Investors often find it incredibly difficult to stomach the ability of their assets to rapidly reduce in value whilst the debt required to buy them in the first place continues to take a long time to reduce.

Just recently this unpalatable financial reality was witnessed again in a report compiled by the Federal Reserve Bank of New York. This regional Reserve Bank acting alongside the Board of Governors in Washington D.C. created the first of a series of quarterly 30 or so page publications focussed on household credit and debt. This 38 page laid out the bare facts indicating the as a nation the U.S. consumer remains in a very weak position now more than three years after the recession started.

Debt elimination for most has been very slow and painful, albeit people have made positive, strong efforts towards reducing the money owed to their creditors.

As an example, during 30^th June total consumer debts amounted to $11.7 trillion, only 6.5% below a peak in the third quarter of 2008. Open credit card accounts had become much reduced, by 23.2%, from the all time highs witnessed during 2008’s second quarter. Mortgage rates also fell during this time, by 6.4% from what was a peak just under two years ago.

Despite people cutting back heavily, consumers are still very much in the vice-like hold of this recession. In 2010, by around June 11.4% of outstanding consumer debt was seen to be delinquent, $986 billion of which was considered at serious levels of debt – still having not been paid at 90 days and counting. Although balances are down by roughly 3% with regard to delinquencies from the same period last year, delinquencies that were serious rose a little by 3.1%.

Yet more worrying statistics could be found from the ‘Fed’. The period between 31^st March to 30^th June saw half a million people with foreclosure having been added to their credit reports. This amounted to an increase of 8.7% over 2010’s first quarter. Consumer bankruptcies also rose in this first quarter by 34% to 621,000. From what the Fed recorded over the last few years bankruptcies had taken a significant rise.

People often refer to owing large amounts of money as being “crippling”, and if you have severe debt problems the word may certainly not be an exaggeration. Crippling debt can be just that, an all-consuming and controlling event that takes complete control over people’s lives if they do not seek out debt solutions.

One option that many people turn to when severe debt problems strike is to ignore it, this way they do not have too concern themselves and worry about what may happen if they do not resolve the situation.

Of course unplugging the phone, nailing up the letterbox, and never answering your door may stop you receiving news that you do not wish to hear, but in the end someone will come to your door you cannot ignore, the bailiffs.

Ignoring severe debt problems is not the way to handle an inability to pay what you owe, there are other solutions, but the first thing you will need to do is make contact with someone that is able to guide and assist you in finding a debt solution to suit your exact situation.

There is not one single easy to swallow pill for resolving debt problems, there are several ways of helping people to deal with the situation, each of which needs to be specifically tailored to a person’s particular problems.

Many people believe, incorrectly, that “ going broke” and declaring bankruptcy is the only way to clear your debts if you do not have the cash, this is in fact is the last option, and there are several other ways of dealing with the clearance of severe debt.

One way is simply to find a debt counsellor who can take a look at all of your debts and monthly spending, as well as your income, and come up with a debt solution plan that will reduce the amount of money that you spend, while slowly clearing the debts that you owe.

This is not just a matter of juggling some figures around for telling you to spend less on the weekly grocery bill. Debt counsellors can contact the people that you owe money too, and negotiate with them on your behalf to lower the amount of the payments you need to make each month and possibly to suspend the ever growing interest so that you do not get any further into debt.

By using their professional skills as negotiators on your behalf they can often reduce the overall amount that you owe, stop the interest piling up each month, and work out a viable plan that will allow you to pay off what you owe at a rate you can afford, while also keeping the credit card companies, car finance debt collectors and everyone else away from your front door.

Once you have agreed terms with the companies via a debt counsellor you will be able to plug in the phone, un-nail your letterbox and get on with your life without having to endure the stress of severe debt problems.

Debt is affecting people across the country. It is not a new idea but the rampancy of debt struggles has risen in America. Debt affects a lot of families, causing stress and inconvenience. It’s harder to get loans with the bad credit scores that arrive from paying bills late or defaulting on payments. The last straw for debtors is usually bankruptcy.

Bankruptcy is an arduous process and doesn’t solve all your debt problems. It is a strict legal process that not only takes a lot of time, it also costs money. After bankruptcy has been declared, some debts will be wiped from your slate but it leaves a giant mark on your credit history and score for up to ten years.

