give someone access to your VA information without a power of attorney.
• Don’t apply for a job if it requires giving out banking information or if you must pay to get hired.

Additional resources:
https://smartmoneystar.com/grants-for-disabled-veterans-to-pay-bills/

Veterans: It’s hard to have financial peace when you are paying off debt such as a large credit card bill.

If anyone knows this statement to be true, it’s me.

I also know a few veterans who have come to me and said: “I don’t know how I got so much credit card debt”  but got out and to this day live debt-free. But success stories are the exception and not the rule.

I was your average college graduate who had student loans up the wazoo that surpassed my yearly income three times over and credit cards that carried high balances every month.

I knew that paying the bare minimum wasn’t going to do much to rescue me from the bondage of owing more than I earned but I still managed to make minimum payments every month. At least I had some clue about credit repair while I was busy paying off debt.

Don’t get me wrong; I was definitely sick about my situation. There were nights when couldn’t sleep at the thought of spending the rest of my life paying down debt all while never experiencing true financial freedom.

It wasn’t until I got reeeally angry about my situation, however, that the motivation to do things differently came about. I channeled all of my frustrations toward the insurmountable bills that had me by the collar, and now, several years and a many many sacrifices later, I am out of debt. Now what?

“Just exactly how did you do that?” you may ask. “Did you use a budget to pay off debt?” Patience!  That, and a lot more patience…

First, a note about getting out of debt, health, and capitalism

We all know that having more month left than money is a horrible feeling, but I don’t think we are aware of just how much debt affects our health. Some people carry the notion that it’s not a big deal…”In fact, I’m paying debt off in a year!”

This same person will have no plan, no tactics, nor strategy and will have no idea how to pay off debt in a year, nor will have done the homework to determine if this is a mathematical possibility.

The point is that our stress levels rise every time we get a bill in the mail that we cannot pay in full. “Not I,” you might say. “I pay all of my bills on time.”

But how calm are you when surprises arise that threaten your stellar record? Exactly! No matter how perfect or imperfect your credit history is, you must admit that the mere thought of owing someone money creates anxiety.

Unfortunately, given our capitalist society, we deem such stress induced nervousness as normal. As such, many average people are one job loss away from saying to themselves “Whoa! I am in debt and have no money to pay it off!”

When you go to buy a car, the first thing that the salesman does is a probe for information to put on a credit application. He automatically assumes that you don’t have the means to pay cash for the vehicle and, as such, sends your information through for a credit check before showing you any car possibilities.  Of course he will not offer very creative ways to pay off the debt. Just sign here (and here) please!

The only time he inquires about out-of-pocket costs is for a down payment, which he hopes is at least ten percent of the vehicle’s price tag. Why doesn’t he ask if you have resources to pay the full amount in cash before resorting to a credit application? Well, that’s not how our current form of capitalism works.

Our current form of capitalism puts a country’s economy in the hands of private corporations and not the federal government. A corporation’s central goal is to make money. If you pay for your car in cash, this makes a small tidy profit for the dealer, but this common sense act does almost nothing for the financial partners who only earn money when you take on debt and submit to their ridiculous interest rates.

They make even more when you pay late every month as a late fee is tacked onto what you owe and, depending on your contract, interests rates increase.

The corporate debt monster is always looking for ways to enslave more poor souls.  There’s a reason that an entire season, i.e., Christmas, devoted to spending as much money as possible, much of which most shoppers don’t readily have on hand.

Money that you charge on your credit cards today equals BIG PROFITS in prolonged interest for financial institutions tomorrow. The corporations come out as the winners, and we are left to grapple with the fact that there isn’t enough money in the bank for you to care for your future properly.

In fact, it is usually the Christmas splurge that will have most Americans with a shopping hangover rushing to the internet to find out “how to find out how much debt I have” from the likes of Equifax (ugggh).

Aren’t you tired of being a puppet in such a system? Don’t you want to know the real answer to the question “How to pay off my debt?” Our national health sure is exhausted.

Studies show that people with less debt are happier than those with mounds of bills. Such is the case even if those who do not owe reside in a small shack and make the choice to walk everywhere.  Living minimally is the only sustainable American debt relief.

“How could they be happier than someone living in a mansion and driving the latest luxury car?” you ask. Well, the person with the tiny, but paid-for home doesn’t have the threat of “stuff” or their “reputation” being taken away when collectors come a-calling.  She won’t be the one responding to some sleazy law ad claiming to have the answer to the question “Mr Lawyer, how can I get out of debt fast?”

She owns the small house in which she resides and believes in saving to make improvements to this residence. The shack owner very likely has money saved for a rainy day and doesn’t have to solve money problems by taking out a loan to pay down other debt.  She is not in debt.  The person with the small house sleeps well knowing that she is living within her means.

The supposed rich man, if the fancy lifestyle was financed by credit cards or home equity lines of credit however, will rarely get a night of peaceful sleep. One small misstep will bring the whole house of cards down.

Many seemingly rich people, although having the appearance of wealth, have zero dollars saved for the future. They are living on the razor’s edge of potential disaster every day and this surely weighs on their health over time. Given all that, I would prefer being the lady residing in a shack any day, wouldn’t you?

“Ok Smarty Pants,” one might be on the verge of asking “How can I pay off my debt quickly with bad credit??”  While we may say that one should strive for the simple life, the truth is that it takes hard flipping work to get out of debt.

It takes serious mental resilience to resist the urge to live beyond your means in a capitalist society that weaves instant gratification into our every day lives.  So what does it take to get out from crushing debt to live as a free person on the mountain top? Read on and follow these steps!

Steps needed to get out of debt and avoid bankruptcy

Step #1: Know how much money you get to keep each month

Before you can learn how to clear debt fast, let’s get your money house in order starting with what’s left over at the end of the month.  It’s absolutely amazing how so few Americans know how much they make after necessary expenses.

