Help for the Single Mother with Managing Credit and Debt

Today's consumers benefit drastically from the usefulness of credit. Credit cards are especially useful for large purchases, emergency situations, making reservations, identification, and protection from fraud. Unfortunately, millions of consumers abuse credit cards beyond their financial earnings. The use of credit results in costly interest payments and late fees, impulse buying, overextended lifestyles, and the unnecessary stress from harassing telephone calls from collectors.

If you answer yes to more than one of the following listed below you might want to consider getting help with finances.

Over the Limit Credit Card Spending

If all of your credit card balances are greater than 80 percent of your credit limits, you should consider this a bright red danger signal to debt.

Too Many Cards/Too Much Debt

If you stop using your credit cards and still can't pay off your combined credit card debt within one year, you should consider this a serious issue.

Out of Money

Many people are starting to use credit for small purchases such as food and gas. If you previously paid cash for these items or other small items, but are now using credit, not debit or cash, it could be a sign that there is a problem.

High Debt-to-Income Ratio

Your debt-to-income ratio measures the amount of debt you have against the amount of income you are making. You can calculate this ratio by dividing your total monthly debt payment (excluding mortgage/rent) by your total monthly gross income (before taxes). If your debt-to-income ratio is close to or over 20 percent, this is a sign that you may have a debt problem.

Emergencies

Crises and emergency situations do occur, and sometimes people are unable to afford such things such as emergency auto repairs or medical expenses because their credit cards are maxed out or the majority of their earnings are put towards debt repayments. It's always important to keep an open line of credit available for such situations or even better, having an emergency savings.

Minimum Payments

What many people don't realize about revolving credit card bills is that making only the minimum payment can take 12 to 15 years to repay. You are not applying any significant amount toward the principal if you are only making minimum payments concluding that you may be overextended and in need of putting together a spending plan.

Using Your Credit to Make Payments on Other Cards

Taking cash advances to pay bills is not a solution for paying off debts. If you are paying one credit card with another you are actually creating more debt. You will also be faced with any cash advance fees and interest from that new line of credit. Balance Transfers

Many creditors offer new credit cards with balance transfers available at low interest rates for only a limited introductory period. If you are transferring balances from one card to another, it's important to remember that after the introductory period the interest rate usually skyrockets up to 19 percent or more. As well, a growing number of credit cards are associating fees with transferring balances.

Skipping Payments

If you are late with getting payments in such as your mortgage, rent, car loan, or utility bills more than once per year and are juggling bills and skipping payments, this is a definite sign that you have a debt problem.

Borrowing Money

If you are borrowing money from family and friends and unable to pay them back while struggling to pay your bills, credit counseling can teach you how to budget or advise you to go on a plan for paying off your debts.

Debt Consolidation Loans

Are you borrowing from a new source to pay off an old debt? Many people who do so obtain debt consolidation loans to pay off all their existing bills. However, once the bills are paid off, some people wind up charging on their credit cards again. This means having to pay back the loan plus the new credit card charges, which ends up driving people into further debt. Unsure of the Amount Owed

If you have no idea how much debt you owe on a monthly basis and keep using credit cards, your financial spending might be slipping out of your control.

Now looking back on the list if you answered yes to one or more of the debt concerns, you should consider getting help managing your finances to prevent further debt.

Help for Single Mother if in Debt

Get to know your debt.

Study everything relevant about your debt such as your account balances, the interest rates, if the interest is deductible, how and when those rates can change and find out if you'll face any kind of penalties for paying an account early. If you're not sure call your lender and ask.

Next, prioritize your debt.

Divide your debts into two piles, deductible and non-deductible debt. Non-deductible debt is debt where you don't receive a tax break on the interest such as credit cards, car loans and personal loans. Deductible debt includes mortgages, home-equity loans and possibly student loans depending on your income. Once you divided your debt into piles rank them from highest interest rate to lowest.

Eliminate your debt.

