Mar 10 2011

Mistakes that you must evade while reducing credit card debts

In case you are having too much trouble dealing with your credit card debts and want immediate debt relief, then you must consider ways in which you can get out of debts. You must be aware that it is very easy to go under credit card debts as you do not feel the pinch in your pockets when you spend with a credit card. However, it is not very easy for you to get out of credit card debts. Thus, it is essential that you plan your finances well so that you can keep credit card debts at bay and plan your finances in such a way that you can have a debt free life.

However, if you are already in a lot of debt, then there is no reason to lose hope. You can definitely come out of this financial mess and have a healthy financial life. However, to do this you must be very focused towards debt relief and must try to avoid a few mistakes.

Some of the mistakes that you must avoid while trying to pay off your credit card debts are as follows.

1. Putting the blame on others: One of the most important things that you are to do when you are trying to pay off your debts is to take the full responsibility for the situation that you are in. Do not blame others for your debts as this will weaken your desire to pay it off. Under certain circumstances such as the loss of a job or any serious medical problems you may have been compelled to use your credit cards but under all other circumstances you are completely responsible for the situation that you are in. Thus, you should try and accept that you made a few wrong decisions and are under debts because of them. This will help you stay motivated when it comes to paying off credit card debts.

2. Separating money mentally: If you just think that you want to pay off your debts but do not work towards it, then you will not be able to get out of debts. Try not to lose the desire to pay off your debts because if you do so, then you will not be able to get out of your debts. Do not just make plans try and execute them. Put away every extra penny that you have towards debt repayment so that you can get out of the situation faster.

3. Making use of home equity line of credit: If you want to use a home equity loan in order to pay off your credit card debts, then you should know that you are putting your home at risk for paying your unsecured debts. This means that if you can not make the payments towards the home equity loan, then your house may get foreclosed. Thus, it is not at all advisable to use the home equity loans in order to pay off your credit card debts. Also remember that in case you default on credit card payments the credit card company can at the most drag you to court. However, if you are not able to pay towards the home equity loan, then you may lose your home.

4. Not taking a 401(k) loan: One of the best ways in which you can pay off your credit card debts is to take out a loan against your 401(k) plan. If you ignore this option, then you will be making a mistake. This option has many advantages that you must know. When you opt for this option, then you can avoid 10% penalty that is usually changed when you withdraw early. You may also get various tax benefits if you pay the loan back on time.

These are a few mistakes that you should take care to avoid when you are trying to pay off your credit card debts.

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Mar 10 2011

3 Things that you can consider in order to achieve debt reduction

In case rising debts are become a constant burden on you and you want to free yourself from the clutches of your debt, then you must consider ways in which you can reduce you debts. It is important for you to know that debt reduction is not a very easy thing to achieve and your debts will not miraculously vanish overnight. You have to put in a lot of effort and only then will you be able to achieve debt reduction.

There are a few things that you should consider in order to get out of debts. If you follow these tips the process of debt reduction will be much smoother.

Some of these tips that you may follow are as follows.

1. Form a budget for yourself: One of the most important steps that you can take in order to get out of debts is to formulate a budget. This is essential as you must know where you are spending and how much you are spending exactly. When you are making a budget, then you should list all your expenses in it. These expenses must be put into separate categories. It should also record your total income. When you make any expenditure no matter how small, it has to be put into the budget. You can subtract the total expenses from the total income in order to get the net income. Your net income is the amount that you have in order to pay off your debts. Thus, a budget provides you with a clear idea of your financial situation; you get to know how much you have to pay towards you debts. You also understand how much you are to cut down from which category. So, you get a clear picture of where you stand and how you must proceed towards debt reduction.

2. Look for ways to earn more: When you are struggling to get out of debts it is not at all right to spend more than the amount that you earn. However, sometimes it is not possible to reduce your expenses after a certain stage. In such circumstances it is advisable to try and increase your income. You can earn from any alternative source of income that you can opt for after your regular job timings. This leads to extra earnings that you can put towards the repayment of your debts.

3. Try not to take on new debts: When you are trying to reduce debts it is best not to take on more debts. This is because if you take out new loans, then you will have to pay towards them as well. This leaves you with little to pay towards your current debts making the debt repayment process longer. Thus, you should not take on new debts as you will have to repay them as well.

These are a few tips that you are to follow in order to reduce your debts. If you want to get out of debts and lead a healthy financial life, then you must consider these tips.

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Mar 5 2011

Federal Reserve and their ever growing debt. Scary chart

The Federal Reserve keeps growing their grab bag of junk and toxic waste all the while telling the public that everything is fine.  They keep hiding the waste and attempting to inflate the debt away.  The U.S. dollar is getting the brunt of this and Americans are realizing that their U.S. dollar is getting weaker and weaker thanks to the Federal Reserve.  Ultimately the Fed is trying to save the banking system at the expense of the U.S. public.

This is the endgame.  The Fed keeps taking on more and more debt and saying that all is well when all they are doing is taking on the junk waste of banks.  Just take a look at this chart showing the immense growth of the Fed balance sheet:

fed_all_short_stacked

This chart is not for the weak at heart.

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