Most people don’t spend a lot of time thinking about their credit scores. There are so many details to keep track of in life, and a credit score might seem like a figure that doesn’t have much relevance to everyday life. However, your credit score is a layer running beneath your whole financial life. It determines whether or not you’ll be able to borrow money (and at what price), how much access you’ll have to good housing and jobs, and how much money you’ll likely be able to save over your lifetime. We’ll break down these ideas below to help you appreciate the importance of a credit score. 3 Reasons To Pay Attention To Your Credit Score #1. Borrowing Money Your credit score is perhaps most relevant to the price and availability of … [Read more...]
How To Handle Debt & Maintain Your Mental Health
It’s no secret that most people feel lousy when they’re in financial trouble, and one of the biggest financial stressors seems to be debt. When you’re in debt, simple tasks like going to your mailbox, where you anticipate finding an avalanche of bills or overdue notices, can bring on stress. If you relate to this feeling, you aren’t alone. According to a Time article, there are a plethora of Americans in an excessive amount of debt. In fact, the Federal Reserve reported at the end of 2015 that, on average, an American between the ages of 18 and 64 has $4,717 in credit card debt. So aside from being a burden on our wallets, what does this debt do to us? “Financial issues are a common source of stress,” Dr. Jay Winner, director of the … [Read more...]
6 Signs That You May Have Too Much Debt
Personal consumer debt has reached such high levels that if it were a disease the World Health Organization would have announced a pandemic; a dangerous one, like avian flu or the plague. Since debt is not an illness and the main institution that is supposed to monitor it profits from its rising levels we tend to ignore the symptoms until, in some cases, it is way too late. There are straight forward ways to know, once and for all, whether you are in debt and how much: you work out the 4 numbers I was telling you about in my previous post. I know that most of you won’t, though. How do I know? I know from experience – certain knowledge is painful and we tend to do everything possible to avoid pain. So today, I am not going to ask you … [Read more...]
Do Balance Transfers Actually Create Indebtedness?
A balance transfer is a great option to work down your debt by moving it from an existing credit card to one that charges low interest or even 0% for a specified period, thereby helping you save money. For example, if you have accumulated credit card debt at an average rate of 18% interest and you switch the balance to 0% interest card, you will pay just the principal on your debt until the promotion period ends, which could be as long as three years or longer. It works like an interest-free loan. Now, doesn’t that sound like a great deal? But don’t get too excited yet. Issuing companies are smarter than you think. They offer you 0% because they can find plenty of ways to make again if you make mistakes or don’t stick to the … [Read more...]
Increasing Assets and Decreasing Liabilities
There are two ways to increase one’s net worth: increase assets or decrease liabilities. That is all there is to it. It really is a simple equation in principle but very difficult in practice. That is because we are conditioned by the media, our friends, and many other external influences to think that we need this or that such that when we spend our hard earned money on these items, we really aren’t doing anything to increase our net worth. Why Track Net Worth? Tracking your net worth gives one an idea of financial progress. It is calculated by adding up all of our assets and then subtracting the sum of all of our liabilities. The resulting number is your net worth, which can be positive (meaning you own more than you owe) or negative … [Read more...]
Easy Steps You Can Take To A Better Credit Score
Having a good credit score is important for several reasons. Lenders reward loan applicants who have higher credit scores with better interest rates. You can save thousands of dollars over the life of a loan simply by having a lower interest rate. A higher credit score can also help you qualify for a car or home loan. Some places of employment, such as businesses in the financial industry, may require that their employees have fair credit ratings. There are several ways that you can raise your credit score. Choose Cards Carefully Several stores offer special promotions for customers who will open an account with them. It can be tempting to sign up for these offers when you are making purchases at a store. If you do not have any credit, … [Read more...]
The Downsides of Loan Modifications
Have you heard that a loan modification could be the answer to your dreams? In some cases, it decreases mortgage payments and protects your credit score. However, on the other side, there are significant risks you take regarding your credit, especially if not approved for the modification. Here are the six downsides to a loan modification. The Program Will Not Help You If Unemployed The first downside of a loan modification is to realize, you may not qualify off the bat. The purpose of a loan modification is to help reduce your mortgage payments based on your pre-tax income. However, while unemployment is income to you, it is not considered the qualifying income under the Home Affordable Modification Program. Submitting Lower Payments … [Read more...]
Debt Crisis 101: Seven Steps to Taking Charge
Debt is a bad thing, true. But this is not all. Probably the worst thing about debt is that it creeps upon you and surprises you; so when most people discover that they have debt, they are already in crisis. Now, I have always believed that crisis is a good thing: we need crisis to change dramatically and grow. Many great and beautiful things are born out of crisis. However, we are only human and the first human reaction to crisis is often panic. Don’t panic! Just follow these seven steps to take control of your debt crisis! 7 Seven Steps To Overcome A Debt Crisis Step One: Look At Your Income and Expenses Look at your income and expenditures; if you have looked recently, look again – this time properly. Make sure that you really know … [Read more...]
Financial Carnival for Young Adults – End of Summer Edition
Welcome to the Financial Carnival for Young Adults - End of Summer Edition. Yup, summer is officially over. It was a great one for me, lots of weddings, lots of golf and lots of great weather. I love the fall, so the only downside to the end of summer is that the days are getting shorter. As you begin to prep for the fall and eventually the winter, be sure to take a moment to review your finances too. Staying on top of them will help you to realize your financial goals! Here are a handful of great posts to get you started! If you would like to host this carnival or submit your posts, check out this link. Don @ Money Reasons writes The Hurdles With Helping Others Financially - I've decided to do a new financial experiment and so now … [Read more...]
Importance of Perspective With Money
When it comes to money, some people put too much emphasis on it. Making it, saving it, spending it, whatever the case may be. I even know of a few people that live life by the almighty dollar. If those last three sentences describe you, please keep reading because I am here to tell you that there is so much more to life than money and that you need to put money into perspective. My Trouble With Money When I was younger, I got myself into credit card debt. At the time, I was ashamed that I let myself get into debt, but now I feel blessed for the lessons it taught me. I got into credit card debt because I was depressed and was trying to buy my happiness. I would shop for electronics and clothing and get excited when I had all of these new … [Read more...]
Thanks again for visiting Penny Thots. My goal for this site is simple: to help you become a master of your financial future. You do this by learning to overcome your debt, making smarter spending choices and start investing for your future. When you succeed, I succeed. By teaching you about personal finance, you can take the steps needed to secure your financial future. As always, if you have any questions or want help with any personal finance issue, please 
