Holiday budgets help make for a happy New Year!

Holiday budgets help make for a happy New Year!

It is that time of year again where just about everyone’s focus turns to the holiday season. And even though there has not been much to celebrate in 2020, the holiday season always seems to lift the spirit and the charge cards for most of us. The immediate issue with using credit cards to purchase your holiday gifts is that the bills roll in later. And with the hustle and bustle of the season, it is really easy for many people to lose track of their spending. Even worse, most people have come to accept the season’s increased level of spending and are resigned to the fact that they will be spending the first part of the new year paying off or down those debts.

But does it need to be this way? I don’t think so. I think with a little for sight and thought and a good dose of discipline, we can minimize the financial snowstorm the holiday spending season brings. How can we accomplish this? Simple, by creating and sticking to a holiday season budget.

Creating a budget

Now we have reached the meat and potatoes of our subject matter, creating a household budget. A household budget and not just s budget for holiday spending? Yes! Granted we are discussing how to keep holiday spending under control; but we must accept that holiday spending is directly tied into our larger household budget. Where do you think the money to pay off the bills for all those presents is coming from? Your household budget! Now I know what you are thinking that this seems overwhelming and daunting. And to be honest, yes it can be. But you are not in this alone; there are ways to get help. I mean, that is why you are reading this blog right now, to get help, correct? Rest assured that I wrote this blog to do just that, help. So, before I go onto to a little fuller explanation about creating a budget; feel free to download the one that I created. There are two versions, one you print out and another that is an excel worksheet. Use one or both! Now I will quickly go over the steps to creating your household budget.

Step 1: Collect all your outstanding bills and sources of income statements. It is vital that you account for every penny coming in and going out!

Step 2: Using our worksheets (or you own ledger system) make two columns (one for income and one for debts) and list the type and amount of each monthly income and debt source.

Step 3: Total each column and compare them. Are you in black (have extra money left over each month) or in the red (spending more than you are making)?

Step 4: Make your plan. If you have extra money each month, how much will you set aside to pay off your holiday credit card spending? Do/can you move around or cut out current household expenses to add to your holiday spending? If you are in the red, then in all honest, you should not be spending anything on holiday gifts. But if you feel like you must, then pay in cash! Never use credit cards when you have more money going out than coming in. If you do, you are just digging yourself into a deeper financial hole.

Step 5: Once you create your plan; stick to it at all costs! Feel free to review it and make changes but do not abandon it.

Paying off the bills

Once the holidays are over, the bills will start rolling in. A new year and new debt; something to look forward too. Well, maybe; after all, you have prepared for this situation. You had setup and stuck to a budget. And now you just need to implement your repayment strategy. There are several ways to repay your credit card debt. Here is a list of four ways to repay that holiday credit card debt.

  1. Target on debt at a time. You want to be sure to pay the minimum amount on each of your credit cards. But choose one (the one with the highest interest rate or the smallest balance) and pay extra on that debt. You want to try and clear that debt as fast as possible. Once you do, repeat the process.
  2. Pay more than the minimum. You if your budget affords allows it, pay more than the minimum payment required. This works well if you only have one or two credit cards.
  3. Consolidate cards. If the numbers work out, try moving the debt from a couple of your cards to a new low interest rate card. This is only a good idea if you plan on making payments. Otherwise, you are doing nothing more than kicking the debt can down the road.
  4. Re-budget! Take a fresh look at your household budget and see if you can move things around or cut out. Then put that freed up money into paying down your debt.


Well there you have it. Simple right? Just create a budget and then pay off the bills when they start arriving. Trust me, it is certainly easier said than done. But you can do it! You just need to stick to and trust the process. It will take dedication and will power, so if you feel weak or like you are faltering, look to you your support system. Get your self a budget buddy! Someone that you feel confident that they can help you stay the course. Heck help each other out; be each other’s budget buddy! The bottom line is that with all the craziness in the world and the severe decrease in delayed gratification, we all need a little help with financial responsibility.

