Posts Tagged ‘debt’

Here at F4Y:TB, we tend to focus more on avoiding financial mishaps. That is by design. I believe that my energies are best spent helping young people learn the skills and gain the tools needed to avoid as many financial setbacks as possible. Because of the time I’ve spent in the financial field, I don’t have a cautionary tale about when I hit the bottom or how I clawed my way to where I am financially. My personal money story is much like the majority of people’s. If you are looking for the other kind of narrative, there are many awesome bloggers out there who fit the bill. What I provide is professional advice, accurate information, catchy music, gratuitous pictures of excessively cute animals, and hopefully a laugh here and there, all while trying to make sure you don’t make the mistakes that get so many others in trouble.

All that being said, it happens to many people every day. Maybe you made the colossal error of trying to with the credit arbitrage game and missed a payment because you forgot about it. Maybe you “won” that thing from e-bay that you don’t really need, but you kinda thought it might be cool so you bid on it just for fun but not really. Or maybe you lost a job, or got sick, or worst of all, you just got unlucky. Whatever happened, you are now financially screwed and all the “spend less than you earn” just isn’t helping right now! So what do you do?

Whatever happened, you are now financially screwed, and all the “spend less than you earn” just isn’t helping right now!

First, don’t panic! Chances are that you are already panicking, so your first goal is to stop panicking. When you panic, you are more likely to make a wrong choice that makes things worse than if you face your problems calmly, with reason rather than emotion. While we’re at it, are you really in as bad a situation as you initially thought, or did you panic and things are bad, but not yet drastic?

Second, if you find yourself in a worst case scenario position, you have to do some serious assessment to see where things went wrong. Some PF guys will say it doesn’t matter where things went wrong, you are trying to fix that they went wrong. I get the impulse, but this is a short-sighted way of looking at things, and chances are good that you will wind up back to doing wherever it is you are trying to stop. Instead, look at where things started to unravel. What happened? What changed? Was it something you did or had control over, or was this something that was going to happen, and nothing you could do would stop it? Honesty is key here. Lying to yourself won’t work. You’ll know you’re lying, and you are only delaying your ability to help yourself out of a serious problem.

Third, STOP! Whatever happened to put you in bad shape, if your actions or inaction contributed to your current situation, stop doing whatever it was that you were doing. At this point I’m not saying to do the opposite, all I’m saying is to stop what you are doing.

Next, look at your alternatives. A lot. Most people, when drowning, will reach for anything to pull them back to the surface. If you are actually in the water, that’s just fine, but if you are drowning in debt, or in some other financial issue, most people find that the rope they thought they were reaching for was actually a thick chain connected to an anchor that will pull them even further under. You are already in a f%*#ed-up situation. Waiting a day or two to finally get yourself to break a very difficult cycle won’t do much more damage. It will do significantly less than some of the impulse decisions many people make to get themselves out of a mess. Do the research in to all your options, not just the ones that seem easiest or quickest or even least painful. Sometimes, suffering through something is a viable option, and sometimes even the best option ultimately.

Finally, communicate! I get that financial problems can be embarrassing. This is something that seems so simple that you should be able to breeze through it. It isn’t. And even if it were, whenever a crisis hits, communication is the key to surviving it, even if you can deal with things on your own. Find people who know their own stuff and communicate with them. I’m not saying to ask them to bail you out; in fact I’m specifically saying you shouldn’t ask people to bail you out of financial problems. When you do, you put that person in an awkward position which will affect your relationship. Look, if someone can help you and wants to help you, they’ll make the offer all on their own, without you asking for it. Be careful who you choose to communicate with, however. You want to confide in people who are a) worthy of your confidence, b) successfully away from the type of situation you are experiencing, and c) willing to be a shoulder to lean on. If you can find one of those people, you are in great shape.

We’ve all heard that an ounce of prevention is worth a pound of cure, and that is true almost all the time. Sometimes all the prevention in the world just isn’t enough and you need to find a cure. Keep in mind that finance is not a simple thing, that success is not simple, and that fixing your situation probably won’t be simple either. There is a reason that medicine tastes like it does.

If you find yourself truly falling financially, there isn’t a whole lot that is funny or witty.  Take a second to step back and regain your perspective and realize that there is a song this awesome exists.  Enjoy

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Note From Wil: This is a guest post from Chris Martin, a freelance writer. 

I like to include the writings and opinions of as many people as I can. If you want to contribute to Finance For Youth: The Blog, send me an email:


So maybe you’ve seen this little gem in your email inbox before:

Consolidate Your Credit Card Debt Now!

Keep More $$$ In Your Pocket!

Show Those Nasty Credit Card Companies That YOU’RE The Boss!

Spend Money Again Like it is Water!

