5 Ways To Avoid Getting Stuck In The Credit Card Debt Trap

(This is a guest article by Kris Bickell*)

If you've ever used a credit card, you know how easy it is for the balance to grow REALLY big, REALLY fast. And like a ball rolling down a hill, once it starts rolling ... well, once it starts rolling it's a lot easier to wait until it stops rather than chasing it down the hill.

So, think of credit cards like the ball.

And hold onto them tightly. Because once you start building debt, it's a lot like the rolling ball.

I know, that's much easier said than done. For most people, by the time you figure out you've got a debt problem, you've got a HUGE debt problem!

Trust me, huge debt problems don't go away quickly. Or easily. So do yourself a really big favor. And don't get stuck in the "debt trap" in the first place. One of my friends used to say "Money doesn't come with instructions". Which is so true. And even more true with credit cards. You get all the fine print about terms, rights, penalties, privacy policies. But nothing that tells you "don't charge more than you can pay off when the bill comes!"

I got my first credit card when I was in college. Imagine that!

I had no income. No credit. And no idea how to use it.

Yet American Express thought it was a good idea to give me a card anyway. Why? So they could make money off me, of course. Fortunately, American Express cards must be paid off each month. But the cycle of debt was started when I was only 20.

I remember my friends went on a day trip to Atlantic City and called me to tell me how much they missed me, because there were machines that took credit cards and gave you cash (of course, they didn't really miss me - they just wanted my fancy new AMEX card to use to get cash!)

The moral of the story is that the whole business of credit cards is nothing more than a money machine - for the banks!

So here are those instructions mom and dad never gave you. And American Express never gave you (or CitiBank or Chase or Capitol One, etc.) Here are 5 ways to avoid getting stuck in the credit card debt trap:

1) Don't fall for the lure of rewards cards (unless you can pay off the debt every month):

Rewards cards sound great. And if you can pay off the balances, they are. But if not, you'll probably end up paying a LOT more in interest than you gain in store discounts, frequent flyer miles, or other rewards.

2) Don't keep transferring balance & getting more cards:

Sure, credit card "surfing" is very common - constantly shifting your debt to low interest promotional offers. But in the long run, it's easy just to dig yourself a deeper hole, as you keep getting more and more credit. Want to use this as a temporary "quick fix"? OK. But as a long term strategy, this is like throwing the ball down the hill.

3) If you have more than one card, hide it:

It is tempting to use a retail card to save an extra 5% or 10% on purchases. Or use the new fancy looking card you just got in the mail. Or use the one with the lowest interest rate. And if you can pay it off when the bill comes, OK - then feel free to use them. But if you do fall victim to the temptation often enough, before you know it your credit card ball will start rolling down the hill!

4) Take yourself off the offers list:

The best way to keep yourself from getting caught up in the credit card trap is to keep yourself from getting all the tempting offers in the first place. So go to www.optoutprescreen.com and www.dmachoice.org to get your name off the most common mailing lists!

5) Don't use your credit cards as a spending account:

Make sure to set up a savings account to use for emergencies. Then, when you need some immediate cash, you can use this money instead of a credit card.

So there you have it. Sounds so simple, doesn't it? Sure, it takes some discipline. And many of your friends and family won't understand why you don't rely on credit cards to pay for everything. But if you follow them, these five steps will keep you out of the credit card debt trap!


*About the author: This is a guest article by Kris Bickell. If you would like to learn more about avoiding the credit card debt trap, visit www.Debt-Tips.com. You'll learn how the author, Kris Bickell, paid off all of his credit card debt and the various debt relief options you can use to improve your financial problems.