It is so easy to charge things and not worry about the consequences. You know what they say, out of sight, out of mind. But debt builds up fast and with the high interest rates, you could very well be paying off that $5 cup of coffee for well over a year! It may be a good cup of coffee but not at 19% to 21% interest! It is high time we start accepting responsibility for our decisions and actions, once again. And what better place to start than with our personal finance? Don’t forget to grad our Debt Elimination Blueprint to help you on your way.

Am I prepared to apply for a credit card?

Am I prepared to apply for a credit card?

It is always a big day in a person’s life when it happens. Even from when we were little kids, most of us dreamt of it. We pretended to use them. We watched in awe as our parents pulled them out. We instinctively knew someday that would be us! So just exactly what is this mystical thing that has held our fancy through all of our childhood and into adulthood? Yep, you guess it, credit cards. We love them! But just how do we know exactly when we are ready, really ready, for them. When are we ready for the responsibility? The simplest answer is that there is no set time that is the same for everyone which dictates when a person is ready to open a charge account. However, there are some markers than can help a person decide if and when they are ready, or should I say, when they are more prepared to handle the demand of that little three by two plastic demon.

How old do you have to be to apply for a credit card?

Although it has been said that age is just a number, in cases of legally binding contracts or decisions that may affect your life for many years, just a number is really not an acceptable answer. The official answer is that a person must be a least 18 years old to apply for and obtain a credit card. Remember, a credit card is a legal contract between two entities. In America, the age of 18 is widely considered reaching adulthood; where a person can legally vote, go to war, and sign contracts among other things.

While most credit card companies are more than happy to sending out thousands of offer mailings to all those 18 years old and above, they may apply stricter guidelines as to who can qualify for their card, especially if you are between the ages of 18 and 21. Just because you have just celebrated your 18th birthday does not guarantee that you will get that credit card you have been dreaming of since your childhood.

How much should your debt to income ratio be?

A person’s debt to income, or DTI, ratio can be a pivotal factor in that person’s ability to obtain loans or lines of credit. So, what exactly is DTI? Let us find out together. Firstly, let me define DTI for you; DTI is found by taking a total of all your monthly debts (ie. rent, utilities, insurance, etc.) divided the total of all your combined monthly income. This ratio is your personal DTI. This number is important because financial and credit lenders use this number to help them determine if you will be able to pay back loans or other financial obligations. So, what is a good DTI to have? Here are a few percentile benchmarks to give you an idea and whether your DTI will help or hinder you borrowing efforts.

  1. 36% and below: You should be in good shape. A DTI in this range most likely indicates that you are managing your debt well or at the very least have sufficient income to stay on top of paying your debts.
  2. 36% to 42%: You might need a little work. A DTI in this range causes some caution lights to appear for lenders. If you can, you should probably work on getting your DTI down before trying to get a loan or credit card. If not, lenders may impose other restrictions (ie. having a co-signer) for you to obtain the loan or credit card.
  3. 43% to 50%: You need a lot of work. A DTI in this range can severely limit your access to loans or credit cards without significant restrictions or limits. When lenders see DTIs in this range, they see red flags!
  4. 50% and up: If you are in this range, you need to spend a considerable amount of your time paying down your debts and put the idea of getting a loan or credit card onto the back burner. Lenders will consider you a very high risk if you DTI is in this range and most likely will decline your application out of hand.

Do you need to have a job before applying for a credit card?

Although all lenders will sleep better at night if their card holders have a verifiable job; most credit card companies do not require proof of employment before issuing a credit card. However, you may have to provide some sort source of income before being accepted. Again, a credit card company may add on other restrictions or requirements (ie. a co-signer) if you do not provide them with employment or other source of income details.

There are certain types of cards, called Secured Credit Cards, that an applicant can apply and obtain without having a job, providing the applicant can provide a deposit equal to the line of credit to the card lender institution.

