A few weeks back, I posted some tips about getting out of debt by improving your loan rates. Improving your rates is great (if you can do it) for all the reasons I posted about. But improving your rates, alone, won’t get you out of debt. It helps you get out of debt– but you still need a plan of action to complete the job.
One plan of action that I’ve had personal success with is a little something called a “debt snowball.” That might be a term that’s familiar to you, especially if you are also familiar with Dave Ramsey, who is a pretty well-known personal finance guy who has long championed the method. Perhaps you have a plan in place to deal with your debt, already. If you do, that’s great (having a plan is super-important.) If not, then maybe a debt snowball is the plan for you. Let’s look at how it works.
Last week’s post and the three questions in it have me thinking about a principle that’s worth devoting a little bit of time to. I want to talk about compound interest. Often, when I am counseling people and I breach the topics of either retirement or investing, I ask if the member knows what compound interest is. Also often, they don’t.
Einstein is quoted (perhaps fictitiously) as having said, “Compound interest is the greatest invention in human history.” He is also quoted (also perhaps fictitiously) as having answered, “Compound interest,” when asked the question, “What’s the most powerful force in the universe?” Whether Einstein actually said this stuff or not is up for debate; whether compound interest is an amazing thing or not isn’t. Compound interest is amazing. Understanding compound interest is a key component of financial literacy, because it’s something that can work greatly for you– but it can also work against you, if you don’t understand the concept. So, let’s talk about what compound interest is, why you should fall madly in love with it, and how to make it work for you.
Debt is a major financial problem for many, many people. I’ve spoken before about my own past financial issues and massive debt was certainly one of the ingredients in that not-so-tasty dish. If you have debt, you’re definitely not alone. Today, we’re going to talk a little bit about some of the ways that you can help yourself as you are trying to get out of debt.
The average American consumer has at least six credit cards. Think about that for a second. Six. If you have a $5000 limit on each of those cards, that means you could potentially have $30,000 worth of credit card debt(!) Yikes. But that’s just one possible example of troublesome debt. Let’s go a step further and take a look at some numbers:
Well, it’s that time of year again. In just under a few weeks, your taxes will need to be filed (if you haven’t done so, already.) And, as we all know, the filing of taxes often means receiving tax returns (though definitely not always.)
As people get tax returns back, they use them in any number of different ways. Some folks have plans for their tax returns and some don’t. Of course, I think it’s important to have the same type of awareness, thought, and planning in regards to your taxes and tax returns as for everything else in your financial life. If you’re not giving any deeper thought to your tax returns, you might be missing out on an opportunity to use your taxes to make a significant, positive impact on your overall financial life.