considering hiring a financial planner to help with financial goals (credit card freedom and home ownership)?
Posted on September 27th, 2009 by admin
Did hiring someone work for anyone to reach some long-term goals like paying off credit cards and preparing for home ownership? Can I solicit some person experiences about successfully paying off those credit cards?
Honestly, paying someone else to help you fix credit debt is usually not helpful. Set some goals for yourself. Make them modest but significant in how they’ll get you to your end-goal.
Pay off credit with the highest interest rate first. Pay the maximum amount you can afford to pay on that until it’s gone, while paying the minimum on the rest of your debts. When the highest is paid, move on to the next highest and put the full amount you can to that while minimums on the rest.
Pay yourself first. That is, get some savings built up while you’re doing this. Then you’ll have cleared your debt and saved a little money at the same time. Some people say to pay debts before saving, but I like to recommend saving a little at the same time in order to have some cash reserves to fall back on in case of emergency, rather than running up debt again in an emergency.
For example, if you make $2000 per month. Your expenses, not counting credit debt are $1300 per month. Credit debt is $7500, with 3 cards at 15.6%, 11.8%, and a special rate of 8.8% for the next six months that goes up to 18% at the end of that period. Save $100 per month in savings. Keep another $100 to "have fun with" because the biggest problem people have is not sticking to a really strict budget plan. Use the remaining $500 to pay the minimum on the 8.8 and 11.8% debts, let’s say $150 total. Put the other $350 toward the 15.6% debt. At the end of the grace period for the 8.8% that then becomes 18%, shift that to the top of the pile and pay it first.
Any time you get a raise, take 1% of the raise and add that to the money you are saving. Take the rest of the raise and put it toward your debts. When you’re debt free, put all the money toward your savings and other investments.
My biggest benefit came when I got divorced. I sold my house, paid all the credit debts my ex and I had and then got rid of all my credit cards. Since then I’ve only bought what I could pay cash for and I’ve been much better off as a result. Sometimes it meant I went "lean" for a little while on fun things, but I’ve been debt free, other than student loans for almost 10 years now. I’ll be completely debt free (from student loans and everything) in the next year and a half. I just recently bought a new home with my current wife, and we’re building a lot of investment capital besides our 401k and savings, so we should be able to retire at about 45-50 years old if things continue on the present path.
September 28th, 2009 at 1:47 am
Honestly, paying someone else to help you fix credit debt is usually not helpful. Set some goals for yourself. Make them modest but significant in how they’ll get you to your end-goal.
Pay off credit with the highest interest rate first. Pay the maximum amount you can afford to pay on that until it’s gone, while paying the minimum on the rest of your debts. When the highest is paid, move on to the next highest and put the full amount you can to that while minimums on the rest.
Pay yourself first. That is, get some savings built up while you’re doing this. Then you’ll have cleared your debt and saved a little money at the same time. Some people say to pay debts before saving, but I like to recommend saving a little at the same time in order to have some cash reserves to fall back on in case of emergency, rather than running up debt again in an emergency.
For example, if you make $2000 per month. Your expenses, not counting credit debt are $1300 per month. Credit debt is $7500, with 3 cards at 15.6%, 11.8%, and a special rate of 8.8% for the next six months that goes up to 18% at the end of that period. Save $100 per month in savings. Keep another $100 to "have fun with" because the biggest problem people have is not sticking to a really strict budget plan. Use the remaining $500 to pay the minimum on the 8.8 and 11.8% debts, let’s say $150 total. Put the other $350 toward the 15.6% debt. At the end of the grace period for the 8.8% that then becomes 18%, shift that to the top of the pile and pay it first.
Any time you get a raise, take 1% of the raise and add that to the money you are saving. Take the rest of the raise and put it toward your debts. When you’re debt free, put all the money toward your savings and other investments.
My biggest benefit came when I got divorced. I sold my house, paid all the credit debts my ex and I had and then got rid of all my credit cards. Since then I’ve only bought what I could pay cash for and I’ve been much better off as a result. Sometimes it meant I went "lean" for a little while on fun things, but I’ve been debt free, other than student loans for almost 10 years now. I’ll be completely debt free (from student loans and everything) in the next year and a half. I just recently bought a new home with my current wife, and we’re building a lot of investment capital besides our 401k and savings, so we should be able to retire at about 45-50 years old if things continue on the present path.
References :
September 28th, 2009 at 2:23 am
Hi,
Usually financial advisors charge inordinate fees for what they provide. You would be better off doing a bit of research and doing it yourself.
The best way I find is to budget properly and cotrol you’re spending sprees.
The following is a site packed full of tips advice and resources which should help and its free. There are many links to other comaonieas and services if you do go down that route.
Thanks
http://www.good-financial-planning.info/
References :
September 28th, 2009 at 2:37 am
The first step to credit card freedom is to stop using them.
Make a list of all of your credit card debts and the interest rates. Start a savings account to have an emergency fund with at least $1000.00 while you are paying off your cards. After your cards are paid off continue adding to your emergency fund until you have at least three months of your expenses. Then you can start saving towards your down payment very quickly.
Always pay off the highest interest rate card first, then the next highest and so on. Pay the minimum due on all of them and then put you extra money towards paying off the highest one first. After you get that one paid off, you put the money you were paying on card #1 (the minimum payment and the extra payment) towards card #2. That will pay card #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly.
To start :
Card #1 (highest interest): minimum payment+ extra payment
Card #2 (middle interest): minimum payment
Card #3(lowest interest): minimum payment
Card #1: paid off
Card #2: minimum payment from Card #1+ Minimum payment from Card #2 +extra payment
Card #3: minimum payment
Card #1: paid off
Card #2: paid off
Card #3:Mimimum payment from card #1+ minimum payment from Card #2+ minimum payment from Card #3+ extra payment.
That way, you will get them all paid off, on time, and pay the least interest. Then you can build up your emergency fund and then save towards the house without debt.
References :
September 28th, 2009 at 3:17 am
The above 3 are on the money. Most charge. All you need to do is build out the plan for what you need. Doing research online will help with that.
If you want help anyways, find someone in the area that wont charge you. Some do that with the expectation of doing business.
It’s a great feeling when you get rid of it all, just don’t reuse them.
If you’re in the DFW, TX area, message me through Yahoo! and I’ll help you with it. If not, I could probably find an office of someone in your area that could help you.
References :