Debt Woes?
By: Candi Young
By the time I was 18, I was receiving offers in the mail for “0% interest” credit cards. Many of you out there may have found yourself part of the credit card industry’s target market as well. That target being fresh out of high school, young, and maybe not educated on the use of credit cards as a tool to build credit as opposed to a supplement for your income. How much were you actually taught about building credit in high school?
Another attribute to the “where has all my money gone” syndrome is the fact that checks are a thing of the past and debit cards are now the norm. Many stores now post the sign “Sorry, we no longer accept checks” these days, forcing the public to use debit/credit cards for all transactions unless you keep cash in your wallet.
Do you actually write down your expenses in a register and track how you spend your money when you use your debit card? I think many of us today—and I too am a culprit—take a quick look online and check our balance to see how much money we have only focusing on the balance, rather than documenting to where the money is disappearing. In this situation, “ignorance is bliss” may not be the best approach to budgeting your money and saving for the future, or paying off bills. When I was in college, saving money was like this big weird mystery that people like my parents did, and someday I would magically have that too when I grew up. You may be forced to do what you can to get through college all to graduate in hopes of attaining a better paying job. So now, how do you go about getting out from under the debt you’ve been so used to carrying?
Orman also advises to pay as much over the minimum amount that you can, paying off the card with the highest interest rate first. When you pay off your first card, apply that money to the next card to pay it off sooner, and so on. In an interesting example that really shocked me, Orman explains that “if you owe a credit card company $5000 at 18 percent interest, and all you do is pay the minimum each month, it will take you over 30 years to pay it off.” Now that credit card companies have had some restrictions placed on them by the government, it is interesting to see that companies such as Citibank are becoming more transparent and offer a warning on your account actually telling you how long it will take to pay off your balance by only making the minimum payments.
If you’re interested in finding out more information on this, I encourage you to look at Suze Orman’s website. She has many interactive online tools that force you to be honest about your money such as her “Debt Eliminator” and “Expense Tracker.” It has really opened up my eyes.
Have any of you ever experienced a situation in which you have had to deal with an uninvited roommate, or the mystery guy on the couch? Did you do anything to try to fix the situation? E-mail me at HYPERLINK “mailto:cly.mweekly@gmail.com” cly.mweekly@gmail.com