*Image Credit: Photograph by Leonid V. Kruzhkov [via Flickr Creative Commons]

5 Tips You Can Use to Start Saving Money Today

(This is a guest article by Raine Parker*)

By now, no one needs to be told that the national economy has seen better days. Although there are signs that the recession might be bottoming out, it's too soon to tell. But the slowdown in the market has been a reminder that saving a few bucks here and there is a good idea, and there are great ways to save money even when the economy starts to pick back up. With that in mind, here are five simple ways to pinch pennies and make sure you're prepared for a rainy day:

1. Take your lunch to work.
This is a quick way to see savings. It can cost between $150 and $200 a month to eat out every day, and that's way too much to spend on daily meals. Instead of going broke by eating out, try taking a lunch to work instead. The cost of groceries for a week of meals is far below that of eating out, and as a bonus, you'll be able to pack yourself healthy lunches that are better for you than fast food. You'll start to feel the financial difference immediately.


2. Make a monthly budget.
A great way to save money is to first see how and where it's being spent. Plan out everything: Make a list of all your revenue sources, and then make a list of your expenditures. Be as accurate as possible, and don't leave anything out. Account for major bills like rent and utilities, car and phone payments, and an approximate grocery cost. If your expenditures are higher than your income, that's a big problem, and even if the two figures are close, it's not good. Your list of expenditures will be able to tell you where you can start cutting. Do you really need that DVD or trip to the mall? It's better to think twice and plan your purchases. You'll be less likely to make impulse buys.


3. Pay yourself first.
Take 10 percent of your paycheck and put it in savings right away. It's the best way to start building a savings fund that can be used for emergencies or large planned purchases or investments, but you'll be less willing to do it if you start spending your check right away. If you take 10 percent off the top, you won't even feel it, and before you know it you'll have a comfortable cushion you can use if something unexpected happens.


4. Don't use credit cards.
At all! Plastic money is a wicked gimmick, and though there are benefits to very controlled spending, like improving your credit rating, it's almost never a good idea to just put things on the card. You're less likely to keep track of how much you spend, and before you know it, your interest rate has skyrocketed and your monthly minimum payment is crippling you. If you don't have the money, don't buy on credit.


5. Set small rewards.
This isn't counterintuitive to saving. In fact, small rewards can help motivate you to keep saving and spend wisely. It's that little light at the end of the tunnel that can keep you on the track to smartly dealing with your money. Go out to eat with your partner or spouse; pick up the new album from your favorite band; enjoy a night at the movies. You'll feel the happiness of being rewarded and the satisfaction of knowing you earned it by making the right choices.

These are just a few ways to save money, but they'll get you started on the path to short-term and long-term savings.

*About the author: This guest post is contributed by Raine Parker, who writes on the topics of online accounting degree. She welcomes your comments at her email Id: raine . parker6 @ gmail . com

*Image Credit: Photograph by happyhaggis [via Flickr Creative Commons]

The Secret to Finding a Part-time Job in Tough Economic Times

(This is a guest article by Caroline Fraissinet*)

Part-time jobs are sometimes necessary for students to earn enough money to pay for their education. In these economic times, it can be difficult to find part-time jobs. However, that does not mean that all hope is lost. There are some great resources and places to start which students (or anyone, for that matter) can use to search and apply for jobs. Here is a list of a few general tips and sources for finding a part-time job:

1. Take A Walk Around Town – stores or local businesses sometimes have “Help Wanted” signs on their windows. Many times, people may overlook them, so keep an eye out for them. Take a walk around your neighborhood and see if there’s any in a nearby location. This is more of a hit-or-miss option, as “Help Wanted” signs in the window are more characteristic of a smaller town or community. However, it’s a good starting point because most of the time, you can just walk right in and get a feel for what you might be doing as well as whom you might be working with right away. So take a little stroll around the block – who knows what kind of opportunities you might find?



2. On-Campus Job/Work-Study – college campuses have many services for students. Naturally, that means that a lot of assistance is needed for many of the great places open for the student body. Get in touch with specific locations on campus and see if they have any job openings. Some of the best places to look are the library and any food service locations. Colleges will also frequently post job openings in specific places to students on the university website. If you like meeting new people and being an on-campus leader, residence assisting might be a good option for you. RAs usually get room and board free for supervising specific floors in dorms, and sometimes get a stipend in addition to that for activities. Also, colleges may offer the opportunity for work-study if you qualify. These are more or less the same jobs, but the money that you make goes directly towards your tuition. Sometimes to get enough money to pay for your education, you need look no further than your college or university.



