Erase Debt and Avoid Debt Burden.

We all know that some debt is necessary but it's how you borrow and what you borrow for that is the important thing. This tip that will help you to avoid the need to erase debt:

•   Only take on only debt you can afford the repayments to and only buy items that appreciate in value when using borrowing. 

Do you have a large credit card balance? This is not good debt – and yes it is a debt as you must pay it back and the interest on credit cards are one of the highest at around 18 percent or higher.  An overwhelming credit card balance caused by your need to impress others is just a costly lie. 

•     Living within your means is living honestly.  Make a promise to yourself to live within your means and do a budget.
•   Rather than using your credit card for spending, save for the purchase.
•  Always pay more than the minimum if you cannot pay your credit card in full.

Because of temptations and high interest rates it is important to control and erase debt on your credit cards.

 

Is This Gold Digging Training?

How's this for a bit of gold digging...?

I just read a report that in an attempt to get unemployed Dutch women off the dole they are being offered a fashion and beauty makeover plus free membership of a dating agency. This is all to help them find a 'solvent' husband. For the single woman who wants to get work they are getting a new hairdo and outfit and a bit of training...well this sounds a bit more feasible. If you've been unemployed for a time you perhaps do need a little help. What are your thoughts?

Asset Rich, Cash Poor

Lennie was chatting with me the other day about his situation.

"My boys just spend money with no thought..."

"But Lennie what lessons did you give them when they were growing up?" I asked.

"I know, I used to earn a lot and had lots of money coming in. I never thought about money and budgets, I just spent. You're right my boys learned that from me. But now I'm... what's it called?..."

"...'asset rich, cash poor'?" I prompted.

"That's the one...."

So what caused this change? Lennie has had a love affair with rental properties like so many New Zealanders. He was earning good money in a job he enjoyed and didn't want to stop working even though he was past retirement age. Then he suffered a stroke, the rental property market took a tumble and the recession hit.

Late in life Lennie decided to see an adviser, admitting this was something he should have done when he was younger.

Financial planning is so much more than investing money on behalf of your client. It's planning for the future and devising strategies to avoid being asset rich and cash poor.