Category Archives: Success Stories

How the New Credit Card Law Makes It Tougher for You If You Owe Money

Gary North

A story on MarketWatch gives some horror stories on how the new credit law has stung credit card debtors.

Read the article if you think things are going to get better for debtors anytime soon.

You risk have tour credit line frozen. You risk having your FICO score lowered if you cancel the card.

Know the risks before you make any major changes.

Get out of debt. That is the #1 solution.

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Watch Those Bank Fees

Gary North

Bank fees add up. The new bank law will make them add up faster.

Be sure you read this article. Take its advice.

You must plan ahead. Most people don’t.

You’re Not Alone, Says Survey. Six Out of Ten Workers Live Paycheck to Paycheck

Gary North

A September 2009 report indicates that six out of ten workers live paycheck to paycheck.

Six-in-ten (61 percent) workers report they always or usually live paycheck to paycheck just to make ends meet, up from 49 percent last year and 43 percent in 2007. This is according to a new nationwide survey of more than 4,400 workers by CareerBuilder. Three-in-ten (30 percent) workers with salaries of $100,000 or more report that they too live paycheck to paycheck, up from 21 percent in 2008.

To meet ends meet, a fifth of them are dipping into their savings.

Some workers are making ends meet by dipping into their long-term savings. More than one-in-five (21 percent) workers say they have reduced their 401(k) contributions or personal savings in the last six months to get by. Looking at workers earning six figures or more, a nearly equal number (23 percent) report that they have also reduced their 401(k) or savings.

One-third have no retirement or savings program.

While some workers are tapping into their long-term accounts, others are having a hard time saving anything at all. More than one-third (36 percent) of workers say they do not participate in any programs such as 401(k), IRAs or retirement plans, up from 31 percent in 2008. In addition, one-third (33 percent) report that they don’t put any money aside into their savings each month, up from 25 percent in 2008, while 30 percent set aside $100 or less per month for savings and 16 percent save less than $50.

This is a disaster in the making.

What should you do? Use the tools on this site.

Keep track of spending – Create a spreadsheet to analyze what you spend each month, including the money spent on those inevitable invisible expenses, such as a morning coffee, cab ride or afternoon snack. Once you can see where your money goes, you can clearly see where you can cut back.Boost your income – One-in-ten workers report taking on a second job in this economy to help make ends meet.* Ask yourself if this is something you can handle on top of your current job and then pursue some viable options. Check out sites like www.sologig.com for contract and freelance opportunities.

Cold Turkey for One Year: A “Won’t Buy Anything Except Food and Make-Up” Family Spending Plan

Gary North

This Redbook story seems incredible. The family stopped buying anything.

Both adults were “gotta have it” spenders. Finally, the wife wised up. She persuaded her husband to go along with the plan. They would buy almost nothing for one year.

If you had peeked into my closet or taken a gander at my credit card statements a couple of years ago, you would have quickly figured out how I spent not only my money but also my time. I was consumed with the latest trendy items and loved to shop online; plastic was my ticket to fulfillment. I liked things, got a high from finding the perfect outfit, and could smell a great sale from miles away. When someone in my family wanted something new, whether we truly needed it or not, we simply bought it. I was happy, my husband, Jon, was happy, and our two daughters, Zoe, 9, and Avi, 6, were happy. Life was good.

They were addicted. Then the addiction’s highs began to fade. “Then one day, I woke up to the realization that shopping wasn’t as enjoyable for me as it had once been.”

It was like the old Peggy Lee song, “Is That All There Is?”

We were spending too much time thinking about what to buy, buying whatever it was we thought we needed, and not appreciating what we had just acquired. I found myself wondering, When is enough going to be enough?

She developed a plan.

RULE 1: Jon and I wouldn’t purchase anything for one year. No clothing, shoes, adorable pocketbooks, or gadgets. Nada.RULE 2: The girls would be allowed to get clothing only at the beginning of the school year or if they outgrew something they needed. New toys and games were off-limits.

RULE 3: All gifts would be in the form of books, gift cards, or homemade items.

RULE 4: Broken items would not be replaced.

RULE 5: Purchasing makeup was allowed. (A girl can only sacrifice so much!)

RULE 6: Any form of family entertainment was allowed — and encouraged.

Her article describes the close family relationships the plan produced.

Abstaining from shopping changed more than just our monthly credit card statements. Not being consumed with the latest hip items allowed me time to think about what I really valued in my life, and I started making bigger changes. I realized there were many external distractions besides materialism that took time away from my family life. I reduced the clutter in our house, planned errands in batches to save time and gas, and said no to social engagements I didn’t truly want to attend. And a family trip spent camping in the mountains of North Carolina, about two hours from our home, was about making memories, not buying mementoes.

The experience changed their lives.

I’m proud to say we successfully completed our shopping fast. The one-year mark came and went, and we aren’t bound by the rules anymore. But we’ve internalized the lessons and the benefits: Zoe will question the necessity of a potential purchase, both kids are more appreciative when they receive something, and we all prioritize and value our family time together above all else. I have a clear understanding that the way we lived our life before the shopping fast was excessive — and that the way we lived our life during the shopping fast was extreme. So we’ve found a healthy balance that works for our family.

It is not necessary to go cold turkey on this scale to get out of debt. But this story provides evidence that people can do this if the stakes are high enough.

How high are the stakes in your life?

An Upper-Middle-Class British Couple Learn About Budgeting. Where Does It All Go?

Gary North

This couple still has no savings. They will not come to grips with their spending habits. You must do better than this.

Five Really Dumb Things Not to Do If You Are Up to Your Eyeballs in Debt

Gary North

This article describes the “dumb five.”

Pay the minimum payment on your debt. This can go on for years.

Seek handouts from friends and family. They will want to avoid you. You stay in debt.

Pay credit counselors up front. You may get skinned.

Get a high-interest loan to pay off old loans.

Declare bankruptcy before using this site to get out of debt honorably.

http://www.howlifeworks.com/a/a/?cid=7060dg&AG_ID=769

On Fooling Around Rather Than Cutting to the Bone

Gary North

Here is an article on a mother of two, recently divorced, up to her ears in student debt.

http://seattletimes.nwsource.com/html/businesstechnology/2015267670_pfmakeover12.html

She was never taught to budget. But, at her age, she has no excuses. It’s the old blame game. “Someone else did this to me.” You know: “The woman that thou gavest to me, she made me eat the fruit.”

We are personally responsible for our actions. Alcoholics Anonymous begins its 12-step program with a self-inventory and taking personal responsibility.

She has no clue as to what she must do. She should be cutting costs. She should be working a second job in the summer. She should figure out that her teenage sons in Washington could be enrolled in a joint program of high school and community college, where they can graduate at 18 with an A.A. degree.

People don’t know how to handle money. They reach middle age up to their ears in debt.