“It’s Debt Jim, But Not As We Know it”

By Isobel Miller

Would have been something Bones shrieked to Kirk as he pulled him up by the scruff of his regulation v-neck skivvy, with that desperate madman look in his eye as he turned the Captains attention to the alien species that just squelched its way onto the bridge, it looked like debt only it had evolved and mutated into something Kirk and the crew barely recognized. It was our debt.

Flashback to the days of 1966 when the fabulous Lieutenant Uhura sported a mini dress barely passed off as regulation starship uniform, the ultra sophisticated communication device she skillfully operated looked more like your common garden variety spark plug and the heaviness of her make-up was rivaled by every male crew member of the Enterprise.

During those times, debt looked pretty different too, nowadays it’s not without its share of evolution and alteration. In fact, our modern debt looks pretty far removed from its 1960’s sister.

A snapshot in time during the year 1966 revealed that people saved on average around 11% of their income, compared to that of 0% in 2004. (Remember these are averages throughout the population).

While Spock was busy cavorting and communicating with aliens using his famous Vulcan Mind Melding Technique, the humble folks watching him at home on their television sets were saving their money. They knew the value of a dollar and didn’t have the option of credit to fall back onto, in fact in those times the credit card itself was in its infancy and had only been in existence for 8 brief years, not everyone had access to them the way they do today.

Dollar for dollar equivalent by today’s standards our 1966 counterparts, on a single income had an extra $20,000 discretionary income and $23,000 in fixed costs, these fixed costs represented mortgage, health insurance, car costs, taxes).

Fast forward to 2004 we have a measly $18,000 discretionary income and $56,000 fixed costs in comparison. Fixed costs for us had been adjusted to include the cost of childcare yet in the 1960’s it was virtually unheard of.

The alarming thing is that our modern day figure represents a two person income, even combined their discretionary income is still less than a single person income in 1966. It’s understandable that our parents today feel as though they work just to cover the cost of childcare and travel expenses.

We can adopt some of the tricks of our 1966 ancestors by saving for the future rather than relying on credit cards and loans as our financial safety net.

The sun will always shine, the wind will always blow and just as certainly as our fixed costs have increased over time, so will it continue along this path. We can’t control inflation and the very reason we carry so much debt and rely upon our credit cards so heavily is because we simply do not make enough discretionary income to survive on alone.

Explore your options, seek out work closer to home and if you’re a parent, even working part time to save on travel expenses and reduce the cost of childcare.

Telecommuting is also becoming increasingly popular as more people are starting to work from home. The sky is the limit with what you can make money with these days and if you’re passionate about fishing, gardening, pets, scrapbooking, beekeeping, cooking you can be certain you’d be able to turn these into an extra sideline income to help make ends meet.

Even though they didn’t make as much money as we do now Kirk and the crew had it pretty good back then and they probably didn’t even know it.

Beam me up Scotty.

Debt Consolidation – Your “Get Out of Jail Free” Card?

By Isobel Miller

A woman convicted of probation violation tried to use the famous Monopoly “get out of jail free” card to avoid incarceration, the judge humored her by asking the local sheriff if they accepted the cards to which he replied “no”. She was eventually jailed, but not without at least trying her luck first.

The “get out of jail free” card originated from the timeless game of Monopoly and made its debut in 1935, since then over 200 million games have been sold worldwide and has become the most widely played board game in history (recorded in the Guinness Book of World Records).

Since then the expression “get out of jail free” has been immortalized in modern society to mean “a way to get out of a sticky situation” and just like been given the card to get ourselves out of an undesirable situation, so is the act of debt consolidation when we find ourselves in financial difficulty and need a little outsider assistance.

Is Debt Consolidation Like a Get Out of Jail Free Card?

In a manner of speaking it is based upon a similar fundamental premise that if we’re in a situation where we’re struggling financially and are have difficulty coping with our current level of debt then we have the opportunity to alleviate that burden through consolidation. When we’re not careful it’s easy to accumulate more debt than we think we have when we don’t proactively track our spending.

How Do I Know If Debt Consolidation is Right For Me?

1. When at least half of your income goes towards paying your debts.

2. When constantly worrying about the level of debt you have to the point where it effects your sleep, job performance and general behavior.

3. When you feel a sense of helplessness from being financially over extended on a regular basis, this is different if it’s once in a while and you’re able to eventually regain control of your finances, but if you constantly feel this way no matter how much extra you pay to get ahead only to find you’re still at square one, then consolidation might be the option for you.

4. When you don’t meet your financial commitments. If you miss payments or have a sketchy bill paying track record.

5. When you’re sacrificing important things. If you’re having to pay visa before paying the power bill then you’re not managing.

