If you’re tired of reminders being sent in the mail that you owe debt, or have been hitting ‘ignore’ on the phone when you know your credit card company is calling, you should consider accepting the inevitable: you are in debt and you owe money. But all hope is not lost; here are some simple ways to pay off your debt sooner than you thought possible.

Step #1 More is Better

Whoever said “less is more” was wrong when it comes to paying credit card minimums. Paying the minimum (typically 2% or 3% of the total debt owed) simply delays the pain of paying what you owe. Create a long-term financial budget that devotes more than what’s required to pay your bills. If you’re unsure where to fuel the extra finances, start scrimping and saving. Say ‘goodbye’ to those skinny iced lattes or brown bag your lunch. You’d be amazed to know that your $8 work lunches amount to $3,000 a year on just that one midday meal!

Step #2 “C” is for Consolidate

If you have outstanding debts on multiple cards, consider combining them into one lump debt. Examine each credit card’s interest rates, and if possible, transfer higher interest rate debts to lower interest cards. Keep an eye out for promotions offered by credit card companies. Often, these companies will offer significantly lower interest rates that could save you money. The money you save by consolidating can be put toward your monthly payment.

Step #3 Tap into Your Savings

Sure, you’ve been saving up to take a fabulous vacation in the Cayman Islands, or you’re looking to retire at the ripe age of 38. Using your savings toward your debt might be a painful reality to face, but it’s a worthwhile option. The higher the interest rate on your debt, the better this decision is.

Step #4 Talk it Out

Creditors do not know who their individual borrowers are. Let yourself be known! Contact the companies and tell them your situation. They might assume you’re just withholding the money. If you’re having trouble making payments, some companies will re-negotiate terms of the debt owed, which may result in lower monthly payments and interest rates. You’ve got nothing to loose!

Step #5 File for Bankruptcy

Consider filing for bankruptcy as a last resort for individuals seriously in debt. Before filing, consider all the repercussions that will result from this drastic action. Credit companies will retain your bankruptcy information for an entire decade, so for the next 10 years, you’ll have trouble getting credit. Also, as ludicrous as it sounds, filing for personal bankruptcy costs money! Attorney and court fees quickly amass, and in this situation, must be paid prior to become bankrupt.

Thermometers aren’t the only things rising this summer. With the ever-increasing cost of daily essentials like gas and dairy products, Americans across the nation are looking to cut their summer spending habits. Check out these tips to keeping cash in your wallet.

Turn It Up

Investing in a programmable thermostat can equate to over $180 in savings per year. By bumping temperatures higher in summer and lower during the winter months, not only will your wallet thank you, but so will the environment! According to Energy Star, changing settings during a typical 10-hour workday to 8 degrees lower in the winter and 7 degrees higher in the summer can help save energy, lower your energy bill and maintain a comfortable temperature in your home at all times.

Bonus: If you tend to be more cold-blooded, layer up! Invest in thermal sweaters and blankets in case you’re chilly.

Cut the Caffeine

If you’re a caffeine junky, you probably find yourself running to the nearest Starbucks or local coffee joint once or twice a day “because you need it”. Look at your spending long-term. That tall caramel macchiato runs at $3.45 a pop and is packed with 120 calories. Over a typical 50-week year, that means $862 of your salary was spent on coffee alone, as well as 30,000 extra calories sipped.

Bonus: Can’t kick the habit? Purchase coffee for your office in bulk; add caramel drizzle for that extra sweet flavor.

Write it Down

Have you ever just “had to have” the adorable skirt or perfect shoe you hadn’t intended on buying? Don’t worry, most of us fall prey to wandering eyes while shopping; whether it’s the grocery store or the tres-chic shop around the corner, we’ve purchased things we don’t need. In order to beat temptation, write a list before you leave for the store. If your list is too long, try eliminating things you simply want, instead of need. Also, be sure to shop on a full stomach; shopping while hungry encourages more spontaneous purchases (candy bars, chips and other junk food items).

 

Bonus: If you’re still having trouble sticking to a list, try walking to the store; you’ll only be able to buy what you can carry and its good exercise.

Re-imagine Renovation

By now, you’re probably recycling your canned and paper goods, but have you ever considered saving what you’re ditching? Instead of buying a plastic shelving unit, old coffee tins make perfect storage units for all small garage parts. Plastic grocery bags make great make-shift trash bags and paint tray liners.

 

 

 

 

Bonus: Can’t keep all those plastic bags contained? Re-use tissue  boxes and store plastic bags in this convenient, portable box.

As the countdown narrows toward Election Day 2008, both Republican and Democratic presidential nominees are imparting what platform changes they'll institute upon entering the White House. Among their many proposals, both have discussed income tax percentages. For many unaware tax payers, they could be on the cusp of a potential tax increase by 20%, which is a significant increase compared to recent years.