Who should or should not apply for a credit card?

Even though you may be able to meet the requirement on paper to apply for a credit card that does not necessarily mean that you should. There is more to obtaining a credit card than just being of age, having a social security number, and having a job. There are several other considerations that a person should think about before jumping into a relationship with a credit card. How are you with your money? Are you being responsible (ie. paying bills on time, saving) or are you barely living paycheck to paycheck? Do you have a budget, and do you stick to it? What is your attitude towards money (ie. conservative or frivolous)? Do you have an impulsive personality, or can you stick to delayed gratification?

In Summary

The question was asked, when is a person ready to apply for a credit card. And as you have just read there are a myriad of factors that come into play when considering if a person is prepared to get the plastic timebomb. Things like a person’s age and ability to pay are just a few things that go into getting a credit card. There are also things like DTI (debt to income ratio) that credit card companies look at as well before extending a credit card.

However, most people only consider these ‘on paper’ factors; and they really need to take a personal inventory before applying for a credit card. A person’ personality and maturity level can and will play a huge factor in determining whether they are prepared for the responsibilities of managing that plastic taskmaster. A credit card can give a person a sense of freedom. But when the bills turn up at the end of the month, that sense of freedom may turn into a life shackled to your new plastic masters.

Is my personal debt affecting my personal health?

Is my personal debt affecting my personal health?


As the old saying goes, “at least you have your health.” But do you? Do you really? With all the craziness happening in the world today, it is almost impossible to stay, keep, and/or get healthy. There are many stressors in our daily lives that impact, to some degree, our health and well-being. Money and finance issues rank among the biggest when it comes to causes of stress and anxiety in our lives. Why is that? What are the numbers? Just how much does carrying personal debt impact our mental and physical health? Is it really a huge issue or is it more a matter of individual perspective? Let’s find out together.

What is the average debt average people carry?

In June of 2020, it was reported by the Federal Reserve that the total consumer debt was slightly under $4.1 trillion, with revolving debt coming in at just under $1 trillion and nonrevolving debt being just over $3.1 trillion. So just to be clear, let me define those terms starting with consumer debt. Consumer debt has been defined by Investopedia as, “… personal debts that are owed as a result of purchasing goods that are used for individual or household consumption. Credit card debt, student loans, auto loans, mortgages, and payday loans are all examples of consumer debt.” Revolving debt, also known as revolving credit has been defined by Investopedia as, “… a situation where credit replenishes up to the agreed upon threshold, known as the credit limit, as the customer pays off debt.” And finally, nonrevolving debt “is also known as installment debt because you typically repay it in regular monthly installments featuring a fixed amount,” per the folks over at The Nest.

What are some of the health issues linked to carrying excessive debt?

The human body is a wonderous and mysterious creation. It really is a remarkable piece of work; however, it is not without its flaws. The body can succumb to a wide array and variety of maladies but physically and mentally. The human body is susceptible to attacks physically and emotionally; what I mean is that the stressors that affect can come in the form of something tangible (like a fall or punch to the face) or intangible (like worry or verbal abuse). For our purposes here, we are dealing with almost exclusively the intangible and their effects on health.

So, what are some of the more common types of health issues that are related to debt or carrying debt. One study conducted by Sturgeon et al. published in 2016 determined that financial issues can elevate psychological stress, play a factor in lower self-esteem, increase strained interpersonal relationships and increase difficulty being productive and focused at work.

A study conducted by Gunasinghe et al. published in 2018 concluded that there was evidence supporting a link between exposure to debt and common mental disorders. Clearly there is no shortage of evidence linking your health with the state of your finances.

How does your personal debt affect your personal health?

According to a study conducted by The American Psychological Association (APA) in 2017, it was concluded that money came in one percentage point below the number one stressor, which was concern for the future of the nation, as the most common source of stress among Americans. Money ranked higher, in order, than “work, current political climate, and violence and crime”!