What Consolidation Will Do For You

Debt Consolidation will take all of your existing payments, credit cards, loans and condense them into one manageable weekly, monthly payment (whichever terms you agree upon).Interest rates are competitive for these types of loans so it pays to shop around. I would start with your bank. If you have a home you can leverage it by borrowing against the equity you have. The equity is the difference between the current market value your home is appraised at and the amount owed on the mortgage. The equity is the amount that you can borrow up to the value of.

Because consolidation puts your total debt into perspective, you’re able to keep up with your payments which helps your credit scoring while establishing a new positive payment track record for your credit report.

What Consolidation Won’t Do For You

It’s not uncommon to get into situations of extreme debt through unforeseen circumstances and emergencies, however there are instances where we do get into unnecessary debt through poor management on our own behalf, so if you consider consolidation as a option then you still need to devise a budget if you do not already have one, and stick to it faithfully.

Use any extra disposable income left over to pay off your debt faster. Remember, debt consolidation will relieve the pressure of your current debt but it won’t change how you got into the debt in the first place, especially if it was due to poor financial planning and lack of budgeting.

Keep a close watch on your future finances.Once you get into the habit of living by a budget and eventually become debt free, your new budgeting skills should keep you out of debt, permanently.

Killing Me Softly

By Isobel Miller

Before you finish that sentence and belt out at the top of your lungs in your very best shower voice “…with his soooooong!” just hold your horses for one second, that’s not the killing me softly I was referring to but rather to the little entity that you can’t see or touch but you know is there. The presence you have felt on several occasions this year and will continue to throughout the rest of your life. No one is immune to its effects, we've all experienced it. I’m talking about that deadly predator, the silent killer known as stress.

In the age we live in, we are busier now than we ever have been at any other period in history. We are experiencing unprecedented stress levels and psychological disorders than we ever have before, heart attacks and strokes are the symptoms of our now lifestyle mixed with stress and yet its not alarmingly uncommon for people in their 20’s and 30’s to be struck by this.

If we are to lengthen and improve the quality of our lives we need to unwind and leave our jobs at work.

Here are some great tips to help you settle at the end of a stressful day.

1. Clear your mind. It’s difficult to wind down when all you can think of is the things you need to do tomorrow. Don’t worry, your work will still be waiting for you when you get there. Focus on the now. The best way to clear your mind is to focus on a stationery object for 5 minutes, the more distracting thoughts try to creep into your head (and they will), focus more intensely on the object until your minds stills itself.

2. Move It. If you’re too wound up after a hard day, get some exercise. Grab your best friend and go for walk, not only does it help to vent to your buddy and offer a change of scenery but endorphins boost your body’s energy levels and creates a sense of euphoria, in other words, it helps you feel fantastic.

3. Breathe. Who would have thought that a dozen purposeful breaths could be so relaxing? This is why smokers think that smoking calms them but in actual fact it’s the way they breathe while smoking that has the calming effect. So find a nice quiet spot and breathe in through the nose, hold for a count of 3 then exhale slowly. Repeat 6 to 12 times.

4. Laugh more. Laugher really is the best medicine. Did you know that recent medical studies have found that good bouts of laughter reduce the risk of heart disease through improved blood flow? There are actual schools in India dedicated to teaching the best laughing methods. They believe its good for the soul and like exercise also produces those “feel good” endorphins, boosts the body’s immunity and to top it off, you feel great. Need a laugh now?, check out www.youtube.com, trust me, there’s never a shortage of weird ‘n whacky things to watch there.

5. Keep a journal. It’s not healthy to harbor pent up anxiety and frustration. Bottling up such intense emotion can have adverse effects on our health. Keeping a journal provides a healthy and safe outlet for your emotions without offending or hurting anyone’s feelings in the process. It also has the added benefit as acting as a record of your progress to see how far you have come over time.

Follow the above tips and you’ll find that you’ll not only sleep better but cope more effectively with your current stress levels and remember to always keep things in perspective, you are bigger than anything that can ever happen to you and as my wise buddy Bobby Mcferrin once said “don’t worry be happy.”

5 Tips for a Debt Free You

By Isobel Miller

Never in the entire history of mankind has there ever been a time with such great technological development as there has been in the past 150 years, the light bulb, the telephone, motorized transportation, television, computers, cell phones, satellite, internet, CD, DVD, wireless technology, in fact if the earths entire existence were represented as a 24 hour day, the amount of technological growth in the past 150 years would only represent a brief three thousandth of a second in comparison.

Something else that’s increased as equally as rapid as developing technology and has seen as many incarnations itself is the face of debt. Over the past 150 years debt has evolved into something to satisfy the instant gratification needs we’ve adopted in recent times. We have extra disposable cash to impulse buy with, only problem is, it isn’t ours to begin with.

We’ve sunk deeper into debt buying with money we don’t have, we’ve become a nation of borrowers and are struggling to pay what we owe.

Getting out of debt needn’t be worse than tooth pulling, even just making little adjustments with spending can translate into big savings over time.

