(Filing bankruptcy) You Need Good Credit And Cash Management Skills To Stay Financial Trouble Free

November 1st, 2008 admin Posted in finance |

By MIKE SELVON

There is no doubt that it can be an exciting experience to get your first job and then your first paycheck. It can provide a person with a wonderful sense of independence and freedom, something that most teenagers crave when they go out looking for work.

However, there are often problems that arise when young people have their own money for the first time because of the excitement and they can get themselves into financial trouble if they don’t have a good understanding of credit and cash management.

The biggest problem that many young adults run into when they are first out on their own is having what appears to be too much money. They find themselves cashing their paycheck after a couple weeks on the job and discover more money in their hands than they have ever seen before. Suddenly, they begin thinking about all the great things they have always wanted to buy and often they go about spending without taking the time to set up any kind of budget for themselves or a good personal finance money management plan.

The next thing that typically happens is that the offers for credit cards start rolling in, each one with a better offer and more attractive bonuses and incentives to get them to open various credit card accounts. In no time at all, these young adults can find themselves with tens of thousands of dollars of available credit lines, but without a solid credit and cash management plan, all too often they will use that credit for frivolous purchases.

When that happens, they can quickly get deep into debt and find they are soon having trouble keeping up with their rent, their other basic living expenses and their credit card payments. Suddenly, the salary that appeared to be more than they needed is now far too little and the financial stress starts to mount quickly. The exhilaration of earning a full-time income is over and financial worries become a reality that most never saw coming.

A personal money management crisis can usually be completely avoided, or at least minimized to a large extent, if people become educated about proper cash and credit management and begin to use money management tool options in their personal finances. This financial education can lead to acquiring money management skills that will stay with them for life. It can be the most important line of defense against getting in over your head and into dire straights financially.

Credit and cash management classes, software, and other products are available from numerous sources and these resources can help young people learn exactly how they can get and stay in control of their money. Many of these financial management solutions and resources are now available online, which makes it extremely easy, especially for the younger, internet savvy generation, to take care of their personal money management.

Educate yourself about credit and cash management from Mike Selvon portal. We appreciate your feedback and welcome your comments at our financial money management blog.

Do you find Credit Relief with Debit Consolidation?
By Dr. Jennifer Baxt, DMFT, NCC, DCC

When your credit becomes difficult to manage, it can be tempting to simply declare bankruptcy and hope that everything works out down the road; however, this is the exact wrong thing to do, and as a credit holder it is up to you to honor your debts. Not to mention that bankruptcy can literally destroy your credit for years, lowering it by as much as 200 points and keeping you from getting a home, car or any type of loan for as little as seven years, or as much as ten years. Bankruptcy is not a good solution and will stay on your credit for up to twelve years, keeping you from getting the good interest rates you were hoping for.

There is a solution to all of this and it comes in the form of debt consolidation. When a person has a lot of debt, it can become overwhelming to manage it all and that is what usually leads to someone losing their head in a mountain of debt. For example, if someone has four credit cards, one loan, two car loans and a mortgage, that means that there are eight different payments they have to make. It can be a lot to keep on top of, and many fall apart as their debts get more complex. Debt consolidation can be just the solution a person in debt is looking for.

What is debt consolidation? A debt consolidation program will take all your debts, and put them together into one easy package. The way this is done is through a larger loan through the debt consolidation company. For example, if you owe $11,000 on the credit cards, $23,000 on the loan, $38,000 on the cars and $120,000 on the home, then the debt consolidation company will make a loan for the amount of $192,000. This loan pays off all the other loans so they get off your back. Then, you make monthly payments to the debt consolidation company to pay off the $192,000 loan that they have on you.

Debt consolidation is a great solution for anyone who has a lot of trouble managing their credit and want to start over without a bankruptcy. It should be noted, however, that debt consolidation is not perfect and if you take this route you will pay more than if you paid off the debts yourself. If you pay six percent interest on your debt consolidation loan, then that means you will pay $11,520 in interest on the loan, though it is unlikely your home would be included in this loan so you actually would pay much less in your interest payment.

Debt consolidation is a great idea for anyone who has a mountain of debt but is losing focus on it because of the number of bills that they have. Debt consolidation companies will work out the best payment schedule for your income bracket, and they will help you repair your credit and get back on track. As a result, many have chosen debt consolidation over bankruptcy and have never regretted their decision.

Jennifer Baxt, works with people who are having trouble with their credit and want to improve their score. We offer solutions to credit problems by removing negative items from credit reports. You can visit our website www.creditrepairbydrjen.com for more information.

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