3. Surf The Web – there are countless websites that employers post job openings regularly. Craigslist.org is one of the best places to look for local job opportunities. They have many different subcategories of jobs to search, and also feature a separate section just for part-time jobs. Also be sure to check the “Gigs” section if you’re in a field that would apply (writing, film, ect.) or for miscellaneous jobs that can earn you a few quick bucks. Craigslist also posts many paid research studies, which could be a good way to make some quick cash if you qualify as well. Other places to look include Monster.com, SimplyHired.com and CareerBuilder.com. Keep in mind that internships may or may not be paid, but could also be a good opportunity for students to gain experience and make contacts for later on. Search the web for jobs; it’s one of the easiest ways to discover new job openings.



4. Talk To Friends – sometimes getting a job isn’t about what you know, but who you know. Try asking friends and family about places that they work or worked in the past. They may have some connections or contacts that you can get in touch with for some work. Another possibility is that if you have a friend currently working at a place, they might know about upcoming openings and be able to put in a good word for you. You can also get an insider’s perspective on different places and find out if the employer is someone that you actually want to work for. When job searching, never forget about your friends and family – someone you’re close to could make a huge difference to your finances as well as your social life!

Rough economic times don’t have to signal unequivocal doom to job searchers. There are many different ways to look for part-time jobs for students. By using any or all of these resources, you might be able to find a job that not only pays the bills, but that you might actually enjoy, too. Don’t get discouraged looking for jobs; if you utilize these strategies and are consistent about looking for employment, you should be able to find a great job that can help you to finance your studies.




*About the author: This is a guest post by Caroline Fraissinet, a student at Drexel University in Philadelphia, PA, majoring in Film/Video with a minor in TV Production. More articles by Caroline can be found here.

*Image Credit: Photograph by boogah [via Flickr Creative Commons]

This article was included in the Carnival of Personal Finance #243. Thanks, JD!

Apply for Scholarships, Not Loans!

(This is a guest article by Caroline Fraissinet*)

Let's face it... most college students are always a little short on cash. That means that the opportunity to get a little money is always welcome and very much appreciated. One of the best ways to get some money to finance your education is through scholarships: it not only serves the purpose of paying for all the necessary expenses and allowing you to finance more ambitious goals and projects, but it’s also a great thing to put down on resumes because it shows that the student is hard-working and skilled in a particular field. It doesn't hurt either that scholarships don't have to be paid back, making them a far better option that taking out an education loan! Here are a few types of scholarship opportunities available to college students to consider:

1. University scholarships – most colleges offer specific scholarships available to students if they achieve a certain criteria. Alumni sometimes put aside funds to recognize students that possess a certain skill set or character trait that they themselves may particularly value. Check your college’s resource center for in-school scholarships. They typically have a GPA requirement, and may include a requirement to participate in a certain club or activity, demonstration of a particular quality or skill. Some scholarships may also require an interview, and most require paperwork. Specific majors and departments may also have scholarships and grants available to students majoring in specific fields. University scholarships are typically one of the easiest to access, but competitiveness may depend on the criteria and pool of students.



2. Local/city or town-based scholarships – individual towns and cities usually offer scholarships, but they are usually not very well advertised. This can work in a student’s favor, because if less people know about them, less people are likely to apply. They are usually broader in criteria than university-based scholarships and are typically smaller in amount. The problem with city-based scholarships is that winning them may be more based on who you know rather than what you possess, and they can be more or less competitive depending on the size of the city. However, they can be extremely rewarding and are definitely worth considering in your search for scholarships.



3. State-based scholarships – as you might be able to tell already, for every sub-category of living, there’s usually a scholarship for it. State-based scholarships can work twofold for college students; if you go to a school that is in a different state than you reside, you might be able to apply for both. The criteria is usually similar to city-based scholarships, but may be a little broader. You might be able to find information on broader state-based scholarships while you look for city-based ones. Due to the fact that the pool has been opened up to a larger pool of people and they are typically advertised a bit more, they may be more competitive; however, they are still exclusive enough that they may not be extremely competitive.



