Tag: personal finance

so let's say for example you have right now a $5,000 credit card okay that's the balance on this card you're paying 25% interest annually and that's about a $100 minimum payment every single month you're actually responsible for paying now all of a sudden by Magic you actually get an offer in the mail from a balance transfer credit card and you're like yo it must have been my luck it's not luck it's marketing your information has been sold thus the company knows about it and thus now they're sending you offers Direct offers to you now the offer says this we're going to give you 21 months to transfer your debt over to us and you get to pay it off in 21 months and we won't charge you any interest whatsoever for those first 21 months and you might say well this sounds like a great deal over here I'm paying for example a 100 bucks per month in interest but over here I'm going to be paying Z in interest for the first 21 months this saves me a bunch of money and the only catch is you have to pay a 3% fee for the entire balance transfer now that's not a big deal because right now you're paying $100 as a minimum payment and when you take 3% of 5,000 that's only about $150 or so so it's really not a big deal so why is this attractive what is the problem with it and what exactly is a balance transfer credit card I'm going to go into all the details in this video now do me a favor guys and ask you smash the like button I appreciate it a ton now the first thing is this guys okay a balance transfer credit card I'm not going to complicated it's basically just a credit card that is designed to actually get people that are in debt in some way to transfer their debt over to this credit card and potentially that company be the one that's actually going to get all that interest from you going further it's kind of like a long-term investment okay they're actually betting that you're not going to to pay it off in that introductory period and the TR going to keep the balance and you're going to continue to pay them and pay them and pay them and yes it could actually turn against them if you actually pay but for the most part they get 3% outright and if you don't pay them well you might become a customer for something else you might get another credit card with them or another product or a loan or a mortgage whatever it is okay they have a customer a prospect to get other things that is what a balance transfer is actually good for it now what is the problem here Tommy I still don't understand okay they're giving me an offer if I'm smart and I take advantage of it I walk away without paying any interest isn't that great well the answer is this okay you might think that you're actually going to walk away dilly dally free okay but what happens is usually this what's actually going on when you actually open up a Balan transfer credit card whether it's an offer whether you've been pre-approve approval whatever you just basically you basically just opened up another line of credit that is what's actually going on so let's say for example you have credit card a you owe $5,000 a year and now you actually get pre-approved for a balance for a credit card and then you basically apply and then say hey we're actually going to give you a balance of or a credit line of $7,000 and you say well that's awesome that's more than I had over here so now you say I want to transfer the balance from credit CR card a over to credit card B your new card the balance transer card and by the way it doesn't have to be a credit card it could also be for example Hospital loans it could be any debt overall even Collections and they could actually just basically pay that off by sending them a check and basically now you're in here and the debt is over here that's the whole idea okay so what happens is this okay you say I want to transfer balance from this card over to here they say okay just pay us a 3% fee you pay the 3% fee that's $150 they sent over a check to your credit card okay now that's fully paid off the balance on credit card a is basically zero the balance on your new balance crit card is basically um $5,000 or whatever the balance here basically was that's the idea now what actually happened here okay you went from having a credit line of $5,000 to having a credit line of basically $122,000 remember so if you got in value so far I'm going to ask for a favor subscribe to the channel because only like 20% of the people that watch or actually subscrib so go ahead and subscribe right now cuz I have a lot more content and having a credit line of basically $112,000 remember they actually gave you $7,000 and you have 21 months to pay that off okay without any interest and you might think this is awesome okay what I'm going to do is basically pay this off and never look back but what usually happens is this and I'm sad to say this okay but what usually happens is this okay you have credit card a now which is basically empty and you have credit card B all right and what happens is basically you say well this one is free you start using it again okay and before you know it this goes right back up to 5,000 or 3,000 or 4,000 and this one you're barely making any real payments or any Dent to it remember they gave you 5,000 the balance transfer credit card is still a credit card you can still use it to buy stuff and it still gave you $2,000 extra dollars and you actually need it so now you might use that for some things else okay and before you know it the 21 months have gone by and now you owe over $110,000 overall you owe credit card a you also go owe credit card B credit card B is saying yep we got them now we're actually collecting interest payments every single month from you and credit card a is saying well he paid it off but now he's back to pay now so I guess we win also so what is the right way to go about this and Tommy how have you ever done this the answer is I owed about wait for it $133,000 in credit card debt and I actually used balance transfer credit cards to actually help me clear all the debt now I was not one of the people that actually went ahead and basically clear credit card a transfer to credit card B and then build up a balance back in credit card a what I did was this I follow this three step system okay the first step is you want to set for yourself some really real istic goals based on how long they're actually going to give you interest free so overall let's say I actually owe $5,000 right that's how much I actually owe I'm going to divide this number by how many months you're actually going to give me so divided by 21 in this in this case by the way what credit card am I actually talking about I'm actually talking about the city Simplicity balance transfer credit card that offer 21 months to pay interest free 0% APR and even 12 12 months to actually buy things and not get charged any interest obviously they're doing this for a reason you transfer the balance over you get 21 months to pay it off but you also get 12 months to buy other crap and actually build up even a bigger balance don't be stupid don't fall for that okay so now I know that per month I need to pay about $240 to be debt free in21 months okay that's the idea and that's how I would actually do it now for me personally I would say well if if this is actually very doable I would stick to it if it's actually a little bit less than I can basically do I would actually lower it and basically even if I end with the balance okay at least I was actually realistic okay now for me personally I actually paid more towards it to be able to pay it off a lot faster I actually paid off $133,000 in credit card debt in 12 months okay because I actually fell for that trap where discover sent me a credit card and they were like Hey we're going to give you I think 18 months of purchase free interest and I went crazy okay I went crazy and what happened is I maxed out everything then it was like um I think it was 18 months right so I spent like 6 months doing some crazy stuff and then I had 12 months and I was like yo I need to pay all this in 12 months and I basically was able to cover everything in 12 months I think at a point I to transfer balance over to the balance transer card but I was actually able to do it which actually saved me a ton of money but it was only because I was smart so step number two is basically once you transfer the balance well close credit card a all right close it because you don't want to be at risk at rebuilding this actual um credit line and to actually get into double the debt you actually want to clear that and then lastly all right the balance CH credit card don't use it to get into more debt only use it to actually pay off the debt fast and be done with it and once you're done with all the debt my advice would be a 100% just close to to credit cards overall and don't get back into those problems okay ever since I became debt free and I don't have any credit cards I have no method no way of getting into debt anymore so it's not something I worry about but as long as you have that possibility that availability to watch you say I'm going to use this credit card for this or that for this emergency or that emergency you're always going to be going back into debt and going right back into where you landed I think the Bible says a dog is always going to return to his vomit and that's just disgusting okay so if debt is actually getting you into trouble over and over again and you're going back to it well that's just stupid and nonsense okay you actually want to avoid that so yes okay understand what they're trying to do they're trying to get you to bring your balance over to hopefully spend more money to be trapped with them and to pay them a bunch of interest but if you're smart what you're actually going to do is say I'm going to use you and I'm going to take advantage fully I'm going to close credit card a and once I'm done with you I'm also going to close you and I'm going to be done with it so set for yourself achievable goals so you're actually able to do this as fast as possible guys thanks for watching as always like subscribe hit the Bell sh notified there are obviously other balance of credit cards out there so if you know a few of them comment them down below if you want a full video on the offers out there let me know and I'll actually get to work up here is another video and this video is actually made possible by the supporters over at patreon here is a list of their names I appreciate it a ton if you actually want to join us on patreon support the channel the link is going to be down below thanks for watching as always like subscribe hit the Bell so you get notified peace

