CESI Debt Solutions

Mint, You Complete Me: Part 4

2010-07-27T23:28:23Z

In my last blog I shared how my journey to budgeting suceess had started out a little rocky, but I was determined to stay on track for the month of July. Once I took the time to analyze my spending habits for my bare necessities and decided I needed at least a 3 month emergency fund, I hit the ground running. Okay, maybe I began with a leisurely stroll that turned into one of those funny fast walks and culminated into the moderate jog that I’ve been on for the past month. After taking my first month using www.mint.com as a learning experience, I tweaked my budget for the month of July and got down to the business of being frugal! The first step was to commit to eating at home most of the time with a modest budget set for the occasional Quiznos $5 deal. I’ve learned to enjoy the time spend making my own culinary creations for dinner and then using those leftovers for the next day’s lunch. Next, I made the personal choice to get into shape and that took up a lot of time that would’ve ultimately led to me going out and spending money because I felt bored. Instead of focusing on what I felt I was losing out on from not spending money, I’ve now progressed to thinking about what I’ve gained because I can commit to saving my money. I actually had to remove my self from several email clubs for local restaurants, clothing stores, and shoe websites. Speaking of shoes . . . they’ve always been my ultimate weakness and this brings me back to my hairline fracture breakdown that lead to me writing the first blog in this series . . . .

I’d forgotten that I still get emails from DSW whenever they’re having sales or new collections arrive. “Fall Boots have arrived. Last day to save up to $50!” was the title that screamed at me as I checked my inbox. I thought to myself that it couldn’t hurt to take a peek at these fall boots since it was the last day to save up to $50 and who knows, maybe I'd see a pair that are $50.99 *wishful thinking*. Of course once I was on the website I saw the catch was that I’d have to spend $199 to receive $50 off, but hey I was already there so it couldn’t hurt to see what new styles were out . . . Or so I thought, until I stopped on the page of the N.Y.L.A Mieko Bootie and then my breakdown began. I started going thru the usual rationalizations of why it would be okay to buy the shoes. First, they normally cost $150.00 but they’re priced at $79.95 and that’s a savings of $70.05! Next, they have my size and all my size 10 people know this is one of the first sizes to sell out. Then, I thought about how this shoe price does qualify for the $10 off, so it’s really only $69.95 and since I’m spending over $35, the shipping is free! I continued to think of all the reasons why it would be okay to slow down my mental financial jog for a quick moment and get these shoes, and then I had a moment of clarity. I opened up a new tab in my browser and logged into my www.mint.com account and took a look at my finances. As I looked over my checking, savings, and credit card accounts, I felt myself slowly start calming down. I began checking over my budget in hopes of finding some extra money that I could use for this oh so important splurge but instead found myself looking at how I had thus far managed to stay within most of July’s budget categories and was still on track for reaching my emergency fund goal. As I took the time to categorize some of my latest transactions, I started backtracking on those prior rationalizations. After taking a deep breath and crying a little inside, I closed the DSW website tab, deleted the email and decided I’ve come too far to go back now.

I’m happy to report that out of the 20 budget categories that I’ve created, so far I’ve only gone over one for the month of July and am on track to remain at or under the other set budgets! For those of you who've had numerous budgeting setbacks in the past, I strongly encourage you to give www.mint.com a try. The site works best for anyone who primarily uses their debit card for day to day transactions and also have online account access for the accounts you wish to track.

Mint, You Complete Me: Part 3

2010-07-27T23:22:51Z

In my last blog I talked about the initial excitement that I felt when I discovered the website www.mint.com, only to begin feeling overwhelmed and start losing interest. I was trying to do too much too soon and had to take a step back and work on a logical approach. My first step was to be very realistic about my income compared to what I wanted to budget, particularly for discretionary spending categories such as restaurants, entertainment, clothing, etc. As much as it hurt to admit it, I was going to have to do some serious cutting backs in those departments and start a financial change that would ultimately change my way of living. Once I got over the initial shock of figuring out that $80 a month for clothing (well, umm really that’s shoes but that’s besides the point) wasn’t a necessity, I got to work on creating my budget items.