4. National scholarships – these are typically the most rewarding, but also the hardest to get. They can range in specificity from having a rare quality or skill to simply being a good leader. They are extremely competitive and usually require a lot more work to be considered for. This is when an updated high school resume really comes in handy; it’s typically the same process for applying for the same types of scholarships in high school, except that you are in a different age range and may be expected to offer different skills or criteria. They are usually very well advertised and very generous. Many nationally successful companies offer them, such as Coca-Cola, Pepsi and McDonald’s. This is one way to go about searching for them; simply go to any large company’s website, and chances are, you’ll find information about a scholarship they offer. Good resources to find other scholarships are FastWeb.com, Scholarships.com and CollegeScholarships.org. (When searching for scholarships online, however, make sure that you are using a FREE website; those that ask you to pay to access scholarships are, 99.9% of the time, scams.)

Scholarships are a great way to get money to finance your education. They range from a few hundred to several thousand dollars, which can help to achieve all of your educational goals and help keep debt at bay. When looking for scholarships, work from more specific to more general to get the perfect fit for your needs and eligibility. Scholarships look great to future employers and show that you take initiative and aim to excel in a particular field or skill set. And of course, your future self will thank you for not having to worry about paying off the loans. When it comes to ways to gain a little extra cash in college, scholarships are one of the best directions to look.



*About the author: This is a guest post by Caroline Fraissinet, a student at Drexel University in Philadelphia, PA, majoring in Film/Video with a minor in TV Production. More articles by Caroline can be found here.

*Image Credit: Photograph by acycakes [via Flickr Creative Commons]

Four Simple Tips for Saving Money in College

(This is a guest article by Caroline Fraissinet*)

An education is one of the best investments that you can make…but that investment can mean that a little extra cash might come in handy while you’re earning your degree. However, there are a few small things that you can do to spend the money that you do have more effectively. Here are four quick and easy ways to save money:

1. Cook! – Pizza and take-out may be quick, convenient and relatively cheap, but it can add up over time. Generally, buying ingredients to make your own meals is much more cost-effective (and usually tastier, too!) For example, instead of buying pre-made pasta sauces, it may be cheaper to buy all of the ingredients and make a larger batch of sauce yourself. Cooking your own meals can also be creative, social and even relaxing. Keeping the times that you choose to order food down can help to save a few dollars here and there.
   
   
2. Break Those Bills – A simple way to accumulate a little more cash without even thinking about it is to break bills whenever possible. Always pay for things with bills and put the change aside. Try not to use the change unless absolutely necessary. Let it build up in a jar or piggy bank. When it’s full (which may take very little time), take everything to the bank to get it changed into cash. You’d be surprised at how much money you can collect over time.
   
   
3. Don’t Pay Full Price – With a little bit of searching, you might find that almost anything you want can be purchased for a lower price than you might expect. For most items available, there’s usually always a coupon or discount for it somewhere. It may seem insignificant to clip that 40-cents-off coupon, but if you clip enough, you may save a good chunk of change. But don’t let your deal-searching stop at what you find in the paper. Many restaurants offer great deals if you sign up for their mailing list. For example, Buca di Beppo frequently sends out $10 off a $20 purchase for both dine-in and take-out options to people who sign up for their e-mail list. College towns and cities also often offer programs that give discounts for students at local shops, such as Campus Philly in Philadelphia. For online shopping, you can often search around and find some great promotional codes that could take off a few bucks or even get you free shipping (check sites such as retailmenot and shopping-bargains by entering the name of the online retailer you want to get something from). In short, always research whether or not there’s a discount somewhere before making a purchase. A simple web search may save you a good deal of money.
   