As found on YouTube

how should you handle debt once it has gone into collections now not to give away the ending but i'm telling you right now that paying it is quite literally the very last thing that you should do when it comes to debt collectors hi i'm laurie ann co-founder of dow jane's and if you are dealing with the stress of having a debt collector chasing you for money don't worry i am going to tell you everything that you need to know what a debt collector cannot do what your rights are and how you should handle debt collectors if you want to learn more about how to save invest and make the most of your money be sure to subscribe and hit the bell so you don't miss out on future videos [Music] now let's dive in what happens when your debt goes to collections well one of two things happens when a debt goes into collections either option one the creditor that you owe money to so say your credit card issuer or your mortgage lender when the lender thinks that you're behind on payments the creditor might use its own debt collectors to follow up and collect the debt from you or they may hire a debt collection agency or a law firm to take it on option number two is that a different company actually buys your debt from the original creditor and now they are trying to collect on the money that you owe in this case the original lender probably already received some sort of insurance money and sold your debt for pennies on the dollar now before i give you some tips for dealing with debt collectors i want to make sure you know what debt collectors can and cannot do and how to make sure that you are not being scammed and what your rights are when it comes to debt collections so the first thing i want you to know is that debt collectors are only allowed restricted contact they can only call you between the hours of 8 am and 9 pm and they're not allowed to call you at work so if you get a call outside of these hours then you might be dealing with a debt collection scam the second thing i want you to know is that you can request a callback number just like any other legitimate business a debt collection agency should be able to provide you with company information including a number to call them back when you get contacted by them write down as much information about the company as possible including its name and address this is important to see if they are legally operating in your state the third thing i want you to know is that debt collectors cannot lie or harass you or just generally be toxic people debt collectors cannot make you pay more than you owe or threaten you with a arrest jail time property liens or wage garnishment if you don't pay they do not have the power to do that so if they say otherwise hang up wage garnishment may be legal in your state but your debt collector will need to take you to court first and if a debt collector is posing as police or threatens to arrest you then there's a good chance this is a scam and you can report them to and the threat to the federal trade commission and the consumer financial protection bureau the last thing i want you to know about your rights is that you can stop a debt collector from contacting you under the fair debt collection practices act if you notify the collection agency in writing to stop communicating with you then they can only contact you again to advise you on one of two things one that they're going to stop trying to collect from you or two that they intend to take action against you such as filing a lawsuit and this law applies even if you do own the debt so you do not have to just surrender to the fact that you're going to be called repeatedly by debt collectors notify them in writing if you don't want to hear from them anymore now that you understand your rights uh and how to watch out for potential scams let's talk about how you should actually handle it when the debt collector starts ringing you up number one don't admit to the debt i know i might sound like a fat cat lawyer here but seriously just don't admit to the debt especially not on the first phone call some debts come with a statute of limitations meaning after a certain period of time collectors legally can't win a court order for repayment and so if you admit that the debt is yours you may actually reset the clock on that statute of limitations so don't confirm the debt especially on your first contact until you get more facts even if you know the debt is yours so point number two is you want to get the facts straight without admitting that the debt is yours get information on the debt itself ask who the original creditor was the original debt amount and how much is owed and the more details the debt collector can provide the better if the statute of limitations has expired the debt collector can no longer sue you to recoup the debt plus when your debt has been sold there's often misinformation about the debt itself or who owes it so you want to make sure that all of that is accurate point number three don't be emotionally manipulated a lot of people feel guilty about their debt and debt collectors prey on that emotion they create a sense of urgency that hits you right where you're sensitive we always tell people that they have to learn how to deal with the difference between money facts and money feelings so think about where your emotions and attitude towards debt and money have come from and then release yourself from any negative emotions that are holding you back if you find yourself on the phone with a diet collector don't let them make you feel bad okay and don't pay or promise payment or give any payment information at this time you're sensing a theme in this video like i said paying is literally the last thing that you're going to do you want to just ask for information on the debt and say that you'll be in touch later number four dispute any errors with the debt if you find any erroneous information with the claim dispute it mail a letter to the debt collector stating the amount that they're saying you owe is incorrect you should also ask for proof of the debt collector's claim that you owe money such as copy of a credit card bill and be sure to keep a copy of the letter yourself the consumer financial protection bureau offers a sample dispute letter on its website which i'll link to down below if you and the collector cannot settle the dispute you may want to bring in a third party arbitrator to weigh the evidence and if things get really hairy you may want to consider hiring an attorney make sure that you have records of everything you've been discussing with the collector in case it reaches this point it's always better to communicate via email or mail so you have a copy of your conversations in writing the fifth step you're going to decide if you want to pay off this debt or not this may sound a little odd we often feel like we have a moral obligation to pay our debts but the truth about how debt works is that the lender does take on a certain amount of risk when they lend out money this is part of why they charge interest it's to cover the cost of debts that have gone bad so you may have your own relationship to debt you may want to pay off this debt but it may actually not be in your best financial interest to do so when a debt goes into collections the main impact that it has on you is damage to your credit score and any debt that has already gone into collections has already done that damage and it's going to continue to have a negative impact on your credit score for about seven years until it falls off of your credit report now in some cases you may be able to negotiate the removal of this derogatory mark on your credit report as part of paying a settlement on the debt but if you have a debt that's gone into collections and it's close to being seven years old it will likely fall off your credit report soon and it may not be worth paying it's not going to improve your credit score at this point to clear it off because you've had that mark on your report for so long and if it's going to fall off and stop damaging your credit report you may be better off just waiting it out especially if you have any current debts that you're struggling with so i want you to focus first on maintaining good standing with the active debts that you have before paying off debts in collections number six negotiate the debt if you do decide to pay it at the end of the day whether it's a creditor or a collections agency reaching out to you all they want is some money and usually they paid a lot less for the debt than the amount that you actually owe on it so they might be willing to consider either lowering the debt so you can pay it all off in one lump sum or setting up a payment plan that you can reasonably manage make sure that you negotiate and always always always get any agreement that you come to in writing before you take the final step step 7 pay down the debt now at long last after you have done all of the previous steps it's finally time to pay up if you have decided to pay off this debt how you go about this will depend on what you worked out with the collector if you agreed to a lower lump sum then pony up the payment and move on with your life if you've set up a payment plan then make sure that you have that payment built into your monthly budget and that you're going to be able to meet it and if you need some help setting up a budget we have a video to help you out which i'll link to in the description below all right final thoughts i mean rarely should you just try to solve a problem by throwing money at it and when it comes to debt collections that should not be your first instinct i know this is stressful but take a deep breath and approach this problem with knowledge patience and strategy if you need some help getting out of debt be sure to check out our free training say goodbye to debt forever the principles that we teach in this class are specifically around credit card debt but really they apply to all kinds of debt all right hope to see you in that free training and good luck

