How To Pay Off Debt

Hopefully you are not one of the hundreds of thousands that find themselves in over their head in debt. If you are however, you can find additional free information. Regardless of your current financial situation this article will serve to help you become more debt aware and possible save you a lot of money.

I’m sure you’ve heard, "Debt never sleeps" or "Debt is your second boss". How about "You are paying the credit card to let you work?"  It’s true, debt can compound as much as 21% each and every month. Still, all hope is not lost. Take a look at the list below and see if there is anything that you can do to reduce and pay off your debt.

• Pay twice the minimum:
  First, you need to make more than just the minimum payment.  Honestly, if you make just the minimum payment, you are playing right into the banks hands.  You need to eat out less, not drive as much, stay at home on the weekends, etc. So that you may put that money toward paying off your debt.  If your minimum payment is $125 a month, then pay $250 a month!  Let go of a few of the luxuries so that you can relieve the burden.
• Snowball your debt payments:
  Second, you need to find out which credit cards/debt has the highest interest rates.  If you can consolidate your debt into one payment with a low interest rate, you will count your lucky stars in the end.  When you consolidate your debt, you save hundreds, if not thousands of dollars depending on your interest rates.  We highly recommend using the popular program of “Debt Help for Women”
• Use your savings:
  You could also use your savings to pay off the debt.  This is obviously a hard thing to do. However, if you become a slave to debt, it’s good to dig yourself out of that hole first, and then you can focus on building your savings account again.
• Try to get a loan from your life insurance policy:
  Many policies have a hard cash value? If yours does, you can borrow against your policy. In essence this is like giving yourself a loan because you are borrowing money that you own. The interest rate is usually far below other loan rates, and you will have more time to pay back the money. Be sure though that you do bay it back though. The downside to this type of loan is that you could die before it’s paid back. If this happens, the outstanding balance and interest will be taken from the overall value of the policy payable to the beneficiary.
• Family and/or friends:
  Family and friends are always a good source to help in time of need. Make sure it’s a friend who you have established a good trust line with. Otherwise, you will lose your friends and distance yourself from your family.
• Try a home equity loan:
  Home equity lines of credit are also a good way to pay off debt.  You can borrow the small amount and pay it off as a second loan on your home.  This is another way to consolidate your debt into one loan.
• Use your 401k:
  Do you participate in a 401k qualified retirement plan through work or your home business? Many plans let you borrow 50% of the account value, or $55,000; whichever amount is smaller. Interest rates vary from a point or two above the going prime rate. None the less, it will be much cheaper than high interest credit cards. Again, this is a form of consolidation. There are some setbacks though as the loan and interest have to be repaid with your tax dollars. You have to pay back the loan within five years or less. If you go to another job, you have to pay back the loan in full when leaving. If it’s not repaid, then you will have that amount treated as a distribution to you and you will pay taxes on it also. If you are under 59 there will be an additional 10% tax for early withdrawal. You should check up on your plans to see specific details per plan.

The last thing that Creditors want you to do is to run. They want to know where you stand.  If you can talk to your creditors and let them know where you are at, you might be able to negotiate new terms. If however, you could use some help with your debt, please click the link below for FREE information about debt help in your area.

CreditServicer.com provides free assistance for consumers seeking help with ChexSystems or bad credit. We also offer a variety of financing options such as bad credit loans and credit cards.

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How to Plan Your Estate

It can be depressing to think about, but every adult should spend time planning and preparing their estate. When you are ready, here’s how to plan your estate.

Retirement Planning

Retirement planning and estate planning overlap, but are not necessarily the same thing. Your estate is the bulk of your assets when you die. Presumably, those assets helped sustain you during your retirement. So when planning for retirement, you must also give some thought to your estate as well.

Assess Your Situation

The first place to start in estate planning is to assess your situation. How much money do you have in retirement funds? How much will you realistically be spending each year? Are you trying to retire early? Will your retirement funds be enough to last through the end of your retirement?

Tally up all of your assets. If your total net worth is over one million dollars, you should strongly consider a trust. Even if your total is less than one million, a trust will allow you to set conditions on how your money is distributed after your death. It also offers protection from government taxes.

Set up Your Will

If you do not already have a will in place, set one up immediately. This will save time and legal proceedings when you pass, even if you have no funds left in your retirement accounts. A will specifies who receives what from your estate. Speak with a lawyer or financial planner to have a will set up to maximize your estate.

Set up a Power of Attorney

You must also have a power of attorney to execute the will. Your power of attorney allows someone to act on your behalf, so it is necessary to have a power of attorney in place before you become incapacitated in any way.

Set up a Medical Power of Attorney and Living Will

You need to specify your plans for hospitalization and life support. You can set up a plan telling doctors to keep you on life support as long as humanly possible, or you can ask to not be resuscitated or kept alive solely by machines. A medical power of attorney or healthcare proxy will act on your behalf when you become unable to make your own medical decisions.