So how does this impact people’s health and lives? Believe it or not, according to the survey, the reported levels of stress has remained about the same across 2016 and 2017, averaging 4.8 on a scale of 1 to 10. However, those that reported feeling the effects of stress did increase, 40% in 2016 to 45% in 2017. “Around one-third of adults reported experiencing feeling nervous or anxious (36 percent), irritability or anger (35 percent), and fatigue (34 percent) due to their stress,” as recorded in the study.

Statistics on health and debt.

Quite obviously stress affects many of us daily. Let’s delve into the numbers for a bit. What are the numbers and how do they look for who? According to the APA’s 2017 study, women, more so than men, reported experiencing higher levels of stress. In the same vein, Hispanic and Black men reported higher levels of stress than their White counterparts. Even older adults have reported an increase in their stress levels. The group with the highest across the board stress levels are Millennials. And the effects of stress, according to the data, knew no boundaries as the reported levels were fairly consistent no matter what part of the country the data came from.

What are some of the ways to deal with debt related health issues?

As with any issue or problem there are usually many different ways to deal with or overcome the circumstances that you are facing. And fortunately dealing with the effects of debt on your mental and physical well-being is no different. Although some of these options may be hard to see or implement due to debt induced stress or anxiety; nevertheless, they are still viable options. You might just need an objective by-stander to help you realize them. So, what are some commonsense options to dealing with debt induced health issues.

The first step is to create a budget. This a straightforward, relatively simple task that helps organize your income and expenditures in a concrete fashion. There are plenty of online resources to help you get your budget up and running. Check out this Debt Elimination Blueprint from the team at Debt Reset US. It comes in a downloadable pdf and even has a couple of downloadable Excel budget sheets. Once you have a budget, then you can attack your debt by reallocating resources currently going to unnecessary expenditures and apply those resources to paying down your debt.

Another option is putting together some type of emergency savings. For example, I like to keep around $1500 in a separate savings account just for emergencies. This is in addition to my regular checking, savings, and investment accounts. In my situation, I know that I have at least 2 months’ rent in reserve. And speaking of reserves, a goal of six months’ rent, and essential bills should be in place.

Thirdly, try and avoid plopping down the plastic. Again, having one or maybe two credit cards for emergencies is not a bad thing. But try not to rely on using credit cards when money is tight. Credit cards are certainly a fickle master and getting into the habit of using them instead of working within your budget can lead to problems down the road.

Lastly, asking for help and working with a company, like Debt Reset US, can be and is a viable option. Legitimate debt relief companies can help eliminate your debt and even help you repair your credit. But be sure to do your due diligence before signing up to work with any company.


As we can clearly see, whether we like to admit it or not, stress impacts a large swath of people living in America. It, being stress, knows no boundaries; it does not discriminate between locations, socioeconomic levels, race, age, or gender. It is an equal opportunity annoyance. The sad fact is the current societal conditions, including how to handle personal debt, have a negative impact on the health and well-being of each of us to some degree. But there is hope!

There are plenty of ways to help relieve the stress; things like exercise, meeting with friends, and connecting with family. The biggest way to eliminate stress is to admit that you feel stressed! Like with any other issue, once you acknowledge that it is an issue, you can start the process of dealing with it appropriately. Don’t let the blues cast a dark hue over your life. Get out that and get the appropriate help if you need it. The world is filled with beautiful colors even during our darkest times.

How Safe Is It To Apply For A Credit Card Online?

How Safe Is It To Apply For A Credit Card Online?

Is it ok to apply for a credit card online?

I just received a credit card offer in the mail and it made me wonder, how safe it is to apply for a credit card online, really?

So, I set the paper application down and picked up my laptop and started digging into just how safe it is to apply for a credit card online. The long and short of it is, yes, it is safe to apply for a credit card online, well, sort of. I know, not a very helpful answer, right? Trust me, I felt the same way. So, I continued to dig to get a more fulfilling answer. And here is what I found. It really depends on how reputable the website is that you are providing your personal information too. Okay, great, but what does that mean? Below are some of the answers that I came up with as more questions sprang out from the original question.