As found on YouTube

[upbeat music] [Female voice] No one likes being in debt, but sometimes, well, you have to borrow money in order to invest in something big for your
future like your college degree or a house like Hector. Hector knew it was
important for him to make a plan to pay his existing debt in tandem with a good
spending plan that would help him avoid unnecessary debt. What is debt? Well
simply speaking, debt is an amount of money you borrow that must be paid back. Whether it's borrowed with a loan or through a credit card, it is money that
has to be paid back and usually with interest and fees. Hector learned that
there are two kinds of debt. There is bad debt like car loans and credit card debt
and good debt such as a student loan, a home mortgage, and business loans. An easy
way to think about this if that good debt is an investment in something that
will increase in value.

For example, student loans are an investment in
yourself, and if used wisely, can be a great tool to help pay for a
degree that will increase your earning potential and quality of life. When his
loans go into repayment, he will need to make his payments on time and in full to
ensure his loans remain in good standing. If he doesn't, there could be serious
consequences for his credit and overall financial well-being. Bad debt is when
you borrow money for something that does not increase in value. Unfortunately, you
may not always be able to avoid bad debt. For example, most people don't have the
resources to pay cash for a car. However, you should always be cautious about how
much bad debt you take on, and there are other ways that debt may get away from
you, resulting in debt distress. Hector had many of the signs of debt
distress like only making minimum payments, using his credit cards to pay
living expenses, and even paying his bills with his savings.
Fortunately for Hector, he discovered there is a smart way to borrow. While he
was a student, Hector created a spending plan to see
how much he needed to pay for his basic educational expenses.

Even though he was
offered more in loans, he only borrowed what he needed based on his spending
plan. Hector also made use of loan calculators
to determine how long until his loan is paid off, what would happen if he made
extra payments, and even how long it will take him to pay off his credit cards. One
way to pay his debts was to plan a month at a time and prioritize the debts. He
could do this by starting with either the debt that has the highest balance or
the highest interest rate. Instead, Hector chose to use the snowballing approach. He
listed his debts from smallest to largest and paying the minimum balance
on all of his debts while paying more on the smallest one. When he finished paying
off the smallest debt, he then put that payment amount towards the next smallest
debt until he paid that one off.

Then he repeated the process until they were gone.
Hector knew not to get impatient and go for the quick fix. He made sure to avoid
the temptation to use pawnshops, payday loans, or title loans to try to resolve
his debt. Instead, he made a plan. In addition to creating and using a
spending plan, he prioritized his debt repayments, prioritized his basic
expenses, and worked his debt repayment into cost on his spending plan. Hector also looked for assistance by
speaking to the folks from the Bears for Financial Success program on campus. Now,
Hector controls his money, his debt, and his future. And with a solid spending
plan and debt repayment plan in place, you too can become an empowered
financial decision maker like Hector..

As found on YouTube

Hi! It's LaTisha from YoungFinances.com today
I'm going to talk a little bit more about how paid off my $22,000 worth of credit card
debt. I've had a couple of people ask me about the credit counseling service that I used
to help me pay off that debt and so I wanted to answer those questions today. The first question was how did I find them?
I know that there may be some credit counseling services out there that are not very reputable.
There are some that I've heard horror stories so I can completely understand this question.
A friend of mine introduced me to the service. They had great success with it and they
were able to pay off their debt within three years. The service that I used Is based out
of Atlanta. It's a consumer credit counseling service the name of the service is called
Clearpoint. That's the service I used to help me pay off all of my debt. Someone else asked
me, how much did it cost? I had to pay a monthly fee it was a small monthly fee.

I think one
month I paid $35 and then as my payments went down each month than I paid a smaller and smaller
monthly service fee to Clearpoint. So that actually goes hand-in-hand with the next question
which is what with my monthly bill? My monthly bill started off pretty high. I had a lot
of debt that I added to it. I had $26,000 of debt that I added to the debt management
plan. So what they do is they set you up with a debt management plan and help you to figure
out how to pay down your debt and pay off your debt within a certain timeframe whatever
timeframe that you want to do. Typically it's three years and I opted for three years. So what happened was when they were setting up my debt management plan I put all of my
debt on there like I said it was about $26,000 I realized I had doubled up on one creditor
because one of them was already in collections I had two people collecting on the same debt
so once I removed that debt it came down to about 22,000 and then I wanted to pay everything
off in three years so I wanted to make sure that after three years I was completely done
so we worked on a payment that was comfortable and something I was able to make along with making the rest of my payments that I had to make on my budget but something that
would also help me to pay off all the debt within three years.

