Controlling Debt -10 things to know

 The average American household with at least one credit card has nearly $9,200 in credit card debt, according to CardWeb.com, and the average interest rate runs in the mid- to high teens at any given time.

 

2. Some debt is good.
Borrowing for a home or college usually makes good sense. Just make sure you don't borrow more than you can afford to pay back, and shop around for the best rates.

 

3. Some debt is bad.
Don't use a credit card to pay for things you consume quickly, such as meals and vacations, if you can't afford to pay off your monthly bill in full in a month or two. There's no faster way to fall into debt. Instead, put aside some cash each month for these items so you can pay the bill in full. If there's something you really want, but it's expensive, save for it over a period of weeks or months before charging it so that you can pay the balance when it's due and avoid interest charges.

 

4. Get a handle on your spending.
Most people spend thousands of dollars without much thought to what they're buying. Write down everything you spend for a month, cut back on things you don't need, and start saving the money left over or use it to reduce your debt more quickly.

5. Pay off your highest-rate debts first.
The key to getting out of debt efficiently is first to pay down the balances of loans or credit cards that charge the most interest while paying at least the minimum due on all your other debt. Once the high-interest debt is paid down, tackle the next highest, and so on.

6. Don't fall into the minimum trap.
If you just pay the minimum due on credit card bills, you'll barely cover the interest you owe, to say nothing of the principal. It will take you years to pay off your balance, and potentially you'll end up spending thousands of dollars more than the original amount you charged.

7. Watch where you borrow.
It may be convenient to borrow against your home or your 401(k) to pay off debt, but it can be dangerous. You could lose your home or fall short of your investing goals at retirement.

8. Expect the unexpected.
Build a cash cushion worth three months to six months of living expenses in case of an emergency. If you don't have an emergency fund, a broken furnace or damaged car can seriously upset your finances.

9. Don't be so quick to pay down your mortgage.
Don't pour all your cash into paying off a mortgage if you have other debt. Mortgages tend to have lower interest rates than other debt, and you may deduct the interest you pay on the first $1 million of a mortgage loan. (If your mortgage has a high rate and you want to lower your monthly payments, consider refinancing.)

10. Get help as soon as you need it.
If you have more debt than you can manage, get help before your debt breaks your back. There are reputable debt counseling agencies that may be able to consolidate your debt and assist you in better managing your finances. But there are also a lot of disreputable agencies out there.

By Masayo K. Quick and David N. Sutton of the law firm of David N. Sutton & Associates, LLC

 

 

Her mother was elderly and lived with her. As many can relate to, her mother wanted to live at home as long as possible rather than in a nursing home. This daughter, whom we will call Celia*, worked full time to pay the bills. She cared for her mother herself as much as she could evenings and at night. During the time she was at work, she ensured her mother was cared for at an adult day care center.

As is common with many elderly persons, and exacerbated with certain
medications; Celia's mother bruised easily, tended to fall and healed slowly. Celia's mother had fallen at the adult day care facility several times. Having paper-thin skin, the injuries were always quite apparent for some time. Celia felt the care facility was not as careful as it should have been but continued to try to work with them to obtain the best
care for her mother.

Perhaps in an attempt to alleviate their own liability, the adult care center turned the tables by contacting Adult Protective Services and reporting that Celia was abusing her mother! Celia found herself caught in the middle of an ugly dispute. To make matters worse, her determination to abide by her mother's wishes for natural care
wherever possible just added to the suspicion that she was neglecting her mother.

 Read Article

Courtney L. Smith, NCG, PDMM

 

Helping families, one client at a time

 

Most of us realize that every family has their own unique set of circumstances and dynamics.  We have all witnessed or been party to the typical "dysfunctional family" and the stress it can cause on everyone involved.

 

This is one of the reasons I get phone calls everyday from people who need help and want to let go of the responsibility of managing the day to day finances. 

 

Here are just a few of the scenarios that come up for a lot of families:

 

1) the elderly parent who has a child who expects them to give them money or is constantly asking them to help them pay their bills.  The parent feels "obligated"  but doesn't want to be in that position and has a hard time saying no.  They want to be the parent, not the bank. 

 

2) the child or family member who lives closest to mom or dad who has been helping them manage their affairs is always getting questioned and interrogated from the out of state siblings or family who want to know "what was going on and why did you do that or what happened to the money?" It becomes too much of a conflict and the child wants out.

 

3)  the parent who needs help but has several children who don't get along and they are worried what might happen to their children's relationship if they are forced to work together in that capacity.

 

4) the parent who needs help but their only child has a drug or alcohol problem and the parent worries what would happen to their money if left in the hands of that child.  Most parents don't want to put themselves or their child in that position.  

 

Although many families can relate or have had these experiences, the positive side is that there are people who can help. 

 

This is one of the reasons why I love what I do.   I get to make a difference in people's lives and the lives of their families. 

 

I recently had one family member who sent me an email thanking me for helping their family open up the lines of communication which had been non-existent for years.   With a little help from us they are on the road to putting aside a long history of family conflict.

 

 That makes it all worthwhile.