Sure, most people can figure out a good approximation at tax time, but as a general rule we simply don’t keep tight enough tabs on cash flow every month. The first step to becoming debt free is knowing exactly how much you are bringing in every month AFTER EXPENSES. Knowing this will allow you to pay off debt fast even with a low income or with no money saved because it’s not how much you earn but how much you keep.

Now if you want to know how to get debt-free with no money this is another lesson entirely.  But really, if you are able to earn in some fashion then you can’t say you have NO money at all.

The debt-to-income ratio is something that creditors use to determine whether or not you can afford a loan. You, too, should use the equation when determining how much needs to be cut from your budget to achieve debt-free living.

There are two types of debt-to-income ratio: front-end ratio and back-end ratio. The front-end ratio, commonly referred to as the housing ratio represents the percentage of your monthly income that goes towards things like your rent or mortgage. Meanwhile, the back-end ratio shows you the portion of revenue that you need to cover all debts including housing expenses and outside creditors.

Calculating your front-end ratio involves adding up all of your expected household expenses which include utilities along with rent or mortgage. You then divide that number by your monthly net income and multiply the results by 100. The number that you get in the end represents the percentage of income that goes towards monthly housing expenses. Your front-end ratio is 22.5 percent if you earn $5,000 per month and only pay $900 in rent and utilities. Such percentage is definitely living within your means as far as housing is concerned.

Totaling your back-end ratio is similar to calculating the front-end number with the only difference being that you must include all of your debt and divide the result by your net income to get a figure. Let’s say you have an additional $3,000 in credit card payments each month. Your 22.5 percent ratio suddenly rises to 78 percent when credit cards and other expenses are factored in and take away that additional money from your monthly income.

Still, even with your other expenses being more than three times the cost of your housing accommodations, you still aren’t doing as bad as some who have back-end ratios in the negative. Such persons have zero left over to save and are positively drowning in debt.

You may be doing better in the financial department than you think, but you’ll never know until you tally your debt-to-income ratio. You cannot calculate this number, however, without first knowing your net income. It is after you have knowledge of how much money you make on at least a monthly basis that you can begin to formulate a budget aimed at accomplishing your goal.  The next section gets meaty because now we’re going to talk about how to budget to pay off debt.

Step #2: Get Rid of Debt Fast by Utilizing Effective Budgeting

Many people hate budgeting because they feel it doesn’t work for them. You cannot pretend that you are living the high life when the numbers that would say that you can barely afford to rent a room in a barn house. Quite frankly you need to know how to budget to pay off debt. Simple as that.

Think about this, properly creating and respecting a budget has allowed people to get out of debt with bad credit, little to no money, in far less time than would happen without it.  It is simply the best way to pay off debt quickly and yet live by your own terms while paying off debt.

It also takes a special amount of discipline to keep track of your spending habits and refrain from spending more than your budgeted amount. However, make no mistake, budgeting is essential to your financial freedom. You do not need to track every dollar that you spend all of the time to have an efficient system, though. But in the beginning of your journey to pay back debt it makes a ton of sense to do it.

Keeping track of every dime that you spend during the beginning stages is important because you are trying to get hold of your financial inner program.  Many of us spend on autopilot and this is counter-productive with all known ways to pay down debt.  How do you ever expect to break through to debt-free living when you don’t even know where your money goes every week?

Yeah, not going to happen. Paying down debt is no joke and you need to know if the enemy is “YOU“!

You need to write down or record the amount and purpose of every dollar that leaves your bank account for at least one week so that you can analyze just how you spend your money. Most people find it incredibly suprising to track their spending habits for at least one month, noticing how the money just slips through their hands in many small and previously unnoticed ways.

It may be helpful for you to charge all expenses to your debit card instead of using actual cash during the observation period since the bank does an excellent job of keeping tabs on even the smallest purchases.  Yes, even for that $1.25 candy purchase at 7-Eleven.  If the cashier smirks at you just smirk back…harder!

After tracking your purchases for up to one month comes the interesting part: Analyzing your habits that siphon off the money that could be used to free you from your situation.

It may be difficult to look at yourself in the mirror after seeing how many times you dined out when there was a refrigerator full of food at home.  Particularly when that food went bad!  Most who go through this exercise can no longer say the have no money with with to pay off debt.

Perhaps you went on a mini “retail therapy” spree that caused you to be tardy on others bills during this period. You might want to kick yourself with those new shoes you bought when you could have used that money to mount an attack against the credit monster!

The good news is that by doing this exercise you, unlike most people, start to become aware of your good and bad programmed spending habits and can now make changes that will get you miles ahead of where you are now quickly.

After looking at the ugly truth of their spending practices, some people try to attack all areas of budgeting at once. They may try to eat at home all while going cold turkey on frivolous shopping at the mall at the same time thinking this will show them how to pay down debt. The truly ambitious even determine that it’s high time to stop using credit cards altogether and start shopping at discount stores.

After all, “We’re trying to save money, here!”

While the effort to tackle every aspect of your spending problems at once is noble, it may not be the best idea because too much abrupt change can cause a psychological burnout leaving you further behind than before!  In a burnt out state you simply won’t grasp how to pay off bills quickly if at all.  In fact you might wake up to even more debt!

We, as humans, burn out relatively easy when we try to do too much out of our normal patterns. The thought of going from a lavish lifestyle to minimalist is so extreme to some people that they won’t even make the slightest effort to change. It is best, then, that you attack your poor spending habits in bite-sized steps.

For example, you could first address the unplanned dining out habit. Pack your lunch the night before AND set a reminder that alerts you to look in the fridge at your normal departure time so that you can’t use the excuse of not having time to prepare food for lunch. Also, it may be necessary for you to plan your dinner meals every day.