   
4. Take Surveys – One of the easiest ways to make some quick cash is to participate in surveys. In bigger cities, there are often research studies going on that will pay qualified participants a certain amount of money for voicing their opinion on something. College campuses sometimes offer paying research studies as well. There are also many websites that offer online surveys with cash or gift card payouts. SendEarnings.com has many different ways in which members can earn money, from taking surveys to buying things online for credit to even simply reading e-mails that they send out. PollingPoint.com, EPollSurveys.com and ESurvey.com offer cash payouts, but also other types of rewards such as gift cards to a good number of locations as well as high-quality electronics. Other survey sites, such as SurveyU.com, gear their surveys more towards students, which can mean that qualification for particular studies might be easier. The one issue with earning money through surveys is that it can take a long time for your money to actually get to you if you’re requesting a check; fortunately, more and more survey sites are offering PayPal payment as an option, which sometimes makes the process of getting paid a lot quicker. Who knew simply expressing your opinion could have such a payoff?

All of these small actions can help to save you a few much-needed dollars in college and beyond. Saving money sometimes does not take much more than thinking about where your money is going and being resourceful about spending, but it can have a huge payoff. Following these four simple tips may help you to keep some cash in your wallet without costing you too much time and effort.


*About the author: This is a guest post by Caroline Fraissinet, a student at Drexel University in Philadelphia, PA, majoring in Film/Video with a minor in TV Production. More articles by Caroline can be found here.

*Image Credit: Photograph by seychelles88 [via Flickr Creative Commons]

How Higher Education Can Make A Difference

(This is a guest article by Mary Acheson*)

There are a number of reasons why higher education plays a vital role in furthering your career; no matter what profession you plan to pursue. Some careers and career advancement opportunities will be limited - and sometimes eliminated - by not having sufficient post-secondary schooling. Even in careers that don’t require specific post-secondary education, having more qualifications and knowledge will give you a step up on your competition.

Screening applicants

Employers screen new job applicants all the time. They are constantly looking for candidates that have the knowledge and skills that they need to perform the functions of the job they are hiring. No news there. However, many employers are also looking to the future when they’re hiring new employees and job seekers sometimes forget about this.

One thing most employers know is that keeping great employees in the long term will determine the future success or failure of their company. One way that they can tell that you are serious about a particular position in their company is by showing them that you have spent significant amounts of time (and money) studying in that field. Higher education shows commitment and employers like that.

To recap – post-secondary education demonstrates to your employers the following:

1. You have formal training and have therefore gained the necessary entry-level skills to complete the tasks of your new job.


2. You are committed to a long-term career in your chosen field. An employer will have confidence because you have shown commitment to your education in this field.

These are just two reasons why higher education can be an important deciding factor during the hiring process.

Higher education = higher income

A huge advantage of higher education is that it will benefit you financially. Many employers use your level of education to determine the salary that you will receive when you are hired. At lots of companies, promotions, and pay raises are also tied to the completion of courses and programs specifically designed for career advancement. So even if you are able to get an entry-level position at a company, without a post secondary education it will be difficult to move up or make more money.

Statistics show that people with higher education make as much as $200,000 more over a lifetime than those with lesser education.

A qualification of higher education is necessary in many careers including dentistry, medicine, engineering, and architecture. Other professions such as law or speech therapy will require you to have a postgraduate qualification before you can practice.

College and university graduates are also more likely to have access to better healthcare and dental benefits that come with more established careers.

Life experience

Another thing that people often forget is that college or university allows you to experience a rich social and cultural scene, and meet all kinds of different people while pursuing a field you love.

It will also allow you to see different places, and for many people it is their first chance to live on your own.

Options

Monster.com and other job sites have thousands of different job postings every day. Most of these jobs require you to have some form of post-secondary education and without that education you have less options when it comes to finding a great career.

Studying also allows you to improve your reading, writing, and math skills that will help you with all aspects of your life. Improving these basic skills can help you do the following:

• Plan your money better


• Get a better job


• Give you new confidence in your working life

It also allows you to study in a field that interests you and to follow an area of study that you are passionate about. Pursuing things that you are passionate about and gaining confidence with an education will help you lead a healthy and fulfilling life.

*About the author: This is a guest post from education writer Mary Acheson. Mary works for a number of websites on education and insurance including LifeInsuranceCanada.org, a Canadian life insurance website.