So the payment that was
settled on at the beginning was $800 and I paid it every paycheck I paid $400 then after
a while it even things started to get a little bit tighter for me where I felt like I wasn't
able to really manage that so all I did was I gave them a call and let them know that
my budget has changed a little bit would they be willing to help me negotiate down to $600
a month and so we were able to work together to figure out how I could do that. I was able
to work with them and they help you create a budget.

That's one thing that they helped
me to do was create a budget to see what I could pay and how I can do this and really
get rid of my debt within three years that was very helpful. And then the last question
is what was the biggest advantage of working with Clearpoint? One of the biggest advantages
is that they contacted all of my creditors and negotiated my interest rates down. In
most cases they were able to negotiate the high interest rates that I had of 22% to 24% and
they were able to negotiate that down to 0% for a lot of my creditors they were also able
to help me remove some of the fees and get fee concessions for me. My debt was pretty
delinquent at the time so they were able to call and negotiate.

So they did all of the
negotiations for me in that instance whereas I might have been able to get some of that down but
and they were really good at that so that helped a lot. It really helped me to pay all of
that debt within three years. Another thing that they did was they were the contact person
for all of my creditors. If I had creditors calling and some of them I it were in
collections all I did was say "hey I'm working with a credit counseling service
and you can contact them if you have any questions or if you want to know what payments are available
to be made because they are handling it all." I don't know what it is not think of something
in the industry where if you're working with a credit counseling service the creditors
they just don't bother you they will call the credit counseling service.

So they called
the credit counseling service and Clearpoint was able to talk to them. I didn't have to worry
about being scared my phone ringing all the time and figuring out "Should pick it up or
not?" Because at the time and I had a lot of debt it was a point where it was very stressful
and I talked about that in the blog post on how I paid off my $22,000 of debt. It was very
stressful. Yeah so that was the biggest advantage them being able to save me a ton of money
on fees, they saving money on interest rates and they were able to contact and talk to
my creditors and be that liaison. So that's my experience with Clearpoint as a credit counseling
service like I said I used them to help me pay off my $22,000 worth of debt.

If you have debt and you
have more questions on how you can pay off debt, your options and maybe more questions
about debt feel free to contact me at YoungFinances.com or you can leave a comment in the box below
just fill it up with any and all of your questions and I will be sure to either answer them in
the comment section or create a video response for you. Make sure you head over to YoungFinances.com
where I've got more information on debt, building credit and getting your finances on the right
track so that you can become a financial success. And finally if you liked this video and it
gave you some good information, give it a thumbs-up! I really appreciate all the support from
you guys and hope to see you next time.

Ok bye..