Get Rich, Popular, And Better-Looking!



Okay, so maybe this is a slight exaggeration. But many of these ads do tend to promote consolidation of your credit cards like it’s the best thing since sliced bread, the iPhone, and DVRs combined. But what’s the real story on credit card consolidation? Is there a catch?

Here are some of the catchphrases that are often found in these “Consolidate Now!” emails – and how you should perceive them.

“Compute your credit card debt… and see how much money we can save you!”

This is actually a wise thing to do even if you aren’t actively pursuing credit card consolidation. Gather up your credit card bills, then take a pen and paper and write down the amount you owe and the annual percentage rate on each card. Then add up the dollar amounts to determine your total credit card debt.

The way credit card consolidation works is to take that large sum and create a loan with an interest rate that ideally is near the low end of the APRs you have written down (or perhaps even lower than all of them). If a company can offer that kind of a deal to you, it’s worth considering.

“Manage all of your credit card debt with one easy payment!”

This is actually true. If you find that juggling credit card statements and due dates is a hassle, credit card consolidation can solve that problem for you. You only have to make one payment a month to the company that is holding the loan.

“We negotiate with your creditors to get you the best rate possible!”

That’s pretty much true as well, but you need to understand the ramifications of what this means. Consolidation companies contact the credit card companies on your behalf to negotiate an arrangement. This involves the consolidator agreeing to “pay off the debt” on that credit card in exchange for a reduced payoff amount. The credit card company gets a large sum of money up front, and the consolidator in essence “makes a profit” on the loan.

But what also happens is that the credit card company records the fact that you didn’t pay off the entire amount that you charged on your card. This information gets sent to the credit bureaus, and it often has an adverse effect on your credit score. This could create problems if you’re trying to get a mortgage or another type of bank loan. On the other hand, if you find that making one monthly payment to a consolidator keeps you from paying credit card bills late (or missing payments altogether), then over time this will actually improve your credit score because you are paying your debt amount down.

The fine print.

Of course, there are always a few things that the consolidators won’t want to point out to you. Like the fact that some of their loan arrangements can be “re-priced” after a period of time, which means that nifty interest rate you have could increase after a year or two based on market conditions. There may also be penalties if you try to pay off your loan ahead of time – after all, consolidators make money by charging you interest on unpaid balances, so they want you to carry an unpaid balance for as long as possible. Therefore, take the time to read the fine print in the email (or follow the link provided that lists the terms and conditions) before you sign on the dotted line.

Oh, yeah – one other thing. If you choose to go the credit card debt consolidation route, there’s another thing you’ll have to do in order for it to have its intended effect: stop using your credit cards! (Or at the very least, strongly curtail their use.) If you don’t take this vital step, you’ll just get yourself back into debt and wind up even worse off than you were before you consolidated.

The best strategy is to either “go credit less” and pay for everything with cash, checks, or your debit card; or to maintain one credit card for emergencies and for other necessary tasks (like reserving – but not paying for – a hotel room or rental car, for example). It sounds challenging, but it can be done; many people across the country are living “debt-free” lifestyles.

Credit card consolidation may be the right solution to your credit card debt woes. But in order for this to happen, you have to look beyond the hype that gushes out of consolidators’ solicitous emails. A good rule of thumb is: if a phrase is followed by an exclamation point (or several), be sure to check it out to make sure that it isn’t “too good to be true.” 


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Since this is the month where we all have to pay money we don’t have in taxes that won’t be spent well, I decided to break loose with the secrets to real wealth that all personal finance people know that we don’t share. The truth is, PF people have been yanking chains for centuries since the web was discovered. We kind of have to if we want to keep our membership in the Personal Finance cabal.

Well I’m tired of keeping you, my loyal readers, from learning how to make some scrilla on the real. I don’t care anymore. You deserve better than that from me, and dammit this is my chance to do right by you. Here’s my problem. I’m not going to risk the chastisement and the beatings that the illunimoney (The official name of the overseers of the Personal Finance community) for 5 people. If I just put the rules on this post, it will be shut down, along with the rest of within minutes.

I’ve enabled a string of code within this post that will send readers a copy of the coveted secrets to true wealth known to us PF people. It will be triggered by getting 1000 hits to this post, or 250 email comments that repeat a specific phrase (which I’m embedding into the video below). I wish you all well with the information you will receive.

Because I’ve chosen to embark on this path, it is with great sorrow and sadness that I also announce that this will be the final post from Finance For Youth: The Blog. It has been a great run, but what is f4y about if I can’t at least make my readers filthy rich? This has been the adventure of a lifetime, and I thankful that you have allowed me to take it with you.

Once again, find the phrase embedded below and send me at least 250 different email comments containing it and the code will be delivered into your mail box within one hour of the 250th message.



