Getting Out of Debt

We live in a culture where more is better, and spending beyond our means is encouraged. Because of this, the average American household has an average of $15,611 in credit card debt, over $150,000 in mortgage debt, and $32,000 in student loans. These numbers are alarming, and are a reality for many people. There’s nothing worse than feeling suffocated by debt, but the situation is not hopeless. Though it takes dedication and sacrifice, these few simple steps can help you save money, and work your way out of debt.

Stop Borrowing Money

This one may be obvious, but don’t take on any more loans, and don’t borrow money to pay off your loans. If you truly want to get out of debt, you need to stop spending, and concentrate on shrinking down what you have.

Know Your Number & Organize Debt

Pull out all of your loan paperwork, or access it online. Even if it’s cringe worthy, add up your total debt to know exactly what you’re working with.  Organize your loans with the ones accruing the most interest as a priority and the ones with the lowest interest being paid off last. You’ll want to avoid extra interest charges by tackling the high interest ones first.

Make a Budget

Sit down, and really look at the expenses of your family. Be realistic with your expenditures, but realize that you are also going to need to cut back on luxuries in order to tackle your debt.  Make sure to look at things like past credit card statements, utility bills, and car payments to accurately set your budget.  If your numbers just aren’t adding up, consider taking on extra work.  Nobody said getting out of debt was easy, and working after hours just might be what it takes.  Cut out things like eating out and going on expensive outings to movies and concerts.  Instead of shopping at expensive department stores, consider more budget friendly stores like Sears where you can get more for your money.

Start an Emergency Fund

Oftentimes, when families encounter a crisis, they borrow money to stay afloat.  By stocking a small emergency fund, usually about $1000, the money will be available for those unexpected situations.

Stay Committed

Though it’s tempting to spend your tax return on a family vacation, that money should be used to pay off debt. If fully committed to the cause, any extra money should be used to pay down loans.  Use your tax return, birthday money, and rebates to get one step closer towards your goal.
Getting out of debt is possible if you’re willing to work hard, make sacrifices, and stay committed.  Follow these steps, and you’ll experience the financial freedom you’ve always dreamed of.

How Smart Are You With Credit Cards?

Personal finance is something you might call a hobby of mine. I’ve written on the subject here before, and on a couple of personal finance blogs that I own. One of the things that constantly gets batted back and forth between the experts in personal finance is the use of credit cards. There are some that will tell you that you shouldn’t use any credit cards at all. I happen to not be one of those. I think that credit cards can be a valuable tool. Emphasis on can. Used properly, a person can take advantage of the many available interest free credit cards to pay regular bills and then pay one large payment to pay the card off each month. It can help you with your budget by turning a handful of payments to different places into one payment to the card company.

There are other ways that you can use a credit card wisely without running up the debt. Obviously, the first step is to pay the thing off every month. Another step is finding a card that works for you. There are all kinds of cards that are available that have some sort of rewards system in place. They range from a simple percentage in cash back to much more complex point reward systems. Which one you might want to take advantage of will depend on your personal preferences. You might travel often, and make good use of a card with reward miles attached to it. I travel rarely, and have little to no use for miles. Instead, the main card that I use is an Amazon rewards card. I get a small points amount back for every purchase that is then tied to my Amazon account and used when I make purchases on Amazon. I read quite a bit, and buy plenty of stuff from Amazon, so this works out really well for me.

If you have credit card debt, like me, you’re not using your credit cards as wisely as you can. In the last several years, I’ve paid off a large portion of my credit card debt, but not all of it. I’m still working on the rest. One of the tools that I’ve used, with some success, are 0% balance transfer deals. Credit card companies make money on people like me (and probably you) who maintain balances on their credit cards. Each month, the earn that high interest rate on the remaining balance, while we whittle away at it with the small required payment. With the transfer offers, I’ve been able to maintain a 0% or low interest rate on my debt for over a year. Each time I’ve had to transfer the debt to a new card, I’ve paid a transfer fee of about 3%. Small price to pay for no interest for a year, if you ask me.

Of course, with anything, even the transfer deals can be hazardous. If you aren’t making any progress on paying the debt off, you’re really missing the boat. Used as a tool, the deals can be valuable in eliminating debt. Another pitfall of the deals can be that if you use too many of them, your credit rating can suffer. If you’re credit rating starts dropping, the new offers in the mail will stop coming, and there you are paying interest again.

Used properly, credit cards can be a tool. Building up rewards and cash back on cards you pay off every month can be a nice bonus at the end of the month. I still maintain that you should have as little credit card debt as possible in order to reduce the amount of interest you pay each month. Be smart with credit cards, and use them like a tool, and you’ll have much happier financial situations in your future.