 The Effects of Bankruptcy

If you file for bankruptcy, you will have to go through legal appointments with your creditors and prove to the court your intention to relieve your debts is not fraudulent. Afterwards, the bankruptcy stays on your credit and can affect new job searches, new applications for credit cards, loans, and any other financial matters. One part of the bankruptcy effect involves your life insurance but few people realize this. If you have an existing policy, the bankruptcy court typically won’t touch it in court to protect your beneficiaries. If you have a permanent life insurance, the bankruptcy court will allow you to keep part of the cash value. The amount will be determined by where you live as the laws differ between states. Any insurance policies you have taken out for someone else like your children or your spouse will be surrendered to the court.

Raising Rates

A bad credit score is known to adversely affect your life insurance premium rates. If you score is bad, the rates for your premium will be very high. If you are already struggling in debt, paying a higher premium is not going to help your financial situation. Once you have filed bankruptcy, you can wait for some time to pass while you rebuild your score before shopping for insurance. However, understand that life insurance companies will still see your bankruptcy on your history report and will consider you a risk.

Life insurance is a smart financial move and you should not avoid it due to debt issues and bankruptcy. It will serve you well to seek out the insurance companies that provide you with term life insurance policies so your family is protected while you straighten out your personal financial life.

Parents instinctively want to take care of their children, whether they are 13 or 35. Although a grown adult with hands out-stretched for a financial bailout from mom and dad can bring to mind some unpleasant assumptions of mismanagement, this isn’t necessarily the case. Regardless of the circumstances though, both children and parents need to follow certain guidelines to make sure the arrangement doesn’t end badly.

Children Should Always Treat Their Parents as the Lender of Last Resort

If your financial situation is getting bleaker by the day you may feel like you are running out of options. However, you should try to exhaust all your sources of financing before you put your parents under strain. If they see you have made attempts to cut back on your spending and possibly taken on a second job they will be more confident about giving you a loan as well.

Parents are Emotional Lenders, But They Should Not Be Exploited

The difficult thing about asking parents for money is also ironically what makes it easy to ask them for money. They take an emotional response to your needs so they are not too concerned with the financial details like fixing a hard deadline for repayment or even setting a fair interest rate, if you will be charged interest at all. However, they also usually do not support lending money for what they deem to be irresponsible spending. They are more likely to lend for student loans or mortgage payments than they are to lend for credit card payments. You should not hide the reason for your loan to take advantage of their vulnerabilities because this will lead to a serious default of trust.

Don’t Ask Unless Your Parents are Financially Able to Lend

Adult children understand how hard it can be to juggle multiple financial obligations and this is exactly why they should not ask for a loan from the ‘Bank of Mom and Dad’ unless they are absolutely sure they can afford to lend. Adding to the financial woes of elderly parents will only come back to haunt you in time because you may end up being the cause of an additional financial burden for your parents.

Make the Loan Terms Official

Although the arrangement is made between family members it should be made official. It doesn’t necessarily need to be done as a legal document but it pays to have the terms clearly stated and all the assumptions and expectations laid out. The involved parties should sign and date the document so the lender is put at ease about the security of the arrangement and the borrower is motivated to stick to the terms.

Make Repayment Automatic

Adult children can go one step further to put their parent’s at ease. They can have a standing order set up to start deducting small repayments when the time is right. This makes it easy on both parties because there is no awkwardness about returning the money and it is also taken out before it can be spent.

“Neither a borrower nor a lender be” may be smart advice, but when there is no where else to turn, parents and children may end up going against this timeworn axiom. As long as certain guidelines are kept in mind though everyone may be able to come out of the situation unscathed.

Many people that are attempting to manage their financial future effectively will eventually turn to a loan to obtain additional money for their financial needs.  A loan can be used for many different things, such as purchasing expensive items, making costly additions or repairs to the home, or buying personal vehicles to transport the person or their family.  There are two main types of loans that may be available for the person to choose from; secured loans and unsecured loans.