Here are some instant money saving tips.

Budget

Face your debt demons, find out the full extent of your debt and determine which course of action best suits you. If your debt is manageable, create yourself a budget and stick to it, use extra money to beef up credit card and loan payments, the less interest you pay overall, the better. Why give the banks more money than you have to?

If your having difficulty getting your debts under control on your own, then you might want to consider consolidating all your payments into one, that way it’s easier to keep tab of your finances, this accompanied by a realistic budget will help you get out of debt faster.

Make a debt repayment plan. Taking all of your debts into consideration calculate how long it would take you to become debt free if you paid “x” amounttoward your debts on a weekly basis. Set the date you finish paying off your last debt. Stick to that goal!

Tricks of the Saving Savvy

1. Cook your own meals. You’ll be amazed at how much you can save just buy cooking your own food. There are excellent economical recipes everywhere on the internet, just because you’re cooking on a shoestring doesn’t mean your food has to taste like it.

2. With economic recession a reality and threatened job security ever present it pays to have a little extra set aside for the unforeseeable emergencies. The rule is to always set aside 10-15% of your net income. Set up a debit payment system for the 10-15% to go directly into the “emergency” account fund. You won’t miss the money you never see and you’ll learn to budget with what you have left over.

3. Repair, recycle and revive clothing. Heck fashion always has a habit of recycling itself that you’re bound to catch it again on its comeback. Need to breathe life into your existing wardrobe without breaking the bank?, accessorize by adding a good black dress, white shirt and pair of trousers to your ensemble, these basics are timeless and never go out of style.

4. Take a gander inside the average Americans wallet and lurking amongst the lint and the odd receipt, you might find between 2 to 6 credit cards!, imagine keeping up with the monthly repayment fees and only barely being able to cover the minimum, you opt for this and you’ll remain in debt much longer and make the banks and credit companies even richer. If you have more than one credit card, keep 1 and get rid of the rest. If you need extra help to get that debt under control, consolidate then put as much of your wages toward paying off the loan.

5. Tendency to impulse buy? You won’t be so tempted if you’ve set a debt goal for yourself, just knowing that buying something unnecessarily will effect the achievement of your goal. Remind yourself that by not buying the “to die for” shoes will get you out of debt sooner than if you did, a powerful motivator.

Becoming debt free can be simple and done by implementing small changes on a permanent basis, once you become accustomed to them, they become lifestyle.

Like Rust It Never Sleeps

By Isobel Miller

It grows when you’re happy, when you’re sad, while you’re snuggled up in your favorite chair watching 24. It grows regardless of age, sex, race, creed, it has no bias, it doesn’t care if you’re sick, penniless or in the midst of a major life crises. It never pities, shows neither compassion nor remorse and doesn’t spare a thought for the bad day you just had. Like rust it doesn’t sleep, it doesn’t eat, it doesn’t have a conscience but that’s okay, it’s not personal. Its appetite is never satisfied and it never stops growing.

Like a scene from the movie “The Blob”, debt interest grows and snowballs over time, swelling your original credit card or loan debt to the point where all you end up paying each month is the interest on the debt you owe.

Stuck in the Spin Cycle

Like being forever caught in a washing machine set on the “spin” cycle it’s hard to get anywhere with your debt reduction when you only opt to pay the minimum amount, this keeps you in debt longer and for the most part only covers a good chunk of the interest never mind the original amount you borrowed. The banks and credit card companies love you, in fact, that’s why they give the option, sure it makes the amount you pay each month manageable but you remained trapped in that nasty debt cycle.

Light At the End of the Tunnel

Although paying the minimum keeps the debt collector monkeys off your back you’re actually penalizing yourself by paying more in the long run.

Do the simple thing of increasing the amount you pay or pay more frequently, doing so puts more money in your own pocket you saved on the extra interest you would have paid.

Put your debts in order of interest rate, the highest having the most urgent priority to the lowest.

The Psychology of Using Cash

We live too much in a “plastic, cashless” society, banking institutions have made it too convenient for us to pay for items with the simple swipe of a card, it slips our attention just how much we’ve shelled out by the time we get to the fourth credit card purchase for the day. The risk of paying with credit is the tendency to spend what you don’t have.

Pay credit card payments, bills and groceries using cash instead of credit, the more you spend using cash and physically handling it, the better. It gives a sense of psychological perspective on how much you’re actually spending.

For example, it’s much easier to realize you’ve spent $100 in cash when you’re counting the bills in your hands rather than with a few electronic swipes of your card. You have more thought for the “hard earned” dollar you worked for when you’re forking it over to the shopkeeper for your groceries.

Stores reward cash buyers and give them greater purchasing power and bigger discounts so there are great benefits to using cash.

Do not procrastinate debt interest. Use cash and you’ll not only be debt free quicker but have a deeper appreciation for the hard work it took to earn that money.