I took the time to write down the monthly recurring bills such as rent, electric, gas, water/sewage, cable/Internet, home telephone, cell phone, and my gym membership. From there I wrote down what I considered monthly necessities such as gas for my car, groceries, credit card payments, savings contributions, prescriptions, miscellaneous supplies for the home and personal hygiene. Lastly, I created modest budgets for eating out, entertainment, and cash spending. It was necessary for me to really sit down and think about what I could do without, as well as make sure that I did allow myself a little bit of budget freedom to sporadically spend money to have fun. Once I had every category created with a monetary amount that stayed within my bi-weekly income, it was time for a fresh start to re-creating my financial profile. I waited till the first day of June to begin tracking my transactions. I decided to ignore any prior transactions and focus on that day going forward. I’ll admit it was hard in the beginning but I basically developed a routine in where I devoted at least five minutes a day to checking my Mint account and categorizing my transactions. I also customized my Mint alerts that are sent when I go over a budget or come close to surpassing it. My first month was rocky and outside of my monthly recurring bills, I pretty much surpassed the budgeted amounts for almost every other category. However, I didn’t let this get me down. Instead, I used my spending habits in June to really think about what caused me to stray from my budget. I also re-analyzed the budgeted amounts to determine whether I was being to stringent. After careful consideration, I came mapped out my budget game plan for the month of July and looked forward to finding out what I could really achieve.

Will I stick with my plan or find myself facing another month of setbacks? Stay tuned for the last installment of Mint, You Complete Me.

Mint, You Complete Me: Part 2

2010-07-27T22:48:29Z

As I’d mentioned previously, I tried almost every Excel budgeting spreadsheet known to man, in addition to using methods from Dave Ramsey and a couple of finance websites. However, I always had a hard time with dedicating effort into plugging in each transaction date, name, and dollar amount. I also had issues with coming up with a realistic budget that I could stick to. Fortunately, the software provided at www.mint.com makes what was once tedious, into a simple click of a mouse. The site is totally free, secure, and anonymous. If you’re curious about the details, the site offers the customary ‘About’ page that give you a wealth of information from inception to the present.

I’m one of those people that uses my debit card for every transaction I make with the exception of an occasional lottery ticket and that’s only because those require cash. I tried to join the ‘back to cash’ movement after taking the Dave Ramsey Financial Peace University course; however, cash is just not for me in this day and age. I pay all bills online in addition to using my debit card for day to day purchases. For once, this came in handy since the main benefit of www.mint.com is that it can track all debit/credit card transactions, loans, as well as stocks! It is necessary to have prior online account access for any accounts that you would like to track on this website. Mint gives you access to all account transactions, and furthermore, allows them to be categorized to fit under the budget categories that you are able to customize. I immediately set forth creating a budget for my monthly expenditures and then starting placing my checking account transactions under the proper categories designated in the budget. I realized after about one week that this was a big mistake for me. I had started using Mint in the middle of the month and soon grew tired of going back to categorize all transactions from my pre-Mint days and was having a hard time keeping up with expenses that didn’t seem to fit in the budgets the way I wanted them to. Everything seemed out of whack and I was already beginning to get quite frustrated with the process. I'll admit I abandoned the website for about a week, until I decided it was time for me to re-group and re-approach the organization of my finances.

Check out my next installatin of Mint, You Complete Me to find out how I overcame my initial set back with Mint and found out what worked best for me!

Mint, You Complete Me: Part 1

2010-07-27T22:37:48Z

The other day I sat staring at my computer screen and nearly had a mental breakdown . . . Well, maybe it wasn’t as severe as a mental breakdown, but there were definitely a lot of hairline fractures permeating my thought process. As my mind raced to and fro, I started thinking of what I had to gain and what my spending impulses could cause me to lose . . . .