Secured Loans
A secured loan is a loan that is secured by items of value that can be seized by the lender in the event of a default on the loan.  Also called collateral, the items that are used to secure the loan are often examined by the lender before they approve the loan to make sure that the value of the item is as much as the borrower is claiming it to be.  It is believed that holding the ability to seize these assets will reduce the chance of the person defaulting on the loan and if the person does default on the loan, the lender has a chance to reduce their losses by selling the assets used as collateral for the loan.

Secured loans are generally made to people that have a blemished credit history or a lower credit score than the lender is comfortable with.  These loans have higher interest rates associated with the loan and the amount of money that is loaned under a secured loan is often less than what could be obtained with an unsecured loans. The lender would rather have the loan repaid under the terms of the agreement, but being able to seize the collateral that has been attached to the loan will mean that the losses suffered by the lender under a default will not be as great.

Unsecured Loans
Unsecured loans, such as payday advance and cash loans, are typically viewed as the most desirable type of loan available to people today.  These loans are typically made to people that have an excellent credit history, a very good credit rating, and have a high enough salary to easily repay the loan without creating a financial hardship.  No collateral is required for an unsecured loan because the person has demonstrated that they will be able to repay the loan and the interest with no problems.  For people that have a good history with the lender that they are using to obtain their loan, obtaining an unsecured loan can be accomplished in a short period of time.

The type of loan that is offered to the person will depend on many different factors.  The lender will look at the credit history of the person to determine whether the person has ever had a problem with paying their obligations on time as well as the value of the items put up as collateral for a secured loan.  If the lender determines that the person may be a credit risk, the person will be offered a secured loan but if the lender determines that the risk of default is minimal, then the person will be offered an agreement for an unsecured loan.

Due to the fact that credit is very important today, many individuals are wondering how to repair bad credit.  Learning how to repair bad credit is not hard, regardless of how bad your credit score may be.  There are routes that average individuals with bad credit can take to repair bad credit quickly without necessarily paying off debt.  Knowing where to look for these debt reduction tips and how to take advantage of what is offered is one thing that every individual should know.

Find A Reputable Credit Counseling Company

Learning how to repair bad credit does not have to be difficult.  There are many sources of bad credit repair that you can use and where you turn depends on what required you to seek the methods in the first place.  One important source of bad credit repair methods is traditional companies affiliated with government programs that offer credit repair plans and financial counseling.  After you consult with the company, the representative will submit your information to the creditors and the creditors determine whether you are eligible for any actions that could reduce your debt and help you repair your credit quickly.  Using companies for bad credit repair in this way works well for people that have a lot of creditors and not a lot of time to negotiate with each of them.

Another option for an individual to learn how to repair bad credit is to respond to one of the credit counseling advertisements that frequently show up in the mail.  These advertisements will often have a website or phone number listed within the information that can be used to contact the company to learn how to repair bad credit.  Individuals are required to give their information to the customer service representative or type their information into an online form and access to the program can typically be granted or denied within a few minutes.

There are a couple of drawbacks to taking this approach to learn how to repair bad credit.  One drawback is that even though you are granted instant access, it will still take a few days to submit all of your information and have someone from the credit counseling company contact you about your situation.  There is also an increased risk of becoming the victim of a scam when you use this method to learn how to repair bad credit because there are a number of criminals that will prey on desperate people that are looking for a way to repair their credit score.  By conducting a careful review of the company before allowing them to take your personal and financial information, you will reduce the risk of becoming a victim of a scam.

If you’re fed up with paying late fees on your credit cards and overdrafts to your bank, these tips should help. When you live from one paycheck to the next, or maybe even worse, you don’t know when you’re next paycheck is going to come – it’s difficult to juggle the bills and due dates. Taking strides to improve your financial situation can save you both in terms of late fees and overdrafts – but also in the long run. Credit card companies routinely increase interest rates on cardholders who pay their cards after the due date, since you’re seen as a bigger financial risk to them.

The following tips will help you minimize late fees and overdrafts:

When Is it Due, Exactly?

When money is tight, many people find themselves sending all of their payments in on the day they are due. You would think as long as it is postmarked by the due date, or paid online on the due date, it should be considered “on time” right? Check the fine print on the back of a credit card statement to see when the late fees are applied – technically a late fee can be applied if a payment is not received and posted to your account by a certain TIME on the due date – even if it’s postmarked on time.

