Evan Vitale

Evan Vitale – Resist Holiday Spending Bug

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Evan Vitale

November is here and, before you know it, you’ll be bombarded with holiday ads, commercials and new credit line offers so you’ll have more money to spend during the busy shopping season.

The temptation to spend – especially when creditors offer credit in front of your sparkling eyes – now is the time to stick to your budget; stick to the plan that you set nearly a year ago. Resist the urge to spend and resist the urge to sign up for a new line of credit.

You’ve come so far in creating and setting your budget, now is not the time to blow it. Yes, everyone will have a Merry Christmas, but you’ll regret the spending decisions you make now when the credit card bills come around in January (and, believe me, everyone regrets those big spending decisions when that fat bill – with high interest rates – arrives in the mail).

Suzy Orman calls it the “buy-it-now-bug” saying everyone catches the spending bug now and we start feeling the full effects in January. She advises:

  • Use only cash. Challenge yourself to not buy any gift with a credit card.
  • Go homemade. Whether it’s baked, knitted, scrap-booked or any other gift that you make yourself, it will feel more meaningful to the recipient and it will keep you away from the spending temptation.
  • Check your giving circle. Have a conversation with your family and friends about scaling back with your holiday giving. Who knows? They may have wanted to have the same conversation with you, so break the ice and have that discussion now.

An extra tip is to have a “secret Santa” drawing in your family. Instead of giving gifts to everyone, why not set a budget and everyone has a “secret Santa?” This way, the spending is kept to a minimum and everyone gets to enjoy a special gift.

Resist the urge. Follow the tips mentioned above and stay within your budget. You’ll be happier come January!

Evan Vitale – Getting Out of Debt (Part IV)

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By Evan Vitale

As we know, credit cards can get you into a lot of debt very quickly. Credit cards are easy to obtain but if you don’t control and manage your spending, you can get into a lot of trouble very quickly.

So, what happens when you get in over your head and you can’t keep up with paying off credit card debt? After all, paying the minimum payment each month is not nearly enough to provide relief.

Here’s when most people consider hiring a debt consolidation agency to help and guide them through the debt consolidation process. Here’s how it works:

A debt consolidation agency will help you develop a plan that will help you pay off your debt. In addition, some agencies will continue to provide additional services after the debt is resolved in order to restore and rebuild your credit score. Debt consolidation agencies pool your entire debt together so that you’ll make one payment per month until your debt is paid off. In some cases, they will work with the credit card companies and may be able to get some of your debt excused.

A word of warning: debt consolidation agencies charge fees so make sure the amount you pay them won’t be more than the interest you’re paying to credit card companies.

Do a little bit of research before you hire a debt consolidation company. Read their websites; check out their reviews and call them to schedule an appointment. It’s always nice to have someone on your side you can help guide you through your debt process and make like a little bit easier on you.

Evan Vitale – Getting Out of Debt (Part III)

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By Evan Vitale

Our series on getting out of debt continues today by taking a look at credit card debt.

As we know, it’s very easy to use plastic; buy things we don’t really need and run up a credit card bill. While it feels good to “shop until you drop,” it certainly doesn’t feel good when the statement comes in each month.

Paying the minimum amount is only a temporary fix. Over time, the interest on your debt will bury you and, perhaps, you won’t be able to use your card again. Therefore, here are some steps on how to get your credit card spending under control:

  • The biggest step in getting your credit card debt under control is to stop using your credit card. Stop. Stop. Stop. A good rule to follow while you pay down your debt is to only use cash (or a debit card). In order words, if you can’t pay cash, then don’t buy it.
  • If your debt is serious – and a spending problem exists – cut your credit card(s) in half. This will definitely keep you from using them.
  • Create a spreadsheet and record your credit card accounts; how much you owe and how much you pay on each one each month.
  • Compare your numbers with your other living expenses: mortgage or rent; food; utilities, etc. You’ll be able to make quicker progress on reducing your credit card debt if you create a strict budget. That way, you’ll have a better handle on income and expenses and how much money is available to pay down your credit card debt quicker.
  • If your numbers don’t match up and you can’t pay more than the monthly minimum payment on each credit card, then you’ll eventually be in the red each month. The interest on those cards will continue to mount.

Next week, we’ll take a look at some options and theories on reducing and paying off credit card debt.

Evan Vitale – Getting Out Of Debt (Part I)

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By Evan Vitale

We all have some level of debt – a mortgage, a car payment, etc., but big-time debt could include past-due tax liabilities and a mound of credit card debt.

However, even if you feel like you are “drowning,” there are plenty of options and steps you can take to manage it better and get out of debt before you even consider bankruptcy.

First, let’s discuss past due tax debt. If you owe the Internal Revenue Service (or any state or local authority), this is something you should take care of right away. The IRS is more than willing to work with you on allowing for monthly payment arrangements (more on that in a future blog post).

The worst thing you can do (or not do) when it comes to ignoring your tax debt is to ignore it. Believe me, it’s not going away. Ignoring “past due” statements only increases your debt with additional interest and fees, but the correspondence will become more severe until you eventually face possible garnishment.

Do not ignore your tax debt.

When it comes to credit cards, the best thing you can do in order to handle this amount of debt is to stop using your credit cards. Just stop.

If you have multiple card cards, read your statements and figure out which card is charging you the most amount of interest and then focus on paying off the balance.

Another theory to handling credit card debt is to pay off the smallest debt first and move on to the next lowest card, etc. Some choose to pay each card each month and this is good, but you’ll need to may an effort in making sure your payment is larger than just the minimum due.

If you only pay the minimum amount due, it will take you a long time to pay off that credit card because of the interest charged.

Again, take a look at the interest each credit card is charging you and make proper payments accordingly.

In our next blog post, we’ll take a more in-depth look at how you can pay off your tax debt.

Evan Vitale – College Students and Credit Cards

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By Evan Vitale

When it comes to college students and credits cards, it can sometimes be like mixing oil and water. Sometimes, it seems like credit card companies offer credit to college students like candy.

Too much of anything is a bad thing.

Fortunately, college students still need to qualify for credit and, with some help from parents (and the bank), students can keep themselves out of early credit trouble.

Here are some tips for college students thinking about credit cards:

  • Make sure you know how credit cards work. What’s the credit limit? Is there an annual fee? What is the interest rate? When is the due date? What is the penalty and late fee if you can’t pay on time?
  • It is a good idea for any student to have a job before they have a credit card. Typically, if a student is under the age of 21 and they don’t have a job, they may need a co-signer in order to obtain a credit card. Even then, higher interest rates may be attached to the card due to the risk involved.
  • Make sure you do your research. Many credit card offers will be coming your way as you start college. Check the rules; rates; fees and benefits of each card before filling out an application.
  • Avoid signing up for multiple cards. With many credit cards in hand, you’ll be tempted to spend more and, before you know it, you’ll juggling payments and late fees. This is how quickly some college students get into credit trouble.

Some credit cards offer rewards for purchases made using a particular credit card. In some cases, rewards act as cash that you can use to help pay off your credit card balance or they can be cashed in for other perks such as free gas or for gift cards.