Studies show that those who map out breakfast, lunch, and especially dinner are less likely to take the easy route of eating out. For them, it doesn’t make sense to have someone else cook your food when there is a clear outline for the week.  This is just one thing a person can do to properly work through how to save money and pay off debt.

Many who are aiming to get rid of debt fast rather than slowly learn to  adhere to the 3-Category-Budget.

Instead of trying to tackle every bad habit at once, consumers pick out three categories that they would like to improve upon in coming weeks. An executive unhappy with the amount of money he spends eating food on the road and the large portion of his paycheck that goes towards transportation may include these two areas in his 3-Category-Budget plan. By the way I also used this method to get myself out of debt.

He may focus all of his attention of lowering the cost of food and gasoline for his vehicle by preparing meals at home and forgoing the weekend road trips. It is when he feels that he has developed a strategy to combat his poor spending habits, and given himself time to make new characteristics routine, does he move on to other categories in his budget that are troubling.

The 3-Category-Budget plan, then, serves as a way for you to create steps to get to your desired result, which is financial freedom.

Of course, you cannot be successful in your steps unless you understand the goal of your budget. A monthly financial scheme is not meant for you to micromanage the family’s money.

Honestly, you will probably grow tired of recording every expense by month three of such practices. The purpose of a monthly budget is for you to organize your finances and take control of your spending habits so that you will overtake debt and not the other way around.

You cannot conquer the debt monster while spending every dime before it can get safely in the house. It is necessary to reduce spending somewhere if you ever hope to see the light at the end of the tunnel that says, “Financial Freedom – Next Right!”

Step #3: How to Get Rid of Debt Fast By Cuttting Unnecessary Spending

America, for all of its wealth, fosters and nurtures remarkably spoiled citizens. Our definition of poor is not having an HD television and being forced to go the summer without air conditioning. Other parts of the world wish they had such problems as their poorest citizens may have to select their family’s meals from garbage dumps.

“Why are you bringing this up, I thought we were talking about how to pay down debt fast?” you ask. Well, this is an attempt to adjust the typical mindset before telling you that you must forgo some of the luxuries that you deem necessities if you ever hope to break free of debt.

Such extras might include cable television, convenient transportation, and, just maybe, that ridiculously expensive latte that calls your name every day.

Here’s a breakdown of four luxuries that you anyone can trim on their journey towards financial security.

Cable TV– It’s hard to believe that some people still pay ungodly amounts for cable television service, but this is America where wasting money is celebrated. Paying off debt quickly becomes a tad easier when you realize that the typical cable bill costs upwards of $60 for basic channels and that many people are likely paying double the amount for premium shows without accounting for pay-per-view, which is another beast in itself.

Did you know, though, that Internet-based services such as Hulu and Netflix charge under $10 per month for many of the shows that you see on cable TV? YouTube is also getting into the television sphere with its latest plan charging $35 per month for a service that practically mirrors traditional cable.

You can subscribe to all three of the previously mentioned services – Hulu, Netflix, and YouTube – and have a television bill that’s cheaper than your standard cable bill. Why do you subscribe to this service, again?

Cellphone – If you are in financial difficulty how is it possible to get debt free if you are still one of those people who pay over $100 every month for a cell phone bill just to have the latest smartphone. Sure, prepaid wireless companies like Virgin Mobile and others make you pay for your phone and service up front, but they could save you every year by charging no more than $65 for unlimited service.

Gym membership – I am all for investing in one’s health.  I mean, what’s the point of learning how to pay off credit card debt quickly if you end up in the hospital due to poorly maintained health?  My main problem with a gym membership is that many of us who shell out $50 per month plus the annual $50 contract renewal fee rarely use the service.

If I’m paying over $600 per year for a gym membership, you’d better believe that I’m going to be in the place working out every day possible, because for that kind of money there has to be some serious benefit to being there (like connections that can get you more money?).

Frankly, you don’t need a gym membership to be healthy, and you certainly need to get rid of the expense if you don’t go regularly. Planet Fitness, however, is a fair alternative for those who feel the need for fitness club membership despite not going to exercise on a daily basis. At least you’re only out $10 per month when fall off the wagon and continue to pay.  At least consider it…

Pay Off Credit Cards Fast By Avoiding Starbucks and the like– I spotlight Starbucks because they continue to increase their prices while their devoted customers faithfully purchase their favorite drinks every day. Are you aware that a regular cup of coffee at Starbucks is about $2.20 (but seriously, who pays that low of an amount? Who??)

You might be paying at minimum $11 per week for an ordinary cup of joe that you can brew at home or your office.  I mean, not even Starbucks coffee sold in the bag that you buy from your local Wal-Mart costs $11 per five servings.

Why, then, are you paying for the overall experience of buying your coffee out when you can make it at home? The latest coffee makers are so advanced that they can be set to start brewing when you wake up for work, so you only need to pour a cup and walk out of the door. There’s no excuse for spending $44 per month (or likely, way more) on coffee. This should begin to answer most questions about how to get money to pay off debt.

You may feel like forgoing the luxuries of life for financial freedom is asking too much. You’re partially right if you don’t know how much debt you’ve accumulated over the years.

Step #4: In Order To Pay Your Debt, Track Your Debt

Pulling your credit report is the best way to determine the severity of your debt hole and allow you to determine just how difficult it will be to pay off all your debt. There are three major credit bureaus – Equifax, (oops to them!) Experian, and Transunion – with individual goals of keeping track of every financial obligation you’ve ever acquired in your adult life.

Your report will have balances that you know about along with past debts that may have gone to collections. It simply isn’t possible to know how to get rid of debt quickly without this vital information. Upon review of all your listed debts, you may want to consider paying off your existing debt first and then proceed to old obligations in collections.