Recently, I’ve been on a quest to build a three month emergency fund and have been practicing frugality as if my life depends on it. Yes, I may stumble here and there, but ultimately I’ve cut back on a lot of life’s frivolities in order to reach my goal. In the process of cutting out my bi-weekly trips for sushi, getting my hair done, hanging out at bars and party events, etc., I’ve learned that I can fill my time with other activities such as reading, going to the gym, and occasionally going to a cookout, and I do not feel as if I’m missing out. In fact, I’ve gained a sense of confidence that, when faced with situations that require me to reach into my wallet, I’ve learned to say no and look for a free alternative. In the past I found it hard to buckle down and save money and it was mainly because I didn’t have a specific goal. I had never taken the time to actually figure out an exact dollar amount that was going to be meant for a specific purpose. Like many others, I’ve written countless budgets where I’ve allocated every dollar to a certain category and like many other people, this would work for all of two weeks before I would fall off track. One of my main issues was that I hadn’t developed a good idea of what my monthly spending habits were. With the exception of monthly utility bills, my cell phone, and rent, I spent whatever I felt was needed for other areas such as auto maintenance and gas, home items and groceries, etc. I decided this was a task that went far outside the capabilities of my simple Excel spreadsheet, so I started looking for online tools that would help me track every checking, saving, and credit card account in addition to helping me develop my monthly budget, as well as set goals. Lo and behold, enter the wonderful world of www.mint.com! I know many of us feel as though we have little time to spend plugging in financial information but I was pleasantly surprised once I found out what Mint was all about and realized that after the initial setup, five minutes a day was all it took for me to finally take charge of my finances.

Stay tuned to learn how I finally started getting a handle on my financial life with a little dedication and the assistance of www.mint.com.

How do I create a Budget?

2010-07-27T19:25:53Z

A budget can consist of many different categories, a realistic household budget, should include expenses that you are paying right of your own pocket, not what being deducted out of your income: Mortgage or Rent Payment, Utilities, Entertainment, Education, Car payment, gas for car, insurance for car, life/health insurance, Child support/Alimony, Grocery,Drying Cleaning/Laundry, Misc. etc. Subtract your House expenses from take home pay. What you have left over is what's left to pay to external bills ( Credit Cards, Loans, etc.) If you don't have enough income to cover external bills then adjustments on your budget have to be made in order to compensate for making payments. if you have made realistic adjustments and still no bid difference, then try contacting creditors to see if there are any programs that you may qualify for that can help with the payments or rates on those loans or cards. If this was done and either not enough help or no help then you should seek out the advice from a Credit Counselor for professional assistance.
a Website that can help with a budget is www.learnvest.com
This is a wonderful resource try this out. Good Luck

New things to watch out for on your Credit Card Statements.

2010-07-23T23:21:03Z

Thanks to a new study released by Pew Health Group’s Safe Credit Cards Project we have good news that much of the “deceptive” practices that were used by Credit Card companies have been eliminated. However, the study found that there are still some areas to watch out for:

The fee for cash advances has risen on most credit cards from an average of 3% to 4%.
And the penalty fees and interest rates are now averaging $39 for a late fee and 29.99% interest rates for consumers behind 60 days or more on payments.

So pay close attention to your credit card statements and be aware of all the costs involved with using the credit card so that you can stay on top of your finances. If you are behind or struggling with your credit card debt you may want to look into a Debt Management Program to gain control once again.

Saving Money And Planning For Your Future

2010-07-23T02:45:28Z

Ran across an interesting article at money central on msn.com that takes a look at some of the quickest ways to save pretty significant amounts of money. Some of these ideas are pretty extreme, and probably not always realistic for everyone. But for some people, putting these ideas into action can be a great way to save. One point the article makes is that there are two parts to the saving equation. How much you make and how much you spend. For most people, automatically increasing the income side of things is going to be pretty tough, especially in these tight times. But by focusing on some of the bigger ticket spending you may do, you can still save. Fewer and fewer people smoke, and for those that do, it’s not always a given that you can quit. But if you have a pack a day habit and are spending $5 or so a day on cigarettes, quitting could save you well over $1500. The article points out that if you live in an area where you can cut back on driving to and from work, either by carpooling or taking advantage of public transportation, that can be another $1000 plus you can stash away in saved gas, insurance and maintenance money each year. The article mentions that the average American spends around $4000 a year between eating out and other entertainment expenses. Stay home instead of going to the movies, eat in the majority of the time and get books at the library instead of buying them, and it should be fairly simple to cut that in half. Also, think about buying clothing at thrift stores and consignment shops. I love doing this just for the fun of the great finds you can come up with. But with clothing spending averaging in the $1800 a year area, it’s another way to save pretty big bucks pretty easily. We here at CESI Debt Solutions hope these blogs bring you helpful tips for your finances. And one thing the below linked article mentions that I think we should all take to heart is taking some time out each month to think about, learn about, and plan out your finances. Think about how much time you spend maintaining your home, your car, or your yard. I can’t think of much that is more important than your finances and how they affect your future. So, above all, set aside some time every single month to do something, learn something, or plan something related to your money. In the long run, you’ll be glad you took the time.

http://moneycentral.msn.com/content/savinganddebt/savemoney/p36019.asp

When the collectors come calling.