Start Distributions

The government has powerful estate tax laws that are changing a bit now, but will solidify in a few years. This means that any estate over $1-3.5 million can be taxed at almost 50% by the government. It is important to set up a trust to protect the assets when you are gone, or you can begin distributing funds now to avoid the tax burden. You can currently give an individual $12,000 a year (or $24,000 if you’re married) tax free. You can also pay unlimited amounts of education and medical bills on behalf of someone else or set up charitable donations tax free.

Explain Your Plan

Finally, you need to explain your plan to your family. Be sure others have a copy of your documents and explain your desires and rationale. This will help avoid confusion or even conflict at the time of your passing.

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How to Maintain Your Life Insurance

Life insurance is critical for most adults, and especially those with dependents. Many adults have little or no difficulty selecting one form of insurance or another to suit their individual needs, but over time, the policies might lapse for one reason or another.

Even as your children grow up and leave the house, it is still important to maintain your life insurance until you are sure you no longer need it – which for many of us, will not be until the policy payout has been collected by our dependents.

Select the Right Plan

The first step in maintaining your life insurance is to select a policy that will last the longest and be affordable. There are various kinds of life insurance including whole life and term, and each has its benefits and drawbacks. Research your options and discuss various policies with your dependents and financial advisor. Then select a plan that has the maximum amount of coverage with a premium you can afford.

Pay Premiums

The easiest way to maintain your life insurance is to meet the requirements of the plan. Pay the premiums on time every month. If you selected a plan whose premiums are too high to make comfortable, discuss your options with the company. It is far better to have even a little bit of life insurance than none at all, so find a plan whose premiums you can afford – even if you have a plan worth only $15,000. It is much more advisable, however, to find a plan with adequate coverage and find a way to meet the premiums.

Know Your Limits

Many life insurance plans are offered based on the assumption or even signed intent of remaining healthy and not engaging in life threatening activities. Most plans are intact for the life of the contract, but have disclaimers. If you are seen to have taken unnecessary risks and perished, your life insurance company may be able to avoid paying your dependents.

Study the plan and read the fine print. Are there exclusions? What if you gain weight? Are terminal illnesses covered? Some things, such as terminal illnesses, can’t be avoided and should be included in the plan. Others, such as sky diving accidents and drag racing are certainly avoidable and might void your contract and are inherently dangerous as it is.

Get Insurance Early

The earlier you arrange life insurance, the better your terms will be. Term life insurance especially has tremendous benefits if you set up a plan early in your adulthood. As you age and more health conditions develop, it becomes more difficult to qualify for plans and this can make them that much harder to maintain.

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How to Buy Life Insurance

All adults, especially those with dependents or children, need to have some form of life insurance. The life insurance offered in company benefit packages is often a token gesture, but almost never enough to provide for your family satisfactorily after your death. You need to plan ahead, and you need to know how to buy life insurance.

Determine Your Need For Insurance

Life insurance in Canada, the United States and most developed nations comes with essentially the same terms and is offered in similar formats. There is term life insurance, which is essentially rented for a set amount of time, or there is whole life insurance which is a policy purchased over time which may be considered a form of investment.

To buy life insurance, you must determine what sort of policy you need. Is it likely your dependents will be off and successful on their own in a matter of twenty years or less? Or do you like the security of knowing you have life insurance right up to the end? Term life insurance is less expensive than whole life and it is most often purchased to last through your child rearing years or while you are the primary breadwinner. A smaller (less expensive) policy may be purchased after that if necessary. Whole life is more expensive, but you are able to show a purchased policy at the end of the payments which will be with you for good.

Determine the Amount of Insurance

The amount of your life insurance should be enough to:

• Fully cover your funeral, burial and maintenance expenses
• Settle all outstanding debts including credit cards, loans, medical payments, and liens.
• Pay off your home is your dependents will still be living there.
• Provide adequate living expenses for your spouse and dependents for an appropriate amount of time.
• Possibly pay for your children’s higher education.

There is a difference between buying life insurance with children and without. If your spouse works and you have no children, your policy need only cover what would be required to clear your accounts after your death and possibly pay off half or all of your major expenses to keep your spouse from going under from trying to keep up with all the bills.

If you have children, however, your spouse may not be working out of the home. You must plan for what your spouse will do in the event of your death. Will you need to pay for childcare if she is working? What sort of job is she qualified for? It is always best to leave as much as possible to cover your children’s living expenses until they are legal adults to make the strain of your absence bearable.

Buy the Life Insurance Policy

Discuss your options and selections with a life insurance broker. Compare plans from competing companies either through representatives or online. When you’ve found the plan that is right for you and your family, purchase it and then never lag on payments. Life insurance isn’t about you – it’s about keeping your family safe and comfortable when you are gone.

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