You can start with your highest interest rate, non-deductible debt-or the non-deductible debt with the smallest balance. Either way, put as much money as you can toward your first debt-elimination target. Once you pay that account off, take the same amount of money and put it towards your next target. Keep doing this until you have no non-deductible debt left. Next you can start tackling your deductible debt, boost your investing, or both.

Below are some effective ways of cutting down expenses and saving money:

1) Cut down on long-distance telephone calls or make calls when rates are cheapest.

2) Cut down on restaurant and take-out meals. Prepare your own food.

3) You'll save a lot by bringing your lunch to work and packing your children's lunch. Put yourself on a lunch budget where

4) you treat yourself one or two times per month.

5) Try to reduce your home-utility bills by turning off lights when you're out of the room, being conservative with the thermostat, checking weather stripping to eliminate drafts, and air drying dishes and laundry.

6) Use your own bank's ATM to avoid fees from other banks.

7) Seek out garage sales and your newspaper's classified sections for discount purchases such as toys, clothes, and new and used items at a good price.

8) Go to matinee movies instead of the regular showings where prices are raised

9) Clip newspaper, magazine, and other print coupons.

10) Save on expensive dry-cleaning costs by purchasing a book on fabric care.

If you have fallen into debt, don't lose sleeping stressing over the matter. It happens everyday to people just like you but each day people are starting to realize they need to do something to eliminate their debt. So take charge of your finances and you'll see improvements in no time!

Singlemotherresources.com is the number one resource for single mother home loans and grants for single mothers.

---

Credit Counseling ? Signs That You May Need Help

Credit counseling is a viable option for those who are... Read More

Out of Credit Card Debt - Without Filing Bankruptcy

To be out of credit card debt is your dream... Read More

What is Bankruptcy?

Personal bankruptcy is a legal way to give people with... Read More

Debt Handling Solutions

Sometimes debt can seem overwhelming. In those instances, or even... Read More

Bankruptcy - The Easy Option?

Incredibly, since the changes in the bankruptcy law in April... Read More

Take Careful Consideration Before Filing Bankruptcy

Filing bankruptcy is not fun! It is a last resort... Read More

Repair Bad Credit Yourself

In March 2005, the U.S. financial services industry succeeded in... Read More

Debt Getting You Down? - Make a List!

Debt is not much fun and when faced with it,... Read More

The Five Most Popular Questions About Bankruptcy

WILL MY CREDITORS STOP HARASSING ME?Yes, they will! By law,... Read More

Bankruptcy - Your Fresh Start

Most American consumers are living too close to the edge.... Read More

Credit Card Debt: How to Get Rid of It

This method is simple, but requires some discipline.First, you have... Read More

Bankruptcy, Is It A Way Out

Negotiations with creditors have failed. Repossession is imminent and foreclosure... Read More

A History of Money and Banking Secrets That Banks Dont Want Published

A History of Money and TradeTo start with a history... Read More

What is Debt Settlement?

Debt settlement is the process of negotiating with your creditors... Read More

The 7 Secrets to Getting?and Staying?Out of Debt

As vice president of the American Credit Foundation, a nonprofit... Read More

Five Major Ways to Save Money

There are two main roads to improving your personal finances:... Read More

Free Quick and Easy Money Saving Tips ? Part 2

Although many consumers would argue differently saving money doesn't have... Read More

Tips To Take Control Of Debt Collection

Yes, debt collection tips can help. You may think you... Read More

The Road to Debt Relief

Living with debt is not something someone hopes for, but... Read More

Tips For Saving Money

Still living from pay to pay? Or envying those great... Read More

What Are The Benefits and Consequences Of Getting Rid Of Debt The Easy Way

We have all experienced getting so far in debt we... Read More

What is Debt Settlement and How Does it Work?

Debt settlement involves negotiating with a creditor or creditors to... Read More

Debt Management Systems

What is a debt management system, and when do you... Read More

Debt Settlement : What You Need To Know

Debt Settlement companies work with your creditors to help you... Read More

Corporate Debt Management ? Perspective on the Why

Entrepreneurs have a tough time in their formative years. They... Read More