2010-07-17T00:43:40Z

Many consumers today are struggling with their finances whether its due to a loss of job or just a reduction income or even increased expenses. With people falling behind on their bills it is becoming more common for people to be receiving collection calls on their debts. As a consumer it is very important to understand what your rights are when dealing with debt collectors. I have had clients tell me debt collectors threaten them with jail time, loss of job, or even foreclosing on their home. These are things that debt collectors cannot legally do. The government has passed a law called the Fair Debt Collections and Practices Act which protects consumers from harassment from debt collectors. Some of the highlights of this law are: Collectors cannot call before 8am or after 9pm; Nothing can be taken from you for an unsecured debt; you do not serve jail time for unpaid bills; they cannot threaten you with violence or verbally abuse you; and most importantly they cannot share your debt issues with anyone other than you. It is very important to remember these things when dealing with debt collectors because they have been becoming more ruthless in todays economy because they cannot collect from people who do not have it to give. I was on CNN Money’s website today and read an interesting article from debt collectors and thought I would share it with you. The link is http://money.cnn.com/galleries/2010/news/1007/gallery.debt_collectors/index.htmlHope this helps those of you in this situation.

Top Tips For Keeping Your Resume Out Of The Reject Pile

2010-07-16T00:47:33Z

The optimistic amongst economic forecasters talk about a potential economic turnaround. But for those out of work and looking for a job, that optimism means little. And with an estimated six job seekers for every available position right now, you can’t afford mistakes when looking for work. That being said, I ran across a helpful web page (link listed below) that describes the many things you should avoid when sending out resumes. Most of them are fairly obvious, but it’s always helpful to get tips from employment recruiters, which these tips are. A couple of the tips deal with the preparation of your resume. You should never send out a bunch of generic resumes for several different positions. Always be as specific as possible about your past accomplishments, and include details about how your skills relate to the particular job you are applying for. Companies give job descriptions for a reason, and your resume should explain specifically how you fit the job. Also, take the time to review your resume in order to avoid sending it out with any typos. Errors like that show laziness and will almost always disqualify you from consideration. And although you do want to be as specific as possible about your performance in past jobs, you never want to embellish your job history. Starting out a job search by not being truthful is never the way to go. You always want to include a cover letter with a resume. And, again, make it specific about your accomplishments and what you can do for the company you’re applying to. Never be general and boring with a cover letter. The people hiring you want to know what you can do for them. It’s OK to stretch your expectations a bit in your job search, but you don’t want to waste someone’s time by applying for a job you have no qualifications for. And finally, always include an “objectives” statement, but not one where you explain what the company can do for you, but one in which you explain what you can do for the company. Follow these rules and the others listed at the link below, and you will help yourself stand out from the crowd. It just might help you land that job you’re searching for.

http://shine.yahoo.com/channel/life/what-not-to-do-7-ways-to-ruin-your-resume-2009803/

One of life’s biggest reward’s, ” Don’t owe anyone”

2010-07-15T16:48:35Z

Debt can be a burden, depending on how you manage it, the type of debt that you have, and how much. Due to the Americain way, credit is someting that is only handed out to the previlaged. If you are fortunate to have this privagle you can use it in 2 ways only. Using the power for good, or evil. Well looking at the ecomony now, it's obvious that we all have inherited the fruits of thy labor, but the outcome is well you know... You hear it, you see it, you read about it. No so good. Well there are baby steps backwards that we must use in order to get ourselves out of this quick sand, by making rational, and well thought out decision when it comes to Managing Debt. It takes alot of practice, and discipline. First thing is not to temp yourself with using Credit if you dont need to, use your money first. Use Credit for emergency purchases, or if you dont have the money for the purchase. which should be a judgement call, in terms if that purchase is a neccssisty or a want. The amount of open accounts that are on your Credit Report, could also pay a big role. Paying balances in full will make a positive impact on your credit history, go to myfico.com for more information on what will and wont effect your credit history and other information on how your Credit history works for you and against you.
Checking you Credit history at least once per year, you are entittled to 1 free credit report per year by going to Annaulcreditreport.com. If you have questions regarding Money management, Debt Consolidation, Fiancial Planning, and Budget & Saving. Dont heisitate to contact one of our Licensed Fianacial Counsleors. Here at CESI Debt Solutions.