As found on YouTube

over the last 5 years I have tried and tested so 
many different strategies to manage my money and   I've done that because understanding how to 
manage your money and be in control of your   money is one of the most important life skills 
we can learn today it doesn't matter if you're   making 50,000 or a 100,000 a year the number one 
thing that makes a difference is how you're able   to manage that money and the real skill of money 
management is about making the most of the money   that you have not just for investing and for 
growing wealth but instead to find the perfect   balance between living in the moment and planning 
for the future when you find something that a   is easy to do and B it's easy to maintain then 
managing your money stops feeling like a chore   so in this video I wanted to talk you through my 
three-step method for effectively managing your   money in a way that makes you feel in complete 
control of what is coming in and out of your   account every month I'll also give you some of 
my favorite tips along the way if you want to   use the same template that I have created then 
in the description box you can find completely   for free the link to to download and use this 
to incorporate for your own finances as well   okay so this is what the tracker looks like it's 
got the colorcoded spending categories the income   section at the top and then the overview on this 
table over here so these sales will change color   as you start filling in the sheet you'll see in 
just a moment you just have to click file make   a copy and then you can duplicate it and use it 
for yourself now step one is to define the three   fword wait for it a key part of being in control 
of your money is defining where you want to but   before we even do that you need to First figure 
out exactly how much money you're bringing home   each month so this is the amount that lands in 
your bank account after tax if you have multiple   income sources you want to include all of them 
in here your 9 to-5 day job your weekend gig your   freelancing work that you do on the side maybe 
some Investments that are paying off whatever   these numbers are you want to put them in the 
top left blue section over here for example if   I'm making 3,000 a month after taxes for my day 
job I'll put that here another 200 a month let's   say from my creative side hustle and 500 a month 
from freelancing so you just plug in those numbers   at the top now if you're employed the number 
is pretty straightforward it's the amount that   lands into your bank account each month after 
tax and other state contributions have already   been deducted so in this case that's a 3,000 a 
month but if you already contribute towards your   workplace pension you actually want to add that 
number back in So if you contribute say 200 a   month towards your pension add that 200 back into 
this and so that number would instead be 3,200   the reason for this is because the amount that 
you're putting towards your pension contribution   actually goes towards the future U category 
which will come to in a second now if you're   self-employed or you're a freelancer you need 
to take into account taxes the last thing you   want to do is assume you have all this money 
coming in and Define your goals on a higher   number than you should and then be disappointed 
when you don't hit your goals so in this case   the 200 from my side hustle and the 500 from my 
freelancing work that is after tax once you put   those numbers in your total income is calculated 
now that we've done that we can Define the three   FS the fundamental bucket the fund bucket and the 
future you bucket you want to decide how much of   your net income so the 3,700 in this case you 
want to put towards each of these buckets the   funds allocated to the fundamental bucket are 
dedicated to your essential needs these are the   non-negotiables of Life housing Transportation 
food money placed in the fund bucket those are   the costs that enrich your life with joy with 
experiences and then lastly everything you put   into the future you bucket that is an investment 
towards the life you envision years down the road   in the world of budgeting there is a popular 
guideline that you may have heard of called   the 50320 rule it suggests that 50% of your 
net income should go towards the fundamental   needs 30% should go towards the fund bucket and 
20% should go towards the future U so those are   the percentages that I'm going to put into this 
column right here so 50% towards fundamentals   30% towards fun and and 20% towards future me 
and what you'll see as we start filling in the   sheet and putting your numbers and your actual 
spending in is that the colors of these sales   will change depending on whether or not you're 
in line with your goals or if you're overspending   or under saving I do want to make a quick Point 
here actually about the 50 3020 guideline it was   introduced in 2005 in the book all your worth the 
ultimate lifetime money plan and so it was during   a different economic landscape over the years 
we have seen inflation Rising healthcare costs   inreased student loan debt fluctuating housing 
markets all of these factors have really impacted   people's disposable income and the proportion of 
their income that goes towards their fundamental   needs so you may want to modify these percentages 
and tweak them based on your unique circumstances   you want to start filling in the three colorcoded 
columns in the middle so the fundamentals the fun   stuff and the future you the fundamentals like 
we said are the non-negotiables they are the   fundamental things for your day-to-day living 
so this includes things like housing your rent   or your mortgage payments includes utilities 
and other bills so we're talking about um water   gas electricity it includes Transportation 
so your car payment train tickets to get to   work or any other mode of Transport that you pay 
for groceries would also go into here Insurance   minimum debt payments for your debt o ations and 
you want to find what you spend on each of these   by looking through your bank statements so your 
debit card statement your credit card statement   or any apps that you use it may be that your app 
automatically categorizes your spending for you   so maybe all your utilities come into one so 
you can put that one number as a total let's   say 200 into this cell over here or you can split 
it up so break it down by water gas electricity it   depends on how detailed you want this to be when 