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Note From Wil: This is a guest post from my friend, and fellow personal finance writer Martha Jackson.

I like to include the writings and opinions of as many people as I can. If you want to contribute to Finance For Youth: The Blog, send me an email:


Are you having any problems with your credit cards? Are you failing to maintain the different credit cards that you have been using? If you want to get out of this situation, you will have to first think as to how you can stop your debt amount from increasing. What you need to realize is that, in order to pay off your credit card debts, you will have to stop the debt amount from increasing. Now, the only way in which you can do that is putting a stop to the usage of your credit cards. After that you can opt for credit card consolidation in order to make debt pay off easier.

Myths and truths related to consolidation

Credit card consolidation is one such debt pay off method that can help you to pay off your bills easily enough. Consolidation lowers the interest rate on your credit card debt and also helps you save some money on your debt payments. Thus it helps to manage your finances more efficiently. If you are able to both save money and pay off your debts, you might be able to become almost a hero amongst your friends – like the Greek hero conquering the evil called “Debt”.

However, while consolidating your credit cards you should be aware of the myths and the contrasting truths associated with credit card consolidation or else you might end up having additional financial problems.

  • Myth: Credit card consolidation cuts interest rate by half – One of the myths associated with credit card consolidation is that, consolidation cuts the interest rate by half. Consolidation lowers the interest rate but not by half.

    Truth: This will depend on the creditor – The truth is that consolidation lowers your interest rate but by how much it may get lowered will depend on your creditor.

  • Myth: Credit card consolidation cannot be done all by you – Many people believe that consolidation cannot be done all by yourself. You need to take the help of a debt consolidation company.

    Truth: “Do it yourself” credit card consolidation exists – But the truth is that you can try the “Do it yourself” credit consolidation. In do it yourself consolidation, you need to negotiate with all of your creditors and request them to agree to consolidation as you are having financial problems.

  • Myth: Credit card consolidation loans are easily available – Many believe that consolidation loans are easily available. However, this is another myth.

    Truth: You need to have good credit in order to get the loan – You need to have atleast a respectable credit and you will also have to go through all the paperworks in order to get a loan.

  • Myth: Debt consolidation and settlement is same thing – Another myth associated with consolidation is that it is the same thing as debt settlement.

    Truth: The two are different debt pay off methods – However, the truth is that debt consolidation or credit card consolidation is different than debt settlement. While consolidation lowers the interest rate on your debts, settlement lowers the outstanding debt that you have.

  • Myth: Consolidation always saves money – Consolidation always helps you to save money. This is another myth and will depend on the way you are making the payments.

    Truth: You will have to pay off fast in order to save – the truth is that you can even end up paying more towards the interest if you take long time to pay off the debts. So, if you want to both save money and pay off debts, you will have to try and pay off the debts as fast as possible.

  • Myth: Credit card consolidation hurts your credit – Another myth is that consolidation hurts your credit.

    Truth: Consolidation actually improves your credit – However, the truth is that consolidation improves your credit as you make on-time payments. However, your credit may be hurt if you close down your accounts after consolidating all of the debts into one large debt.  

Visit for more tips, tools and resources for dealing with debt.

You need to be aware of all the ins and outs of debt processes irrespective of the type you are opting for. Another thing that you should be aware of, before consolidating your credit card bills is that you will be able to consolidate only your unsecured debts. Secured debts cannot be consolidated.

Author’s Bio: Miss Jackson loves to write financial articles and she is a contributory writer associated with the Debt Consolidation Care Community and has written several articles on debt consolidation, debt settlement, bill consolidation and get out of debt for various financial websites. She holds her expertise in the Debt industry and has made significant contribution through her various articles.

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Ask most Finance professionals to name important aspects of personal finance, and I will guarantee that the word “budget” or some euphemism thereof is among the top answers. If it isn’t, I’d argue that you need find experts that know what they are talking about. Budgets are important. defines budget as:

noun, adjective, verb, -et·ed, -et·ing.


1. an estimate, often itemized, of expected income and expense for a given period in the future.

2. a plan of operations based on such an estimate.

3. an itemized allotment of funds, time, etc., for a given period.

4. the total sum of money set aside or needed for a purpose: the construction budget.

5. a limited stock or supply of something: his budget of goodwill.

6. Obsolete. a small bag; pouch.



7. reasonably or cheaply priced: budget dresses.


–verb (used with object)

8. to plan allotment of (funds, time, etc.).

9. to deal with (specific funds) in a budget.


–verb (used without object)

10. to subsist on or live within a budget.


A lot of choices, but I like to use choices #4 and #8. Sure, budgeting usually talks about money, but many young people have no money (actually, you have more than you think, but that’s another story). So what do they budget? Time is a good answer.

