Staying current
Hunihan's former spending habits have damaged her credit history, but she can repair it in several ways:
Pay her current bills on time.
Knock out a large loan, such as the one for a new car she took out in 2007. Her poor credit netted her a 36-month loan that requires weekly payments. The $10,000 loan will cost her an additional $4,000 in interest by the time she's through, but successfully paying it off will indicate to future lenders that she's a better credit risk now.
Get a secured credit card. Hunihan could open a secured card with a small amount, say $200. The lender would give her a credit card with a matching $200 limit. The lender would have Hunihan's bank deposit for collateral, and, as long as she made timely payments, Hunihan could prove she's become more responsible.
Set up a regular repayment schedule with the bank where the checks were overdrawn. The account is closed, but sending money consistently will exhibit her financial discipline.
Avoiding future disasters
Hunihan shouldn't devote all her earnings to paying current bills and ridding herself of her debts, though. She still needs to prepare for surprises.
She should set aside a small amount each week -- even $10 a month -- to a savings account she can access in emergencies.
And Hunihan should get health insurance. She's living without it because her employer doesn't provide it. But the risk is too large. If she developed an unexpected illness or had an accident, her financial plan would be ruined, and she'd be buried under medical bills.
Hunihan should check whether she's eligible for any discounted health policies through alumni or industry groups, such as the National Cosmetology Association, which offers discounted insurance policies to its members. Or, if she looks for part-time work to bring in extra cash, she could seek an employer that offers insurance to part-timers. These are hard to find, but some larger chain companies do offer health benefits.
She should also check Families USA's state-by-state guide to see whether she qualifies for any state health insurance programs.
Having the right attitude
Despite all her troubles, Hunihan has the right attitude. She considers herself lucky. She says she easily could have been one of those people with $23,000 in credit card debt rather than the total debt of $3,000 she has.
She also has a goal that motivates her to stick to frugality: She wants a zero balance and a shot at someday opening her own hair salon or doing hair and makeup for videos or film.
"I don't usually fail," she says. "I'm trying to fight for the good and make my dreams come true, and thereafter I hope to do good for other people. You'll see me someday, I promise."
Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts
Thursday, May 14, 2009
Sunday, May 10, 2009
Get out of debt on $26,000 a year [chapter1]
Attacking those old debts
Hunihan has a tight budget but could start knocking out those lingering bills:
First, she could find a way to bring in extra income and put every penny of it toward old debts. Perhaps she could get an extra shift at the hair salon or a part-time retail job.
Next, she should pay off the smallest debt first. Though a $79 gym bill may not seem like much, erasing it from her "to pay" list would feel like a great accomplishment. She could then move on to the next bill, and the next, until they're gone. Her old credit card bills have balances of less than $600 each and interest rates of more than 25%, so there's no advantage to paying one over the other.
Hunihan also needs to check her credit report to make sure there are no old bills she's overlooking. She can get a free credit report once a year from AnnualCreditReport.com, a service provided by the three major credit bureaus.
Understanding how she dug the hole
Hunihan no longer has any credit cards -- the lenders canceled them due to nonpayment -- but her debts remain.
To avoid falling back into dangerous spending patterns, Hunihan needs to understand the roots of her habits.
"My first memory of my mother and money is seeing my father yell at my mother because she was always spending money," Hunihan says.
Her dad was a strict budgeter who used a green pad and pen to keep track of every dime, but Hunihan took after her mom, whom she calls a shopaholic.
Hunihan began her relationship with credit cards as a freshman in college when she was greeted by a long table filled with banking representatives. In minutes, she walked away with five credit cards and thousands of dollars of available credit.
Within two or three months, Hunihan had maxed out her plastic. She didn't bother -- nor could she afford -- to pay the balances, and she wasn't worried about it. Back then, she didn't understand why it was important to make timely payments.
"I don't think it was until about five years ago that I understood I had to pay even the rent on time, that people couldn't just wait for their money," Hunihan says. "I have to pay things on time to look in the mirror and respect myself or have other people respect me."
from MSN Money
Hunihan has a tight budget but could start knocking out those lingering bills:
First, she could find a way to bring in extra income and put every penny of it toward old debts. Perhaps she could get an extra shift at the hair salon or a part-time retail job.
Next, she should pay off the smallest debt first. Though a $79 gym bill may not seem like much, erasing it from her "to pay" list would feel like a great accomplishment. She could then move on to the next bill, and the next, until they're gone. Her old credit card bills have balances of less than $600 each and interest rates of more than 25%, so there's no advantage to paying one over the other.
Hunihan also needs to check her credit report to make sure there are no old bills she's overlooking. She can get a free credit report once a year from AnnualCreditReport.com, a service provided by the three major credit bureaus.
Understanding how she dug the hole
Hunihan no longer has any credit cards -- the lenders canceled them due to nonpayment -- but her debts remain.
To avoid falling back into dangerous spending patterns, Hunihan needs to understand the roots of her habits.
"My first memory of my mother and money is seeing my father yell at my mother because she was always spending money," Hunihan says.
Her dad was a strict budgeter who used a green pad and pen to keep track of every dime, but Hunihan took after her mom, whom she calls a shopaholic.
Hunihan began her relationship with credit cards as a freshman in college when she was greeted by a long table filled with banking representatives. In minutes, she walked away with five credit cards and thousands of dollars of available credit.
Within two or three months, Hunihan had maxed out her plastic. She didn't bother -- nor could she afford -- to pay the balances, and she wasn't worried about it. Back then, she didn't understand why it was important to make timely payments.
"I don't think it was until about five years ago that I understood I had to pay even the rent on time, that people couldn't just wait for their money," Hunihan says. "I have to pay things on time to look in the mirror and respect myself or have other people respect me."
from MSN Money
Saturday, April 26, 2008
About Money
We didn’t always have money. People used to trade things they had for things they wanted. If they had a lot of rice, they might trade it with someone who had too much fruit. Or a person who was very good at building might make a chair or table and get paid with chickens or clothes!This kind of trading, without using money, is called barter. But you can imagine the problems people had. What if one person had, say, mangoes to trade and wanted shoes in return? But the shoemaker didn’t want mangoes that day! Plus, the mangoes could spoil, so you couldn’t wait until next week when the shoemaker would want mangoes. So money was invented.
Learn how to manage your money, make smart investments, start and run your own business, do your taxes and save for retirement from this blog.
How to keep and use bank notes
Bank notes are made from papers so it is easy to be destroyed. Well, here is the guidance to keep your bank note stay longer.
1. Use it carefully to prevent tearing. 2. Keep bank notes in shape, avoid folding or scraping the notes. If you have to double over it, you should keep the front side together. 3. Keep away from humidity, heat and flame. 4. Should not write or stamp on the note. 5. Avoid stapling bank note.
If you keep bank note in proper way, it’s not only make it stay new for very long time but you also help the country saving budget to reproduce bank notes.
Learn how to manage your money, make smart investments, start and run your own business, do your taxes and save for retirement from this blog.
How to keep and use bank notes
Bank notes are made from papers so it is easy to be destroyed. Well, here is the guidance to keep your bank note stay longer.
1. Use it carefully to prevent tearing. 2. Keep bank notes in shape, avoid folding or scraping the notes. If you have to double over it, you should keep the front side together. 3. Keep away from humidity, heat and flame. 4. Should not write or stamp on the note. 5. Avoid stapling bank note.
If you keep bank note in proper way, it’s not only make it stay new for very long time but you also help the country saving budget to reproduce bank notes.
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