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Saturday, May 25, 2019

Digging Out: Hints for getting out of Debt

Posted by admin on June 16, 2010

Over spending and lack of proper money management skills is the main reason why many of us find ourselves in the predicament known as debt. In order to dig our way out of this negative circumstance there are valuable guidelines that can be followed to better increase our chances of getting out of debt.

Learning to budget is one of the best ways to begin the process of getting out of debt. Once you have come to the realization of how in debt you are you must make yourself aware of your household’s monthly income and the necessities that this income will be going towards. Start by making yourself accessible to some sort of money managing software. If you do not have access to such a software a simple pen and notebook can go a long way in your journey to get out of debt. List all your living necessities down and make sure that it is reasonable and logical. Your budget must be adequate for your living needs. Food, electricity, water, and gas are monthly wages that fluctuate each month. For these expenses set an average amount that you are willing to pay and take initiative to not go over it.

Also, try not to borrow money to get out of debt, particularly consolidation loans. Remember, a consolidation loan is simply a way to combine all your loans and pay them off together. This in actuality means that you are simply combining your debt. This mistake is especially made when those in debt try to pay off their many payday loans. In times of need, if you must borrow money, the best way to go is by borrowing from a family member or a friend because the interest rate would be virtually non existent.

Now let us move on to actually paying off the debt. It is smartest to pay off your highest interest rate debt first. The only scenario where you wouldn’t pay off your highest interest rate is if the balance on one of the cards goes beyond 50 percent of your credit limit. Paying all the balances below 50 percent of the card limit is a way to lower your credit score. After this is done, move on to the highest interest rate and pay that off. Continue this process every month by paying off the card with the next highest interest rate. Keep going until the card with the lowest interest rate is reached. This should be used as your primary account.

Trust deeds are really helpful option for those who have unsecured debts and unable to pay the debts on time. Trust deed protected individuals are not allowed to get pressurised by the creditors.

With this new formed knowledge, the process of digging yourself out of debt is now in your hands. Just remember that budgeting your money is the primary step to getting out of debt. Once you create a plan for the spending of your money you can then move on to actually paying off your cards. It is important to remember that breaking bad money management habits is going to be tough. Although it might be difficult to sacrifice little luxuries it will all be well worth it in the end when you can claim yourself debt free!

Insurance claim – Open a claim checking account

Posted by admin on June 14, 2010

insurance

insurance

Most of the policyholders after doing a settlement with the creditor do not think about a claim that they have to show to the IRS for tax treatment. In order to protect from the wrath of the IRS, it is important to open a special checking account which will only be used for your insurance claim replacements and repairs.

When you get the first check from the insurance company, go to your bank and open a separate account just for handling claim issues. When you receive the payments for the claim, deposit them in this checking account. You should be using this checking account for the purpose of any expenses of the claim. Close the account after the claim is completed.

When an insurance company issues advance payments against the ALE or content losses, the checks will be payable only to you, because there’s no mortgage on your contents. So, those checks can be deposited directly into your claim account.

If you get a settlement check, do not deposit it in your normal checking or savings account. It will be a good idea to keep a separate account for insurance claim related expenditures. This will also help in maintaining good records.

If you have got a dwelling coverage and you ask for an advance, the insurance company will need the name and address of your mortgage company. The check will be issued jointly in your name and the name of the lender. The check might be sent to you and the lender will like you to endorse it and give the check to them. Then they will set up a repayment plan. You must contact the Escrow department of your mortgage company in order to know more about the payment system and how it works. Each lender is different. You should contact the lender and know his plans.

This same procedure will be used by the insurance company when they issue the checks for repairs to the dwelling or even settlement for a car wreck. Anything you own that also has a lien holder or mortgage holder will be issued jointly in the name of the owner and the name of the lien holder. If you own your dwelling or vehicle free and clear, the insurance company will issue your settlement check only in the name of the owner.

When you get the claim, don’t waste it in weekend vacation or buy a new motorcycle you have always wanted unless and until you can afford to do so. Keep them separate and you will have a more pleasant insurance claims experience.