What type of safety measures do websites use to protect my personal information?

The big factor to look for is what type of encryption the website is employing. There are a variety of different encryption types which include, DES, which is a low level encryption and not widely used anymore, TRIPLE DES, which is simply DES run three times, ADVANCED ENCRYPTION STANDARDS or AES, which has been the United States of America standard since 2002 and is the most widely used, and TWOFISH, which is free to use for hardware or software and as far as algorithms go, it is one of the fastest available.

So most, if not all, reputable websites use some type of encryption software to protect the personal information that you are keying in their electronic application form. Most websites use what is called SSL (Secure Sockets Layers) encryption. This basically “scrambles” the information while it is being transported from the computer you are entering it into the end terminal, say the company collection the credit card application.

Do websites that collect my personal data have privacy policies in place?

YES! Many countries have laws in place that mandate companies that use websites or online forms to collect personal information from their current or potential customers have a Privacy Policy in place. So, what is a Privacy Policy and what must it state? Simply put, a company’s privacy policy is an agreement between a company and its website visitors. In the most basic sense, it must state how the company collecting the information will use that information and how they intend to keep it safe.

Some of the things Privacy Policies cover are 1) the types of information to be collected, 2) why that information is being collected, 3) how that information will be stored, 4) how that information will be kept safe, 5) if the company plans to use cookies, and 6) if that information will be sold or shared with any affiliates or third party organizations. For more in depth information about privacy policies, check out this blog.

Are there benefits to applying online versus over the phone or with a paper application?

Yes, there are several advantages to applying for a credit card online rather than with a paper application. The biggest advantage to filling out an online application form, or any online form really, is ease. Many paper applications may have smaller areas to fill in and if your handwriting is large or sloppy this can be a pain. Online forms remove those obstacles instantly. Which leads right into the second advantage, accuracy.

With online forms if you make a mistake filling it out, the mistake can be easily and quickly fixed, before submitting it. Also, the person processing the information on the other end will not have to “figure out” illegible handwritten applications. A third advantage is that you don’t have to sit face to face or even talk to a person over the phone when filling out an application. It is often more convenient to be able to fill out one of these online forms while still in your pajamas. Also, sometimes people may feel uncomfortable, like the other person taking the information is judging them on their financial situation.

One final advantage is speed. With a paper application after you fill it out, you must wait for your local post office to collect it, sort it, and ship it to the credit card company. Then you must wait for the company to open your letter and process your application. Then you must wait even longer to get a response as to whether you were accepted or rejected. However, by filling out the application online, once you have completed it and proofread it for accuracy, you can simply click the submit button, and away it goes, being delivered almost instantly to the credit card company. And nowadays, many times you will get an acceptance or rejection response in a matter of hours, usually via email.

What information will I need to apply online?

The information may vary a little from company to company that you may be applying with online. However, you should expect to provide these five basic essentials at a minimum:

  1. Full Legal Name
  2. Current Mailing Address
  3. Date of Birth
  4. Social Security Number
  5. Annual Income

Depending on the type of credit card or the company offering said card, there may be other questions you may be required to answer. Usually, though, these five questions are enough for the company to start the review process of your application. I hope this helps answer your questions about whether it is safe to apply for a credit card online and to alleviate some of your security risk concerns upon doing so.

Explaining Charge Offs on Credit History Reports

Explaining Charge Offs on Credit History Reports

What does it mean when you see a credit card account charge off on your credit report?

So, if you are like me, you recently got your free credit report and while perusing through it you may have seen the words ‘charge off’ after an account or two. So, what does charge off mean? The simple answer is that it means the creditor to whom you owe the debt has decided to no longer pursue you, in an attempt, to collect the money owed to them. Sounds like a good thing, right? Not necessarily and here is why. Please, keep reading.

What happens when a creditor charges off an account?