it comes towards spending towards your needs you   want to as much as possible have this automated 
have direct debit set up so that everything is   getting paid automatically the more friction you 
can take out of anything the more likely you're   able to keep that thing up the last thing you 
want is to receive constant monthly reminders   to pay your bills and then you need to remember 
your password log into your system enter your bank   details manually transfer each month it's just not 
fun and these kind of things make managing your   money a chore it creates unnecessary friction so 
once you go through and enter all these numbers so   let's say 1,200 for mortgage 100 for utility 30 
for phone and you keep filling in these numbers   you can then check the table on the right and 
that will immediately show how you are doing in   relation to your goals so I had to set a Target 
here of 50% of my net income to spend towards the   fundamentals but this sale here has turned red so 
I'm clearly exceeding that threshold so then you   need to reassess that goal and that something will 
come to in step three and this column by the way   at the end it shows the actual amount that you're 
spending in the currency that you're spending in   this way you have a clear idea of both the portion 
of your income that you're spending in terms of   percentages towards each of these categories 
but also the exact amount you're spending as   well then we have the middle column and that is 
the fun stuff now you want to be really clear   with yourself here you want to clarify these 
categories from the outset you really don't   want your fun stuff creeping into your needs just 
to justify some spending so the fun bucket is all   the things that are not essential these are the 
things that at the core are completely optional   so examples of what can fall into the fun category 
include subscriptions like Netflix Spotify Amazon   Prime entertainment so things like going out 
to the movies eating out getting that round   of drinks self-care so things like your nails 
facial haircuts and traveling these are all   examples of what falls into the fun category 
the fun bucket also includes those upgrade   decisions that you make so if you're buying a 
Mercedes instead of buying a more economical   Toyota or if you're shopping at Marks and Spencers 
instead of Tesla goes or getting a gym membership   instead of working out at home those are all 
upgrades they're little extras that you spend   money on that makes life more enjoyable and more 
entertaining so you can see a few more examples   that I've put in there and again you could split 
it out so I've got clothing as spending 200 100   in that category you could split that out and 
make it as detailed as you want you could have   a line by line jumper trousers or whatever you've 
bought in the clothing section everything could   go into here once you fill in all the categories 
for your wants as I've done here the table on the   right again will signal whether you're on track 
or whether you need to cut back once again in   this case I'm spending 25% of my net income on 
my wats so the sale hasn't flagged up I've got   some leeway I've got some room to spend more if 
I want and then the third column is the future   UB bucket and this is all about paying yourself 
first there are a few ways you can do this but I   always recommend setting up automatic transfers 
from your bank account that you get paid into   into a separate savings account as soon as you get 
paid again when you create a system that works for   you you remove the need for willpower you remove 
any friction and there's no excuse not to save you   don't get to the end of the month and realize 
you don't have enough money to be able to save   like you said you would at the start of the month 
all of that push and pull just disappears in this   category you can include things like investing 
in stocks and shares topping up your emergency   fund and putting money towards your savings funds 
if you're not sure where you should start and in   which order you should put money towards I have 
a video right here that explains step by step   where you should be putting your money and in 
what order when it comes to your savings fund   I would also recommend having a separate account 
for each of your bigger saving goals so if you're   saving for a house have a house fund if you're 
saving for a car have a car fund have them all   with specific purposes that way you're keeping 
them separate and you could easily just log into   your account and check what the balance is and 
how far off or close you are to that goal it's   a lot more motivating than having it all in one 
as just a savings pop so there a sale right here   for the future U category that works in reverse 
if you're contributing less than the amount you   initially planned for the future you the savings 
and investment bucket then the sale will turn red   indicating that you're not saving enough and then 
we're on to step three and that is the reflections   arguably the most important part there's no point 
in coming up with all these goals and all these   of questions you can consider and ask yourself is 
have you paid all your bills on time are there any   late payments if so why can you set that up to be 
automatic are any of the sales read meaning either   you spent more than you should or you saved less 
than you should if that's the case why did that   happen what did you spend on if it's that you're 
spending too much in the fun bucket then are   there ways to get the same thing for less or is it 
that you simply need to reassess and cut some of   those things out or maybe you spent less than you 
thought you would in your fun bucket in which case   you can increase maybe your savings an investment 
section you could pay more towards yourself and   pay off your debt faster it might be that this is 
the first month that you're tracking your spending   in which case these percentages might need 
some tweaking to make it something that is more   sustainable over the long run instead of just like 
plugging the numbers and closing it and getting on   with your life reflect at the end of the month and 
see where you can improve your finances once again   if you do want to download and use the same one 
that I have it's linked completely for free in the   description box below if you do use it this month 
come back and tell me how you get on I'd love to   see what what you thought and how it helped 
thank you for watching and see you next week