Do what you can to change how you pay your bills – if they’re due on the 15^th, pretend they’re due on the 10^th. This will give you 5 days for your mailed checks to arrive and get posted; or 5 days for an online payment to be posted. (Did you know some online payments take 2 days to post to your account?! Why isn’t it instant? Who knows – but knowledge is the power here. Even when paying online, give yourself a few days before the due date to ensure there is enough time for the payment to post).

Change Your Due Dates

Instead of just pretending you have an earlier due date, you can actually change many of your account due dates. If you find almost all of your bills are due on the same day of the month, you can call and change due dates and stagger them out across the month if that makes it easier for you to pay. Instead of coming up with the full amount for all of your bills by the 10^th of the month, you can pay a few each week, which makes managing your cash easier.

If you have a mortgage that you pay monthly, you may even consider asking the mortgage company for a bi-weekly mortgage plan. There is usually a fee to set it up which increases the amount you owe over the year, but you pay less interest over the life of the mortgage. Plus, if paying half of your mortgage payment every other week is easier than paying it all at the end of the month, the money you save in late fees or overdrafts is probably more substantial than the fee charged by the mortgage company for setting up a bi-weekly payment.

Bank Regulations Help Reduce Overdrafts

Previously, banks were known to change the order of withdrawals so that the most expensive withdrawal would post the account before any of the other, smaller withdrawals that clear in the same time frame. This meant if you were a few dollars short, instead of having one overdraft for the last withdrawal to clear the bank – you would have multiple overdraft fees for each individual withdrawal if the largest withdrawal was processed before the smaller ones.

Luckily, changes in banking regulations are putting a stop to this practice. You can even opt-out of overdrafts by signing a form with your bank that prevents them from paying any withdrawal that you don’t have enough money to cover.

Many of the people that would like to find a way to complete a loan consolidation to reduce their debt quickly do not understand the importance of finding a good loan consolidation company.  There are thousands of loan consolidation companies across the nation and each one is charged with matching each person to the process that is best for their needs and their financial situation.  Finding a good loan consolidation company can be very important for being able to get out of debt and repair your credit for the future.

Understanding How The Loan Consolidation Process Works

The person representing the debt consolidation company is trained to explain different types of programs available from the company.  The person seeking loan consolidation should know about the different types of programs available and the requirements for each one before determining which program is the best for their needs.  The representative can answer any questions that the person may have and help them find the right type of program for their current financial situation.

The loan consolidation company can also provide the person with the steps that are needed to complete the process and remain out of debt.  Most people do not apply for a loan consolidation frequently so they may not understand all of the terms that are used during the process.  Some programs have tons of requirements for the person to follow and will require the person to divulge a great deal of personal information to accurately judge the person’s ability to repay their debts.  The representative of the loan consolidation company will go over the paperwork and answer any questions about the loan consolidation requirements that the person may have after completing the application.

A good loan consolidation company will pride themselves on the relationship that they have with their clients and will do all that they can to retain a positive reputation.  A loan consolidation company knows that the loss of reputation in their targeted area may be something that the company will be unable to recover from.  No one wants to go to a loan consolidation company that may be cheating their customers or driving them deeper into debt.  For this reason, a loan consolidation company will do their best to provide their customers with the proper type of loan consolidation for their needs.

There are two ways to improve personal finances:  spend less or earn more. If only life were that simple. In the current economic environment, earning more is not an option for many. Indeed, earning less is a prospect being faced by those who had previously considered themselves to be in secure employment. Focus must therefore be on spending less.

A lot of individual spending is driven by habit. How many times do we walk around the supermarket and pick up the same items? Too tired perhaps after a day at work or looking after children to notice that alternate brands are better value. Habitual behaviour is triggered by an emotional response. Retailers are experts in the marketing techniques that are sure to press the ‘buy-now’ button in many of us.

By implementing some simple self improvement suggestions it is possible to reduce our susceptibility to these marketing ploys and become savvy shoppers with improved personal finances.

Where to start?

Notice what triggers spending for you. When are you most likely to spend money on the things you don’t absolutely need? Do you spend money when you are down, to cheer yourself up? Do you go shopping when you are excited and buzzing?