Like I said early, a creditor will charge off the debt you owe them after failing to make your minimum payments, usually after several months, anywhere from 120-180 (months not days) typically. Basically, the creditor is giving up chasing after you. They will just classify your account as a bad debt, and it will appear as a loss on their profit / loss financial sheet. Once this happens, they will officially close your account and move on from. This sounds like a good thing, but do not start jumping for joy just yet.

Am I still responsible for the debt after it has been charged off?

You may very well be (I warned you not to start the celebration)! After your account has been charged off, the original creditor may then transfer (or sell) that account to everyone’s favorite industry, debt collection! There is considerable debate, however, on whether or not you would owe a collection agency that has bought your debt any money. But that is an answer for another question in another blog.

The fact remains though the even though the original creditor has charged off your account with them, it does not really mean that the debt has been forgiven let alone forgotten. If they haven’t sold off your bad debt to a collection agency, their collection efforts may take one more swing at you, that being suing you in small claims court.

To relieve this debt after it has been charged off you can try to agree to a settlement with the original creditor, file for bankruptcy, or roll the dice and hope the statutes of limitation in your State runs out before they take you to court.

How do charge offs effect my credit score?

Once a company classifies your account as a charge off your credit score can take some serious damage. Sadly, charge offs can be one of the most egregious offenders to your credit score. Even one missed payment or a late payment can affect your credit score, sometimes lowering it as much as 100 points depending on the type of account the payment was intended for.

Remember, the biggest factor comprising your credit score is payment history. That is why late or missed payments hurt your score so much. And, in fact, with a charge off, you get hit with both; late and missed payments for that account! With charge offs it may take as long as three years to recoup the points lost on your credit score.

How long do charge off accounts remain on my credit report?

Charge offs can also remain on your credit report for up to seven years, making it incredibly difficult to raise your score over that time frame. I do not want to even imagine how incredibly difficult it would be to raise a credit score with multiple charge offs. If you do have more than one charge off on your credit report, the thing to remember is that date of your last missed payment on each charged off account is when the seven-year timeline begins for each account. There is one saving grace to this process and that is that the seven-year timeframe does not reset if the debt is moved into a collection agency. The big glaring negative to all this is that the timeframe will reset if you make a payment to that debt collection agency (or original creditor). One final remark on this, if you have multiple charge off accounts and make a payment on one of them (whether intentionally or not), that payment only resets that particular account and does not effect the seven year timeframe of any other charge off accounts on your report.

Can I get charge off accounts removed from my credit history?

Well, yes and no (sorry, I know everyone hates wishy-washy answers). As mentioned earlier, charge off accounts will automatically be removed from your credit history after seven years have passed from the date of your last missed payment. With that being said, it is still a good (no, great) idea to review your credit report every year to double check that those accounts actually are removed from your report! You might as well, remember you get one free credit report from each of the big three credit reporting bureaus.

Another thing to remember is that paying off a settlement that you have agreed to with the original creditor or collection agency does not remove the charged off account from your credit report. It simply changes that account from ‘charged off’ status to ‘charged off-paid’ status. Any way you slice it, charged off-paid accounts will still remain on your report until that magic number of seven (years) has been reached.

There is one way to get a charged off account removed from your credit report without waiting the seven years, and that is by contacting the original creditor and begging and pleading! That is if they a have not sold your account to a collection agency. Collection agencies have no souls or hearts (this is a bit of tongue and cheek sardonicism), so begging will fall on deaf ears for sure. Seriously though, collection agencies are less than willing to just forgive a debt they have bought. They are going to want you to pay the full amount; however, on occasion (when a certain hot region freezes over) the collection agency will be willing to make a deal and take full payment for a percentage of the amount owed.

So, contacting the original creditor and discussing how and what you need to do to have them remove the charge off from your report is a viable option. Most times you may be able to reach an agreement (a lower total balance or a payment arrangement). Besides, it never hurts to ask!