It is also important to note the significance of negotiation when you are dealing with collectors of old debts. You shouldn’t feel bad about asking for a deal that cuts your initial debt in half (or more!) since they purchased the debt literally for pennies on the dollar. This is a secret shortcut (but fairly painful) way of how to pay off a debt in 6 months or less.  Of course, if you are able it’s always best to pay all of what you owe for your own sake.

Reviewing your credit card statement both on paper and online is also a good way to track your debt. Paper statements can be quite tricky when you are actively paying down debt, which is why many stick with online account viewing. Calling your creditors is best when you have enough money for a payoff. Neither your paper statement or online balance owed prove accurate in such instance.

Step #5: How I Paid Off My Debt Using a Budget Spreadsheet

There is little excuse for you not to have an organized budget in this digital age where some form of Excel comes with all computers and many tablets. Heck,  if I  had to do it all over and wanted to clear my debt today there’s a ton of apps out there that would be super beneficial!

And for those reading with “little to no money”, a budget is how to get out of debt on a low income.   The following are steps to creating an effective budget using an Excel spreadsheet to pay off bills fast. You can go here and download an awesome google sheet

(at https://docs.google.com/spreadsheets/d/1hTBBf3rQB0WgHtAhK0sAiBHY_tSOncXagm4u0EIiHSA/edit?usp=sharing  )

which was lovingly created by www.spreadsheet123.com or make your own by:

Step 1: Open Excel and select a blank spreadsheet
Step 2: Enter the months that you wish to account for horizontally starting in column B
Step 3: List your income source(s) down the first column (A)
Step 4: Next skip a row in column A then enter your monthly expense sources
Step 5: Then add the appropriate amount to column to the right of each item in Column A
Step 6: Begin setting up your spreadsheet so that it can calculate math formulas. Click on the cell where you would like the total to show up and then click Autosum. Click and drag all of the cells that you want the program to include in the calculations, and press “Enter.” Copy and paste the formula that you’ve created in all other cells and repeat until your entire spreadsheet is capable of automatically tallying totals when you enter figures. Such automation takes the pain of counting your income and expenses manually and decreases the possibility of error due to oversight or outright bad math and is the best way to pay off debt fast.

The fact is that I would not have been able to exit the debt trap without know what I habitually did with my money, and then having a plan to do something different with it.  A closely followed budget is a tool that must be in your kit in order to pay credit card debt fast.

Step #6: One Of The Best Ways To Get Out Of Debt Fast!

Of course, creating and using a budget is an awesome step in your quest to pay off bills. But the next phase of the process involves adopting a method that works best for your situation.

So, what exactly is the best way to pay off debt (credit card or otherwise) and in what order? Many people start out by attacking the credit cards with the highest balances or personal loans with the most outstanding debt. This strategy of going from high to low can be seriously discouraging because it takes more years to pay off high debt than small bills.

Consider, then, the idea of the Snowball Effect where your start by using your money to pay off the smallest debt first.  This gives a quick win and is the snowball that starts the momentum that eventually creates an avalanche that annihilates your financial prison. When you absolutely, positively need to pay off debt, every small bill paid in full brings you one step closer to your ultimate goal of not owing anyone anything anymore.

Others feel that the best way to pay down debt is to pay significantly more than the minimum amount due on all balances. In reality, if your financial situation allows it, you should only regard the bare minimum as a last resort when money is tight for the month. If possible, make it a practice to pay at least ten percent of the balance owed if you cannot pay in full every month.

Giving creditors $400 towards your $4,000 debt puts a much larger dent in what you owe than succumbing to the temptation only to pay $70, which mainly pays for the interest. You will begin to feel accomplished three months into implementing the ten percent rule when you see your balance shrink. This sense of fulfillment will make you want to pay more, which you may do in the form of weekly payments which would really put SAUCE on your effort to pay off all debt.

There are others who believe that the smartest way to pay off debt is….the Machine Gun approach! (OK – so we made up that name…but it is catchy, eh?) The reality is that many people believe that making payments to revolving debt every other week is pointless. “Interest is going to eat up whatever extra I pay, anyway. So what’s the point,” they may think.  Interest, however, doesn’t work like income taxes and overtime pay.

Small, rapid succession payments are a secret most financial institutions don’t want you to know about.  Why? Well, it takes time for compound interest to work it’s magic.  Using the Machine Gun approach to pay off your debt chops down the money owed before interest has had time to work against you.

Unlike the federal government which taxes you more when you work harder, the math behind compound interest calculations reward you for your efforts. Interest is only attached to your balance once per month, so you can pay $200 every week and see the benefits of contributing $800 to reduce your $5,000 debt.

Of course, you will need to halt reckless spending to see the fruits of your labor otherwise you will be ruining the best way to pay off credit cards fast. What’s the point in paying $800 towards your debt on one credit card only to charge $1,000 on another? You should definitely reward yourself when you meet personal goals, but it is essential that the rewards do not cancel out the accomplishment.

Step #7: How To Pay Off Your Debt Fast By Avoiding Traps

The road to financial freedom has many tricky sticky wickets along the way. Here are five common pitfalls that you should avoid when trying to pay off debt.

Disregarding the need for a set budget – History has proven that we’re not as financially savvy as we may think. Why, then, would we try to address the problem of debt without first establishing a budget? Your financial life needs a plan and high level insights, and you get this by outlining in advance where your money goes every month.

Keeping the same spending habits – Not even the Snowball Effect nor the vaunted Machine Gun approach (OK – we will stop trying to make this a thing…) can help if you continue to blow through your income without regard for priority. You may need to go cold turkey with extra expenses until you get your impulses under control.

Earning the same amount while trying to pay off debt – Sure, you’ll eventually pay off your bills if you are consistent while earning the same annual salary. It would be WAYYY more beneficial, however, for you to find ways to make more money so that your debt can be paid sooner rather than later.

