The balancing act

Throughout the course of your life, you’re likely to encounter dozens of different types of debt. You’ve got your couple of credit cards sitting in the wallet, that department store card that never seems to get paid off fully, your car payments and, of course, your mortgage. Chances are your mortgage is going to be the highest level of debt you currently have on the books, meaning you’re throwing much of your paycheck at that every month. But that doesn’t mean the other forms of debt aren’t important, too. In fact, you may feel satisfied about paying off the mortgage every month because it means you own a little bit more of your house than you did the month before. But throwing a few hundred dollars at a credit card to pay off the tab on a bunch of clothes that you don’t wear anymore can be significantly less rewarding. Still, you must learn to balance all your debt and treat them equally. After all, they all affect your overall credit score.

Combining your consumer debt and mortgage

So, how can you attack all your debt at once without sacrificing your house? One option for you might be to roll your consumer debt into the mortgage that you are already paying. Effectively, you will be borrowing money against the mortgage to pay off the consumer debts that you have elsewhere, meaning you can pay off your high-interest credit cards and other forms of debts and simply make one monthly payment instead of multiple payments. This can be very effective, if for no other reason, because it allows you to get better control over the payments and allows you to know and understand what you owe every month. Many Americans struggle to make payments simply because they forget to make payments on time. By rolling all your debt into your mortgage, you can avoid this and still pay off your debt at one interest rate.

Things to be wary about

Just because some mortgage companies offer you the opportunity to roll your consumer debt into your mortgage doesn’t mean that you’re home free. For one, you should understand that rolling over your consumer debt into your mortgage doesn’t eliminate the debt. You may save yourself money but you won’t eliminate the debt. You’ll simply owe more money on your mortgage. Also, rolling over consumer debt should give you the opportunity to think about where you are spending your money. Get rid of all your credit cards except one. Pay off any loose department store card payments that you may have forgotten about. Overall, think about your credit history and how you can avoid amassing more consumer debt. In the long run, using your mortgage to pay off your other forms of debt should be helpful not hurtful. So act responsibly and, of course, be careful about financing your debt with a credible lender.

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Create a budget that works for you

Everyone wants more money. Regardless of how much money you make every year, there are ways to maximize your income and put more money into your pockets and bank account. For instance, did you know that by consolidating your debt or simply making payments on your bills every month, you can actually save money? More on that later, but to start, if you’re interested in having more money every month, make a budget for yourself. First, figure out how much money you make per week. Then, sketch out the normal debts you incur per week. Find how much your bills typically cost, how much groceries, rent, a mortgage or other necessities will cost you. And figure in any extra costs (going out on the weekends, shopping, etc.) that you normally spend. By doing this, you can see how much money you’re bringing in every month versus how you’re spending. It will allow you to make adjustments accordingly. By simply cutting out one or two typical expenses, you may be able to save thousands of dollars every year!

Pay your bills on time

If you are currently in default on the payment of some form of debt, you know how that can impact your monthly income. Paying bills on time is extremely important for keeping your financial situation strong. A $5 late fee may not sound like much, but over the course of the year, on various late fees, you could cost yourself hundreds of dollars. Late payments on credit card payments are even worse. If you fail to make a payment on your credit card or student loan, not only will you cost yourself money, but you could cost yourself valuable points on your credit report. By paying your bills on time, you will be able to manage your money much better and keep your financial sanity throughout the course of the year.

Write everything down

Most Americans do a very poor job of documenting the amount of money they spend each week. Pack of gum? Oh well, it only cost 50 cents. Right? Wrong! Every day, you probably waste at least a few dollars every day that could be put to much better use. Try this: Go home every day and write down the amount you spent that day and what you spent in on. By doing this, you’ll know where part of your income is going every month. If you’re budgeting your money well, this could be added as an expense to your weekly budget. You can then see how much you’re spending per day and how you could better manage your money during the course of the year. There is income out there that you are spending recklessly. Do something about it today.

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The advantages of a 0% balance transfer

Everyone needs a little bit of help from time to time when it comes to money. Think about it. Don’t you remember a time in your life when you needed to borrow a few dollars or asked for an extension on a debt you owed? Of course you can. Much like those times, a 0% balance transfer on a new credit card can be very helpful to you. First, you get to transfer the money (or, at least, a portion of the money) on a high-interest credit card onto a credit card that will hold an introductory 0% rate. Plus, with a 0% balance transfer, you won’t pay anything for making the transfer. This allows you to simply make the minimum payment every month on the card without accruing any additional fees or costs, provided you make your payments on time. It will also decrease the costs on your other card because the interest rate will be applied to a lesser amount. In these ways, a 0% balance transfer can greatly help out your credit situation.

But there are some disadvantages, too!

