Being deep in debt seems to have all too many people chained to jobs they don’t want to be at. This is a question from one of my readers in that situation.

Q. I’m currently at a crossroad in my life. I have a full time job that I’m not happy at and I feel like I don’t have enough time to spend with my family. The problem is that I don’t see a way out as I have a lot of debt that needs to be paid off. I’d like to create an internet business for myself that will allow me to have more time with my family, help pay off my debts and create more financial freedom in my life. How can I create more confidence to be able to do this?

A. This is a challenge that seems to be on the minds of many. I have been asked this question numerous times by people who are either facing downsizing in their current position or simply wanting to create an additional source of income. The first and most important step is to get clear on your current financial situation so that you can develop an action plan. Often, when you feel “stuck” and unable to see the forest through the trees, it’s easy to lose perspective on what’s real. In order to gain clarity, you will need to list not only your total debts owing but the money you’ve got coming in as well as going out each month. This will allow you to see your numbers in black and white so you can determine if there’s any room to restructure your current financial situation. It’s when we don’t write the numbers down that it’s easy to get vague about how much money we actually have or don’t have available to us. With regards to your debts, if you haven’t already, you will need to put a debt elimination plan in place. Depending on the amount of debt you’re carrying and whether you are behind in payments, there are a number of debt relief options to consider. These include debt consolidation loans (mortgage refinance, home equity line of credit or unsecured personal loan), consumer credit counseling and debt settlement. If you are experiencing difficulty in staying current with your debt repayments, you can research these options to see which one would be the best fit.
With regards to starting an internet business, you need to ask yourself the following questions:
• What interest or hobby do I want to turn into a business?
• What kind of need is there for the product or service I want to offer?
• What are my skills for starting such a business?
• Who do I know that can help me launch this business?
• How much will it cost me to start and run this internet business?
• How much additional income do I think I can generate?
• Will this provide me with the freedom to spend more time with my family?

As you can well imagine, starting a new business will consume your time, energy and resources, especially up front. However, the rewards can be many and if it will allow you to spend more quality time with your family and allow you to perhaps enjoy your current job more, it may well be worth your efforts!

DON’T let the buden of overwhelming debt keep you from doing what you want to do in life - it’s just not worth it. If you have debt you know you need and want to get rid of, it’s time to look at your options on how to get this done. Go to www.debtreliefoptions .com to find out what’s available to you.

Be sure to email me your questions on getting out of debt and building great credit at coach@debtfreediva.com

Knowledge is power and it’s important that you have all the facts so you can make educated decisions around your finances!

Dee Dee Sung
Founder, Debt Free Divas, Inc.
From Self Worth to Net Worth
www.debtfreediva.com

coach@debtfreediva.com

Getting Divorced and your debt:

I got divorced. My spouse was ordered to pay the credit card debts so I don’t have to: False

You get divorced. As part of the settlement, your (now) ex-spouse was ordered to pay the debts (car or mortgage note, credit cards, medical bills, etc.). Some divorce lawyers may tell you that your creditors will honor the divorce decree and relieve you of the obligations. I am sorry. They are wrong. Some creditors may. Most often, they will pursue you as well if the debt remains unpaid. Further, they will report the negatives on your credit report. This will hurt your FICO score and future ability to obtain credit for years to come. In addition, you could still be sued by your creditor(s) for …continue reading the article titled Demystifying the Myths about credit:

Over the next several publications, I am going to take a look at some of the most common misconceptions about credit and debt. Hope it helps….

The amount of money you make determines how good your credit is: False

An impressive salary doesn’t translate into a good credit report or good credit score. It’s true that a lender will look at the amount of money you make to determine your ability to make your monthly payments on the loan but, that’s as far as it goes.

Your credit worthiness is based upon your credit history, not your salary. Creditors use a FICO score to determine if you are qualified to get a loan, and at what interest rate that loan needs to be paid back at.

FICO scores range from 400 to 850 points. The higher your score, …continue reading the article titled Demystifying the Myths about credit:

One of my Debt Free Divas community members just sent this question in about her finances - hope you find it helpful!

Q. I’m determined to get my finances on track this year and would welcome a few pointers on where to start. There’s so much information out there that it becomes confusing. I’m tired of feeling like my debts are overwhelming and I have no money available at the end of each month. What’s bothering me the most is that I don’t really know where my money’s going.

A. Congratulations on your commitment to get your finances in order! The cynics believe that New Year’s resolutions are meant to be broken but it doesn’t have to be that way. The truth is that it’s important to have a plan of action in place that’s simple and easy to follow. Remember, it’s the baby steps that lead to giant results. Okay, let’s talk about these 5 STEPS to a financially healthy new year!