As found on YouTube

Meet Tom. Tom is a few years out college with a great
job and a lot credit card debt. Tom wants to get out of debt, but isn’t
quite sure how. Luckily for Tom, there exists a great solution
to his problem: balance transfer cards. However, before we continue, if Tom doesn’t
have a firm understanding of what a credit card or credit score is, or how to effectively
use either, we highly recommend watching our three videos “Credit Cards 101,” “Credit
Scores and Reports 101,” and “Credit Cards: Mistakes and Best Practices” before continuing
further. But let’s get back to the matter at hand. What is a balance transfer? Well, a balance transfer is simply the act
of transferring an existing credit balance to another credit card.

Most credit cards aren’t good this for:
they’ll immediately start charging interest on the transferred balance, plus a fee, generally
about 3-5% of the transferred balance. However, there is a specific subset of credit
cards, called balance transfer cards, that won’t immediately start charging interest,
instead giving Tom a 15-21 month window of 0% APR to pay off his balance interest-free. This is a great deal, but let’s still walk
through the steps you’ll need to take to get one: Step 1: Before doing anything, make a debt
repayment plan, ideally using our free recommended website, and rank your credit cards by interest
rate, as no matter what you end up doing, you’ll always want to tackle the highest
interest rate debt first.

Step 2: Once that’s done, call your credit
card company and try to get them to lower your APR. Emphasize that if they don’t agree, you’ll
move your balance to another company offering lower rates. Step 3: If the call fails and you still want
to transfer, keep in four three things. One: You’ll need good credit to get a balance
card. Two: You can’t transfer a balance to a card
offered by your current bank. Three: Depending of the size of your debt,
you may not be able to pay it off by the end of the promotional period, so have a plan
for that. And Four: The credit line on your balance
transfer card may be below your total debt load, meaning you’ll either have to:
Apply for a second balance transfer card Keep the remaining debt on your current card
and pay the high rate. Or use a personal loan, which is slightly
more expensive than a balance transfer card, but comes with a lower credit score requirement. And don’t worry, we’ll cover this option
in our next video. However let’s assume for now that Tom has
been approved for a balance transfer card with a high enough credit limit.

This is an important first step, but they’re
still a few more things to keep in mind: One: Don’t spend on the card, as the 0%
APR period may not extend to purchases. Two: Complete the transfer as fast as possible
or the 0% APR offer may expire. Three: Be careful about consolidate multiple
balances onto one card, as that will lower your credit score.

