Families today come in many shapes, forms, and sizes. In years gone by, the term family referred to a father, mother, and 2 1/3 children, but that is simply no longer the case. A family is any group that consists of two or more people who live under the same roof and share the same financial situation.

The income of a family is the total amount of money that is contributed by every member to the common good….a REAL mutual fund, if you will. The rent or mortgage, the utility bills, the groceries, etc., are all purchased out of this mutual fund.

Every member of a family that contributes financially should have a voice in how the family income is spent. Each member that contributes will also spend.

When the day finally comes to make a family budget, and that day WILL come at some point, the viewpoint of every contributing member is important. The family budget should be a consensus.

Some things are, of course, nonnegotiable. The rent or mortgage must be paid, electricity and gas bills have to be paid, and food has to be purchased. Phone service used to be optional, but it isn't now. The cable TV bill is something that everybody uses and so is the Internet service. Everybody has to get to and from their jobs.

Once the essentials have been covered, however, the remainder is disposable income, and the decision about this disposable income is a family affair. Does the family need a new car, or would the family rather have a boat? Would a family vacation be the best choice for spending the disposable income? Or, is all of what would have been disposable income already allotted to pay credit card bills?

Budgeting family income is a family affair.

Tags: personal debt, debt management, credit rating, foreclosure, personal finance, debt consolidation, good debt management

People who work as debt management experts go to school for that sort of thing. Many spend four years or more getting college degrees that identify them as experts in the money and debt management fields. And they are experts, there's no doubt about it.

The best of the debt management experts and debt management teachers, however, are those who have learned to manage their personal finances and their personal debts, and then passed that knowledge along to their children.

Those who actually do it are the experts, and they are the ones that we need to learn from to avoid having to visit with a well-educated debt management expert because we have gotten ourselves into financial hot water.

As I look around at expert debt managers (those who successfully manage their own finances) I find that they have many things in common. They don't all do things exactly the same way, of course, but the structure in which they manage their finances is basically the same.

1. They save first. Those people who know how to save very rarely get into financial trouble. Sure, they can. Life can throw some pretty hard curve balls….the loss of a job or a major illness. But unless their financial trouble is caused by an outside force they will not get themselves in debt up to their eyeballs.

2. They live within their means. They do not base their spending upon what their friends have. The neighbors might buy a new car, but that will have no bearing upon whether they do or not.

3. They all have budgets. Not only do they have budgets, but they live within the constraints of that budget. They do not make impulse buys. If asked, they could tell you how much is spent each month on food, shelter, clothing, utilities, and transportation.

Tags: being foreclosed on, foreclosure, consolidate your debt, mortgage, no credit crunch, personal finance, personal debt relief

It is sometimes just amazing, but people have no idea what interest rate they are paying on loans — even on their mortgages.
Interest rates matter!

Interest on credit card debt is the highest. Credit card interest rates are higher than bank interest rates that you may have for your car loan or the installment loan for furniture or appliances.

Another very amazing thing is that the majority of people do not understand what simple interest is and the difference between simple interest and compound interest. Every high school in America should teach this and the course should be a graduation requirement. Not understanding interest rates costs Americans hundreds of billions of dollars every year.

I do not have the space here to teach a course about interest rates. Remember this: simple interest is less than compound interest. The compounding frequency determines how much higher. Interest that is compounded monthly will be less than interest that is compounded weekly or daily.

Your credit score determines what interest rate you will be offered, and it will also determine just how much interest rate negotiating power that you have. The people with the highest credit scores will always be able to get lower interest rates than people with lower credit scores.

No credit history is viewed in the same way by lenders as a poor credit history, in that the interest rates that are offered will be virtually the same. Build a good credit history and you will get a lower interest rate.

First-time borrowers may have to pay higher interest rates, but it is to their advantage to make their payments on time and in full. If payments can be made prior to the due date, that will raise the credit score. Paying a loan off early will also raise a credit score.

Tags: personal loans, credit debt, personal financial problems, managing personal finance, debt relief, debt management, foreclosure