*Image Credit: Photograph by lumaxart [via Flickr Creative Commons]

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Looking for more information on higher education? Then check out all the online education info you need at MyDegreeOnline.com.

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Selective Amnesia: 5 Things to Consider Before You Buy a New Home

(This is a guest article by Donald Farber*)

The picture is so vivid in your mind you might as well be watching it on glorious high definition television. Stretched out on your private deck soaking in a beautiful sunset while sipping wine with your loved one thinking how lucky you were to find this gem. In fact, you’re so wrapped up in your daydream you just nod politely when the realtor tells you that the reason for the low price is the high-rise slated for development across the street. It’s selective amnesia and it’s more common for homeowners than you might expect.

"You simply can’t persuade some people even if you know their decision isn’t in their best interest; it really just boils down to emotions," says 20 year veteran realtor Tony Swanson. "It’s usually not price, or size of style but usually something more personal."

For instance, he says, a recently divorced father of two who wanted a place that would be great for his kids decided to move them into the city where he grew up. "It was because he wanted the best for his kids that he moved back to his old neighborhood."

Unfortunately in the 30 years since he had lived there, things had went downhill in that area. "You can’t blame him because he was seeing everything through a veil of his happy childhood". It was two months later before he realized what a poor decision it had been and something Swanson says was avoidable.

So how do you let cooler heads prevail and balance those emotions with reason? Here are 5 tips that can help you see a potential home in a more complete light.

1. Talk to the neighbors. This is such a fundamental one, but oftentimes people neglect it. Sure it’s friendly, but it can also let you know if you’ll be buying a house amongst a sea of college aged renters. Find out if they have an association or newsletters. These are usually a good indicator that the community you are moving into also cares about it. This makes them more likely to look out for your home or kids, which can be great for your peace of mind.



2. Get a Home Inspection. This is incredibly important as it can save you substantial headaches down the line. Ask for referrals from your friends or from an independent agency. The important thing is to find out if the home inspector offers any guarantees or liability if they miss anything. Be careful about taking the realtor’s recommendation. Chances are that 99% of the time they will refer you to a legitimate inspector but always remember there may be a conflict of interest. Being aware of the financial consequences of having your inspector miss something crucial is reason enough to find your own inspector.



3. Obtain any records about renovations done on the house. A qualified inspection can only tell you so much. Be on the lookout for anything that raises alarm bells when it comes to the quality of materials used in any improvements. Being a detective means scouring any receipts for clues. Finding out the water heater was replaced two years ago despite the house only being 4 years old is a great example. Seemingly innocuous clues such as these could mean a flooded basement, which means you will want to be extra sure no mold is lurking in the drywall. Don’t be afraid to quiz the current homeowner. It’s not an interrogation, but can help you learn about other unique features of the home.



4. Think big picture when it comes to the add-ons. Sure a hot tub seems like a great idea, but what about the upkeep of chemicals and maintenance. The same thing can be said about the pool, or large beautiful yard and garden. Being realistic can save you significant time and money in the future. If gardening is your passion or you can afford the landscaper then by all means - but, often potential buyers seem swayed by the bells and whistles only to realize their annual hot tub dip is costing them $400 dollars on electricity and chemicals.



5. Don’t forget the house is in a community. Exploring the surrounding area can be a deal breaker on a great house. Finding out your house is a couple blocks from a fire station or hospital means the chances of 3AM siren wake up calls all the more likely. Expect similar problems with nearby airports, railroad track or even agriculture areas. Having the constant smell of manure may put a damper on your summer backyard BBQ. On the flip side, a less than perfect home may become more appealing when you realize how close it is to the elementary school, local park, or shopping centre. It might also save you a lot of money. The important thing is to do your research before you buy and make sure you’ve made the right choice.

*About the author: This guest post was contributed by Donald Farber, who writes extensively about first time home buyers and life insurance for LifeCover.ca

*Image Credit: Photograph by mamamusings [via Flickr Creative Commons]