Our public motto used to be "word hard, play harder", but these days its harder and harder to avoid the obvious - we have to face our worst financial fears because they could become reality.

Earlier this month we asked you to do a little free association and set goals for your future which is important in the fulfillment of a happy, satisfied life.  However, you need a contingency bail out if the bottom falls out.  Your parents can't help you any more and you can't count on that guaranteed bonus at the end of the year.  Stop being too busy living the latte life and take an inventory of your financial who, what, where, and when.  Sometimes facing our fears is the first step to financial freedom.

The second step in setting up a financial plan is formulating long-term financial goals.  If that presents a bigger challenge than you are ready to tackle right now; break them down into a number of short term goals.  What can you achieve in the next six months or within two years?

The third step in setting up a financial plan is to educate yourself by reading books, taking classes, or meeting with a financial planner.

The fourth step in setting up a financial plan is to review your progress on a regular basis.  For instance, at the end of the month, did you stick to your budget and did you have extra money to put into savings?  Did you start a 401K plan?

By setting up smaller goals, you will eventually realize bigger dreams!

First, set out some goals but allow yourself to do some free association.  Imagine that anything is possible.

Your goals can include:  "I want to send my children to college" or "I want to save money for a vacation" or "I need to plan my retirement".

You can expand these goals to be more specific:  "I want to send my son to Georgetown" or "I want to save money for my vacation in Provence" or "I need to plan my retirement which I envision as living in a house on Lake Geneva".  Notice the words "need and want" ... and notice how just being more specific really opens you up to possibility that you can create your own destiny.

Sometimes just getting past an "I need" goal which could be "I need to pay off my credit cards so I can begin to take regular vacations" can lead you to an "I want" goal.

In our next blog, we'll talk about actually setting the goals.

We applaud you for making the commitment to get out of debt, but realize that the reality of living without a credit card can present challenges. 

In some circumstances, keeping at least one credit card is needed for emergencies when the water heater goes out, or you find that your child needs new books for classes and they didn’t think to tell you about it until the day before they need them.

Although self-control and sound judgment certainly must enter into your decision about whether to use your card or not, there are other ways to decrease your day-to-day expenses;

 

• By bringing your lunch to work each day instead of going out, you are saving money on gas too!
• Get a library card and start reading books instead of buying movies or adding premium channels to your cable system. 
• Start taking public transportation a couple of times a week or begin a carpool with co-workers.  Not only you are saving gas money; you are also allowing yourself some extra time to actually read that book!

We applaud you for making the commitment to get out of debt, but realize that the reality of living without a credit card can present challenges. 

In some circumstances, keeping at least one credit card is needed for emergencies when the water heater goes out, or you find that your child needs new books for classes and they didn’t think to tell you about it until the day before they need them.

Although self-control and sound judgment certainly must enter into your decision about whether to use your card or not, there are other ways to decrease your day-to-day expenses;

 

• By bringing your lunch to work each day instead of going out, you are saving money on gas too!
• Get a library card and start reading books instead of buying movies or adding premium channels to your cable system. 
• Start taking public transportation a couple of times a week or begin a carpool with co-workers.  Not only you are saving gas money; you are also allowing yourself some extra time to actually read that book!

First, stop accruing new debt by putting a freeze on your credit card spending.  While the two of you may agree to keep a card or two available for designated expenses, this isn’t the time to run up new debt or take out cash advances on your credit cards.  This is a great time to close out those department store cards with higher interest rates.  And never cut off your spouse without first letting them know of your plans to freeze the debt.

Over 70% of all marriages that end in divorce are due to financial problems, and divorcing couples are likely to have as much debt as they have property.  Just as you would divide assets, divorcing couples need to assign responsibility for the debt.

Sometimes it’s as easy to acknowledge that one individual assumes responsibility for that debt which was brought into the marriage.  However, if you and your spouse have been married for a long time, you have a shared credit history, and allocating responsibility for the fair division of debts is the key to the success of your individual financial futures.

First, do you have adequate space to accommodate the parent or elderly family member?  Has that space been remodeled to accommodate any physical handicaps?  Is the space located in a part of the home that is easily accessible should an emergency occur?  Will the parent or elderly family member be on their own for meals or will you supplement their care with home health care?  Is the home health care organization licensed or are you relying on the assistance of an independent agent?  Is the agent bonded?  Is the agent able to administered medicine or do you need to explore additional assistance from a medical provider?

If the cost of assisted living is huge, the cost of moving a parent or elderly family member into your home is overwhelming.

Regardless on which avenue you embark, it’s a commitment, which will affect the rest of your collective lives.  Be prepared and get information today.

Are you prepared for your financial future of your parent?

Although some Boomers are financially set and can afford the luxury of moving a single parent into their homes, there are several considerations, which come to the immediate forefront of this delicate, delicate issue.

We strongly encourage clients of Debt Settlement USA to pay themselves first, and coudn't recommend a better use for your stimulus refund and/or your tax refund than helping yourself to become debt free.

Our negotiators can negotiate great deals any time of year but during the tax season, many creditors will negotiate special 'tax time settlements'.   And, many credit card companies are hoping that their clients will use their stimulus refund to pay down their debt.

If you have funds saved to apply towards a settlement or anticipate receiving a refund of any kind, please contact your personal debt negotiator right away.

Back in the Sixties, a popular hit record coined the phrase, "Money Can't Buy Me Love".  The troubadors were right on the money, so to speak, and the same advice could be played loud and clear today, and it is our case in point:

A man and a woman are in a jewelry store buying an engagement ring. It is a big diamond and the woman is beaming with joy. However, a sales clerk comes up to the woman's fiancé and advises him that he does not have a sufficient line of credit to pay for the merchandise.

A) Does the man spoil the day completely and tell his happy fiance that he cannot afford the big diamond?

B) Does the man pull his fiance aside and tell her that although he has sufficient credit to buy a diamond, the size of the ring will have to be smaller?

C) Should the couple have discussed their finances prior to becoming engaged and determine what money will be allotted for an engagement ring as well as the wedding itself.

We heartedly recommend answer C. Although discussing finances can be a difficult subject to address, especially when the event is at hand and a graceful exit isn't always available. However, it is vital to learn the exact nature of your significant other's financial status. Because if oneof the individuals has significant debt, that debt becomes the other person's significant debt. Nothing is more difficult to overcome at the beginning of a marriage than learning your new wife or husband is thousands of dollars in debt.

So remember, everyone wants a beautiful wedding day and some will go to no expense to have it become the most special day of their lives. If you can afford it -- great!

But if planning your wedding is going to put you into more debt than you can handle -- a burden you do not want in your first years of marriage -- think of affordable alternatives. Remember -- there are anniversaries that can be celebrated later in your life to accommodate a more frugal yet beautiful wedding day. Your frugality will also help you save for a home of your own (the most sought after dream of a married couple) or vacations to those places you've always wanted to visit.

Don't delay - make today the day you schedule a date to discuss your finances!

 

How did you learn to become financially responsible?  Was it something that was taught to you in school?  Was it something that was discussed often in your home, and did your parents take the time to nurture and instruct you in the fine art of handling money?  Or did you, like many, have to learn "the hard way" by running up debt on credit cards that you did not have sufficient funds to pay back in a timely manner?

 

Believe it or not -- it's never too early to start teaching your kids about money!  One of the first things young children understand is "I want".  So why not take the time to instruct your child that with "I want" comes the responsibility "I earn".

 

 

But that amount doesn’t include interest!  So in addition to the $5000 charged on the credit card, you will pay the credit card company an additional $7115 over the next 26 years in interest.