I talk with kids everyday who tell me how there isn’t enough time in the day for them to get everything they need done. Surprisingly, I agree with them to a large extent. Out of 168 total hours in a week, Kids today have:

  • Thirty hours of school (give or take).
  • Ten or more hours of practice for sports.
  • Another ten or more hours of music practice or other extra-curricular activities.
  • Twenty-five hours or thereabouts of homework.
  • Fifty-six hours needed for sleeping

If you’ve done the math, you are left with 37 hours a week to do everything else! Realistically, kids do exactly what adults do when faced with these kinds of numbers. They give up on stuff. They’ll cut down on time spent on homework, or they’ll cut back on sleep. Some of my juvenile hall students skip out on time spent in school.

I believe Petronius said, “Moderation in all things, including moderation”. I had no idea who Petronius was before researching the quote, but I’ve heard many versions by many people, including Mark Twain. Wherever it originated, good advice is good advice. Take steps to budget your time so that you can do what is important to you, and your parents, without feeling like you are running yourself ragged. The practice will help you when you have to build budgets for other things, like money.

  1. Like your income, there is a finite amount of time in a day, a week, or a month. You have to work within that framework.
  2. Just like expenses for food, medicine, and others that are not flexible, there are some time sinks that are unchangeable. You have to budget out realistic sleep time, realistic school and homework time, and some padding to allow for transition between activities.
  3. Plan ahead. When working with money budgets, sometimes you have to wait and save to buy things, especially big-ticket items like houses, cars, and big vacations. Want to go see a concert? Make sure you get your report on World War II done before.
  4. Finally, MODERATE! Don’t get hung up on budgeting every single second of your day. Leave some wiggle room for some of those spontaneous things that pop up. You don’t want to miss out on a great experience because you have your day planned out such that you can’t change.

So, the point is, don’t over-budget your time so that you miss out on great experiences, but also don’t waste your time.



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Okay, maybe you’ve already broke your New Year’s Resolution to get in better shape. You probably have broken many of your resolutions. Just this Monday, I had a student tell me that they broke their new year’s resolution to be on time to school. Monday was the students’ first day back after winter break.

The reason I refused to name specific resolutions for New Year’s is because so many resolutions fail. Rather than look sad like my friend here, now you have the opportunity to get off your butt and do something. Just don’t call it a resolution!

Getting in shape is the most popular resolution. Getting out of debt and being better with money was up there. Guess which one I care more about?

  • Understand that learning about finance, much like getting in better physical shape, is a process, not a simple declaration. Take small steps. Right now, you are young enough to make a real effort, and even to make a few missteps once in a while. Don’t give up already.
  • Don’t get hung up on titles or artificial definitions. You want to learn to be better with money than your friends and some members of your family. You don’t need to say that you are going to be “debt-free” in 2011, unless you really think this is a goal that is attainable and worthy of attaining. I’m not saying there is anything wrong with wanting to avoid debt, but don’t lose sight of the bigger picture of being happy and living a fulfilling life.
  • While this is an individual journey, you don’t have to always be alone. If you don’t have friends or family that will go on a similar journey, find people that have already been there or who are on the fence about starting their own. There are tons of Finance blogs out there where this is their whole approach. Check out my blogroll for several of what I consider to be the best examples. Check out my Twitter followers for others.
  • Do not ignore the benefit of doing your homework. Just like in math, science, or any other class in school, you don’t have all the answers. You have access to them, but you have to do the work. Reading these articles will help, reading and re-reading finance for youth: the book will also get you there. Frankly, there are several other writers out there who might resonate more with you that will help. I don’t care where you get the information (as long as it is accurate), just that you get it and read it.
  • Practice what you learn. There is a huge difference between reading books about Bruce Lee and taking martial arts lessons. I’ve done both. The books were great, but they never helped me to defend myself when I needed to. You need to practice the skills I teach you here or else you won’t be able to use them when you need to. Nowhere in the world of f4y do I tell you how to handle every situation. I have no intentions of changing that. I give you guidelines and basic skills. It is up to you to adapt what I teach you into something that serves you in other situations.

There are no guarantees in life, which means you could do everything right and some stupid thing or another could screw it up anyway. It also means that you may succeed even if you do nothing. I’m suggesting ways to increase the probability that you can succeed, and instead of being like my friend above, you can be more like his idol here. Notice how through following my advice, from a very young age, he is now in fantastic shape to succeed. I hope the same for you!

So instead of wallowing in whatever failure you think you are guilty of because you couldn’t stick to something as weighty as a New Year’s resolution, start tonight to build in a determined, planned, reasoned out, regiment to succeed. I’ve got a feeling that you might succeed after all!



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