Pay Off Your Credit Card Debt

Credit card debt is the number one obstacle to getting ahead financially. Those little pieces of plastic are so easy to use, and it is so easy to forget that it's real money we're dealing with when we whip them out to pay for a purchase, large or small. Despite our good resolves to pay the balance off quickly, the reality is that we often don't, and end up paying far more for things than we would have paid if we had used cash.

It sounds simple, but many people struggle with this first basic rule. Make sure you know what your job is worth in the marketplace, by conducting an evaluation of your skills, productivity, job tasks, contribution to the company, and the going rate, both inside and outside the company, for what you do. Being underpaid even a thousand dollars a year can have a significant cumulative effect over the course of your working life.

No matter how much or how little you are paid, you will never get ahead if you spend more than you earn. Often it's easier to spend less than it is to earn more, and a little cost-cutting effort in a number of areas can result in big savings. It doesn't always have to involve making big sacrifices.

If your employer has a 401(k) plan and you do not contribute to it, you're walking away from one of the best deals out there. Ask your employer if they have a 401(k) plan (or similar plan), and sign up today. If you're already contributing, try to increase your contribution. If your employer doesn't offer a retirement plan, consider an IRA.

This one sounds simple too, you would not believe that many people have savings accounts, but they only have $5.00 in there that they opened the account with. But that’s not us, right? You've heard it before: Pay yourself first! If you wait until you've met all your other financial obligations before seeing what's left over for saving, chances are you'll never have a healthy savings account or investments. Resolve to set aside a minimum of 5% to 10% of your salary for savings BEFORE you start paying your bills. Better yet, have money automatically deducted from your paycheck and deposited into a separate account.

If your employer has a 401(k) plan and you don't contribute to it, you're walking away from one of the best deals out there. Ask your employer if they have a 401(k) plan (or similar plan), and sign up today. If you're already contributing, try to increase your contribution. If your employer doesn't offer a retirement plan, consider an IRA.

Did you know that if you invest $2,000.00 a year for four years in an IRA, by the time you retire, you will be a millionaire. If you invest $5,000.00 in a CD, in nine years you will have over $18,000.00.

I know we do not like to hear this word: budgeting. It is not a four-letter word anymore. How can you know where your money is going if you do not budget? How can you set spending and saving goals if you do not know where your money is going? You need a budget whether you make thousands or hundreds of thousands of dollars a year.

Track your spending habits for one week. Write down every penny that you spend and where you spend. Are you stopping at McDonald’s 2 - 3 times per week? Most of spend over $5,000.00 per year eating out at McDonald’s. That’s your CD (Certificate of Deposit) money.

Do we need to get our nails done every 3 weeks? Calculate how much you spend a year on nails. What other little things are we spending our hard earned money on? Remember, when we spend on those things, we are sacrificing our financial futures. It’s not worth it.

Employment benefits like a 401(k) plan, flexible spending accounts, medical and dental insurance, etc., are worth big bucks. Make sure you are maximizing yours and taking advantage of the ones that can save you money by reducing taxes or out-of-pocket expenses.

Too many of us are talked into paying too much for life and disability insurance by our insurance companies. Whether it is by adding these coverages to car loans, buying whole-life insurance policies when term-life makes more sense, or buying life insurance when you have no dependents. On the other hand, it's important that you have enough insurance to protect your dependents and your income in the case of death or disability.

Approximately 70% of Americans do not have wills. If you have dependents, no matter how little or how much you own, you need a will. If your situation is not too complicated you can even do your own with software like WillMaker from Nolo Press. Protect your loved ones. Write a will. We show our children how much we love them when we are alive. Show them how much you love them, when you are gone. Remember, where there’s a will, your children will have a way.

If you do not keep good records, you are probably not claiming all your allowable income tax deductions and credits. Set up a system now and use it all year. It is much easier than scrambling to find everything at tax time, only to miss items that might have saved you money.

Also, as a former National Grid/Niagara Mohawk employee for over 21 years, payments are mailed in without a bill stub, the check does not have a name or an account number on it. Those payments are set aside - nothing happens to them.

How are you doing with above list? If you are not doing at least seven of them. Take the time to make improvements. Choose one area at a time and set a goal for incorporating all of them into your life. It make take awhile, but getting started is what is important. It is up to each of us to improve our financial situations, noone is going to do it for us.

After food and shelter the bills that should be paid first are the bills that affect your credit score. Basically, if it shows up on your credit report, it should be a top priority. Note: National Grid bills do not show up on your credit report unless the bill is a final bill.

Be sure to read our monthly column in CNY Urban newspaper.  If you are in the Syracuse, New York area tune into to our radio broadcast, 'Improving Your Credit Worthiness' on WSIV 1540 AM every Wednesday 2 - 2:30pm.  To schedule a workhop or seminar for your group please call us at 315-446-4668.