Weekend gigs are the best because they give you the additional income you need to reach your goal without disrupting your daily work routine (that is…unless your job has you working on the weekends, but you get the drift!). Selling possessions that you no longer use is another way to increase cash flow and can even start a rewarding side hustle.

Using your home’s equity to pay debt faster – WE DO NOT RECOMMEND THIS! This is a case of robbing Peter to pay Paul . Not only is this trap counterproductive to your goal of being debt free, but it is also quite risky. You stand to lose your home if you default on an equity loan. You should definitely reconsider this supposed “way” to financial freedom.

Trying to hide your financial situation instead of being honest – Admitting to having mountains of debt can be quite embarrassing. In fact, you may be so humiliated about your financial situation that you fail to seek proper assistance in finding a solution to the problem. Don’t let your embarrassment be the thing that prevents you from breaking through to the freedom that you so desperately desire.

Take full advantage of a financial counselor who can evaluate your situation and establish a plan of action that gets you out of the red.  You may read this section and think, “Great! I’ll call a debt consolidation company!” You should definitely proceed with caution.

Step #8: Consider A Debt Consolidation Loan Company With Caution

Many people resort to debt consolidation companies in a final attempt to take control of their finances and avoid bankruptcy. You should be aware, though, that about half of debt consolidation plans are success stories.

Part of the reason why so many consumers fail at consolidating debt is that they attack the problem, which is mounting bills, without addressing the source. One can’t rack up $50,000 worth of revolving debt by having reigned-in, overly-modest spending habits.  It just ain’t likely…

How, then, can a debt consolidation plan keep you from repeating the process several years down the road? You must attack the problem at the root, which is a wealth harming spending habit, head-on if you hope to maintain a financially sound life long into the future.

Another reason why debt consolidation companies are a bit toxic is that their model that encourages you to be several months behind on your bills. Many firms cannot offer their services until you are on the brink of having debt sent to collections. Only then can they offer you a package that might rescue you from the torture of debt.

What if you don’t want to let your credit score hit rock bottom before doing something about your financial situation, though? They can’t help you there!

Some consolidation firms do offer the option of debt management, which involves them negotiating on your behalf so that all of your credit card obligations can be combined into one payment. The consolidation company divides your one payment into several so that all of your credit card bills are paid at the same time.

Debt management can have some benefits, including reduced interest rates across the board. The program also comes with serious repercussions if you fall off the wagon. You run the risk of defaulting on all of your loans by missing just one payment. Such pressure is not applied when you keep your revolving debt separate.

Step #9: Embrace the Minimalist Lifestyle

The best way to become debt free is through good old self reliance without relying debt settlement practices. Remaining financially secure requires just as much effort.

Many people celebrate their accomplishments after making the final payment to their last loan only to become entangled in the web of debt again several months later. Steering clear of indebtedness is particularly challenging given our society that glorifies living beyond one’s means. You will need to be prepared to push against the grain of consumerism and embrace a more minimalist lifestyle if you want to maintain your financial freedom.

Minimalism is built on the notion of a person using only what he needs to survive. A house with five bedrooms and two bathrooms is not necessary if you are single and without children.

Living according to the minimalist way means that you exchange large living quarters for smaller homes. You reward yourself for reaching milestones in your ongoing financial goals, but paying for extravagant vacations every three months is not the way of the frugal-minded.

Going the way of minimalism at least when it comes to your finances opens the door to many opportunities for investment. You are better capable of making your money work for you when you have funds to spend.

Conclusion: Financial Freedom By Paying Off Debt Is Not Easy

There is nothing easy about striving to get out of debt now. You will need to make a conscious decision to stop living from paycheck-to-paycheck.  Take steps towards your goal of financial security. The benefits of enjoying life without a horde of bills can be all the motivation you need to keep going. Imagine yourself working less and enjoying the passions that used to take a backseat because you had too much debt.

Financial security is something that every American talks about, but few pursue. Will you be among those who fantasize about getting yourself out of debt? Will you continue to charge credit cards with things are basically unnecessary?

Or, will you be one of the ones to become angry and motivated to do something about their financial standing? I was one of the few. I haven’t regretted my decision to pay my debt off at all.

Image Credits:
Pixabay.com
Giphy.com

Veterans: Could You Detect A Fake Credit Card Terminal If Presented With One?

You’ve got enough problems already and might be trying to figure out how to get out of debt.  What with monthly bills trying to overwhelm your pay, the cost of everything rising constantly, and raises few and far between, we simply don’t need the added burden of someone stealing from us.

That’s why we should always be on our guard when it comes to protecting our personal information even if the big companies (we’re looking at you Equifax) aren’t up to the task.  In that light, we’d like to present you with a list of photos that will help you determine whether you should swipe that credit card, or put off your purchase until you get to a less shady feeling retailer.

So let’s review the details that your eagle-eye should be trained to spot, in order to keep you from needing to file a fraud report.

1. Skimming Terminals Are Significantly Larger Than Normal

A skimmer should be longer and wider than the terminal itself to correspond to its size. That’s why a skimming terminal is noticeably larger than a true one. This is the principal feature that helps recognize fraudulent devices.

Note the card depth of the reader on the left.  It almost practically swallows the entire card like you are performing a swipe inside the chip reader area.  If your card goes to far inside you might have a problem.

Chip reader terminals should only allow enough depth to get the chip just inside the reader.

@ingenico

2. Does the terminal look oddly sized?

A skimming mechanism MUST be longer and wider than the terminal itself in order to fit on top of it. That’s why a skimming terminal is noticeably larger than a true one. This is the principal feature that helps you recognize any fraudulent devices you might come across.

Be on guard and constantly make note of the size of the average terminal reader you might use at your local convenience store, grocery store, or other highly trafficked areas.

That way, when you come across a reader that is bulkier than normal you’ll say “No Thank You” to the purchase.