5 Money-Management Tips for Entrepreneurs

How to stay above water while your business is growing

Being an entrepreneur means being excited about the prospects of new ideas, products, and businesses. Entrepreneurs spend a lot of time finding and securing funding for new ventures, and then dive right into infrastructure, marketing and selling; but too often, good money management practices are neglected or outright forgotten. Many a failed venture need only look back on cash flow issues that were evident from the onset of operations. Here are some ideas to make sure you are properly managing your money.

1.Have a grown-up in charge of your budget

If you’ve been in the game for a while, you know the importance of having a solid business plan, and you know how much weight rests on the financial planning portions of that plan. Before they start their business, most people have a general idea of what your finances will be, but you might not realize all of the expenses that you or your business will need to stay afloat. Brand-new startups should have weekly budget assessments, that can gradually stretch into monthly and quarterly meetings—but if you know that you’re not detail-oriented enough to make it happen, find someone who is. There must be at least one person in your organization whose primary focus is asking “Where’s the money coming from?”

2. Size matters

You’re not an entrepreneur because you think small; but not every startup company will be bought up in the first year by a giant software company, so you might not be a multi-millionaire as soon as you anticipated. Be smart, and use your company’s small size to your advantage. A small company is better able to adapt to shifting market trends, and if you’ve got your ear to the tracks you’ll be able to see those changes coming, and plan quickly to take advantage. Growing large quickly simply to get noticed won’t benefit you, your investors, or your clients. Keep operations tight and efficient and in time everyone will be thanking you for your smart business planning.

3. Accountable accounting

One of the biggest mistakes small businesses can make is outsourcing too much, too quickly. Some things are better kept in-house, and accounting is one of them. Even if funds are tight, and you can only hire an accountant part time or on a contract basis, do this instead of farming that service to an outside company. Having someone that is intimately aware of your business, who you can talk to any time you need to, will be invaluable. Utilize free money management services and applications from Mint, Google, your bank and others to keep you on top of your finances.

4. Tech Savvy

Being tech-savvy can not only help you save money in operation expenses, but keep you aware of your money-management issues as well. Small businesses can easily operate with small and efficient computer, network, and other telecommunication solutions. The more educated you are on the availability of money management tools, online financial services, and free or low-cost communication devices and plans, the more you can do yourselves, and the better you’ll be positioned to keep a positive cash flow.

5. Money-minded

While you should be devoted to creating the best product, service, or model possible for your business you should always have your finances in the back of your mind guiding every decision you make. A great way to make sure you’re making your decisions on accurate numbers is by loading up your smart phone or tablet with some free financial apps that can be linked to your credit cards and bank accounts. Use them to stay on top of bills and to coordinate with your accountant in your weekly planning meetings.

Aimee Watts is a staff writer for Mobile Moo. She has spent ten years telecommuting full-time, and loves spreading tips and advice for fellow work-at-home parents. She loves gadgets, new ideas, and skiing with her two favorite people: her husband and teenage son. They live in Evergreen, Colorado.

Why Wouldn’t You Run Ads?

On any given day, you can run around the blogosphere and find someone who’s been blogging about the removal of ads from their site. Or why they won’t ever have ads on their sites. It always goes back to some moral stance that they are trying to make and how it supposedly adds more weight to what recommendations that they do make. This isn’t one of those posts.

I run ads. I most likely always will. I enjoy blogging. It’s a great outlet for me both creatively and professionally. But I can’t do it for free. There are expenses involved. Arguably, I make more than my expenses are in a year, in a month. But the extra profit from this particular outlet allows me to work on other outlets. Other websites and other business ventures. For instance: I sell on eBay. It’s a small scale operation, with dreams of being a bit bigger. The extra money from this and other sites has allowed me to buy larger amounts of inventory and as a result, make more money there as well. That same extra money has allowed me to buy more domains to develop. (never mind that I’ve been having a hard time getting the motivation to develop them.)

In nearly every facet of life, there are two sets of people. The professionals and the hobbyists. I make money from my work here. That makes me a professional. If you don’t make money from your work, I would argue that you are merely a hobbyist. If you see yourself as a professional, you should be getting paid for your work. And unless you’re blogging for your employer, you’ll have to pay yourself. How will you do that? Advertisement revenue. Jim at The Net Fool put it best in the title of his post today. Cash is King!

Advertisements don’t have to be intrusive. They don’t have to be deceiving. You can still hold your moral ground while getting paid for your work. Make the decision to clearly label all affiliate links (I don’t, but that’s another post) and advertisements. If you’ve disclosed that you may make money from the link or banner, how is that a bad thing? You can be a professional and moral at the same time. It sometimes seems rare, but it does happen.

One last bit to chew on. Abraham Lincoln once said (long before the time of blogs) that “that which we attain too cheaply, we esteem to lightly”. If you’re giving your content away for free with no visible means of revenue, what does that tell you about how your content will be esteemed?