 Once you have identified your triggers, you can control them by managing your emotional responses. Without the increase in self awareness the triggers will prompt the spending before you even know what has happened.

Take some time. Look around and see where you have spent money. What was the trigger for the purchase? How could you have distracted yourself? What would be a good, alternate behaviour in the future?

What are your weaknesses? What temptation do you find it impossible to resist? Again, by increasing self awareness you can gain self control. What strategies can you come up with to strengthen your will when temptation rears its ugly head?  This does not mean you can never visit a casino again or buy another pair of shoes. It simply means that you will be in control. You will not be the victim of emotional spending. Set aside an allowance to spend on your passion and stick to that allowance. Bring some thought to how you are spending that money. You may even find that the compelling nature of the desire weakens once it is identified.

 Do not put yourself in impossible situations. Everyone will overspend if they shop when tired, hungry, stressed or depressed.

Give yourself some support. Do not go grocery shopping before your meal. Go afterwards. You will have more energy and you will not be hungry. Those impulse buys will be so much easier to resist. 

If you are feeling low, take action to improve your mood before opening your purse or wallet. Spending more money, especially money you cannot afford, is not going to improve your mood. It could even worsen it. Make a list of things that can cheer you up – think about dancing, music, good friends, upbeat films, exercise, sunshine, gratitude journals. Whatever works for you.  

Build up your own self-esteem. Be proud of yourself and what you have achieved. Remember the good stuff. Do not compare yourself to others. Do not compare what you have or do not have. Be thankful. Do not give in to peer pressure. Do what is right for you.

By increasing self awareness and focusing on self improvement you can also improve your personal finances. As an added bonus, you will notice improvements in many other areas of your life too.

With all the focus on the latest trends and the hottest entertainment spots it’s easy to forget that there are actually a lot of ways to indulge in some good free fun. Check out this list of cool things to do that won’t cost a single dime.

1. Go to a Museum. Many cities have museums that don’t charge a cover to enter. Visiting a museum is actually a pretty decent way to spend the afternoon. You can go alone or take a friend along and you’re sure to learn something new, which is not bad for free education.

2. Take a Historical Tour of Your City. There’s a growing trend of people learning to vacation in their home states because of budget constraints. Staycayioning can be a great way of getting a break from the norm without springing for the cost of a trip. There’s also no need to take an actual tour, unless you can find a free one, you can simply do some research ahead of time and then drive out to your city’s places of interest and experience them with new eyes.

3. Go for a Swim. If you don’t often take the time to go to a nearby beach or local swimming hole you’re probably long overdue for a bit of aqua relaxation.

4. Volunteer at a Local Charity. Giving of your time can really help to put things into perspective and it also gives you the opportunity to meet new people. You may be able to offer someone some much needed help just by doing what you like to do.

5. Go to the Park. Spending a day at the park can take many forms. It can be a family picnic, a chance to unwind solo and just people watch or an eventful afternoon spent playing games with friends.

6. Play Cards. There are lots of cards games that can relieve hours of boredom without ever spending a cent. You can challenge yourself to a game of patience or you can get friends together for some good-natured competition.

7. Spend Time at a Friend’s House. In days gone by it was quite a common occurrence to spend some time at a friend’s house. As a matter of fact, visiting friends for an extended period was actually expected and it was something that was eagerly awaited. Nowadays it’s not really the norm, but if you have a group of friends that are up for the experience, why not spend some time in a different environment. It’s even better if they live in a different city.

8. Have a Movie Marathon. Invite friends over and ask them to each walk with one movie. This is a really affordable way to have a movie fest with great company.

9. Set up a Camp Site in Your Back Yard. If you have children this is especially exciting but even if it’s just you and your special someone it can be a great way to have a romantic getaway. Imagine relaxing under the stars with a bottle of your favorite wine and the person you enjoy spending time with more than any other.

10. Attend a Free Lecture or Art Exhibition. If you live close to a university you may be lucky enough to have access to a free lecture series that is on a topic that is of interest to you. If not, you may be able to capitalize on some free art exhibitions; usually all that is required is that you get your name on the list to be notified in advance.

Having fun doesn’t have to mean spending a lot of money. Use your imagination and you will find there are lots of things you can do that are totally free!