What is debt-to-income ratio all about?

2010-07-10T00:45:08Z

You may have already heard of the term debt-to-income ratio before, but many people don’t know what it is or how to calculate it. To calculate your debt-to-income ratio you simply just add up all the minimum payments for things like your mortgage, credit cards, car payments and other debts and take that number and divide it by your pre-tax monthly income. Once you have calculated your debt-to-income ratio compare it to the national average of 14.5. If you find that your debt-to-income ratio is much higher than average then there are some simple things you can do to improve your number. Start by paying much more than the minimum on your credit cards to get them paid off and then those payments will not be included in the debt-to-income ratio. Second, you can take the extra money that you now have and start to put more towards your car payment to pay that off faster. You will not only be on your way to improving your debt-to-income ratio but you will also be saving a ton in interest. The reason you need to know what your ratio is, is because most lenders use this figure when trying to determine whether or not to approve you for more credit. The higher your ratio the less likely you are to be approved because you cannot afford to take on another payment. I hope this helps and if anyone has any other suggestions please share them with us.

Life without Credit Cards, can be done.

2010-07-08T15:01:11Z

Life without Credit Cards, can be done.

What I've been hearing allot lately is, " Life without a credit Card is simply not realistic". Well this this is true to a degree. Those that have overspending troubles, bad budgeting, no money management. etc. Shouldn't use any type of credit cards unless it's there money. I know Credit Scores are a huge concern, but Financial Troubles are even a greater concern. For decades now, we have been taught to become co-dependent on the use of the "Charge it" mentality, before you use your money. However, for everything that a Financial Counselor warns you not to do regarding Credit Cards, your creditors find another way to reel you back in with costly advertising campaigns. Offering great incentives like using that card at the Olympics, or major cash back rewards, Airline bonus miles etc. But what they don't inform you as, who do you think will be stuck with the bill for all that costly marketing? You are. When you see that Apr jump on your statement up more then 3%, then you will know who is paying for those Marketing Campaigns, if your balances are paid off within 45 days, that Apr. can and will raise. Even with the new Credit Card Law. It's very important that you educate yourself with the new Law so you will know how, and what your creditors can/can't do, what type of protection that you have. With the economy in total array now, and there are allot of signs showing positive movement in the right direction. But, we haven't scratched the surface yet. Your financial judgments can make the difference in your lifestyle, and if you do decide on a Credit Card 2 things that you need to keep aware of. 1# a manageable rate (9%-12%), 2# a manage credit line that can be paid off within your budget that wont take you more than 3 months to pay off, and for emergency use only.

Credit Card Calculators To Help Put Money In Your Pocket

2010-07-08T00:59:44Z

One of the best websites out there for all things credit card is also one of the most simply named—creditcards.com. There are all sorts of articles and information related to various types of cards on the site. But one of my favorite pages on the site is the calculator page. There is a link to the page below, and you’d be surprised at all the ways you can analyze your cards. One of the simplest is the minimum payment calculator. With this, you can calculate not only how long it will take you to pay off your balance by making only minimum payments, but how much in interest you will pay along the way. Another simple calculation you can do is the payoff. Here you can calculate how long it would take you to pay off your debts by paying a certain amount every month, or plug in how long you want to take to pay off and the calculator will give you the amount you would need to pay every month. You have to be careful with doing balance transfers, such as transfer fees or higher interest rates than you have now after the promotional term expires. But oftentimes it can make a lot of sense to transfer a balance. The site has a calculator that can help you calculate how much in interest you can save by transferring to a lower rate card. Some of you may qualify for a low interest rate card and might want to compare if it makes more sense to go for that or a card that offers high cash back amounts. There’s a calculator here to see which is the best option for you. And if you travel a lot, there’s even a calculator to help you decide whether a high frequent flier mileage card might make sense for you. I never realized that there were so many calculators out there to help manage credit cards, but follow the link below. It might just save you a chunk of cash.

