CREDIT CARD PAYOFF CAUTIONS

Yahoo.com posted this information on paying off your credit cards the wrong way.  They are certainly worth consideration.

"Whether you're carrying a few hundred or a few thousand dollars in loans and credit card debt, making a commitment to get out of debt is a noble goal--unless you're using the wrong payoff strategy.
Some self-discipline with the budget and a strategic debt payoff plan will put you in a better financial position, but you'll also need to make wise decisions about how you pay off that debt. Paying off large amounts of debt all in one go or using up a savings fund aren't always the wisest financial moves.
[See 10 Ways to Start Earning Extra Money Now.]
Here are five dangerous debt payoff strategies to avoid:
1. Paying off credit card debt too fast. If you're a habitual credit card user and decide to pay off credit card debt in one big swoop, you'll enjoy the satisfaction of clear credit balances for a while--but could end up racking up more credit card debt in the near future. If your credit card spending is out of control, you'll need to work on breaking the habit of spending with credit cards altogether. Paying off that credit card debt quickly without making some adjustments to spending habits could lead to another credit card spending "binge." Wean yourself off credit card spending so that you don't fall back into old habits.
2. Using emergency funds. Your emergency fund needs to be one of your "no touch" accounts until you're facing a real emergency. If you use up your emergency funds to pare down that debt load, you'll have to deal with financial instability when faced with medical bills, a family emergency or another situation that demands some quick cash. Avoid tapping into your reserves just to pay off debt. Even though you would be eliminating a debt load, you won't have any type of financial cushion to fall back on. Look for ways to earn more money or sell assets so that you have more cash available for your debt payoff strategy.
[See The Secret to Living Well on $40,000 a Year.]
3. Tapping a home equity line of credit. Borrowing against the equity of your home can give you some extra cash for large purchases and even pay off some debt. However, this strategy can be a bad move in the current economic climate when housing prices continue to drop. When the value of your home drops and you end up having to sell the property, you'll end up owing more than you bargained for. Avoid tapping into a home equity line of credit unless you're certain that you will be staying in your home for several years, and that your home has the potential to increase in market value.
4. Withdrawing from a 401(k). You've worked hard to build up a healthy balance in your 401(k) account and have been consistent with your contributions. Don't let all that hard work go to waste by withdrawing early. While withdrawing funds from a 401(k) may seem like a simple way to get a lump sum of cash to put toward a debt repayment plan, you will be paying fees for an early withdrawal and will be clearing out those much-needed savings for retirement. Look for other, less costly ways to pay off debt so you can leave your 401(k) intact for as long as possible.
[See 401(k) Mistakes to Avoid.]
5. Filing for bankruptcy. Filing for bankruptcy can seem like an easy fix when you're overwhelmed by your current debt load or can't seem to put together a workable debt payoff plan. Keep in mind that the effects of filing for bankruptcy can last 10 years and creditors and employers will see the bankruptcy filing listed on your credit report. Potential creditors can turn you down for a new credit line when they see bankruptcy on your record, future landlords might think twice about renting to you, and employers that conduct credit checks will see the bankruptcy filing on your credit report.
It can take years to repair your credit after bankruptcy so you need to do whatever you can to pay off that debt on your own. Working with a debt counselor instead of a bankruptcy attorney can help you get a better perspective on your current financial situation and formulate a debt payoff plan that works. If you pursue a debt relief program, you may be able to settle your debt without going down the bankruptcy route."

Sabah Karimi is an award-winning Yahoo Contributor and WiseBread.com's guide to travel rewards credit cards.

5 Easy Steps to Becoming a Millionnaire

Yahoo finance (http://financiallyfit.yahoo.com/) lists their 5 Easy Steps to Becoming a Millionnaire.  I'll just list them, but you can go to their website for the rest of the information.  Some of them are self explanatory:

1.  Only marry once. (Divorce costs a lot of money and you lose your stock pile)
2.  Live off one income.  (Save the second income)
3.  Choose the right career.  (Be aware of new trends and don't get stuck in a vanishing job)
4.  Put your money in appreciating assets.  (Cars, toys, etc. will never resell at a higher price)
5.  Don't live the millionnaire lifestyle.  (Keep your home, drive an older "new" car)
(There's an old saying:  "Use it up... Wear it out ... Make it do ... Do without".  Apply to a lot of things.)