Many Americans get intrigued and then fooled by 0% balance transfers. Essentially, credit card companies are handing you a free line of credit for a certain number of months. However, this causes many people to simply make the minimum payments and forget about the balance. Companies are banking on this and will take the risk that you won’t pay off the credit card fully. As soon as the introductory period is over, you’ll start getting hit with normal interest rates and be forced to make payments on two credit cards now. It certainly is not the end of the world but you should have a plan before applying for a 0% balance transfer on a new credit card. Think about how you’re going to attack your debt and then do it!

How to decide whether you need a 0% balance transfer

Before you even think about applying for a 0% balance transfer, think about how it will help you—and how it could hurt you. Are you prepared to do everything you can to make payments on the new card and eliminate the debt before the introductory period ends? Are you prepared to make the transfer and then make payments on your other card or cards? Can you avoid racking up new debts on the old cards? If you can answer “yes” to all of these questions, then a 0% balance transfer could help you and your credit situation immensely. But before you apply, do your research and decide how you’re going to attack your debt.

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Credit cards could be considered a staple among the financial tools at our disposal. Some experts consider them a requirement in today’s world. Today, you can’t buy a plane ticket, reserve a hotel room, or rent a car without a credit card. I suggest you view credit cards as a tool that can help you. If you’re responsible and payoff your credit card bill every month, you can use that card to help you earn bonuses such as frequent-flier miles, which is a great benefit.

Credit cards are also known as the best friend of new business owners, who often don’t have the track record to get a traditional bank loan. Often, they can finance their new business by utilizing their credit cards as a lending vehicle, and spreading the payments out over time. While credit cards can be wonderful and offer us convenience, they can be a deadly part of the debt game.

Credit card lenders are really banks. The banks collect deposits from consumers and other entities, and then loan that money out. However, in the case of credit cards, they’re loaning that money out to credit card customers instead of traditional bank lending customers.

A credit card provides high-interest, unsecured loans that allow the cardholder to “buy now, pay later.” This is a very lucrative business for the banks that issue credit cards to consumers. They make up to 21 percent or more on the balance due if the balance is not paid off each billing period, and new purchases begin accruing interest right away.

This is known as a revolving account because the holder can simply roll the new balance to the next billing cycle and pay only the stated minimum amount shown on the bill. These cards mayor may not have an annual fee depending on the other “goodies” like frequent-flier points, money back at the end of the year, or no annual fee.

Credit card rules can also change frequently. What may look like some junk mail may actually be a brochure that tells you the rules of the game have changed. If you don’t pay attention to it, you may be in for Some surprises on your bill. My credit card company changed the envelope that the bills came in and it looked to me like more offers to get a credit card. I threw them away unopened until I got a phone call asking me why I suddenly stopped paying my bill. When we discovered my problem, I agreed to pay it immediately and they cancelled the accrued interest and late charges, due to my excellent payment record. Keeping the cardholders ignorant is an advantage to the credit card issuer but they do have to disclose any changes to your original agreement. If you miss them, you’re the one responsible.

Most of the major credit card companies work hard to educate consumers about credit card debt and how to make it work for you. Next time you’re in the bank or browsing online, look for information about the use of credit cards by the issuing companies represented by the bank.

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Some business owners would chuckle to see a section like this induded in a chapter about earning more income. For many business owners, owning a company means not having an income for sometimes two or more years. Of course, if the business survives and makes a profit, the payoff will be worth it. If not, it can mean a devastating loss in both income and net worth.

The truth is, however, that business owners do have the greatest chance for high net worth. If you have always wanted to own your own company, be sure that you can afford to do it. Take each step carefully and calculate your risk along the way.

There is a great deal of help available to you if you are going to start a business. Small Business Development Centers are located throughout the country, and they are joined by a multitude of live and online resources. There are also numerous organizations created especially for the woman owned business, induding the Business Women’s Network and the National Foundation for Women Owned Businesses.

Remember, starting your own business can be as simple as turning the Christmas toffee you make once a year into a cottage candy company. Or it can be as logical as turning your new van into an airport shuttle or a guided tour van for points of interest in your area.

Or, you may prefer to use your talent at the piano to teach piano lessons. Maybe you love children and want to host an after school study program at your home for kids in your neighborhood.

Ask yourself what logical outgrowth of who you are and what you do could be transformed, or monetized, into an income stream. Let it develop naturally, and pay yourself first.

Before you open your doors, get some books from the library and develop a good business plan. Talk to people who are in the business and ask what they recommend for you.

Don’t give up easily on pursuing the possibilities of having your own business if you really feel strongly about doing it. Choose a business that comes naturally to you, that uses your best skills. Just be sure that you have done as much research as you need to before you plunge in. Remember, you are trying to increase your net worth through this venture.

So, whether you are opening a franchise, starting an Internet business, or launching a delivery service, do it right. Listen to those who have been there. Take advantage of every class and resource, and remember that the Internet can give you as much information in three hours as you could possibly want. An online excursion to flametree.com will get you started.

Be a money-smart business owner and watch out for your own bottom line. No business is worth losing your net worth.

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