Four and Finally: Once you’ve completed
the transfer, always pay on time and don’t close out your old accounts, as failing to
follow either will lower your credit score. Hopefully you and Tom now better understand
balance transfer cards. Be sure to check out our next video, where
we’ll teach you how to get out of credit card debt without them, and be sure to website,
where you can find more educational content, your free credit score, and great credit card
recommendations..

As found on YouTube

– Multiple credit cards, high balances, high interest rates, high stress levels. You've been making payments
over a long period of time, but it doesn't seem to have
put a dent in your debt. Perhaps, you're even
considering the dreaded B word. But, before you go that far, you may be considering something
called debt consolidation. – What is debt consolidation? It's simply taking two or more accounts and
combining them into one. And, that's where you'd
make your payments. – Well, that sounds good. Simplifying makes things easier right? Not always – Consolidating your debt
may mean less paperwork, but that doesn't mean it's
the best path out the woods. – There are several different
ways to combine your balances and you should understand
the good and bad of each before you decide what's right for you. (lively music) – One way to consolidate debt is to simply transfer the
balance from one credit card to another.

Credit card companies are
often happy to do this since it means you'll
get in deeper with them. Many will offer a variety of promotions, 0% APR over the course of
anywhere between 12 to 18 months. Some will offer an
extended promotion date, but at a slightly higher interest rate. Transfer fees are common. So, be sure to factor that in. – This sounds like a pretty simple way to get some immediate relief, but beware of the fine print. Most of these deals
involve deferred interest which means that you're
still accruing interest on your balance during the
whole promotional period. When the promotion expires, you are charged all of
that accumulated interest despite the number of
payments you've made. Yikes. – Another way to consolidate debt is through a personal loan. You get a loan from a bank, use it to pay off all your credit cards, and then make payments to the bank.

Sounds simple. Again, there are some hitches. – First of all, your credit has to be in a favorable condition
to actually get approved. If you've been struggling to make payments on multiple cards, which you probably are if you're considering consolidation, then it'll be pretty hard to get a loan. And, even if you do, the
terms probably won't be great. This route only makes sense if you can get a lower APR on the loan than you have on the cards. – Also, this method can
be very risky for someone who has trouble restraining
their urge to spend. Suddenly having several
wide open credit cards may be too much temptation.

There are many cases where consumers have taken out a loan to pay
off all their credit card debt just to turn around and run
the cards right back up. – The third option is to
seek the help of a company that specializes in debt settlement. It may sound attractive
to let someone else handle all the messy details, but you should definitely
know how it works. – First, they ask you to
stop paying all your debts and instead start making payments into a special savings account.

Once there's enough there,
they take that money and negotiate a payoff with
each of your creditors, typically much lower than
the full amount you owe them. So, what are the downsides? – First, their fee, which can be as high as 25% of your total debt. Second, since you're effectively
defaulting on your loans, your credit score will get hammered. And, third, they may
not even be successful. If they can't reach an agreement with one or more of your creditors, you'll still be on the
hook for the full amount with all the fees and
damage to your credit. – Maybe, none of these sound
like great options to you.

Well, there's good news. Many people actually have greater success by not consolidating their debt. It may sound nice to
simplify your payments, but the psychological effect
of having one giant loan can be very intimidating. At a time when you need
discipline and optimism, you feel discouraged and hopeless. – By keeping debts separate and focusing on one at a time, you can get a feeling of
accomplishment and pride with each closed account, which can go a long way
to keeping you motivated.

It's all about knowing what
works best for your personality. – If you decide to keep
your debts separate, you can negotiate directly
with your creditors for some leniency, often called hardship programs. These policies were
developed to assist consumers that are struggling with
making on time payments. If qualified, the creditors
will lower your monthly payment and interest rate, no defaulted accounts, no wasted money paying a company to do what you can do yourself.

But, there are some hurdles. – You may have to prove that you are actually facing a hardship. Shop-aholism doesn't count. Think family emergencies,
job losses, pay cuts, or medical illness, and you may need
documentation to prove it. Once in the program, the lender will either close
or freeze your account. They may also lower your credit limit. If this results in a high
utilization percentage, the proportion between what you owe and the total you can borrow, you are likely to see a
decrease in your scores. – In the end, there's no one right way to handle debt. The important thing is that you know what you're getting into and that you know yourself – Your personal strengths and weaknesses will determine how well
each option would work.

So, you need to take an
honest look at yourself before making a decision. – [All] And, that's our two cents. – [Female Narrator] Thanks to our patrons for keeping Two Cents financially healthy. Click the link in the description to become a Two Cents patron. – If you want more strategies
for dealing with debt check out our video, What's the Fastest Way to Pay Off Debt? (lively music).

As found on YouTube