So before the 2008 election day arrives, be sure to determine which tax bracket you are classified under. Tax brackets are determined based upon the amount of income earned annually, as well as your status as an individual (single, married filing jointly or qualified widower, married filing separately or head of household).

The 2008 tax bracket breakdown can be seen below:

*If you qualify as 'married filing separately or 'head of household', determine your income tax rates here.

The Candidates & Their Platforms

John McCain will maintain the highest income tax bracket at 35 percent. His platform goals reflect the importance of small business owners who offer a large proportion of job opportunities nationwide. Additionally, McCain plans to phase in an increase in those eligible for dependent exemption by two-thirds.

Presidential hopeful Barack Obama plans to institute a generous "Making Work Pay" tax policy that includes a credit of up to $500 per person, or $1,000 per working family. Also, senior citizens earning less than $50,000 per year would not be subjected to income tax. 

Find out more information on McCain's 'Reform, Prosperity, Peace' campaign and Obama's 'Change Our Country Needs' campaign.

Despite the plethora of financial troubles, some individuals are seeking to start building their credit this fall, namely students, recent graduates and those with low credit scores. With so many types of credit cards to choose from, it’s difficult to know which one is right for you.

Shop Around

Before signing the dotted line on any card, be sure to evaluate what you are looking for in a credit card. If you’re a frequent flyer or drive a gas-guzzler, using a rewards-based credit card might be best for you. For students or individuals looking to establish credit, find one with low rates and no annual fees. Prior to using, be sure you can pay the bill to zero for each and every purchase; this way, you’ll eliminate the risk of gradually slipping into debt.

Read, Then Sign

Agreement terms are written in fine print, encouraging confusion and a headache. Maybe your initial rates are a steal, but after a year, they could triple. It’s not uncommon for this hard-to-read section to detail changes within 6 months or a year after signing. If you have trouble deciphering the legal jargon, hire a lawyer to explain the agreement. Once you fully understand the terms of agreement, then and only then should you sign the dotted line.

With the government taking over lending giants Fannie Mae and Freddy Mac, many assume that mortgage rates will lower and the credit crunch will ease. Are homeowners celebrating prematurely?

According to an article on CNNMoney.com, Treasury official Henry Paulson believes that the much-needed financial relief will take longer than expected. Paulson states, “The primary mission of [Fannie Mae and Freddie Mac] now will be to proactively work to increase the availability of mortgage finance. Our economy and our markets will not recover until the bulk of this housing correction is behind us.”

Yet, Paulson encourages homeowners to remain hopeful. Because the government has taken over these lenders, mortgage rates are poised to drop. Additionally, the lower rates will potentially increase borrower applications, which are down 27% from August 2007.

If you’re like thousands of Americans who are struggling to pay bills under the vice-like grip of the credit crunch, don’t lose hope, you’re not alone. There are alternatives to getting out of debt- and quickly. Many have chosen to settle their debt; this occurs when a creditor negotiates and “settles” for a specific amount that is lower, usually significantly lower, than the actual amount owed. If this sounds like a viable option for you, consider these tips before settling your debt.

Seeing Green

Creditors can often negotiate up to 60% of your debts owed, saving you thousands of hard-earned dollars. However, in order to have the most bargaining power, debt settlement is recommended for those middle-of-the-road debtors. What does that mean for you? If you’re in significant amounts of debt, you may want to consider other debt consolidation means, such as filing for personal bankruptcy. Or, if you’ve just accumulated a small bit of debt, call a lending company directly to discuss your options.

Stick to Facts

When talking with a tough debt collection agent, you may be nervous, or downright scared. Before you call, write down everything that is necessary for the collector to know; leave the tale of woe behind. This way, you’ll stay focused on what matters: the facts. Prioritize your bills, starting with necessities for your family such as food, clothing, and insurance costs, and then include extras like credit cards. Next, calculate what you can afford to pay on a monthly basis. When you are discussing what you can afford, try to offer less. After you’ve written everything down, make the call.

Slow & Steady

Don’t let the smooth talking get to you; stay focused on your goal: settling your debt for a smaller, affordable repayment plan. Words like “rush”, “immediate” and “one-time only” should raise a flag in your mind; do not take any action until you have a written agreement of the terms in your hands. By following this rule, you’ll weed out fraudulent debt settlement companies and have time to discuss the terms of agreement with your family prior to signing.

Welcome to the American Financial Freedom blog- a resource for all your financial needs. Read the latest on debt settlement and consolidation, personal finance and student loans, as well as what’s new on American Financial Freedom.

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