Get smart with your money
Let’s face the grim truth: Those 10 pounds you want to lose will likely be among your New Year’s resolutions next year, too.
If you really want a sense of accomplishment, take care of money tasks that don’t require ongoing discipline and that you typically don’t have to repeat every year. In my latest for the Associated Press, what you can do to create a sense of progress towards your financial goals.
Despite what you often read, credit card debt isn’t typical. One quarter of U.S. households don’t use credit cards at all, and another 35 percent or so regularly pay their balances in full, according to Federal Reserve statistics. Among households that carry credit card balances, the median debt–where half owe more and half owe less–is somewhere around $3,000.
Whopping “average credit card debt” statistics are what grab headlines, though. They’re typically compiled by taking the total amount charged on plastic at the end of the year and dividing it by the number of card-carrying households. Those total charges include amounts that are about to be paid off by us so-called “convenience users,” and often business credit card balances as well. Also, averages can be misleading, since a relatively small number of households carrying a lot of debt can skew the average upward.
If you’re the one with the debt, though, you know it doesn’t feel good. If your balances grew over the holidays, you may be stressing already about how to pay it off. Here are some ideas:
Skip the post-holiday sales. You’ve heard it over and over: You can’t get out of debt if you don’t stop digging. But our brains tells us sales are the exception. We’re saving money! Nope, we’re spending–and adding to our debt stress. Whatever’s on sale likely will be on sale again, so let it go.
Have a no-spend month. I hosted one of these more than a decade ago on MSN, and readers reported saving $300, $400 and more. A no-spend means you spend only on essentials: no eating out, paid entertainment or shopping. You’ll learn frugality skills like planning and making do that can help you save year round.
Check the cushions. You may have money tucked away in various forms–jars of coins, unused gift cards, rewards programs that can be converted to cash back or gift cards. (Sites like Gift Card Granny can help you convert plastic to cash.)
Make weekly credit card payments. Don’t wait until the bill arrives to pay it–start whittling down your balance with regular injections.
Lower your interest rate. If you have good credit, you may be able to qualify for low- or zero-rate balance transfer offers. Use them as a way to speed up your debt repayment.
Today’s top story: Credit card late fees are expected to rise in 2017. Also in the news: 10 New Year’s resolutions for your wallet, will Millennials be ready for retirement, and 3 signs you should switch banks.
Look for Credit Card Late Fees to Rise in 2017
More incentive to pay on time.
Sean Talks Money: 10 New Year’s Resolutions for Your Wallet
Starting the news year off on the right foot.
Only 30 Years to Go. Will Millennials Be Ready for Retirement?
The clock is ticking.
3 Signs You Should Switch Banks in 2017
Knowing when it’s time to switch.
Today’s top story: 9 facts about FHA loans. Also in the news: What we learned about the stock market in 2016, 3 student loan resolutions to make in the new year, and why many seniors are having their Social Security cut by student loans.
9 Facts About FHA Loans
What you need to know.
5 Things We Learned About the Stock Market in 2016
A year of moodiness.
3 Student Loan Resolutions for 2017
Make them and stick with them.
For many seniors, student debt eats into Social Security
Social Security checks are being garnished to pay back loans.
Today’s top story: 4 steps to managing your parents’ bank accounts. Also in the news: How banks boost overdrafts by counting big debits first, how to determine whether to pay down debt or save for retirement, and mistakes to avoid when choosing a financial advisor.
4 Steps to Managing Your Parents’ Bank Accounts
Taking the reins.
Many Banks Boost Overdrafts by Counting Big Debits First, Report Says
Putting transcations in a certain order can guarantee overdraft fees.
This Calculator Will Tell You Whether to Pay Down Debt or Save for Retirement
Which should you choose?
3 Mistakes to Avoid When Picking a Financial Advisor
Selecting the right one for your needs.
Lauren Greutman’s moment of truth dawned when she sneaked $600 worth of clothes into her closet. She didn’t want her husband to see what she had bought — or to know that they were $40,000 in debt.
J.D. Roth hit bottom after buying a home he thought he could afford
Zina Kumok’s epiphany came when she saw her student loan payment eating 20 percent of her paychecks.
The catalysts were different, but the reactions of these three people in different parts of the U.S. were the same. Years of incurring debt made them realize that they couldn’t continue to spend like before.
In my latest for the Associated Press, learn how these three people changed their financial lives.