http://www.creditcards.com/calculators/

Debt Settlement: Separating Myth from Reality

2010-07-05T20:57:17Z

If I had a nickel for every time I've spoken to a client who's considering debt settlement without being sure of what debt settlement is, I wouldn't be here. I'd be in my summer house in the Hamptons - the one that I bought with all of those nickels. The truth is that most people aren't aware of what debt settlement involves. They just think, "Settlement? That means that I can settle my debts with the creditors quickly and easily, and get them off my back faster than you can say 'payoff.'" Not necessarily. Here are some of the more common myths about debt settlement (and there were a lot of them to choose from):

"Debt settlement is my right."

No, it isn't. You have to have a very good reason to even be a candidate for having your balances cut in half (or cut by whatever percentage they agree to), and I hate to break it to you, but something like, "Macy's was having a one-day sale!" doesn't count. Reasons that do count are divorce, job loss, or hospital stays - anything that indicates financial hardship, especially the kind outside of the cardholder's control. Sorry, but Macy's doesn't count, no matter how cute those shoes were.

2. "Debt settlement won't affect my credit score."

The way that debt settlement works poses an inherent danger to your score in and of itself. Naturally, what makes creditors happiest is to see timely and consistent payments on balances, on which the minimum payment or (preferrably) more gets paid each month. With settlement, after you sign up, you give them a monthly amount that they send to your creditors. They don't, however, send this money right away, but rather wait a period of 3-6 months, the reasoning being that creditors are more willing to settle an account when it's past due than when it's current. Of course, when this happens, the missed payments will undoubtedly be reported to the credit bureaus, and down goes your score. In addition, while the effect isn't nearly as bad as bankruptcy, the fact that the balances were paid off in part rather than in full can't help things either.

3. "Debt settlement is cheap."

It may seem that way, at least until you get a look at the fees charged by the debt settlement company, or see that 1099-C from the IRS come tax time (but more on that later). Companies charge fees for their services using one of two ways. They either (1) ask for a percentage of your total debt (usually 15-18%, and usually up-front), or (2) the percentage of what you end up saving (usually around 25%, and usually after you settle). And that doesn't include the monthly fees, or the initial start-up fee.

As for the 1099-C, keep an eye out for it in your mailbox right around April. You know that amount on your balances that you didn't have to pay by going through debt settlement? The IRS will count that as taxable income. In other words, you can add the amount forgiven by your creditors to your annual taxable income, and it may actually place you in a higher tax bracket.

4. "Debt settlement has to involve a third party."

If you have the stomach for it, you can cut out the middleman (i.e., a debt settlement company) and try negotiating with your creditors yourself. Think of it from the creditors' point of view - they want to collect as much money as they can. Involving a debt settlement company will naturally mean that some of the money that would have gone to your creditors is now going to the company instead. To quote Ken Clark, author of "The Complete Idiot's Guide to Getting out of Debt," the biggest issue that people have with this, however, is, ""It comes back to hand-holding. There's a huge fear of conflict. It's like the kid who broke the window and doesn't want to go in and face Mom and Dad. We're afraid to face these companies." The way I see it, mom and dad are going to find out eventually, so just fess up and see what can be done to fix things.

Where can I find information about my credit score?

2010-07-03T01:01:36Z

Pretty much all of us know what a credit score is, but most Americans don’t actually know what it is comprised of and how to make it better. Fair Isaac corporation takes the information about you and puts it to a mathematical formula to come up with your credit score. The banks and financial institutions then use this number to determine if they are going to lend you money or what interest rate they are going to charge you. So its important to understand what makes up your credit score. Your payment history, length of time open, and types of accounts are some major components in your credit score. But to get an in depth knowledge of what percentages each of those categories make up go to this link: http://www.myfico.com/CreditEducation/WhatsInYourScore.aspxWhen you go to the website www.myfico.comyou will find all kinds of information about your credit score and if you want to order it to find out what your score is you can do that there too. If you want to improve your credit score then the best place to start is to find out what makes up your score and go from there. I hope this helps on your journey to a better score.