@ingenico

3. Are the button highlights missing or do they feel “odd” when pressed?

If so, you need to be on guard that the terminal you are using might not be worth the trouble of using.  If criminals are in a hurry, they might try to apply the cover interface too quickly, leaving a bad fit.

This will leave a problem with buttons.  A wary shopper would instinctively feel that something isn’t quite right with the setup.

And leave.

@ingenico

4. Green LED light is not there, not working, or blocked

When using a proper terminal, each time you scan the card the reader will have a green light go on at the top of the reader.

When the underlying reader is covered, the light may be blocked or obscured.

Most people wouldn’t notice this bit of information, but now you should be on the lookout, even when using a legit reader.  The reason is that the more you get used to seeing a properly working reader, the more likely you will spot a phony.

Be on guard!

@ingenico

5. Does the terminal cause a long line or delays?

Skimmers are often attached shoddily to real card readers.  This means that while the real reader is trying to do its job the skimming mechanism is getting in the way.

It may take several tries to make each transaction go through.  If you see this in the line you happen to be in, it may be best to put your stuff back.

Unless you’re starving, with no other options for miles, it may be time to take that hike.

And save yourself some trouble.

@oberthur Technologies

6. Where’s the freaking stylus?

Payment terminals that haven’t been tampered with will have a stylus that allows you to create a signature after the card has been scanned.

A skimming plate that has been placed over the top of a real reader will necessitate removal of the stylus.

See in the photo how the area for holding the stylus has been taken up by the added skim plate cover.

It is residing on top of the real card reading mechanism, ready for cheating.

@ingenico

7. The machine just plain feels shoddy.

If you approach a card reader ready to put your credit card in, you might want to give it jiggle, tug, or a hard grab at the face plate.

If everything doesn’t feel like it is all “of a piece” or tightly manufactured, think whether something could be wrong.

If the face plate feels like it could be removed, it may be a good idea to bring this to managements attention.

Or leave.

It’s probably easier to leave, but others will very likely continue to be victimized.  Do what you think is best..

Note how much additional bulk this skimming reader adds.

8. It’s not just retail store terminal’s that are at risk.

ATM machines (particularly in 3rd world countries) are ripe for picking off card stripe information.

Just take a look at the photo below.  Is there anything that would make your spidey-senses tingle?

Well, the fact that the place where you enter your card doesn’t have a normal, level look ought to tip you off.

If you knew nothing else, you should be able to say to yourself “that ain’t right…” and keep moving.  The cracks in other areas of the interface might also give you pause.  This machine simply screams “Shady!”

Best to move on from this one, or you might end up with some awkward unknown charges on your bank or credit card statement.

imgur

So there you have it.

Thieves are constantly on the prowl and are ahead of the curve.  I am sure that we’ll be seeing much more sophisticated attempts to get our information in the near future.

However, at the very least we can become more aware of the less sophisticated stuff and protect ourselves.

Hey Veterans: Here’s A Simple Do-It-Yourself Credit Repair Guide

Hey Veterans: You might be aware that there are many options available on the market if you find that you need to repair your credit.  It’s not a fun job, but there are many companies ready to take on the task for you if you don’t already know which loans to pay off first.

However, most credit repair companies will not help you until you hand over their fee. Some credit repair companies do a really good job, but too many customers claim that many do not.

You must remember that these companies are mostly only out for your money, so you should be on guard.

Repairing your own credit, however, is quite possible, if you want to take the time to learn to do it. But you’ll need persistence and organization.  Get those two things going for you and you can do your own repair as well as any company who charges for the service.

Before we get started, just realize that this process cannot force a company to take off any information that is UNTRUE. But there is still always a little room for improvement on most credit reports.

Follow these steps to begin to successfully repair your credit on your own:

1. Get copies of all your credit reports.

Experian, TransUnion, and yes, even Equifax are the big 3 credit reporting firms. You should get your reports from all three sources so you know what you’re dealing with.

• You can easily get a free copy of your credit report once a year from all three companies by visiting https://www.annualcreditreport.com.

• OR if you’ve recently been denied credit or a job (yikes!) for having poor credit, you are also entitled to free copies of your reports, as long as it has been less than a year since you got copies.

• Sit down and carefully read the reports to figure out what these companies are saying about you and your beloved creditworthiness.

2. Determine if there any errors in those reports.

Once you obtain your credit reports, be sure to list any negative information, even if it’s true. Due to the nature of the beast, almost all people will have at least one error on their credit report.

• Remember that the credit bureaus are just machines designed to spew any information that gets posted to them. They simply can’t take the time to verify it, so it’s up to you.

• Make a concise list of every item you’ll want to dispute.

3. Dispute all the negative items.

It won’t do any good to dispute true items still carrying a balance because the lender still has a vested interest in making you pay up.  However, everything else is fair game. Items with a balance will just reappear the following month anyway.

• All disputed items should be documented in writing from your own Word doc or Google doc. Don’t use forms that are available online on the credit bureau’s website. They need to do some work anyway.

• Do a search. There are many form letters online that you can use for your dispute. You basically just want to say that you don’t agree with the items and wish to have them verified.

• The credit bureau now has 30 days to go back to the creditor and try to verify the accuracy of the item or else it must be removed from your credit report. This also works if they fail to accomplish the ask in a timely fashion, for any reason. It’s the law!  Boom!

• Make certain to send all business correspondence via registered mail, FedEx, or their equivalent. You’ll want to be able to prove that the item was indeed received by the credit bureau and when.

• Then, if they don’t verify the disputed items in time, you can then remind them of the law and demand that the items in question be removed from your credit report.

4. Don’t give up. Queue the Rocky Theme Music!

Patience, persistence, and organization (ok, so I couldn’t come up with that third “P” word) are going to be the keys to success. That, and the fact that the bureaus have no real vested interest in keeping items on your report.  However, you must send and resend your letters if necessary, then follow up, and document everything. Be sure to keep copies of your letters in a folder along with the company responses. You might need this information later to make some things happen.

