Wednesday, October 29, 2008

Eliminate High-Interest Credit Card Debt

Many people do not have the financial foundation of education. On average, high school students generally do not hear much about bookkeeping and how you write a check. You can not assume that the fundamental Mathematical be enough to a person for the "real world" Personal Finance and Investments. If the school does not provide that financial education, then who?

What about Indiana Jones?

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If Indiana Jones negotiates buyer costs or try to run the conveyor Will Rock crushers, Indiana Jones man who knows how to take care of yourself you must learn to do the same if you want to take control of your finances.

The first step towards a comfortable retirement is 10 percent rule in force. This is one of the oldest and best understand your finances. You must pay 10 percent of salary before you do. This is money that you use for investment.

This rule is very popular for several reasons. First, a 10 percent of your monthly income would not have a big impact on your life. This is a goal that all could meet. Secondly, this percentage, so that they can adapt to changes in income and May. This eliminates a popular excuse to raise money if you have. This is also a step that you can do immediately.

Take on the biggest enemy in the first

Indiana Jones has always respected the rules in a bar fight: it takes most people first and its way down from there. The general idea is to assume the worst, if you have the power to turn it down.

You must have the same approach to your debt: priority for them and eliminate them one by one. Here are the steps for a decision on the debt must come first.

1st Take the highest interest debt first. It may be your credit card debts or other high interest loans.

2nd Pay debts, not give you a tax deduction. These debts are lines of credit, bank loans and auto loans. They all debts, unless you can write the interest on your tax return.

3rd The fight against debt, which threatens the tax. Student loans is a good example of this type of debt.

4th Get Rid of your mortgage. Paid leave the house has more advantages than the mortgage.

You should not invest before to get rid of your high interest debt. Let us on this basis, for example.

If you have your own 10 percent of your monthly income you 200 U.S. dollars. You need 400 U.S. dollars from your credit card. What should I do with this money?

You can invest in the fund or an index of bonds and receiving from 6 to 12 percent by the end of this year. Your credit card debt, but 13 percent interest. Interest costs to 52 dollars per month. You will not do more than you lose your investment in your interest credit card.

The debt burden on investment. If your debt is 8 percent, you need the investment, which increased by more than 8 percent. This may be difficult to find investments that pay a lot. Thus, the first and second priority debt can be a problem when you invest. Tax-mortgage debt, not how you invest.

Rocks ducking and dodging arrows

You may wonder why Indiana Jones is also jittery Pfeil, when he is confronted with weapons or skirt. At the end, you could probably with a few hints, not killed. You can not say the same thing to be shot or crushed by rubble.

If you think about arrows for you, but you will be slower, and your enemies can cling to you. It is therefore only logical that the fear of those threats. Why do people ignore this logical thinking to save money?

People often mistake the two most important resources. Arrears in the purchase is the first mistake. People buy things that are expensive, and continued to prove expensive years. Unfortunately, people do not like ADEPT on the case, because they are assets in debt. Cars are a good example. Not only cars to decline in value, but the cost of the car directly affect the monthly insurance premiums.

This is not only great costs, which the people down. The second biggest mistake that people, it has no control over their finances. EVN small expenses add up to 0% on balance transfer cards: People are buying lunch instead of packing, go to the latest movies, drink coffee, Fantasy, racks and other expenses. Persons, the premiums do not always invest and save more than they did before they added income. Small costs can be considered as Indiana Jones' hands to try to make it.

These two errors can be a deadly combination. The Rolling Rock is a very expensive life, and debt that you buy. As you does not matter if you're not money. You must from the beginning of the block and minimize costs.

Retired as Indy

When you talk about your debt, which has begun to minimize their costs, and you pay each month, May you believe that you have the right to leave. Life is not like a movie, though, and you can not your journey at this time. You only at the beginning of your great adventure of saving and investment. The problem will not disappear, as your journey continues - it is easier to find problems.

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