• Set realistic goals – unattainable goals are a surefire way to set you up for failure. I emphasize the word “realistic” as you will build your confidence when you start to see positive results.
• Track your spending – this may seem tedious but it’s the only way you’ll be able to see where you precious dollars are really going. Many people like to remain vague so they don’t have to confess to the miscellaneous expenditures that are eating up their hard earned cash and preventing them from reaching their goals and dreams.
• Envelop system for budgeting – this is all about getting back to basics. Create an envelope for every category within your budget and when you receive your paycheck, allocate a percentage into each category. Generations before us successfully used this system and, in my opinion, it’s still one of the most powerful ways to create and stick to a budget. Believe me, it’s empowering to know where your money’s being spent and it will allow you to make necessary adjustments over time. More so, once the cash in a particular envelope has been depleted, you know you’ve hit your spending limit. As they say, proof is in the pudding!
• Progress not perfection – it’s all too tempting to set lofty, unattainable goals. Unfortunately, that usually results in taking your commitment to that goal from excitment to overwhelm and defeat. I like to remind people that any journey is more about making progress versus striving for perfection. You will find that focusing on progress will take a lot of pressure off of the task at hand. It’s also important that you have some fun and be willing to laugh as you learn!
• Save before you spend – consistently allocating a portion from each paycheck into a savings account (no matter how small the amount) will go a long way to build your money confidence and give you a sense of freedom. Usually, the #1 excuse for not doing this is that there isn’t enough money from each paycheck to save. This is where the envelope and tracking systems come into play as they will both allow you to determine where you’re spending your money that you could cut back on. It doesn’t matter what amount you start with - $25, $50 per month – what matters most is that you start. As you see your savings account balance start to grow, you’ll be inspired to find ways to free up more cash to save.

Embarking on these steps requires you to make a commitment to yourself. You might also consider finding a friend who wants to take these steps with you. The best way to creating a healthy relationship with money is to connect with other like minded people who are on the same journey. Although there will be discomfort along the way, believe me, the rewards will be many!

For answers to your questions about credit, debt elimination methods and smart money management - please email me at coach@debtfreediva.com

Happy 2006!

Dee Dee Sung
Founder, Debt Free Divas, Inc.
From Self Worth to Net Worth
www.debtfreediva.com
coach@debtfreediva.com

Initially, it was Frank McNamara of New York’s Hamilton Credit Corporation that come up with the idea of giving affluent businessmen a convenient way to charge some of their business related expenses.

In 1950, he issued the original Diners Club card. It was made of pasteboard with the customer’s name on one side and a list of twenty-seven restaurants that accepted it on the other. In 1955 the pasteboard card was replaced by one fabricated from plastic.

American Express began issuing cards in 1958 followed by The BankAmericard, issued by the Bank of America. Soon, smaller banks joined the BankAmericard system. In 1977 the card underwent a name change and became …continue reading the article titled Credit Cards, debt of a Nation

It’s that time of year again; soon you will have many sources popping up suggesting ways to spend your upcoming tax refund. Let’s put this in perspective.

First, tax refunds are not “found” money, but a return of money YOU overpaid into the tax system! The average refund check is somewhere around $2,200 and $2,400.

One of the first things that you should do, if you had no abnormal deductions for the year and anticipate that those deductions will remain the same in the future, is to change your withholdings so you don’t overpay in 2006. I have no idea why you would want to give someone (even the government) money to hold onto for a year with no interest being made off of that money.

An easy way to calculate this adjustment is to take your refund amount, divide it by twelve and adjust your withholdings accordingly. Your company’s payroll department can assist you in this process. By doing this, it could give you several hundred dollars …continue reading the article titled Tax refunds a good way to get out of debt

I want to share with you another question from one of my readers - the same concerns are shared by many people and this is one of the most commonly asked questions:

Q. I need help ASAP. I don’t really know where to begin. I am about $30,000 in credit card debt. It’s becoming increasingly difficult to keep up with the minimum payments. I would like to know where I can go to get help without going the bankruptcy route because I really do not want to do that. Thank you.

…continue reading the article titled Knowledge is Power…Know your options for getting out of DEBT

For too long, DEBT SETTLEMENT as a form of debt relief has been misunderstood and not utilized bythe many people who could benefit. As of Oct. 17, 2005, the changes in the bankruptcy laws now make it more difficult for people to file for Chapter 7 bankruptcy which would absolve them of all their debts. Now, consumers filing for bankruptcy are subject to a means test to determine if they’re eligible to file for Chapter 7 or if they’ll need to go the Chapter 13 route.

…continue reading the article titled Debt Settlement Viable Option in Light of Changes in Bankruptcy Laws

A debt elimination plan starts with an understanding of where your money is going. If you are ever going to become debt free or get ahead financially, you have to start with setting up a budget. I’m not talking about keeping a running tab in your head or doing your best “guesstimate”, we’ve all done that. I’m talking about taking the time to actually calculate every penny that is coming in and going out. It isn’t easy but once it is set up and you get into the routine, it’s easy to maintain and will give you a better perspective about your overall financial situation and allow you to gauge and plan towards the future.

It will take you about 2 hours so; set some time aside undisturbed, and get it done. You don’t have to do the information gathering all at once, start at the beginning of the month. Take a few moments out of each day and start gathering up the materials. Remind yourself that this is the year that I am going to become debt free. I’m going to eliminate my debt and invest in my future.

Treat yourself like a company. Get into the habit of looking at your own personal financial life as you would run a company. Manage your debt and expenses as well as the income coming in correctly and you will reap the rewards as a good CEO or fail as a bad one.

Once you have all of your information, commit to a day at the end of the month that you will put all of it to good use and set up that budget!

Here is what you will need: …continue reading the article titled Get Debt under control by setting up a budget first