5. Remind yourself of the basic truth.

The truth is that credit bureaus make money by selling credit reports and not by responding to your nit-picking inquiries. The last thing they prefer to do is waste time and resources on helping you fix your reports.  However, if you can prove to be a bit of a pain in the neck, you will eventually get what you desire.

6. I’ll see you in court!

Threatening to take or even going through with taking the credit bureaus to court and suing them to change your information can be thought of as a last resort, scorched earth solution.  For monetary reasons, though, it really shouldn’t make it that far. Why?  Because:

• Anytime there’s a mistake on your credit report and the credit bureau refuses to remove it, they’re subject to a $1,000 fine. The same $1,000 fine applies for each item they fail to verify and/or refuse to remove.  Talk about a big stick!

• Credit bureaus have a long and glorious history of caving-in at the last minute and giving the consumer everything they want.  It’s just smart business.  Why subject yourself to all those fines plus the potential bad PR?

• They don’t even want to show up for the People’s Court.  Don’t hesitate to file a lawsuit with your local small claims court to get “satisfaction”.

• Of course, there may be the odd case when you might have to actually show up to court before they are willing to deal. So be it.  Just remember that these credit agencies simply don’t want to get stuck with thousands of dollars in fines, especially when they have nothing to gain. If some manager lets it get this far, their job is surely on the line. Remind them of that.

Summing It All Up!

Free (Ok – mostly free in money, but not time) DIY credit repair is something that anyone with some patience and perseverance (Oooohhh, I found that third “P” word!) can do. It is super simple but brutally effective.  Be prepared, though, because it can take months to see any real improvement.  Just remind yourself that it’s much faster than just waiting out ten or so years it will take for the items to fall out of the database and off their lists naturally.

Boost your credit, fix your good name, and take control of your life. You’ll be very happy you learned how to be these bureaucracies at their own game!

Getting Yourself Out From Under Crippling Debt

Hey Veterans: Do you feel like have no idea how to get rid of credit card debt? The fantastic thing is that no matter how high the mountain looks, you can scale it and pull yourself from the metaphorical hole you might end up in.

Here are some ways to handle that debt and bring it down to size:

1. Only buy what you can afford.

The perfect way to keep debt from becoming a problem is to avoid the issue completely from this point forward. As opposed to splurging on a fancy piece of digital hardware, only wait and save up for it.

By remaining within budget and paying off your bills each month, you do not need to be concerned about debt piling up on top of you.

You can still escape debt and feel the sweet relief of being debt free by changing your mindset from “using it now” to one of appreciating it even more when you have the cash.

2. Pay off the lowest balance.

Financial adviser Suze Orman often advises individuals in debt to look after the high-interest debts first. Generally speaking, this is a fantastic thing to do, however, in case you’ve got a credit card with a balance of just a few hundred bucks, it would also be beneficial to knock that one off right from the gate.

It is possible to eliminate a complete payment, save on interest charges, and put that money towards another invoice.

3. Prioritize bills by interest rate.

In the long term, paying off the higher interest cards will save you the most money. It is usually the interest that keeps knocking you back. By taking the higher interest cards, you will feel a greater sense of advancement when paying your bills each month.

4. Consolidate.

Among the overwhelming aspects of being in credit card debt is continually being reminded of it with all these bills from various cards. 1 way to fight back is to consolidate your debt. You can do this by taking out a loan from a financial institution or shifting the balance to a card.

If you recently got a new credit card, you can transfer some of the balance to this. This will save you a little bit of interest as most cards will place that equilibrium under the introductory rate.

If you take out a loan, you are able to pay off a number of the cards and cut back the amount of email you get. It is less daunting emotionally to get one massive bill rather than a bunch of small ones.

5. Convert to money and debit only.

One of the best ways to keep yourself in debt is to continue using your credit cards. They are handy and it’s easy to justify their intermittent usage by stating that it is only a pop or a tank of gasoline.

Those small charges add up fast! A dollar here, a few more there, and you’re going to negate the payments that you are making in a really short time frame.

Paying with cash can allow you to develop new spending habits. From the time you get your debts paid down, you will have educated yourself to the point where you do not put yourself in that circumstance.

Conclusion

Debt is a problem that happens to almost everyone sooner or later. Even wealthy men and women find themselves overextended by debt.

Even when you’re working on a shoestring budget, then it is possible to pull yourself out of debt. With discipline, focus, and hard work, you can end up relieved of the mounting pressures.

Veterans: Is Building Up Your Child’s Credit A Good Idea?

Most parents will do anything in their power to protect their children from harm.  From teaching them to look both ways at crosswalks to the “don’t take candy from strangers” speech, protection is at the heart of these lessons.

But when it comes to talk about personal finances, the typical family money speech to kids resembles something along the lines of an 18^th Century discussion about sex: A few words mumbled under the breath that sound like “Uhh, don’t do it.”

Well, at least that was the way it was in my household. So when I entered the world of finance as a college freshman, I was woefully unprepared to master money and debt and thus had to learn how to pay off debt fast on my own.  This struggle continued well into adulthood before I began to get serious about frugality, investing, and debt reduction.

Many parents are in this very same boat and now feel impelled to help their kids avoid the mistakes that they made.  A good way to achieve this goal is to help the child learn to save.

However, some parents take these lessons a bit farther by helping their teens obtain credit cards or other loans. Let’s examine one argument for and against this approach.

Pro: The Child Starts Building A Credit History Early

A child who has earned a stable and established credit history by the time she turns 18 will be significantly ahead of a majority of the population at that age.  This financial head start can be a major benefit if loans are needed to help cover the cost of education.

Also, when her income level rises after college, it will be much easier to acquire a house, car, or other high ticket items at a reasonable interest rate, if so desired.