5 Things Worth the Splurge

According to USAA's Summer 2011 edition, there are five things to splurge on when you buy to get the best value for your money.  Buy the best that you can afford.  Surprisingly, a "great deal" may not be your best buy.  Check websites for advice on particular brands.

.   Interior paint - $10 - $50/gal (usually about $25)
.   Estate planning - $800 - $1800+.  The more complex your issues, the more the cost.
.   Mattress - check coil count, coil guage and filling maerials.  A decent queen size with innersprings = $700
.   Kitchen knives - premium knife has high-carbon steel blade forged out of a single sheet of metal and a         handle made out of hard, crack-resistant material.  A full set may be about $400
.   Running shoes - entry level may be as low as $50

Now's the time!

Everyone is slowing their spending down these days.  Even if you are not out of work, it will be a great idea to really look at your spending.  Sometimes we pay for things that used to be a good idea, but in truth we don't need that service, idea, magazine, etc. any more.  www. robinroost.blogspot.com included an extensive article concerning couponing.  Be sure to read it and see if it might be of great help to you.  It might also be a good idea to look at http://www.bankrate.com/ to see if your bank savings might make even a little bit more using an online bank.  You have to set up your account and link it to your checking account, but after while even a little makes more.  Take the time to overhaul your finances - you'll find lots of ways to have a little extra money.  God bless you!

A novel idea!

Remember that while getting totally out of debt (except your house payment), it is necessary to deal in cash and to keep each month's money in the same month.  However, if you are debt free, there are some options available that you can use.  Some Credit cards are offering 5% cash back on gas purchases and 1% back on everything else.   It's a whole lot more than savings accounts are paying right now - usually less than 1%.  Depending on how you spend, that could mean a 2-3% saving.  When it was first offered, I just enjoyed the reduction in our credit card bill (we use credit card for travel and gas purchases).  Then I realized that it was a SAVING and began writing a check for that amount and putting it in one of our special savings accounts (emergency, furniture, etc).

***A way of keeping the expense in the same month would be to have cash for your monthly expenses and when you use your card, take that amount out of cash and put in a special place.  When the credit card bill comes, take the cash and deposit it back into your checking account.  You can then pay the bill on the correct month's allowance.  You could also transfer your cash amount you would spend in a month and transfer it to a connected savings account.  This may take a little time, but you will be able to get the savings and not get yourself into credit card debt.  Once you are out of debt - never go back!  It's just a thought and strategy.

Enjoy the whole blog

This blog has all kinds of fun information included:  financial, every day, recipes, etc.  My other blog has only financial information on it and the way to order my book, "FREEDOM FROM DEBT - A Simple Guide". This small book is like a stick of dynamite showing you basic finances for beginners (and those who think they might have missed a step) as well as new married and career folks.  The information is basic but  like secret tips.  Hope you enjoy it.  http://www.wisdombuildsahouse.blogspot.com/

10 Great Reasons to go cash

Smart Money Magazine provided this information to Yahoo Finance!.  The article "10 Reasons I'm Cancelling My Credit Cards" is by Brett Arenda and posted on Friday, July 8, 2011.  You will find it very interesting and helpful.  I'm listing the categories, but you will want to read the article.
#1 I'll spend less;     #2  The card bonuses aren't worth it;    #3  Cash makes budgeting easy;    #4  Less worry about identity theft;    #5  Fewer impulse purchases;    #6  I can still shop online (prepaid card);   
#7  Say Godbye to debt;  #8  Privacy;    #9 Cash rebuilds the link between what I earn and what I spend;   #10  Cash helps peopole I want to help (merchants & suppliers - no fees). 

It's the best starting place to get your financial health together!