Friday, August 27, 2010

By 

James W. Stone

Congratulations are in order for many Americans. Overall, the total of all revolving credit balances fell 9.5% in the twelve months ending with June, 2010 (as reported in the Federal Reserve Bank's report G.19). Some of us have been more successful at reducing our debt than others. But the overall trend is good. Some people have reduced their debt because they fear the possible consequences of carrying debt. Others simply want to quit paying interest on debt.

To reduce their debt, some people have taken any available cash they could find and used it to pay down their debt. Some have negotiated with the lending company to settle the account for an amount less than the outstanding balance. And, some have quit using their credit cards altogether in the expectation that someday the balance will be reduced to zero.

One common thread to efforts to reduce debt is how individuals have cut down on their use of credit cards, or limited their use to only one card. Such practices...   >>MORE

Friday, August 20, 2010

By 

James W. Stone

You've been looking for this story for a long time. "How To Buy Happiness." Is it true? Can it be done? Yes! Money can buy happiness. And the story that explains how this is true doesn't really take that long to tell.

Happiness is that elusive state-of-being that seems to be a moving target. One day we tell ourselves, "If I can just _______ I'll be happy." You can fill in the blank with anything that suits your taste. But, even if you manage to do what you thought would make you happy, the next day you will need something different to make you happy.

If the blank you filled in required the purchase of something you wanted, you should be able to make yourself happy by making the purchase. Let's try that. Let's assume your plea said "If I can just buy a new smartphone like I saw advertised on TV, I'll be happy." Now let's go through with it. Let us assume that the particular model of phone you wanted was sold by the carrier you already had, and that you even got a...   >>MORE

Friday, August 13, 2010

By 

James W. Stone

From personal experience, I can tell you it is not easy to pay off credit card debt. I've studied the reasons why paying down debt is so difficult and have come to accept that there really is no "easy" way to pay down your debt. If you have debt, you have it for a reason. Unless you change that "reason" you will continue to pile up debt, even as you try to pay it down. It's like trying to swim upstream as the current is pushing you downstream.

When I hear the pitch for an "easy" way to pay down your debt, I look at the person making the claim to see what they are selling. There is always something being sold. The marketplace works that way. If you want to sell something, find a way to offer what a person is willing to pay for. There are thousands of people willing to pay for the "truth" about the easy way to pay down debt, hoping this truth will show them the easy way out of their situation. Because there is a vast audience of potential clients, we see offerings for debt...   >>MORE

Friday, August 06, 2010

By 

James W. Stone

When students return to college campuses this fall, one of the biggest changes they will find involves credit cards. It’s easy to see that many college students have not used credit cards properly in the past. A Sallie Mae study, issued in April of 2009, reports the average college senior carried a credit card debt of over $4,000.

New provisions in the Credit Card Act prevent credit card companies from issuing credit cards to anyone under age 21, unless they have proof of income from earnings or have an adult co-signer on the account. Any company offering credit cards to college students must remain at least 1,000 feet from college campuses if they are offering free gifts or food to entice students to apply for credit cards.

The Credit Card Act has already brought many improvements in what was seen as abuses by credit card companies. But, on campus, the impact will bring mixed results. The new effort to limit companies from issuing credit cards to persons under the age...   >>MORE

Friday, July 30, 2010

By 

James W. Stone

If you want to feel successful about what you do with your money, there are two performance measures that matter more than others – New Worth and Cash Flow. While it seems obvious to measure how much you are worth in terms of dollars (your Net Worth), watching your Net Worth can be frustrating if you aren’t aware of your Cash Flow.

Cash Flow in personal finance is often misunderstood. You’ve heard these lines: “Oh, yeah, I’ve got lots of Cash Flow – all of it OUT!” or, “You wanna see Cash Flow? Watch me go shopping.”

Cash Flow is not how FAST you spend money. Rather, it is a comparison of the money you have coming in to the money you have going out. In a simple sense, it is your income minus your spending for a defined period of time. If your personal income is $4,000 for a month and you spend $3,000, you have $1,000 positive cash flow. On the other hand, if your personal income is the same $4,000 and you spend $4,500, you have a $500 negative cash flow. A...   >>MORE