Con: Responsibility and Maturity Levels Vary

For truly responsible kids who really understand the value and danger of credit, the potential for harm can be significantly mitigated, and the future rewards amplified.

But if the child is not able to really understand the threat, no amount of speeches about the dangers of credit and the virtues of saving are going to sink in until the actual pain of monetary mismanagement comes home to roost.

In our modern and technologically advanced society the power of constant marketing and peer pressure often overwhelms even the brightest young minds.  Advertisers offer us everything we want, right now, and will give it to us even if we can’t afford really it. All that’s needed is a simple signature.

Rationalizations happen and BOOM, soon the poor kid is carrying a balance at an obscene interest rate.  Then the real struggle begins.

What We Should Be Teaching Kids

Some kids just seem to have an “I’m From Missouri, You Need To Show Me” mentality where they need to have the punishment doled out before they can really learn the lesson.  Other kids are the type that are able to learn profound life lessons merely from hearing stories about various pitfalls.  In either case, parents should instill the following principles in their kids at an early age: Minimalism and Frugality.

This is the true foundation for being able to properly evade the constant traps being offered to the unwary.  If children can learn to make correct economic decisions in small things, this same process should scale out allow them to make the correct decisions in big things.

That way, if the child chooses to go the route of building their credit profile it will be with this sturdy mental foundation as a basis for action.

Hey Veterans: Are You Drowning In Credit Card Debt?

The scenario: You have debt, and lots of it, but you also happen to have a home that you have owned for a while.  You will probably find your dinner meals being continually interrupted by telemarketers asking you the following questions:

Do you currently have equity in your home? Are aware of the “financial power” locked in your home’s current market value?

Well, if so, be very careful! Many financial planners will tell you to that the one time it is ok to use debt to pay debt is to use a HELOC or an equity line of credit to quickly pay off high-interest credit card debt.

Our advice: There is never really a good time to use in your debt elimination plan. So normally we do not suggest it.

I’m not a fan of this plan of attack for one simple reason – if you get yourself into so much trouble that you eventually decide to declare bankruptcy, your card balance collection is not secured by your assets, while a mortgage is guaranteed by your home.  So this transfer of debt actually endangers your home!

At the very least, this means that you have attached credit card debt to your home.  Before this, the worst that credit card companies could do to you was go to court and try to get a judgment against you. However, when a debt is backed up by the value of your home – the bank has a real, legitimately painful way to get their money back.  This leverage they’d now have can force you to either stay with the loan or to give up your home.

However, it is your call, so you must figure out what will allow you to rest at night. If your credit card debt is currently manageable and you prefer to save on interest charges in the short term, an equity line of credit will allow that. If you think there is even the remote possibility that you may be forced to file bankruptcy, it may be this a tragic mistake that you vacate your home.

There are many creditors out there who really prefer to place a lien on your home to get your money or assets.

Questions you must ask yourself before pulling the trigger:

1. Are you using your home equity as an excuse to continue your bad spending habits?  Most people do not realize that new loans that pay off old loans do not really address the bad credit spending habits that are programmed into them.
2. Are you able to stop spending unnecessary money? If so, perhaps you can save your way out of your current situation.
3. Do you have any investments in a 401k or other type of savings program? If so, being your own banker is one of the best things you could do.  You’d take a loan against your investment, then pay yourself interest. Combine this with new spending habits and you could be on the path to wealth instead of debt in no time.So what are you going to do? Are you going to address the root of the problem? Will you seek help for the disease? Or will you merely continue to put Bactine on the symptoms and hope for the best?   The sooner you stop with the accumulation of debt you can start planting your money tree orchard, which will bear you good fruit from your labors years from now.

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Hey Veterans: Do Your Kids Know That Going To College Is Worth It Financially, But Paying For It Is A Heavy Burden?

I came from a household where my parents did not go to college.  Due to this fact, we grew up in an environment where going to a university was not a clear expectation but something you could choose to do if you wanted to.

Luckily, I got to be part of a summer camp program that started to open my eyes to the importance of continuing my education after high school.

I really wanted to go to the University of Illinois after going on a visit with the summer camp and was lucky enough to be able to attend the school.

It was only long after I had graduated that I realized just what a huge difference that experience had made in the trajectory of my life.

My siblings who chose not to go to college seem to struggle way more than necessary  in life.

However, it was not all roses for me.  I struggled with the student loan I accumulated for many years after graduation.

I came across an awesome article (no longer available on StumbleUpon unfortunately) that talked about ways a student could get a jump on the college cost machine.

It most certainly would have been nice to have someone mention some of these things to me while I was still in high school, but to be honest, I am not sure I had my head properly screwed on at that time.

However, a parent can definitely use some of these methods of lowering the cost of a college education to coach their young person into a space that they will definitely appreciate once the fog of adolescence clears up.

One of the biggest ideas I took away from reading the article was the idea of trying to get some of your potential college course requirements out of the way while in high school.

For example, using AP level courses while in high school to offset the need to take those courses in college can literally save thousands of dollars.

I TOOK AP courses.  No one informed me that I could have used those to shave a few requirements while at university.  I literally slapped my forehead when I saw that tip and thought about the inefficiency of sitting through those courses in high school and not leveraging them for college.

The other tip in the article that I could have easily took advantage of was taking a few classes at the local community college to get some of the pre-requisites out of the way.

It’s funny because I distinctly remember helping my aunt with math homework from the local community college.  I thought the work was ridiculously easy.

However, later when I had a full course load at college, I could have seriously used the break from needing to complete so many courses.

By the end of the four years I was completely burned out on classes.  It would have nice to have been warned about this at an earlier point in life, but hey, things happen.

If you have other hints or tips that a parent should know while trying to get their young person prepared for a college experience with less debt let us know by commenting on our Facebook page.