Delaware debt consolidation

5 Money Mistakes To Sidestep - Brief Article

Anyone can err. But if financial security is a goal, there are some money mistakes you can't afford to make, says investment guru Baunita Greer, president of New York-based Cromwell, Miller & Greer, Inc., a division of B. Pierce & Co. She points out five common money errors that she counsels her clients against:

1. Paying the minimum on credit-card balances.By making minimum payments, Greer it would take 19 years to pay off a balance of $3,300 at the standard 17 1/2 percent annual interest rate.

2. Not developing a budget. A budget is a financial road map that lets you see what's coming in and going out. To start, write down your income and all actual expenses. "If you're bringing in $1,000 but spending $1,500, the other $500 is going on your credit card. So you see right away that you're at a deficit," she says. The goal is to live below your income. If you're not, look for areas to cut back, like phone bills or dining out for lunch. (The best budget also includes savings.)

3. Not participating in employer 401(k) or 403(b) retirement plans. When money is taken out of your pay before you get it, you don't miss it, she says. At the minimum, if your employer is contributing to the plan, you should put whatever the employer match is. And every time you get a raise, invest a little more.

4. Only buying monthly savings bonds. There are so many other investment vehicles that pay a better return, such as mutual funds. If you're saving for a child's education or anything long-term--five years or longer--mutual funds offer more growth, she notes.

5. Paying full price for goods and services, including cars, travel and clothing. "We need to be training our children to shop for good deals, particularly at outlets, instead of paying expensive retail prices," Greer advises. And the same mind-set applies if you're buying a luxury car, which begins to depreciate the moment it rolls off the lot: You save big bucks buying preowned.

MONEY MATTERS From shopaholic to home-equity owner

Once a debt-burdened, credit-card-obsessed shopaholic, Vernese Edghill became a property-owning financial wiz in less than ten years. The 35-year-old director of the Center for Black Culture and Multicultural Programs at the University of Delaware graduated from Bucknell University in 1987 with $10,000 in credit-card debt and a job that paid $14,000. She lived huge, buying lots of clothes, eating out, traveling, never using cash and paying the minimum on bills. "Ooh, I was dumb!" Edghill recalls.

She was being sucked under a wave of debt--using one credit card to pay another, with bad credit from late payments despite debt-consolidation loans. Then a friend showed her how to pay more than the minimum; stagger payments; save for recurring expenses; go from one twice-monthly paycheck to the next with money in the bank and pay herself first. He also advised her to get a part-time job while in graduate school and earmark those earnings for credit-card debt. By 1992, when Edghill received her M.A. in college counseling, she had curbed her extravagance.

When her apartment rent skyrocketed in 1996, Edghill, Barbadian-born and raised in Brooklyn and in Pennsylvania, decided to buy a house. She had already begun cleaning up her credit report by writing to creditors asking that they remove obsolete information. The house she found cost $89,000 but was appraised at $99,000. With 6 percent Federal Housing Administration (FHA) financing, a $6,000 down payment and the owner's help with settlement costs, she moved into her house with $10,000 in equity and just one credit card. Now earning around $50,000 a year, Edghill is the ultimate savvy shopper: "I tell my students to just say no to credit-card debt."